FRV Powertek Limited |
Notes to the Financial Satements |
for the year ended 31 December 2023 |
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1 |
General information |
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FRV Powertek Limited (the 'Company') is a private company limited by shares incorporated on 9 June 2022 in England and Wales, registration number 14161993. The Company's registered address is Building 7 Chiswick Park, 566 Chiswick High Road, United Kingdom, W4 5YG. |
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This Company is a holding company for a platform to develop, construct, own and operate a portfolio of energy storage system projects in the United Kingdom. |
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The Company's functional currency is the same as the primary economic environment in which it operates. All figures are presented in Pounds Sterling (£), rounded to the nearest Pound. |
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The Company's comparative accounting period from 9 June 2022 (the date of incorporation) to 31 December 2022 is not audited. Please refer to note 2.16 for explanation of restatement of prior year comparative figures. |
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2 |
Accounting policies |
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2.1 |
Basis of preparation |
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the requirements of the Companies Act 2006. The disclosure requirements of Section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. |
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2.2 |
Going concern |
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During the year, the Company made a loss of £833,127 and had net liabilities of £1,317,259 at 31 December 2023. The Company is dependent on its parent company for the working capital needs. The Company's parent entity has confirmed that for at least the next 12 months from the date of approval of these financial statements, it will continue to make available such funds that are needed by the Company. Based on these the Directors believe that it is appropriate to prepare the financial statements on a going concern basis. |
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2.3 |
Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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2.4 |
Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. The Company has not generated turnover to date. |
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2.5 |
Cost of sales |
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Cost of sales is measured at the fair value of the consideration paid or payable, net of discounts and value added taxes. Cost of sales includes costs of the developing project that have not reached critical milestones to capitalise (see accounting policy 2.9 'Tangible fixed assets'). |
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2.6 |
Administration costs |
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Administration costs are measured on an accruals basis at the fair value of the consideration paid or payable, net of discounts and value added taxes. |
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2.7 |
Interest payable |
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Interest payable is the amount of interest paid or payable on company borrowings (note 10). |
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2.8 |
Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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2.9 |
Tangible fixed assets |
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Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount. Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. |
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Depreciation is provided on the following basis: office equipment - Straight line depreciation, 5 years |
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
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Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income. The depreciation expense is charged to administrative expenses within the Statement of Comprehensive Income. |
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Development costs are capitalised and called 'assets under construction' based on the feasibility of the project being successful, as per the group capitalisation policy. These are not depreciated straight away but once construction is complete, these costs will be depreciated over the life of the asset. If the project is not successful, the capitalised costs are expensed. |
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2.10 |
Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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2.11 |
Cash and cash equivalents |
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Cash is represented by cash in the bank and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
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2.12 |
Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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2.13 |
Financial instruments |
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The Company has elected to apply the provisions of Section 11 "Basic Financial Instruments" of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Company's Statement of Financial position when the Company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts represented in teh financial statements when there is a leglly enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
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Basic financial assets |
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Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments. |
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Impairment of financial assets |
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Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the Statement of Comprehensive Income. |
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Financial liabilities |
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Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities. Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. |
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2.14 |
Leased assets |
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Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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2.15 |
Judgements and key sources of estimation uncertainty |
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In preparing these financial statements, the Directors have made the following judgements: Tangible fixed assets Tangible fixed assets are depreciated over their useful lives considering the residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Development costs Development costs are capitalised based on the feasibility of the project being successful, as per the group capitalisation policy. These are not depreciated straight away but once construction is complete these costs will be depreciated over the life of the asset. If the project is not successful, the capitalised costs are expensed. |
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2.16 |
Restatement of prior year comparative figures |
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The following table represents restatement made to Cost of sales and Debtors balances to adjust for receivable balance which was incorrectly reported as an expense in the 31 December 2022 unaudited financial statements. |
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Unaudited |
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Unaudited |
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Unaudited |
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31 Dec. 2022 |
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adjustment |
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restatement |
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as previously reported |
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total |
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£ |
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£ |
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£ |
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Unaudited statement of financial position |
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Fixed assets |
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Tangible fixed assets |
2,518 |
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- |
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2,518 |
