Company registration number 08441850 (England and Wales)
MARGAM GREEN ENERGY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
MARGAM GREEN ENERGY LIMITED
COMPANY INFORMATION
Directors
H Unwin
M Patel
A Sarandidis
(Appointed 12 October 2023)
Company number
08441850
Registered office
4th Floor, The Peak
5 Wilton Road
London
United Kingdom
SW1V 1AN
Auditor
Azets Audit Services
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
Solicitors
Orrick, Herrington & Sutcliffe (UK) LLP
107 Cheapside
London
United Kingdom
EC2V 6DN
MARGAM GREEN ENERGY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 28
MARGAM GREEN ENERGY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The principal activity of the Company continues to be the operation of a biomass energy plant for the generation of electricity.

The key financial and other performance indicators during the year were as follows:

 

2023

2022

 

£

£

Revenue

38,857,450

42,669,704

Operating profit/(loss)

6,110,952

12,702,604

Earnings before interest, tax, and depreciation

14,047,019

20,601,850

Electricity generated

232,896MWh

242,035MWh

Revenue decreased in the year by £3,842,254 (9%). Revenue has decreased on the prior year following a fall brown power prices and reduced generation as a result of unplanned outages in the year .

 

Future outlook

Waste wood arisings began to fall off towards the end of 2023 as economic activity, and particularly construction and demolition activity, stagnated. Whilst this did not impact output in 2023, if low arisings persist there is a risk that output may be affected.

 

The key value driver affecting operating UK renewable energy generators is the wholesale power price.

 

The company intends to continue operation as a biomass energy plant, generating electricity from waste wood supply.

Principal risks and uncertainties

In the ordinary course of business, the company is exposed to and manages a variety or risks in relation to its operating activities. The management of risk is fundamental to the company, with the board of directors having responsibility for the overall system of internal control and for reviewing its effectiveness. The principal risks and uncertainties facing the company are broadly grouped as such as regulatory, fuel, technical and financial instrument risk.

 

Regulatory risk

Regulatory risk may arise from a change in regulations and law that might affect industry or business. Renewable energy projects are dependent for their commercial viability on a suitable regulatory regime. There is a risk that the government may introduce retrospective changes to the regime that was agreed at the time the project commenced. This is unusual in the market and changes to the regulatory regime are more typically for future projects. Both legislative and regulatory risk are managed by awareness of industry news, publications and regular communication with industry experts and the regulator.

Fuel risk

The availability of woodchip in the market is subject to the ongoing operations of the UK construction industry and Household Waste Recycling Centres (HWRC). The company has mechanisms and processes in place that seek to mitigate the risk of insufficient volumes being available by ensuring buffer stocks are held by the fuel supplier and maintaining the ability to source fuel from European markets.

 

MARGAM GREEN ENERGY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Technical risks
The company is exposed to technical risks with the operation of its biomass plant that could reduce availability for  electricity generation, particularly with long lead times for certain components.  To mitigate against this technical risk  the company has contracted a team of experienced engineers who are responsible for monitoring and managing  performance.  Additionally, a store of key spare parts for the plant is maintained.  

Macroeconomic
Russia's invasion of Ukraine during 2022 created geopolitical instability which impacted commodity prices, inflation  rates and interest rates after the year end. At the time of signing these financial statements the macroeconomic environment has begun to stabilise, with inflation rates falling.

Financial instrument risks
Financial instrument risks are described in Notes 16 and 17.
Directors' Responsibilities Pursuant to Section 172 of the Companies Act 2006

In carrying out their roles, the directors have acted in a manner that promotes the success of the Company for the benefit of our stakeholders, following the principles set out in section 172(1)(a)-(f) of the Companies Act 2006.

