Company registration number 13063145 (England and Wales)
BIO CAPITAL 2 LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BIO CAPITAL 2 LTD
COMPANY INFORMATION
Directors
M Czulowski
P Gill
E Archer
E Gissin
A Sharpe
I Raanan
Company number
13063145
Registered office
The Corn Store
Hyde Hall Farm
Buntingford
Hertfordshire
United Kingdom
SG9 0RU
Auditor
Azets Audit Services
2nd Floor, Regis House
45 King William Street
London
United Kingdom
EC4R 9AN
BIO CAPITAL 2 LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
BIO CAPITAL 2 LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

BUSINESS REVIEW

Bio Capital 2 Limited operates in the UK renewable energy sector. It is a platform for ownership and operation of UK based operational Anaerobic Digestion (AD) assets . As at 31 December 2023 the company held a portfolio of two AD assets which it owns and operates.

 

Investors in the company are investment funds managed through a joint venture by Equitix AD 2 Co Limited and Helios 5 Bio Gas UK 1 LP who have a track record of investment in the renewable energy and infrastructure sectors.

 

Each asset is held as part of the company’s investment portfolio and is recognised in accordance with the accounting policies adopted by the company. The value to the company is through fair value as part of a directly held basket of investments rather than as a media through which the company conducts its business. The assets, which are subsidiary companies in the group, are accounted for at fair value under FRS 102 and, in accordance with FRS 102 and the Companies Act, the financial statements of Bio Capital 2 Ltd are not consolidated.

 

A group wide long term strategy is fully developed which sees continued investment in the portfolio to optimise the efficiency and robustness of operations and enhance operational revenue generation through innovation in product development.

 

The company has placed emphasis on the ongoing improvement in HSEQ across all companies and has received industry recognition for its initiatives in this.

 

The company’s operating loss for the year, (before interest, depreciation and amortisation) was £0.9m (2022: £0.3m), which the directors consider to be satisfactory. The loss before taxation in the year is £9.3m (2022: £6.0m profit before taxation).

 

The net current assets as at 31 December 2023 are in line with the previous year at £36.6m and the net liabilities are £3.6m, compared to net assets of £5.7m in the previous year.

 

The movement in loss/profit before taxation and net liabilities/assets results from the movement in the fair value of the company's investments in the year.

 

The company has not made any significant donations to charities in the year (2022: £Nil) and did not make any donations to political parties.

BIO CAPITAL 2 LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
KEY PERFORMANCE INDICATORS

The company monitors a range of financial indicators; operating profit and loss, profit before tax and net assets. These results for the year are detailed in the business review.

 

The company monitors a range of subsidiary company operational KPIs, with the following overall results across group:

 

The accident frequency rate

The accident frequency rate (AFR) is calculated for all Bio Capital subsidiary companies cumulatively. The AFR shows the number of accidents sustained by all workers for every 1,000,000 hours worked. The AFR has decreased by 25% from the previous year.

 

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR)

The Company compares its injury incidence rates of reported non-fatal injuries (reported to the HSE under RIDDOR) against various industries.

 

There were no RIDDOR reportable lost time injury (in excess of 7 days) in the 12 month period. This incidence rate is lower than that reported the waste industry, the oil and gas industry and the all industry average.

 

Feedstock Processed & Controlled

Total tonnages controlled for the period were 98% of budget and 0% higher than the previous year.

 

Biogas/biomethane generation

Biogas generated during the period was 112% of budget and 12% higher than the previous year.

 

Key Cost Metrics

The Company monitors the cost of feedstock and maintenance costs. These KPIs were in line with the budget for the period.

The Company continues to focus on optimising performance to maximise generation opportunity in its operating companies.

BIO CAPITAL 2 LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
PRINCIPAL RISKS AND UNCERTAINTIES

The Company and its subsidiary companies face the following risks during the normal course of operations:

 

Legislative risk

The Company is at risk of loss of revenue and cash generation from changes in legislation which affect the renewable energy sector.

 

The Company monitors the likelihood and impact of legislative changes through its participation in industry bodies such as Renewable Energy Association (REA) and UK Anaerobic Digestion and Bioresources Association (ABDA).

 

Price & availability of feedstock risk

The operating facilities of the Group require a consistent supply of suitable feedstock to maintain the biology of the plant and resulting generation. Market pressures, weather, plant issues/capacity can all impact feedstock supply.

 

This risk is mitigated by maintaining strong contractual relationships with its feedstock suppliers. Market pressures faced in recent years continue to impact feedstock costs and revenues which show a strong correlation to agricultural crop price movements.

