Registered number: 08372348
GCP BIOMASS 1 LTD
AUDITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2023
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GCP BIOMASS 1 LTD
REGISTERED NUMBER: 08372348
BALANCE SHEET
AS AT 31 MARCH 2023
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Creditors: amounts falling due after more than one year
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The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 2 to 7 form part of these financial statements.
Page 1
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GCP BIOMASS 1 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
GCP Biomass 1 Ltd is a private company, limited by shares and incorporated in England and Wales, registered number 08372348 . The registered office is 24 Savile Row, London, W1S 2ES.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
These financial statements are presented in sterling which is the functional currency of the Company and rounded to the nearest £'000 unless otherwise stated.
The following principal accounting policies have been applied:
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Compliance with accounting standards
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The financial statements have been prepared using FRS102 The Financial Reporting Standard applicable in the UK and the Republic of Ireland, including the disclosure and presentation requirements of Section 1A, applicable to small companies. There we no material departures from this standard.
The Company was loss making in the period and is in a net liability position at the year end date. The financial statements have been prepared on a going concern basis which means that the Company can be expected to meet its liabilities as they fall due for a period of 12 months from the date of signing these financial statements. In assessing the appropriateness of the going concern basis of preparation the Directors have taken into account the key risks of the business as well as the Company's business model and the availability of cash resources.
The Company is part of a financing structure, the underlying loans structured to ensure that actual cash inflows from the loan debtor exceed the Company's cash outflows to service the loan creditor and overheads over the loan term. The Directors have prepared financial models over the life of the loan which support this position. Further, the Directors cite the ongoing support of fellow group companies including the Company's lender to not call its debt to the detriment of the Company. On this basis the Directors consider it is appropriate to prepare the financial statements on a going concern basis.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Turnover comprises interest receivable from the provision of loan financing. Interest receivable is recognised over the loan period using the effective interest method, which takes into account related fees and transaction costs.
Page 2
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GCP BIOMASS 1 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Interest payable is recognised using the effective interest method, which takes into account related fees and transaction costs. Interest payable is included within cost of sales as it is directly attributable to the interest receivable included in revenue.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Page 3
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GCP BIOMASS 1 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Income and Retained Earnings.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In preparing the financial statements, management is required to make judgements, estimates and assumptions which affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. Use of available information and application of judgement are inherent in the formation of estimates, together with past experience and expectations of future events that are believed to be reasonable under the circumstances. Actual results in the future could differ from such estimates.
Management do not consider the Company to have any key sources of estimation uncertainty nor any significant judgements or assumptions in preparing these financial statements.
The Company has no employees other than the Directors, who did not receive any remuneration (2022 - £NIL).
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Loss on impairment of loan debtor
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Unamortised loan fees payable
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Writedown of loan creditor
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Loss on impairment of loan debtor
As part of a restructuring which completed in the prior year one of the Company's loan debtors was acquired by a fellow group subsidiary. Upon joining the group, the Company waived interest totaling £1,706,000 in the prior year.
Unamortised loan fees and writedown of loan creditor
The refinancing of the Company’s loan debtor, which completed in December 2021, resulted in the loan debtor and related loan creditor balances being repaid in the prior year. As a result of the aforementioned restructures, the Company’s lender also agreed to waive £6,640,000 resulting in a gain in the prior year. Associated unamortised loan fees of £771,000 were charged to the statement of income and retained earnings.
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Page 4
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GCP BIOMASS 1 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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Due after more than one year
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Amounts owed by group undertakings
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Amounts owed by group undertakings
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Amounts owed by group undertakings comprise interest bearing loan notes which are accounted for at amortised cost.
Refer to note 12 for details of the prior year adjustment recorded.
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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Amounts owed to group undertakings are interest free and repayable on demand.
Refer to note 8 for details of external loans.
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Page 5
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GCP BIOMASS 1 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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Creditors: Amounts falling due after more than one year
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External loans comprise interest bearing loan notes which are accounted for at amortised cost and are repayable by instalments.
The loan notes are secured by a debenture over all assets of the Company, present and future.
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The aggregate amount of liabilities repayable wholly or in part more than five years after the balance sheet date is:
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Financial assets measured at fair value through profit or loss
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Financial assets measured at fair value through profit or loss comprise cash and cash equivalents.
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Allotted, called up and fully paid
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1,000 (2022 - 1,000) Ordinary shares of £0.01 each
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Profit and loss account
The profit and loss account represents cumulative profits and losses net of all adjustments.
Page 6
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GCP BIOMASS 1 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The Directors have reviewed the disclosure of amounts owed by group undertakings and determined that the presentation in the prior year financial statements does not reflect the repayment terms set out in the underlying facility agreement.
Amounts owed by group undertakings due less than one year have been reduced and amounts due greater than one year increased by £21,459,000.
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Related party transactions
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The Company is exempt under the terms of Financial Reporting Standard 102 (FRS 102) paragraph 33.1A, from disclosing related party transactions with other group companies, on the grounds that the Company is wholly owned within the Group.
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The Company's immediate and ultimate parent undertaking is GCP Intermediary Holdings Limited, a company incorporated in England and Wales.
The smallest and largest group of undertakings into which the results of the Company are consolidated is headed by GCP Intermediary Holdings Limited.
The consolidated financial statements of GCP Intermediary Holdings Limited may be obtained from Companies House or from its registered office 24 Savile Row, London, W1S 2ES.
The auditors' report on the financial statements for the year ended 31 March 2023 was qualified.
The qualification in the audit report was as follows:
Basis for qualified opinion
The Company's loan debtor operates a portfolio of biomass plants. As a result of a number of historic operational issues, the borrower defaulted on the loan. The loan was restructured in the prior year and the borrower was acquired by a fellow group subsidiary with a view of improving performance across all sites. In the current year performance has improved however there is still uncertainty over the level of future cash flows expected to be generated due to the lack of reliable plant data.
As a result, the audit evidence available to substantiate the forecast future cash flows expected to be generated by the plants are limited. The carrying value of the loan as at the balance sheet date is £29,302,000 (2022 - £32,695,000).
The audit report was signed on 27 November 2023 by Mark Nelligan FCA (Senior Statutory Auditor) on behalf of Wellden Turnbull Limited.
Page 7
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