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Current assets |
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Debtors |
89,093 |
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67,650 |
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156,743 |
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Cash and cash equivalents |
1,159,432 |
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- |
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1,159,432 |
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Creditors: amounts falling due within one year |
(85,439) |
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- |
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(85,439) |
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Net current assets |
1,163,086 |
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67,650 |
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1,230,736 |
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Total assets less current liabilities |
1,165,604 |
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67,650 |
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1,233,254 |
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Creditors: amounts falling due after more than one year |
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(1,717,386) |
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- |
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(1,717,386) |
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Net liabilities |
(551,782) |
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67,650 |
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(484,132) |
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Capital and reserves |
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Called up share capital |
101 |
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- |
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101 |
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Profit and loss account |
(551,883) |
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67,650 |
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(484,233) |
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Shareholders’ funds |
(551,782) |
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67,650 |
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(484,132) |
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Statement of comprehensive income |
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Cost of sales |
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(133,598) |
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67,650 |
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(65,948) |
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Gross loss |
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(133,598) |
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67,650 |
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(65,948) |
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Adminstrative expenses |
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(400,810) |
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- |
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(400,810) |
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Operating loss |
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(534,408) |
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67,650 |
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(466,758) |
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Interest payable |
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(17,475) |
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- |
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(17,475) |
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Loss before taxation |
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(551,883) |
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67,650 |
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(484,233) |
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Loss for the financial period |
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(551,883) |
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67,650 |
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(484,233) |
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Statement of changes in equity |
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Shares issued |
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100 |
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- |
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100 |
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Preference share capital |
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1 |
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- |
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1 |
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Profit and loss account |
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(551,883) |
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67,650 |
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(484,233) |
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(551,782) |
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67,650 |
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(484,132) |
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3 |
Operating loss |
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(Unaudited) |
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The operating loss is stated after charging: |
9 June 2022 to 31 December 2022 |
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2023 |
£ |
£ |
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Depreciation |
630 |
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630 |
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Audit fee |
18,000 |
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- |
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There are no non-audit services provided by the auditor. |
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4 |
Taxation |
(Unaudited) |
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9 June 2022 to 31 December 2022 |
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2023 |
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Corporation tax |
£ |
£ |
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Current tax on profits for the year |
- |
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- |
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Total current tax |
- |
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- |
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Deferred tax |
(438,700) |
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- |
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Total deferred tax |
(438,700) |
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- |
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Tax on loss |
(438,700) |
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- |
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Factors effecting tax charge for the year |
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The main rate of corporation tax changed from 19% to 25% from 1 April 2023 for companies with profits over £250,000. The tax assessed for the year is greater than (2022 - less than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below: |
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(Unaudited) |
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9 June 2022 to 31 December 2022 |
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2023 |
£ |
£ |
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Loss on ordinary activities before taxation |
(1,271,827) |
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(484,233) |
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Loss on ordinary activities before taxation multiplied by standard UK corporation tax of 23.52% (2022: 19.00%) |
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(299,134) |
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(92,004) |
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Effects of: |
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Expenses not deductible for tax purposes |
148 |
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148 |
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Changes to tax rates |
(23,999) |
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- |
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Deferred tax asset not recognised |
- |
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91,856 |
