Company registration number 04493876 (England and Wales)
BLACK HILL WIND FARM LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BLACK HILL WIND FARM LIMITED
COMPANY INFORMATION
Directors
Bryan Acutt
Prince Dakpoe
Secretary
Infrastructure Managers Limited
Company number
04493876
Registered office
Cannon Place
78 Cannon Street
London
EC4N 6AF
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants & Statutory Auditors
Atria One
144 Morrison Street
Edinburgh
EH3 8EX
Bankers
Lloyds Bank plc
71 Lombard Street
London
EC3P 3BS
BLACK HILL WIND FARM LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditors' report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 21
BLACK HILL WIND FARM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present their strategic report on Black Hill Wind Farm Limited ("the Company") for the year ended 31 December 2023.

Principal objectives and strategies

The principal activity of the Company is the generation and sale of wind generated electricity and associated benefits. The contract is in year 17 of its term expiring in 2032.

Performance Review

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

 

The profit for the financial year, after taxation, amounted to £7,043,564 (2022: profit of £13,666,573).

 

At the Statement of financial position date, net assets are £10,518,410 (2022: £14,414,846).

 

The directors are satisfied with the overall performance of the Company and do not foresee any significant change in the Company's activities in the coming financial year.

 

There has been a large decrease in the profit for the financial year due to the prior period electricity market having exceptionally high energy prices for a period of time, this was always expected to impact energy prices temporarily.

 

Ordinary dividends were paid amounting to £10,940,000 (2022: £7,123,579). The directors do not recommend payment of a final dividend.

 

Future Developments

The directors intend for the business to continue to operate in line with the contractual terms and do not expect any strategic changes. There have been discussions regarding re-powering of the wind farm beyond its initial contract, which was to expire in 2027. The contract expiry is now 2032 which is in line with the land rental agreements and planning permission.

Principal Risks and Uncertainties

Maintenance Risk

The Company's maintenance risk is held by the company. The Company has a maintenance contract with a third party that covers a large degree of maintenance risk. In order to ensure costs are recorded in the year in which they are incurred, routine monitoring is carried out on maintenance costs, this compares actual spend to a pre-approved budget.

 

Price Risk

The Company's price risk is the exposure to price fluctuations in electricity generation prices. The Company continues to monitor these prices and can take the option to fix the price received for a specified period of time.

 

Liquidity Risk

Cash flows are generated on the sale of wind generated electricity and associated benefits. The project cash-flows are reasonably predictable. The Company's exposure to cash flow fluctuations will continue to be monitored. The Company has no external debt and costs are comfortably covered by revenue.

 

Contract Performance Risk

The Company's contract performance risk is mostly mitigated as operations and maintenance service contract has been subcontracted to a third party provider.

Financial Instruments

Many of the cash flow risks are addressed by means of contractual provisions.

 

Investments of cash surpluses are made through banks 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.

BLACK HILL WIND FARM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key Performance Indicators

The directors do not consider KPI's appropriate given the nature of the business. The company is performing well and in the prior financial year it paid off the loan with the senior debt provider, therefore assessment of the company's performance against loan covenants is no longer appropriate.

Climate Change

The directors recognise that it is important to disclose their view of the impact of climate change on the company. The company's key operational contracts are long-term and with a small number of known counterparties. In most cases, the cashflows from these contracts can be predicted with reasonable certainty for at least the medium-term. Having considered the company's operations, its contracted rights and obligations and forecast cash flows, there is not expected to be a significant impact upon the company's operational or financial performance arising from climate change.

Going Concern

These financial statements have been prepared on the going concern basis for the reasons set out in the Accounting Policies.

This report was approved by the board of directors on 27 June 2024 and signed on behalf of the board by:

 

Bryan Acutt
Director
27 June 2024
BLACK HILL WIND FARM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and the audited financial statements of Black Hill Wind Farm Limited ("the Company") for the year ended 31 December 2023.

Results and dividends

Details of the results and dividends are noted in the Strategic report.

Directors

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

John Cavill
(Resigned 1 April 2024)
Bryan Acutt
Prince Dakpoe
(Appointed 1 April 2024)
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

Details of the financial instruments are noted in the Strategic report.

