Brocklesby Biogas Limited |
Notes to the Accounts |
for the year ended 31 December 2023 |
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1 |
Accounting policies |
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Accounting convention |
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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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. |
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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 £. |
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The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below. |
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Going concern |
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The company meets its day to day working capital requirements through loans from shareholders. |
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The loan note holders have stated that they will not recall the loans to the company whilst it would damage the interests of external creditors. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis. |
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Turnover |
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Turnover represents amounts receivable from the generation of electricity through anaerobic digestion, net of VAT. Turnover from the sale of electricity is recognised when it is exported, that being the point at which the significant risks and rewards of ownership have passed to the buyer. |
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Tangible fixed assets |
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Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. |
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Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases: |
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Leasehold Land and buildings |
5 - 6% |
straight line |
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Plant and equipment |
5 - 33% |
straight line |
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Depreciation is charged from the month following completion of the asset or the commencement of its use. The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss. |
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Impairment of fixed assets |
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Parent loan notes |
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All interest bearing loans are initially recognised at net proceeds. After initial recognition debt is increased by the financial cost in respect of the reporting period and reduced by repayment made in the period. Interest is recognised on an accruals basis. |
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Equity instruments |
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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. |
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Stocks |
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Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss. |
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Deferred tax |
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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. |
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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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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. |
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Leases |
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Rentals payable under operating leases are charged against income on a straight line basis over the lease term. |
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Foreign exchange |
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Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period. |
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2 |
Critical accounting judgements and key sources of estimation uncertainty |
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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. |
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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. |
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Critical judgements |
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The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. |
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Impairment of Fixed Assets |
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At each reporting period end, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication of impairment. If there is any such indication, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). |
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Deferred Tax |
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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. |
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3 |
Operating loss |
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2023 |
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2022 |
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Operating loss for the year is stated after charging: |
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Fees payable to the company's auditor for the audit of the company's financial statements |
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7,500 |
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7,000 |
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4 |
Employees |
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2023 |
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2022 |
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The company had no employees during the current or prior year. |
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- |
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5 |
Tangible fixed assets |
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Leasehold Land and buildings |
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Plant and machinery etc |
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Total |
£ |
£ |
£ |
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Cost |
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At 1 January 2023 |
18,757,514 |
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84,324 |
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18,841,838 |
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Additions |
29,518 |
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- |
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29,518 |
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Disposals |
- |
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- |
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- |
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At 31 December 2023 |
18,787,032 |
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84,324 |
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18,871,356 |
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Depreciation |
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At 1 January 2023 |
4,050,239 |
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20,488 |
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4,070,727 |
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Charge for the year |
941,724 |
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10,827 |
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952,551 |
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At 31 December 2023 |
4,991,963 |
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31,315 |
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5,023,278 |
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Net book value |
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At 31 December 2023 |
13,795,069 |
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53,009 |
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13,848,078 |
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At 31 December 2022 |
14,707,275 |
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63,836 |
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14,771,111 |
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Included within the cost of leasehold land and buildings is loan interest totalling £2,772,692 (2022: £2,961,739). |
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6 |
Debtors |
2023 |
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2022 |
£ |
£ |
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Trade debtors |
303,801 |
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370,676 |
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Deferred tax asset |
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- |
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40,332 |
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Other debtors |
909,440 |
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1,251,562 |
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1,213,241 |
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1,662,570 |
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7 |