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Deferred tax asset now recognised |
(115,715) |
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- |
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(438,700) |
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- |
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As at 31 December 2023 the Company has losses of £1,754,800 (2022: £483,603) to carry forward. The future benefit of these losses has been recognised in the accounts to the extent where ultimate recoverability is probable. |
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Factors that may affect future tax charges |
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From 1 April 2023, the rate of corporation tax in the United Kingdom increased from 19% to 25%. Companies with profits of £50,000 or less are continuing to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase. Deferred tax recognised during the year has been calculated at 25%. |
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5 |
Employees |
2023 |
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2022 |
Number |
Number |
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Average number of persons employed by the Company |
- |
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- |
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There were no employee or director emoluments or company contributions to a defined contribution pension scheme in the year to 31 December 2023 (2022: none) |
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6 |
Tangible fixed assets |
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Assets under construction |
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Office equipment |
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Total |
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£ |
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£ |
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£ |
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Cost |
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At 1 January 2023 |
- |
|
3,148 |
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3,148 |
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Additions |
66,882 |
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- |
|
66,882 |
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At 31 December 2023 |
66,882 |
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3,148 |
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70,030 |
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Depreciation |
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At 1 January 2023 |
- |
|
630 |
|
630 |
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Charge for the year |
- |
|
630 |
|
630 |
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At 31 December 2023 |
- |
|
1,260 |
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1,260 |
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Net book value |
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At 31 December 2023 |
66,882 |
|
1,888 |
|
68,770 |
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At 31 December 2022 |
- |
|
2,518 |
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2,518 |
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(Unaudited Restated)* |
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7 |
Debtors |
2023 |
|
2022 |
£ |
£ |
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Due after more than one year |
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Deferred tax asset |
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|
438,700 |
|
- |
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|
438,700 |
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- |
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Due within one year |
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Prepayments |
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|
|
|
690,539 |
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68,500 |
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VAT recoverable |
43,445 |
|
88,243 |
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|
|
|
|
|
733,984 |
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156,743 |
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* Please refer to note 2.16 for explanation of restatement of prior year comparative figures. |
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(Unaudited) |
8 |
Deferred tax asset |
2023 |
|
2022 |
£ |
£ |
|
Deferred tax asset brought forward |
- |
|
- |
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Deferred tax credit to comprehensive income |
438,700 |
|
- |
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Deferred tax asset carried forward |
438,700 |
|
- |
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The deferred tax asset is made up as follows: |
(Unaudited) |
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
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Losses |
438,700 |
|
- |
|
|
|
|
|
|
438,700 |
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- |
|
|
|
|
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|
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(Unaudited) |
9 |
Creditors: amounts falling due within one year |
2023 |
|
2022 |
£ |
£ |
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Trade creditors |
23,873 |
|
9,689 |
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Amounts owed to group undertakings |
|
217,729 |
|
- |
|
Taxation and social security costs |
- |
|
- |
|
Accruals |
120,000 |
|
75,750 |
|
|
|
|
|
|
361,602 |
|
85,439 |
|
|
|
|
|
|
|
|
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Amounts owed to group undertakings are unsecured, interest free and repayable on demand. |
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(Unaudited) |
10 |
Creditors: amounts falling due after one year |
2023 |
|
2022 |
£ |
£ |
|
|
Amounts owed to group undertakings |
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2,433,163 |
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1,717,386 |
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|
|
|
|
|
|
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Amount owed to group undertakings are subject to 6% per annum interest charge. They are unsecured and have no repayment date. |
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11 |
Commitments under operating leases |
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The Company has no commitments under operating leases. |
|
(Unaudited) |
12 |
Called up share capital |
2023 |
|
2022 |
£ |
£ |
|
Ordinary shares: |
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Alloted, called up and fully paid |
|
100 Ordinary shares of £1.00 each |
100 |
|
100 |
|
|
|
|
|
|
100 |
|
100 |
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Preference shares: |
|
1 Preference share of £1.00 each |
1 |
|
1 |
|
|
|
|
|
|
1 |
|
1 |
|
|
|
|
|
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The Company has one class of ordinary shares which carry voting right, but no right to fixed income. |
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The Company has one class of preference shares which carry no voting right, no right to fixed income but a preference on share dividends over Ordinary shares. |
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13 |
Related party transactions |
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The Company has taken advantage of the exemption offered in FRS102, not to disclose transactions entered into between two or more members of a group, provided that any subsidiary undertaking which is a party to the transaction is wholly owned by the same parent undertaking. |
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14 |
Controlling party |
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The Company's controlling party is FRV Devco Energy S.L., a company registered in Spain. The registered office of the controlling party is Calle Maria De Molina No. 40, 5th Floor, Madrid, Spain, 28006. |
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The smallest group for which consolidated financial statements are prepared is that headed by FRV Devco Energy S.L. The largest group for which consolidated financial statements are prepared is that headed by Fotowatio Renewable Ventures S.L. |
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15 |
Events after the reporting date |
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|
On 6 June 2024, the Company changed its name from FRV TH Powertek Limited to FRV Powertek Limited. |