COMPANY REGISTRATION NUMBER 07042490
ESKEN RENEWABLES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
ESKEN RENEWABLES LIMITED
COMPANY INFORMATION
Directors:
R Jenkins
J Drewe-Smith
S Miller
Registered office:
Viking House
Mathieson Road
Widnes
WA8 0NX
Auditor:
Forvis Mazars LLP
1 St Peter's Square
Manchester
M2 3DE
Banker:
Barclays Bank
The Headrow
Leeds
Yorkshire
LS1 6PU
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ESKEN RENEWABLES LIMITED
STRATEGIC REPORT
YEAR ENDED 29 FEBRUARY 2024
Principal activity
Business model
The company is a renewable energy processor as well as a central aggregator, specialising in sourcing and distributing renewable fuel to customers in the form of processed recycled waste woods, virgin chip derived from forestry and refuse derived fuel on a long-term contractual basis.
The company offers a total supply solution based on expertise across the supply chain from materials sourcing and quality control, day to day logistical management to on-site fuel preparation and supportive administration and is frequently involved from the early stages of project layout design and the planning of materials handling. Working with our own processing sites and partner sites we can audit and manage the supply quality and provide relevant sustainability data required.
Business review, results and future developments
During the year Esken Group completed the sale of Esken Renewables to Pioneer Infrastructure Partners SCSp. The transaction was completed on 1 December 2023.
Although Pioneer Infrastructure Partners SCSp are the ultimate parent company of Esken Renewables Limited there are a number of businesses in the group structure each with 100% of the share capital of its subsidiary. The stack of companies is listed below in order of ownership.
Pioneer Infrastructure Partners SCSp
Pioneer 1 UK Master Holdco Limited
Pioneer Balmoral Topco Limited
Pioneer Balmoral Midco Limited
Pioneer Balmoral Finance Limited
Pioneer Balmoral UK Limited
Esken Renewables Limited
Turnover increased by 8.5% in the year to £101.7m (2023: £93.7m).
Plant revenues have increased due to becoming the exclusive supplier at a major forestry by-products customer which has increased volumes supplied.
Prior year was impacted by a significant unplanned outage at several key customer plants.
The operating profit for the year was £9.2m (2023 Profit £8.7m). The company's loss before taxation amounted to £3.4m (2023 Profit £7.0m). Exceptional costs of £9.7m (2023 £nil) was the main contributory factor for the reduction in profit.
The results have been impacted by several factors
One off claims for £9.7m (2023 £nil) relating to change of ownership have been shown as exceptional costs
One off claims for £2.5m (2023 £nil) relating to settlements agreed with key customers in the year recognised against cost of sales.
The current year was impacted by the waste wood gate fee market due to market conditions and price pressures caused by increased export demand. To ensure the volume required to supply contractual requirements the gate fee price was reduced throughout the country, causing a reduction in the gate fee revenue. This continued at the start of FY25 but has since recovered.
Spend on direct materials increased by 30.4% to £53.6m (2023 £41.1m). This was due to additional sales volume.
Inflationary pressures have been partially eased by RPI-linked indexation elements within the long-term customer supply contracts.
Management continued its focus on maintaining strong customer & supplier relationships.
Management have continued its focus on optimising performance as the business continues to mature.
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ESKEN RENEWABLES LIMITED
STRATEGIC REPORT
YEAR ENDED 29 FEBRUARY 2024
Key performance indicators
The key performance indicators used by the directors in assessing the performance of the business are tonnes supplied 1.7m (2023 1.6m) and EBITDA per tonne £9.49 (2023 £10.75).
Principal risks and uncertainties
The directors consider the key risks and uncertainties to the company achieving its growth targets to continue to be:
Availability of waste wood in key locations and fluctuations in gate fees – mitigated through strong relationships with key waste wood suppliers and spreading of risk across multiple suppliers.
Plant shutdown or failure – mitigated through contractual claim mechanisms and working closely with the plant to ensure fuel quality.
Changes in legislation and regulatory guidelines – mitigated by working closely with the Environment Agency.
Changes in government budget and support offered to the renewable energy industry – mitigated by long term strategy for future supply options
Shareholder value
Engaging with stakeholders to deliver long term success is a key area of focus for the Board and all decisions take in to account the impact on stakeholders. Obviously, stakeholders are impacted by, or benefit from, decisions made by the Board in different ways. However, it is the Board's priority to ensure that the Directors have acted both individually and collectively in the way that they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole with regard to all its stakeholders and to the matters set out in paragraphs a-f of Section 172 of the Companies Act 2006
a)
The board annually approves the five-year plan and monitors its implementation through the year using detailed reports on operating and financial performance. In approving the strategy, the Directors also consider external factors such as competitor behaviour, the performance of the industry, as well as the evolving economic, political and market conditions.
b)
The Directors understand the importance of the company's employees to the long-term success of the business. The health and safety of the employees (and other stakeholders) remains its main priority and the Directors review the performance in this area at each board meeting. The company regularly communicates to its employees through presentations, internal company-wide emails and newsletters. The company provides ongoing training to employees and regular appraisals to further their career development.
c)
The Board regularly reviews how the company maintains positive relationships with all of its stakeholders, including suppliers, customers and others. There has been significant investment in developing the supply chain to meet the demands of all customers. Key account managers are in place across the business to ensure relationships are being closely managed and they work hard to resolve any issues quickly as they arise.
d)
We are committed to creating sustainable, long-term opportunities in our communities. In addition to aiming to become an employer of choice in our communities, we also seek to engage with the wider community in which we operate. The business recognises its responsibility to manage the environmental impacts of our activities, products, and services in all areas of our business and is committed to continual improvement of environmental systems and enhancing performance through ongoing review and the setting of objectives and targets which are an integral part of our management review. A charity and volunteering committee is in place to support with engagement.
e)
The Directors take the reputation of the company seriously which is not limited to only operational and financial performance. The Board has approved several policies including anti-slavery and human trafficking and anti-bribery and corruption.
f)
The Directors act fairly across all members and shareholders of the company and ensure that it remains a sustainable long-term business.