 

On behalf of the board

H Unwin
Director
7 November 2024
MARGAM GREEN ENERGY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and the audited financial statements for the year ended 31 December 2023.
Principal activities

The principal activity of the company continued to be that of operation of a biomass energy plant for the generation of electricity.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

J Reid
(Resigned 12 October 2023)
H Unwin
M Patel
A Sarandidis
(Appointed 12 October 2023)
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

The Directors have concluded that the Company will be able to continue in operational existence for the foreseeable future. Consequently, the Directors have concluded that it is appropriate to prepare these financial statements on a going concern basis. Accordingly, these financial statements do not include any adjustments to the carrying amount or classification of assets and liabilities that would result if the Company was unable to continue as a going concern.

Financial instruments

The company has chosen to present information on its financial risk management policies in the Strategic report in accordance with Section 414 C (11) of the Companies Act 2006.

Directors' Liabilities
The company maintains liability and indemnity insurance for its directors and officers. The provision has been in place throughout the year and remain in place as of the date of signing.
Independent auditors

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

In accordance with the Streamlined Energy and Carbon Reporting (SECR) regulations, the directors present the Company’s energy usage, related emissions, and energy efficiency actions:

MARGAM GREEN ENERGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

In accordance with the Streamlined Energy and Carbon Reporting (SECR) regulations, the directors present the Company’s energy usage, related emissions, and energy efficiency actions:

Metrics

In 2023, the Company avoided approximately 93,158 tonnes of CO2[1] and generated enough renewable electricity to power 86,257 homes[2].

The Company’s Scope 1, Scope 2 and Scope 3 greenhouse gas emissions based on ownership in the underlying investment are disclosed below.

Scope 1 emissions for the portfolio primarily relate to stationary combustion emissions (natural gas). Scope 2 emissions are associated with electrical consumption, which were calculated as nil in the comparative period. Scope 3 emissions include the following categories: purchased goods and services, capital goods, and fuel and energy related activities which are associated with the transmission and distribution losses or imported electricity and heat used by the assets. The largest contributors were fuel and energy related activities.

Carbon Footprint and Weighted average carbon intensity data for the year ended 31 December 2022 was not reported as it had not been assessed.

[1] The carbon avoided reflects the carbon intensity of the marginal energy generator, i.e., the technology that would be used to provide energy to the grid if the assets were not generating power most of the time in each region. In the UK, this is assumed to be gas generation, based on research by a leading energy market expert, with an intensity of 0.4tCO2/MWh (IEA).

[2] The number of homes powered is based on the average annual household energy consumption in the relevant region, using the latest reported figures, and reflects the portfolio’s annual electricity generation as at the relevant reporting date for each region. In the UK, this is 2.7 MWh/annum (OFGEM)

 

Emissions disclosures

 

Year ended
31 December 2023

Year ended
31 December 2022

Scope 1 – Direct emissions (tonnes CO2)

11,101

10,332

Scope 2 – Indirect emissions (tonnes CO2)

355

-

Scope 3 – indirect emissions (tonnes CO2)1

10,612

13,158

Total Scope 1, 2 and 3 emissions (tonnes CO2)

22,068

23,490

Carbon Footprint – scope 1,2 and 3 emissions normalised by the value of the portfolio, expressed in tonnes CO2e/£M current value of all investments 2

65 tonnes CO2/£m revenue

Not reported in 2022

Weighted Average Carbon Intensity (revenue) – weighted exposure to investee asset scope 1,2 and 3 emissions per revenue generation, expressed in tonnes CO2e/£M revenue3

548 tonnes C02/£m revenue

Not reported in 2022

Carbon Intensity (activity) - total asset scope 1 and 2 emissions per energy generation, expressed in tonnes CO2e/MWh4

0.0492 tonnes CO2/MWh

Not reported in 2022

 

 

 

1 Scope 3 emissions are the result of activities from assets not owned or controlled by the Company, but that the Company indirectly impacts in its value chain. Scope 3 emissions include all sources not within the Company’s Scope 1 and 2 boundaries.

2 Calculated per TCFD Guidance: 3 Calculated per TCFD Guidance: 4 This metric is calculated by dividing portfolio Scope 1 and 2 emissions (sum of all asset scope 1 and 2 emissions reflecting fund ownership) and dividing this by aggregate portfolio MWh energy generation (sum of all asset MWh energy generation reflecting fund ownership). The Manager believes this metric is most relevant to the investment strategy and investments.

