ANNUAL REPORT
31 DECEMBER 2022
PAGE
3
6
9
10
11
17
20
24
25
29
30
31
32
33
IBC
CONTENTS
Chairman’s Statement
Chief Executive Officer’s Statement
Board of Directors
Directors’ Report
Corporate Governance Report
Audit Committee Report
Directors’ Remuneration Report
Directors’ Responsibility Statement
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Company Information
Uskmouth power station
Vessel Control Room
Shop 1 Nigg Energy Park
TTG2 Deployment 2023
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 3
Chairman’s Statement
Introduction
Following the significant restructuring of the business in the first part of 2022, I am pleased to report that the last
12 months has seen the Group make solid progress on its key projects. Key highlights have been the execution
of the lease agreement and receipt of the £10 million upfront premium on our first battery energy storage system
(“BESS”) project at Uskmouth, strong operating performance at MeyGen Phase 1A, and the award of a 28 MW
Contract for Difference for MeyGen Phase 2.
Uskmouth
Following the difficult decision in 2022 to halt the development of the Uskmouth Power Station conversion from
coal to waste-derived fuel pellets, we have made excellent progress on the redevelopment of the site into
a Sustainable Energy Park.
The Group made significant progress over the last 12 months on the 230 MW BESS with Energy Optimisation
Solutions and Quinbrook Infrastructure Partners, including securing the necessary grid variations in August 2022,
the grant of planning consent by Newport City Council in December 2022 and culminating in the execution of the
lease agreement in June 2023 and receipt of the final instalment of the £10 million upfront premium in July 2023.
Energy Optimisation Solutions and Quinbrook Infrastructure Partners are expected to commence construction
of the project later this year.
The Group is also in advanced stage discussions with another developer in relation to co-developing a further
120 MW battery energy storage system project on the Uskmouth site which we look forward to providing
further details of in the coming months.
We continue to work on the development of a comprehensive plan for the redevelopment of the Uskmouth site
into a Sustainable Energy Park and continue to believe that there is the potential to unlock significant value from
the site from both further battery energy storage systems as well as other sustainable energy initiatives.
As well as delivering value to shareholders, the successful development of our first BESS project at Uskmouth is
allowing the Group to develop and demonstrate our capabilities in developing BESS projects. We see a significant
market opportunity in the UK for BESS projects and we are exploring further opportunities at Uskmouth as
well as elsewhere.
Tidal engineering and services division
In October 2022, we announced new investment into, and the purchase of a 79% shareholding in, the Group’s
tidal engineering and services division by Proteus Marine Renewables Limited (“Proteus”). Whilst the vertical
integration between tidal turbine supplier and tidal project developer has served the Group well to date in the
development of the tidal industry, there was always a recognition that these were very different businesses and
as the tidal power industry has matured, we considered that this was the right time to separate the two businesses
to allow each to focus on its own very different objectives.
This was another difficult decision but ultimately one that the Board considered essential in the interests of each
business. If the tidal power sector is to be viable, it needs well capitalised tidal turbine suppliers that can provide
large turbine orders backed by the required warranties, which the Group is not able to provide given its financial
position.
The spin-out of the Group’s tidal engineering and services division was the last stage in our restructuring that
has significantly reduced the Group’s operating costs and created a pure play sustainable energy and battery
storage project developer. I am pleased to report that the Group is working well with Proteus on MeyGen 1A as
well as with regard to the potential tidal turbine supply for MeyGen 2.
Annual Report and Accounts 2022 3
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 4
Chairman’s Statement
continued
MeyGen phase 1A
We have continued to make good progress in stabilising operations at MeyGen Phase 1A. In September 2022, we
returned the third of the four MeyGen 1A tidal turbines to service, with all three turbines operating well over the
course of much of the last 12-months. The fourth turbine was successfully returned to operation in July 2023
following a significant upgrade and refurbishment programme of works, however, at the same time, we took the
difficult decision to bring forward the reshoring of the Atlantis-supplied “Turbine 4” to allow for preventative
maintenance and upgrade works.
In February 2023, MeyGen Phase 1A achieved a significant milestone in generating 50 GWh of clean and
predictable electricity since the project’s inception. Whilst the Phase 1A project has historically had a significant
number of technical challenges associated with it being a “first of kind” project, it is now in a situation where it is
in stable operations with significant learnings which are being applied to ongoing operations as well as to
MeyGen 2.
MeyGen phase 2
We were delighted to announce in July 2022 that we had secured a Contract for Difference (CfD) from the
UK government in the AR4 allocation round for a further 28 MW of tidal power at the MeyGen site. Following the
announcement, we have progressed development of the project including initial design and engineering work,
negotiations with potential tidal turbine suppliers, and the appointment of a financial advisor to advise on securing
debt and equity funding for the project. Financial close of the project is targeted for Q2 2025 and we will provide
further updates as development progresses.
Securing this CfD is a very significant development for MeyGen and for the tidal power sector as a whole, allowing
an expansion of MeyGen’s existing 6 MW array to a total of 34 MW. It allows the Group to build upon the success
and learnings of the MeyGen Phase 1A project to deliver a project at commercial scale that will be able to
demonstrate the commercial viability of tidal power as a key source of clean and predictable power.
New conversion opportunities
The Group continues to seek opportunities internationally to apply the expertise that it developed in the Uskmouth
Power Station conversion project to other coal to waste-derived fuel pellet conversion projects. Our efforts remain
focused in Eastern Europe where we see a number of potential opportunities given continued high gas prices,
security of supply concerns, and the availability of waste feedstocks.
We continue to be of the view that simply closing coal-fired power stations in many countries around the world
is not an option, so conversions of existing coal-fired power plant to waste derived fuel pellets that bring down
carbon emissions significantly, akin to those of a new gas-fired power station, and which in addition address the
huge issue of plastic waste, are compelling. Our focus over the last 12 months has been on development activities
at Uskmouth and MeyGen, but we will continue to seek to identify potential opportunities and will update
shareholders accordingly.
Strategy
With the spin-off of the tidal turbine engineering and services business, we are a pure play developer of innovative
sustainable alternative energy projects. We are not seeking to compete with large utilities and oil companies in
delivering “commoditised” renewable energy projects such as wind and solar, but rather seek to identify innovative
solutions to help aid the energy transition. In particular, we recognise the challenges posed by the growing
dominance of weather-dependent renewable generation and that the transition to renewables and net zero cannot
be immediate.
Our BESS projects will serve to provide grid stability given the dominance of weather dependent, intermittent
renewables and our tidal projects provide a predictable source of generation that is uncorrelated to weather
dependent renewables. Our coal project conversions provide a predictable, diversified source of sustainable power
generation, provides for a larger reduction in carbon emissions than the same capacity of weather-dependent
renewables, and delivers the added benefit of addressing the plastic pollution problem.
4 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 5
Chairman’s Statement
continued
Our priorities in the near term remain focused on the development of the Uskmouth Sustainable Energy Park, and
the stabilisation of existing operations at, and expansion of, the MeyGen tidal project.
Thank you
The transition to net zero continues to be a key global priority and as a Group we remain committed to making
a tangible contribution to the transition to net zero. We look forward to the next 12 months and to keeping you
apprised of our progress.
I would like to sincerely thank all the members of our fantastic management team for their hard work throughout
the last 12 months and all of our stakeholders - shareholders, local communities, governments, and business
partners - for their ongoing support to the Group and our projects.
Annual general meeting
Our Annual General Meeting will be held on Friday 11 August 2023. Details of the resolutions to be proposed are
set out in a separate Notice of Annual General Meeting, which accompanies this report for shareholders receiving
hard copy documents, and which is available at www.saerenewables.com for those who elected to receive
documents electronically.
Duncan Black
Chairman
25 July 2023
Annual Report and Accounts 2022 5
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 6
Chief Executive Officer’s Statement
The business has made significant progress in the last 12 months, and I am incredibly proud to have led the
committed and dedicated team who delivered this change, ensuring that we are in a really strong position to
deliver an exciting future for our company and our shareholders.
Key to this change has been focus. We have worked across the business to set clear objectives and focus on
four strategic priorities:
l
l
Create a streamlined business, which can identify, respond, and deliver opportunities for the company.
Significantly reduce costs and improve efficiency, aligned around 2 business areas: tidal stream and battery
energy storage systems (BESS).
l Maximise the return on our assets at Uskmouth and MeyGen.
l
Dispose of non-core businesses.
In the last 12 months, we have made significant gains against these priorities, with the business streamlined and
focused on delivery, I am pleased to set out below how we have progressed in our business areas.
Tidal Stream Business:
The MeyGen site continues to demonstrate why it is the global home of tidal stream energy.
The phase 1a project continues to perform above expectations, with availability above 90% and the significant
milestone of 50 GWh of generation recently achieved. This represents more than 70% of the global generation of
tidal stream electricity.
Recently we have successfully deployed turbine 2, following significant upgrade work. We appreciate that this
turbine has been out of the water longer than we all would like, but taking the time to install these significant
upgrades are key in proving the technology and ensuring the projects long term success. During the same
operation we took the opportunity to collect turbine 4 so we can complete some performance enhancing
upgrades. We are extremely grateful for the support we continue to receive from the Scottish government and its
associated organisations.
We were all very excited to secure a Contract for Difference (CfD) of 28 MW in the Application Round Four (AR4)
auction. We were pleased with the outcome of AR4 and that the price was an endorsement of our responsible
bidding strategy, securing the maximum price possible for our project. This guaranteed revenue stream is critical
in unlocking future stages of the project. A lot has happened in the world since winning the auction, which
continues to drive up costs for all technologies, including offshore wind. Tidal stream is equally impacted and the
project economics are challenging. The team and I have been working tirelessly to manage these increases and
deliver a viable project, while meeting the CfD timescales which are, Financial Investment Decision in 2025 and
Commercial Operations in 2028.
Our ambition remains to deliver utility-scale tidal stream energy at the MeyGen site and we have been successful
with our application for the next auction round, Application Round Five (AR5). The application window closed
24th April, with the sealed bid window open from 9th August 2023 to 15th August 2023. The results are expected
sometime before 8th September 2023.
A major change in the tidal stream business is to mirror a similar model, like other renewable industries, where
the development business is separate from the technology business. This allows us to prioritise the delivery of
the site and work across the turbine industry. This meant in October 2022 we agreed to the sale of a majority
stake in our Advanced Tidal Engineering and Services division (ATES). This was the best option for the business.
As well as allowing us to focus on site delivery it also helped us achieve our focus on reducing operating costs,
and together with the net sale proceeds, provides additional funding to support Group operations and the
development of key projects.
6 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 7
Chief Executive Officer’s Statement
continued
BESS Business:
The move into BESS is an exciting development for the company. It’s a huge growth market with demand for
energy storage and grid services increasing dramatically as intermittent renewables contribute more to the grid
and the cost of gas and coal increase, and their use is phased out. We are very excited to help deploy this critical
technology and find that it contributes to both our sites and experience.
Uskmouth Sustainable Energy Park
In May we were delighted to announce a 230MW battery storage project, which will be owned and operated by
Quinbrook Infrastructure Partners and is due for completion in approximately 24 months. This project reached
financial close during July 2023. We have recently signed a variation to this contract which could facilitate an
additional 100MW of generation on the site.
We are working hard to finalise the details of a further 120 MW BESS project which is currently in the planning
process, we hope to be able to provide further details on this in the coming months with a target of a favourable
planning outcome in early 2024.
We have identified the potential for c.1 GW of BESS projects at the Uskmouth site and it's our aspiration to deliver
this. The demand for BESS at the Uskmouth site is high, and the infrastructure and land we own make it an ideal
location and vital in helping the decarbonisation journey for the area.
MeyGen
The opportunity to combine two of our core business areas is very exciting. Tidal energy is the most predictable
source of renewable energy and what we are looking at is the co-location with BESS to deliver a real base load
solution. There is an appetite in Government to see this type of energy solution developed, and we think the
MeyGen site is the perfect location.
We are working on a BESS project of 287 MW with a grid connection date of 2027, which will complement the
tidal stream project. There is a lot of work being done to unlock this opportunity, but it represents the next step in
our evolution.
Sustainable Fuel Conversions Business:
Finally, while we have cancelled the Uskmouth conversion, we still retain significant knowledge and experience
and see the potential of global opportunities to utilise this learning, however this is not a priority for the business
at this time, our clear focus is on BESS and Tidal development.
2022 financial Performance:
The Group recorded a loss before tax of £11.1 million for the year ended 31 December 2022, compared with a
£74.1 million loss in the prior year. The improvement in the results is driven by a £5.0 million reduction in operating
expenses coupled with a £2.0 million improvement in the Uskmouth sustainable energy park valuation compared
to the recognition of £53.1 million of non-cash impairment provisions in 2021, and a reduction of £7.4 million in
depreciation & amortisation expenses. The group also recognised a £2.4 million loss on sale of the Advanced
Tidal and Engineering services division.
Group revenue fell from £9.3 million in 2021 to £8.5 million in 2022. This reflected the completion of the Japanese
consulting contract in 2021 and the impact of the sale of Green Highland Renewables in 2021 offset by an
improvement in the performance of MeyGen and income from the sale of metals and consumables at the
Uskmouth power station.
Power sales from the MeyGen tidal power project were £3.9 million, a rise of £2.3 million from 2021 reflecting the
successful deployment of two turbines in March and September 2022.
Total expenses for the year (excluding depreciation and impairment) were £11.6 million, down from £16.6 million
in 2021. The reduction in expenses reflects the completion of the restructuring of the group during 2022 with
average headcount falling from 81 to 22 full time employees and lower costs incurred on MeyGen operations.
Annual Report and Accounts 2022 7
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 8
Chief Executive Officer’s Statement
continued
The Group’s closing net asset balance was £5.7 million (2021: £16.7 million) with the decrease primarily being
the result of the trading performance during the year.
In March 2023 the Group reached agreement with its Atlantis Future Energy debenture holders to defer repayment
of £4.9 million of principal due on the 31 March 2023 until 31 March 2024. In June 2023 the Group reached
agreement with its Atlantis Ocean Energy debenture holders to defer repayment of £4.9 million of principal due
on the 30 June 2023 until 30 June 2024.
Graham Reid
Chief Executive Officer
25 July 2023
8 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 9
Board of Directors
Duncan Stuart Black
Non-Executive Chairman
Duncan was appointed Chair of the of the Board on 1 September 2021, following his return to the Board as a
Non-Executive Director in October 2020. Duncan previously served as the Chief Financial Officer and an Executive
Director of the Company from 2012-2015, and subsequently as a Non-Executive Director. He has been based in
Asia for over 20 years working in the power and infrastructure sectors as a project developer, CFO, investment
banker and fund manager. Duncan’s previous roles have included Co-Head of Infrastructure Investment at
Eastspring Investments (part of Prudential plc), Asia Head of Acquisitions at Deutsche Asset Management’s
infrastructure funds management business, and CFO of CLP Holdings’ Australian electricity and gas utility
business, now EnergyAustralia. Duncan is currently engaged in asset management of renewable energy projects
in Asia for a leading impact fund manager. Duncan has a BEng (Hons) in Civil Engineering and a PhD in Fluid
Dynamics, each from Imperial College, London.
Graham Matthew Reid
Chief Executive Officer
Graham Reid became Chief Executive Officer and a member of the Board of Directors on 18 January 2021.
Graham is an experienced and highly capable CEO, leader and engineer with extensive international experience
in the energy and infrastructure space. Prior to joining the Company, Graham was CEO of RES Americas, and prior
to that CEO of Arcadis Middle East, a member of Network Rail’s project delivery board for the London bridge
station project and earlier in his career was the UK Managing Director and an Executive Board member of Hyder
Consulting plc. Mr Reid has delivered more than 5GW of wind, solar and storage projects in previous roles, Mr Reid
has been selected by the Board of Directors to build on the successful development history of the Company.
Simon Matthew Hirst
Chief Financial Officer
Simon Hirst was appointed Chief Financial Officer on 25 April 2022. Simon has worked at SAE since 2015 and
has primarily been responsible for all financial and commercial aspects of the MeyGen project. Before joining
SAE, Simon gained international blue-chip corporate experience at a number of organisations including
ExxonMobil, Pepsi Cola, Iron Mountain and international power generation company InterGen.
John Anthony Clifford Woodley
Non-Executive Director
John Woodley joined the Board on 22 September 2008. He was at that time co-head of the power and gas related
commodity business for Europe and Asia at Morgan Stanley. He founded the very successful US electricity trading
operations for Morgan Stanley in New York in 1994, having worked as a power plant operator and then as an
industrial marketing engineer for electric utilities. After ten years with Morgan Stanley in New York, John moved
to London to help build the electricity and electricity-related energy business outside the US. John is now based
in Switzerland and acted as a senior adviser to Morgan Stanley until Q1 2021. John has a BSc Eng (Elec) from
Wits University, Johannesburg, an MBA from Valdosta State University and an MS in Finance from Georgia
State University.
Annual Report and Accounts 2022 9
266018 Simec Atlantis Energy_pp03-pp10.qxp 25/07/2023 14:08 Page 10
Directors’ Report
The Directors are pleased to present their report and the consolidated audited financial statements of the
Company and the Group for the year ended 31 December 2022.
Corporate governance
The corporate governance statement on pages 11 to 16 forms part of the Directors’ report.
Principal activities and business review
The Group is a global developer, owner and operator of renewable and sustainable energy projects. The Group
holds equity positions in the world’s flagship tidal stream project, MeyGen and the Uskmouth power station site
that is being repurposed into a sustainable energy park initially housing battery energy storage projects. Further
information on the Group’s activities is contained in the Chief Executive Officer’s Statement on pages 6 to 8.
A review of the business during the year is contained in the Chairman’s Statement and Chief Executive Officer’s
Statement on pages 3 to 8.
Directors
The Directors who served in office during the year ended 31 December 2022 were as follows:
Duncan Black – Independent Non-Executive Chairman
Graham Reid – Chief Executive Officer
Simon Hirst – Chief Financial Officer – appointed 25 April 2022
John Woodley – Non-Executive Director
Andrew Charters – Chief Financial Officer - resigned 25 April 2022
Andrew Dagley – Non-Executive Director – resigned 18 August 2022
Further detail of the Board changes can be found in the Corporate Governance Report on pages 11 to 16.
Directors’ remuneration
The report on Directors’ remuneration is set out on pages 20 to 23.
Directors’ interests in shares
The interests of Directors in shares of the Company are disclosed in the Remuneration Report on pages 20 to 23.
Annual general meeting
The Company’s Annual General Meeting will take place on 11 August 2023 at 11.00 am. Further details of the
AGM can be found within the separate Notice of Annual General Meeting available at www.saerenewables.com.
This report was approved by the Board 25 July 2023 and signed on its behalf.
By order of the Board of Directors
Duncan Black
Chair of the Board
25 July 2023
Graham Reid
Chief Executive Officer
25 July 2023
10 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 11
Corporate Governance Report
The Company was incorporated in Singapore under the Singapore Companies Act on 19 December 2005 and has
been listed on AIM since 20 February 2014.
