Company registration number SC405192 (Scotland)
ST. JOHNS HILL WIND HOLDCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
ST. JOHNS HILL WIND HOLDCO LIMITED
COMPANY INFORMATION
Directors
N A Wood
L J B Roberts
Secretary
FLB Company Secretarial Services Limited
Company number
SC405192
Registered office
101 Rose Street South Lane
Edinburgh
Scotland
EH2 3JG
Independent auditor
KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 1WR
ST. JOHNS HILL WIND HOLDCO LIMITED
CONTENTS
Page
Directors' report
1 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
ST. JOHNS HILL WIND HOLDCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

The directors present their annual report and audited financial statements of St. Johns Hill Wind Holdco Limited (the "Company") for the year ended 30 June 2023. The comparative is a shorter period of 6 months, due to a change in the prior year of the Company's accounting reference date to align with other entities within the Bluefield Solar Income Fund ("the Group").

Principal activities

The principal activity of the Company is to own special purpose vehicles which own and operate wind PV assets to generate income through the sale of electricity and receipt of government subsidies.

 

Country of incorporation and legal form of the entity

St. Johns Hill Wind Holdco Limited was incorporated as a private company, limited by shares, under the Registrar of Companies for Scotland on 11 August 2011.

 

Risk management and Control

In the ordinary course of business, the Company is exposed to and manages a variety of risks in relation to its activities, including financial risk. The management of credit, interest rate, liquidity and portfolio operational risks are fundamental to the Company, with the Board of directors having responsibility for the overall system of internal control and for reviewing its effectiveness.

 

The key areas of risk in relation to the use of financial statements are listed below and are properly addressed by the management of the Company:

 

Interest risk: Fluctuations in the prevailing levels of market rates of interest pose a risk to the Company's financial position and cash flow. This is not considered a significant risk to the Company as the interest on loans owed to group undertakings is charged at a rate agreed by the parent company and are not subject to interest movements in the market. The Company also holds external loans which bear interest at a prescribed margin over the UK Base Rate, which is subject to increases and decreases. The Company uses interest rate swap contracts to mitigate its exposure to the interest rate risk attached to changes in the Base Rate on its external loans which is subject to fluctuation.

 

Liquidity risk: Failure to meet financial obligations in a timely and cost effective manner due to mismatches in the maturity profile of assets and liabilities. The Company closely monitors its cash flow levels and financial obligations to anticipate its future cash commitments.

 

Portfolio operation risk: The Directors consider that the principal risks impacting the Company relate to portfolio operation, management and reporting. The risks associated with the underperformance of the portfolio are mitigated through the asset management activities of Bluefield Services Limited who send weekly, monthly and annual reports highlighting the operational status of the portfolio as well as engaging with contractors to ensure technical issues are resolved promptly. Reporting risks, which principally cover possible valuation discrepancies (detail of which are highlighted in note 9), are mitigated through work performed by the Group's Investment Adviser, who is an active participant within the UK wind market.

 

Russia/Ukraine conflict risk: The directors are continuously monitoring the impact, if any, that the ongoing conflict in Ukraine may have on the entity and the impact on energy prices across the portfolio. The Company has no direct exposure to either Ukraine or Russia.

Results and dividends

The loss for the year, after taxation, amounted to £4,975,114 (2022: £7,077,456 profit).

 

No dividends were distributed in the current year or prior period.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

N A Wood
L J B Roberts
ST. JOHNS HILL WIND HOLDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Qualifying third party indemnity provisions

The Company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Post reporting date events

There have been no significant events affecting the Company since the year end.

Independent Auditor

In accordance with the company's articles, a resolution proposing that KPMG Channel Islands Limited be reappointed as auditor of the company will be put at a General Meeting.

Statement of directors' responsibilities

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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

 

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

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.

Small companies

In preparing the financial statements, the directors have taken advantage of section 414B of the Companies Act 2006 and have not prepared a Strategic Report.

ST. JOHNS HILL WIND HOLDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
On behalf of the board
N A Wood
Director
4 March 2024
ST. JOHNS HILL WIND HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ST. JOHNS HILL WIND HOLDCO LIMITED
- 4 -
Our opinion

We have audited the financial statements of St. Johns Hill Wind Holdco Limited (the “Company”), which comprise the statement of financial position as at 30 June 2023, the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including FRC Ethical Standards. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Going concern

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (the “going concern period").

