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Registered number: SC482709
MeyGen Holdings Limited
Annual report and financial statements
For the Year Ended 31 December 2024
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MeyGen Holdings Limited
Company Information
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Chartered Accountants & Statutory Auditor
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MeyGen Holdings Limited
Contents
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Independent Auditor's Report
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Consolidated Statement of Profit or Loss and Other Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Consolidated Financial Statements
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MeyGen Holdings Limited
Directors' Report
For the Year Ended 31 December 2024
The Directors present their report and the financial statements for the year ended 31 December 2024.
Directors' responsibilities statement
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The Directors are responsible for preparing the Directors' Report and the consolidated financial statements, in accordance with applicable law.
Company law requires the Directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.
Under company law the Directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing the consolidated 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 they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙assess the Group and 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 Group or 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 Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent 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 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 Group and to prevent and detect fraud and other irregularities.
The Directors who served during the year were:
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Brian Francis Monaghan (appointed 3 July 2024)
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Brian Monaghan was appointed as a non-executive director pursuant to the rights held by Scottish Enterprise.
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and
∙the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.
Page 1
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MeyGen Holdings Limited
Directors' Report (continued)
For the Year Ended 31 December 2024
Small companies' exemption note
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In preparing this report, the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
Events after the reporting period
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The debt standstill agreements entered into between MeyGen PLC and its senior creditors expired on the 31st March 2025 and have not been replaced. MeyGen PLC is therefore in default of its senior debt repayment obligations under the finance documents. MeyGen PLC is working with the senior creditors in good faith to reach agreement on replacement debt standstill agreements as soon as possible.
Under section 487(2) of the Companies Act 2006, Kreston Reeves LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
Graham Matthew Reid
Director
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Page 2
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MeyGen Holdings Limited
Independent Auditor's Report to the Members of MeyGen Holdings Limited
We have audited the financial statements of MeyGen Holdings Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 14 - 25. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.
In our opinion:
∙the financial statements give a true and fair view of the state of the Group's and the Parent Company's affairs as at 31 December 2024 and of the Group's loss for the year then ended;
∙the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and
∙the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
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 Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
Material uncertainty related to going concern
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We draw attention to note 3.2 in the financial statements, which indicates that the Group is currently in default on loan agreements with Scottish Enterprise and Crown Estate Scotland, though discussions for new agreements are ongoing. Additionally, the success of the Group's tidal energy operations depends on their ongoing reliability, and any significant failures could necessitate a need for further financial support from key stakeholders.
As stated in note 3.2, these events or conditions, along with the other matters as set forth in note 3.2, indicate that a material uncertainty exists that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Page 3
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MeyGen Holdings Limited
Independent Auditor's Report to the Members of MeyGen Holdings Limited (continued)
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.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Directors' Report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the Parent Company 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; or
∙the Directors were not entitled to take advantage of the small companies' exemptions in preparing the Directors' report and from the requirement to prepare a Strategic report.
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement on page 13, 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 Group's and the Parent 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so
Page 4
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MeyGen Holdings Limited
Independent Auditor's Report to the Members of MeyGen Holdings Limited (continued)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the Group and the Parent Company and the industry it operates in, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation legislation.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate profits, and management bias in accounting estimates and judgemental areas of the financial statements. Audit procedures performed by the engagement team included:
∙Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud, and review of the reports made by management; and
∙Assessment of identified fraud risk factors; and
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud; and
∙Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
∙Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
∙Reading minutes of meetings of those charged with governance and reviewing correspondence with relevant tax authorities; and
∙Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and
∙Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
Page 5
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MeyGen Holdings Limited
Independent Auditor's Report to the Members of MeyGen Holdings Limited (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Group's and the Parent Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
∙Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and the Parent Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group or the Parent Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtains sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
Mark Attwood FCCA (Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Canterbury
31 July 2025
Page 6
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MeyGen Holdings Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 31 December 2024
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Total comprehensive income
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The notes on pages 13 to 44 form part of these financial statements.