Carbon footprint indicators are measured in line with the industry standard GHG Protocol based on an equity control approach, meaning emissions from the Company’s operations are weighted according to the Company’s ownership interest. Scope emissions calculations will be conducted by third party consultants. The sustainability indicators are subject to an annual review.

The Carbon Footprint and Weighted Average Carbon Intensity (“WACI”) indicators are measured in line with TCFD methodologies and disclosed in line with TCFD recommendations although they are not considered the most relevant intensity metrics for the asset, with carbon emission per MWh of generation capacity being a more appropriate metric. Therefore, the Company includes this metric as well.

Carbon emissions data is measured based on the provision of data by third party operations and maintenance (‘O&M’) service providers to the Board. The carbon emissions of the asset are calculated and reported on an annual basis, supported by specialist external advisers.

MARGAM GREEN ENERGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Carbon footprint indicators are measured in line with the industry standard GHG Protocol based on an equity control approach, meaning emissions from the Company's operations are weighted according to the Company's ownership interest. Scope emissions calculations will be conducted by third party consultants. The sustainability indicators are subject to an annual review.
   
The Carbon Footprint and Weighted Average Carbon Intensity (“WACI”) indicators are measured in line with TCFD methodologies and disclosed in line with TCFD recommendations although they are not considered the most relevant intensity metrics for the asset, with carbon emission per MWh of generation capacity being a more appropriate metric. Therefore, the Company includes this metric as well.

Carbon emissions data is measured based on the provision of data by third party operations and maintenance (‘O&M') service providers to the Board. The carbon emissions of the asset are calculated and reported on an annual basis, supported by specialist external advisers.
Statement of disclosure to auditors

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

On behalf of the board
H Unwin
Director
7 November 2024
MARGAM GREEN ENERGY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, International Accounting Standard 1 requires that directors:

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

MARGAM GREEN ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MARGAM GREEN ENERGY LIMITED
- 7 -
Opinion

We have audited the financial statements of Margam Green Energy Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

MARGAM GREEN ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARGAM GREEN ENERGY LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

MARGAM GREEN ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARGAM GREEN ENERGY LIMITED
- 9 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Howells (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
18 November 2024
Chartered Accountants
Statutory Auditor
Ty Derw, Lime Tree Court
Cardiff Gate Business Park
Cardiff
United Kingdom
CF23 8AB
MARGAM GREEN ENERGY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Revenue
4
38,857,450
42,669,704
Cost of sales
(28,087,076)
(25,188,167)
Gross profit
10,770,374
17,481,537
Administrative expenses
(4,659,422)
(4,778,933)
Operating profit
5
6,110,952
12,702,604
Investment revenues
7
562,032
-
0
Finance costs
8
(8,169,833)
(9,522,719)
Other gains and losses
9
-
0
1,969,381
(Loss)/profit before taxation
(1,496,849)
5,149,266
Income tax expense
10
(788,935)
(3,989,668)
(Loss)/profit and total comprehensive income for the year
(2,285,784)
1,159,598

The notes on pages 13-28 form part of these financial statements.