Esken Renewables is required under Companies Act 2006 (Strategic Report and Directors' Report) Regulation 2018 to disclose annual UK energy consumption and Greenhouse Gas (GHG) emissions.
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ESKEN RENEWABLES LIMITED
STRATEGIC REPORT
YEAR ENDED 29 FEBRUARY 2024
Roadmap to Net Zero
Esken Renewables is committed to reducing its operational impact on the climate and in government policy has developed a road map to net zero.
The business has robust data collection systems in place which has underpinned the reduction targets for decarbonisation for Esken Renewables.
Esken Renewables has developed a road map to net zero by 2040 and have identified short, medium & long-term reduction targets for both scope 1 and 2 carbon emissions. (Scope 3 emissions are also reported below for information).
Scope 1
·
Esken Renewables scope 1 emissions are 92% of the carbon footprint, (i.e. including Scope 1 and 2 emissions only as summarised below). Diesel makes up 99% of the scope 1 emissions. Diesel Removal along with gas oil will reduce Esken Renewables scope 1 Emissions to <1%, in the short term an 8% reduction aggravated over the next three to five years would be achieved with the new fleet replacement. Esken Renewables will also replace small vehicles and trial biofuels on site.
Scope 2
·
Esken Renewables scope 2 emissions are 8% of the carbon footprint. Esken Renewables have established a medium term reduction plan to move to a renewable energy contract by 2030 reducing scope 2 emissions by 100%.
Greenhouse Gas (GHG) Footprint Comparison
FY22/23
FY23/24
Total Change
Scope 1
14,411
13,227
1,184
Scope 2
1,364
1,138
226
Scope 3
16,968
12,123
4,845
GHG Emissions Scope
Scope 1
·
Diesel Fuel consumed in Esken's vehicle fleet for collection of wood by-products and waste wood from suppliers, and delivery of processed wood chips to customers.
·
Diesel fuel consumed by plant and machinery in Esken-owned processing facilities such as Tilbury and other facilities.
·
Fuel oil used for heating and hot water in offices and welfare facilities owned or leased by Esken Renewables.
·
Emissions from Esken Renewables' company cars.
Scope 2
·
Electricity purchased by Esken Renewables and used on all Esken owned or leased offices and facilities.
Scope 3
·
Emissions from the mining, processing and manufacture of goods and raw materials consumed by Esken Renewables (e.g. tyres and batteries for fleet vehicles, oils and lubricants for plant and fleet).
·
Emissions from water supply and wastewater treatment for water used in all Esken Renewables owned and leased offices and facilities.
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ESKEN RENEWABLES LIMITED
STRATEGIC REPORTtrue
YEAR ENDED 29 FEBRUARY 2024
·
Emissions from business travel by land, air and sea.
·
Emissions associated with the treatment or disposal of waste generated by Esken Renewables.
·
Emissions associated with haulage of wood to Esken facilities or from Esken to customers by third party hauliers.
In the FY23/24 Esken Renewables' Scope 1 and 2 emissions totalled 14,365 tonnes of carbon dioxide equivalent (tCO2e) which is a decrease of 2,466 tCO2 against the baseline year of FY21/22 (16,831 tCO2).
Carbon data reporting methodology
The Methodology used to prepare Esken Renewables' carbon data calculation has been detailed below:
·
Based on BEIS (2023) Greenhouse gas reporting: conversion factors 2023:
·
For Esken Renewables' carbon footprint the intensity metric used for total Greenhouse Gas (GHG) emissions per £m revenue (tCO2e/£m) for normalising emissions.
·
For Esken Renewables' carbon footprint the intensity metric used for total Greenhouse Gas (GHG) per tonnage of wood supplied (tCO2e/tonnes).
·
All scope 1 to 3 emission sources estimated to be greater than 1% have been deemed material and are included.
·
Scope 1 to 3 data has been collected from within the UK.
·
Includes emissions that Esken is responsible for based on an operational control approach.
·
Esken Renewables undertook third-party research with Logika Consultants to validate scope 1-3 emissions data.
On behalf of the board
J Drewe-Smith
Director
9 September 2024
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ESKEN RENEWABLES LIMITED
DIRECTORS' REPORT
YEAR ENDED 29 FEBRUARY 2024
The directors present their report and the financial statements of the company for the year ended 29 February 2024.
Dividends
During the year the company has not paid a dividend (2023: £nil).
Directors
The directors who served the company during the year are listed below. All directors served throughout the year unless otherwise indicated.