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Page 7
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MeyGen Holdings Limited
Registered number: SC482709
Consolidated Statement of Financial Position
As at 31 December 2024
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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Trade and other liabilities
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Issued capital and reserves attributable to owners of the parent
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The financial statements were approved and authorised for issue by the board of Directors and were signed on its behalf by:
The notes on pages 13 to 44 form part of these financial statements.
Page 8
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MeyGen Holdings Limited
Registered number: SC482709
Company Statement of Financial Position
As at 31 December 2024
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Other non-current investments
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Cash and cash equivalents
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Trade and other liabilities
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Issued capital and reserves attributable to owners of the parent
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The Company reported £23,175k (2023 - £NIL) loss for the year.
The financial statements on pages 7 to 44 were approved and authorised for issue by the board of Directors and were signed on its behalf by:
The notes on pages 13 to 44 form part of these financial statements.
Page 9
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MeyGen Holdings Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2024
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Total attributable to equity holders of parent
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Total comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 13 to 44 form part of these financial statements.
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Page 10
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MeyGen Holdings Limited
Company Statement of Changes in Equity
For the Year Ended 31 December 2024
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Total comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 13 to 44 form part of these financial statements.
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Page 11
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MeyGen Holdings Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2024
Cash flows from operating activities
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Depreciation of property, plant and equipment
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Impairment of property, plant and equipment
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Movements in working capital:
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Decrease/(increase) in trade and other receivables
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(Decrease)/increase in trade and other payables
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Net cash from operating activities
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Purchases of property, plant and equipment
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Net cash from/(used in) investing activities
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Cash flows from financing activities
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(Payment of) / new lease liabilities
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Net cash used in financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Cash and cash equivalents at the end of the year
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Cash and cash equivalents include encumbered deposits amounting to £255k (2023 - £714k).
The Company generated no cash flows during the current or previous reporting period and therefore does not present a separate Statement of Cash Flows.
The notes on pages 13 to 44 form part of these financial statements.
Page 12
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
MeyGen Holdings Limited (the 'Company') is a limited company incorporated in the United Kingdom. The Company's registered office is at 26 Dublin Street, Edinburgh, EH3 6NN. These consolidated financial statements comprise the Company and its subsidiaries (collectively the 'Group' and individually 'Group companies').
The Group's principal activity is the operation and maintenance of tidal generation facilities.
The Group's consolidated and the Company's individual financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 31 July 2025.
Details of the Group's accounting policies, including changes during the year, are included in note 3.
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of Comprehensive Income in these financial statements.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 4.
These financial statements are presented in pounds sterling which is also the currency of the primary economic environment in which the Group and Company operates.
These financial statements are rounded to the nearest thousand pounds, unless stated otherwise.
The financial statements have been prepared on the historical cost basis.
Page 13
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
2.Basis of preparation (continued)
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2.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 January 2024
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A number of amendments to standards and interpretations are effective for annual periods beginning after 1 January 2024. These amendments to standards and interpretations had no impact on the financial statements of the Group.
ii) New standards, interpretations and amendments not yet effective
At the date of authorisation of these financial statements, several new but not yet effective, Standards and amendments to existing Standards, and Interpretations have been published by the IASB. None of these Standards or amendments to existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year have not been disclosed as they are not expected to have a material impact on the Group's financial statements.
3.Accounting policies
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
∙has power over the investee;
∙is exposed, or has rights, to variable returns from its involvement with the investee; and
∙has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
∙the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
∙potential voting rights held by the Company, other vote holders or other parties;
∙rights arising from other contractual arrangements; and
∙any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Page 14
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
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Basis of consolidation (continued)
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Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
In adopting the going concern basis for preparing these financial statements, the Board has considered the Group and Company’s business activities, together with factors likely to affect its future development, its performance and principal risks and uncertainties.