 

In our evaluation of the directors' conclusions, we considered the inherent risks to the Company's business model and analysed how those risks might affect the Company's financial resources or ability to continue operations over the going concern period.

 

Our conclusions based on this work:

 

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.

ST. JOHNS HILL WIND HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ST. JOHNS HILL WIND HOLDCO LIMITED
- 5 -

Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

 

As required by auditing standards, and taking into account possible incentives or pressures to misstate performance and our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries, and the risk of bias in accounting estimates such as valuation of unquoted investments. On this audit we do not believe there is a fraud risk related to revenue recognition because the Company’s revenue streams are simple in nature with respect to accounting policy choice, and are easily verifiable to external data sources or agreements with little or no requirement for estimation from management. We did not identify any additional fraud risks.

 

We performed procedures including:

 

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general sector experience and through discussion with management (as required by auditing standards), and discussed with management the policies and procedures regarding compliance with laws and regulations.

 

The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

 

The Company is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of litigation or impacts on the Company’s ability to operate. We identified company law as being the area most likely to have such an effect. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

 

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

 

In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

ST. JOHNS HILL WIND HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ST. JOHNS HILL WIND HOLDCO LIMITED
- 6 -

The directors' report

The directors are responsible for the directors' report. Our opinion on the financial statements does not cover that report and we do not express an audit opinion thereon.

 

Our responsibility is to read the directors' report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:

Matters on which we are required to report by exception

Under the Companies Act 2006, we are required to report to you if, in our opinion:

 

We have nothing to report in these respects.

Respective responsibilities

Directors' responsibilities

As explained more fully in their statement set out on page 2, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities

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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

ST. JOHNS HILL WIND HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ST. JOHNS HILL WIND HOLDCO LIMITED
- 7 -

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company's member, 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 member 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 its member, for our audit work, for this report, or for the opinions we have formed.

Barry Ryan (Senior Statutory Auditor)
For and on behalf of KPMG Channel Islands Limited (Statutory Auditor)
Chartered Accountants
Guernsey
5 March 2024
ST. JOHNS HILL WIND HOLDCO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
Year
Period
ended
ended
30 June
30 June
2023
2022
Notes
£
£
Turnover
3
141,085
62,894
Administrative expenses
(209,370)
(91,697)
Net (losses)/gains on financial assets held at fair value through profit or loss
7
(3,569,021)
7,666,568
Operating (loss)/profit
(3,637,306)
7,637,765
Interest payable and similar expenses
6
(1,337,808)
(560,309)
(Loss)/profit before taxation
(4,975,114)
7,077,456
Tax on (loss)/profit
8
-
0
-
0
(Loss)/profit for the financial year/period
(4,975,114)
7,077,456
Other comprehensive income
Cash flow hedges gain arising in the year/period
622,666
820,267
(Loss)/profit for the financial year/period and total comprehensive (loss)/income
(4,352,448)
7,897,723

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

 

The notes on pages 12 to 24 form part of these financial statements.

ST. JOHNS HILL WIND HOLDCO LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
30 JUNE 2023
30 June 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Financial assets held at fair value through profit or loss
9
36,407,128
44,642,845
Current assets
Debtors
11
1,649,891
850,911
Cash at bank and in hand
328,606
215,472
1,978,497
1,066,383
Creditors: amounts falling due within one year
12
(14,285,107)
(16,538,679)
Net current liabilities
(12,306,610)
(15,472,296)
Total assets less current liabilities
24,100,518
29,170,549
Creditors: amounts falling due after more than one year
13
(6,421,389)
(7,138,972)
Net assets
17,679,129
22,031,577
Capital and reserves
Called up share capital
16
1,450,100
1,450,100
Hedging reserve
17
1,442,933
820,267
Profit and loss reserves
14,786,096
19,761,210
Total equity
17,679,129
22,031,577