Creditors: amounts falling due within one year |
2023 |
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2022 |
£ |
£ |
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Loan notes within 1 year |
5,182,540 |
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3,789,384 |
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Bank loans and overdrafts |
9,952 |
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9,707 |
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Trade creditors |
266,375 |
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153,253 |
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Other creditors |
56,555 |
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115,754 |
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5,515,422 |
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4,068,098 |
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8 |
Creditors: amounts falling due after one year |
2023 |
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2022 |
£ |
£ |
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Bank loans |
22,435 |
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32,387 |
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Loan notes 1-5 years |
9,473,459 |
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6,854,327 |
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Loan notes after 5 years |
21,736,422 |
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22,350,914 |
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31,232,316 |
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29,237,628 |
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Interest of 12% per annum is payable on the loans of £36,392,421 (2022: £32,994,625). During the period, £4,098,913 (2022: £3,679,324) was charged. The company has granted a standard security and floating charge in favour of Iona Renewable Infrastructure LP. In addition, a standard security and floating charge secured over the company's loan was granted to Iona Capital Limited, as security trustee. |
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9 |
Deferred Taxation |
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The directors have considered future profit projections and have recognised tax losses to the extent that they will be utilised against future taxable profits. |
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2023 |
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2022 |
£ |
£ |
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At 1 January 2023 |
40,332 |
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40,332 |
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Movement for the year |
(40,332) |
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- |
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At 31 December 2023 |
- |
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40,332 |
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10 |
Called up share capital |
2023 |
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2022 |
£ |
£ |
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Ordinary share capital Issued and fully paid |
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200 Ordinary shares of 50p each |
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100 |
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100 |
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11 |
Operating lease commitments |
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Lessee |
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The company has entered into an agreement for the lease of land until 14 July 2038, with a break option on the 20th anniversary of the project's commercial operations date. Future minimum lease payments under non-cancellable operating leases are as follows: |
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2023 |
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2022 |
£ |
£ |
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Not later than one year |
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138,716 |
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125,668 |
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Later than 1 year and not later than 5 years |
554,866 |
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502,672 |
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Later than five years |
1,324,077 |
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1,325,195 |
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2,017,659 |
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1,953,535 |
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12 |
Related party transactions |
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During the prior year Iona Environmental Infrastructure 2 LP entered into a sale and purchase agreement to sell all of their shares and loan notes to Iona Environmental Infrastructure 3 LP at face value. The agreement was executed on 7 October 2022. |
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As at the year end, the company owes Iona Renewable Infrastructure LP (formerly known as Iona Environmental Infrasturcture 3 LP) £36,392,421 (2022: £32,994,624). During the year, interest of £4,098,913 (2022: £2,408,144) was charged on these loans, of which £700,000 (2022: £Nil) was paid and the remainder capitalised. At year end, £11,965 (2022: £10,848) has been accrued and is included in note 7 under other creditors. |
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Iona Capital Limited is a member of Iona EI (General Partner) 3 LLP, which is the General Partner of Iona Renewable Infrastructure LP. Iona Capital Limited has a 25% shareholding in Iona Management Services Limited and Philip Davies is a director of Iona Management Services Limited. |
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2023 |
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2022 |
£ |
£ |
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Transactions with related parties |
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During the year the company entered into the following transactions with related parties: |
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Sales made to entities with common control or common significant influence |
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85,036 |
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84,809 |
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Purchases made from entities with common control or common significant influence: |
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Feedstock |
844,803 |
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726,295 |
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Services |
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1,678,641 |
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1,667,391 |
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In addition to the disclosures above, further trading balances due from related parties are set out below: |
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2023 |
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2022 |
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£ |
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£ |
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Amounts due from related parties |
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6,090 |
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Nil |
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Amounts due to related parties |
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169,236 |
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102,513 |
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13 |
Parent Entity |
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In the opinion of the directors, the immediate controlling party is Iona Renewable Infrastructure LP due to it being the sole shareholder of the company. During the prior year, Iona Environmental Infrastructure 3 LP changed its name to Iona Renewable Infrastructure LP. Further details of the general partner is disclosed in note 12. |
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14 |
Other information |
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Brocklesby Biogas Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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123 Pall Mall |
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London |
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SW1Y 5EA |
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15 |
Audit report information |
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As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006: |
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The auditor's report was unqualified. |
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The senior statutory auditor was Kenneth McDowell. |
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The auditor was Saffery Champness LLP. |
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The audit report was signed on |
25 June 2024 |