The Directors are required to state whether it is appropriate to adopt the going concern basis of accounting in preparing the financial statements, and to identify any material uncertainties as to the Group and Company’s ability to continue as a going concern over a period of at least 12 months from the date of approval of the financial statements. The period of management’s going concern assessment is to 31 July 2026.
The Group and Company is in a net liability position at the financial year end. However, the Directors have assessed the Group and Company’s ability to continue as a going concern by considering its operational cash flows for the period to 31 July 2026. Based on the Group’s healthy cash balance as at 31 July 2025 and forecasted positive operating cash flows over the next 12 months, the Directors have assessed that the Group and Company is forecast to be able to meet its operating liabilities as they fall due.
Material uncertainties
The Group's lending deferral agreements with Scottish Enterprise and Crown Estate Scotland expired on 31 March 2025 and have not been replaced at the date of signing these accounts. The Group is therefore in default of its repayment obligations under the Finance Documents. This gives the right to either creditor to declare all amounts accrued or outstanding to be immediately due and payable. The Directors are engaged with both creditors and are working towards negotiating replacement agreements in the coming months.
The success of MeyGen’s operations is heavily dependent on the performance and reliability of still relatively novel tidal turbine technology. Failure of key components or underperformance of installed turbines could result in operational delays, increased maintenance costs, or reduced energy outputs. The impact may render the Group unable to service its operating cash flow requirements without negotiating and securing additional financial support from its shareholders and other key stakeholders.
The above conditions indicate the existence of material uncertainties that may cast significant doubt on the Group and Company’s ability to continue as a going concern. The financial statements do not include any adjustments that would be required should the Group or Company be unable to continue as a going concern.
Notwithstanding these material uncertainties, the Directors have concluded that it is appropriate to continue to adopt the going concern basis of accounting in preparing these financial statements.
Page 15
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.
Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Group and the customer.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
Revenue for the sale of equipment is recognised when the risk and rewards of the product are transferred to the customer.
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(ii) Rendering of services
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Revenue from providing services is recognised in the accounting period in which the services are rendered.
For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously.
Where contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. Where these are not directly observable, they are estimated based on expected cost plus margin. For service contracts including a goods element, revenue for the separate good is recognised at a point in time when the good is delivered, the legal title has passed and the customer has accepted the good.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management. In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
Consulting fees are recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date.
Revenue for power sales is recognised based on the quantity of electricity exported and the contracted rate on the date of generation.
Page 16
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are presented as a deduction from the carrying amount of the related assets, and recognised as income over he useful lives of the assets by way of a reduced depreciation charge.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the consolidated Consolidated Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Page 17
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
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(iii) Current and deferred tax for the year
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Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
Page 18
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:
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Plant, property and equipment
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Computer equipment and software
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Freehold land is not depreciated.
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Impairment of tangible and intangible assets other than goodwill
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At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Page 19
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
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Investments in joint ventures
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A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of joint ventures are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, an investment in a joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the joint venture. When the Group's share of losses of a joint venture exceeds the Group's interest in that joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture.
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Cash and cash equivalents
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Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Page 20
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
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Financial assets (continued)
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Amortised cost and effective interest method
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The effective interest method is a method for calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.
For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased and originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. On the other hand, the gross carrying amount of a financial asset is the amortised costs of a financial asset before adjusting for any loss allowance.
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVOCI. For financial instruments other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by the applying the effective interest rate to the gross carrying amount of the financial asset.
For purchased and originated credit-impaired financial assets, the Group recognises interest income by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit-impaired.
Interest income is recognised in profit or loss and is included in the 'finance income' line item.
Page 21
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
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Financial assets (continued)
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Measurement and recognition of expected credit losses
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The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date; for loan commitments and financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Group's understanding of the specific future financing needs of the debtors, and other relevant forward-looking information.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. For a lease receivable, the cash flow used for determining the expected credit losses is consistent with the cash flows used in measuring the lease receivable in accordance with IFRS 16 Leases.
For a financial guarantee contract, as the Group is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed, the expected loss allowance is the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the Group expects to receive if the loan is drawn down.