Auditors

The auditors, PricewaterhouseCoopers LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditors

In the case of each director in office at the date the Directors' Report is approved:

 

This report was approved by the board of directors on 27 June 2024 and signed by order of the board by:
Mike Forrest
For and on behalf of Infrastructure Managers Limited
Secretary
27 June 2024
BLACK HILL WIND FARM LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", 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 the financial statements, the directors are required to:

 

 

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.

 

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.

 

 

The financial statements were approved and signed by the director and authorised for issue on 27 June 2024

 

 

 

 

Bryan Acutt

Director                        

 

BLACK HILL WIND FARM LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF BLACK HILL WIND FARM LIMITED
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Report on the audit of the financial statements
Opinion

In our opinion, Black Hill Wind Farm Limited's financial statements:

 

 

 

 

We have audited the financial statements, included within the Annual Report and Financial Statements (the "Annual Report"), which comprise: the Statement of financial position as at 31 December 2023; the Statement of comprehensive income and the Statement of changes in equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

Independence

We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

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.

 

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.

 

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.

 

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

BLACK HILL WIND FARM LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF BLACK HILL WIND FARM LIMITED
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

 

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

 

With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.

 

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.

 

Strategic report and Directors' report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for the year ended 31 December 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.

 

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.

Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements

As explained more fully in the Directors' responsibilities statement, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also 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.

 

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.

Auditors' 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 auditors' 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.

BLACK HILL WIND FARM LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF BLACK HILL WIND FARM LIMITED
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Based on our understanding of the company and industry, we identified that the principal risks of non­-compliance with laws and regulations related to Companies Act 2006 and UK tax legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inappropriate journal entries and the risk of management bias in accounting estimates. Audit procedures performed by the engagement team included:

 

 

 

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.

Use of this report

This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

BLACK HILL WIND FARM LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF BLACK HILL WIND FARM LIMITED
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -

Other required reporting

 

Companies Act 2006 exception reporting

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

 

 

 

 

 

We have no exceptions to report arising from this responsibility.

Paul Cheshire (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
27 June 2024
BLACK HILL WIND FARM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
12,522,984
19,896,799
Cost of sales
(4,470,728)
(3,818,124)
Gross profit
8,052,256
16,078,675
Administrative expenses
(462,874)
(20,451)
Operating profit
4
7,589,382
16,058,224
Interest receivable and similar income
7
665,014
87,984
Interest payable and similar expenses
8
(73,924)
(67,203)
Profit before taxation
8,180,472
16,079,005
Tax on profit
9
(1,136,908)
(2,412,432)
Profit for the financial year
7,043,564
13,666,573

This income statement has been prepared on the basis that all operations are continuing operations.

 

There is no other comprehensive for the current financial year.

The notes on pages 12 to 21 form part of these financial statements.

BLACK HILL WIND FARM LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
4,795,200
6,350,541
Current assets
Debtors: amounts falling due within one year
12
4,642,996
4,988,908
Cash at bank and in hand
4,669,378
8,190,078
9,312,374
13,178,986
Creditors: amounts falling due within one year
13
(2,156,982)
(3,438,934)
Net current assets
7,155,392
9,740,052
Total assets less current liabilities
11,950,592
16,090,593
Provisions for liabilities
Provisions
15
(813,161)
(739,237)
Deferred taxation
14
(619,021)
(936,510)
(1,432,182)
(1,675,747)
Net assets
10,518,410
14,414,846
Capital and reserves
Called up share capital
16
1
1
Profit and loss reserve
17
10,518,409
14,414,845
Total shareholders' funds
10,518,410
14,414,846

The notes on pages 12 to 21 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 27 June 2024 and are signed on its behalf by:
Bryan Acutt
Director
Company registration number 04493876 (England and Wales)
BLACK HILL WIND FARM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Called up share capital
Profit and loss reserve
Total
Notes
£
£
£
Balance at 1 January 2022
1
7,871,851
7,871,852
Year ended 31 December 2022:
Profit for the financial year
-
13,666,573
13,666,573
Dividends
10
-
(7,123,579)
(7,123,579)
Balance at 31 December 2022
1
14,414,845
14,414,846
Year ended 31 December 2023:
Profit for the financial year
-
7,043,564
7,043,564
Dividends
10
-
(10,940,000)
(10,940,000)
Balance at 31 December 2023
1
10,518,409
10,518,410

The notes on pages 12 to 21 form part of these financial statements.

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Black Hill Wind Farm Limited ("the Company") is a private company limited by shares incorporated in the United Kingdom and is registered in England and Wales. The registered office is located at Cannon Place, 78 Cannon Street, London, EC4N 6AF.