 

Plant operating risk

Failure of key components of an operating plant may lead to reduced generation. This risk is mitigated by scheduled planned maintenance and monitoring alongside a team of experienced engineers and long term maintenance partnerships with experienced and competent maintenance providers for specialist plant.

 

Regulatory compliance risk

The Company operates within a heavily regulated environment with failure to comply with regulations having the potential to impact operations. The companies across the group operate 1SO9001, ISO 14001 and ISO 45001 with an integrated management system.

Compliance and health and safety are a high priority of the directors and reviewed regularly by the Board. All audits during the year were successfully passed.

 

Credit risk

The Company mitigates credit risk by obtaining external credit reports for every new customer in conjunction with regularly monitoring customer credit levels.

 

Interest Rate Risk

The Company has no external debt.

 

Energy pricing risk

The Company operates in the UK energy market and as such is exposed to movements in wholesale power and gas pricing. Where appropriate, the operating companies within the group have entered into medium term power price agreements to mitigate this risk.

 

Liquidity risk

the Company monitors and manages the cash flow requirements on a group wide basis with annual budgets and monthly rolling forecasts that are reviewed regularly by the directors. The capital requirements of the Group are met through cash reserves and shareholder loans.

On behalf of the board

A Sharpe
Director
14 May 2024
BIO CAPITAL 2 LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of a holding vehicle for a portfolio of anaerobic digestion investments.

Results and dividends

The results for the year are set out on page 9.

No ordinary 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:

M Czulowski
P Gill
E Archer
E Gissin
A Sharpe
I Raanan
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.

Financial instruments
Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise

interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the

business.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies

which must fulfil credit rating criteria approved by the Board.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are

monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

BIO CAPITAL 2 LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
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). 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 also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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.

Going concern

Please refer to note 1.2 to the financial statements. The company has net liabilities as at the balance sheet date. Notwithstanding this, the directors have a reasonable expectation that the company will have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis in the financial statements.

On behalf of the board
A Sharpe
Director
14 May 2024
BIO CAPITAL 2 LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BIO CAPITAL 2 LTD
- 6 -
Opinion

We have audited the financial statements of Bio Capital 2 Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

BIO CAPITAL 2 LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BIO CAPITAL 2 LTD
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

BIO CAPITAL 2 LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BIO CAPITAL 2 LTD
- 8 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our 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.

Laura Pingree
Senior Statutory Auditor
For and on behalf of Azets Audit Services
14 May 2024
Chartered Accountants
Statutory Auditor
2nd Floor, Regis House
45 King William Street
London
United Kingdom
EC4R 9AN
BIO CAPITAL 2 LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
-
209,988
Administrative expenses
(963,130)
(546,597)
Operating loss
4
(963,130)
(336,609)
Interest receivable from group undertakings
6
3,631,964
2,949,672
Other interest payable and similar expenses
7
(5,296,250)
(3,771,333)
Changes in fixed asset investments held at fair value
(6,651,925)
7,170,411
(Loss)/profit before taxation
(9,279,341)
6,012,141
Tax on (loss)/profit
8
-
0
-
0
(Loss)/profit for the financial year
(9,279,341)
6,012,141

The profit and loss account has been prepared on the basis that all operations are continuing operations.

BIO CAPITAL 2 LTD
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
9
14,511,282
21,094,443
Current assets
Debtors falling due after more than one year
11
36,457,717
36,298,083
Debtors falling due within one year
11
569,977
91,083
Cash at bank and in hand
567,460
287,026
37,595,154
36,676,192
Creditors: amounts falling due within one year
12
(957,319)
(262,427)
Net current assets
36,637,835
36,413,765
Total assets less current liabilities
51,149,117
57,508,208
Creditors: amounts falling due after more than one year
13
(54,759,283)
(51,839,033)
Net (liabilities)/assets
(3,610,166)
5,669,175
Capital and reserves
Called up share capital
15
3,378
3,378
Profit and loss reserves
16
(3,613,544)
5,665,797
Total equity
(3,610,166)
5,669,175
The financial statements were approved by the board of directors and authorised for issue on 14 May 2024 and are signed on its behalf by:
A Sharpe
Director
Company Registration No. 13063145
BIO CAPITAL 2 LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
3,378
(346,344)
(342,966)
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
6,012,141
6,012,141
Balance at 31 December 2022
3,378
5,665,797
5,669,175
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(9,279,341)
(9,279,341)
Balance at 31 December 2023
3,378
(3,613,544)
(3,610,166)
BIO CAPITAL 2 LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(321,803)
318,386
Investing activities
Investment in subsidiaries
(68,764)
(13,924,031)
Issue of loans to group undertakings
(425,000)
(15,746,230)
Repayments of loans to group undertakings
644,198
700,684
Interest received
2,827,803
2,315,192
Net cash generated from/(used in) investing activities
2,978,237
(26,654,385)
Financing activities
Issue of loans from shareholders
-
29,714,498
Interest paid
(2,376,000)
(3,986,920)
Net cash (used in)/generated from financing activities
(2,376,000)
25,727,578
Net increase/(decrease) in cash and cash equivalents
280,434
(608,421)
Cash and cash equivalents at beginning of year
287,026
895,447
Cash and cash equivalents at end of year
567,460
287,026
BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Bio Capital 2 Ltd is a private company limited by shares incorporated in England and Wales. The registered office is The Corn Store, Hyde Hall Farm, Buntingford, Hertfordshire, SG9 0RU.

