Company Registration No. 10859744 (England and Wales)
GENIE ENERGY UK LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
GENIE ENERGY UK LIMITED
COMPANY INFORMATION
Directors
Mr M M Stein
Mr S Ritter
(Appointed 6 June 2019)
Mr A Goldin
(Appointed 6 June 2019)
Company number
10859744
Registered office
C/o Sable International
13th Floor, One Croydon
12-16 Addiscombe Road
Croydon
Surrey
CR0 0XT
Auditor
HJS (Reading) Limited
Chartered Accountants and Statutory Auditors
3 Richfield Place
Richfield Avenue
Reading
Berkshire
RG1 8EQ
Business address
St Dunstan's House
201 Borough High Street
London
SE1 1JA
GENIE ENERGY UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 6
Group income statement
7
Group statement of financial position
8
Company statement of financial position
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 26
GENIE ENERGY UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report and financial statements for the year ended 31 December 2019.
Review of the business
The principal activity of the Group for the year under review was the marketing and supply of energy to residential customers in Great Britain.
The Directors are pleased with the progress made during the year, with turnover growing by £22.2m to £24.1m in our second year of active operations.
Genie Energy UK successfully built its sales channels to reach and engage those customers who would benefit from switching supplier and enable them to access the savings and service that they can offer.
The Directors are also pleased to report that the Group built out its platform during the year to be able to manage and service customers with pre-payment meters, increasing the market it can service by approximately 20%.
Principal risks and uncertainties
The Risk Management committee considers the below to be the principal risks.
Wholesale market Risk
Wholesale energy market volatility continues to be the most significant risk to an energy supply business in the UK. Genie Energy UK Group manages and mitigates this risk through its key relationship with Shell Energy Europe Limited. Through this relationship Genie Energy UK Ltd can and does fully hedge its forecast customer demand.
Credit Risk
Genie Energy UK Group manage bad debt risk through a combination of products, technology and a high proportion of Direct Debit customers.
Operational Risk
Genie Energy UK Group has built its platform to minimise operational risk by working with market leading partners with deep experience in the UK energy market.
Genie Energy UK Group through its Risk management committee reviews its operational risks on a regular basis to ensure that any risk which falls outside of its tolerance, is actioned and monitored until it has been brought back within its appetite.
Covid-19
The Directors have considered the impact of COVID-19 in relation to their assessment of going concern and in their opinion have taken all reasonable steps to mitigate these factors.
As at the point of authorising the accounts, and for the foreseeable future, the directors consider the going concern assumption to still be appropriate.
The Directors acknowledge that given the currently rapidly changing business and social environment, there are likely to be significant unknown factors which may present themselves. Such factors are considered by the Directors to represent a general inherent level of risk to the energy retail sector in relation to the going concern assumption albeit not quantifiable at this time.
The Directors consider that the Group with its strong platform, strong team and committed parent companies is well placed to manage these uncertainties.
Financing
Genie Energy UK, while in its growth phase, accesses funding to meet its working capital requirements via its immediate parent company. Genie Energy UK forecasts out its cashflow requirements at a daily level for a minimum of a rolling 12 months. Short term is monitored on an ongoing basis to ensure short term commitments are met and the long-range forecast is used to guide any requirements for additional capital.
GENIE ENERGY UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
Future developments
The Directors expect the Group to continue its growth journey, delivering great service and price to customers who have not yet been able to benefit from the deregulation and increased competition in the market. Driving growth enables the business to leverage the strong platform that is now in place and the wholesale energy deal with Shell Energy Europe Limited which provides stable prices and certainty to our customers.
KPIs
Growth: Turnover has increased to £24.1m in the second active year of supplying customers.
Gross Margin: 5.4%
Service: 4.5 stars out of 5 at year end as measured by Trustpilot
..............................
Mr M M Stein
Director
.........................
2020-12-03
GENIE ENERGY UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M M Stein
Mr S Ritter
(Appointed 6 June 2019)
Mr A Goldin
(Appointed 6 June 2019)
Supplier payment policy
The group's current policy concerning the payment of trade creditors is to:
-
settle the terms of payment with suppliers when agreeing the terms of each transaction;
-
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
-
pay in accordance with the company's contractual and other legal obligations.
