Skylark Biomass Ltd

	Page
Balance Sheet	1
Notes to the Financial Statements	2—5

1. General Information

Skylark Biomass Ltd is a private company, limited by shares, incorporated in England & Wales, registered number 12537902 . The registered office is C/O Cutts And Company, Eden Point Three Acres Lane, Cheadle Hulme, Cheadle, SK8 6RL and there is no single principal place of business.

The presentational currency of these financial statements is Pound Sterling (£).

Accounts in these financial statements are rounded to the nearest £.

2. Accounting Policies

2.1. Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 section 1A Small Entities "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

2.2. Going Concern Disclosure

The directors have not identified any material uncertainties related to events or conditions that may cast significant doubt about the company's ability to continue as a going concern. The company is reliant upon the continued support of Skylark Holdings SAS, the company's immediate parent company. Skylark Holdings SAS has confirmed in writing that it does not intend to seek repayment of this loan in the 12 month period following the sign off date of these financial statements.

2.3. Significant judgements and estimations

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the reporting date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes might differ from those estimates.

The following judgements have been made by the directors in applying the company's accounting policies:

Property, plant and equipment

Property, plant and equipment is depreciated over the average lease term of the sites on which the assets are sited. This has been estimated by the directors to be 13.5 years (with effect from 1 January 2022) equating to 7.41% per annum.

Other loan provision

The directors have a provision of £5,500,000 against a loan within Other debtors which is based on the discounted cash flows generated by the plant held at that debtor's site over the next 9 years.

2.4. Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and VAT. Turnover relates to remittances from Ofgem and other power companies for energy produced by the company at its site. Turnover is reduced for estimated rebates and other similar allowances.

2.5. Tangible Fixed Assets and Depreciation

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided at rates calculated to write off the net book value at 1 January 2022 and the cost of the fixed assets purchased thereafter, less their estimated residual value, over their expected useful lives on the following bases:

Plant & Machinery

7.41% per annum

2.6. Leasing and Hire Purchase Contracts

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.

2.7. Foreign Currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.

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Skylark Biomass Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 December 2024

2.8. Taxation

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 as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other year and items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable timing 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 timing differences can be utilised. 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 assets and liabilities 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. Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. The measurement of deferred tax liabilities and asset reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current or deferred tax for the year is recognised in profit or loss, except when they related to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively.

2.9. Borrowing costs

All borrowing costs are recognised in the profit and loss account in the year in which they are incurred.

2.10. Financial instruments

The company only has basic financial instruments, which are recognised at amortised cost.

Debtors

Short term debtors are measured at transaction price less any impairment.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including loans, are measured at amortised cost.

3. Average Number of Employees

Average number of employees, including directors, during the year was: NIL (2023: NIL)

4. Tangible Assets

	Plant & Machinery
	£
Cost
As at 1 January 2024	10,932,142
Additions	4,100,000

As at 31 December 2024	15,032,142

Depreciation
As at 1 January 2024	1,658,319
Provided during the period	763,913

As at 31 December 2024	2,422,232

Net Book Value
As at 31 December 2024	12,609,910

As at 1 January 2024	9,273,823

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Skylark Biomass Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 December 2024

5. Debtors

	2024	2023
	£	£
Due within one year
Trade debtors	984,650	172,606
Prepayments and accrued income	349,623	573,814
Other debtors	1,469,219	4,101,040

	2,803,492	4,847,460

6. Creditors: Amounts Falling Due Within One Year

	2024	2023
	£	£
Trade creditors	32,204	7,155
Other creditors	-	379,886
Accruals	285,500	310,422
Amounts owed to group undertakings	311,680	360,379

	629,384	1,057,842

7. Creditors: Amounts Falling Due After More Than One Year

	2024	2023
	£	£
Amounts owed to group undertakings	18,413,528	12,395,763

8. Share Capital

	2024	2023
	£	£
Allotted, Called up and fully paid	100	100

9. Related Party Transactions

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", not to disclose related party transactions with wholly owned subsidaries within the group.

Interest and loan balances with group companies are shown in notes 6 and 7 respectively. Accruals include related party balances of £285,500 (2023: £310,422) owed to group companies.

10. Exceptional Items

At the year end the company provided an amount of £5,051,405 (2023: £448,595) against a loan included within Other debtors, which has been charged against profit.

11. Ultimate Parent Undertaking and Controlling Party

The company's immediate parent is Skylark Holdings SAS and its ultimate parent undertaking is InfraVia Capital Partners SAS which, on 14 November 2024, acquired 75% of the shares of the company's previous ultimate parent company, Kyotherm SAS. The group accounts are not available for public access.

The ultimate controlling parties are not disclosed on the Paris Registre du Commerce et des Societes.

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Skylark Biomass Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 December 2024

12. Audit Information

The auditor's report on the accounts of Skylark Biomass Ltd for the year ended 31 December 2024 was qualified.

The basis of qualification in the auditor's report was as follows:

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Included in trade and other debtors are balances of £947,857 and £1,463,508 respectively owed by a non-connected company. The other debtor is a working capital loan whose repayment terms have been breached by the debtor company. Skylark Biomass Limited has not pursued payment or drawn up a new agreement. The last filed financial statements of the debtor company show it to be technically insolvent.

Skylark Biomass Limited has provided £5,500,000 against the original gross loan debt plus interest of £6,963,508 based on discounted cash flows for the RHI income generated from its plant located at the site of the debtor company. Management of Skylark Biomass Limited have taken a big picture view that the RHI cashflows and income is effectively a return on its own plant and on the debt owed by the debtor company.

We disagree with this rationale as paragraph 2.52 of FRS102 does not permit the offset of assets and liabilities, or income and expenses, unless required or permitted by FRS 102: it does not permit this in this case. Furthermore, SI 2008/409, Schedule 1, Section 8 (as found in the UK's Small Companies and Groups (Accounts and Directors' Report) Regulations 2008) sets out a general rule that balances and profits are not to be offset against each other, meaning that assets and liabilities, or income and expenses, cannot be set off against each other. This ensures clarity and prevents misrepresentation in a company's financial statements, providing a foundation for accounting principles.

Consequently we disagree with the lack of further provision against these two debtor balances of £947,857 and £1,463,508.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

The matters required to report by exception are stated below:

The auditor's report was signed by Paul Allan Byrne BA (Double Hons) FCA (Senior Statutory Auditor) for and on behalf of Ascendis Audit Limited , Statutory Auditor.

Ascendis Audit Limited

Unit 3 Building 2, The Colony

Altrincham Road

Wilmslow

Cheshire

SK9 4LY

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		2024		2023
	Notes	£	£	£	£
FIXED ASSETS
Tangible Assets	4		12,609,910		9,273,823

			12,609,910		9,273,823
CURRENT ASSETS
Debtors	5	2,803,492		4,847,460
Cash at bank and in hand		765,568		374,855

		3,569,060		5,222,315
Creditors: Amounts Falling Due Within One Year	6	(629,384 )		(1,057,842 )

NET CURRENT ASSETS (LIABILITIES)			2,939,676		4,164,473

TOTAL ASSETS LESS CURRENT LIABILITIES			15,549,586		13,438,296

Creditors: Amounts Falling Due After More Than One Year	7		(18,413,528 )		(12,395,763 )

PROVISIONS FOR LIABILITIES
Deferred Taxation			(771,616 )		(485,383 )

NET (LIABILITIES)/ASSETS			(3,635,558 )		557,150

CAPITAL AND RESERVES
Called up share capital	8		100		100
Profit and Loss Account			(3,635,658 )		557,050

SHAREHOLDERS' FUNDS			(3,635,558)		557,150