 

The principal activity of the Company is the generation and sale of wind generated electricity and associated benefits. The contract is in year 17 of its term expiring in 2032.

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. The principal accounting policies adopted are set out below and have been consistently applied to the years presented, unless otherwise stated.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of BIIF Holdco Limited. These consolidated financial statements are available from its registered office, Cannon Place, 78 Cannon Street, London, EC4N 6AF.

1.2
Going concern

Atruet 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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The financial statements are prepared on a going concern basis which the directors believe to be appropriate for the following reasons.

 

The Company prepares cash flow forecasts covering the expected life of the asset and so including the 12 month period from the date the financial statements are signed. In drawing up these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period. Based on these forecasts the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.

 

In light of this, the directors continue to adopt the going concern basis of accounting in preparing the Company’s annual financial statements.

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover

Turnover comprises amounts received and receivable in respect of the invoiced value of generated electricity, Renewable Obligation Certificates (ROCs) and accrued income. Turnover is recognised when it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Turnover is measured at the fair value of the consideration received, excluding sales taxes or duty.

 

Turnover on the generation of energy comprises the value of units supplied during the year. Units are determined by energy volumes recorded on the wind farm meters and market settlement systems.

 

Under the terms of its Power Purchase Agreements with customers, ROCs are immediately transferable to the customer. Turnover in relation to ROCs is recognised in line with the generation of energy.

 

Accrued income represents the sales value of energy (and related ROCs) which is yet to be invoiced and is based upon the value of units supplied with respect to energy and quantity of units supplied with respect to ROCs.

1.4
Tangible fixed assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

 

An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

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:

Other property, plant and equipment
5% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

 

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

1.6
Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of six months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.

 

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

Basic financial assets

Basic financial assets, which include debtors , cash and bank balances, are initially measured at transaction price including transaction costs and debtors 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 instruments are subsequently measured at fair value, with any changes recognised in the Statement of Comprehensive Income.

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.

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.

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including Creditors, bank loans, loans from fellow group 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

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.

1.8
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 Statment 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 Statment 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.

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.10
Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset.

1.11

Decommissioning costs

Provisions for decommissioning are recognised in full when the related facilities are constructed. A corresponding amount equivalent to the provision is also recognised as part of the cost of the related plant and equipment. The amount recognised is the estimated cost of decommissioning, discounted to its net present value, and is reassessed each year in accordance with local conditions and requirements. Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with prospectively by recording an adjustment to the provision, and a corresponding adjustment to plant and equipment. The unwinding of the discount on the decommissioning provision is included as a finance cost.

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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Impairment of assets

The carrying value of those assets recorded in the Company's Statement of Financial Position, at original cost less any accumulated depreciation and accumulated impairment loss, could be materially reduced where circumstances exist which might indicate that an asset has been impaired and an impairment review is performed. Impairment reviews consider the fair value and/or value in use of the potentially impaired asset or assets and compare that with the carrying value of the asset or assets in the Statement of Financial Position. Any reduction in value arising from such a review would be recorded in the Statement of Comprehensive Income. Impairment reviews involve the significant use of assumptions. Consideration has to be given as to the price that could be obtained for the asset or assets, or in relation to a consideration of value in use, estimates of the future cash flows that could be generated by the potentially impaired asset or assets, together with a consideration of an appropriate discount rate to apply to those cashflows.

Decommissioning provision

The amount recognised is the estimated cost of decommissioning, discounted to its net present value, and is reassessed each year in accordance with local conditions and requirements.

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sale of electricity, including renewable incentives
12,522,984
19,896,799

The whole of the turnover is attributable to the principal activity of the Company wholly undertaken in the United Kingdom.

4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
1,555,341
1,555,341
5
Auditors' remuneration
2023
2022
Fees payable to the company's auditors and associates:
£
£
For audit services
Audit of the financial statements of the company
15,218
14,740

Included in the fee above is £2,739 (2022: £2,490) for the audit of the immediate parent entity Black Hill Wind Farm Holdco Limited and £2,739 (2022: £2,490) for the audit of the ultimate parent entity Black Hill Wind Farm Topco Limited.

6
Employees

The average number of persons employed by the Company during the financial year, including the directors, amounted to nil (2022: nil). The directors are not employed by the company and did not receive any remuneration during the year (2022: nil).