Auditor
HJS (Reading) Limited were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr M M Stein
Director
3 December 2020
GENIE ENERGY UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group for that period. In preparing these financial statements, International Accounting Standard 1 requires that directors:
-
properly select and apply accounting policies;
-
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
-
make an assessment of the group and company's ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
GENIE ENERGY UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GENIE ENERGY UK LIMITED
- 5 -
Opinion
We have audited the financial statements of Genie Energy UK Limited
(the 'parent company')
and its subsidiaries (the 'group')
for the year ended 31 December 2019 which comprise the income statement, the statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and
notes to the financial statements, including a summary of significant accounting policies
. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion the financial statements:
-
give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2019 and of its loss for the year then ended;
-
have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the
group's or the parent
company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GENIE ENERGY UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GENIE ENERGY UK LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and parent
company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-
the parent company financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the
group's and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the
group or the parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Mark Rogers FCCA (Senior Statutory Auditor)
for and on behalf of HJS (Reading) Limited
9 December 2020
Chartered Accountants and Statutory Auditors
3 Richfield Place
Richfield Avenue
Reading
Berkshire
RG1 8EQ
GENIE ENERGY UK LIMITED
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 7 -
2019
2018
Notes
£
£
Revenue
4
24,145,712
1,908,510
Cost of sales
(22,849,870)
(1,926,716)
Gross profit/(loss)
1,295,842
(18,206)
Administrative expenses
(8,513,831)
(3,212,565)
Operating loss
5
(7,217,989)
(3,230,771)
Investment revenues
6
-
26
Finance costs
7
(35,748)
-
Other gains and losses
8
-
(1,163,500)
Loss before taxation
(7,253,737)
(4,394,245)
Income tax expense
-
-
Loss and total comprehensive income for the year
(7,253,737)
(4,394,245)
Loss for the financial year is attributable to:
- Owners of the parent company
(5,311,187)
(2,958,553)
- Non-controlling interests
(1,942,550)
(1,435,692)
(7,253,737)
(4,394,245)
The income statement has been prepared on the basis that all operations are continuing operations.
GENIE ENERGY UK LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2019
31 December 2019
- 8 -
2019
2018
Notes
£
£
Non-current assets
Intangible assets
12
100,000
100,000
Property, plant and equipment
11
26,608
42,779
126,608
142,779
Current assets
Trade and other receivables
15
8,665,950
1,064,366
Cash and cash equivalents
2,215,222
1,375,555
10,881,172
2,439,921
Total assets
11,007,780
2,582,700
Current liabilities
Trade and other payables
17
21,246,588
5,860,371
Net current liabilities
(10,365,416)
(3,420,450)
Total liabilities
21,246,588
5,860,371
Net liabilities
(10,238,808)
(3,277,671)
Equity
Called up share capital
19
100
100
Revaluation reserve
1
1
Retained earnings
(8,807,308)
(3,496,121)
Equity attributable to owners of the parent company
(8,807,207)
(3,496,020)
Non-controlling interests
(1,431,601)
218,349
(10,238,808)
(3,277,671)
The financial statements were approved by the board of directors and authorised for issue on 3 December 2020 and are signed on its behalf by:
Mr M M Stein
Director
Company Registration No. 10859744
GENIE ENERGY UK LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2019
31 December 2019
- 9 -
2019
2018
Notes
£
£
Non-current assets
Investments
13
6,112,400
4,005,000
Total assets
6,112,400
4,005,000
Current liabilities
Trade and other payables
17
6,112,300
4,004,900
Net current liabilities
(6,112,300)
(4,004,900)
Total liabilities
6,112,300
4,004,900
Net assets
100
100
Equity
Called up share capital
19
100
100
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company did not trade during the period and didnt make a profit or a loss.