R Jenkins
J Drewe-Smith
S Miller (appointed 1 December 2023)
L I Girdwood (resigned 24 July 2023)
N Dilworth (resigned 1 December 2023)
Political and charitable contributions
No charitable or political contributions were made by the company in either the current or prior year.
Financial risk management objectives and policies
As a subsidiary of Pioneer Balmoral UK Limited, the company has adopted the group's policies on risk management. The risks are assessed as operational, compliance and financial. Regular reviews of these risks are carried out by the board and managed through a detailed risk register.
Disclosure of information to auditor
The directors who held office at the date of approval of this directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the company's auditor is unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, the Directors' 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 they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework. 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, the directors are required to:
·
select suitable accounting policies and then apply them consistently;
·
make judgements and estimates that are reasonable and prudent;
·
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
·
access the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the company or to
cease operations, or have no realistic alternative but to do so.
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 responsible for such internal control as they determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.
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ESKEN RENEWABLES LIMITED
DIRECTORS' REPORT
YEAR ENDED 29 FEBRUARY 2024
Future Developments
Post change of ownership, Esken Renewables Limited has invested significantly in the upgrading of existing fleet and equipment to ensure we are utilising the latest technology available and the environmental benefits it brings. Following the waste wood market challenges in FY24 this continued at the beginning of FY25 but has now improved.
Research and Development
Esken Renewables Limited is a recognised industry leader in biomass fuels, given the experience in the sector, the business continues to lead the market in the development of waste wood production techniques, fuel quality and IT system development.
Post Balance Sheet Events
There are no significant post balance sheet events to note.
Going concern
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 cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements which indicate that, the company will continue to be able to meet its obligations as they fall due. Please see note 1 for further details. The Directors are comfortable that the going concern assumption remains appropriate.
Appointment of Auditors
Pursuant to Section 487 of the Companies Act 2006, the shareholders have agreed to the appointment of Forvis Mazars LLP as auditors for the year ended 29 February 2024.
On behalf of the board
J Drewe-Smith
Director
9 September 2024
Registered address:
Viking House
Mathieson Road
Widnes
WA8 0NX
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Independent auditor's report to the members of Esken Renewables Limited
Opinion
We have audited the financial statements of Esken Renewables Limited (the ‘Company') for the year ended 29 February 2024 which comprise the profit and loss account and other comprehensive income, balance sheet, statement of changes in equity, statement of cash flows and notes to the financial statements, a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
·
give a true and fair view of the state of the Company's affairs as at 29 February 2024 and of its loss for the year then ended;
·
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
·
have been prepared in accordance with the requirements of the Companies Act 2006.
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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our audit procedures to evaluate the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included but were not limited to:
·
Undertaking an initial assessment at the planning stage of the audit to identify events or conditions that may cast significant doubt on the Company's ability to continue as a going concern;
·
Evaluating the directors' method to assess the Company's ability to continue as a going concern;
·
Evaluating the key assumptions used and judgements applied by the directors in forming their conclusions on going concern; and
·
Reviewing the appropriateness of the directors' disclosures in the financial statements].
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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 the audit:
·
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; andtrue
·
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In 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:
·
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
·
the financial statements are not in agreement with the accounting records and returns; or
·
certain disclosures of directors' remuneration specified by law are not made; or
·
we have not received all the information and explanations we require for our audit.
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Responsibilities of Directors
As explained more fully in the directors' responsibilities statement set out on page 6, 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 the financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: environmental laws, employment regulation, anti-money laundering regulation, and UK tax legislation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
·
Inquiring of management and, where appropriate, those charged with governance, as to whether the Company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
·
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
·
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
·
Considering the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
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In addition, we evaluated the directors' and management's incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to manual journal postings to manipulate financial performance, cut-off and completeness of revenue related to the delivery of processed material to biomass plants and related accrued income, and management bias through judgements and assumptions in significant accounting estimates and significant one-off transactions.
Our audit procedures in relation to fraud included but were not limited to:
·
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
·
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
·
Discussing amongst the engagement team the risks of fraud; and
·
Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of the audit 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.
Valerie Levi (Senior Statutory Auditor)
for and on behalf of Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
One St Peters Square
Manchester
M2 3DE
9 September 2024
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ESKEN RENEWABLES LIMITED
PROFIT AND LOSS ACCOUNT AND OTHER COMPREHENSIVE INCOME
YEAR ENDED 29 FEBRUARY 2024
2024
2023
Note
£
£
93,748,171
101,712,001
Turnover
2
(72,040,484)
(86,349,853)
Cost of sales
21,707,687
Gross profit
15,362,148
598,582
Other income
3
511,255
(12,555,738)
(6,721,482)
Administrative expenses
Impairment of tangible fixed assets
(1,015,859)
8,734,672
Operating (loss) / profit
4
9,151,921
(1,782,199)
Interest payable and similar charges
6
(2,844,961)
-
Exceptional Costs
7
(9,739,000)
(3,432,040)
6,952,473
(Loss) / Profit before taxation
1,028,985
Tax on Profit
8
(2,220,581)
(5,652,621)
7,981,458
(Loss) / Profit after taxation
Items that will not be reclassified to profit or loss:
(273,001)
Change in fair value of investments
-
Other comprehensive income/(expense), net of tax
(5,925,622)
7,981,458
Total comprehensive income for the year
All of the activities of the company are classed as continuing.
The notes on pages 16 to 30 form part of these financial statements.