For undrawn loan commitments, the expected credit loss is the present value of the difference between the contractual cash flows that are due to the Group if the holder of the loan commitment draws down the loan, and the cash flows that the Group expects to receive if the loan is drawn down.
Where lifetime ECL is measured on a collective basis to cater for cases where evidence of significant increases in credit risk at the individual instrument level may not yet be available, the financial instruments are grouped on the following basis:
∙Nature of financial instruments;
∙Past-due status;
∙Nature, size and industry of debtors;
∙Nature of collaterals for finance lease receivables; and
∙External credit ratings where available.
The grouping is regularly reviewed by management to ensure the constituents of each group continue to share similar credit risk characteristics.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12m ECL at the current reporting date.
The Group recognises an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVOCI, for which the loss allowance is recognised in other comprehensive income and accumulated in the investments revaluation reserve, and does not reduce the carrying amount of the financial asset in the Consolidated Statement of Financial Position.
Page 22
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
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Financial assets (continued)
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Derecognition of financial assets
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The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as at FVOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in an equity instrument which the Group has elected on initial recognition to measure at FVOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings.
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Financial liabilities and equity instruments
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(i) Classification as debt or equity
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Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company or Group's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company or Group's own equity instruments.
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(iii) Financial liabilities
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All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Group, and commitments issued by the Group to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Page 23
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
∙fixed lease payments (including in-substance fixed payments), less any lease incentives;
∙variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
The lease liability is included in the 'Loans and borrowings' line in the Consolidated Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
∙a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the 'Property, Plant and Equipment' and 'Investment Property' lines, as applicable, in the Consolidated Statement of Financial Position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 3.8.
Page 24
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
3.Accounting policies (continued)
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The Group as a lessee (continued)
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Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the 'other expenses' line item in profit or loss.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Page 25
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
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Accounting estimates and judgements
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In the application of the Group’s accounting policies, which are described in note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
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4.1 Estimates and assumptions
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Recoverability of plant, property and equipment
The Group tests its property, plant and equipment annually for impairment, or more frequently if there are indicators that it might be impaired. The recoverable amounts for the Group’s property, plant and equipment are supported by the estimated value-in-use of these assets. The value-in-use is calculated using a net present value cash flow model which compares the costs of completing each of the respective projects, including financing costs, with expected revenues, net of operating and maintenance expenditure, over its operating life.
The key assumptions used to determine the MeyGen project's value-in-use are the forecast operating cashflows from the Phase 1 array, estimated development expenditure and capital costs to complete construction of additional capacity, the financing structure and cost, forecast operating and maintenance costs, revenue per MWh and the WACC to calculate present values. Specific WACC’s, ranging from 11% to 13%, are applied to different phases of the tidal project to reflect the different stages of each project.
The recoverable amounts for the MeyGen tidal project were determined to be lower than the carrying value of its property, plant and equipment and as a result a decrease of £14.7 million to the value in use was recognised in 2024 (Note 12).
Provision for decommissioning costs
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. If the effect of the time value of money is material, discounting is applied.
The estimated cost of decommissioning the assets used in the generation of power is reviewed periodically. Provision is made for the net present value of the estimated cost of decommissioning at the end of the producing life of these assets. The estimate is based on technology and prices at the balance sheet date. The unwinding of the discount on the provision is included in finance costs.
Page 26
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
4.Accounting estimates and judgements (continued)
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4.1 Estimates and assumptions (continued)
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Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the leases, therefore, it uses its incremental borrowing rate (‘IBR’) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.
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The following is an analysis of the Group's revenue for the year from continuing operations:
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All revenue relates to the generation of power sales, recognised based on the quantity of electricity exported and the contracted rate on the date of generation. Power sales includes associated revenue from Renewable Obligation Certificates ('ROCs').
All turnover arose within the United Kingdom.