The financial statements were approved by the board of directors and authorised for issue on 3 December 2020 and are signed on its behalf by:
Mr M M Stein
Director
Company Registration No. 10859744
GENIE ENERGY UK LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 10 -
Share capital
Revaluation reserve
Retained earnings
Total controlling interest
Non-controlling interest
Total
£
£
£
£
£
£
Balance at 1 January 2018
100
1
(537,568)
(537,467)
2,524,041
1,986,574
Year ended 31 December 2018:
Loss and total comprehensive income for the year
-
-
(2,958,553)
(2,958,553)
(1,435,692)
(4,394,245)
Reduction in investment
-
-
-
-
(870,000)
(870,000)
Balance at 31 December 2018
100
1
(3,496,121)
(3,496,020)
218,349
(3,277,671)
Year ended 31 December 2019:
Loss and total comprehensive income for the year
-
(5,311,187)
(5,311,187)
(1,942,550)
(7,253,737)
Acquisition of non-controlling interests
-
-
-
-
292,600
292,600
Balance at 31 December 2019
100
1
(8,807,308)
(8,807,207)
(1,431,601)
(10,238,808)
GENIE ENERGY UK LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 11 -
Share capital
£
Balance at 1 January 2018
100
Year ended 31 December 2018:
Balance at 31 December 2018
100
Year ended 31 December 2019:
Balance at 31 December 2019
100
GENIE ENERGY UK LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 12 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
585,640
213,982
Interest paid
(35,748)
-
Net cash inflow from operating activities
549,892
213,982
Investing activities
Purchase of property, plant and equipment
(2,825)
(34,040)
Purchase of non controlling interest
292,600
(870,000)
Interest received
-
26
Net cash generated from/(used in) investing activities
289,775
(904,014)
Net cash used in financing activities
-
-
Net increase/(decrease) in cash and cash equivalents
839,667
(690,032)
Cash and cash equivalents at beginning of year
1,375,555
2,065,587
Cash and cash equivalents at end of year
2,215,222
1,375,555
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 13 -
1
Accounting policies
Company information
Genie Energy UK Limited is a
private
company limited by shares incorporated in England and Wales. The registered office is C/o Sable International, 13th Floor, One Croydon, 12-16 Addiscombe Road, Croydon, Surrey, CR0 0XT.
The group consists of Genie Energy UK Limited and all of its subsidiaries.
1.1
Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, (except as otherwise stated).
The financial statements have been prepared on the historical cost basis, except for the revaluation of . The principal accounting policies adopted are set out below.
1.2
Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
The consolidated financial statements incorporate those of Genie Energy UK Limited and all of its subsidiaries (ie entities that the
g
roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 31 December 2019
.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
1.3
Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the
true
company
has adequate resources to continue in operational existence for the foreseeable future.
The directors have
also
considered the impact of COVID-19 in relation to their assessment of going concern and in their opinion have taken all reasonable steps to mitigate these factors. The directors acknowledge that given the currently rapidly changing business and social environment, there are likely to be significant unknown factors which may present themselves. Such factors are considered by the directors to represent a general inherent level of risk in relation to the going concern assumption albeit not quantifiable at this
time t
hus they continue to adopt the going concern basis of accounting in preparing the financial statements.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 14 -
1.4
Revenue
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
1.5
Intangible assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost or value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
1.6
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
20% straight line
Computers
33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
1.7
Impairment of tangible and intangible assets
At each reporting end date, the
company
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, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 15 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that the Company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.
1.9
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Loans and receivables
Trade Receivables
, loans and other receivables that have fixed or determinable payments 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 impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those
measured
at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.11
Financial liabilities
The company recognizes financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either
'
financial liabilities at fair value through profit or loss
'
or
'
other financial liabilities
'
.
Other financial liabilities
Other financial liabilities, including borrowings
, t
rade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs
directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method
.
For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company’s
obligations are discharged, cancelled, or they expire.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Hedge accounting
Trading companies within the Group mitigates the risk versus volatile wholesale markets by forward buying energy in line with its customers’ requirements.
The company accordingly classifies these forward hedges as “matched” with our requirements to supply this energy to our customers.
No energy is forward bought on a speculative basis, and as such these purchases are outside of the scope of IAS39.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 17 -
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of
inventories
or non-current assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the fair
value of the assets at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss
so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, less any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
d
asset are consumed.