MARGAM GREEN ENERGY LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
ASSETS
Non-current assets
Property, plant and equipment
11
99,735,697
107,128,602
Other receivables
12
1,878,000
1,878,000
101,613,697
109,006,602
Current assets
Trade and other receivables
12
11,931,656
11,004,849
Cash and cash equivalents
3,423,411
33,721,965
15,355,067
44,726,814
Total assets
116,968,764
153,733,416
EQUITY
Called up share capital
20
202
202
Share premium account
21
17,142,036
17,142,036
Retained earnings
(29,406,026)
(27,120,242)
Total equity
(12,263,788)
(9,978,004)
LIABILITIES
Non-current liabilities
Borrowings
14
109,862,059
144,862,058
Deferred tax liabilities
19
10,026,823
9,237,888
119,888,882
154,099,946
Current liabilities
Trade and other payables
18
6,076,468
3,213,730
Borrowings
14
3,267,202
6,397,744
9,343,670
9,611,474
Total liabilities
129,232,552
163,711,420
Total equity and liabilities
116,968,764
153,733,416
The financial statements were approved by the board of directors and authorised for issue on 7 November 2024 and are signed on its behalf by:
H Unwin
Director
Company registration number 08441850
MARGAM GREEN ENERGY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Share premium account
Retained earnings
Total
£
£
£
£
Balance at 1 January 2022
202
17,142,036
(28,279,840)
(11,137,602)
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
1,159,598
1,159,598
Balance at 31 December 2022
202
17,142,036
(27,120,242)
(9,978,004)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(2,285,784)
(2,285,784)
Balance at 31 December 2023
202
17,142,036
(29,406,026)
(12,263,788)
MARGAM GREEN ENERGY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
15,982,950
14,500,750
Interest paid
(8,169,833)
(9,522,719)
Net cash inflow from operating activities
7,813,117
4,978,031
Investing activities
Purchase of property, plant and equipment
(543,162)
(1,701,779)
Interest received
562,032
-
0
Net cash generated from/(used in) investing activities
18,870
(1,701,779)
Financing activities
Repayment/(Proceeds) of borrowings
(38,130,541)
93,812,217
Repayment of bank loans
-
0
(78,478,483)
Net cash (used in)/generated from financing activities
(38,130,541)
15,333,734
Net (decrease)/increase in cash and cash equivalents
(30,298,554)
18,609,986
Cash and cash equivalents at beginning of year
33,721,965
15,111,979
Cash and cash equivalents at end of year
3,423,411
33,721,965
MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Margam Green Energy Limited is a private company limited by shares incorporated in England and Wales. The company is domiciled in England having its registered address at 4th Floor The Peak, 5 Wilton Road, London, England, SW1V 1AN. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Accounting convention

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, except for derivative financial instruments that have been measured at fair value. The principal accounting policies adopted are set out below. The accounting policies been applied consistently, other than where new policies have been adopted.

1.2
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

The Directors have concluded that the Company will be able to continue in operational existence for the foreseeable future. Consequently, the Directors have concluded that it is appropriate to prepare these financial statements on a going concern basis. Accordingly, these financial statements do not include any adjustments to the carrying amount or classification of assets and liabilities that would result if the Company was unable to continue as a going concern.

 

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.3
Revenue

Revenue comprises amounts received and receivable in respect of generated electricity and Renewable Obligation Certificates (ROCs). Revenue in respect of both energy generation and ROCs is recognised over time. Under the terms of its Power Purchase Agreements (PPA) with customers, ROCs are immediately transferable to the customer.

Revenue from PPAs with customers is recognised when control of the goods are transferred to the customer at an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods. Revenue on the generation of energy is recognised based upon the value of units supplied during the year at the price under the PPA, with the number of units determined by energy volumes recorded on the plant meters and market settlement systems. The company has concluded that it is the principal in its revenue arrangements because it typically controls the goods before they are transferred to the PPA counterparty.

All revenue recognised in the year relates to performance obligations satisfied in the year. There are no significant judgements taken in respect of the recognition of revenues.

While the performance obligation is satisfied as the electricity is generated, payment is generally invoiced within 30 days from supply of the energy or 90 days from transfer of the ROCs, with the related amount recognised as a trade receivable or accrued income until payment is received from the customer. Payment terms under the Power Purchase Agreement are 10 business days from invoice date.

The company has no material contract assets or liabilities other than trade debtors and accrued income as disclosed in note 12. There is only one operating activity and all revenue is generated within the United Kingdom.

 

1.4
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Such cost includes borrowing costs for long-term construction projects.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and equipment
6% per annum straight-line

Freehold land is not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.5
Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.7
Financial assets

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.

Impairment of financial assets

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

 

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

 

For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.8
Financial liabilities

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Financial liabilities at fair value through profit or loss

Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A financial liability is classified as held for trading if:

 

 

Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Adoption of new and revised standards and changes in accounting policies

There have been no standards, amendments, and interpretations to IFRSs that were effective for the first time in the current accounting period and have been adopted.