The Directors recognise the importance of sound corporate governance and the Board is committed to
maintaining high standards of corporate governance in line with an effective and efficient approach to
management. The Board has taken into consideration the Corporate Governance Code for Small and Mid-Size
Quoted Companies produced by the Quoted Companies Alliance (“QCA Code”) and has taken steps to comply
with the principles of the QCA Code in so far as they can be applied practically, given the size of the Group, its
stage of development, resources and the nature of its operations.
The QCA Code adopts key elements of the UK Corporate Governance Code, as well as other relevant guidelines
and tailors these to the needs and particular circumstances of small and mid-size quoted companies on a public
market. Further details of the Company’s application of the QCA Code are set out in this report or on the
Company’s website. Where we do not comply with the QCA Code, this is set out in further detail on our website.
The Board of Directors
During 2022, the Board comprised four Directors by the end of the year. The Board comprises an independent
Non-Executive Chairman, one independent Non-Executive Director and two Executive Directors: the Chief
Executive Officer and the Chief Financial Officer.
The following Directors of the Company were in office during the whole of the year ended 31 December 2022:
Duncan Black – Independent Non-Executive Chairman
Graham Reid – Chief Executive Officer
John Woodley – Non-Executive Director
On 25 April 2022 Andrew Charters resigned as Chief Financial Officer and was replaced by Simon Hirst.
Andrew Dagley resigned as non-executive director on 18 August 2022.
Director biographies illustrating their relevant skills and experience can be found on page 9.
The Chairman
The Chairman, Duncan Black, is deemed by his fellow Directors to be independent and to have no conflicting
relationships.
The Chairman is responsible for providing leadership for the Board and ensuring its effectiveness in all aspects
of its role, ensuring that Directors have sufficient resources available to them to fulfil their statutory duties.
The Chairman is responsible for running Board meetings, ensuring there is sufficient challenge from Non-
Executive Directors with a particular focus on strategic issues. The Chairman promotes a culture of openness
and debate by facilitating the effective contribution of Non-Executive Directors in particular, and by encouraging
a constructive relationship between Executive and Non-Executive Directors. Board members are encouraged to
openly and constructively challenge proposals made by executive management. Board agendas are reviewed
and agreed in advance to ensure each Board meeting utilises the Board’s time most efficiently. The Board and its
Committees are provided with information on a timely basis in order to ensure proper assessment can be made
of the matters requiring a decision or insight.
The Board
The Board is collectively responsible for the effective oversight and long-term success of the Company. It has
responsibility for formulating, reviewing and approving the strategic direction and governance structure to achieve
the long-term success of the Company and deliver shareholder value.
In addition to setting the strategy, the Board takes the lead in areas such as financial policy and making sure the
Company maintains a sound system of internal control. The Board’s responsibilities are set out in a formal schedule
of matters reserved for the Board. This schedule is reviewed and updated by the Board where considered appropriate.
Annual Report and Accounts 2022 11
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 12
Corporate Governance Report
continued
The Board receives appropriate and timely information prior to each meeting, A formal agenda is produced for
each meeting, and Board and Committee members are given a sufficient period of time to review these prior to
the meetings taking place. Directors are encouraged to attend all Board meetings and meetings of Committees
of which they are members.
The Board delegates authority to its Committees to carry out certain tasks on its behalf, so that it can operate
efficiently and give an appropriate level of attention and consideration to relevant matters. The composition and
role of each Committee is summarised below and is further detailed on pages 13 to 15.
The role of the Chairman and the Chief Executive Officer are separate with a distinct division of responsibilities.
Notwithstanding that Duncan Black holds ordinary shares of the Company (as detailed on page 20), the Board
has considered his independence and has concluded that Duncan has demonstrated the utmost regard for his
independence, appropriately challenging the Board during his tenure as Chairman and maintains high standards
of corporate governance on the Board. Furthermore, the Board considers that Duncan has not served as a
Non-Executive Director for an undue length of time.
In accordance with the QCA code, the Board consists of at least two Independent Non-Executive Directors.
The Board is aware of the other commitments and interests of its Directors and effective procedures are in place to
deal with any conflicts of interest which may arise. Any changes to these commitments and interests are reported
to the Board at the earliest opportunity. SAE and SIMEC entered into a relationship agreement to ensure that the
Company can continue to operate independently of the SIMEC Group and the GFG Alliance, and whilst that
agreement has now terminated, key provisions of this agreement continue to be effective that continue to provide
this assurance.
As well as the support of the Company Secretary, there is a procedure in place for any Director to take independent
professional advice at the Company’s expense in the furtherance of their duties, where considered necessary.
Board Diversity
Diversity, equality and inclusion are very important to the Board of Directors and the Executive Team. All candidates
are selected for roles on the basis of their credentials and suitability for that role. Further information about our
approach to diversity, equality and inclusion can be found in the Our People section on page 16 and on our website
www.saerenewables.com.
Board Operation
The Directors meet at regular Board meetings, held at least four times a year, with additional meetings arranged
as necessary. During the year to 31 December 2022, the number of scheduled Board meetings attended by each
of the current Directors was as follows:
Attended
Duncan Black 14/14
Graham Reid 14/14
John Woodley 13/14
Simon Hirst 7/7
Additional Board meetings were also held as required during the year and were attended by those Directors
available at the time.
The Group has a detailed Delegated Authority Matrix which is reviewed by, and approved by, the Board on at least
an annual basis, or more frequently as may be required. The Delegated Authority Matrix provides an overview of
the thresholds of approval that senior management and the subcommittees of the Board can operate to. It is
intended to ensure that the day-to-day operation of the business can operate in accordance with Board approved
budgets while ensuring that any deviations are appropriately escalated.
12 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 13
Corporate Governance Report
continued
A third party advises newly appointed Directors of their responsibilities in connection with becoming a director of
an AIM company. All Directors, including those newly appointed, receive advice, where applicable, from the
Company’s nominated adviser and external lawyers.
Board Evaluation
The Directors are aware that they need to continually monitor and improve performance and recognise this can
be achieved through regular Board evaluation, which provides a valuable feedback mechanism for improving
Board effectiveness.
The Board is satisfied that all of the current Directors contribute effectively and have the appropriate balance of
skills and experience relevant to the leadership and direction of the Company. The Board is also satisfied that it
has suitable levels of experience and independence to allow the Directors to discharge their duties and
responsibilities effectively. The Board further concluded that the Chairman remained independent and his
performance was satisfactory, with strong leadership capability.
Succession planning is given consideration by the Nomination Committee as and when needed.
Senior Independent Director
The Company has not identified a Senior Independent Director of the Company in view of the size of the Board,
and the Company’s stage of development.
Directors’ Election/Re-Election
Under the Company’s Articles of Association, Directors are required to stand for election at the first Annual General
Meeting (“AGM”) after their appointment. All Directors thereafter are obliged by the Articles of Association to retire
on a rotating basis and are subject to re-election at the AGM, which will be applied at the 2023 AGM.
Accordingly, Duncan Black and Graham Reid will stand for re-election at the forthcoming AGM.
With regard to those Directors who are offering themselves for re-election at the next AGM, the Board believes
that they will continue to make effective and important contributions to the Company’s success and that
Shareholders should support their re-election.
Board Committees
The Board delegates authority to four Committees, including three Committees recommended by the
QCA guidelines: the Nomination Committee, the Remuneration Committee and the Audit Committee, as well as
an additional Technology Committee.
These Committees operate within a scope and remit defined by specific terms of reference, as determined by the
Board. The Committees’ full terms of reference are available on the company’s website, www.saerenewables.com.
These terms of reference were reviewed and updated during 2021.
Each Committee is responsible for reviewing the effectiveness of its own terms of reference and for making
recommendations to the Board for changes when necessary. Other than the Chief Executive Officer’s membership
of the Nominations Committee, Executive Directors are not members of the Board Committees, although they
may be invited to attend meetings.
Directors’ attendance at Committee meetings (in their capacity as members of each Committee) held during 2022
is provided in the table below:
Audit
Committee Committee
Member Attended
Remuneration Nomination Technology
Committee Committee Committee
Attended Attended Attended
Duncan Black 4/4
John Woodley 4/4
Andrew Dagley 3/3
Graham Reid 4/4
1/1 1/1 2/2
1/1 1/1 2/2
1/1 – –
1/1 1/1 2/2
Annual Report and Accounts 2022 13
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 14
Corporate Governance Report
continued
Outside of statutory membership of the above Committees, the Chairman, in agreement with the Chairs of each
Committee, encourages all Board Directors to attend any Committee meeting as observers, as appropriate.
Graham Reid and Simon Hirst in their positions as Executive Directors are not formal members of the
Audit Committee, Remuneration Committee or Technology Committee, however they attend meetings as deemed
appropriate by the Committee Chairs.
Audit Committee
Chairman: John Woodley
Members: Duncan Black and Andrew Dagley (resigned 19 August 2022)
The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that
the financial performance of the Group is properly measured and reported. It receives and reviews reports from
the Chief Financial Officer and auditor relating to interim and annual accounts, and the accounting and internal
control systems in use throughout the Group.
The current Chairman of the Audit Committee has previously held senior positions with Morgan Stanley in the US
and the UK. The Board is satisfied that he has recent and relevant financial experience. The Chairman of the Audit
Committee attended all scheduled meetings throughout the year under review.
The Audit Committee is required to meet not less than three times a year at appropriate times in the financial
reporting and audit cycle and whenever otherwise necessary to fulfil its responsibilities.
The Audit Committee’s role is to assist the Board in discharging its responsibilities with regard to monitoring the
integrity of financial reporting, overseeing the relationship with the external auditor, making recommendations to
the Board regarding the appointment of the external auditor, and reviewing the adequacy and effectiveness of the
Company’s internal controls and risk management systems. The ultimate responsibility for reviewing and
approving the Annual Report and Accounts and the half-yearly reports remains with the Board.
The Audit Committee met four times during the course of 2022 and once post year end. It has subsequently
advised the Board that this Annual Report and Accounts, taken as a whole, is fair, balanced and understandable
for shareholders to assess the Company’s performance, strategy and business model.
The report from the Audit Committee is set out on pages 17 to 19.
Remuneration Committee
Chairman: John Woodley
Members: Duncan Black and Andrew Dagley (resigned 19 August 2022)
The Remuneration Committee is required to meet at least twice a year and whenever otherwise necessary to fulfil
its responsibilities.
The Remuneration Committee is responsible for reviewing the performance of the Executive Directors and setting
the remuneration policy for Executive Directors. The objective of the policy is to attract, retain and motivate
executive management of suitable calibre without paying more than necessary, having regard to the views of
shareholders and stakeholders. The Remuneration Committee monitors and makes recommendations to the
Board on matters relating to level and structure of executive management remuneration.
The Remuneration Committee will also make recommendations to the Board on proposals for the granting of
share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in
operation from time to time.
The Remuneration Committee met once during the course of 2022.
The Directors’ Remuneration Report from the Remuneration Committee is set out on pages 20 to 23.
14 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 15
Corporate Governance Report
continued
Nomination Committee
Chairman: Duncan Black
Members: John Woodley, Graham Reid
The Nomination Committee is required to meet at least twice a year and whenever otherwise necessary to fulfil
its responsibilities. During 2022, the committee met once to consider the appointment of the Chief Financial
Officer, with no other business to consider in the year.
The role of the Nomination Committee is to assist the Board in determining its composition, and that of the
Committees of the Board. It is also responsible for periodically reviewing the Board’s structure and identifying
potential candidates to be appointed as directors as the need arises. The Nomination Committee is responsible
for evaluating the balance of skills, knowledge, experience and diversity of the Board and keeps under review the
leadership needs of the Company. It makes appropriate recommendations to the Board on such matters.
No external consultants were engaged during this period. The Nomination Committee is mindful of the need to
maintain an appropriate balance of skills, experience and personalities to shape the direction of the Company
going forward. Building a diverse Board that is reflective of our Company is one of the factors that will be taken
into consideration when appointing new directors.
An evaluation of the effectiveness and performance of the Board and its Committees was not carried out in 2022
but one will be carried out in 2023 with leadership from the Nomination Committee.
Technology Committee
Chairman: John Woodley
Members: Duncan Black
The Technology Committee is responsible for monitoring the integrity of the regular internal reporting on the
status of technology development within the Company and for sanctioning the external reporting of key technology
milestones. The Technology Committee also keeps under review the adequacy and effectiveness of the
Company’s internal engineering, internal management controls and risk management systems and ensures that
core technology is being developed to plan and within agreed risk parameters.
The Technology Committee met twice during the year.
Internal Controls and Management
The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness.
With the active involvement of the executive management team, it approves all aspects of the overall risk
management framework, including the strategic direction of the business, annual budgets and business plans,
the risk management policy and delegations of authority. There is an agreed risk tolerance which is reflected in
the Group’s strategy and risk management activities are geared towards achieving business plans whilst
safeguarding the Group’s assets.
This system is designed to manage rather than eliminate the risk of failure to achieve business objectives and
can only provide reasonable and not absolute assurance against material misstatement, loss and the prevention
and detection of fraud and other irregularities.
The Group’s system of internal control includes an on-going process of identifying, monitoring and managing
risks by executive management, who ensure that adequate systems, processes and controls are in place. Reports
are provided by management to the Audit Committee on internal control and risk management policies, and the
Board monitors risk exposures, risk management activities and the effectiveness of controls. In particular, Health
and Safety (“H&S”) has been identified as a key area of risk to the business.
Annual Report and Accounts 2022 15
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 16
Corporate Governance Report
continued
The Group’s internal financial control procedures and monitoring systems include:
l
financial policies and approval procedures with proper authorisation level and segregation of duties for
financial management;
l maintenance policies and approval procedures with proper authorisation level and segregation of duties for
financial management;
l
l
l
l
an annual budgetary process to set the appropriate target for monitoring the progress of the Group;
a detailed monthly financial reporting system that reports on operating results, cash flows, assets and
liabilities;
reporting on any non-compliance with internal financial controls and procedures; and
review of the audit findings report issued by the external auditor.
Our People
Our people are integral to our success and their fulfillment and development is core to our people proposition.
Shareholder and Social Responsibilities
The Directors are aware of the importance of considering the Company’s impact on its wider stakeholders. Where
appropriate, the Company endeavours to take account of feedback received from stakeholders.
The Company has developed and implemented a Business Ethics Policy which provides a framework and
guidance on its approach to achieving and maintaining good business behaviour by means of sound ethical
conduct.
Shareholder Engagement
The Company is committed to ensuring that there is effective and regular communication with shareholders on
matters such as governance and strategy so that the Board understands the views of large shareholders on these
issues and that shareholders receive a balanced and consistent view of the Company’s performance.
Communication is primarily through the AGM which provides an opportunity for shareholders to meet and ask
questions of Directors and management. The CEO presents a detailed presentation to shareholders at the AGM
on the Group’s business. The Company continues its dialogue with investors by periodical public correspondence
between the management and the shareholders, via the use of the Company website and social media.
A range of corporate information is also available to shareholders, investors and the public on the Company’s website
www.saerenewables.com. All shareholders will receive a copy of the audited financial statements, either via hardcopy
or the website. The Company’s Annual Report and Accounts are made available on the Company’s website.
The Company’s website is regularly updated and announcements or details of presentations and events are
posted onto this website.
Major Shareholder and Shareholder Arrangement
On 21 May 2018, the Company and SIMEC, which currently holds 29.7% of the Company’s share capital, entered
into a relationship agreement, the principal purpose of which is to ensure that the Company is capable at all times
of carrying on its business independently of SIMEC and its connected persons and to ensure all transactions and
relationships between them and the Group are conducted at arm’s length and on normal commercial terms. Whilst
this agreement has now terminated as a result of SIMEC’s shareholding falling below 30%, key provisions of the
agreement survive the termination.
By order of the Board of Directors
Duncan Black
Chairman of the Board
25 July 2023
16 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 17
Audit Committee Report
The Board has delegated responsibility to the Audit Committee to oversee financial reporting, including the finance
function, internal control, risk management and the effectiveness of the audit process. The Audit Committee
provides independent oversight of both the senior management team and the external auditors. It regularly reports
to the Board on the execution of its duties and responsibilities.
The Audit Committee comprises two Non-Executive Directors (the “Members”), appointed by the Board.
All Members of the Audit Committee are considered to have relevant experience in the industry in which the
Company operates. The Board is also satisfied that at least one Member of the Audit Committee has recent and
relevant financial experience. Further details on the Audit Committee’s membership and attendance records can
be found in the Corporate Governance Report on page 13.
No individual who is not a Member of the Audit Committee is entitled to attend or to vote at its meetings.
The Company’s Chief Executive Officer and Chief Financial Officer may attend meetings by invitation and other
members of the senior management team attend as required. The audit partner and audit manager from the
Company’s external auditor are invited to attend meetings on a regular basis.
Role of the Audit Committee
The principal duties of the Audit Committee, which reports its findings to the Board, are to:
l monitor the integrity of the Company’s financial reporting and significant financial accounting policies and
judgements;
l
review the content of the Annual Report and audited financial statements where requested by the Board,
and advise on whether it is fair, balanced, understandable and provides the information necessary for
shareholders to assess the Company’s performance, business model and strategy;
l monitor the effectiveness of the Company’s internal controls and risk management framework;
l
l
l
l
l
consider annually whether the Company should initiate an internal audit function and make a
recommendation to the Board accordingly;
consider and make recommendations to the Board, to be put to shareholders for approval at the Company’s
AGM, in relation to the appointment, re-appointment and removal of the Company’s external auditor;
advise the Board on the appointment, terms of engagement and remuneration of the external auditor and
monitor their independence and effectiveness;
review the effectiveness of the Company’s systems for the detection of fraud and the prevention of bribery;
and
review the adequacy and security of the Company's arrangements for its employees and contractors to
raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters.
The Audit Committee works closely with the Chief Financial Officer and senior management to ensure the
Committee is provided with the necessary information it requires to discharge its duties. The Audit Committee’s
meeting agendas are based on annual reporting requirements and other ad-hoc issues which arise during the
course of the year.
Matters Considered During the year
The Audit Committee met on four occasions during the year and once post year end until the date of this report.
At these meetings, the Audit Committee has considered the following:
l
l
l
Group operational risks;
Resignation of external auditor;
Appointment of external auditor;
Annual Report and Accounts 2022 17
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 18
Audit Committee Report
continued
l
l
l
l
l
l
l
l
l
Internal controls and risk management;
Group tax considerations;
Going concern and cash flow projections;
Financial statements and key assumptions;
Review of the audit plan and fees;
Review of external audit services;
External auditor’s report to the Committee;
The effectiveness of the audit process;
External auditor reappointment.
Insights into the Audit Committee’s Activities During the year
The Audit Committee has reviewed, analysed and challenged the significant assumptions within the audited
financial statements with an independent mind-set. It has considered the application of materiality, the auditor’s
assessment of risks of material misstatements and how management has been responsive to the audit.
Our external auditors, Moore Stephens LLP, were engaged to perform an audit on the financial statements of the
Company and Group for the year ended 31 December 2022 which are presented in this annual report
to shareholders.
