Registration number:
Kinlochleven Power Ltd
for the Year Ended 31 December 2024
Kinlochleven Power Ltd
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Statement of Income and Retained Earnings |
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Statement of Financial Position |
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Statement of Changes in Equity |
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Statement of Cash Flows |
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Notes to the Financial Statements |
Kinlochleven Power Ltd
Company Information
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Directors |
M Panfili T Cunningham |
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Registered office |
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Auditors |
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Kinlochleven Power Ltd
Strategic Report for the Year Ended 31 December 2024
The directors present their strategic report for the year ended 31 December 2024.
Principal activity
The principal activity of the company is the operation and sale of electricity from the hydropower plant located at Kinlochleven in Scotland.
Fair review of the business
The Company generated over 182MW of renewable electricity during the course of the year.
The directors’ focus is to operate the plant safely and to optimise the future of the hydropower scheme. This is supported by operations and maintenance (O&M) and management services contracts being in place, which have the following key objectives:-
- achieving the optimum reliability of the assets ;
- minimising operational costs on a life cycle basis;
- management of the service & maintenance of the assets; and
- continued compliance with all regulatory, environmental and consents requirements
- prioritising the health and safety of all personnel working on site
The results for the year ended 31st December 2024 are set out on page 12.
Generation in 2024 was around 7% higher than in 2023, partially as a result of water levels in the dam being higher after a drier prior year, but also due to ongoing work to optimise operational performance and availability.
The positive impact of increased generation was offset by wholesale energy prices receding following the spike in prices which had occurred in 2023 following the escalation of the war between Russia and Ukraine. However, lower energy prices also resulted in a reduction in payments under the Energy Generation Levy to £1,782,107 (2023 - £6,911,883) resulting in lower operating costs.
The company's key financial and other performance indicators during the year were as follows:
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Financial KPIs |
Unit |
2024 |
2023 |
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Revenue |
£m |
39,030 |
47,389 |
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Gross Profit |
£m |
27,529 |
31,443 |
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Operating Profit |
£m |
27,249 |
31,130 |
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Profit before tax |
£m |
20,674 |
24,273 |
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Profit after tax |
£m |
15,786 |
22,523 |
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Net assets |
£m |
14,471 |
25,525 |
Future Developments
The priorities of the Company for the future continue to be to:
- fully comply with all safety standards and environmental requirements; and
- ensure the generation assets are available to respond to customer demand, market conditions and meet contractual obligations
Additionally, a strategic review of the O&M and asset management responsibilities of the Company has been undertaken with the objective to optimise the efficiency, reliability, availability and longevity of the assets. This has led to the adoption of updated asset management and O&M plans and the decision to enter a series of new contractual arrangements to manage and maintain the assets which will come into force during 2025.
Kinlochleven Power Ltd
Strategic Report for the Year Ended 31 December 2024
Principal risks and uncertainties
The management of the business and the execution of the Company's strategy are subject to a number of risks. The key business risks affecting the Company are set out below.
Continuity of Generation
Generation is impacted by a number of factors, the principal risks being:-
• Water availability;
• Operational performance of the assets;
A secure and stable supply of water is key to the success of the Company. Management have put in place systems to monitor and control the release of water from the storage reservoir to the power station to optimise water availability. Climate change has the potential to change the pattern and volume of rainfall. The average rainfall of the West of Scotland, where the scheme operates, is monitored closely with regular risk assessment undertaken. To date, the average rainfall patterns year on year do not show any trends which cause concern.
The scheme is regularly maintained under an O&M contract, with management of the asset overseen by Green Highland Renewables Ltd, who also continually monitor the scheme and can react quickly to resolve any operational performance. A comprehensive insurance package is also maintained which covers both unforeseen business interruption and breakdowns.
Power Prices
To mitigate the risk of fluctuations in energy prices, the directors have put in place a Power Purchase Agreement which fixes the export price of energy and provides certainty over short term income (typically 12mths). All longer term forecasts and planning is undertaken based on the Baringa energy price curve forecast. The Company‘s hydropower scheme is also accredited under the Renewable Obligations scheme and Renewable Energy Generation of Origin scheme, administered by Ofgem, which both issue certificates (ROCS and Regos) for generation of renewable energy. While prices of Regos fluctuate in line with energy prices, ROCs are sold at a minimum buy-out price set by Ofgem, and are adjusted by RPI each year, thereby providing a mitigation against inflation and energy price fluctuations..
