The members present their annual report and financial statements for the period ended 31 December 2024.
The principal activity of GW Mozambique Investments LLP ('the LLP') is investment in and management of international development finance projects in Mozambique, any other business associated with, relevant to, or necessary for, the activities specified above or as otherwise approved by Gridworks Development Partners LLP.
The partnership was incorporated on 15 December 2023 and these are its first financial statements.
The LLP values its portfolio in accordance with IFRS 13 Fair Value Measurement and the International Private Equity and Venture Capital Valuation Guidelines. This being the price which would be received in an orderly transaction between market participants at the measurement date. The valuation methodology is further explained in note 1. Valuation risks are mitigated by comprehensive reviews of underlying investments in the projects on an ongoing basis, and formally evaluated by management twice a year.
The LLP’s activities expose it to a variety of financial risks including market risk, credit risk, climate risk and liquidity risk. Market risk includes foreign currency risk, interest rate risk and price risk. The main financial risks managed by the LLP are liquidity risk, credit risk, market risk and valuation risk. Climate risk is considered by the LLP's Investment Committee at the beginning of and during investments.
The transmission project remains in development. Operational risks includes risks associated with people, processes, systems and external events.
The LLP recorded a net profit $2,066 for the period ended 31 December 2024. The net assets attributable to the members were US$2,789,031 at 31 December 2024. This increase in deployment represents growth in assets in investment and development projects in Mozambique. The key performance indicator's for the LLP are profit/loss and net assets.
The Limited Liability Partnership Members' Agreement ('Partnership Agreement') sets out the details and governance around subscription of funds to the LLP. The LLP is not anticipating members' drawings or repayment of members' capital in the short term as the LLP continues being established. All profits and losses belong to Gridworks Development Partners LLP and ultimately to British International Investment plc. Any future drawings or repayment of capital will be considered within the ongoing funding arrangements defined within the Partnership Agreement.
The designated members who held office during the period and up to the date of signature of the financial statements were as follows:
The auditor, Deloitte LLP, is deemed to be appointed under section 487(2) of the Companies Act 2006.
The LLP at a corporate level has not consumed more than 40,000 kWh of energy this reporting period, hence, it qualifies as a low energy user and is not required to report on its emissions, energy consumption or energy efficiency activities. It is noted that this does not include the operations of the investments.
The LLP is a wholly owned subsidiary of Gridworks Development Partners LLP which is a wholly owned subsidiary of British International Investment plc and British International Investment Overseas Limited and should operate near breakeven during the development and construction phases of a project. As projects complete and become operational, the LLP expects to become profitable. Gridworks Development Partners LLP made a $2,786,965 contribution for operational and development costs to date. Forecasts demonstrate that sufficient liquid resources are in place to fund the business for the 12 months following the signing of the financial statements.
Accordingly, the going concern basis of accounting has been used in preparing the report and financial statements.
There have been no material events since the reporting period and before signing that would require adjustment to these financial statements.
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the members’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the limited liability partnership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.
Other information
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.
We considered the nature of the limited liability partnership’s industry and its control environment, and reviewed the limited liaility partnership’s documentation of its policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the members about their own identification and assessment of the risks of irregularities, including those that are specific to the limited liability partnership’s business sector.
We obtained an understanding of the legal and regulatory framework that the limited liability partnership operates in, and identified the key laws and regulations that:
had a direct effect on the determination of material amounts and disclosures in the financial statements. These included the Companies Act 2006 as applicable to limited liability partnerships and relevant tax legislation; and
do not have a direct effect on the financial statements but compliance with which may be fundamental to the limited liability partnership’s ability to operate or to avoid a material penalty.
We discussed among the audit engagement team including relevant internal specialists such as valuations specialists, regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.