The Audit Committee reviews and approves both the external auditor’s audit plan and its findings in respect of its
audit of the Company’s financial statements, carefully monitoring these to ensure completeness, accuracy, clarity
and integrity. The Audit Committee regularly monitors the objectivity and independence of the external auditor to
ensure its continued effectiveness, value for money and compliance with statutory duties. The Audit Committee
met with the auditors once prior to the year-end (and once post year-end) to discuss the risk assessment, audit
planning matters and results from the audit.
The primary areas of review by the Audit Committee, and the key assumptions, estimates and judgments
considered and addressed in relation to the financial statements were as follows:
l
l
Going concern and longer-term viability – the Audit Committee reviewed the current liquidity position,
Management’s financial forecasts including stress testing of potential risks, and Management’s conclusions
that there is a reasonable expectation that the Company and Group have sufficient resources to continue in
operation for the period of going concern assessment. The Audit Committee concurred with the material
uncertainties highlighted in Note 3(a) and concluded that the disclosures in this Annual Report and Accounts
2022 regarding the Group’s going concern and future viability were balanced and understandable.
Carrying value of property, plant and equipment – the review for impairment of property, plant and equipment
is based on cash flow projections to calculate a fair value less cost to sell for each of the Group’s projects.
The achievability of the forecast is a risk, given inherent uncertainty within any financial projection. The Audit
Committee evaluated a paper from Management on the results of the impairment assessment. Key
assumptions were reviewed and challenged by the Committee, including discount rates, business risk factors
and cash flow projections based on the most recent budget and strategic reviews. Actions and factors likely
to influence levels of impairment were reviewed with alternative scenarios requested for further analysis.
Taking into account the documentation presented, the Audit Committee was satisfied with the approach
and judgements made.
18 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 19
Audit Committee Report
continued
Internal Audit Function
The Audit Committee considered the need for an internal audit function and has determined that there is no
current need given the limited size of the Group and the Group’s internal controls. It has been agreed that the
Audit Committee will consider the need for an internal audit function on at least an annual basis, or more frequently
as may be appropriate.
Auditor Objectivity and Independence
The Audit Committee monitors and reviews the effectiveness of the external audit process, including a review of
the audit plan and the audit results report. The Audit Committee has assessed the performance of the external
auditor in respect of the 2022 audit. The Audit Committee has satisfied itself that safeguards were in place to
protect the objectivity and independence of the external auditor.
Moore Stephens LLP have expressed their intention to resign and not seek re-appointment, although will stay in
office until such time as a replacement auditor is appointed. The Audit Committee will oversee the process to
identify a suitable replacement Independent Auditor for the Company for recommendation to the Board for its
appointment.
Following the consideration of the above matters and its detailed review, the Audit Committee was of the opinion
that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s position and performance, business model and
strategy.
Terms of Reference
The Audit Committee keeps its terms of reference under review and makes recommendations for changes to the
Board. The full terms of reference are available on the Company’s website at www.saerenewables.com.
John Woodley
Chairman of the Audit Committee
25 July 2023
Annual Report and Accounts 2022 19
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 20
Directors’ Remuneration Report
This report includes details of the Directors’ remuneration in 2022. Shareholders will be asked to approve the
Directors’ Remuneration Report at the forthcoming AGM.
Remuneration Committee
The members of the Remuneration Committee and the Remuneration Committee’s role are set out on page 14.
Remuneration Framework
The overall aim of the Company’s remuneration framework is to provide appropriate incentives that reflect the
Company’s performance, culture and values. The Company also attempts to ensure the remuneration guidelines
and culture are sustainable, transparent and appropriate. The Company’s framework aims to attract and retain
high-performing employees and reward both short-term and long-term contributions to the Company.
The Remuneration Committee is satisfied that this framework successfully aligns the interests of executive
Directors, senior managers and other employees with the Shareholders’ long-term interests, by ensuring that an
appropriate proportion of remuneration is directly linked to overall performance, in both the long and short term.
In determining the practicalities of the approach, the Remuneration Committee considers a range of internal and
external factors and appropriate market comparisons against other companies of a similar size and nature.
Arrangements to Enable Directors to Acquire Shares
During and at the end of the financial year, neither the Company nor any of its subsidiaries was a party to any
arrangement whose purpose was to enable the Directors to acquire benefits by acquiring shares in, or debentures
of, the Company or any other body corporate, except as disclosed in this report.
Directors’ Interests in Shares
According to the Register of Directors’ Shareholdings kept by the Company under Section 164 of the Singapore
Companies Act 1967 (the “Act”), none of the Directors of the Company holding office at the end of the financial
year had any interests in the shares or debentures of the Company and its related corporations, except as follows:
Shareholdings registered
in the name of Directors
At beginning At end
of the year of the year
Ordinary shares
Duncan Black
Simon Hirst
1,042,419 1,042,419
82,034 82,034
Executive Directors’ Service Contracts and Payments for Loss of Office
The Chief Executive Officer and Chief Financial Officer are employed under a service contract with a fixed period
of notice of termination. Their services may be terminated on a maximum of six months’ notice by either party.
Non-Executive Directors’ Letters of Appointment
The Company’s Non-Executive Directors are not committed by service contracts to the Company and are engaged
by letters of appointment. These provide for a maximum of three months’ notice of termination by either party at
any time, with no pre-determined amounts of compensation.
Payments to Past Directors
There have been no payments made to past directors during the year.
20 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 21
Directors’ Remuneration Report
continued
Payments for Loss of Office
There have been no payments made to Directors for loss of office during the year.
Annual Remuneration of Directors
The table below sets out the annual remuneration of the Directors for the years ended 31 December 2022 and
31 December 2021. This includes any pension and employer’s National Insurance contributions and excludes
share-based payments.
Director
John Neill(3)
John Woodley(2)
Andrew Dagley(6)
Mark Elborne(4)
Duncan Black
Tim Cornelius(1)
Graham Reid(1)
Andrew Charters(5)
Simon Hirst(7)
Annual Remuneration
2022 2021
£’000 £’000
– 55
44 39
21 119
– 32
72 48
– 72
349 290
50 13
137 –
(1)
(2)
Timothy Cornelius was employed by Atlantis Operations (UK) Limited and resigned as Chief Executive Officer and Director on
18 January 2021. Graham Reid was appointed as his replacement on the same date and is employed by Atlantis Resources
(Scotland) Limited.
John Woodley was remunerated in Singapore dollars. Figures shown above are Great British Pounds equivalents, converted at
the prevailing exchange rate.
(3)
John Neill resigned from the Board on 18 August 2021.
(4) Mark Elborne resigned from the Board on 26 October 2021.
(5)
(6)
(7)
Andrew Charters was appointed to the Board on 29 November 2021 and resigned on 25 April 2022.
Andrew Dagley resigned from the Board on 19 August 2022.
Simon Hirst was appointed to the Board on 25 April 2022.
Long Term Incentive Plan (“LTIP”)
On 11 December 2013, it was agreed, contingent on admission of the Company’s shares to trading on AIM, that
the Company offered certain senior management and Directors options over shares through an LTIP. In 2015, the
rules of the LTIP were amended to allow the Board to determine the date on which awards granted under the LTIP
can vest. As at the date of this report, there has been no change to vesting dates.
The options granted to Directors as at the end of the financial year are shown below:
Date of Ordinary Nature Exercise
Name grant shares of award price
Vesting period
Graham Reid 4 January 2021 1,000,000 Option £0.25
Graham Reid 05 February 2021 1,000,000 Option £0.25
Graham Reid 19 March 2021 1,000,000 Option £0.20
Graham Reid 31 December 2021 5,000,000 Option £0.022
Simon Hirst 31 December 2021 1,000,000 Option £0.022
1/3 on each of first, second and third
anniversary of grant
1/3 on each of first, second and third
anniversary of grant
1/3 on each of first, second and third
anniversary of grant
1/3 on each of first, second and third
anniversary of grant
1/3 on each of first, second and third
anniversary of grant
Awards issues are exercisable up to the tenth anniversary of the date of the grant.
Annual Report and Accounts 2022 21
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 22
Directors’ Remuneration Report
continued
Until awards vest or options are exercised, participants have no voting or other rights in the shares subject to the award.
Ordinary shares issued or transferred pursuant to the LTIP rank pari passu in all respects with the ordinary shares then
in issue except that they will not rank for any dividend/distribution of the Company paid or made by reference to a record
date falling before the exercise date. The option is not assignable or transferable.
Details of the options granted under the LTIP on unissued ordinary shares of the Company are as follows:
Balance
Date of grant / at Cancelled /
modification 1.1.2022 Granted Exercised lapsed
Balance Exercise
at price Exercisable
31.12.2022 per share period
01.01.2016 150,000 – – (150,000)
30.09.2016 250,000 – – (250,000)
15.06.2018 300,000 – – (300,000)
15.06.2018 75,480 – – –
29.06.2020 100,000 – – (100,000)
04.12.2020 60,000 – – (60,000)
04.12.2020 300,000 – – –
04.01.2021 1,000,000 – – –
05.02.2021 2,000,000 – – (100,000)
19.03.2021 1,250,000 – – –
31.12.2021 20,300,000 – – (7,750,000)
28.04.2022 – 1,500,000 – –
31.10.2022 – 1,000,000 – –
– £0.50 01.01.2016
to 01.01.2026
– £0.50 30.09.2016
to 30.09.2026
– £0.35 15.06.2018
to 15.06.2028
75,480 £0.50 15.06.2018
to 15.06.2028
– £0.50 29.06.2020
to 29.06.2030
– £0.20 04.12.2020
to 04.12.2030
300,000 £0.30 04.12.2020
to 04.12.2030
1,000,000 £0.25 04.01.2021
to 04.01.2031
1,900,000 £0.25 05.02.2021
to 05.02.2031
1,250,000 £0.20 19.03.2021
to 19.03.2031
12,550,000 £0.02 31.12.2021
to 31.12.2031
1,500,000 £0.02 28.04.2022
to 28.04.2032
1,000,000 £0.01 31.10.2022
to 31.10.2032
Total 25,785,480 2,500,000 – (8,710,000)
19,575,480
Company Share Option Plan (“CSOP”)
On 10 November 2016, the Company established a Company Share Option Plan (“CSOP”) to offer share options
to employees. Under this programme, holders of the vested options are entitled to purchase shares at the
proposed exercise price. The options are fully vested on the third anniversary of the date of the grant, and
exercisable up until the tenth anniversary of the date of the grant. The shares acquired on the exercise of the
option shall rank pari passu with all other shares then in issue except that they will not rank for any
dividend/distribution of the Company paid or made by reference to a record date falling before the exercise date.
The option is not assignable or transferable.
The options granted to Directors at the end of the financial year are shown below:
Date of Ordinary Nature Exercise
Name grant shares of award price
Vesting period
Simon Hirst 10 November 2016 14,285 Option £0.70
Simon Hirst 19 August 2019 50,000 Option £0.20
Simon Hirst 25 March 2021 111,111 Option £0.09
3 years from grant
3 years from grant
3 years from grant
22 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 23
Directors’ Remuneration Report
continued
Details of the options granted under the CSOP on unissued ordinary shares of the Company are as follow:
Balance
Date of grant / at Cancelled /
modification 1.1.2022 Granted Exercised lapsed
Balance Exercise
at price Exercisable
31.12.2022 per share period
10.11.2016 285,700 – – (228,560)
19.08.2019 2,100,000 – – (1,650,000)
25.03.2021 4,666,662 – – (3,111,108)
57,140 £0.70 11.11.2016
to 11.11.2026
450,000 £0.20 19.08.2019
to 19.08.2029
1,555,554 £0.09 25.03.2021
to 25.03.2031
Total 7,052,362 – – (4,989,668)
2,062,694
Other than the above, no option to take up unissued shares of any corporation in the Group was granted and there
were no shares of any corporation in the Group issued by virtue of the exercise of an option to take up unissued
shares. At the end of the financial year, there were no unissued shares of any corporation in the Group
under option.
Shareholder Vote at the Annual General Meeting
The 2022 Directors’ Remuneration Report will be put to an advisory shareholder vote at the 2023 AGM.
The 2021 Directors’ Remuneration Report was approved by shareholders at the Company’s AGM held on 18
August 2022.
Approved and signed on behalf of the Board.
John Woodley
Chairman of the Remuneration Committee
25 July 2023
Annual Report and Accounts 2022 23
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 24
Directors’ Responsibility Statement
We are pleased to submit this Annual Report to the members of the Company together with the audited financial
statements for the financial year ended 31 December 2022.
In our opinion:
l the financial statements set out on pages 29 to 32 are drawn up so as to give a true and fair view of the
financial position and changes in equity of the Group and of the Company as at 31 December 2022 and the
financial performance and cash flows of the Group for the year ended on that date in accordance with the
provisions of the Singapore Companies Act 1967, Singapore Financial Reporting Standards (International)
and International Financial Reporting Standards; and
l at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they fall due.
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
On behalf of the Board of Directors
Duncan Black
Chairman of the Board
Graham Reid
Chief Executive Officer
25 July 2023
25 July 2023
24 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 25
Independent Auditor’s Report to the Members of
Simec Atlantis Energy Limited (Incorporated in Singapore)
Report on the Audit of the Financial Statements
Opinion
1. We have audited the accompanying financial statements of Simec Atlantis Energy Limited (the “Company”)
and its subsidiaries (collectively the “Group”) which comprise the consolidated financial position of the Group
and the statement of financial position of the Company as at 31 December 2022 and the consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows of the Group and the statement of changes in equity of the Company for the year
then ended and notes to the financial statements, including a summary of significant accounting policies
and other explanatory information.
2.
In our opinion, the accompanying consolidated financial statements of the Group and the statement of
financial position of the Company are properly drawn up in accordance with the provisions of the Companies
Act 1967 (the “Act”), Singapore Financial Reporting Standards (International) (“SFRS(I)s”) and International
Financial Standards (“IFRSs”) so as to give a true and fair view of the consolidated financial position of the
Group and the financial position of the Company as at 31 December 2022 and of the consolidated financial
performance, consolidated changes in equity and consolidated cash flows of the Group and changes in
equity of the Company for the year ended on that date.
Basis of Opinion
3. We conducted our audit in accordance with Singapore Standards on auditing (“SSAs”). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Group in accordance with the Accounting and
Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct and Ethics for Public Accountants
and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit
of the financial statements in Singapore and we have fulfilled our ethical responsibilities in accordance with
these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
4. We draw your attention to Note 3(a) to the financial statements; for the year ended 31 December 2022, the
Group incurred a loss for the year of ₤11,060,000 (2021: loss of ₤71,594,000) and net cash flows used in
operating activities was ₤5,528,000 (2021: ₤6,658,000). Furthermore, as at 31 December 2022, the Group
and Company are in a net current liability position of ₤15,737,000 and ₤6,196,000 respectively (2021:
₤7,143,000 and ₤6,285,000 respectively).
5.
6.
The above conditions indicate the existence of a material uncertainty which may cast significant doubt
about the Group’s and the Company’s ability to continue as a going concern.
As disclosed in Note 3(a). the ability of the Group and the Company to continue as a going concern is
dependent on the following factors:
a.
b.
c.
d.
Subsequent to the year end, the Group has successfully delivered their first Battery Energy Storage
System (“BESS”) project. The Group is in the process of securitising the rental income stream over the
30 years life of the project. At the date of this Report, the Group has received an offer with regard to
the securitisation of this income, and is targeting to finalise the transaction by end of 2023;
Heads of Terms for a land lease option with a developer for a second BESS project have been agreed.
Management expects to complete the project in 2024;
Repayment of two of the Group’s Bonds were deferred to March and June 2024 respectively. Management
may either repay the bonds, extend the repayment date or refinance the bonds with new debt;
Repayment of the grant funding from the EU of ₤3.4 million. Management is of the view that they have
sufficient grounds to dispute the repayment of this amount and in the event, they are unsuccessful,
the Group will be able to negotiate a suitable repayment plan.
Annual Report and Accounts 2022 25
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 26
Independent Auditor’s Report to the Members of
Simec Atlantis Energy Limited (Incorporated in Singapore)
continued
7.
In the event the Group is unable to successfully conclude the abovementioned mitigating actions on a timely
basis, and generate sufficient cash flows necessary to sustain the Group’s operations, the Group and the
Company may be unable to discharge their liabilities in the normal course of business and adjustments may
have to be made to reflect the situation that assets may need to be realised other than in the ordinary course
of business and at amounts which could differ significantly from the amounts at which they are currently
stated in the consolidated statement of financial position of the Group and the statement of financial position
of the Company. No such adjustments have been made to these financial statements.
8.
Our opinion is not modified in respect of this matter.
Key Audit Matters
9.
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming an opinion thereon and we do not provide a
separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related
to Going Concern section, we have determined the matters described below to be the key audit matters to
be communicated in our report.
Key Audit Matters
How our audit addressed the key audit matters
Impairment assessment of property, plant and
equipment (“PPE”) and investment in subsidiaries
Our response
In obtaining sufficient audit evidence, the
following procedures were carried out:
l
l
l
Evaluated management’s assumptions and
estimates applied in the cash flow forecast
taking into consideration our knowledge of
the operations and historical performance
of the relevant CGU’s.
Reviewed the reasonableness of key
assumptions and
in the
discounted cash flow forecast; and
inputs used
Checked the mathematical accuracy of the
underlying calculation.
We found the underlying key assumptions and
inputs used by management in the discounted
cash flow forecast of the relevant CGU’s to be
within a reasonable range.
We refer to Note 3(i) under “Summary of Significant
Accounting Policies” and Note 4(a) under “Critical
Accounting Judgements and Key Sources of Estimation
Uncertainty” and Notes 11 and 14 to the consolidated
financial statements.
As at 31 December 2022, the carrying amount of the
Group’s PPE was ₤74,455,000 which accounted for 88%
of the Group’s total assets. The Company has investment
in subsidiaries amounting to ₤11,220,000, representing
93% of its total assets.
Management reviews for any indicators of impairment
and where such an indicator exists, the carrying amount
of the Group’s PPE and the Company’s investment in
subsidiaries is compared against their recoverable
amount.
Management prepared value in use (“VIU”) calculations to
determine the recoverable amounts of the Group’s PPE
and the Company’s investment in subsidiaries. Based on
the impairment assessment prepared by management,
there was a write back of a previously recognised
impairment loss on PPE of ₤2,000,000 with respect to the
Uskmouth Cash Generating Unit (“CGU”). There was an
impairment loss of ₤7,994,000 recognised with respect to
the Company’s investment in subsidiaries.
We focus on this area because the assessments made by
management involved the use of significant judgements
and estimates over the impairment indicators and in the
determination of the recoverable amounts of PPE and
investment in subsidiaries.
26 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 27
Independent Auditor’s Report to the Members of
Simec Atlantis Energy Limited (Incorporated in Singapore)
continued
Other Matter
Disclaimer of Opinion in respect of the consolidated financial statements for the year ended 31 December 2021.
10. Our audit report on the consolidated financial statements for the year ended 31 December 2021 included a
disclaimer of opinion with respect to the preparation of the consolidated financial statements on a going
concern basis. An update of the disclaimer opinion in respect of the going concern of the Group and the
Company is disclosed in the Material Uncertainty Related to Going Concern section above.