Increased Operating Costs
The main costs of operation relates to O&M costs, rates and insurance. The O&M management contract has been negotiated to limit the annual increase to no more than inflation, with an annual forecast of O&M expenditure together with a medium term outlook of forecast costs agreed annually in advance by the directors.
The risk of unforeseen increases in operating costs relates largely to breakdown & repairs and the directors are satisfied that the insurance arrangements which are in place are appropriate to mitigate this risk.
Environmental Risk
Managing environmental risk is a key priority of the directors and a range of controls and processes are in place to ensure ongoing compliance with environmental legislation. This includes an automated system to monitor the daily performance of the scheme, internal reporting of compliance reported on a monthly basis, bi-annual independent inspections of the Blackwater reservoir, where the hydropower scheme is located, and independent inspections of the dam at regular intervals.
Kinlochleven Power Ltd
Strategic Report for the Year Ended 31 December 2024
Financial Risks
Arrangements are in place to manage the financial risks arising from generation, power price and operational risks as set out above. Additionally, financial risk is actively managed through a cycle of monthly monitoring using appropriate financial and operational key performance indicators.
The Company has secured debt funding from its parent company on a long-term basis at a fixed rate of interest and therefore has no exposure to interest rate volatility.
The Company manages credit risk by assessing the credit risk of the counterparties for all revenue contracts using qualitative and quantitative criteria.
Section 172(1) statement
Section 172 of the Companies Act 2006 requires each director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. Furthermore, section 172 requires each director to have regard, amongst other matters, to the following matters:-
- the likely consequences of any decisions in the long term;
- the need to foster the company’s business relationships with suppliers, customers and others;
- the impact of the company’s operations on the community and the environment;
- the desirability of the company maintaining a reputation for high standards of business conduct; and
- the need to act fairly as between members of the company.
In discharging their section 172 duties, the directors of the Company have considered each of the matters set out above in all decision making, in addition to consideration of the specific matters relating to the decision being made. This includes the regulatory and legal responsibilities in the operation and future decommissioning of the hydropower plant.
The directors have a system of regular review of health and safety, environmental, legal and regulatory compliance and financial and operational performance. This is in addition to due and full consideration of all other pertinent matters relating to the successful operation of the Company over the course of the year including the Company’s business strategy, key risks, stakeholder related matters, corporate responsibility, governance and compliance with all legislation. This is effected by consideration and discussion of reports and presentations made to the board throughout the year and having appropriate and effective processes in place for all decision-making.
By considering the Company’s purpose, vison and values, together with its strategic priorities and its desire to ensure a high standard of business conduct is maintained at all times, the directors aim to ensure that decisions are consistent and fair in all circumstances, taking into account the Company’s relationships with and views of all of its stakeholders including its suppliers, contractors, customers, members and ultimate shareholders, local community, government and regulators. The Company does not have any employees with management and operation of the assets outsourced to contractors.
The perspectives, insights and opinions of stakeholders are recognised as being key to effective operational, investment and business decision making by the Company and its directors to ensure that decisions are fair, proportionate and sustainable. The mechanisms in place to assist the directors in understanding the relevant views of its stakeholders comprise collation and review of information from a range of different sources including specific reports and presentations on financial and operational performance, environmental, social & governance matters and the outcomes of specific engagements of work commissioned by the directors with the intended outcome being a rounded understanding of stakeholder priorities, issues and concerns.
Kinlochleven Power Ltd
Strategic Report for the Year Ended 31 December 2024
Approved and authorised by the
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Kinlochleven Power Ltd
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 of the company
The directors who held office during the year were as follows:
The following director was appointed after the year end:
Financial instruments
Objectives and policies
The company continues to prioritise maintaining consistent production and financial results. Revenues for 2025 is expected to be similar due to market factors and allowing for greater investment into the assets.