As a result of performing the above, we identified the greatest potential for fraud in the following area, and our procedures performed to address it are described below:
Valuation of investments with significant unobserveable inputs involves the application of a valuation methodology and the use of assumptions which require significant management judgement and therefore there is potential for management bias. We challenged management on the appropirateness of the methodology employed, and evaluated the appropriateness of key inputs and assumptions used in the valuation.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
enquiring of management and in-house legal counsel concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and
reading minutes of meetings of those charged with governance.
Matters on which we are required to report by exception
Under the Companies Act 2006 as applied to limited liability partnerships we are required to report in respect of the following matters if, in our opinion:
adequate accounting records have not been kept by the limited liability partnership, or returns adequate for our audit have not been received from branches not visited by us; or
the limited liability partnership financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
Use of our report
This report is made solely to the limited liability partnership’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 as applied to limited liability partnerships. Our audit work has been undertaken so that we might state to the limited liability partnership’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 limited liability partnership and the members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
The accompanying notes on pages 12 to 20 form an integral part of these financial statements.
GW Mozambique Investments LLP is a limited liability partnership incorporated in England and Wales. The registered office is 123 Victoria Street, London, SW1E 6DE.
The limited liability partnership's principal activities are disclosed in the Members' Report.
The reporting period represented is from the date of incorporation, 15 December 2023 to 31 December 2024.
The financial statements have been prepared in accordance with UK-adopted international accounting standards and, with International Financial Reporting Standards as issued by the IASB.
The financial statements are prepared in dollars, which is the functional currency of the limited liability partnership. Assets and liabilities are retranslated at spot rates at the statement of financial position date. Foreign exchange gains and losses resulting from the settlement of such transactions and from translation of assets and liabilities denominated in foreign currencies at the year-end exchange rate are recognised in the statement of comprehensive income. Monetary amounts in these financial statements are rounded to the nearest $.
The financial statements have been prepared on a historical cost basis except for financial assets measured at fair value through profit and loss which have been measured at fair value in accordance with relevant accounting standards.
The LLP is a wholly owned subsidiary of Gridworks Development Partners LLP which is a wholly owned subsidiary of British International Investment plc and British International Investment Overseas Limited and should operate near breakeven during the development and construction phases of a project. As projects complete and become operational, the LLP expects to become profitable. Gridworks Development Partners LLP made a $2,786,965 contribution for operational and development costs to date. Forecasts demonstrate that sufficient liquid resources are in place to fund the business for the 12 months following the signing of the financial statements.
Accordingly, the going concern basis of accounting has been used in preparing the report and financial statements.
Financial assets at fair value through profit and loss
These financial assets are assets held at fair value through profit and loss by management at the date of inception.
Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the statement of financial position date.
The LLP's fair value methodology has been derived using the International Private Equity and Venture Capital Valuation Guidelines. This methodology is applied to direct investments and investments held within funds. The approach to calculating the fair value is as follows:
the enterprise value is determined using a methodology that is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio using reasonable assumptions and estimates;
the enterprise value is adjusted for surplus assets or liabilities or any other relevant factor;
higher ranking financial instruments are deducted taking into account any financial structuring that may dilute the investment holding;
the net attributable enterprise value is apportioned between the financial instruments held according to their ranking; and
the amounts derived are allocated according to the holding in each financial instrument, representing their fair value.
Gains and losses realised on disposal or redemption, by reference to the valuation at the previous statement of financial position date and unrealised gains and losses from changes in the fair values of the equity portfolio are taken to the statement of comprehensive income.
At each reporting period end date, the LLP reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the LLP estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can be identified, assets are 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 annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Financial assets
Unquoted equity investments are included in the statement of financial position at fair value. There is no material difference between the fair value and the book value of the LLP’s cash.
Basic financial assets, which include trade and other receivables, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the LLP transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Cash and cash equivalents
Cash and cash equivalents comprise of cash balances held in bank accounts, converted to US$ where relevant at the closing rate, deposits (maturing in less than three months) and money market balances.