The notes on pages 12 to 24 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 4 March 2024 and are signed on its behalf by:
N A Wood
Director
Company Registration No. SC405192
ST. JOHNS HILL WIND HOLDCO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
Share capital
Hedging reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
1,450,100
-
0
12,683,754
14,133,854
Period ended 30 June 2022:
Profit for the period
-
-
7,077,456
7,077,456
Other comprehensive income:
Cash flow hedges gains
-
820,267
-
820,267
Total comprehensive income for the period
-
820,267
7,077,456
7,897,723
Balance at 30 June 2022
1,450,100
820,267
19,761,210
22,031,577
Year ended 30 June 2023:
Loss for the year
-
-
(4,975,114)
(4,975,114)
Other comprehensive income:
Cash flow hedges gains
-
622,666
-
622,666
Total comprehensive loss for the year
-
622,666
(4,975,114)
(4,352,448)
Balance at 30 June 2023
1,450,100
1,442,933
14,786,096
17,679,129
The following describes the nature and purpose of each reserve within equity:
Share capital - nominal value of share capital subscribed for.
Profit and loss reserves - cumulative profit or losses, net of dividends paid and other adjustments.
Hedging reserve - the hedging reserve represents movements in fair value of interest rate swap.

The notes on pages 12 to 24 form part of these financial statements.

ST. JOHNS HILL WIND HOLDCO LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
21
(3,639,857)
(17,971)
Investing activities
Receipts from investments
7
4,666,697
238,256
Net cash generated from investing activities
4,666,697
238,256
Financing activities
Repayment of borrowings
(686,970)
(485,917)
Interest paid
(244,802)
(130,082)
Net cash used in financing activities
(931,772)
(615,999)
Net increase/(decrease) in cash and cash equivalents
95,068
(395,714)
Cash and cash equivalents at beginning of year
(400,552)
(4,838)
Cash and cash equivalents at end of year
(305,484)
(400,552)
Relating to:
Cash at bank and in hand
328,606
215,472
Bank overdrafts included in creditors payable within one year
(634,090)
(616,024)

The notes on pages 12 to 24 form part of these financial statements.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 12 -
1
Accounting policies
Company information

St. Johns Hill Wind Holdco Limited is a private Company limited by shares incorporated in Scotland. The registered office is 101 Rose Street South Lane, Edinburgh, Scotland, EH2 3JG.

 

The principal activity of the Company is to own special purpose vehicles which own and operate wind PV assets to generate income through the sale of electricity and receipt of government subsidies.

1.1
Reporting period

The directors present a full year from 1 July 2022 to 30 June 2023. The comparative period was for the 6 months to 30 June 2022, following a change of year end to align with other entities in the Bluefield Solar Income Fund Limited group ("the Group"). As such, the comparatives may not be entirely comparable.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.

 

The directors have concluded that the Company’s subsidiaries should be excluded from consolidation as the interests in subsidiaries are held as part of an investment portfolio, as defined in paragraph 9.9 (b) of FRS 102 and are measured at fair value with movements in fair value recognised in the Statement of Comprehensive Income in the year in which they arise.

1.3
Going concern

These accounts have been prepared on a going concern basis although the Company is in a net current liability position. The directors believe this basis is appropriate following the consideration of cashflow forecasts which show the Company is able to meet its liabilities as they fall due for at least 12 months from the date of approval of these financial statements.

 

At the year end, the Company reported net current liabilities of £12,306,610 (2022: £15,472,296), as a result of an intra-group loan (see note 12).

 

The directors have considered the impact which the current conflict in Ukraine could have on the Company. In their view, as the Company has no direct exposure to Ukraine or Russia, the directors do not expect a significant impact on revenue and cash flows of the Company arising from the conflict.

 

Should any unforeseen circumstances require additional funding, the Company has obtained written confirmation from its intermediate parent that it would provide financial support to meet the Company's liabilities for a period of at least 12 months from the date the financial statements are approved.

1.4
Turnover

Consultancy services fee income is recognised on an accrual basis.

 

The Company has entered into consultancy agreements with its SPV for the provision of on-going ad-hoc advisory services in the management, administration and operation of its SPV. The consultancy services fee income is charged according to plant capacity and agreed from time to time between St. Johns Hill Wind Holdco Limited and its SPV.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Fixed asset investments

The directors have assessed the position of the Company and are of the opinion that the Company should exclude all subsidiaries from consolidation on the grounds set out in FRS 102 paragraph 9.9.

 

Consequently, the investments held as part of an investment portfolio are measured at fair value, with changes in fair value recognised in Statement of Comprehensive Income.