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Insurance claims receivable
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Page 27
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
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Depreciation of property, plant and equipment
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Impairment of property, plant and equipment
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As disclosed in note 4.1, a value-in-use calculation is undertaken each year to determine the need for impairment of the Group's property, plant and equipment. Following this assessment, an impairment charge of £14,695k (2023 - £2,929k) has been recognised.
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During 2024, auditor remuneration of £12k (2023 - £12k) relating to the Company for the audit of the Group's financial statements was borne by another SIMEC Atlantis Limited Group company and was not recharged.
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Employee benefit expenses
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The Group and Company does not have any staff under its employment. A service fee is charged by the related company, Atlantis Resources (Scotland) Limited, for services rendered by its employees.
Certain directors are employees of other subsidiaries within the Group and no consideration is paid by the Company to the other subsidiaries for the services rendered by these directors.
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Page 28
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
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Finance income and expense
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Recognised in profit or loss
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Unwinding of discount on right-of-use leases
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Unwinding of discount on decommissioning provisions
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Other loan interest payable
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Amortisation of debt-raising expenses
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Net finance expense recognised in profit or loss
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Page 29
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
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11.1 Income tax recognised in profit or loss
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There is no tax expense for the year (2023 - none).
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
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Income tax expense (including income tax on associate, joint venture and discontinued operations)
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Tax using the Company's domestic tax rate of 25% (2023:23.52%)
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Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
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Capital allowances for the year in excess of depreciation
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11.2 Unrecognised deductible temporary differences, unused tax losses and unused tax credits
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At the end of the reporting period, the Group has unutilised tax losses of £14,802k (2023 - £12,105k) available for offset against future profits.
No deferred tax asset has been recognised due to the unpredictability of future profit streams.
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Page 30
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
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Property, plant and equipment
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Computer equipment and software
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Right-of-use - Land and buildings
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Decommissioning provision movement
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Decommissioning provision movement
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Computer equipment and software
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Right-of-use - Land and buildings
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Accumulated depreciation and impairment
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Charge owned for the year
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Charged financed for the year
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Charge owned for the year
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Charged financed for the year
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Page 31
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
12.Property, plant and equipment (continued)
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Aggregate grants of £13.3 million, comprising a £10 million grant from the United Kingdoms Department of Energy and Climate Change, and two grants from Scotland’s Highlands and Islands Enterprise totalling £3.3 million, were awarded for MeyGen projects in August 2014.
During 2020, the Group received £1.5 million in grant funding from the Scottish Governments Saltire Tidal Energy Challenge Fund and additional funding from Highlands and Islands Enterprise to develop and install a subsea tidal turbine connection hub.
In December 2021 the Group received a further £296k in grant funding from Scottish Enterprise.
Grants received where the conditions attached to them have been complied with, were recorded as a deduction from the carrying amount of the asset in accordance with the accounting policy stated in note 3.4.
As disclosed in Note 4, a value-in-use calculation is undertaken each year to determine the need for impairment of the asset. The Company has recognised an impairment charge of £14,695k (2023: £2,929k) during the year, which has been recognised in profit or loss.
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12.1. Assets held under leases
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The Group has lease contracts for land, with lease terms of between 25 and 100 years.
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The net book value of owned and leased assets included as "Property, plant and equipment" in the Consolidated Statement of Financial Position is as follows:
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Property, plant and equipment owned
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Right-of-use assets, excluding investment property
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Information about right-of-use assets is summarised below:
Net book value
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Depreciation charge for the year ended
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Page 32
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
12.Property, plant and equipment (continued)
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12.2 Impairment losses recognised in the year
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The recoverable amount of PPE has been assessed using a discounted cash flow model to calculate their value in use. The value in use cash flow model utilises supportable assumptions and demonstrates there was impairment of £14,695k during the year.
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12.3 Assets pledged as security
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The assets of the Group are pledged for security to secure long-term loans
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Other non-current investments
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Details of the Group's material subsidiaries at the end of the reporting period are as follows:
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Place of incorporation and operation
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Proportion of ownership interest and voting power held by the Group (%)
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Development of tidal power
generation project
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Investments in subsidiary companies
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They Company's investment in MeyGen PLC was fully impaired during the year.