1.1
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 balances at fair value. The principal accounting policies adopted are set out below.

The company and group are exempt from preparing consolidated financial statements as the investments are held as part of an investment portfolio and are held at fair value with the changes in fair value recognised in the statement of comprehensive income in compliance with Financial Reporting Standard 102 section 9.9 C (a).

 

This is a change of basis where the company had previously accounted for its investments at cost less accumulated impairments and has been applied retrospectively to the comparatives as presented in these financial statements.

1.2
Going concern

The company has net liabilities as at the balance sheet date. Notwithstanding this, as part of the regular budgeting and forecast review process, the directors have prepared cash flow forecasts covering a period in excess of 12 months from the approval of the financial statements and are satisfied the company will have sufficient cash to meet its obligations as they fall due during this period. The company is also a member of a group whose financial position is closely linked to the status and continued support of other group undertakings. Each of these fellow group undertakings have committed to support each other as required for the foreseeable future.true

 

The company has long-term financing agreements in place in the form of shareholder loans and under these arrangements any unpaid interest may be deferred until the final repayment date of January 2051, at the company's discretion. These loans are listed as Eurobond Loan Notes on The International Stock Exchange.

 

Having considered the information available at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

 

The directors have therefore continued to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Transaction costs are expensed to profit or loss as incurred. Changes in fair value recognised in the statement of comprehensive income in compliance with Financial Reporting Standard 102 section 9.9 C(a).

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.

1.5
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.

1.6
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.

 

Financial instruments are recognised in the company's balance sheet 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 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

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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 profit or loss.

 

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 profit or loss.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, amounts owed to group undertakings and preference shares that are classified as debt, 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.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, 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.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.7

Interest income

Interest income is recognised in the statement of comprehensive income and retained earnings using the effective interest method.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.8

Finance costs

Finance costs are charged to statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

1.9
Related parties

The company has taken advantage of the exemption available under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' not to disclose related party transactions with wholly owned subsidiaries within the group.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty

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 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Valuation of investments

Investments in companies held as part of an investment portfolio are measured at fair value, with changes in fair value recognised in the income statement in accordance with Financial Reporting Standard 102 section 9.9C(a).

 

In conducting impairment reviews of investments in subsidiaries, the company is also determining whether the amounts receivable from the subsidiaries require impairment or whether a provision against the amounts is required. Determining whether the amounts receivable are impaired is based on the ability of the subsidiaries to generate sufficient cash in the future to enable repayment of the debt. Where expected cash generated is lower than the amounts due to the company, an impairment loss may arise, or a provision may be required to reflect the risk that the full amount is not recovered. After reviewing the business environment and the company's expected future cash flows, management concluded that there was no impairment of amounts due from group undertakings at the current year

end.

 

The directors conduct valuation reviews of investments in companies held as part of an investment portfolio in accordance with the relevant accounting standards. Fair value movements are recognised in the statement of comprehensive income. The directors review the underlying assets held by the investments and review the performance of the assets and the forecasts prepared to determine the fair value, using a discount rate of 10.00% to 10.50% over a specified period of time.

Recoverability of amounts due from group undertakings

In conducting the impairment review of investment in the subsidiary, the company is also determining whether the amounts receivable from the subsidiary require impairment or whether a provision against the amounts is required. Determining whether the amounts receivable are impaired is based on the ability of the subsidiary to generate sufficient cash in the future to enable repayment of the debt. Where expected cash generated is lower than the amounts due to the company, an impairment loss may arise, or a provision may be required to reflect the risk that the full amount is not recovered. After reviewing the business environment and the company's expected future cash flows, management concluded that there was no impairment of amounts due from group undertakings at the current year end.