Other Information
11. Management is responsible for the other information. The other information comprises the information
included in the Annual Report, but does not include the financial statements and our auditor’s report thereon.
12. Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion there on.
13.
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, 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.
Responsibilities of Management and Directors for the Financial Statements
14. Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the provisions of the Act, SFRS(I) and IFRS, and for devising and maintaining a system of
internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded
against loss from unauthorised use or disposition; and transactions are properly authorised and that they
are recorded as necessary to permit the preparation of true and fair financial statements and to maintain
accountability of assets.
15.
In preparing the financial statements, management is responsible for assessing the Group’s and the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and the using the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
16. The Directors’ responsibilities include overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
17. 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 SSAs 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.
18. As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
l
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Annual Report and Accounts 2022 27
266018 Simec Atlantis Energy_pp11-pp28.qxp 25/07/2023 14:10 Page 28
Independent Auditor’s Report to the Members of
Simec Atlantis Energy Limited (Incorporated in Singapore)
continued
l
l
l
l
l
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
19. We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
20. We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
21. From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial statements of the current year and are therefore the key audit matter.
We describe the matter in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
22.
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those
subsidiaries incorporated in Singapore of which we are the auditor have been properly kept in accordance
with the provisions of the Act.
23. The engagement partner on the audit resulting in this independent auditor’s report is Mr Christopher Bruce
Johnson.
Moore Stephens LLP
Public Accountants and Chartered Accountants
Singapore
25 July 2023
28 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp29-pp32.qxp 25/07/2023 14:12 Page 29
Consolidated Statement of Comprehensive Income
For the financial year ended 31 December 2022
Revenue
Other income
Employee benefits expense
Subcontractor costs
Depreciation and amortisation
Reversal of impairment loss/ (impairment loss)
on property, plant and equipment
Impairment loss on intangible assets
Other operating expenses
Share of loss of equity-accounted investees
Total operating expenses before non-recurring items
Loss on impairment of investment in joint venture
(Loss)/Gain on disposal of subsidiaries
Results from operating activities
Finance costs
Loss before income tax
Income tax credit
Loss for the year
Other comprehensive (loss)/income
Items that are or may be reclassified subsequently to profit or loss:
- Exchange differences on translation of foreign operations
Total comprehensive loss for the year
Loss for the year attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive loss for the year attributable to:
Owners of the Company
Non-controlling interests
Loss per share:
Basic and diluted loss per share
The accompanying notes form an integral part of the financial statements
Note
5
6
7
11 - 13
11
12
15
15
14
8
9
10
2022
£’000
3,902
4,560
8,462
(2,484)
(5,442)
(3,275)
2,000
–
(3,682)
(28)
(12,911)
(377)
(2,232)
(7,058)
(4,021)
(11,079)
19
(11,060)
(63)
(11,123)
(9,649)
(1,411)
(9,712)
(1,411)
2021
£’000
7,511
1,789
9,300
(5,793)
(6,562)
(10,656)
(45,312)
(7,836)
(4,279)
(106)
(80,544)
(890)
1,502
(70,632)
(3,450)
(74,082)
2,488
(71,594)
41
(71,553)
(67,623)
(3,971)
(67,582)
(3,971)
23
(0.01)
(0.12)
Annual Report and Accounts 2022 29
266018 Simec Atlantis Energy_pp29-pp32.qxp 25/07/2023 14:12 Page 30
Statements of Financial Position
As at 31 December 2022
Group Company
2022 2021
Note £’000 £’000
2022
£’000
2021
£’000
ASSETS
Non-Current Asset
Property, plant and equipment 11 74,455 76,796
Intangible assets 12 1,465 4,178
Right of use assets 13 1,331 779
Investments in subsidiaries 14 – –
Investments in joint ventures and
other investments 15 133 405
Loans receivable 16 258 592
–
–
11,220
–
258
–
153
–
19,096
–
592
77,642 82,750
11,478
19,841
Current Assets
Trade and other receivables 17 3,326 1,348
Cash and cash equivalents 18 3,701 3,771
7,027 5,119
365
172
537
111
2,444
2,555
Total Assets 84,669 87,869
12,015
22,396
EQUITY AND LIABILITIES
Capital and Reserves
Share capital 19 201,496 201,496
Capital reserve 20 12,665 12,665
Translation reserve 21 7,058 7,121
Share option reserve 22 420 576
Accumulated losses (216,285) (206,910)
Total equity attributable to owners of the Company 5,354 14,948
Non-controlling interests 14 328 1,739
5,682 16,687
LIABILITIES
Non-current Liabilities
Lease liabilities 13 1,000 697
Provisions 24 12,581 13,546
Loans and borrowings 25 41,890 43,906
Deferred tax liabilities 26 752 771
56,223 58,920
Current Liabilities
Lease liabilities 13 296 62
Provisions 24 – 172
Loans and borrowings 25 15,895 4,914
Trade and other payables 27 6,573 7,114
22,764 12,262
Total Liabilities 78,987 71,182
201,496
–
(227)
420
(196,845)
4,844
–
4,844
201,496
–
(227)
576
(188,712)
13,133
–
13,133
–
–
438
–
438
–
–
82
6,651
6,733
7,171
–
–
423
–
423
–
30
95
8,715
8,840
9,263
Total Equity and Liabilities 84,669 87,869
12,015
22,396
The accompanying notes form an integral part of the financial statements
30 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp29-pp32.qxp 25/07/2023 14:12 Page 31
Statements of Changes in Equity
For the financial year ended 31 December 2022
Share Non-
Share Capital Translation option Accumulated controlling
capital reserve reserve reserve losses Total interest Total
Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Group
At 1 January 2022 201,496 12,665 7,121 576 (206,910) 14,948 1,739 16,687
Loss for the financial year – – – – (9,649) (9,649) (1,411) (11,060)
Other comprehensive loss – – (63) – – (63) – (63)
Total comprehensive loss for
the financial year – – (63) – (9,649) (9,712) (1,411) (11,123)
Transactions with owners, recognised
directly in equity
Recognition of share-based payments 22 – – – 118 – 118 – 118
Cancellation of share options 22 – – – (274) 274 – – –
Total transactions with owners – – – (156) 274 118 – 118
At 31 December 2022 201,496 12,665 7,058 420 (216,285) 5,354 328 5,682
At 1 January 2021 195,375 12,665 7,080 787 (139,841) 76,066 5,710 81,776
Loss for the financial year – – – – (67,623) (67,623) (3,971) (71,594)
Other comprehensive income – – 41 – – 41 – 41
Total comprehensive income for
the financial year – – 41 – (67,623) (67,582) (3,971) (71,553)
Transactions with owners, recognised
directly in equity
Issue of ordinary shares, net of issue costs 19 6,121 – – – – 6,121 – 6,121
Recognition of share-based payments 22 – – – 343 – 343 – 343
Transfer between reserves 22 – – – (554) 554 – – –
Total transactions with owners 6,121 – – (211) 554 6,464 – 6,464
At 31 December 2021 201,496 12,665 7,121 576 (206,910) 14,948 1,739 16,687
Share
Share Translation option Accumulated
capital reserve reserve losses Total
Note £’000 £’000 £’000 £’000 £’000
Company
At 1 January 2022 201,496 (227) 576 (188,712) 13,133
Loss for the financial year – – – (8,407) (8,407)
Other comprehensive loss – – – – –
Total comprehensive loss for the financial year – – – (8,407) (8,407)
Transactions with owners, recognised directly in equity – –
Recognition of share-based payments 22 – – 118 – 118
Transfer between reserves 22 – – (274) 274 –
Total transactions with owners – – (156) 274 118
At 31 December 2022 201,496 (227) 420 (196,845) 4,844
At 1 January 2021 195,375 (227) 787 (80,238) 115,697
Loss for the financial year – – – (109,029) (109,029)
Other comprehensive loss – – – – –
Total comprehensive loss for the financial year – – – (109,029) (109,029)
Transactions with owners, recognised directly in equity
Issue of ordinary shares, net of issue costs 19 6,121 – – – 6,121
Recognition of share-based payments 22 – – 344 – 344
Transfer between reserves 22 – – (555) 555 –
Total transactions with owners 6,122 – (211) 555 6,465
At 31 December 2021 201,496 (227) 576 (188,712) 13,133
The accompanying notes form an integral part of the financial statements
Annual Report and Accounts 2022 31
266018 Simec Atlantis Energy_pp29-pp32.qxp 25/07/2023 14:12 Page 32
Consolidated Statement of Cash Flows
For the financial year ended 31 December 2022
Cash Flows from Operating Activities
Loss before income tax
Adjustments for:
Grants income
Depreciation of property, plant and equipment
Amortisation of intangible assets
Interest income
Finance costs
Share-based payments
(Reversal of)/ Impairment loss on property, plant & equipment
Impairment loss on intangible assets
Impairment loss on investment in joint venture
Movement in provisions
Loss on write down of current assets
Loss/(Gain) on sale of subsidiaries
Share of loss of joint venture
Net foreign exchange
Operating cash flow before working capital changes
Changes in working capital:
Movements in trade and other receivables
Movements in trade and other payables
Interest received
Net cash used in operating activities
Cash Flows from Investing Activities
Purchase of property, plant and equipment
Disposal of fixed assets
Proceeds from grants received
Loan to joint venture
Net cash from disposal of subsidiaries
Net cash generated from investing activities
Cash Flows from Financing Activities
Proceeds from grants received
Proceeds from issue of shares
Share issuance cost
Proceeds from borrowings
Repayment of borrowings
Loan to related party
Interest paid
Payment of lease liabilities
Deposits (pledged)/released
Note
6
11,13
12
6
8
7
11
12
24
14
15
16
14
19
19
25
25
16
25
13
18
Net cash generated from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of foreign exchange rates on the balance
of cash held in foreign currencies
Cash and cash equivalents at the end of the financial year
18
The accompanying notes form an integral part of the financial statements
32 Simec Atlantis Energy Limited and its subsidiaries
2022
£’000
2021
£’000
(11,079)
(74,082)
(56)
3,237
38
(58)
4,021
118
(2,000)
–
377
(13)
–
2,232
28
122
(3,033)
(1,978)
(541)
24
(5,528)
–
–
–
(194)
570
376
56
–
–
8,500
(2,027)
–
(1,203)
(308)
(5)
5,013
(139)
3,004
64
2,929
(402)
8,972
1,684
–
3,450
343
45,312
7,836
–
223
890
(1,502)
106
194
(6,976)
1,169
(851)
–
(6,658)
(1,542)
(21)
296
(544)
3,104
1,293
402
2,600
(203)
2,000
(55)
(258)
(1,096)
(214)
732
3,908
(1,457)
4,315
146
3,004
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 33
Notes to the Financial Statements
For the financial year ended 31 December 2022
These notes form an integral part of and should be read in conjunction with the accompanying financial statements:
1 General
SIMEC Atlantis Energy Limited (the “Company”) is a company incorporated in Singapore. The address of the
Company’s registered office is Level 4, 21 Merchant Road, #04-01, Singapore 058267. The principal place of
business is 26 Dublin Street, Edinburgh, EH3 6NN, United Kingdom.
The principal activities of the Group are being a developer, owner and operator of sustainable energy projects.
The Company has been transformed into a renewable development and operating company, retaining the key
MeyGen tidal site asset and the Uskmouth sustainable energy park.
The principal activities of the subsidiaries are disclosed in Note 14 to the financial statements.
The financial statements of the Group as at and for the year ended 31 December 2022 comprise the Company
and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s
interest in equity-accounted investees.
2 Application of International Financial Reporting Standards (“IFRSs”)
Application of new and revised IFRSs
(a)
On 1 January 2022, the Group adopted the new or amended IFRSs that are mandatory for application for the
financial year. Changes to the Group’s accounting policies have been made as required, in accordance with the
transitional provisions in the respective IFRS.
The adoption of these new or amended IFRS did not result in substantial changes to the Group’s accounting
policies and had no material effect on the amounts reported for the current or prior financial year.
IFRSs issued but not yet effective
(b)
At the date of authorisation of these financial statements, the following standards have been issued and are
relevant to the Group and Company but not yet effective:
Description
Amendments to:
Effective for annual periods
beginning on or after
l
l
l
l
IAS 1: Presentation of Financial Statements (Disclosure of Accounting Policies
and IFRS Practice Statement 2 Making Materiality Judgements)
1 January 2023
IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors
(Definition of Accounting Estimates)
IAS 12: Income Taxes (Deferred Tax related to Assets and Liabilities
arising from a Single Transaction)
IAS 12: Income Taxes (International Tax Reform)
Amendments to:
l
IAS 1: Presentation of Financial Statements
(Classification of Liabilities as Current or Non-current)
1 January 2024
l
l
l
l
l
IAS 1: Presentation of Financial Statements
(Non-current Liabilities with Covenants)
IAS 7: Financial Instruments: Disclosures
(Supplier Finance Arrangements)
IFRS 16: Leases
(Lease Liability in a Sale and Leaseback)
IFRS S1: General Requirements for Disclosure of Sustainability-related
Financial Information
IFRS S2: Climate-related Disclosures
The Directors do not expect that the adoption of these new and revised standards above will have a material
impact on the financial statements in the period of initial application.
Annual Report and Accounts 2022 33
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 34
Notes to the Financial Statements
continued
3
Summary of significant accounting policies
(a) Going concern
In adopting the going concern basis for preparing these financial statements, the Board has considered the
Group’s business activities, together with factors likely to affect its future development, its performance and
principal risks and uncertainties.
The Board of Directors is required to state whether it is appropriate to adopt the going concern basis of accounting
in preparing the financial statements, and to identify any material uncertainties as to the Company’s ability to
continue as a going concern over a period of at least 12 months from the date of approval of the financial
statements. The period of management’s going concern assessment is the period to 31 July 2024.
The Board of Directors has undertaken the assessment of the going concern assumptions using financial
forecasts for the period to 31 July 2024. Due to the development stage of the business with relatively modest
cashflow from operations, in the event that one or more of the Group’s already contracted projects does not
achieve completion as anticipated, the Company may require external financing during 2024.
In previous years, the Company satisfied its short and medium-term funding requirements through a combination
of equity and debt. Management’s forecasts through to 31 July 2024 anticipate revenues from trading will
increasingly meet the working capital requirements of the Group.
Details of the Group’s loans and borrowings at year end can be found in Note 25 of the financial statements. As at
the 31 December 2022 there were no undrawn loan facilities.
Going concern assessment
Management has prepared a forecast through to 31 July 2024 based on contractually committed revenues and
costs, an estimate of additional costs required and the income and costs arising from development projects that
are expected to be delivered within the forecast period. The forecast has been subject to stress testing.
The Directors’ assessment of the appropriate use of the going concern basis included the following factors:
l
l
Repayment of the Abundance bond principals falling due in March 2024 and June 2024. During the going
concern period, £4.97 million of Abundance Bonds are repayable in March 2024 with a further £4.95 million
repayable in June 2024. The Company may either seek to repay the bonds, extend the repayment date of
the bonds or refinance the bonds with new debt. Failure to repay the principal repayments on these bonds
would put the Group in a position where it would default on the bonds.
Timing of the potential repayment of historical grant funding of an amount of £3.4 million as reported in
previous year. The Board are of the view that there are grounds for disputing any clawback of this grant and
the Company has evidence to support this position. Whilst the Board and management are of the view that
if any clawback were to be payable that a reasonable payment plan could be agreed with the creditor, if the
creditor monies were to be required to be repaid in full in the going concern period, this could lead to a
£3.4 million reduction in liquidity in the going concern period.
Mitigating actions
In the event that cashflows are limited due to delays in the BESS project, delays or failure to monetise the rental
income related to the lease from the Battery Energy Storage System project at Uskmouth (see below), failure to
agree debt repayment deferrals with Abundance or refinance the bonds, or a requirement to repay historical grant
funding coupled with then a failure to agree an appropriate repayment plan with the creditor, controllable mitigating
actions such as reducing the Group’s cost base, suspension of Directors fees, and taking the full benefit of
payment terms with suppliers would be available.
34 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 35
Notes to the Financial Statements
continued
The Board has identified significant factors that are of a material amount as outlined above, and the Board has
identified sufficient evidence of success that includes achievable new sources of revenue that mitigates against
the existence of material uncertainties about the Group’s ability to continue as a going concern. The evidence is
summarised as follows:
l
Delivery of the first Battery Energy Storage System project at Uskmouth:
o
o
o
Receipt of a £10 million development premium for the rights to the project in July 2023.
An agreement for a 30-year land lease signed 20 June 2023
Market evidence of the feasibility of monetising the rental income from the lease. At the date of approval
of the financial statements, the Group has received an offer for consideration, and is targeting to finalise
the transaction by the end of 2023.
l Market evidence and engagement with other battery energy storage project developers for new battery
developments at the sustainable energy park:
o
Heads of Terms for a land lease option are agreed with a developer for a 120 MW battery energy
storage system, with a targeted completion date in 2024. The pre-application consultation for this
project has been completed.
The recent successes achieved at Uskmouth provides considerable confidence to the Board of Directors for further
planned development of the sustainable energy park.
Going concern conclusion
Accordingly, the Board of Directors concluded that it is appropriate to adopt the going concern basis of accounting
in preparing the consolidated financial statements and the parent company financial statements. The Board of
Directors have a reasonable expectation that the Company and the Group will each continue to operate as a going
concern for at least 12 months from the date of approval of the financial statements.
(b) Basis of preparation
The financial statements have been prepared in accordance with Singapore Financial Reporting Standards
(International) (“SFRS(I)”) and IFRS. SFRS(I)s are issued by Accounting Standards Council Singapore, which
comprise standards and interpretations that are equivalent to IFRS issued by International Accounting
Standards Board.
All references to SFRS(I)s and IFRSs are subsequently referred to as IFRS in these financial statements unless
otherwise specified.
The financial statements have been prepared on the historical cost basis, except as otherwise disclosed in the
accounting policies below.
The accounting policies set out below have been applied consistently to all periods presented in these
financial statements.
Foreign currencies
(c)
The individual financial statements of each Group entity are measured and presented in the currency of the
primary economic environment in which the entity operates (its functional currency). The consolidated financial
statements of the Group and the statement of financial position and statement of equity of the Company are
presented in Great British Pounds (“GBP”), which is the functional currency of the Company, and the presentation
currency for the consolidated financial statements.
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange
prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at the end of the reporting period. All exchange
differences are recognised in profit or loss.
Annual Report and Accounts 2022 35
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 36
Notes to the Financial Statements
continued
At each reporting date, for presentation purposes, the assets and liabilities of the Group’s entities that do not use
GBP as their functional currency are translated into GBP at exchange rates presiding at the reporting date, with
gains or losses on retranslation being recognised through the translation reserve.
Income and expense transactions are translated at the average exchange rates for the period, where average
rates are a reasonable approximation of actual rates.
The financial statements are presented in GBP (£), rounded to the nearest thousand.