2
Adoption of new and revised standards and changes in accounting policies
In the current year, the following new and revised Standards and Interpretations have been adopted by the company and have an effect on the current period or a prior period or may have an effect on future periods:
IFRS 16 - Leases
IFRIC 23 - Uncertainty of income tax treatments
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 18 -
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU):
IAS 1 - Presentation of financial statements
IAS 8 - Accounting policies, changes in accounting estimates and errors
IFRS 3 - Business combinations
Revised conceptual framework for financial reporting
In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to
determine whether liabilities are classified as current or non-current. These
amendments
clarify that current or non-current classification is based on whether an entity has a right at
the end of the reporting period to defer settlement of the liability for at least twelve months
after the reporting period. The amendments also clarify that ‘settlement’ includes the transfer
of cash, goods, services, or equity instruments unless the obligation to transfer equity
instruments arises from a conversion feature classified as an equity instrument separately from
the liability component of a compound financial instrument. The amendments are effective
for annual reporting periods beginning on or after 1 January 2022.
The company
is currently assessing the impact of these new accounting
standards and amendments. The
company
does not believe that the amendments to IAS 1 will
have a significant impact on the classification of its liabilities, as the conversion feature in its
convertible debt instruments is classified as an equity
instrument and therefore, does not
affect the classification of its convertible debt as a non-current liability.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 19 -
3
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are 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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Revenue recognition
Revenue is measured at the fair value of the consideration received and receivable.
Revenue for the supply of energy includes an assessment of the value of energy supplied to customers including an estimated value of the volume between the date of the last invoice and the end of the period. Revenue is estimated using consumption patterns on a meter by meter basis, taking into account weather patterns, forecasts and the difference between actual meter readings returned and system estimates. Revenue is presented net of sales tax, returns, rebates and discounts.
The judgements applied and the underlying assumptions are considered to be appropriate at the balance sheet date.
Valuation of intangible assets
Industry accreditation licences were acquired via a dormant company for £100,000 on 24 July 2017. The directors consider the fair value of these licences at 31 December 2019 remains as £100,000.
A company in the Group capitalised its development costs incurred to 31 December 2017 as an intangible asset. The company undertakes an annual review of the fair value of intangible assets and at 31 December 2018 it considered that the development costs have a valuation of £nil and consequently the value was written down to that value.
Useful economic lives of assets
The annual depreciation charge on fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets, and these are reassessed annually.
Deferred tax asset
The deferred tax asset arising from Group tax losses incurred over the past two financial years which are available to be carried forward and offset against future profits have not been recognised at 31 December 2019 due to the uncertainty concerning the exact timescale as to its recoverability. The losses can be carried forward indefinitely and have no expiry date.
4
Revenue
2019
2018
£
£
Revenue analysed by class of business
Energy supplies
24,145,712
1,908,510
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
4
Revenue
(Continued)
- 20 -
2019
2018
£
£
Other significant revenue
Interest income
-
26
5
Operating loss
2019
2018
£
£
Operating loss for the year is stated after charging/(crediting):
Fees payable to the company's auditor for the audit of the company's financial statements
12,455
20,000
Depreciation of property, plant and equipment
18,996
13,303
6
Investment income
2019
2018
£
£
Interest income
Bank deposits
-
26
Total interest income for financial assets that are not held at fair value through profit or loss is £- (2018 - £26).
7
Finance costs
2019
2018
£
£
Other interest payable
35,748
-
8
Other gains and losses
2019
2018
£
£
Amounts written back to/(written off) fair value through profit or loss
-
(1,163,500)
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 21 -
9
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
Group
Company
Group
Company
2019
2019
2018
2018
Number
Number
Number
Number
Sales and administration
49
-
19
-
Their aggregate remuneration comprised:
Group
Company
Group
Company
2019
2019
2018
2018
£
£
£
£
Wages and salaries
2,321,452
-
700,636
-
Social security costs
210,375
-
75,803
-
Pension costs
17,809
-
7,706
-
2,549,636
-
784,145
-
10
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
58,078
-
11
Property, plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2018
983
21,898
22,881
Additions
3,637
30,403
34,040
At 31 December 2018
4,620
52,301
56,921
Additions
815
2,010
2,825
At 31 December 2019
5,435
54,311
59,746
Accumulated depreciation and impairment
At 1 January 2018
9
830
839
Charge for the year
746
12,557
13,303
At 31 December 2018
755
13,387
14,142
Charge for the year
1,054
17,942
18,996
At 31 December 2019
1,809
31,329
33,138
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
11
Property, plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
(Continued)
- 22 -
Carrying amount
At 31 December 2019
3,626
22,982
26,608
At 31 December 2018
3,865
38,914
42,779
At 31 December 2017
974
21,068
22,042
The company had no property, plant and equipment at 31 December 2019 or 31 December 2018.