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The following entity has been included in the consolidated financial statements using the equity method:
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Relationship to the entity
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Place of incorporation and operation
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Proportion of ownership interest held as at (%)
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Grid connection ownership
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Page 33
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
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Trade and other receivables
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Prepayments and accrued income
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Total current trade and other receivables
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No provision for impairment has been made for the receivable balances as the Directors are of the view that these receivables are recoverable.
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Notes supporting statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
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Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of 3 months. The carrying amounts of these assets approximate their fair values.
Included in the fixed deposits are encumbered deposits amounting to £254k (2023 - £714k) that serve as collateral for a letter of guarantee issued by a bank and a letter of credit granted to a contractor.
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Page 34
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
|
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Payables to related parties
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Other payables - tax and social security payments
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Total current trade and other payables
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Payables to related parties
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Total current trade and other payables
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The trade payables and accruals are related to the construction and operation of the MeyGen project.
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Total loans and borrowings
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|
Page 35
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
18.Loans and borrowings (continued)
|
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The terms of the loans are as follows:
i) SIMEC Atlantis Energy Limited
The loan from the ultimate holding company, SIMEC Atlantis Energy Limited, becomes repayable on 1 February 2030. The interest on the loan is compounded based on 12 month SONIA + 5% per annum and is payable at maturity of the loan. At the balance sheet date, the carrying value of the loan approximates its fair value.
The balance outstanding at the reporting date is £1,627k (2023 - £1,481k).
ii) Atlantis Operations (UK) Limited
Atlantis Operations (UK) Limited, a fellow group undertaking, has extended a loan to MeyGen plc. The loan bears interests at 5% + SONIA and is repayable on 1 February 2030.
The balance outstanding at the reporting date is £1,821k (2023 - £1,654k).
iii) Morgan Stanley Capital Group Inc.
A loan from Morgan Stanley Capital Group Inc. (“MSCGI”) is repayable in February 2028, with interest compounded based on 12 month SONIA + 5% per annum and is payable at maturity of the loan.
The balance outstanding at the reporting date is £7,430k (2023 - £6,746k).
iv) ENGIE Marine Developments Limited
A loan from ENGIE Marine Developments Limited (“ENGIE”), formerly known as International Power Marine Developments Limited, is repayable in February 2028, with interest compounded based on 12 month SONIA + 5% per annum and is payable at maturity of the loan. At the balance sheet date, the carrying value of the loan approximates its fair value.
The balance outstanding at the reporting date is £7,430k (2023 - £6,746k).
v) Scottish Enterprise and Crown Estate Scotland
As part of the Phase 1A MeyGen project financing, Scottish Enterprise (as administrator of the Renewable Energy Investment Fund) extended a loan to MeyGen of £7.5 million to finance the construction of the project. They also own shares in the immediate holding company.
The loans are repayable in the period from 2018 to 2027. £Nil repayments were made in 2024 (2023 - £Nil). Interest on the loans is compounded semi-annually at 7.0% per annum.
Crown Estate Scotland committed an investment of £9.8 million to MeyGen, to finance the construction of the Phase 1A project, which will be serviced through the payment of “enhanced rent”, with an exit payment at or before the date 10 years from commissioning of Phase 1A of the project. Enhanced rent payments of £Nil were made in 2024 (2023 - £NIL).
The Scottish Enterprise loan and the Crown Estate Scotland investment to MeyGen are denominated in Great British Pounds and are repayable in the period from 2018 to 2027. The effective interest rates on these loans are in the range of 7% to 7.8% per annum. During 2024 £Nil million (2023: £Nil million) was repaid. On 1 November 2022 two new remedial plans were agreed which suspend any further senior debt repayments until 1 November 2024. The Company has provided a parent company guarantee for £2 million of the Scottish Enterprise loan. Interest on any deferred amount is at an additional 3% above Barclays’ base rate per annum.