(d) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled
by the Company (its subsidiaries) at the reporting date. Consolidation of a subsidiary begins when the Group obtains
control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income
and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial
statements from the date the Group gains control until the date the Group ceases to control the subsidiary. When
necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in
line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Group are eliminated in full on consolidation.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiary. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly
in equity (capital reserve) and attributed to the owners of the Company.
In the Company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net
recoverable value that has been recognised in profit or loss.
Business combination
(e)
The acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The
consideration for each acquisition is measured at the aggregate of the acquisition date fair values of assets given,
liabilities incurred by the Group to the former owners of the acquiree, and equity interests issued by the Group in
exchange for control of the acquiree. Acquisition related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition date fair value. Subsequent changes in such fair values
are adjusted against the cost of acquisition where they qualify as measurement period adjustments.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or a liability that is a
financial instrument and within the scope of IFRS 9 Financial Instruments is measured at fair value with the
changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent
consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes
in fair value recognised in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity
are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain
or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition
date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where
such treatment would be appropriate if that interest were disposed of.
36 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 37
Notes to the Financial Statements
continued
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition
under IFRS are recognised at their fair value at the acquisition date, except that:
l
l
l
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits
respectively;
liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based
payment awards are measured in accordance with IFRS 2 Share-based Payment;
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets
Held for Sale; and Discontinued Operations are measured in accordance with that Standard.
Goodwill
The Group measures goodwill at the acquisition date as:
l
l
l
the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the
acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing,
goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the
combination. Cash generating units to which goodwill has been allocated are tested for impairment annually, or
more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-
generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent
period.
On disposal of a subsidiary or the relevant cash generating unit, the attributable amount of goodwill is included
in the determination of the profit or loss on disposal.
Investment in joint venture (equity-accounted investee)
A joint venture is an arrangement in which the Group has joint control, whereby the Group has a right to the net
assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control.
Investments in joint ventures are accounted for using the equity method. They are recognised initially at cost,
which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include
the Group’s share of the profit or loss and other comprehensive income of equity accounted investees, after
adjustments to align the accounting policies with those of the Group, from the date that significant influence or
joint control commences until the date that significant influence or joint control ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of
the investment, together with any long-term interest that forms part thereof, is reduced to zero, and the recognition
of further losses is discontinued except to the extent that the Group has an obligation to fund the investee’s
operations or has made payments on behalf of the investee. If the equity-accounted investee subsequently reports
profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share
of losses not recognised.
Annual Report and Accounts 2022 37
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 38
Notes to the Financial Statements
continued
Financial instruments
(f)
Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the
Group becomes a party to the contractual provisions of the instrument.
Financial assets
All financial assets are recognised and de-recognised on the trade date where the purchase or sale of an
investment is under a contract whose terms require delivery of the investment within the timeframe established
by the market concerned, and are initially measured at fair value plus transaction costs except for those financial
assets classified as fair value through profit and loss, which are initially measured at fair value. Financial assets
comprise loans and receivables.
Loans and receivables
Trade and other receivables that have fixed or determinable payments and that are not quoted in an active market
are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective
interest method less any allowance for expected credit losses. Interest is recognised by applying the effective
interest method, except for short-term receivables where the recognition of interest would be immaterial. Trade
receivables that do not contain a significant financing component or for which the Group has applied the practical
expedient are measured at the transaction price.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. In order for a financial asset to be classified
and measured at amortised cost or fair value through other comprehensive income, it needs to give rise to cash
flows that are ‘solely payments of principal and interest’ (“SPPI”) on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with
cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the
business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are
held within a business model with the objective to hold financial assets in order to collect contractual cash flows
while financial assets classified and measured at fair value through other comprehensive income are held within
a business model with the objective of both holding to collect contractual cash flows and selling.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, short-term bank deposits with an original maturity of 3 months
or less and cash on hand.
For the purposes of the consolidated statement of cashflows, pledged deposits are excluded.
Impairment of financial assets
IFRS 9 requires the Group to recognise an allowance for expected credit loss (“ECLs”) for financial assets
measured at amortised cost.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest
rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements
that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been
a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore,
the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs
38 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 39
Notes to the Financial Statements
continued
at each reporting date. The Group has established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Additional information about how the Company measures the allowance for impairment is described in Note 32.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire,
or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues
to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability
for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of
a transferred financial asset, the Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting
all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Other financial liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently
measured at amortised cost using the effective interest rate method, with interest expense recognised on an
effective yield basis.
Loans and borrowings (except for financial guarantee contract liabilities) are initially measured at fair value and
are subsequently measured at amortised cost using the effective interest rate method. Any difference between
the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the
term of the borrowings in accordance with the Group’s accounting policy for finance costs (see Note 3 (p)).
Financial guarantee contract liabilities are measured initially at their fair values and, if not designated as fair value
through profit and loss, subsequently at the higher of the amount of the loss allowance determined in accordance
with section 5.5 of IFRS 9, and the amount initially recognised less, when appropriate, the cumulative amount of
income recognised in accordance with IFRS 15.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or they expire.
(g) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment
losses.
The cost of self-constructed assets includes:
l
l
l
l
the cost of materials and direct labour;
any other costs directly attributable to bringing the assets to a working condition for their intended use;
when the Group has an obligation to remove the asset or restore the site, an estimate of the discounted
costs of dismantling and removing the items and restoring the site on which they are located; and
capitalised borrowing costs.
Annual Report and Accounts 2022 39
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 40
Notes to the Financial Statements
continued
The power plant assets are stated at their revalued amounts, being the fair value at the date of revaluation, less
any subsequent accumulated depreciation and accumulated impairment losses. Revaluations are performed at
such regularity on this class of assets so that the carrying amounts do not differ materially from those that would
be determined using fair values at the end of the reporting period.
Any revaluation increase is recognised in other comprehensive income and accumulated in equity except to the
extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which
case the increase is credited to profit or loss to the extent of the decrease previously expensed. A decrease in the
carrying amount arising on the revaluation of such power plant, land and buildings and plant and machinery is
recognised in profit or loss to the extent that it exceeds the balance, if any, held in the revaluation reserve relating
to a previous revaluation of that asset.
Depreciation of these assets, on the same basis as other assets, commences when the assets are ready for their
intended use. Depreciation is charged to the statement of profit or loss using the straight-line method over the
estimated useful life of the asset on the following basis:
Plant, property and equipment
Furniture, fixtures and equipment
Computer equipment and software
Power plant
–
–
–
–
4% - 7%
25% - 33%
25% - 33%
2% - 6 %
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
Freehold land is stated at cost, less any subsequent accumulated impairment losses.
(h)
Intangible assets
Internally-generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Capitalisation of an internally generated asset is only permitted during the development phase. Development
expenditure is capitalised only if development costs can be measured reliably, the product or process is technically
and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient
resources to complete development and to use or sell the asset.
The cost of capitalised development activities should include all directly attributable costs necessary to create,
produce and prepare an asset for a business purpose in the manner intended by management.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-
generated intangible asset can be recognised, development expenditure is charged to profit or loss in the period
in which it is incurred.
Intellectual property
Intellectual property is measured initially at purchase cost. Intellectual property is tested for impairment annually,
or more frequently when there is an indication that it may be impaired (see below for impairment testing).
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are identified and recognised separately from goodwill.
The cost of such intangible assets is their fair value at the acquisition date (see note 12).
Intangible assets are derecognised on disposal or when no future economic benefits are expected from its use
or disposal.
40 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 41
Notes to the Financial Statements
continued
Amortisation
Subsequent to initial recognition, each class of intangible asset is reported at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the expected
estimated useful life of that class of asset. Amortisation will begin when the asset is available for use, i.e. when
it is in the location and condition necessary for it to be capable of operating in the manner intended by
management.
Impairment of Non-Financial Assets
(i)
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, testing for impairment is undertaken.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets. Where the carrying amount of an
asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
Impairment losses of continuing operations are recognised in profit or loss, except for assets that are previously
revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also
recognised in other comprehensive income up to the amount of any previous revaluation.
For assets excluding goodwill, a previously recognised impairment loss is reversed only if there has been a change
in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.
If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued
amount, in which case the reversal is treated as a revaluation increase.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment annually.
Provisions
(j)
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of reporting period, taking into account the risks and uncertainties surrounding the obligation.
If the effect of the time value of money is material, discounting is applied.
Provision for decommissioning is recognised when the related facilities are installed. A corresponding amount
equivalent to the provision is also recognised as part of the cost of the related property, plant and equipment.
The amount recognised is the estimated cost of decommissioning, discounted to its net present value using a
risk-free rate, and is re-assessed each year.
Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with
prospectively by recording an adjustment to the provision, and a corresponding adjustment to property, plant and
equipment. The unwinding of the discount on the decommissioning provision is included as a finance cost.
Share-Based payments
(k)
The Group issues equity-settled share-based payments to certain employees and Directors.
Equity-settled share-based payments are measured at fair value of the equity instruments (excluding the effect
of non-market-based vesting conditions) at the date of grant. Details regarding the determination of the fair value
of equity-settled share-based transactions are set out in Note 22. The fair value determined at the grant date of
the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on
the Group’s estimate of the number of equity instruments that will eventually vest. At the end of each reporting
Annual Report and Accounts 2022 41
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 42
Notes to the Financial Statements
continued
period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the
revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been
adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and
behavioural considerations.
Government grants
(l)
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attached to them and the grants will be received. Government grants whose primary condition is that
the Group should purchase, construct or otherwise acquire non-current assets are presented as a deduction from
the carrying amount of the related assets and recognised as income over the useful lives of the assets by way of
a reduced depreciation or amortisation charge.
Other government grants are recognised as income over the periods necessary to match them with the costs for
which they are intended to compensate, on a systematic basis. Government grants that are receivable as
compensation for expenses or losses already incurred or for the purpose of giving immediate financial support
to the Group with no future related costs are recognised in profit or loss in the period in which they become
receivable.
(m) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, net of sales related taxes.
Consulting fees and Operation and Maintenance Contracts are recognised in profit or loss in proportion to the
stage of completion of the transaction at the reporting date. Revenue from power generation sales and the
associated Renewables Obligation Certificates (ROCs) are recognised based on the quantity of electricity exported
and the contracted rate on the date of generation.
ROCs are awarded to the Group from Ofgem based on generation of power. These ROCs are sold on receipt of
certificates from Ofgem allowing transfer of title. The amount of revenue recognised on sale is in accordance
with a contractual agreement where the pricing is based on Ofgem’s minimum ROC value (the buy-out).
(n) Retirement benefit obligations
Payments to defined contribution retirement benefit plans are charged as an expense when employees have
rendered the services entitling them to the contributions. Payments made to state-managed retirement benefit
schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans
where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement
benefit plan.
Income tax
(o)
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 consolidated statement of profit or loss and other comprehensive income because it excludes items of income
or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax
deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted
or substantively enacted in countries where the Company and its subsidiaries operate by the end of the reporting
period.
Deferred tax is recognised on 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, and are accounted for
using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit.
42 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 43
Notes to the Financial Statements
continued
Deferred tax liabilities are recognised on taxable temporary differences arising on investments in subsidiaries,
except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments and interests are only recognised to the extent that it is
probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or
the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the
end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences
that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to
items credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in
which case the tax is also recognised outside profit or loss (either in other comprehensive income or directly in
equity, respectively), or where they arise from the initial accounting for a business combination. In the case of a
business combination, the tax effect is taken into account in calculating goodwill or determining the excess of
the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities
over cost.
Finance costs and income
(p)
Finance costs comprise interest expense on borrowings. All borrowing costs are recognised in the profit or loss
using the effective interest method, except to the extent that they are capitalised as being directly attributable to
the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be
prepared for its intended use or sale.
Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest
rate applicable.
Leases
(q)
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases
and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use
assets representing the right to use the underlying assets.
Right-of-use Assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received. Unless the Group is reasonably certain to
obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are
depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use
assets are subject to impairment.
Annual Report and Accounts 2022 43
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 44
Notes to the Financial Statements
continued
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of
penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. The
variable lease payments that do not depend on an index or a rate are recognised as an expense in the period
during which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the interest rate implied in the lease
agreements, or if that rate cannot be readily determined, the Group’s incremental borrowing rate at the lease
commencement date. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes
to future payments resulting from a change in an index or rate used to determine such lease payments), or a
change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do
not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of
office equipment that are considered of low value (i.e., individually below £5,000). Lease payments on short-term
leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Group as a Lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an
asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the
lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct
costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased
asset and recognised over the lease term on the same basis as rental income.
Segment reporting
(r)
The Group is currently focused on generating energy from renewable power generation projects, development of
these projects, and in developing its turbines for installation in tidal projects. It currently considers its business
as three operating segments: power generation; turbine and engineering services; and project development.
4 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in Note 3, management is required to
make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and future periods.
Critical Judgements in applying the group’s accounting policies and key sources of estimation uncertainty
(a)
In the process of applying the Group’s accounting policies, which are described in Note 3, the critical accounting
judgements that will have a significant effect on the amounts recognised in the financial statements and the key
sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed
below:
44 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 45
Notes to the Financial Statements
continued
Recoverability of property, plant and equipment and investment in subsidiaries
The Group tests its property, plant and equipment related to the MeyGen project and Uskmouth, annually for
impairment, or more frequently if there are indicators that it might be impaired. The Company also tests its
investment in subsidiaries for impairment where indicators of impairment exist. The recoverable amounts for the
Group’s property, plant and equipment and the Company’s investment in subsidiaries are supported by the
estimated value-in-use of these assets. The value-in-use is calculated using a net present value cash flow model
which compares the costs of completing each of the respective projects, including financing costs, with expected
revenues, net of operating and maintenance expenditure, over its operating life.
The key assumptions used to determine the MeyGen project’s value-in-use are the expected capital costs to
further develop the project, the financing structure and cost, forecast operating and maintenance costs, revenue
per MWh and the discount rate to calculate present values. The model is based on probability weighted sensitised
cash flows using a weighted average cost of capital ranging from 8% to 10% (2021: 8% to 12%). Capital costs for
the subsequent phases of the MeyGen project are based upon 3rd party quotes for the capital cost of developing
the 28 MW Phase 2 array. Operating and maintenance costs are based upon experience gained from the operation
of Phase 1a of MeyGen since 2018.
Following the Company’s announcement on 28 April 2022 that the Company would no longer pursue the
conversion of the Uskmouth Power Station from coal to use a waste-derived fuel pellet, the Company has instead
aggressively pursued its new strategy to create a sustainable energy park at the site, culminating in the sale of
the Uskmouth Power Station grid connection and the award of a land lease for the first Battery Energy Storage
Project (BESS) to be built on the site. Two other BESS projects at the site are being discussed with other developers
and the opportunities for BESS projects now form the basis for the value in use calculations at Uskmouth.
The key assumptions used to determine the Uskmouth project’s value-in-use are the up-front project development
costs necessary for a parcel of land to be “ready to build”, the £/MW development premium received when the site
is sold to a developer, the £/MW lump sum receivable from monetising recurring rental income from the land, and
the discount rate to calculate present values. The financial model used to calculate the value-in-use is based on
probability and risk weighted sensitised cash flows.
The recoverable amounts for the MeyGen project were determined to be equal to the carrying value of its property,
plant and equipment and as a result no change to the carrying value was required. The recoverable amounts for
Uskmouth were determined to be in excess of the carrying values of the property, plant and equipment and as a
result an increase of £2 million to the value in use was recognised in 2022 (Note 11).
In testing the investment in subsidiaries for impairment, using the methodology outlined above, the value of the
investments was determined to equal their carrying value and as a result no change to the investment value has
been recognised in the year (Note 14).
Useful lives of intangible assets
The useful lives are based on similar assets in the industry and taking into account anticipated technological
changes. Judgement is required to determine the period over which the proprietary technology (to which the
intangible assets relate) will continue to have economic value. Amortisation will commence upon the
commercialisation of the assets. The Group reviews the useful lives of the intangible assets at the end of each
reporting period.
Recoverability of intangible assets
The Group tests its intangible assets as detailed in Note 12 annually for impairment, or more frequently if there
are indicators that they might be impaired. The recoverable amount is determined using value-in-use calculations
for each separate cash generating unit.
The key assumptions used to determine the value-in-use of the Tidal Data asset is the expected capital costs of
the MeyGen tidal stream array, the financing structure and cost, forecast operating and maintenance costs,
revenue per MWh and the discount rate to calculate present values. The model is based on probability and risk
weighted sensitised cash flows using discount rates ranging from 8% to 10% (2021: 8% to 12%). Capital and
operating and maintenance costs are based upon experience gained from the development and fully operational
Annual Report and Accounts 2022 45
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 46
Notes to the Financial Statements
continued
phase of MeyGen 1A. Estimated savings have been factored in to take account of scaling up both the capacity
and numbers of the turbines needed for the development of the entire project.
Provision for decommissioning costs
Provision for decommissioning costs is recognised as an amount equal to the Directors’ best estimate of the
expenditure required to settle the Group’s obligation. Provisions are determined by discounting the expected future
cash flows at a pre-tax discount rate that reflects current market assessment of the time value of money and
risk specific to the liability as set out in the summary of significant accounting policies 3(j) on page 41. The
unwinding of the discount is recognised as a finance cost.
The Uskmouth Power Station decommissioning provision is the present value of the best estimate of direct costs
that may be incurred to restore the site of the Uskmouth Power Station to a condition that complies with applicable
legislation, which is anticipated to take place in approximately 2043. The original provision was recognised on
acquisition of the Uskmouth Power Station in 2018 and conversion of the financial statements to IFRS and
updated as of 31 December 2022 based on latest estimates.
5 Revenue
Consulting fees recognised over the year
Operation and Maintenance Contracts
Power sales
Group
2022
£’000
–
–
3,902
3,902
2021
£’000
3,567
2,316
1,628
7,511
Consulting fees in 2021 were earned on the Japan tidal turbine contract delivered by the Company’s subsidiary,
Atlantis Operations (UK) Limited. Operation and Maintenance contract income in 2021 was received from
providing O&M services to hydropower plants delivered by Green Highland Renewables Ltd, a subsidiary sold in
the year ended December 2021. Power sales is the income received from electricity generation at the MeyGen
Phase 1a array and includes the associated revenue from renewable obligation certificates (“ROCs”).
6 Other income
Interest income
Grant income
Income generated from sale of consumable goods and scrap items
Insurance proceeds
Other income
Group
2022
£’000
58
56
2,142
1,007
1,297
4,560
2021
£’000
–
402
–
315
1,072
1,789
Other income relates to research and development expenditure credits and charges of shared costs to third
parties.
Employee benefits expense
7
The average number of employees (including Executive Directors) was:
Average number of employees (including Executive Directors)
46 Simec Atlantis Energy Limited and its subsidiaries
Group
2022
£’000
22
2021
£’000
81
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 47
Notes to the Financial Statements
continued
Their aggregate remuneration comprised:
Wages, salaries and other short-term benefits
Social security costs
Share-based payments (Note 22)
Contributions to defined contribution plan
Other related costs
Group
2022
£’000
1,938
228
118
198
2
2,484
2021
£’000
4,482
419
343
476
73
5,793
During 2022, the Group received £Nil million (2021 - £0.06m) under the UK government COVID-19 furlough
scheme.