12
Intangible assets
Industry accreditation licences
Development costs
Total
£
£
£
Cost or valuation
At 1 January 2018
100,000
1,163,500
1,263,500
Disposals
-
(1,163,500)
(1,163,500)
At 31 December 2018
100,000
-
100,000
At 31 December 2019
100,000
-
100,000
Carrying amount
At 31 December 2019
100,000
-
100,000
At 31 December 2018
100,000
-
100,000
At 31 December 2017
100,000
1,163,500
1,263,500
The industry accreditation licenses have been valued at £100,000 the original purchase price of dormant company with the active licenses on 24 July 17. The directors consider the fair valuation at 31 December 2019 to be £100,000.
At 31 December 2019, had the licences been carried at historical cost less accumulated amortisation and accumulated impairment losses, their carrying amount would have been £nil.
The company had no intangible fixed assets at 31 December 2019 or 31 December 2018.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 23 -
13
Investments
Company
Company
Current
Non-current
2019
2018
2019
2018
£
£
£
£
Investments in subsidiaries
-
-
6,112,400
4,005,000
The company has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.
Fair value of financial assets carried at amortised cost
Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
14
Subsidiaries
Details of the company's subsidiaries at 31 December 2019 are as follows:
Name of undertaking
Country of incorporation
Ownership interest (%)
Nature of business
Shoreditch Energy Limited
United Kingdom
73.22
Energy supplier
Orbit Energy Limited
United Kingdom
73.22
Holding company
The investment in subsidiaries are all stated at amortised cost.
Orbit Energy Limited is indirectly owned by virtue of Shoreditch Energy Limited's 100% share holding.
15
Trade and other receivables
Group
Company
Group
Company
Current
Current
Current
Current
2019
2019
2018
2018
£
£
£
£
Other receivables
8,180,654
-
941,011
-
VAT recoverable
461,685
-
82,538
-
Prepayments
23,611
-
40,817
-
8,665,950
-
1,064,366
-
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 24 -
16
Trade receivables - credit risk
Fair value of trade receivables
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
The company has no allowances for doubtful debts at 31 December 2019 or 31 December 2018.
17
Trade and other payables
Group
Company
Group
Company
Current
Current
Current
Current
2019
2019
2018
2018
£
£
£
£
Trade payables
2,705,924
-
73,119
-
Accruals
7,377,778
-
922,467
-
Social security and other taxation
92,950
-
37,905
-
Other payables
11,069,936
6,112,300
4,826,880
4,004,900
21,246,588
6,112,300
5,860,371
4,004,900
18
Retirement benefit schemes
Defined contribution schemes
The
group
operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is £17,809 (2018 - £7,706).
19
Share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary shares of £1 each
100
100
20
Capital risk management
Externally imposed capital requirements to which the company is subject have been complied with in the period.
21
Events after the reporting date
On 9 October 2020 the company purchased the remaining shares from its former joint venture partner to become the 100% owner of Shoreditch Energy Limited and Orbit Energy Limited.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 25 -
22
Operating lease commitments
Lessee
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
Group
Company
Group
Company
2019
2019
2018
2018
£
£
£
£
Minimum lease payments under operating leases
828,309
-
663,513
-
Set out below are the future cash outflows to which the lessee is potentially exposed that are not reflected in the measurement of lease liabilities:
Group
Company
Group
Company
2019
2019
2018
2018
£
£
£
£
Within one year
763,417
-
323,150
-
Between two and five years
89,181
-
500,822
-
852,598
-
823,972
-
23
Related party transactions
Remuneration of key management personnel
The remuneration of the directors, who are key management personnel, is set out below in aggregate for each of the categories specified in IAS 24
Related Party Disclosures
.
2019
2018
£
£
Short-term employee benefits
58,078
-
The following amounts were outstanding at the reporting end date:
Amounts owed to related parties
Group
Company
Group
Company
2019
2019
2018
2018
£
£
£
£
Parent company
6,112,300
6,112,300
4,004,900
4,004,900
6,112,300
6,112,300
4,004,900
4,004,900
No guarantees have been given or received.