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ESKEN RENEWABLES LIMITED
BALANCE SHEET
AT
29 FEBRUARY 2024
29 February 2024
2024
2023
Note
£
£
Fixed assets
16,667,273
16,667,273
Goodwill
9
Intangible assets
10
9,627,856
-
49,067,382
46,203,103
Tangible assets
11
273,001
Investments
12
111,900
-
Non-current assets
13
72,498,232
66,119,556
Current assets
601,664
Stocks
14
677,850
Debtors
15
22,889,083
22,255,014
Restricted Cash
-
1,000,000
7,612,011
Cash at bank and in hand
2,695,442
26,262,375
31,468,689
(29,800,022)
Creditors: amounts falling due within one year
17
(19,786,163)
Net current assets
6,476,212
1,668,667
Total assets less current liabilities
78,974,444
67,788,223
Creditors: amounts falling due after more than one year
18
(51,425,641)
(34,313,797)
Net assets
27,548,803
33,474,426
Capital and reserves
200,000
Called-up share capital
20
200,001
Profit & Loss Account
27,348,803
33,274,425
Shareholders' funds
33,474,426
27,548,803
These financial statements were approved by the board of directors on
9 September 2024
09 September 2024
and were signed on its behalf by:
J Drewe-Smith
Director
Company Registration Number: 07042490
The notes on pages 16 to 30 form part of these financial statements.
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ESKEN RENEWABLES LIMITED
STATEMENT OF Changes in Equity
YEAR ENDED 29 FEBRUARY 2024
Share
Profit and
capital
loss account
Total equity
£
£
£
200,001
25,223,720
25,423,721
Balance at 1 March 2022
Profit for the financial year
-
7,981,458
7,981,458
Change in fair value of investments
-
-
-
Total comprehensive income for the year
-
7,981,458
7,981,458
Share-based payment credit
-
62,200
62,200
Tax on share-based payment credit
-
7,047
7,047
200,001
Balance at 28 February 2023
33,274,425
33,474,426
Share
Profit and
capital
loss account
Total equity
£
£
£
Balance at 1 March 2023
33,274,425
33,474,426
200,001
Loss for the financial year
-
(5,652,621)
(5,652,621)
Change in fair value of investments
(1)
(273,001)
(273,002)
Total comprehensive income for the year
(1)
(5,925,622)
(5,925,623)
Share-based payment credit
-
-
-
Tax on share-based payment credit
-
-
-
200,000
Balance at 29 February 2024
27,348,803
27,548,803
The notes on pages 16 to 30 form part of these financial statements.
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ESKEN RENEWABLES LIMITED
STATEMENT of Cash Flows
YEAR ENDED 29 FEBRUARY 2024
Cash Flows from Operating Activities
2024
2023
(Loss)/Profit for the year
(5,652,621)
7,981,458
Adjustments for non-cash items
Depreciation
6,660,170
7,614,726
Amortisation 10
372,144
-
Gain on sale of fixed assets
(631,739)
(763,916)
Disposal of Fixed Assets
(6,875,501)
-
Release of grant income 4
144,906
(541,087)
Impairment of Fixed Assets
-
1,015,859
Share option credit
-
62,200
Interest expense 6
2,844,961
1,782,199
Taxation 8
2,220,581
(1,028,985)
(Increase)/Decrease in stock
(76,186)
199,832
(Increase) in trade and other debtors
(3,198,752)
(4,509,073)
(Decrease) in trade and other creditors
(6,754,178)
(7,528,312)
Cash generated from operations
(10,946,215)
4,284,901
Taxation Received
456,002
330,947
Net cash flow from operating activities
(10,490,213)
4,615,848
Cash Flows from Investing Activities
Purchase of PPE and investment property 11
(2,010,324)
(3,612,560)
Purchase of Intangible Assets 10
(10,000,000)
-
Proceeds from new finance leases
1,220,438
3,111,800
Proceeds from the sale of PPE and investment property
2,246,551
2,032,973
Net cash flows from investing activities
(8,543,335)
1,532,213
Cash Flows from Financing Activities
Payment of grant
(1,649,574)
-
Payment of finance leases
(9,135,902)
(6,124,620)
Payment of IFRS16 lease liabilities
(1,124,579)
(1,350,963)
Proceeds from intercompany borrowings
26,816,904
-
Interest paid
(1,789,870)
(1,685,164)
Restricted cash
1,000,000
(1,000,000)
Net cash flows from financing activities
14,116,979
(10,160,747)
Net (decrease) in cash and cash equivalents
(4,916,569)
(4,012,686)
Cash and cash equivalents at beginning of period
7,612,011
11,624,697
Cash and cash equivalents at end of period
2,695,442
7,612,011
The notes on pages 16 to 30 form part of these financial statements.
- 15 -
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
1.
Accounting policies
Basis of preparation
Esken Renewables Limited (“the Company”) is a company incorporated and domiciled in the UK, the registered office is noted on page 1.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101"). In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of international accounting standards in conformity with the requirements of the Companies Act 2006 (“Adopted IFRSs”), but making amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The financial statements are rounded to the nearest pound except where otherwise stated.
The company is limited by shares.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.
Functional and Presentation Currency
The Company's functional currency is GBP and it has adopted GBP as its presentational currency.
Measurement convention
The financial statements are prepared on the historical cost basis except for equity investments and share based payments which are measured at fair value.