8
Finance costs
Interest expense arising from:
- long term loans
- secured long term loans
- long term debentures
- lease liabilities
Unwinding of discount on decommissioning provision
Other finance costs
9
Tax credit
Tax Credit
Group
Group
2022
£’000
845
1,630
1,101
80
161
204
4,021
2022
£’000
19
2021
£’000
586
1,302
1,096
94
107
265
3,450
2021
£’000
2,488
As a result of the Company’s management and control moving from Singapore to the United Kingdom on 1
January 2016, the Company became tax resident in the United Kingdom and all filing requirements are met in
both jurisdictions.
In the United Kingdom, the applicable rate of tax is computed at 19% (2021: 19%). As a result of the Finance Bill
2021 the future tax rate in the United Kingdom is set to increase to 25% from 1 April 2023.
Singapore domestic income tax is calculated at 17% (2021: 17%) of the estimated assessable loss for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.
Annual Report and Accounts 2022 47
266018 Simec Atlantis Energy_pp33-pp48.qxp 25/07/2023 14:15 Page 48
Notes to the Financial Statements
continued
Reconciliation of effective tax rate
Loss before tax
Tax at the domestic rates
applicable to losses in the country concerned
Non-allowable items at rates concerned
Non-taxable income at rates concerned
Tax effect of deferred tax asset not recognised
Tax effect of unwinding deferred tax
Tax effect of asset impairment on deferred tax
Tax effect of rate change on deferred tax (Note 26)
Group
2022
£’000
2021
£’000
(11,079)
(74,082)
(2,105)
1,119
(52)
1,038
19
–
–
19
(14,076)
12,351
(66)
1,795
196
3,310
(1,022)
2,488
At the end of the reporting period, the Group has unutilised tax losses of £ 172.3 million (2021: £171.3 million)
available for offset against future profits. The amount of the Company’s unutilised tax losses available for offset
against future profits is £31.3 million (2021: £31.3 million). No deferred tax asset has been recognised due to the
unpredictability of future profit streams.
Included in the Group and Company losses are £27.3 million (2021: £27.3 million) of losses relating to Singapore
corporation tax, which will only be utilised against taxable income realised in Singapore.
10 Loss for the Year
The following items have been included in arriving at the loss for the year:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
(Reversal of)/ Impairment loss on property, plant and equipment
Impairment of intangible assets
Auditor’s remuneration:
- Audit and audit related fees
Share-based payments
Loss/(Gain) on sales of subsidiaries
Net foreign exchange losses
Group
2022
£’000
3,217
20
38
(2,000)
–
190
118
2,232
122
2021
£’000
8,734
238
1,684
45,312
7,836
186
344
(1,502)
191
48 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 49
Notes to the Financial Statements
continued
11 Property, plant and equipment
Freehold
Leasehold
land improvements
£’000
£’000
Property,
plant and
equipment
£’000
Furniture,
fixture and
equipment
£’000
Motor
vehicles
£’000
Computer
equipment
and
software
£’000
Power
plant
£’000
Total
£’000
Group
Cost
At 1 January 2021 20
Additions –
Disposals –
Reimbursed by grants –
At 31 December 2021 20
Additions –
At 31 December 2022 20
Accumulated depreciation
At 1 January 2021 –
Depreciation for the year –
Disposal –
Impairment loss –
At 31 December 2021 –
Depreciation for the year –
Reversal of impairment loss –
At 31 December 2022 –
Net book value
At 31 December 2021 20
At 31 December 2022 20
87
–
(87)
–
–
–
–
33
54
(87)
–
–
–
–
–
–
–
69,283
(139)
(25)
(296)
68,823
137
68,960
8,231
2,775
(20)
13,236
24,222
2,125
–
26,347
44,601
42,613
139
–
(122)
–
17
–
17
126
2
(111)
–
17
–
–
17
–
–
77
–
(77)
–
–
–
–
31
10
(41)
–
–
–
–
–
–
–
86
3
(2)
87
–
87
57
17
(2)
–
72
12
–
84
15
3
84,817
154,509
241
–
–
105
(313)
(296)
85,058
154,005
(1,261)
(1,124)
83,797
152,881
14,946
5,876
23,424
8,734
–
(261)
32,076
45,312
52,898
1,080
77,209
3,217
(2,000)
(2,000)
51,978
78,426
32,160
76,796
31,819
74,455
Plant, property and equipment
(a)
In 2020, MeyGen was awarded £1.545 million from the Scottish Government’s Saltire Tidal Energy Challenge Fund
and £0.1 million from Highlands and Islands Enterprise to develop and install a subsea tidal turbine connection hub.
Prior to the 2020 award, aggregate grants of £13.3 million, comprising a £10 million grant from the United Kingdom’s
Department of Energy and Climate Change, and two grants from Scotland’s Highlands and Islands Enterprise totalling
£3.3 million, were awarded to MeyGen in August 2014. Grants received where the conditions attached to them have
been complied with were recorded as a deduction from the carrying amount of the project-under-construction in
accordance with the accounting policy stated in Note 3. As disclosed in Note 4, a value-in-use calculation is
undertaken each year to determine the need for impairment of the asset. An impairment of £13.2 million was
recognised in 2021, reflecting operational difficulties with the turbines during 2021 and a cautious approach to the
pace of future development of the MeyGen site. No further impairment is considered necessary in 2022.
(b) Power plant
As disclosed in Note 4, a value-in-use calculation is undertaken each year to determine the need for impairment
of the asset. At 31 December 2022, a partial reversal of prior year’s impairment loss has been recognised in the
year for £2.0m due to a favourable change identified in the opportunity for future Battery Energy Storage Systems
(BESS) projects. In 2021, a value-in-use calculation recognised an impairment charge of £32.1 million as a result
of the decision taken by the Board to withdraw from the Uskmouth Power Station conversion project and to
develop the site as a sustainable energy park. In 2022, a credit of £1.3m has been recognised as a result of a
movement in the decommissioning provision in Note 24.
Security
(c)
At 31 December 2022, assets of subsidiaries with carrying amounts of £75.7 million (2021: £76.8 million) were
pledged as security on long term loans (Note 25). At 22 June 2023 a security held over the Powerplant assets
with a carrying value of £33.1 million was released.
Annual Report and Accounts 2022 49
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 50
Notes to the Financial Statements
continued
12 Intangible assets
Global
technology
licence
£’000
Intellectual Development
costs
£’000
property
£’000
Tidal
data
£’000
Customer
contracts
£’000
Total
£’000
Group
Cost
At 1 January 2021
Disposal
Exchanges differences
At 31 December 2021
Disposal
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Amortisation for the year
Disposal
Impairment loss
Exchange differences
At 31 December 2021
Amortisation for the year
Disposal
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
8,223
–
–
8,223
–
8,223
5,264
493
–
2,466
–
8,223
–
–
8,223
–
–
3,133
–
–
3,133
(3,133)
–
382
38
–
–
–
420
38
(458)
–
2,713
–
16,042
–
(46)
15,996
–
15,996
9,607
1,048
–
5,370
(29)
15,996
–
–
15,996
1,465
–
–
1,465
–
1,465
–
–
–
–
–
–
–
–
–
–
–
1,465
1,465
1,938
(1,938)
–
–
–
–
114
105
(219)
–
–
–
–
–
–
–
–
Intellectual
property
£’000
Development
costs
£’000
Company
Cost
At 1 January 2021 and 31 December 2021 573
Disposal (573)
At 31 December 2022 –
Accumulated depreciation
At 1 January 2021 382
Amortisation for the year 38
Impairment loss –
At 31 December 2021 420
Amortisation for the year 38
Disposal (458)
At 31 December 2022 –
Net book value
At 31 December 2021 153
At 31 December 2022 –
3,347
–
3,347
2,231
223
893
3,347
–
–
3,347
–
–
30,801
(1,938)
(46)
28,817
(3,133)
25,684
15,367
1,684
(219)
7,836
(29)
24,639
38
(458)
24,219
4,178
1,465
Total
£’000
3,920
(573)
3,347
2,613
261
893
3,767
38
(458)
3,347
153
–
50 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 51
Notes to the Financial Statements
continued
(a) Global technology licence
This licence grants the Group an exclusive, perpetual, world-wide licence of the rights to use, deploy and
manufacture certain proprietary technology in respect of turbines and related infrastructure used in tidal energy
generation.
In 2021 the Directors reviewed the future cashflows expected to arise from the Global Technology Licence and
concluded that a full impairment of the asset was required.
Intellectual property
(b)
Intellectual property includes technical know-how, international patent applications and registered trademarks
of the Company.
During the year, the intellectual property relating to the turbine technology was sold.
(c) Development costs
Development costs include expenditure relating to designing activities for the production of new or substantially
improved tidal turbine products and processes.
In 2021, the Directors reviewed the future cashflows expected to arise as a result of these tidal turbine related
development costs and concluded that a full impairment of the asset should be recognised.
(d) Tidal data
Tidal data relates to key information on tidal flows that is crucial to the development of the MeyGen project and
little or no obsolescence is expected. The tidal data will be amortised over the life of the project upon final
commissioning of the project.
13 Leases
As a lessee
The Group has lease contracts for land, buildings and the seabed at the MeyGen site. Those leases have lease
terms of between 1 and 100 years. Land and buildings have a remaining useful life between 1-92 years.
Set out below are the carrying amount of land and buildings right-of-use assets recognised and the movements
during the period:
Group
At 1 January 2021
Depreciation expense
Adjustments
Disposals
At 31 December 2021
Depreciation expense
Additions
Adjustments
At 31 December 2022
Land and
buildings
£’000
1,739
(238)
79
(801)
779
(20)
194
378
1,331
Annual Report and Accounts 2022 51
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 52
Notes to the Financial Statements
continued
Set out below are the carrying amount of lease liabilities and movements during the period:
At 1 January
Additions
Accretion of interest
Payments
Adjustments
Disposals
At 31 December
Current
Non-current
The maturity analysis of lease liabilities is disclosed in Note 31(b).
The following are the amounts recognised in the profit or loss:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Expense relating to lease of low value assets
(included in other operating expenses)
Variable lease payments (included in other operating expenses)
At 31 December
Group
Group
2022
£’000
759
194
80
(308)
571
–
1,296
296
1,000
1,296
2022
£’000
20
80
4
2
106
2021
£’000
1,677
–
94
(214)
39
(837)
759
62
697
759
2021
£’000
238
94
4
2
338
The Group had total cash outflows for leases of £0.3 million (2021: £0.2 million). The Group had no non-cash
additions to right-of-use assets and lease liabilities (2021: £Nil million).
The Group has leases which contain variable lease payment terms that are linked to power generation. Variable
lease payments had the following effect:
Fixed rent
Variable payment
Group
2022
£’000
12
50
62
2021
£’000
12
2
14
Overall, the variable payments constitute 16% (2021: 1%) of the Group’s entire lease payments. The variable lease
payments depend on generation, and whilst the Group expects the ratio to remain constant in future years, a
5% increase in variable payments would result in a £2,500 increase to lease payments.
52 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 53
Notes to the Financial Statements
continued
As a lessor
At the end of the reporting period, the Group had amounts due to it under non-cancellable operating leases, which
fall due as follows:
Within one year
Between two and five years
More than five years
Group
2022
£’000
–
–
95
95
2021
£’000
–
–
96
96
One of the subsidiaries of the Group, SIMEC Uskmouth Power Limited (“SUP”), leases excess land available at
the Uskmouth Power Station site to a related party, SIMEC Power 4 Limited. The lease is agreed on a 999-year
basis and includes a lease premium of £1.5 million, which is recognised in advanced receipts (Note 28).
14 Investments in subsidiaries
Unquoted equity shares, at cost
63,455
Less: Impairment loss (52,235)
11,220
Details of the subsidiaries are as follows:
Company
2022
£’000
2021
£’000
63,337
(44,241)
19,096
Country of
incorporation/
registration
Principal activities and operation
Investment holding Singapore
Investment holding Singapore
Name of Subsidiaries
Held by the Company
Atlantis Turbines Pte. Limited(3)
Atlantis Projects Pte. Ltd.(3)
Atlantis Resources (Gujarat
Tidal) Pte Limited(1)(6)
ARC Operations Pty Limited(4)
Atlantis Resources
(Scotland) Limited(5)
Dormant Singapore
Provision of operational Australia
services to the Group
Provision of project United Kingdom
management and
consulting services
Atlantis Ocean Energy PLC(5)
Financial services United Kingdom
Atlantis Future Energy PLC(5)
Financial services United Kingdom
SIMEC Uskmouth Power Limited(5) Development of renewable United Kingdom
Effective equity
interest held by
the Company
2022
%
100
100
50
100
100
100
100
100
2021
%
100
100
50
100
100
100
100
100
energy generation project
Annual Report and Accounts 2022 53
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 54
Notes to the Financial Statements
continued
Islay Holding Limited(5)
Investment holding United Kingdom
Duncansby Tidal Power Limited(1) Dormant United Kingdom
Name of Subsidiaries
Held by
Atlantis Projects Pte. Ltd,
Tidal Power Scotland Limited(5)
Stroma Tidal Power Limited(5)
Wide Range Developments
Limited
Held by
Tidal Power Scotland Limited
MeyGen Holdings Limited(5)
Held by
MeyGen Holdings Limited
MeyGen PLC(2)(5)
Held by
Islay Holding Limited
Islay Tidal Power Limited(1)
Held by
Atlantis Turbines Pte Limited
Atlantis Operations (UK)
Limited(5)
Marine Current Turbines
Limited(5)
Held by
Atlantis Operations (UK) Limited
Atlantis Operations
Japan Good Kaisha
Country of
incorporation/
registration
Principal activities and operation
Effective equity
interest held by
the Company
2022
%
2021
%
Investment holding United Kingdom
Development of tidal United Kingdom
power generation project
Investment Holding United Kingdom
Investment holding United Kingdom
Development of tidal power United Kingdom
generation project
92
100
–
83
100
100
100
92
100
100
83
100
100
100
Development of tidal United Kingdom
power generation project
100
100
Provision of operational United Kingdom
services to the Group
Development of United Kingdom
turbines and projects
100
100
100
100
Provision of operational United Kingdom
services to the Group
–
100
Held by
Marine Current Turbines Limited
Sea Generation Limited(1) Development of tidal power United Kingdom
generation project
100
100
(1) Not required to be audited as the subsidiaries are dormant.
(2) As at 31 December 2022 and 31 December 2021, shares in MeyGen PLC were pledged as security on long term loans (see Note 25).
(3) Audited by Moore Stephens LLP, Singapore.
(4) Not required to be audited by law in its country of incorporation.
(5) Audited by Kreston Reeves LLP, United Kingdom.
(6) The Company has control over the entity through shareholder voting rights.
54 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 55
Notes to the Financial Statements
continued
Impairment in investment in subsidiaries
(a)
The Directors reviewed the value of the investments in subsidiaries held by the Company at year end and
concluded that the investment in Atlantis Operations (UK) Limited should be impaired in full. In addition, the
investment in SIMEC Uskmouth Power Limited was impaired by £7.3 million (2021: £39.6 million), reducing the
carrying value to £10.8 million.
Share-Based Payments
(b)
During the financial year, share-based payments granted by the Company to the employing subsidiaries, Atlantis
Resources (Scotland) Limited (“ARSL”), Marine Current Turbines Limited (“MCT”), SIMEC Uskmouth Power
Limited (“SUP”) and Atlantis Operations (UK) Limited (“AOU”) resulted in an increase to the deemed investments by
the Company in those subsidiaries totalling £117,924 (2021: £343,890).
(c) Non-Controlling Interest in subsidiaries
Tidal Power Scotland Limited (“TPSL”)
As at 31 December 2022, Scottish Power Renewables (“SPR”) has an equity investment of 6% of the shareholding
in TPSL.
The Group retains a 92% (2021: 92%) shareholding of TPSL.
MeyGen Holdings Limited (“MGHL”)
The following table summarises the information relating to the material non-controlling interest (“NCI”) in
MeyGen PLC, based on its financial statements prepared in accordance with IFRS, modified for fair value
adjustments on acquisition and differences in the Group’s accounting policies.
Group
NCI percentage
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Net assets attributable to NCI
Cash flows from/(used in) operating activities
Cash flows (used in)/from investing activities
Cash flows used in financing activities
Net increase/(decrease) in cash and cash equivalents
Loss for the year
Total comprehensive income
Attributable to NCI:
Loss for the year
Total comprehensive income
2022
£’000
23.22%
44,280
3,535
(45,422)
(978)
1,415
328
1,866
(345)
(995)
526
(6,075)
(6,075)
(1,411)
(1,411)
2021
£’000
23.22%
46,864
1,698
(38,685)
(2,387)
7,491
1,739
(1,363)
296
(60)
(1,127)
(17,093)
(17,093)
(3,971)
(3,971)
Annual Report and Accounts 2022 55
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 56
Notes to the Financial Statements
continued
(d) Disposal of SIMEC GHR Limited (GHR)
On 13 December 2021 the Group disposed of its entire shareholding in GHR, a company that provided hydro
development, project management and operations and maintenance services, for a cash consideration of
£3.6 million. The Group recognised a gain on disposal of £1.5 million as a non-recurring item in the consolidated
income statement. Following the disposal, GHR ceased to be a subsidiary of the Group.
The following table summarises the carrying amount of the major classes of identifiable assets and liabilities
disposed:
Cash and cash equivalents
Property, plant and equipment
Other receivables
Other payables and liabilities
Net assets disposed
Net fair value adjustments disposed
Gain on disposal of a subsidiary
Total consideration from disposal of a subsidiary
Less: Cash and cash equivalents from disposed subsidiary
Net cash inflow on disposal of a subsidiary
£’000
480
107
502
(399)
690
1,392
1,502
3,584
(480)
3,104
(e) Disposal of Wide Range Developments Limited (WRDL) and Atlantis Operations Japan Good Kaisha (AOJ)
On 19 October 2022 the Group disposed of its tidal turbine development business including the entire shareholding
in WRDL and AOJ, an investment holding company and a company that provided operational services, for a cash
consideration of £0.6 million. The Group recognised a loss on disposal of £2.4 million as a non-recurring item in
the consolidated income statement. Following the disposal, WRDL and AOJ ceased to be subsidiaries of the
Group.
The following table summarises the carrying amount of the major classes of identifiable assets and liabilities
disposed:
Cash and cash equivalents
Intangible assets
Current assets
Other payables and liabilities
Net assets disposed
Net fair value adjustments disposed
Loss on disposal of a subsidiary
Total consideration from disposal of a subsidiary
Less: Cash and cash equivalents from disposed subsidiary
Less: Receipt of shares in other investment
Net cash inflow on disposal of subsidiaries and business
£’000
1
2,675
166
(776)
2,066
870
(2,232)
704
(1)
(133)
570
56 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 57
Notes to the Financial Statements
continued
15 Investment in joint ventures and other investments
Investment in joint ventures, at cost
Investment in other investment, at cost
Share of post-acquisition results
Loss on impairment of investment in joint venture
Group
2022
£’000
405
133
(28)
(377)
133
2021
£’000
511
–
(106)
–
405
The detail of the Company’s equity interests in joint ventures and associates is as follows:
Name of entity
NPA Fuels Ltd(1)
Normandie
Hydroliennes(2)
Country of
incorporation/
Nature of registration
relationship and operation
Principal activities
Marketing, production Joint United Kingdom
and delivery of waste Venture
derived fuel pellets
Development of tidal
power generation
project
Joint France
Venture
Proteus Marine
Renewables Limited
Development of Tidal Other United Kingdom
turbine technology
investment
(1) Audited by Kreston Reeves LLP, United Kingdom.