GENIE ENERGY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 26 -
24
Cash generated from operations
2019
2018
£
£
Loss for the year after tax
(7,253,737)
(4,394,245)
Adjustments for:
Finance costs
35,748
-
Investment income
-
(26)
Depreciation and impairment of property, plant and equipment
18,996
13,303
Other gains and losses
-
1,163,500
Movements in working capital:
(Increase)/decrease in trade and other receivables
(7,601,584)
692,172
Increase in trade and other payables
15,386,217
2,739,278
Cash generated from operations
585,640
213,982
2019-12-31
2019-01-01
false
CCH Software
CCH Accounts Production 2020.200
Mr M M Stein
Mr S Ritter
Mr A Goldin
10859744
2019-01-01
2019-12-31
10859744
bus:Director1
2019-01-01
2019-12-31
10859744
bus:Director2
2019-01-01
2019-12-31
10859744
bus:Director3
2019-01-01
2019-12-31
10859744
bus:RegisteredOffice
2019-01-01
2019-12-31
10859744
2019-12-31
10859744
core:ContinuingOperations
2019-01-01
2019-12-31
10859744
2018-01-01
2018-12-31
10859744
1
2018-01-01
2018-12-31
10859744
core:RetainedEarningsAccumulatedLosses
2019-01-01
2019-12-31
10859744
core:RetainedEarningsAccumulatedLosses
2018-01-01
2018-12-31
10859744
core:IntangibleAssetsOtherThanGoodwill
2019-12-31
10859744
core:IntangibleAssetsOtherThanGoodwill
2018-12-31
10859744
2018-12-31
10859744
2018-12-31
10859744
2017-12-31
10859744
core:ContinuingOperations
2019-12-31
10859744
core:ContinuingOperations
2018-12-31
10859744
core:CurrentFinancialInstruments
2019-12-31
10859744
core:CurrentFinancialInstruments
2018-12-31
10859744
core:ShareCapital
2019-12-31
10859744
core:ShareCapital
2018-12-31
10859744
core:RevaluationReserve
2019-12-31
10859744
core:RevaluationReserve
2018-12-31
10859744
core:ShareCapital
2017-12-31
10859744
core:RevaluationReserve
2017-12-31
10859744
core:IntangibleAssetsOtherThanGoodwill
2019-01-01
2019-12-31
10859744
core:LoansReceivables
2019-01-01
2019-12-31
10859744
core:FurnitureFittings
2017-12-31
10859744
core:ComputerEquipment
2017-12-31
10859744
core:FurnitureFittings
2018-12-31
10859744
core:ComputerEquipment
2018-12-31
10859744
core:FurnitureFittings
2019-12-31
10859744
core:ComputerEquipment
2019-12-31
10859744
core:FurnitureFittings
2018-01-01
2018-12-31
10859744
core:ComputerEquipment
2018-01-01
2018-12-31
10859744
core:FurnitureFittings
2019-01-01
2019-12-31
10859744
core:ComputerEquipment
2019-01-01
2019-12-31
10859744
core:CopyrightsPatentsTrademarksServiceOperatingRights
2017-12-31
10859744
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
2017-12-31
10859744
core:CopyrightsPatentsTrademarksServiceOperatingRights
2018-12-31
10859744
core:CopyrightsPatentsTrademarksServiceOperatingRights
2019-12-31
10859744
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
2018-01-01
2018-12-31
10859744
core:Subsidiary1
2019-01-01
2019-12-31
10859744
core:Subsidiary2
2019-01-01
2019-12-31
10859744
core:Subsidiary1
1
2019-01-01
2019-12-31
10859744
core:Subsidiary2
2
2019-01-01
2019-12-31
10859744
bus:OrdinaryShareClass1
2019-01-01
2019-12-31
10859744
bus:FullIFRS
2019-01-01
2019-12-31
10859744
bus:PrivateLimitedCompanyLtd
2019-01-01
2019-12-31
10859744
bus:Audited
2019-01-01
2019-12-31
10859744
bus:FullAccounts
2019-01-01
2019-12-31
xbrli:pure
xbrli:shares
iso4217:GBP