Price risk, credit risk, liquidity risk and cash flow risk
The directors of the company believe these are low risk. The company has a healthy cash reserve. A fixed price Power Purchase Agreement is in place until 2025. Payments for generation are received monthly.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Reappointment of auditors
The auditors Morris & Young, Statutory Auditor are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Approved and authorised by the
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Kinlochleven Power Ltd
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Kinlochleven Power Ltd
Independent Auditor's Report to the Members of Kinlochleven Power Ltd
Opinion
We have audited the financial statements of Kinlochleven Power Ltd (the 'company') for the year ended 31 December 2024, which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
Kinlochleven Power Ltd
Independent Auditor's Report to the Members of Kinlochleven Power Ltd
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 7], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Kinlochleven Power Ltd
Independent Auditor's Report to the Members of Kinlochleven Power Ltd
Auditor 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:
We considered the opportunities that may exist within the organisation for fraud and identified the greatest potential for irregularities to occur is in relation to revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006, UK tax legislation, employment, environmental and health and safety legislation.
We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members at planning and reminded them to remain alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
Our procedures to respond to risks identified included the following:
. reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
. enquiring of directors concerning actual and potential litigation and claims;
. we gained an understanding of the controls that the directors have in place to prevent and detect fraud. We enquired of the directors about any incidences of fraud that had taken place during the year;
. performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
. testing of the completeness and correct allocation of revenue in the year;
. reading minutes of meetings of those charged with governance;
. in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments;
. assessing whether the judgements made in making accounting estimates are indicative of a potential bias;
. and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Kinlochleven Power Ltd
Independent Auditor's Report to the Members of Kinlochleven Power Ltd
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. As with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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For and on behalf of
Chartered Accountants
6 Atholl Crescent
Perth
PH1 5JN
Kinlochleven Power Ltd
Statement of Income and Retained Earnings for the Year Ended 31 December 2024
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Note |
31 December |
31 December |
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Turnover |
|
|
|
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Cost of sales |
( |
( |
|
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Gross profit |
|
|
|
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Administrative expenses |
( |
( |
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Operating profit |
|
|
|
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Other interest receivable and similar income |
|
|
|
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Interest payable and similar charges |
( |
( |
|
|
(6,575,004) |
(6,856,710) |
||
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Profit before tax |
|
|
|
|
Taxation |
( |
( |
|
|
Profit for the financial year |
|
|
|
|
Retained earnings brought forward |
25,525,362 |
17,961,043 |
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Dividends paid |
( |
( |
|
|
Retained earnings carried forward |
14,471,427 |
25,525,362 |
Kinlochleven Power Ltd
(Registration number: SC552928)
Statement of Financial Position as at 31 December 2024
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Note |
31 December |
31 December |
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Fixed assets |
|||
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Tangible assets |
|
|
|
|
Current assets |
|||
|
Debtors |
|
|
|
|
Cash at bank and in hand |
|
|
|
|
|
|
||
|
Creditors: Amounts falling due within one year |
( |
( |
|
|
Net current liabilities |
( |
( |
|
|
Total assets less current liabilities |
|
|
|
|
Provisions for liabilities |
( |
( |
|
|
Net assets |
|
|
|
|
Capital and reserves |
|||
|
Called up share capital |
3 |
3 |
|
|
Retained earnings |
14,471,427 |
25,525,362 |
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Shareholders' funds |
14,471,430 |
25,525,365 |
Approved and authorised by the
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Kinlochleven Power Ltd
Statement of Changes in Equity for the Year Ended 31 December 2024
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Share capital |
Retained earnings |
Total |
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At 1 January 2024 |
|
|
|
|
Profit for the year |
- |
|
|
|
Dividends |
- |
( |
( |
|
At 31 December 2024 |
|
|
|
|
Share capital |
Retained earnings |
Total |
|
|
At 1 January 2023 |
|
|
|
|
Profit for the year |
- |
|
|
|
Dividends |
- |
( |
( |
|
At 31 December 2023 |
3 |
25,525,362 |
25,525,365 |
Kinlochleven Power Ltd
Statement of Cash Flows for the Year Ended 31 December 2024
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Note |
31 December |
31 December |
|
|
Cash flows from operating activities |
|||
|
Profit for the year |
|
|
|
|
Adjustments to cash flows from non-cash items |
|||
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Depreciation and amortisation |
|
|
|
|
Finance income |
( |
( |
|
|
Finance costs |
|
|
|
|
Income tax expense |
|
|
|
|
|
|
||
|
Working capital adjustments |
|||
|
Decrease/(increase) in trade debtors |
|
( |
|
|
Increase in trade creditors |
|
|
|
|
Cash generated from operations |
|
|
|
|
Income taxes paid |
( |
( |
|
|
Net cash flow from operating activities |
|
|
|
|
Cash flows from investing activities |
|||
|
Interest received |
|
|
|
|
Acquisitions of tangible assets |
( |
( |
|
|
Proceeds from sale of tangible assets |
|
- |
|
|
Net cash flows from investing activities |
|
( |
|
|
Cash flows from financing activities |
|||
|
Interest paid |
( |
( |
|
|
Dividends paid |
( |
( |
|
|
Net cash flows from financing activities |
( |
( |
|
|
Net (decrease)/increase in cash and cash equivalents |
( |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
|
Cash and cash equivalents at 31 December |
9,148,340 |
14,267,159 |
|
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
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General information |
The company is a private company limited by share capital, incorporated in Scotland.