 

A subsidiary is an entity controlled by the Company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and 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.

1.7
Financial instruments

The Company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments, unless otherwise detailed below.

 

Financial instruments are recognised in the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors, amounts owed by group undertakings and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Derivatives, including interest rate swaps, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge, in which case changes in the fair value are recognised in other comprehensive income.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
Financial assets at fair value through profit or loss

Classification

The Company has been classified as an investment entity and as such its investments in any subsidiaries are held at fair value through profit or loss and measured in accordance with the requirements of FRS 102 (see note 2).

 

Recognition

Investments made by the Company in its subsidiaries are initially recognised at transaction price on the day the investment is made. Transaction costs arising from the acquisition of the investments that are recurring in nature and that would not be expected to be recovered on a subsequent sale of the investment (such as legal fees relating to due diligence and technical reviews of the wind or solar farms) are expensed to the Statement of Comprehensive Income. However, transaction costs intrinsically linked to the value of the investments (such as legal fees relating to the contract on the construction and maintenance of wind or solar assets, stamp duty costs relating to the leases on the wind or solar farms, insurance during construction and technical due diligence on construction) are included in the cost of the financial assets held at fair value through profit or loss.

 

Measurement

Subsequent to initial recognition, investments in subsidiaries are measured at each subsequent reporting date at fair value. Gains and losses resulting from the revaluation of investments are recognised in the Statement of Comprehensive Income. The Company has elected to recognise all gains and losses from financial assets held at fair value through profit or loss as a single line in the Statement of Comprehensive Income. Fair value is determined on an unleveraged, discounted cash- flow basis in accordance with The International Private Equity and Venture Capital ("IPEV') Valuation Guidelines recognising any other assets and liabilities of the subsidiary.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and 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 have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in statement of comprehensive income.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in statement of comprehensive income.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group undertakings, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company’s contractual obligations expire or are discharged or cancelled.

1.8
Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company.

1.9
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of 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 never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date 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 is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 16 -
1.10

Loans

Non-derivative financial liabilities with fixed or determinable repayments that are not quoted in an active market are classified as loans. Loans are initially recognised at fair value of the consideration received plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method. Arrangement fees and interest payable on financial liabilities that are classified as loans, are charged to the statement of comprehensive income.

 

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest payable over the expected life of the liability. The effective interest rate is the rate that exactly discounts estimated future cashflows to the instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable, that are an integral part of the instrument yield and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows.

 

A financial liability is removed from the statement of financial position when the obligation is discharged, or cancelled, or expires.

1.11

Hedge accounting

The Company uses variable to fixed interest rate swaps to manage its exposure to fair value risk on its long term borrowings. These derivatives are measured at fair value at each reporting date.

 

To the extent the cash flow hedge is effective, movements in fair value are recognised in other comprehensive income and represented in a separate cash flow hedge reserve. Any ineffective portions of those movements are recognised in statement of comprehensive income for the year.

1.12

Interest payable and similar expenses

Interest payable and similar expenses are charged to the statement of comprehensive income over the term of the debt so that the amount charged is at a constant rate on the carrying amount. Interest payable and similar expenses include issue costs, which are initially recognised as a reduction in the proceeds of the associated capital instrument.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
2
Judgements and key sources of estimation uncertainty

The preparation of the financial statements under FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

The area involving a high degree of judgement or complexity or area where assumptions and estimates are significant to the financial statements has been identified as the risk of misstatement of the valuation of the SPV investments (see note 9). Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future period affected.

 

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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

In preparing these financial statements, the directors have made the following judgements and estimates:

 

 

 

 

3
Turnover

 

All turnover arose within the United Kingdom from consultancy services in the current year and prior period.

4
Auditor's remuneration
2023
2022
Fees payable to the Company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the Company
4,250
3,000
ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
5
Employees

The Company had no employees (2022 - Nil) other than its directors, who did not receive any remuneration (2022 - Nil).

