Company registration number:
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COMPANY INFORMATION
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CONTENTS
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DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MARCH 2023
The directors present their report and the financial statements for the period ended 31 March 2023.
The directors who served during the period were:
The directors are responsible for preparing the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments 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 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 to 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.
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DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
The Directors continue to adopt the going concern basis of accounting in preparing the financial statements. More details are given in note 2.2 of the financial statements.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 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.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY CENTRAL MILTON KEYNES LIMITED
We have audited the financial statements of ThamesWey Central Milton Keynes Limited (the 'Company') for the period ended 31 March 2023, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position, the Statement of Cash Flows and the related notes, 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).
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 Auditors' 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 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.
We draw attention to note 2.2 in the financial statements, which indicates that the directors have concluded that there is a
material uncertainty in relation to the Company's ability to continue in operational existence for the foreseeable future. This
material uncertainty primarily arises from the ongoing reliance on the revolving loan facilities from a single funder, Woking
Borough Council, who are currently under a section 114 notice. As stated in note 2.2, these events or conditions, along with
the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the
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 evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included discussions with them with regard to the future plans for the business.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY CENTRAL MILTON KEYNES LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors' Report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY CENTRAL MILTON KEYNES LIMITED (CONTINUED)
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 Auditors' 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:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
∙The Companies Act 2006;
∙Financial Reporting Standard 102;
∙UK health and safety legislation; and
∙General Data Protection Regulations.
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial
statement items.
We understood how the Company is complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might
occur. Audit procedures performed by the engagement team included:
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
∙Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation
for fraud and identified the greatest potential for fraud in the following areas:
∙Posting of journals to the accounting software which are of a non-routine nature in terms of timing and amount; and
∙Timing of revenue recognition.
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THAMESWEY CENTRAL MILTON KEYNES LIMITED (CONTINUED)
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditor
1st Floor
Midas House
62 Goldsworth Road
Surrey
GU21 6LQ
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 31 MARCH 2023
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STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 22 form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2023
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STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
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ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
ThamesWey Central Milton Keynes Limited is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006, and registered in England and Wales. The Company's registered address can be found on the Company Information page.
The Company's principal place of business is 323 Avebury Boulevard, CBX Service Road, Milton Keynes, MK9 2GA.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company extended the year end from 31 December 2022 to 31 March 2023. The year end was extended to be coterminous with the year end of the ultimate shareholder, Woking Borough Council. Therefore, comparative amounts presented in the financial statements, including the related notes, are not entirely comparable.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The financial statements have been prepared on a going concern basis. In determining that the going concern basis of accounting remains appropriate, the Directors have considered the latest guidance on going concern and financial reporting by the Financial Reporting Council.
The going concern basis adopted in preparing the financial statements is contingent upon the continued financial support of the Company’s ultimate parent undertaking, Woking Borough Council.
The Company is financed by way of share capital and long-term loans from the ultimate parent undertaking, Woking Borough Council. The Company pays interest on the loans at a rate that reflects the cost of the Council’s own borrowings plus an agreed margin. The interest charges and loan balance are due to be repaid from operating cashflows generated from the Company’s energy generation activities over the next 20 or more years.
As part of the Directors' review of the going concern status of the Company they have carried out a funding commitment review to identify the loans required for the balance of the 2024/25 financial year.
The Directors and the ultimate parent undertaking are aware that in the coming years the entity will require support from the ultimate parent entity with additional cashflow funding to meet current liabilities and interest costs in excess of in-year profits generated by the company. In addition, the entity is reliant on the ultimate parent to not demand the repayment of loans and interest to the detriment of the company. As part of the Directors review they have assessed the ultimate parent entity’s ability to provide the required funding and have ensured that the Government appointed Commissioners have endorsed the position.
Woking Borough Council have provided a letter granting the company a debt and interest payment suspension until 31 March 2025, contingent upon various solvency and EBITDA tests and as part of the Council's Government support package.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
2.Accounting policies (continued)
The Company’s ability to generate sufficient cashflows over the longer-term to repay the funding support received is dependent on a number of significant and uncertain future factors. These factors include the timing and scale of new customer connections, the profit margins achievable on energy supplied to customers and the cost of operations, the impact of future carbon reduction legislation on the Company’s operations, and the availability and cost of future funding support.
The Company has also experienced fluctuating cashflows due to spiralling energy costs and has strengthened its credit control function to mitigate the impact. The Company continues to engage with government bodies in relation to short and long term issues in the UK energy sector.
The Directors continue to monitor the Company’s profitability, cashflows and plans, and discuss them with the ultimate parent undertaking, and have concluded that at the date of signing the accounts that it is appropriate to prepare the financial statements on a going concern basis. However, they acknowledge that the challenges facing the Company given the future funding requirements and its significant net liability position, mean that there is uncertainty with regard to its going concern status.
Turnover relating to the sales value of units of energy is recognised at the time at which energy is supplied, this is based on periodic meter readings and includes estimates of the value of units supplied to customers between the date of the last meter reading and the year end. Turnover also includes the sales value of service charges relating to the maintenance and supply of energy meters. Turnover relating to the sales value of service charges is recognised at the point at which the service is performed. All turnover is stated net of VAT and discounts.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Other than the matters disclosed in note 2.2 Going concern, the directors do not consider there to be any judgments or estimation uncertainty which materially impact these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
There were no factors that may affect future tax charges.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
The Company's immediate parent company is ThamesWey Energy Limited, a company incorporated in England and Wales.
The Company's ultimate parent undertaking is considered to be Woking Borough Council. The smallest group into which the Company is consolidated is ThamesWey Limited. The address of their registered office is: The St Botolph Building, 138 Houndsditch, London, EC3A 7AR.
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