Going concern
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In forming this expectation, the directors have considered the financial position of the company in additional to projections from financial forecasts approved by senior management covering a five-year period.
Financial statements have used several assumptions including plant availability for planned and unplanned shutdowns, gate fee pricing by geographical area, indexation and cost fluctuations. The balance sheet and cash flow have also made assumptions regarding asset replacement cycles and asset finance availability.
As the business has remained stable for the previous years there are no significant changes to the assumptions being made. Consequently, the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.true
It is not expected to be required, however the ultimate parent company have committed to providing support if required to Esken Renewables Limited.
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition-date fair value, and the amount of any non-controlling interest in the acquiree. Acquisition costs are expensed and included within operating profit/loss.
When acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. Any contingent consideration payable to be transferred by the acquirer is recognised at fair value at the acquisition date.
16
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
Goodwill is initially measured at cost, being the excess of the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised for the non-controlling interest (and where the business combination is achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree) over the net identifiable amounts of the fair value of the assets acquired and the liabilities assumed in exchange for the business combination.
Contingent liabilities representing a present obligation are recognised if the acquisition-date fair value can be measured reliably. If the aggregate of the acquisition-date fair value of the consideration transferred (and where the business combination is achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree) is lower than the fair value of the assets, liabilities and contingent liabilities, and the fair value of any pre-existing interest held in the business acquired, the difference is recognised in the consolidated income statement.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Any impairment in carrying value is charged to the consolidated income statement. See note 8 for details on Goodwill.
Identifiable intangible assets, meeting either the contractual-legal or separability criterion, are recognised separately from goodwill.
Foreign currency
Transactions in foreign currencies are translated to the Company's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Foreign exchange differences arising on translation are recognised in the profit and loss account.
Classification of financial instruments issued by the Company
Financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:
they include no contractual obligations upon the company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the company; and
where the instrument will or may be settled in the company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company's own equity instruments or is a derivative that will be settled by the company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the company's own shares, the amounts presented in these financial statements for called up share capital exclude amounts in relation to those shares.
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other debtors, cash and cash equivalents, loans and borrowings, and trade and other creditors.
Investments in debt and equity securities held by the company are classified as being available-for-sale and are stated at fair value, with any resultant gain or loss being recognised directly in equity, except for impairment losses and, in the case of monetary items such as debt securities, foreign exchange
17
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
gains and losses. When these instruments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in profit or loss.
Trade and other debtors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses.
Trade and other creditors are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.
Cash and cash equivalents comprise cash balances and call deposits.
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.
Turnover
Plant turnover, gate fee turnover and waste removal turnover relate to the collection and supply of biomass material and is recognised in the profit and loss account in line with IFRS 15. Turnover is recognised at point of delivery or collection which reflects when significant risks and rewards of ownership have been transferred and performance obligations have been met.
Haulage turnover relates to the transport of goods and is recognised in the profit and loss account in line with IFRS 15. Turnover is recognised at the point of delivery of the goods when the company has fulfilled its obligations to the customer, when the amount of turnover can be measured reliably and when recovery of the consideration is probable If it is probable that contracted discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of turnover as the sales are recognised.
A breakdown of disaggregation of turnover by primary geographical market, major products/service lines and timing of turnover recognition is shown in note 2.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less accumulated depreciation. A lease is classified as an ROU lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, a lessor recognises assets held under a finance lease in its Balance Sheet and presents them as a receivable at an amount equal to the net investment in the lease. The lessor uses the interest rate implicit in the lease to measure the net investment in the lease and recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor's net investment in the lease.
Depreciation is charged to profit or loss on a systematic basis over the estimated useful lives of each part of an item of tangible fixed assets. The estimated useful lives are as follows:
Leasehold improvements
5% to 10% straight line
Buildings
5% to 15% straight line
Plant & machinery
6% to 50% straight line
Fixtures & equipment
20% to 33% straight line
Motor vehicles
12% to 30% straight line
Stocks
Processed stock is valued at the lower of cost and net realisable value. Cost is calculated based on a weighted average of the input costs incurred. Spare parts stock is valued at the weighted average purchase cost. Tyre stock is valued at the lower of cost and net realisable value and supported by a third-party valuation which is reviewed by management to ensure that the stock is not impaired.
18
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
Hire purchase agreements
Assets held under hire purchase agreements are capitalised in the balance sheet and are depreciated over the shorter of the lease term and the asset's useful economic life. The capital element of the future payments is treated as a liability in the balance sheet. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant rate of charge on the net obligations outstanding each period.
Government grants
Capital based government grants related to an asset are recognised as deferred income in the balance sheet on receipt of funds from the awarding government body and then credited in the profit or loss account over the useful life of the associated asset.
Leases
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The Company has elected not to recognise right-of-use assets and lease liabilities for lease of low-value assets and short-term leases. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Financial Instruments
1.
Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.
2.
Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment; FVOCI – equity investment; or FVTPL.
Investments in associates and subsidiaries are carried at cost less impairment.
Financial assets at amortised cost - These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
3.
Impairment
The company recognises loss allowances for expected credit losses (ECLs) on financial assets
19
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
measured at amortised cost.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the company's historical experience and informed credit assessment and including forward-looking information.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
4.
Intra-group financial instruments
Where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the company considers these to be insurance arrangements and accounts for them as such. In this respect, the company treats the guarantee contract as a contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee.