Standards which are in issue but not yet effective

There are no standards, amendments and interpretations that have been issued but are not yet effective that are anticipated to have a material impact on the financial statements in the future.

3
Critical accounting estimates and judgements

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

In the course of preparation of these financial statements, no judgements or estimates have been made in the application of accounting policies.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
4
Revenue
2023
2022
£
£
Revenue analysed by class of business
Sale of electricity
18,362,876
21,091,314
ROCs and associated income
19,896,022
19,336,903
Other income
598,552
2,241,487
38,857,450
42,669,704
2023
2022
£
£
Revenue analysed by geographical market
UK
38,857,450
42,669,704
5
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging:
Fees payable to the company's auditors for the audit of the company's financial statements
28,500
28,500
Depreciation of property, plant and equipment
7,936,067
7,899,246
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
3
3

No remuneration was paid out to Directors of the company as they provided negligible qualifying services to the company (2022: £nil). The company has no employees other than the Directors (2022: none).

7
Investment income
2023
2022
£
£
Interest income
Financial instruments measured at amortised cost:
Bank deposits
562,032
-
0
Income above relates to assets held at amortised cost, unless stated otherwise.
MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
8
Finance costs
2023
2022
£
£
Interest on bank overdrafts and loans
-
1,651,989
Other interest payable
8,169,833
7,870,730
Total interest expense
8,169,833
9,522,719
9
Other gains and losses
2023
2022
£
£
Change in value of financial assets at fair value through profit or loss
-
1,969,381
10
Income tax expense
2023
2022
£
£
Deferred tax
Origination and reversal of temporary differences
742,247
2,654,764
Changes in tax rates
46,688
838,347
Adjustment in respect of prior periods
-
0
496,557
788,935
3,989,668

The charge for the year can be reconciled to the (loss)/profit per the income statement as follows:

2023
2022
£
£
(Loss)/profit before taxation
(1,496,849)
5,149,266
Expected tax (credit)/charge based on a corporation tax rate of 23.52% (2022: 19.00%)
(352,059)
978,361
Effect of expenses not deductible in determining taxable profit
246,460
1,435,213
Group relief
(465,081)
(257,519)
Deferred tax adjustments in respect of prior years
-
0
496,557
Differences in tax rates
1,359,615
838,347
Deferred tax not provided
-
0
498,709
Taxation charge for the year
788,935
3,989,668
MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
11
Property, plant and equipment
Freehold land
Plant and equipment
Total
£
£
£
Cost
At 1 January 2022
1,200,000
132,446,621
133,646,621
Additions
-
0
1,701,779
1,701,779
At 31 December 2022
1,200,000
134,148,400
135,348,400
Additions
-
0
543,162
543,162
At 31 December 2023
1,200,000
134,691,562
135,891,562
Accumulated depreciation and impairment
At 1 January 2022
-
0
20,320,552
20,320,552
Charge for the year
-
0
7,899,246
7,899,246
At 31 December 2022
-
0
28,219,798
28,219,798
Charge for the year
-
0
7,936,067
7,936,067
At 31 December 2023
-
0
36,155,865
36,155,865
Carrying amount
At 31 December 2023
1,200,000
98,535,697
99,735,697
At 31 December 2022
1,200,000
105,928,602
107,128,602

Included within Property, Plant and Equipment is a total of £33,805,480 (2022: £33,805,480) of interest capitalised, of which £17,760,330 (2022: £17,760,330) relates to the bank loan and facility charges and £16,045,150 (2022: £16,045,150) relates to intercompany loan interest.