(2) Not required to be audited by law in its country of incorporation
Effective equity
interest held by
the Company
2022
%
50
–
21
2021
%
50
51
–
As part of the sale of the tidal turbine business including WRDL and AOJ (Note 14 (e)), the entire investment in
Normandie Hydroliennes (NH) was also sold on 19 October 2022 and the investment in Proteus Marine
Renewables Limited was purchased.
The summarised financial information for these entities that are material to the Group are set out below is not adjusted
for the percentage of ownership held by the Company with results of NH up to the date of sale included below:
NPA Fuels Ltd Normandie Hydroliennes
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Assets and liabilities:
Current assets 8
Total assets 8
Non–current liabilities (207)
Current liabilities (8)
Total liabilities (215)
Net liabilities (207)
Group’s share of joint venture’s net liabilities (104)
Results
Revenue –
Loss for the year (55)
Group’s share of joint ventures’ profit for the year (28)
Carrying amount of the investment as
at 31 December –
5
5
(161)
(2)
(163)
(158)
(79)
–
(117)
(59)
405
–
–
–
–
–
–
–
370
(550)
(280)
–
411
411
(474)
–
(474)
(63)
(32)
392
(142)
(72)
–
Annual Report and Accounts 2022 57
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 58
Notes to the Financial Statements
continued
(a) NPA Fuels Ltd
On 22 December 2020, Atlantis Projects Pte. Ltd., a subsidiary of the Group, entered into a Joint Venture agreement
with N&P Holdings 2, a subsidiary of N+P Group, to create NPA Fuels Ltd (“NPA”) a company domiciled in the UK.
Each partner has a 50% interest in the joint venture. The purpose of the joint venture is to principally be involved
in the marketing, production and delivery of waste derived fuel pellets to convert coal fired power stations
throughout the UK. The initial cost of investment is £463,981.
The Group’s interest in NPA is accounted for using the equity method in the consolidated financial statements
due to the terms of the joint venture agreement. In 2022, the Group’s share of NPA’s loss for the year totalling
£27,569 has been recognised (2021: £58,935) reducing the value of investment as at 31 December 2022 to
£377,478 (2021: £405,047). This investment has been fully impaired. In addition, as at 31 December 2022, the
Group has a loan receivable from NPA of £103,213 (2021: £61,632) which has been provided against in full. As of
31 December 2022, the directors have decided to dissolve the joint venture. The financial statements of NPA are
prepared under IFRS in GBP.
(b) Normandie hydroliennes
On 3 July 2019, Wide Range Developments Limited, a subsidiary of the Group, entered into a joint venture agreement
with Normandie Participations and Efinor to create Normandie Hydroliennes (“NH”), a company domiciled in France.
The purpose of the joint venture was to commence site development, permitting and consenting work to allow for
the construction of a phased array of tidal energy projects. The Group had a 51% interest in NH resulting from
€76,000 investment in the share capital of the joint venture up until the date of sale on 19 October 2022. The Group’s
interest in NH was accounted for using the equity method in the consolidated financial statements due to the terms
of the joint venture agreement. As a result of the recognition of losses to date, the value of investment at 31
December 2021 was reduced to £Nil and the loan provided for in full.
Proteus marine renewables limited
(c)
On 19 October 2022, Atlantis Projects Pte. Limited, a subsidiary of the company, acquired a 21% interest in Proteus
Marine Renewables Limited as part of the divestment of the tidal turbine development business. In accordance
with paragraph 6 of IAS 28 Investments in Associates and Joint Ventures, the Group’s interest in Proteus Marine
Renewables Limited has been recognised as an “Other investment”, due to the Group not exercising significant
influence as demonstrated by:
l
l
No board representation;
Does not participate in policy-making processes, including in participating in decisions about dividends or
other distributions.
Any subsequent fair value movement will be recognised through the profit and loss.
16 Loans receivable
Group Company
2022
£’000
Loans to subsidiaries
- Interest bearing (a) –
- Non-interest bearing (b) –
Less: provision for impairment –
Loans to joint ventures 104
Less: Impairment loss (d) (104)
Related Party Loan (c) 258
Loans receivable 258
2021
£’000
–
–
–
545
(211)
258
592
2022
£’000
1,349
11,075
(12,424)
104
(104)
258
258
2021
£’000
1,283
11,075
(12,358)
545
(211)
258
592
Interest bearing
(a)
The Company has provided a loan to MeyGen PLC which is interest-bearing with an interest rate of 12-month LIBOR
plus 5% per annum, unsecured and repayable in February 2030. The Company has provided in full against the potential
non-repayment of this loan.
58 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp49-pp59.qxp 25/07/2023 14:18 Page 59
Notes to the Financial Statements
continued
(b) Non-interest bearing
In 2014, the Company extended a loan to APPL, which is interest-free and unsecured. The loan is repayable on demand.
Management has no current intention to recall this loan in the foreseeable future and has provided in full against the
potential non-repayment of this loan.
Related party loan
(c)
In 2021, the Company extended a loan to a former employee of its subsidiary Green Highland Renewables. The loan is
unsecured, interest free and repayable in December 2026.
Loans to joint ventures
(d)
As disclosed in Note 15, the Company has extended a loan of £103,890 to NPA. The loan is interest bearing at a fixed
rate of 10% per annum, is unsecured and the repayment is subject to the distribution arrangements in the joint venture
agreement. The loan has been impaired in full.
The loan extended by the company to Normandie Hydroliennes, which was fully provided for at 31 December 2021, was
settled as part of its sale in October 2022.
17 Trade and other receivables
Group Company
2022
£’000
2021
£’000
Trade receivables 109
Deposits 3
Accrued revenue 1,149
Other receivables 1,404
Non-trade receivables due from subsidiaries –
Less:
Impairment loss –
Financial assets
at amortised cost under IFRS 9 2,665
Prepayments 749
Value added tax recoverable (88)
3,326
Non-current –
Current 3,326
3,326
47
52
417
391
–
–
907
432
9
1,348
–
1,348
1,348
2022
£’000
–
3
–
262
70,874
2021
£’000
–
3
–
–
71,687
(70,874)
(71,687)
265
84
16
365
–
365
365
3
93
15
111
–
111
111
The non-trade receivables due from subsidiaries are unsecured, interest-free, and settlement is neither planned
nor likely to occur in the foreseeable future. The balances are stated at cost less impairment losses.
At the end of the reporting period, the Company had a provision for impairment loss of £70.9 million
(2021: £71.7 million) in relation to balances receivable from subsidiaries as recovery of the amounts due is not
considered probable.
The Group’s and the Company’s exposure to credit and currency risks are as set out in Note 31.
Annual Report and Accounts 2022 59
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 60
Notes to the Financial Statements
continued
18 Cash and cash equivalents
Group Company
2022
£’000
Cash at bank 2,929
Fixed deposits 772
Cash and cash equivalents in the
statements of financial position 3,701
Less: Encumbered deposits (772)
Cash and cash equivalents in the
statement of cash flows 2,929
2021
£’000
3,004
767
3,771
(767)
3,004
2022
£’000
172
–
172
–
172
2021
£’000
2,444
–
2,444
–
2,444
The encumbered deposits serve as collateral on behalf of MeyGen PLC and Atlantis Operations (UK) Limited.
MeyGen’s deposit supports the provision of bank guarantees and standby letters of credit as required under the
terms of MeyGen’s seabed lease and to secure the MeyGen project’s electricity transmission capacity. Atlantis
Operations (UK) Limited’s deposit supports the provision of bank guarantees in relation to grant guarantees. The
Group’s exposure to interest rate risks is described in Note 31.
19 Share capital
Group and Company
2022 2021
No. of shares
with no par
value ’000
Issued and fully paid:
At the beginning of the financial year 722,812
Public offerings issued for cash –
Issue of shares other than cash –
Transaction costs incurred in relation
to share issuance –
No. of shares
with no par
value ’000
494,325
104,000
124,487
£’000
201,496
–
–
£’000
195,375
2,600
4,180
–
–
(659)
At the end of the financial year 722,812
201,496
722,812
201,496
Pursuant to the share placing agreement with New Technology Capital Group LLC (“Investor”) announced on
16 December 2020, the Company issued 124,487,312 new ordinary shares during 2021 in satisfaction of
subscription amounts totalling £4,180,000. The agreement with the Investor was terminated on 28 September
2021. The Investor continues to hold 1,900,000 warrants with an exercise period of 36 months from the date of
issue with an entitlement to subscribe for one new share per warrant at an exercise price of £0.30371 per share.
In the current reporting period, no expenses (2021: £0.7 million) were incurred incidental to the issuance of shares.
20 Capital reserve
The capital reserve consists of the difference between the carrying value of net assets transferred to and the
consideration received from the non-controlling interest.
21 Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.
60 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 61
Notes to the Financial Statements
continued
22 Share options
The share option reserve represents the equity-settled share options granted to employees. The reserve is made
up of the cumulative value of services received from employees recorded on the grant date. The expense for
services received will be recognised over the vesting period.
Long Term Incentive Plan (“LTIP”)
In 2013, the Company approved an LTIP. During the year, 2.5 million (2021: 26.6 million) share options were granted
under the LTIP.
The options outstanding at 31 December 2022 have a weighted average contractual life of 8.2 years (2021: 9.7 years).
Details of the share options outstanding are as follows:
Group and Company
2022 2021
No. of
share
options
’000
Weighted
average
exercise price
£
Outstanding at end of the year 19,575
Exercisable at end of the year 8,442
0.078
0.124
No. of
share
options
’000
25,785
2,175
Weighted
average
exercise price
£
0.08
0.302
The share options on issue as at the reporting date expire between 2028 and 2032.
In 2022, the Group and the Company recognised total expenses of £0.12 million (2021: £Nil million), related to
equity-settled share-based payment transactions during the year and this is included as part of employee benefits
expense (Note 7). A total of £0.07 million (2021: £0.55 million) was transferred from the share option reserve to
accumulated losses upon cancellation/expiry of the share options.
Company Share Option Plan (“CSOP”)
On 10 November 2016, the Company established a CSOP to offer share options to employees. During the year,
no share options were granted under the CSOP (2021: 6.99m).
The options outstanding at 31 December 2022 have a weighted average contractual life of 7.8 years (2021: 8.6 years).
No options were exercised in 2022 and 2021.
Group and Company
2022 2021
No. of
share
options
’000
Weighted
average
exercise price
£
Outstanding at end of the year 2,063
Exercisable at end of the year 2,063
0.13
0.13
No. of
share
options
’000
7,053
6,152
Weighted
average
exercise price
£
0.15
0.14
Annual Report and Accounts 2022 61
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 62
Notes to the Financial Statements
continued
The fair values for the above share options were calculated using the Black-Scholes pricing model. The inputs
into the model for share options granted are as follows:
Fair value of options on date of grant
Share price
Exercise price
Expected volatility
Expected life
Risk free rate
Expected dividend yield
2022
2021
£0.01 - £0.02
£0.02 - £0.03
£0.01 - £0.02
£0.01 - £0.10
£0.02 - £0.24
£0.02 - £0.25
81.12% - 90.91% 64.29% - 81.14%
3 years
0.97%
0%
3 years
3.52%
0%
Expected volatility was determined by calculating the historical volatility of the Company’s stock. The expected
life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations.
The Group and the Company recognised no expenses (2021: £0.3 million), related to equity-settled share-based
payment transactions during the year and this is included as part of employee benefits expense (Note 7). A total
of £0.20 million (2021: £Nil million) was transferred from the share option reserve to accumulated losses upon
cancellation/expiry of the share options.
23 Loss per Share
The calculation of loss per share is based on the loss after tax attributable to ordinary equity holders of the
Company and on the weighted average number of ordinary shares in issue during each year.
Total loss
attributable
to owners of Weighted average
the Company Number of shares Loss per share
2022 2021 2022 2021 2022 2021
£’000 £’000 ’’000 ’000 £ £
Basic and diluted (9,649) (67,623) 722,812 558,725 (0.01) (0.12)
Company
Weighted average number of ordinary shares
Issued ordinary share at beginning of the year
Effect of public offerings issued for cash
Effect of shares issued other than cash (Note 19)
Weighted average number of shares at the end of the year
2022
‘000
722,812
–
–
722,812
2021
‘000
453,637
26,857
78,231
558,725
The average market value of the Company’s shares for the purposes of calculating the dilutive effect of share
options was based on quoted market prices for the period during which the options were outstanding.
62 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 63
Notes to the Financial Statements
continued
24 Provisions
Provision for
decommissioning
costs
£’000
2022
At 1 January 13,546
Provision utilised during the year –
Remeasurement of provision (1,124)
Unwinding of discount on
decommissioning costs 159
At 31 December 12,581
Non-current 12,581
Current –
12,581
2021
At 1 January 14,901
Provision made during the year –
Provision utilised during the year (22)
Remeasurement of provision (1,435)
Unwinding of discount on
decommissioning costs 102
At 31 December 13,546
Non-current 13,546
Current –
13,546
Group
Other
provision
£’000
172
(172)
–
–
–
–
–
–
140
112
(80)
–
–
172
–
172
172
Company
Other
provision
£’000
30
(30)
–
–
–
–
–
–
94
–
(64)
–
–
30
–
30
30
Total
£’000
13,718
(172)
(1,124)
159
12,581
12,581
–
12,581
15,041
112
(102)
(1,435)
102
13,718
13,546
172
13,718
Provision for decommissioning costs
The provision for decommissioning costs includes the present value of the best estimate of direct costs that may
be incurred to remove turbine foundations from the seabed and the decommissioning of the Uskmouth Power
Station. The remeasurement credit in the income statement of £1.263 million has resulted from using a 4%
discount rate for present value calculation. Had a discount rate of 1.50% been used (similar to last year), this
would have resulted in an increase in the provisions of £6.8 million.
The turbine seabed foundations relate to the MeyGen project located in the Inner Sound of the Pentland Firth,
which are anticipated to be decommissioned in 2043. A remeasurement debit in the tangible assets note of
£0.1 million has been recognised in the year.
The Uskmouth Power Station provision is the present value of the best estimate of direct costs that may be
incurred to restore the site of the Uskmouth Power Station to a condition that complies with applicable legislation,
which is anticipated to take place in approximately 2043. The provision is based upon an estimate of the timing
and current cost of this exercise, adjusted for the effects of inflation and discounted to present value using an
appropriate discount rate as set out in the summary of significant accounting policies 3(j) on page 41.
A 5% increase in the estimate of current cost would increase the recorded provision by approximately £0.62 million
in each financial year, a 0.1% increase in estimated inflation would increase the recorded provision by
approximately £0.2 million in each financial year and a 0.1% increase in discount rate would decrease the recorded
provision by approximately £0.2 million in each financial year.
Other provisions
The other short-term provisions for payroll liabilities and lease dilapidations were settled during 2022.
Annual Report and Accounts 2022 63
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 64
Notes to the Financial Statements
continued
25 Loans and borrowings
The Group’s and the Company’s total loans and borrowings are as follows:
Group Company
2022
Note £’000
Current loans and borrowings
Short term debentures (e) 9,895
Short term loan (f) 6,000
Financial guarantees –
15,895
Non-current loans and borrowings
Loan from a subsidiary (a) –
Loans from a related party (b) –
Long term loans (c) 12,356
Secured long term loans (d) 25,815
Long term debentures (e) 3,719
41,890
Total loans and borrowings 57,785
2021
£’000
4,914
–
–
4,914
–
2,028
11,628
21,655
8,595
43,906
48,820
2022
£’000
2021
£’000
–
–
82
82
438
–
–
–
–
438
520
–
–
95
95
423
–
–
–
–
423
518
Loan from a subsidiary
(a)
The loan from a subsidiary is denominated in Great British Pounds, is interest-bearing with an interest rate of
5.0% per annum and unsecured. The loan was due for repayment in 2021 but both parties have agreed to continue
the loan under existing terms and there are currently no plans for repayment. The fair value of the loan at the end
of the reporting period was approximately £0.4 million (2021: £0.4 million).
Loan from related parties
(b)
The related party loan from SIMEC Group Limited (“SIMEC”) of £2.0 million was repaid in 2022.
Long-Term loans
(c)
The loan is denominated in Great British Pounds, with an interest rate of 5.0% plus LIBOR, resulting in aggregate
floating rates of interest over the year in the range 5.2% to 6.5% per annum, is unsecured and is repayable in
February 2028. At the end of the reporting period, the carrying value of the loan approximates its fair value.
64 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 65
Notes to the Financial Statements
continued
(d)
Secured Long-Term loans
MeyGen PLC (“MeyGen”)
In August 2014, as part of the MeyGen Phase 1A project financing, Scottish Enterprise (as administrator of the
Renewable Energy Investment Fund) extended a loan of £7.5 million to MeyGen to finance the construction of
the project. The Crown Estate Commissioners committed an investment of £9.8 million to MeyGen, also to finance
the construction of the MeyGen Phase 1A project, which will be serviced through the payment of “enhanced rent”,
with an exit payment at or before the date 10 years from commissioning of Phase 1A of the project. During 2022
enhanced rent payments of £Nil million (2021: £Nil million) were paid.
The Scottish Enterprise loan and the Crown Estates Scotland investment to MeyGen are denominated in Great British
Pounds and are repayable in the period from 2018 to 2027. The effective interest rates on these loans are in the
range of 7% to 7.8% per annum. During 2022 £Nil million (2021: £Nil million) was repaid. On 1 November 2022 two
new remedial plans were agreed which suspend any further senior debt repayments until 1 November 2024. The
Company has provided a parent company guarantee for £2 million of the Scottish Enterprise loan.
On 30 March 2022, MeyGen PLC agreed an additional loan facility of £2.5 million with Scottish Enterprise with
interest compounded semi-annually at a rate of 15% per annum. This loan is repayable on 31 May 2024.
The Group’s secured long-term loans are secured by way of fixed and floating charges over the assets of
subsidiaries as well as MeyGen shares.
At the reporting date, the Company does not consider it probable that a claim will be made against the Company
under the guarantee described above.
The Group’s and the Company’s exposures to interest rate, foreign currency and liquidity risks are described in
Note 31.
Short-Term and Long-Term Debentures
(e)
On 25 July 2017, the Group, via its subsidiary company Atlantis Ocean Energy PLC, raised £4.95 million through
a five-year bond with a coupon of 8% per annum, payable semi-annually, and maturing in June 2022. The bond
was offered through Abundance Investment Limited, the provider of a regulated green peer-to-peer investment
platform.