Pension costs
A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. 
Significant Judgements and estimates
The business makes judgements and estimates in preparing the financial statements. Judgements and estimates are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these judgements and estimates. There are no judgements or estimates that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
20
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
2.
Turnover
All revenue recognised relates to the supply of biomass material and can be categorised as follows:
Analysis of turnover by geographical market:
2024
2023
£
£
United Kingdom
101,712,001
93,748,171
101,712,001
93,748,171
Analysis of turnover by major product/service line:
2024
2023
£
£
Plant Revenue
87,153,382
74,562,619
Gate Fee
6,785,587
10,150,958
Waste Removal
906,308
1,303,026
Haulage
6,866,724
7,731,568
101,712,001
93,748,171
Analysis of turnover by timing of revenue recognition:
2024
2023
£
£
Products and services transferred at point in time
101,712,001
93,748,171
3.
Other Income
2024
2023
£
£
R&D tax credit
511,255
598,582
511,255
598,582
Other income is in relation to Research and Development tax credit scheme.
4.
Operating profit
The operating profit is stated after charging/(crediting):
2024
2023
£
£
Auditor's remuneration – audit services
83,720
120,000
Depreciation of fixed assets – owned assets
3,940,544
2,909,950
Depreciation of fixed assets – assets under hire purchase
1,464,254
3,370,507
Depreciation of fixed assets – assets under IFRS 16
1,255,372
1,334,269
Amortisation - contracts
372,144
-
Impairment of fixed assets
-
2,423,827
Impairment - IFRS 16 Lease liability
-
(1,407,968)
Amortisation of government grant
144,906
(541,087)
Operating lease payments
50,296
21,395
(Gain)/Loss on foreign currency translation
1,052
(119)
Gain/(Loss) on disposal of fixed assets
631,739
763,916
Disposal of fixed assets
6,875,501
-
21
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
5.
Directors and employees
2024
2023
£
£
Wages and salaries
12,433,167
12,478,396
Social security costs
1,159,642
1,043,595
Pension contributions
339,314
369,174
Share based payments
-
62,200
13,932,123
13,953,365
The company makes contributions to certain employees' defined contribution pension schemes. The pension cost charge represents contributions payable by the company and during the year. Accrued contributions at 29 February 2024 amounted to £72,746 (2023: £53,786).
The average number of employees during the year was as follows:
2024
2023
Number
Number
Production / processing
200
224
Management, sales and administration
93
87
293
311
Directors' remuneration in respect of qualifying services which is borne by the company is set out below.
2024
2023
£
£
Emoluments and benefits in kind
312,450
425,608
Pension contributions
29,245
28,956
341,695
454,564
During the year, two directors (2023: two director) accrued benefits under defined contribution company pension schemes.
Renumeration disclosed above included the following amounts paid to the highest paid director.
2024
2023
£
£
Emoluments and benefits in kind
190,250
287,114
Pension contributions
18,025
17,956
208,275
305,070
In addition to the above, emoluments totalling £nil (2023: £710,876), and company pension contributions totalling £nil (2023: £67,000) were borne by other group companies, in respect of the directors of the company who are also directors of the parent company and fellow subsidiaries. The directors do not
22
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
believe that it is practicable to apportion costs being borne by other group companies, between their services as directors of the company and their services as directors of the parent and fellow subsidiary companies.
6.
Interest payable and similar charges
2024
2023
£
£
Interest on hire purchase agreements
688,472
589,055
Interest on lease liabilities
1,103,415
1,193,144
Intercompany Loan Interest
1,053,074
-
2,844,961
1,782,199
7
Exceptional Costs
2024
2023
£
£
Costs incurred relating to Change of Ownership
9,739,000
-
9,739,000
-
These exceptional costs were incurred directly in relation to the sale of Esken Renewables Limited. These costs will not be recurring and are one off transactional fees.
23
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
8.
Taxation on ordinary activities
(a) Analysis of tax credit in the year
2024
2023
£
£
Current tax:
UK Corporation tax at 24.49% (2023: 19%)
463,894
114,207
Adjustment in respect of prior years
27
Total current tax
463,894
114,234
Deferred tax (see note 14)
Origination and reversal of temporary differences
1,734,315
1,113,623
Adjustment in respect of prior years
22,372
436,683
Effect of changes in tax rates
(466,279)
Total deferred tax
1,756,687
(1,143,219)
Total tax credit
2,220,581
(1,028,985)
(b) Factors affecting total tax charge
The difference between the tax assessed in the year and the charge based on the standard rate of corporation tax in the UK of 24.49% (2023: 19%) is reconciled as follows:
2024
2023
£
£
(Loss)/Profit for the year
(5,652,621)
7,981,458
Total tax Charge/(credit)
2,220,581
(1,028,985)
(Loss)/Profit excluding taxation
(3,432,040)
6,952,473
Tax using the UK corporation tax rate of 24.49% (2023: 19%)
(840,568)
1,320,970
Adjustment in respect of prior years
22,371
436,710
Fixed Asset Differences
(1,039,227)
-
Items not deductible/assessable to tax
2,413,821
139,203
Income not taxable
(102,807)
Transfer pricing
(65,466)
Other Adjustments, reliefs and transfers
(26,381)
-
Additional deduction for land remediation expenditure
(13,470)
-
R&D Expenditure Credits
(41,380)
-
Deferred tax chargeable Gains / (Losses)
1,710,160
-
Effect of changes in tax rates
35,254
(466,279)
Group relief
(2,296,448)
Share Options
-
5,133
Amounts not recognised
-
(1)
Total tax credit for the year
2,220,580
(1,028,985)
24
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
9
Goodwill
£
Cost
At 1 March 2023 and 28 February 2024
17,038,335
Amortisation
At 1 March 2023 and 28 February 2024
371,062
Net book value
At 28 February 2024
16,667,273
At 28 February 2023
16,667,273
The goodwill arose on the acquisition of trade and assets from AHS Energy Limited in July 2010 which is £1,700,983 of the net book value. The remainder of the goodwill arose on the transfer of trade and assets from Esken Biomass Transport Limited in April 2020.