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
665,014
84,856
Other interest income
-
3,128
665,014
87,984
8
Interest payable and similar expenses
2023
2022
£
£
Unwinding of discount on provisions
73,924
67,203
BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Taxation on profit
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,454,397
2,648,691
Deferred tax
Origination and reversal of timing differences
(317,489)
(244,319)
Changes in tax rates
-
0
8,060
Total deferred tax
(317,489)
(236,259)
Total tax charge
1,136,908
2,412,432

In 2021 an increase in the corporation tax rate to 25% with effect from 1 April 2023 was substantively enacted. The 23.52% rate used above reflects 9 months of this new rate and 3 months of the previous rate of 19%.

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

2023
2022
£
£
Profit before taxation
8,180,472
16,079,005
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
1,924,092
3,055,011
Tax effect of expenses that are not deductible in determining taxable profit
17,876
14,440
Effect of change in corporation tax rate
(18,789)
(8,060)
Group relief
(786,271)
(648,959)
Taxation charge for the year
1,136,908
2,412,432
10
Dividends
2023
2022
2023
2022
Per share
Per share
Total
Total
£
£
£
£
Ordinary Shares
Interim paid
10,940,000.00
7,123,579.00
10,940,000
7,123,579

Dividends paid during the year (excluding those for which a liability existed at the end of the prior year).

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Tangible assets
Other property, plant and equipment
£
Cost
At 1 January 2023 and 31 December 2023
30,963,689
Depreciation
At 1 January 2023
24,613,148
Depreciation charged in the year
1,555,341
At 31 December 2023
26,168,489
Carrying amount
At 31 December 2023
4,795,200
At 31 December 2022
6,350,541
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
926,843
263,859
Corporation tax recoverable
1,548,000
1,548,000
Prepayments and accrued income
2,168,153
3,177,049
4,642,996
4,988,908
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
69,037
74,375
Amounts owed to group undertakings
1,454,397
2,298,691
Taxation and social security
223,650
930,890
Accruals and deferred income
409,898
134,978
2,156,982
3,438,934

Amounts owned to Group undertakings are made up of £1,454,397 (2022: £2,298,691) relating to a group tax creditor. The amount is non interest bearing, unsecured and repayable on demand.

BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
14
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
778,730
1,077,739
Short term timing differences - trading
(159,709)
(141,229)
619,021
936,510
2023
Movements in the year:
£
Liability at 1 January 2023
936,510
Credit to profit or loss
(317,489)
Liability at 31 December 2023
619,021

The net deferred tax liability expected to reverse in 2024 is £330,239 (2023: £339,457). This primarily relates to the reversal of timing differences on capital allowances offset by expected utilisation of tax losses and short term timing differences.

15
Provisions for liabilities
2023
2022
£
£
Decommissioning provision
813,161
739,237
Movements on provisions:
Decommissioning
provision
£
At 1 January 2023
739,237
Unwinding of discount
73,924
At 31 December 2023
813,161
BLACK HILL WIND FARM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Provisions for liabilities
(Continued)
- 21 -

Decommissioning costs are uncertain and cost estimates can vary in response to many factors, including changes to the relevant legal requirements, the emergence of new technology or experience at other assets. The expected timing, work scope, amount of expenditure and risk weighting may also change. The decommissioning costs were estimated at the time of construction based on the number of turbines installed. The directors have considered the information available to them and believe the decommissioning costs are materially correct. The provision has been discounted at an annual rate of 4% (2022: 4%), and this discount will be unwound and charged to the Statement of Comprehensive Income until 2032, the estimated date of decommissioning.

16
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
1
1
1
1

There is a single class of ordinary share. There are no restrictions on the distribution of dividends and the repayment of capital.

17
Profit and loss reserve

Retained earnings records retained earnings and accumulated losses.

18
Ultimate controlling party

The immediate parent undertaking is Black Hill Wind Farm Holdco Limited.

 

The intermediate parent undertaking is BIIF Holdco Limited, which is the parent undertaking of the smallest and largest group to consolidate these financial statements. Copies of BIIF Holdco Limited consolidated financial statements can be obtained from the Company Secretary at Cannon Place, 78 Cannon Street, London, EC4N 6AF.

The ultimate parent and controlling party is BIIF L.P. BIIF L.P. is owned by a number of investors with no one investor having individual control. Its registered office address is 16 Palace Street, London, SW1E 5JD.

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