6
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
1,091,085
430,159
Interest payable on bank overdrafts and loans
246,723
130,150
1,337,808
560,309
7
Analysis of net (losses)/gains on financial assets held at fair value through profit or loss
2023
2022
£
£
Changes in fair value of financial assets held at fair value through profit or loss
(8,235,717)
7,428,312
Receipts from SPV investments held at fair value through profit or loss
4,666,696
238,256
(3,569,021)
7,666,568
ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 19 -
8
Taxation

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(4,975,114)
7,077,456
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
(1,019,898)
1,344,717
Tax effect of expenses that are not deductible in determining taxable profit
1,052
-
0
Group relief
164,344
59,799
Fair value gains and losses not taxable
854,502
(1,404,516)
Taxation charge for the year
-
-

An increase in the rate of corporation tax from 19% to 25% became effective from 1 April 2023. This will impact the Company's future tax charges accordingly for any profits taxed at the main rate.

 

At the reporting date, the Company had tax adjusted losses carried forward of £684,586 (2022: £684,586). No deferred tax asset has been recognised due to uncertainty around the timing of future taxable profits against which to utilise these losses.

 

The tax losses do not have a expiry date.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
9
Financial assets held at fair value through profit or loss
2023
2022
Note
£
£
At 1 July 2022 and 1 January 2022
44,642,845
37,214,533
Change in fair value of financial assets held at fair value through profit or loss
7
(8,235,717)
7,428,312
At 30 June
36,407,128
44,642,845

Valuation methodology and process

The directors base the fair value of the investments in the SPVs held by the Company on information received from the Group's Investment Adviser. Fair value is calculated on discounted cash-flow basis in accordance with the IPEV Valuation Guidelines. The Group's Investment Adviser produces fair value calculations on a semi-annual basis as at 30 June and 31 December each year.

 

Plants under construction and not yet operational are valued at cost and exclude acquisition costs which are expensed in the period in which they are incurred, whilst investments that are operational are valued on a discounted cash flow ("DCF") basis over the life of the asset (typically more than 25 years) and, under the ‘willing buyer-willing seller’ methodology, prudently benchmarked on a £/MWp basis against comparable transactions for large scale portfolios. The same valuation methodology and process for operational assets is followed in these financial statements as was applied in the preparation of the Company’s financial statements for the period ended 30 June 2022.

 

Each investment is subject to full UK corporate taxation at the prevailing rate with the tax shield being limited to the applicable capital allowances from the Company's SPV investments.

 

The key inputs to a DCF based approach are: the equity discount rate, the cost of debt (influenced by interest rate, gearing level and length of debt), power price forecasts, long term inflation rates, irradiation forecasts, operational costs and taxation.

 

Given discount rates are a product of not only the factors listed previously but also regulatory support, perceived sector risk and competitive tensions, it is not unusual for discount rates to change over time. Evidence of this is shown by way of the revisions to the original discount rates applied between the first UK wind investments and those witnessed in the past twelve months.

 

Given discount rates are subjective, there is sensitivity within these to the interpretation of factors outlined above.

 

Judgement is used by the Board in determining the weighted average discount rate of 8% (2022 - 6.75%) as at 30 June 2023 with four key factors that have impacted the adoption of this rate outlined below:

 

 

In order to smooth the sensitivity of the valuation to forecast timing or opinion taken by a single forecast, the Board continues to adopt the application of a blended power curve from leading forecasters.

 

It is only the SPVs of the Company and their intermediate holding companies that the directors fair value. Fair value of operational SPVs is calculated on a discounted cash flow basis in accordance with the IPEV Valuation Guidelines.

 

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
10
Subsidiaries

 

Details of the Company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
St. Johns Hill Wind Limited
1o1 Rose Street South Lane, Edinburgh, Scotland, EH2 3JG
Wind power generation
Ordinary
100.00
-
Port of Sheerness Wind Farm Limited
1010 Eskdale Road, Winnersh Triangle, Wokingham, RG41 5TS
Wind power generation
Ordinary
-
100.00
Peel Wind Farms (Sheerness) Limited
1010 Eskdale Road, Winnersh Triangle, Wokingham, RG41 5TS
Holding company
Ordinary
100.00
-
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
206,075
-
0
Other debtors
1,443,816
820,267
Prepayments and accrued income
-
0
30,644
1,649,891
850,911

Included within other debtors are derivative assets of £1,442,933 (2022: £820,267) that the Company has entered into for hedging its external loans as disclosed in note 17.