The recoverable amount of goodwill in Esken Renewables has been based on value-in-use calculations using projections from financial forecasts approved by senior management covering a five-year (2023: five-year) period. The main assumptions on which the forecasts were based include gate fee income cash flows and estimated contracted volumes supplied. The gate fee income and profit margins are based on management's experience and are primarily determined by gate fees received and material costs. The pre-tax discount rate applied to the cash flow projections was 11.5% (2023: 12.7%) based on a weighted average cost of capital based on market participant parameters, taking into account the cost of equity and debt, and adjusting for risk specific to the business. Cash flows beyond the five-year period have been recognised up to 2037, being the expiration of Renewable Obligation Certificates (ROCs) issued to renewable energy plants, with an annual growth rate of 2.0% (2023: 2.0%) assumed in the calculations beyond year five. Whilst not all long-term fuel supply agreements go out to at least 2037 the Directors are satisfied that it is more likely than not that all will run to at least this point through contract renewals and extensions.
No impairment losses have been recognised in the current or prior year. The calculation of the value-in-use is most sensitive to the discount rate, gate fee income received, and substantial achievement of contracted volumes as the business matures. However, the Directors are satisfied that the risk of all sensitivities crystallising is remote.
The discount rate used in the impairment workings is in line with those used in the prior year. The methods used to determine the factors within the discount rate calculations were consistent with the prior year.
10
Intangible Assets
£
Cost
At 1 March 2023
Additions
10,000,000
Amortisation
Year to 29 February 2024
(372,144)
Net book value
At 29 February 2024
9,627,856
At 28 February 2023
25
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
11.
Tangible fixed assets
Land & buildings
Plant &
Fixtures &
Motor
machinery
equipment
vehicles
Total
£
£
£
£
£
Cost
At 1 March 2023
43,443,457
28,708,949
1,127,533
14,177,293
87,457,232
Additions
110,000
1,889,928
10,396
-
2,010,324
Recognition of right-of-use assets
3,518,662
-
-
-
3,518,662
Transfer between categories
-
-
-
-
-
Disposals
(12,861,041)
(3,140,979)
(955,152)
(1,098,636)
(18,055,808)
At 29 February 2024
34,211,078
27,457,898
182,777
13,078,657
74,930,410
Depreciation
At 1 March 2023
18,477,781
11,655,088
1,003,501
7,253,479
38,389,849
Charge for the year - Owned
530,508
1,796,987
122,183
1,490,866
3,940,544
Charge for the year - HP
-
851,344
-
612,910
1,464,254
Charge for the year IFRS 16
1,371,140
-
-
2,515
1,373,655
Disposals
(11,680,401)
(2,831,744)
(955,002)
(973,849)
(16,440,996)
Impairment
-
-
-
-
-
At 29 February 2024
8,699,028
11,471,675
170,682
8,385,921
28,727,306
Net book value
At 29 February 2024
25,512,050
15,986,223
12,095
4,692,736
46,203,104
At 28 February 2023
24,965,676
17,053,861
124,032
6,923,814
49,067,383
The figures stated above do not include any borrowing costs, however, they include assets held under finance leases and similar hire purchase contracts as follows:
Land & buildings
Plant &
Fixtures &
Motor
machinery
equipment
vehicles
Total
£
£
£
£
£
NBV at 29 February 2024
-
4,094,923
-
1,097,946
5,192,869
NBV at 28 February 2023
859,331
11,173,125
-
5,965,269
17,997,725
At 29 February 2024, property, plant and equipment includes right-of-use assets as follows:
Land & buildings
Plant &
Fixtures &
Motor
machinery
equipment
vehicles
Total
£
£
£
£
£
NBV at 29 February 2024
19,821,450
-
-
-
19,821,450
NBV at 28 February 2023
17,673,928
-
-
2,515
17,676,443
26
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
12.
Fixed asset investments
2024
2023
£
£
Fair value of 7.5% equity interest in Esken Brands
-
272,000
Investment in Esken Biomass Transport
-
1,001
-
273,001
The 7.5% equity interest held in Esken Brands (formerly Stobart Group Brands) LLP, a limited liability partnership incorporated in the UK and whose principal activity is the management of intellectual property. This includes a 2.17% right to profit. Upon change of ownership on 1st December 2023 Esken Renewables retired as a member of the Esken Brands LLP and disposed of the investment.
The company held an investment in 100% of the ordinary shares Esken Biomass Transport until 2nd May 2023 when the company was dissolved.
13.