Deferred tax asset

The directors are required to assess the probability of whether unrelieved tax losses will be recovered against the reversal of future taxable profits arising in either the company or re-charged across the wider group. As there is doubt over the timing of when the tax losses will be utilised, the directors have not recognised the deferred tax asset.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Turnover

The turnover of the company is generated from its principal activity. The directors consider there to be only one geographical market, the United Kingdom.

4
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
16,850
21,625
5
Employees
The company had no employees in either the current or prior year.
6
Interest receivable and similar income
2023
2022
£
£
Interest receivable from group undertakings
3,631,964
2,949,672
7
Interest payable and similar expenses
2023
2022
£
£
Interest payable on shareholder loans
5,296,250
3,771,333
BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 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
(9,279,341)
6,012,141
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(2,182,552)
1,142,307
Tax effect of expenses that are not deductible in determining taxable profit
1,657,915
220,071
Tax effect of income not taxable in determining taxable profit
-
0
(1,362,378)
Remeasurement of deferred tax for changes in tax rates
(33,000)
-
0
Movement in deferred tax not recognised
557,637
-
0
Taxation charge for the year
-
-
9
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
10
14,511,282
21,094,443
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
21,094,443
Additions
68,764
Valuation changes
(6,651,925)
At 31 December 2023
14,511,282
Carrying amount
At 31 December 2023
14,511,282
At 31 December 2022
21,094,443
BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Redstow Renewables Holdco Ltd
England*
Holding vehicle
for a portfolio
of anaerobic
digestion
investments
Ordinary
100.00
-
Redstow Renewables Limited
England*
Anaerobic digestion plant
Ordinary
0
100.00
Norfolk AD Holding Ltd
England*
Holding vehicle for a portfolio of anaerobic digestion investments
Ordinary
100.00
-
Corbiere Renewables Limited
England*
Anaerobic digestion plant
Ordinary
0
100.00

Registered office address:

*
The Corn Store, Hyde Hall Farm, Buntingford, Hertfordshire, SG9 0RU
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Redstow Renewables Holdco Ltd
(1,674,610)
(929,668)
Redstow Renewables Limited
(2,880,422)
534,826
Norfolk AD Holding Ltd
99,858
1,997
Corbiere Renewables Limited
3,398,163
3,091

In the prior year, the company acquired 100% of the share capital of Norfolk AD Ltd and, by extension, Norfolk AD Ltd's wholly-owned subsidiary, Corbiere Renewables Limited.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
104,459
78,828
Other debtors
465,518
12,255
569,977
91,083
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
36,457,717
36,298,083
Total debtors
37,027,694
36,389,166

Included in other debtors falling due within one year is £425,329 (2022: £Nil) owed by a shareholder to the company. This amount is unsecured, interest bearing at 2.02% per annum and has a final repayment date within 12 months of the balance sheet date.

 

Amounts owed by group undertakings are unsecured and interest bearing at 10% per annum and have a final repayment date for capital and all accrued, unpaid interest of January 2051. Interest payable is calculated on a quarterly basis and compounded quarterly, where unpaid. Repayments of both unpaid interest and capital are at the discretion of the borrower, subject to the final repayment date of January 2051. At the balance sheet date, the capital outstanding was £33,850,289.38 (2022: £34,494,487).

 

Corporation tax losses of approximately £3,515,000 (2022: £1,285,000) were carried forward at the balance sheet date. The directors have not recognised a deferred tax asset in relation to these losses as they do not expect them to be utilised for the foreseeable future.

12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
15,690
7,920
Amounts owed to group undertakings
3,000
147,582
Other creditors
850,000
-
0
Accruals and deferred income
88,629
106,925
957,319
262,427
BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
13
Creditors: amounts falling due after more than one year
2023
2022
as restated
Notes
£
£
Other borrowings
14
54,759,283
51,839,033

Other borrowings relate to loans provided by shareholders which are listed as Eurobond loan notes on The International Stock Exchange. These loans are unsecured and interest bearing at 10% per annum and have a final repayment date for capital and all accrued, unpaid interest of January 2051. Interest payable is calculated on a quarterly basis and compounded quarterly, where unpaid. Repayments of both unpaid interest and capital are at the discretion of the company, subject to the final repayment date of January 2051. At the balance sheet date, the capital outstanding was £49,991,498 (2022: £49,991,498).