12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
634,090
616,024
Other borrowings
14
742,066
686,970
Trade creditors
213,746
12,302
Amounts owed to group undertakings
12,622,208
15,131,122
Taxation and social security
-
0
2,050
Accruals and deferred income
72,997
90,211
14,285,107
16,538,679

Included in amount owed to group undertakings are secured debts of £12,622,208 (2022: £15,131,122). The loans are repayable on demand and bear interest at 7.8% per annum (2022: 7.0%), which compounds annually on 30 June.

 

Clydesdale Bank Plc holds fixed and floating charges dated 27 September 2019 covering all the property or undertaking of the company, the outstanding charge contains a negative pledge.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other borrowings
14
6,421,389
7,138,972
14
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
634,090
616,024
Other loans
7,163,455
7,825,942
7,797,545
8,441,966
Payable within one year
1,376,156
1,302,994
Payable after one year
6,421,389
7,138,972

Other loans are secured debts with Clydesdale Bank PLC. The loans are repayable in instalments over 14 years and are secured by way of fixed and floating charges covering all the property or undertaking of the Company and subsidiary. The loans are stated net of amortised loan transaction costs of £237,548 (2022: £261,303). The loan bears interest at a margin over base rate which ranged between 2.72 - 6.57% per annum during the course of the year. Interest compounds annually on 30 June and repayments are due every 30 June and 31 December, with the facility maturing in June 2033.

 

15
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Cash
328,606
215,472
Financial assets measured at amortised cost
206,075
-
Financial assets measured at fair value through profit or loss
36,407,128
44,642,845
Derivative instruments measured at fair value through other comprehensive income
1,442,933
820,267
Carrying amount of financial liabilities
Financial liabilities measured at amortised cost
20,706,496
23,675,601

Financial assets measured at amortised cost comprise trade debtors.

 

Financial assets measured at fair value through profit or loss comprise investments in group undertakings.

 

Derivatives measured at fair value through other comprehensive income comprise the closing position of the interest rate swap hedge.

 

Financial liabilities measured at amortised cost comprise trade creditors, amounts owed to group undertakings, accruals, other loans and overdrafts.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 23 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1,450,100
1,450,100
1,450,100
1,450,100

The Company has one class of Ordinary shares, which have attached to them full voting, dividend and capital distribution rights (including on a winding up). The shares do not confer any rights of redemption.

17
Hedging reserve
2023
2022
£
£
At the beginning of the year
820,267
-
0
Gains and losses on cash flow hedges
622,666
820,267
At the end of the year
1,442,933
820,267

The hedging reserve represents the movement in fair value of the interest rate swap.

18
Events after the reporting date

There have been no significant events affecting the Company since the year end.

19
Related party transactions

The Company has taken advantage of the exemption under FRS102. s 33.1A not to disclose transactions entered between wholly owned members of the same group.

20
Ultimate controlling party

At 30 June 2023, the Company's immediate parent company was IREEL Wind Topco Limited, a company incorporated in the United Kingdom. The registered office is 1010 Eskdale Road, Winnersh Triangle, Wokingham, Berkshire, RG41 5TS.

 

The ultimate parent company and controlling party is Bluefield Solar Income Fund Limited, which is incorporated in Guernsey.

ST. JOHNS HILL WIND HOLDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
21
Cash absorbed by operations
2023
2022
£
£
(Loss)/profit for the year after tax
(4,975,114)
7,077,456
Adjustments for:
Finance costs
1,337,808
560,309
Amortisation of loan arrangement fees
23,755
11,877
Other gains and losses
3,569,021
(7,666,568)
Movements in working capital:
(Increase)/decrease in debtors
(176,314)
136,455
Decrease in creditors
(3,419,013)
(137,500)
Cash absorbed by operations
(3,639,857)
(17,971)
22
Analysis of changes in net debt
1 July 2022
Cash flows
Other non-cash changes
30 June 2023
£
£
£
£
Cash at bank and in hand
215,472
113,134
-
328,606
Bank overdrafts
(616,024)
(18,066)
-
(634,090)
Cash and cash equivalents
(400,552)
95,068
-
(305,484)
Borrowings excluding overdrafts
(7,825,942)
931,772
(269,285)
(7,163,455)
Amounts owed to group undertakings
(15,131,122)
-
2,508,914
(12,622,208)
(23,357,616)
1,026,840
2,239,629
(20,091,147)
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