The balance outstanding to Scottish Enterprise at the reporting date is £11,585k (2023 - £10,637k). The balance outstanding to Crow Estate Scotland at the reporting date is £14,927k (2023 - £13,816k).
|
Page 36
|
|
MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
18.Loans and borrowings (continued)
|
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|
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The Group has lease contracts for land, with lease terms of between 25 and 100 years.
|
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Lease liabilities are due as follows:
|
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Contractual undiscounted cash flows due
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Between one year and five years
|
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|
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Lease liabilities included in the Consolidated Statement of Financial Position at 31 December
|
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|
|
The following amounts in respect of leases have been recognised in profit or loss:
|
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Page 37
|
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MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
19.Leases (continued)
|
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Interest expense on lease liabilities
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|
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Lease obligations have been discounted based on MeyGen incremental borrowing rate with a weighted average of 8% (2023 - 8%).
|
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Decommissioning provision
|
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Due after more than one year
|
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|
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The provision for decommissioning costs represents the present value of the best estimate of direct costs that may be incurred to remove the turbine foundations from the sea bed at the Inner Sound of the Pentland Firth. Decommissioning is not anticipated until 2043.
|
Page 38
|
|
MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
|
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Ordinary shares of £0.01 each
|
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Ordinary shares of £0.01 each
|
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At 1 January and 31 December
|
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|
|
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.
|
Share premium
This reserve represents the excess of the fair value of the consideration receivable on the issue of ordinary share capital, net of the direct costs incurred in their issue, over the nominal value of those shares (which is recognised as called up share capital). Share premium may only be utilised to write-off any expenses incurred or commissions paid on the issue of those shares, or to pay up new shares to be allotted to members as fully paid bonus shares.
Merger Reserve
Merger reserve represents the difference between the consideration paid for MeyGen PLC and equity attributable to MeyGen PLC.
Retained earnings
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the Company’s shareholders.
Page 39
|
|
MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
|
|
|
Financial instruments - fair values and risk management
|
|
|
23.1 Financial risk management objectives
|
The company is exposed to various financial risks arising in the normal course of business. It has adopted financial risk management policies and utilised a variety of techniques to manage its exposure to these risks.
Currency risk
The Group transacts business in pounds sterling and is hence not exposed to foreign exchange risk.
Interest rate risk
Interest rate risk arises from the potential change in interest rates that may have an adverse effect on the Group in the current reporting year or in future years.
The Group’s exposure to interest rate risk is limited to the effects of the fluctuation in bank interest rate on cash and cash equivalents as well as LIBOR rates on loans and borrowings.
As at 31 December 2024, if the LIBOR rates had been 100 basis points higher/lower with all other variables held constant, the Group’s profit or loss would have been approximately £183k higher/lower, arising mainly as a result of higher/lower finance costs.
A fundamental financial industry reform of interest rate benchmarks is being undertaken globally, including the cessation and replacement of interbank offered rates (“IBORs”) with alternative nearly risk-free rates (referred to as “interest rate benchmark reform”). The Group’s interest rate risk that is directly affected by the interest rate benchmark reform predominantly comprises its variable rate borrowings. As at 31 December 2024, the Group has variable rate borrowings of £18.3 million that are indexed to LIBOR rates which has yet to transit to an alternative benchmark rate.
Equity price risk
The Group is not exposed to equity price risks as it does not hold any quoted equity investments.
|
|
23.3 Credit risk management
|
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
At the reporting date, the total receivables balance is £12k (2023 - £333k). There are no significant concentrations of credit risk.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset as at the end of the reporting period. None of the receivables are past due at balance sheet date.
Cash and cash equivalents
Cash at bank is held with creditworthy financial institutions that are licensed banks in the countries in which the Group operates.
Page 40
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|
MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
23.Financial instruments - fair values and risk management (continued)
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23.4 Liquidity risk management
|
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|
|
The Group maintains its liquidity by maintaining sufficient cash and bank balances and monitoring its cash flow requirements.