New and revised IFRS standards in issue but not yet effective
The accounting policies set out in these financial statements have been applied consistently to all periods presented.
The following accounting standards became effective for periods commencing on or after 1 Jan 2024:
Amendments to IFRS 10 and IAS 28 – Sale of Contribution of Assets between an Investor and its Associate or Joint Venture,
Amendments to IAS 1 Classification of liabilities as Current or Non-Current.
The following standards are issued but not yet effective:
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates titled Lack of Exchangeability,
Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or after 1 January 2026),
IFRS 18 Presentation and Disclosures in Financial Statements,
IFRS 19 Subsidiaries without Public Accountability: Disclosures.
In the application of the LLP’s accounting policies, the Members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are relevant. Actual results may differ from these estimates.
The key accounting estimate is the carrying value of investment assets which are stated at fair value of $2,265,136. As part of the LLP's valuation policy, projects in the development stage are valued at cost until the stage that the project reaches certain construction milestones or the commercial operations date (COD). From this point, it is most likely the project will be valued using a discounted cash flow model (DCF).
Asset valuations for unquoted investments are inherently subjective, as they are made on the basis of assumptions which may not prove to be accurate in expected cash flows, such as discount rates and foreign exchange rates. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Additional key areas of judgement include the likelihood that the project will reach financial close and therefore the capitalisation of the costs on the balance sheet. |
Unlisted shares are included within Level 3 of the fair value hierarchy. The LLP holds no Level 1 or Level 2 investments. There have been no transfers between levels during the year.
The different levels have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset that are not based on observable market data (unobservable inputs).
The fair value of the investments is currently based on the cost injected into the project to date as it remains in the development phase. Once the project reaches certain construction milestones or COD, the valuation will likely be based upon a DCF model of the investments' future cash flows and is updated half yearly. Future cash flows will include any known outflows for climate provisions or reduced inflows for reduced demand (e.g. reduced demand or all fossil fuel energy). It is not expected that climate risks will affect the future cash flows at this point.
Any gains or losses in a period are taken to the statement of comprehensive expense.
The most significant unobservable input into the DCF model will be the discount rate where management have used rates between 10% and 14% to value underlying projects held by its investments.
No sensitivities have been performed this year as the project remains in development and is being valued at cost.
The following table shows the maturity profile of the LLP’s liabilities:
During the period the limited liability partnership entered into the following transactions with related parties:
During the year, the LLP received intercompany loans from the parent LLP. The loans were provided to support the LLP's operations and are subject to standard commercial terms. The balance remains outstanding as of the reporting date, and no provisions for impairment have been recognised. All transactions with the parent LLP were conducted at arm's length and in compliance with applicable regulations.
Members’ Contributions
In 2024, Gridworks Development Partners LLP made a $2,786,965 contribution for operational and development costs.
The LLP's activities exposes it to a variety of financial risks, including market risk, credit risk and liquidity risk. Market risk includes foreign currency risk, interest rate risk and price risk. The main financial risks managed by the LLP are liquidity risk, credit risk, market risk and valuation risk.
The LLP's immediate parent and controlling party at 31 December 2024 by virtue of its 100% beneficial interest in the LLP capital, is Gridworks Development Partners LLP, a corporate entity registered at 123 Victoria Street, London, SW1E 6DE, England. Gridworks Development Partners LLP acts as the immediate parent company of the LLP and its financial statements are publicly available. The ultimate parent of the LLP is the Secretary for Foreign, Commonwealth and Development Affairs. Gridworks Development Partners LLP is not required to produce consolidated accounts.
The parent company website can be found at www.gridworkspartners.com
There have been no material events since the reporting period that would require adjustment to these financial statements. Events after the reporting period that would require adjustment to these financial statements are those that provide evidence of conditions that existed at 31 December 2024, events after the reporting period are indicative of conditions that arose after the reporting period do not lead to adjustment of the financial states, but are disclosed in the event that they are material.