12
Trade and other receivables
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Trade receivables
2,614,989
209,531
-
-
Amounts owed by fellow group undertakings
18,634
43,241
-
0
-
0
Other receivables
126,100
100
1,878,000
1,878,000
Prepayments
1,059,944
850,945
-
-
Accrued income
9,892,575
8,100,356
13,693,608
9,160,932
1,878,000
1,878,000

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

Included in other debtors due after more than one year is the sum of £1,750,000. This reflects a requirement in the purchase power agreement between Margam Green Energy and its pricipal customer that this level of credit support is maintained to the end of the contract period.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
13
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

Expected credit loss assessment
2023
2022
Balance
Rate
Loss allowance
Balance
Rate
Loss allowance
Trade receivables
£
%
£
£
%
£
Under 90 days
2,610,080
-
-
126,298
-
-
90-180 days
4,909
-
-
263,807
-
-
270-360 days
-
-
-
359,650
-
-
2,614,989
-
749,755
-

A provision for doubtful debts of £0 (2022: £0) is included in the above.

No significant receivable balances are impaired at the reporting end date.

14
Borrowings
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Loans from parent undertaking
3,267,202
6,397,744
109,862,059
144,862,058
2023
2022
£
£
Secured borrowings included above:
Loans from fellow group undertakings
113,103,464
151,259,803

Borrowings at 31 December 2023 consists of a loan due from the company's immediate parent, it is repayable on 31 March 2042 and bears interest at 6.5%.

 

15
Financial instruments

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Financial instruments
(Continued)
- 24 -

Fair value

The company uses the hierarchy as set out in IFRS 7 Financial Instruments: Disclosure for determining the fair value of derivatives by valuation technique. Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

 

Level 1: quoted (unadjusted) market prices in active markets for identical assets or liabilities;

Level 2: valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

Level 3: valuation techniques for which the lowest level input that is significant to the fair value measurement is not observable.

The fair value of all financial assets and liabilities is based on the present value of the cash flows discounted at prevailing market rates at each balance sheet date and are considered to fall within the level 2 techniques of IFRS 13 “Fair Value Measurement”.

 

Financial assets

Financial assets that are debt instruments measured at amortised cost

 

 

Carrying value

 

Fair value

 

2023

 

2022

 

2023

 

2022

 

£

 

£

 

£

 

£

Cash and cash equivalents

3,423,411

 

33,721,965

 

3,423,411

 

33,721,965

 

 

 

 

 

 

 

 

Trade and other receivables

11,931,656

 

11,004,849

 

11,931,656

 

11,004,849

Total

15,355,067

 

46,183,079

 

15,355,067

 

46,183,079

 

Current receivables which are level 2 assets, all due within one year, and have been provided for where impaired, have a carrying value that is considered to be materiality in line with their fair value due to the short-term maturity of these items.

 

Financial liabilities at amortised cost

The carrying value of trade and other payables which are level 2 liabilities, all due within one year, is considered to equate to fair value due to the short-term nature of these borrowings.

 

The primary valuation technique used for borrowings and other debt classified as level 2 is discounting of the future associated cash flows using the market rate at each balance sheet date. The Directors have assessed this as equal to the current market rate for equivalent borrowing.

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
16
Liquidity risk

The following table details the remaining contractual maturity for the company's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the company may be required to pay.

On demand
1 – 3 months
5+ years
Total
£
£
£
£
At 31 December 2022
Loans due to related parties
6,397,744
-
144,862,059
151,259,803
Trade payables
-
157,745
-
157,745
Other payables
-
3,055,985
-
3,055,985
6,397,744
3,213,730
144,862,059
154,473,533
At 31 December 2023
Loans due to related parties
3,267,202
-
109,862,059
113,129,261
Trade payables
-
124,673
-
124,673
Other payables
-
5,951,795
-
5,951,795
3,267,202
6,076,468
109,862,059
119,205,729
MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
17
Market risk
Market risk management

The company is exposed to market risk, credit risk and liquidity risk. The company’s senior management oversees the management of these risks, and the Directors review and agree policies for managing each of these risks, which are summarised below.

 

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise a number of types of risk, the following are discussed below: interest rate risk and currency risk. Financial instruments affected by market risk include: loans and borrowings, deposits and derivative financial instruments.

 

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company’s exposure to the risk of changes in market interest rates relates primarily to the company’s long-term debt obligations with floating interest rates. As at 31 December 2023, the company’s borrowings were at a fixed rate of interest.