In the period from April to June 2018, the Group, via its subsidiary company Atlantis Future Energy PLC, raised
£4.97 million through a five-year bond with a coupon of 8% per annum, payable semi-annually, and maturing in
2023. This bond was offered through Abundance Investment Limited.
In the period from August 2019 to February 2020, the Group, via its subsidiary company Atlantis Future Energy
PLC, raised £3.79 million through a five-year bond with a coupon of 8%, payable semi-annually, and maturing in
2024. This bond was offered through Abundance Investment Limited.
On 28 March 2023 the Atlantis Future Energy PLC debenture holders voted to accept a special resolution to defer
the principal repayment of £4.97 million from 31 March 2023 until 31 March 2024. The coupon increased from
8% to 10% per annum for the period 1 April 2023 to 31 March 2024.
On 20 June 2023, the Atlantis Ocean Energy debenture holders voted to accept a special resolution to defer the
principal repayment of £4.95 million from 30 June 2023 until 30 June 2024.The coupon increased from 8% to
10% per annum for the period 1 July 2023 to 30 June 2024.
Annual Report and Accounts 2022 65
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 66
Notes to the Financial Statements
continued
Short-Term loan
(f)
On 23 May 2022, the Group, via its subsidiary SIMEC Uskmouth Power Limited, entered into a loan agreement
with Uskmouth Energy Storage Limited for an interest-free loan of £6 million. The loan provides funding for
working capital for the Group. On 20 June 2023 the loan was repaid via a set-off with the lender for the sale of a
grid connection asset for £10 million to the lender.
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Loans and other borrowings
At 1 January
Proceeds from borrowings
Repayment of borrowings**
Interest expense*
Interest paid
Amortisation of loan costs*
At 31 December
* non-cash movements
2022
£’000
48,820
8,500
(2,027)
3,576
(1,203)
119
57,785
2021
£’000
48,529
2,000
(4,235)
2,985
(1,096)
637
48,820
** £4.18 million of the 2021 repayment was effected by issue of ordinary shares under the share placement agreement with New Technology
Capital (Note 19).
26 Deferred tax liabilities
Movements in deferred tax liabilities of the Group are as follows:
Group
At 1 January
Unwind historic fair value adjustment
Effect of increase in tax rates
Effect of Asset Impairment
Disposal of subsidiary
At 31 December
2022
£’000
771
(19)
–
–
–
752
2021
£’000
3,582
(196)
1,022
(3,310)
(327)
771
The deferred tax liabilities were recognised due to the fair valuation of assets upon acquisition of MeyGen in 2013
and are unwinding over the MeyGen 1A operating period.
During 2021 the deferred tax liability was adjusted to reflect the changes to future UK corporate tax rates from
19% to 25% as a result of the Finance Act 2021 substantially enacted at the reporting date.
66 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 67
Notes to the Financial Statements
continued
27 Trade and other payables
Group Company
2022
£’000
Trade payables 685
Other payables 3,814
Accruals 605
Non-trade payables due to subsidiaries –
Other financial liabilities 5,104
Advance receipts 1,469
Corporate tax payable –
6,573
2021
£’000
1,304
3,697
644
–
5,645
1,469
–
7,114
2022
£’000
29
4
227
6,391
6,651
–
–
6,651
2021
£’000
239
27
239
8,210
8,715
–
–
8,715
The non-trade balances due to subsidiaries and related parties are unsecured, interest-free and repayable on
demand.
Other payables include £3.4 million relating to historical grant income previously received for which the Group
has been notified may be subject to clawback. As disclosed in Note 3 under the Going Concern commentary, the
Group is of the view that there are grounds for disputing any clawback of this grant.
Advanced receipts include the lease premium of £1.5 million (2021: £1.5 million) received as part of the acquisition
of SUP in 2018.
The Group’s and the Company’s exposure to currency and liquidity risks related to trade and other payables are
described in Note 31.
28 Related company and parties transactions
During the year, Group entities were engaged in the following significant transactions with related
parties/companies:
Group Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Interest income from a subsidiary
– MeyGen PLC –
Service fee income from a subsidiary
– Atlantis Resources (Scotland) Limited –
Interest expense arising from a subsidiary
– Atlantis Resources (Scotland) Limited –
Recharge of costs to related party
– SIMEC Power 1 Limited* –
– SIMEC Power 4 Limited* –
– SIMEC Subcoal Fuels Limited* –
Reimbursement of Non-Executive Director
fees paid by SIMEC International (UK) Ltd * –
–
–
–
(98)
(226)
(184)
32
65
91
15
–
–
–
–
64
310
15
–
–
–
32
* Related party by virtue of their relationship to SIMEC UK Energy Holdings Ltd, a significant shareholder.
Annual Report and Accounts 2022 67
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 68
Notes to the Financial Statements
continued
Compensation of Directors and Key Management Personnel
The remuneration of Directors and other members of key management during the year was as follows:
Group
Short-term benefits
Defined contribution benefits
Share-based payments
2022
£’000
580
65
71
716
2021
£’000
645
20
127
792
29 Commitments
As at 31 December 2022, the Group held £Nil million commitments (2021: £Nil million)
30 Contingent liabilities
The Group, through its subsidiary MeyGen PLC, has guaranteed credit facilities of £1.4 million (2021: £3.5 million)
granted to subsidiaries.
The Company has provided a parent company guarantee in respect of the debentures issued by its subsidiaries
Atlantis Ocean Energy PLC and Atlantis Future Energy PLC.
The Company has provided a parent company guarantee for £2 million in respect of the Tranche B loan issued
by Scottish Enterprise to MeyGen PLC.
The Company has provided a parent company guarantee in respect of the performance of its subsidiary Atlantis
Operations (UK) Limited under a turbine supply agreement to MeyGen PLC. The maximum liability under this
agreement to the end of the latent defect period on 28 March 2024 is £3.3 million (2021: £3.3 million).
31 Financial instruments
The Group is exposed to various financial risks arising in the normal course of business. It has adopted financial
risk management policies and utilised a variety of techniques to manage its exposure to these risks.
Credit risk
(a)
Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial
loss to the Group.
There are no significant concentrations of credit risk.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset as at the end
of the reporting period.
Loans and receivables
Loans and receivables are detailed in section (d) below.
The Group’s balances are considered to be recoverable and are not past due. The total provision for impairment
loss relating to loans and receivables for the Group is insignificant but the impairment loss for the Company is
£70.9 million (2021: £71.7 million). See Notes 16 and 17 for further detail of loans and receivables balances.
Cash and cash equivalents
The Group held cash of £3.7 million (2021: £3.7 million) at 31 December 2022. Cash at bank is held with banks
and financial institution counterparties that are licensed banks in the countries in which the Group operates and
that are rated A+ based on Standard & Poor’s ratings.
68 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 69
Notes to the Financial Statements
continued
Guarantees
At 31 December 2022 and 2021, the Company issued guarantees to a lender in respect of credit facilities granted
to a subsidiary (Note 30).
Liquidity risk
(b)
The Group actively manages its operating cash flows and the availability of funding through maintaining sufficient
cash and cash equivalents to finance its activities.
Current financial liabilities in 2022 and 2021 are repayable on demand or due within one year from the end of the
reporting period. Other than certain loans, the remaining financial liabilities are non-interest bearing.
Analysis of financial instruments by remaining contractual maturities. The table below summarises the maturity
profile of the Group’s and the Company’s financial liabilities at the end of the reporting period based on the
contractual undiscounted repayment obligations.
Contractual cash flows
Note
Carrying
amount
£’000
Total
£’000
One year
or less
£’000
Two to
five years
£’000
Over five
years
£’000
Group
2022
Financial liabilities
Trade and other payables
Short term loan
Long-term loan
Debentures
Secured long-term loans
Lease liabilities
2021
Financial liabilities
Trade and other payables
Loans from a related party
Long-term loan
Long-term debentures
Secured long-term loans
Lease liabilities
Company
2022
Financial liabilities
Trade and other payables
Financial guarantees
Loan from a subsidiary
2021
Financial liabilities
Trade and other payables
Financial guarantees
Loan from a subsidiary
27
25
25
25
25
13
27
25
25
25
25
13
27
25
25
27
25
25
5,104
6,000
12,356
13,614
25,815
1,296
64,185
5,648
2,028
11,628
13,509
21,655
759
55,227
6,651
82
438
7,171
8,714
95
423
9,232
5,104
6,000
16,854
15,525
34,026
5,150
82.659
5,648
2,027
15,132
15,232
30,347
3,863
72,249
6,651
82
438
7,171
8,714
3,500
423
12,637
5,104
6,000
–
1,221
–
303
12,628
5,648
–
–
5,146
–
60
10,854
6,651
82
–
6,733
8,714
3,500
–
12,214
–
–
–
14,304
34,026
338
48,668
–
2,027
–
10,086
5,944
214
18,271
–
–
438
438
–
–
423
423
–
–
16,854
–
–
4,509
21,363
–
–
15,132
–
24,403
3,589
43,124
–
–
–
–
–
–
–
–
Annual Report and Accounts 2022 69
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 70
Notes to the Financial Statements
continued
(c) Market risk
Currency risk
The Group transacts the majority of its business in GBP and is not exposed to foreign exchange risk. At the end
of the reporting period the Group held a large cash balance in JPY which was exchanged into GBP in January 2023
for a small gain.
At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated
in currencies other than the respective Group entities’ functional currencies are as follows:
Group
Company
Liabilities
Assets
Liabilities
Assets
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Australian dollars 1
Euros –
United States dollars –
Singapore dollars –
Japanese yen –
2
–
–
–
785
2
199
–
20
610
1
19
1
47
213
1
–
–
–
–
–
–
–
–
–
–
–
–
18
–
80
–
–
17
–
Foreign Currency Sensitivity
The sensitivity rate used when reporting foreign currency risk is 10%, which is the sensitivity rate that represents
management’s assessment of the likely potential change in foreign exchange rates.
If the relevant foreign currencies were to strengthen by 10% against the functional currency of each Group entity, profit
and loss (before tax) and equity will increase (decrease) by:
Group
Equity
Profit and loss
before tax
Company
Equity
Profit and loss
before tax
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Australian dollars –
Euros –
United States dollars –
Singapore dollars –
Japanese yen –
–
–
–
–
–
–
(20)
–
(2)
(61)
–
(2)
–
(5)
57
–
–
–
–
–
–
–
–
–
–
–
–
–
(2)
–
(8)
–
–
(2)
–
If the relevant foreign currency weakens by 10% against the functional currency of each Group entity, the effects on
profit and loss and equity will be vice versa.
Interest rate risk
Interest rate risk arises from the potential change in interest rates that may have an adverse effect on the Group
in the current reporting year or in future years.
The Group’s exposure to interest rate risk is limited to the effects of fluctuation in bank interest rate on cash and
cash equivalents as well as LIBOR rates on certain loans and borrowings.
For variable rate financial instruments, a change of 100 basis points (bps) in interest rate with all other variables
held constant would increase/decrease profit/loss before tax by £0.1 million (2021: £0.1 million).
A fundamental financial industry reform of interest rate benchmarks is being undertaken globally, including the
cessation and replacement of interbank offered rates (“IBORs”) with alternative nearly risk-free rates (referred to
as “interest rate benchmark reform”). The Group’s interest rate risk that is directly affected by the interest rate
benchmark reform predominantly comprises its variable rate borrowings. As at 31 December 2022, the Group
has variable rate borrowings of £12.4 million and the Company has variable rate receivables of £1.35 million that
are indexed to LIBOR rates which has yet to transition to an alternative benchmark rate.
70 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 71
Notes to the Financial Statements
continued
Equity price risk
The Group is not exposed to equity price risks as it does not hold any quoted equity investments.
Capital management policies and objectives
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balances.
The capital structure of the Group and the Company consists of equity attributable to owners of the parent and loans
and borrowings amounting to £63.1 million (2021: £63.7 million) and £12.8 million (2021: £13.1 million), respectively.
There are no changes in the Group’s approach to capital management during the financial year. The Company is
not subject to externally imposed capital requirements. Except for one subsidiary that is subject to loan restrictions
and dividend distributions, such restrictions are complied with and capital relating to that subsidiary is ring fenced
as required by these capital requirements. None of the other subsidiaries are subject to externally imposed capital
requirements.
(d) Accounting classifications and fair values
Except as detailed in the following table, the Directors consider that the carrying amounts of the financial assets
and financial liabilities recognised in the consolidated financial statements approximate their fair values. The fair
values of the financial instruments have been determined based on discounted future cash flows using Level 3
hierarchy, which are derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data.
Carrying
value
Note £’000
Fair
value
£’000
2022
2021
Carrying
value
£’000
Fair
value
£’000
Group
Financial assets
Trade and other receivables 17 2,665
Cash and cash equivalents 18 3,701
Financial assets at amortised cost
under IFRS 9 6,366
Financial liabilities
Trade and other payables 27 5,104
Secured long term loans 25 25,815
Other loans and borrowings 25 31,970
Lease liabilities 13 1,296
Liabilities at amortised cost 64,185
25,820
31,970
Company
Financial assets
Loans receivables 16 258
Trade and other receivables 17 365
Cash and cash equivalents 18 172
Financial assets at amortised cost
under IFRS 9 795
Financial liabilities
Trade and other payables 27 6,651
Loan from a subsidiary 25 438
Other loans and borrowings 25 82
Liabilities at amortised cost 7,171
418
907
3,771
4,678
5,645
21,655
27,165
759
55,224
592
111
2,444
3,147
8,714
423
95
9,232
21,275
27,165
421
Annual Report and Accounts 2022 71
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 72
Notes to the Financial Statements
continued
32 Segment information
(a) Operating Segments
The Group is a developer, owner and operator of renewable and sustainable energy projects. The project development
division currently focusses on the development of a sustainable energy park at the Uskmouth power plant site. The
power generation division currently focuses on the operation and further development of the world’s flagship tidal
stream project, MeyGen. Revenues from power generation are derived from MeyGen’s contract to sell generation
and renewable obligation certificates. The Group divested its turbine and engineering services business in
October 2022.
Other operations include the provision of corporate services which does not meet any of the quantitative
thresholds for determining reportable segments in 2022 and 2021 and is included within unallocated.
Information regarding the results of each reportable segment is included below. Unallocated expenditure, assets
and liabilities include amounts of a corporate nature as well as corporate and inter-segment elimination and are
not specifically attributable to a segment.
Power
generation
£’000
Turbine and
engineering
services
£’000
Project
development
£’000
Unallocated
£’000
Total
£’000
2022
External revenues
Inter-segment revenue
Interest revenue
Interest expense
Depreciation and amortisation
Reversal of impairment loss
(Loss)/Gain on disposal of subsidiaries
Reportable segment loss before tax
Reportable segment assets
Capital expenditure
Reportable segment liabilities
2021
External revenues
Inter-segment revenue
Interest revenue
Interest expense
Depreciation and amortisation
Impairment of property,
plant and equipment
Impairment of intangible assets
Reportable segment loss before tax
Reportable segment assets
Capital expenditure
Reportable segment liabilities
3,902
–
–
(2,541)
(2,004)
–
–
(5,798)
48,668
–
(41,924)
1,628
–
–
(2,178)
(2,016)
(13,236)
–
(18,875)
48,562
26
(36,789)
–
–
–
(76)
(7)
–
(2,232)
(3,023)
1,667
–
(2,716)
3,628
–
86
(69)
(1,061)
–
(7,836)
(11,382)
16,631
3
(58,098)
–
–
–
–
(1,081)
2,000
–
2,308
32,521
–
(18,352)
2,316
–
–
(84)
(5,886)
(32,076)
–
(43,106)
27,945
1,537
(38,298)
–
–
58
(1,404)
(184)
–
–
(4,566)
1,813
–
(15,995)
(61)
–
(86)
(1,119)
(1,693)
–
–
(719)
(5,269)
–
62,003
3,902
–
58
(4,021)
(3,275)
2,000
(2,232)
(11,079)
84,669
–
(78,987)
7,511
–
(0)
(3,450)
(10,656)
(45,312)
(7,836)
(74,082)
87,869
1,566
(71,182)
(b) Geographical segments
Total segment revenue for the Group is £3.9 million (2021: £7.5 million). The Group power generation and project
development operations are mostly based in the United Kingdom. Most of the Group’s assets are located in the
United Kingdom.
72 Simec Atlantis Energy Limited and its subsidiaries
266018 Simec Atlantis Energy_pp60-end.qxp 25/07/2023 14:20 Page 73
Notes to the Financial Statements
continued
33 Events after the reporting period
On 28 March 2023 the Atlantis Future Energy PLC debenture holders voted to accept the deferral of the principal
repayment of £4.97 million from 31 March 2023 until 31 March 2024. The coupon increased from 8% to 10% per
annum for the period from 1 April 2023.
On 23 May 2023 Uskmouth Energy Storage Limited (“UESL”) gave formal notice of their exercise of the option to
take a lease of land at the Group’s Uskmouth site for one of the UK’s largest battery energy storage projects
(230 MW/460 MWh), subsequent to which, in June 2023, UESL entered into the 30-year lease, the Group satisfied
the charge held over all of the undertaking property and assets of SIMEC Uskmouth Power Limited, and, on 24 July
2023 the Group received the final instalment of £4.0 million of the development premium from UESL.
On 20 June 2023 the Atlantis Ocean Energy PLC debenture holders voted to accept the deferral of the principal
repayment of £4.95 million from 30 June 2023 until 30 June 2024. The coupon increased from 8% to 10% per
annum for the period from 1 July 2023.
On 11 July 2023, the Group received a demand from the European Union commission (“EU”) for the repayment
of historical grant monies totalling £1.1 million due within two weeks of receipt of the demand letter. This claim
from the EU was first raised in 2021 and this latest letter is part of the continuing correspondence with them on
this matter. The Group continues to be of the view that there are grounds to dispute any clawback of this grant
and has not paid the requested amount to the EU.
Annual Report and Accounts 2022 73
COMPANY INFORMATION
NON-EXECUTIVE DIRECTORS
Duncan Stuart Black
John Anthony Clifford Woodley
EXECUTIVE DIRECTORS
Graham Matthew Reid
Simon Matthew Hirst
COMPANY NUMBER
200517551R
REGISTERED OFFICE
c/o Level 4
21 Merchant Road
#04-01 Royal Merukh S.E.A.
Singapore 058267
COMPANY SECRETARY
Kelly Tock Mui Han
21 Merchant Road
#04-01 Royal Merukh S.E.A.
Singapore 058267
NOMINATED ADVISOR AND
BROKER
Strand Hanson Ltd
26 Mount Row
London
W1K 3SQ
AUDITOR
Moore Stephens LLP
10 Anson Road
#29-15 International Plaza
Singapore 079903
BROKER
Zeus Capital Limited
125 Broad Street
London
EC2N 1AR
REGISTRAR
Boardroom Corporate
St Advisory Services Pte Ltd
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
DEPOSITARY
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
GUERNSEY BRANCH REGISTRAR
Link Market Services (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St Sampson
Guernsey
GY2 4LH
WEBSITE
www.saerenewables.com
www.saerenewables.com
Registered Office and Company Number
c/o Level 4, 21 Merchant Road, #04-01 Singapore
058267 Company Number: 200517551R