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Summary of Significant Accounting Policies |
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The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements. |
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Statement of compliance |
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The financial statements of the company for the period ended 31 December 2022 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006. |
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Basis of preparation |
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The financial statements have been prepared on the going concern basis and in accordance with the historical cost convention.
Going Concern
Notwithstanding a loss in the year ended 31 December 2022 of £288,638, the company is in a net current asset position of £4,450,949 as at the year then ended. The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
The directors have prepared project development cost forecasts for a period of 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the company will have sufficient funds, through its credit facility with its immediate parent company TotalEnergies Renewables UK Limited to meet its liabilities as they fall due for that period. The borrowing facility of £72 million is not due for repayment until 31 December 2026 which is the contractually agreed termination date. As at 30 November 2023, £24.34 million of the facility is undrawn to meet future project costs and liabilities.
Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. |
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Intangible fixed assets |
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Grid Connection expenditure is written off in the same year unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period from which the company is expected to benefit. Amortisation is not provided for until the grid connection becomes operational. |
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Developments costs |
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Expenditure on development activities may be capitalised if, the product or process is technically and commercially feasible and the Company intends, and has the technical ability and sufficient resources, to complete development, future economic benefits are probable and if the Company can measure reliably the expenditures attributable to the tangible or intangible asset during its development. Development activities involve design for, construction or testing of the production of new or substantially improved products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads and capitalised borrowing costs. Other development expenditure is recognised in the profit and loss account as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation if applicable and less accumulated impairment losses if applicable. |
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Intangible assets |
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Intangible assets |
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Grid Connection |
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Tangible assets and depreciation |
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Tangible assets are stated at cost or at valuation, less accumulated depreciation if applicable. The charge to depreciation is calculated to write off the original cost or valuation of tangible assets, less their estimated residual value, over their expected useful lives as follows: |
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Plant and machinery |
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10% Straight line |
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Development Costs |
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Not depreciated |
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The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.
Development costs are costs in relation to tangible assets that are not yet brought into use. Accordingly, Development costs are not depreciated. |
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Trade and other debtors |
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Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts. |
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Cash and cash equivalents |
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Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the Abridged Balance Sheet bank overdrafts are shown within Creditors. |
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Borrowing costs |
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Borrowing costs relating to the acquisition of assets are capitalised at the appropriate rate by adding them to the cost of assets being acquired. Investment income earned on the temporary investment of specific borrowings pending their expenditure on the assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. |
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Trade and other creditors |
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Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost.
Related parties The company discloses transactions with related parties which are not wholly owned with the same group. Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the directors, separate disclosure is necessary to understand the effect of the transactions on the group financial statements. |
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Taxation and deferred taxation |
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Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future. Timing differences are temporary differences between the company's taxable profits and its results as stated in the financial statements.
Deferred tax is measured on an undiscounted basis at the tax rates that are anticipated to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
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Foreign currencies |
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Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the Balance Sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the rates of exchange ruling at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. The resulting exchange differences are dealt with in the Profit and Loss Account. |
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Financial Instruments |
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Other financial instruments |
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Other financial instruments not meeting the definition of Basic Financial Instruments are recognised initially at fair value. Subsequent to initial recognition other financial instruments are measured at fair value with changes recognised in profit or loss. |
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Ordinary share capital |
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The ordinary share capital of the company is presented as equity. |