 

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The company manage this exposure through active monitoring of exchange rate movements.

 

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily for other receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments. The maximum exposure to credit risk, in the event that counterparties’ fail to perform their obligations as at period end (in relation to each class of recognised financial assets), is the carrying amount of those assets as indicated in the Statement of Financial Position.

 

Liquidity risk

Liquidity risk is the risk that the company may not be able to generate sufficient cash resources to settle its obligations in full as they fall due. The Board holds regular meetings with management to ensure sufficient cash is available for operations.

 

Management of capital

The primary objective of the company’s management of capital is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. No changes were made in the objectives, policies or processes during the year ended 31 December 2023.

18
Trade and other payables
2023
2022
£
£
Trade payables
124,673
157,745
Accruals
4,194,820
2,415,614
Social security and other taxation
1,756,975
640,371
6,076,468
3,213,730
MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
19
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

ACAs
Tax losses
Interest rate swaps
Loan relationship deficit
Total
£
£
£
£
£
Liability at 1 January 2022
10,712,954
(4,972,389)
(492,345)
-
5,248,220
Deferred tax movements in prior year
Charge/(credit) to profit or loss
1,713,017
770,043
-
171,704
2,654,764
Effect of change in tax rate - profit or loss
540,953
243,172
-
54,222
838,347
Other
3,454
226,684
492,345
(225,926)
496,557
Liability at 1 January 2023
12,970,378
(3,732,490)
-
0
-
9,237,888
Deferred tax movements in current year
Charge/(credit) to profit or loss
(37,965)
826,900
-
-
788,935
Liability at 31 December 2023
12,932,413
(2,905,590)
-
0
-
10,026,823

Deferred tax provision

 

Deferred tax has not been recognised on restricted interest of £29,946,904 (2022: £24,364,863) under Corporate Interest Restriction rules. This has not been recognised as the current criteria have not been met but may be in the future.

 

Factors that may affect future tax charges

 

Increase in the UK corporation tax rate from 19% to 25% was substantively enacted on 1 April 2023. Any deferred tax balance at 31 December 2023 has been calcuated using 25%.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Authorised
Ordinary shares of 1p each
20,200
20,200
202
202
Issued and fully paid
Ordinary shares of 1p each
20,200
20,200
202
202

The balances classified as share capital and share premium represents the proceeds (both nominal value and share premium) on issue of the company’s equity share capital comprising £0.01 ordinary shares.

 

MARGAM GREEN ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
21
Share premium account
2023
2022
£
£
At the beginning and end of the year
17,142,036
17,142,036
22
Capital risk management

The company is not subject to any externally imposed capital requirements.

23
Related party transactions

As at 31 December 2023, the company had a loan payable of £109,862,059 to the parent company, Greencoat Brecon Limited. During the period, the company incurred total interest payable on the loan of £8,169,458. The accrued interest payable at the end of the period and has been included in amounts due in less than one year.

 

 

24
Controlling party

The company’s immediate parent undertaking is Greencoat Brecon Limited, a company incorporated in the United Kingdom.

Greencoat Brecon Limited is owned by Greencoat Wilton LP, Greencoat Tachbrook LP, Greencoat Renewable Income LP and Greencoat Solar LP. Greencoat Tachbrook LP and Greencoat Renewable Income LP owns 42.85% and 34.72% shareholding respectively. No other individual company owns more than 25% of the shareholding.

25
Cash generated from operations
2023
2022
£
£
(Loss)/profit for the year before income tax
(1,496,849)
5,149,266
Adjustments for:
Finance costs
8,169,833
9,522,719
Investment income
(562,032)
-
0
Depreciation and impairment of property, plant and equipment
7,936,067
7,899,246
Other gains and losses
-
(1,969,381)
Movements in working capital:
(Increase)/decrease in trade and other receivables
(926,807)
2,803,217
Increase/(decrease) in trade and other payables
2,862,738
(8,904,317)
Cash generated from operations
15,982,950
14,500,750
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