The address of its registered office is:
The principal place of business is:
Kinlochleven Power Station
Fort William
PH33 6TH
Scotland
These financial statements were authorised for issue by the
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
Going concern
The directors have assessed the financial position of the company, including its operational performance, funding arrangements, and future cash flow projections. Based on this assessment, the directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future and have therefore adopted the going concern basis in preparing the financial statements.
The company operates a hydroelectric generation scheme with power purchase agreements in place, providing predictable revenue streams. The directors have considered potential risks including variations in water flow, maintenance requirements, and regulatory changes. Stress testing and scenario analysis have been undertaken to evaluate the impact of adverse conditions.
The company maintains sufficient liquidity and has access to technical and operational support to ensure continuity of generation. No material uncertainties have been identified that would cast significant doubt on the company’s ability to continue as a going concern.
Judgements
Fair value of assets acquired: On the acquisition of the hydropower business, in accordance with accounting standards, the company has recognised the land & building and plant & machinery acquired at fair value. In deriving the valuation of the property, plant and equipment, which is judgemental, the directors sought the expertise of separate external valuer who have valued the land and buildings, and plant and equipment. Due to their specialised nature, these assets are treated as a cash generating unit revalued by discounting their future cash flows. |
Useful lives of property, plant and equipment: Management have based the useful life of the assets as 40 years which is the expected life of the hydropower cash generating capability according to the external valuation. Any changes in estimates may affect the carrying amounts of the respective property, plant and equipment with a corresponding effect on the related depreciation charge. |
Revenue recognition
Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risk and rewards of ownership of the goods have passed to the buyer (usually on consumption of electricity), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
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Leasehold Property |
Straight line method over 40 years useful life |
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Plant and equipment |
Straight line method over 40 years useful life |
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Fixtures and fittings |
Straight line over 3 years |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price.
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twele months after the reporting date.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Turnover |
The analysis of the company's Turnover for the year from continuing operations is as follows:
|
31 December |
31 December |
|
|
Energy sales |
|
|
The analysis of the company's turnover for the year by class of business is as follows:
|
31 December |
31 December |
|
|
Energy sales |
|
|
The analysis of the company's Turnover for the year by market is as follows:
|
31 December |
31 December |
|
|
UK |
|
|
|
Operating profit |
Arrived at after charging/(crediting)
|
31 December |
31 December |
|
|
Depreciation expense |
|
|
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Other interest receivable and similar income |
|
31 December |
31 December |
|
|
Interest income on bank deposits |
|
|
|
Other finance income |
|
|
|
|
|
|
Interest payable and similar expenses |
|
31 December |
31 December |
|
|
Interest expense on other finance liabilities |
|
|
|
Staff costs |
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
|
31 December |
31 December |
|
|
Administration and support |
|
|
|
|
|
|
Auditors' remuneration |
|
31 December |
31 December |
|
|
Audit of the financial statements |
|
|
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Taxation |
Tax charged/(credited) in the profit and loss account
|
31 December |
31 December |
|
|
Current taxation |
||
|
UK corporation tax |
|
|
|
UK corporation tax adjustment to prior periods |
( |
( |
|
5,587,930 |
2,574,206 |
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
( |
( |
|
Tax expense in the income statement |
|
|
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2023 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
31 December |
31 December |
|
|
Profit before tax |
|
|
|
Corporation tax at standard rate |
|
|
|
Decrease in UK and foreign current tax from adjustment for prior periods |
( |
( |
|
Tax increase from effect of capital allowances and depreciation |
|
|
|
Tax decrease from other short-term timing differences |
( |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Decrease from tax losses for which no deferred tax asset was recognised |
( |
( |
|
Tax decrease arising from group relief |
( |
( |
|
Total tax charge |
|
|
Deferred tax
Deferred tax assets and liabilities
|
2024 |
Asset |
Liability |
|
Accelerated capital allowances |
- |
|
|
Short term timing differences - trading |
|
- |
|
Short term timing differences - non trading |
|
- |
|
|
|
|
2023 |
Asset |
Liability |
|
Accelerated capital allowances |
- |
|
|
Short term timing differences - trading |
|
- |
|
Short term timing differences - non trading |
|
- |
|
|
|
The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £2,128,919 (2023 - £2,128,919).