Non-current assets
2024
2023
£
£
Long term loan
111,900
The long-term asset related an unsecured loan which had regular repayments until April 2024 Therefore the loan is now included within current assets. There was no interest on this loan.
14.
Stocks
2024
2023
£
£
Processed stock
208,585
114,530
Tyre stock
294,257
294,257
Spare parts
115,519
85,519
Other
59,489
107,358
677,850
601,664
Stock recognised as cost of sales in the year amounted to £7.2 million (2023 : £9.5 million).
27
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
15.
Debtors
2024
2023
£
£
Trade debtors
8,337,675
7,285,087
Amounts owed by related parties (note 20)
387,895
Prepayments
1,089,934
124,001
Accrued income
7,490,776
5,745,890
Short term loan
124,359
102,000
Corporation tax
531,913
939,975
Other Taxes
1,506,702
Deferred taxation (note 14)
4,860,312
6,617,578
22,889,083
22,255,014
The short-term asset relates to one (2023: one) unsecured loan which had regular repayments until April 2024. There was no interest on these loan.
16.
Deferred taxation
The movement in the deferred taxation balance during the year was as follows:
2024
2023
£
£
Deferred tax asset at 1 March 2023
6,617,577
5,467,312
Adjustment in respect of prior years
(579)
(436,683)
Charge to profit and loss account
(1,756,686)
1,579,901
Credit to equity
-
7,047
Deferred tax asset at 29 February 2024
4,860,312
6,617,577
The deferred tax asset is analysed as follows:
2024
2023
£
£
Difference between capital allowances and depreciation
4,839,137
6,575,820
Temporary differences trading
21,754
19,381
R&D expenditure credit
-
-
Share options
-
22,376
4,860,891
6,617,577
The deferred tax charge at 29 February 2024 has been calculated based on the rate of 25% (2023: 25%) substantively enacted at the balance sheet date. Deferred tax of £1,756,686 (2023: (£1,143,219)).
28
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
17.
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
6,210,766
7,182,141
Social security and other taxes
295,510
1,777,138
Lease liabilities
4,437,773
7,691,158
Amounts owed to group undertakings
6,955,672
Accruals and deferred income
8,842,114
6,193,913
19,786,163
29,800,022
Lease obligations relate to all lease obligations under IFRS 16.
18.
Creditors: amounts falling due after more than one year
2024
2023
£
£
Lease liabilities
23,555,663
32,815,426
Deferred income
1,498,371
Amounts owed to group undertakings
27,869,978
-
51,425,641
34,313,797
Amount owed to group is not due to be settled for at least 12 months after the reporting period. Interest is charged monthly on the balance at a rate of 15% per year. Lease obligations relate to all lease obligations under IFRS 16.
19.
Other interest-bearing loans and borrowings
This note provides information about the contractual terms of the Company's interest-bearing loans and borrowings, which are measured at amortised cost.
2024
2023
£
£
Lease liabilities
27,993,437
40,506,585
27,993,437
40,506,585
The maturity dates of the lease liabilities vary from one to sixteen years. For the split between leases liabilities falling due within one year and falling due after more than one year see notes 15 and 16.
20.
Share capital and reserves
2024
2023
£
£
Allotted, called up and fully paid
200,000 Ordinary shares of £1 each
200,000
200,000
835 A Ordinary shares of £0.001 each
1
200,000
200,001
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. The shares rank pari passu.
29
ESKEN RENEWABLES LIMITED
NOTES TO THE FINANCIAL STATEMENT
YEAR ENDED 29 FEBRUARY 2024
21.
Leases
Leases as a lessee
Right-of-use assets
Right-of-use assets related to lease properties that do not meet the definition of investment properties are presented as property, plant and equipment (note 9):
Motor Vehicles
Land and
buildings
Total
£
£
£
Balance at 1 March 2023
17,673,928
2,515
17,676,443
Additions to right-of-use assets
3,518,662
-
3,518,662
Depreciation charge for the year
(1,371,140)
(2,515)
(1,373,655)
Balance at 29 February 2024
19,821,450
-
19,821,450
The following amounts have been recognised in the profit and loss account:
Under IFRS 16
2024
2023
£
£
Interest on lease liabilities
(1,103,415)
(1,193,144)
Cash outflow for leases
2,226,855
2,447,073
22.
Related party transactions
Following the change of ownership on 1st December 2023 the related party transactions reported in 2023 are no longer relevant for 2024.
There were no other transactions with directors of the company.
23.
Capital commitments
The company had outstanding capital commitments of £nil at 29 February 2024 (2023: £nil).
24.
Contingent liability
The company has entered into a cross-guarantee arrangement in respect of the bank borrowings of Pioneer Balmoral UK, immediate parent. At 29 February 2024 the maximum potential liability amounted to £56,000,000 (2023: £20,000,000).
During the year various claims have been made against the company which are all being vigorously defended with the risk of outflow believed to be low but possible. Any settlement of these claims is covered by the previous parent company Esken Limited, therefore the net outflow will be £nil. The maximum exposure under these claims is £589,094 (2023: £2,560,000).
25
Immediate and ultimate parent company
The company is a subsidiary of Pioneer Balmoral UK Limited which is the immediate parent company. The ultimate parent company and controlling party is Pioneer Infrastructure Partners SCSp.
26
Post Balance Sheet Events
There are no significant post balance sheet events to note.
30
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