All financial liabilities in 2024 and 2023 are repayable on demand or due within 1 year from the end of the reporting period, apart from secured and unsecured long term loans. Other than the secured loans, unsecured loans and related party payables the remaining financial liabilities are non-interest bearing.
|
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|
|
Liquidity and interest risk tables
The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Group may be required to pay.
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Trade and other payables (note 17)
|
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|
|
Loan from ultimate holding company (note 18 - i)
|
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Loan from related parties (note 18 - ii)
|
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Secured loan from related parties (note 18 - iii & iv)
|
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Long term loan (note 18 - v)
|
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Secured long term loan (note 18 - v)
|
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Finance lease liabilities (note 19)
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Page 41
|
|
MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
23.Financial instruments - fair values and risk management (continued)
|
|
23.4 Liquidity risk management (continued)
|
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|
|
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|
|
Trade and other payables (note 17)
|
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|
|
|
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|
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Loan from ultimate holding company (note 18 - i)
|
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Loan from related parties (note 18 - ii)
|
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Secured loan from related parties (note 18 - iii & iv)
|
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|
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Long term loan (note 18 - v)
|
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Secured long term loan (note 18 - v)
|
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Finance lease liabilities (note 19)
|
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The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balances.
|
|
|
The capital structure of the Group comprises of issued capital, accumulated losses and loans.
|
|
|
There are no changes in the Group's approach to capital management during the financial year. The Group are not subject to any externally imposed capital requirements.
|
Page 42
|
|
MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
|
|
Related party transactions
|
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
Details of transactions between the Company and its related parties are disclosed below.
|
|
|
|
|
During the year, the Group entered into the following transactions with related parties:
|
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|
|
Service fees from Atlantis Resources (Scotland) Limited
|
|
|
|
|
Interest on loan from Renewable Energy Investment Fund
|
|
|
|
|
Interest on loan from SIMEC Atlantis Energy Limited
|
|
|
|
|
Interest on loan from Atlantis Operations (UK) Limited
|
|
|
|
|
25.2 Outstanding balances
|
|
|
The following balances were outstanding at the end of the reporting period:
|
|
|
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|
|
SIMEC Atlantis Energy Limited
|
|
|
|
|
Atlantis Operations (UK) Limited
|
|
|
|
|
Atlantis Resources (Scotland) Limited
|
|
|
|
|
Renewable Energy Investment Fund
|
|
|
|
|
|
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|
|
Key management personnel compensation
Certain Directors are employees of other subsidiaries within the SIMEC Atlantis Energy Group and no consideration is paid by the Group to the other subsidiaries for the services rendered by these Directors.
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the Group. The Directors are considered as key management personnel of the Group. During 2024, none (2023 - none) of the Directors received emoluments from the SIMEC Atlantis Energy Group (2023 - £Nil) in connection with their services to this Group.
|
Page 43
|
|
MeyGen Holdings Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2024
The immediate parent company is Tidal Power Scotland Limited, a company incorporated and registered in the United Kingdom. At 31 December 2024 the company's ultimate parent company was SIMEC Atlantis Energy Limited, a company incorporated and registered in Singapore.
The largest group of undertakings for which group accounts are drawn up and of which the Company is included is the group headed by SIMEC Atlantis Energy Limited. No other group financial statements include the results of this Company. The registered office of SIMEC Atlantis Energy Limited is Level 4, 21 Merchant Road, #04-01, Singapore 058267.
Copies of the financial statements of SIMEC Atlantis Energy Limited are available to the public and may be obtained from www.saerenewables.com.
|
|
Events after the reporting date
|
The debt standstill agreements entered into between MeyGen PLC and the senior creditors expired on the 31st March 2025 and have not been replaced. MeyGen PLC is therefore in default of its senior debt repayment obligations under the finance documents. MeyGen PLC is working with the senior creditors in good faith to reach agreement on replacement debt standstill agreements as soon as possible.
Page 44
|