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Tangible assets |
|
Land and buildings |
Plant and machinery |
Assets under construction |
Total |
|
|
Cost or valuation |
||||
|
At 1 January 2024 |
|
|
|
|
|
Additions |
- |
|
|
|
|
Disposals |
- |
- |
( |
( |
|
At 31 December 2024 |
|
|
- |
|
|
Depreciation |
||||
|
At 1 January 2024 |
|
|
- |
|
|
Charge for the year |
|
|
- |
|
|
At 31 December 2024 |
|
|
- |
|
|
Carrying amount |
||||
|
At 31 December 2024 |
|
|
- |
|
|
At 31 December 2023 |
|
|
|
|
Included within the net book value of land and buildings above is £22,179,821 (2023 - £22,865,089) in respect of long leasehold land and buildings.
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Debtors |
|
Current |
Note |
31 December |
31 December |
|
Trade debtors |
|
|
|
|
Amounts owed by related parties |
|
|
|
|
Prepayments |
|
|
|
|
Income tax asset |
- |
|
|
|
|
|
|
Cash and cash equivalents |
|
31 December |
31 December |
|
|
Cash at bank |
|
|
|
Short-term deposits |
|
|
|
|
|
|
Creditors |
|
Note |
31 December |
31 December |
|
|
Due within one year |
|||
|
Trade creditors |
|
|
|
|
Amounts due to related parties |
|
|
|
|
Social security and other taxes |
|
|
|
|
Accruals |
|
|
|
|
Income tax liability |
262,309 |
- |
|
|
|
|
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Provisions for liabilities |
|
Deferred tax |
Total |
|
|
At 1 January 2024 |
|
|
|
Increase (decrease) in existing provisions |
( |
( |
|
At 31 December 2024 |
|
|
|
|
||
|
Share capital |
Allotted, called up and fully paid shares
|
31 December |
31 December |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
3 |
|
3 |
Rights, preferences and restrictions
|
Ordinary shares have the following rights, preferences and restrictions: |
|
Reserves |
Called up share capital
represents the nominal value of shares that have been issued.
Profit and loss account
includes current and prior period retained profits and losses.
|
Obligations under leases and hire purchase contracts |
Operating leases
The total of future minimum lease payments is as follows:
|
31 December |
31 December |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
Later than five years |
|
|
|
|
|
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
|
Dividends |
|
31 December |
31 December |
|||
|
£ |
£ |
|||
|
Interim dividend of £ |
26,840,377 |
14,959,009 |
||
|
Analysis of changes in net debt |
|
At 1 January 2024 |
Financing cash flows |
At 31 December 2024 |
|
|
Cash and cash equivalents |
|||
|
Cash |
14,267,159 |
(5,118,819) |
9,148,340 |
|
|
( |
|
|
|
|
|||
|
Related party transactions |
Summary of transactions with parent
Summary of transactions with subsidiaries
Kinlochleven Power Ltd
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The most senior parent entity producing publicly available financial statements is
The parent of the largest group in which these finanical statements are consolidated is KLL Holidngs Ltd, incorporated in Scotland.
The address of KLL Holdings Ltd is:
1st Floor, Inveralmond Road, Inveralmond Industrial Estate, Perth. PH1 3TW.