14
Loans and overdrafts
2023
2022
as restated
£
£
Loans from related parties
54,759,283
51,839,033
Payable after one year
54,759,283
51,839,033

Loans from related parties are unsecured and interest bearing at 10% per annum and have a final repayment date for capital and all accrued, unpaid interest of January 2051. Interest payable is calculated on a quarterly basis and compounded quarterly, where unpaid. Repayments of both unpaid interest and capital are at the discretion of the company, subject to the final repayment date of January 2051. At the balance sheet date, the capital outstanding was £49,991,498 (2022: £49,991,498).

 

The long-term loans due to shareholders are unsecured.

15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Class A of 1p each
134,957
134,957
1,350
1,350
Class B of 1p each
202,772
202,772
2,028
2,028
337,729
337,729
3,378
3,378

A ordinary shares carry no voting rights.

 

B ordinary shares grant the holders a right to vote.

 

Both classes of shares grant the holders the right to receive dividend and a distribution of assets on a liquidation of the company on a pro-rata basis.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
16
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
5,665,797
(346,344)
(Loss)/profit for the year
(9,279,341)
6,012,141
At the end of the year
(3,613,544)
5,665,797

Retained earnings includes all current and prior period retained profits and losses.

17
Financial commitments, guarantees and contingent liabilities

The company had no financial commitments, guarantees or contingent liabilities at the balance sheet date (2022: £Nil).

18
Related party transactions

Bio Capital Limited

In the year to 31 December 2023, £Nil (2022: £152,004) was paid to Bio Capital Limited, a related party.

 

As at 31 December 2023, an amount of £3,000 (2022: £147,582) was due to Bio Capital Limited, a related party, and is included in amounts owed to related parties due within one year.

 

Helios 5 Biogas UK 2 LP

As at 31 December 2023, deferred distribution of £425,000 (2022: £Nil) was due to Helios 5 Biogas UK 2 LP, a shareholder of the company. This amount is included in other creditors falling due within one year.

 

As at 31 December 2023, an amount of £27,380,499 (2022: £25,920,293) was due to Helios 5 Biogas UK 2 LP, a shareholder of the company. This amount is included in amounts falling due in more than one year. An interest charge of £2,648,206 (2022: £1,198,123) on the shareholder loan is included in other interest payable and similar expenses in the statement of comprehensive income for the year to 31 December 2023.

 

As at 31 December 2023, an amount of £425,329 (2022: £Nil) was due by Helios 5 Biogas UK 2 LP, a shareholder of the company. This amount is included in amounts falling due within one year. Included in other interest receivable and similar income in the statement of comprehensive income is interest receivable of £329 (2022: Nil) on the shareholder loan.

 

Equitix AD Co Limited

As at 31 December 2023, deferred distribution of £425,000 (2022: £Nil) was due to Equitix AD Co Limited, a shareholder of the company. This amount is included in other creditors falling due within one year.

 

As at 31 December 2023, an amount of £27,378,784 (2022: £25,918,740) was due to Equitix AD Co Limited, a shareholder of the company. This amount is included in amounts falling due in more than one year. An interest charge of £2,648,044 (2022: £1,884,883) on the shareholder loan is included in other interest payable and similar expenses in the statement of comprehensive income for the year to 31 December 2023.

19
Controlling party

At the year end, in the opinion of the directors, there was no one ultimate controlling party.

BIO CAPITAL 2 LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
20
Cash (absorbed by)/generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(9,279,341)
6,012,141
Adjustments for:
Finance costs
5,296,250
3,771,333
Investment income
(3,631,965)
(2,949,672)
Fair value loss/(gain) on fixed asset investments
6,651,925
(7,170,411)
Movements in working capital:
(Increase)/decrease in debtors
(27,933)
529,951
Increase in creditors
669,261
125,044
Cash (absorbed by)/generated from operations
(321,803)
318,386
21
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
287,026
280,434
567,460
Borrowings excluding overdrafts
(51,839,033)
(2,920,250)
(54,759,283)
(51,552,007)
(2,639,816)
(54,191,823)
22
Prior period adjustment

In the current year, the directors identified that amounts owed by group undertakings due after more than one year as previously reported relates to loans from related parties due after more than one year. As a result, an amount of £51,893,033 is now shown as loans from related parties in the comparative information presented in these financial statements whereas it was previously reported as amounts owed to group undertakings.

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