Company registration number 08211241 (England and Wales)
STOKES MARSH SOLAR LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
STOKES MARSH SOLAR LIMITED
COMPANY INFORMATION
Directors
Mr Cesar Gonzalez Otalora
Mr Jose Manuel Zorrilla Astudillo
Company number
08211241
Registered office
Gamma Energy Ltd
International House
1 St. Katharine's Way
London
UK
E1W 1YL
Auditor
UHY Hacker Young LLP
Quadrant House - Floor 6
4 Thomas More Square
London
E1W 1YW
STOKES MARSH SOLAR LIMITED
CONTENTS
Page
Directors' report
1 - 2
Independent auditor's report
3 - 6
Income statement
7
Statement of financial position
8 - 9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 27
STOKES MARSH SOLAR LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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 operation of a solar plant and sale of electricity to the national grid.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £657,000. 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:

Mr Cesar Gonzalez Otalora
Mr Jose Manuel Zorrilla Astudillo
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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:

 

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.

STOKES MARSH SOLAR LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

Going Concern

The operations of the company are continuing uninterrupted to the date of signing these financial statements.

 

Having reviewed the company's current position and cash-flow projections for the next twelve months, the Director has a reasonable expectation that the company is in a position to manage its business risks successfully and continue in operational existence for the near future

Small company exemption

In preparing this report, the director has taken the advantage of the small company exceptions provided by section 414B of the Companies Act 2006 not to provide a Strategic report.

 

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 related to small companies.

 

On behalf of the board
Mr Jose Manuel Zorrilla Astudillo
Director
8 May 2024
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF STOKES MARSH SOLAR LIMITED
- 3 -
Opinion

We have audited the financial statements of Stokes Marsh Solar Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, 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 UK adopted international accounting standards.

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.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STOKES MARSH SOLAR LIMITED
- 4 -

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:

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 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.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STOKES MARSH SOLAR LIMITED
- 5 -
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.

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 the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. 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 inflated revenue and results.

 

Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, enquiries of management and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.

 

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 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.

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.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF STOKES MARSH SOLAR LIMITED
- 6 -
Vinodkumar Vadgama (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young LLP
8 May 2024
Chartered Accountants
Statutory Auditor
STOKES MARSH SOLAR LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Revenue
3
2,009,577
4,471,277
Cost of sales
(304,428)
(314,090)
Gross profit
1,705,149
4,157,187
Administrative expenses
(946,619)
(850,147)
Operating profit
4
758,530
3,307,040
Investment revenues
6
34,826
7,521
Finance costs
7
(566,102)
(581,103)
Profit before taxation
227,254
2,733,458
Income tax expense
8
(259,602)
-
(Loss)/profit and total comprehensive income for the year
(32,348)
2,733,458

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

STOKES MARSH SOLAR LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
Non-current assets
Property, plant and equipment
10
10,996,467
11,135,185
Current assets
Trade and other receivables
11
663,328
1,512,261
Cash and cash equivalents
1,522,563
1,921,640
2,185,891
3,433,901
Current liabilities
Trade and other payables
14
272,048
659,561
Current tax liabilities
29,163
-
0
Borrowings
13
714,636
631,537
Lease liabilities
15
78,383
62,938
1,094,230
1,354,036
Net current assets
1,091,661
2,079,865
Non-current liabilities
Borrowings
13
8,183,010
8,859,760
Lease liabilities
15
1,846,083
1,613,399
Long term provisions
16
222,874
216,382
10,251,967
10,689,541
Net assets
1,836,161
2,525,509
Equity
Called up share capital
17
100
100
Retained earnings
1,836,061
2,525,409
Total equity
1,836,161
2,525,509

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

STOKES MARSH SOLAR LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
The financial statements were approved by the board of directors and authorised for issue on 8 May 2024 and are signed on its behalf by:
Mr Jose Manuel Zorrilla Astudillo
Director
Company registration number 08211241 (England and Wales)
STOKES MARSH SOLAR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Capital contribution
Retained earnings
Total
Notes
£
£
£
£
Balance at 1 January 2022
100
6,822,934
(4,540,391)
2,282,643
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
2,733,458
2,733,458
Transactions with owners:
Dividends
9
-
-
(2,490,592)
(2,490,592)
Other movements
-
(6,822,934)
6,822,934
-
Balance at 31 December 2022
100
-
2,525,409
2,525,509
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(32,348)
(32,348)
Transactions with owners:
Dividends
9
-
-
(657,000)
(657,000)
Balance at 31 December 2023
100
-
1,836,061
1,836,161
STOKES MARSH SOLAR LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
1,899,774
3,291,926
Interest paid
(566,102)
(581,103)
Income taxes paid
(230,439)
-
0
Net cash inflow from operating activities
1,103,233
2,710,823
Investing activities
Purchase of property, plant and equipment
(211,413)
-
0
Interest received
34,826
7,521
Net cash (used in)/generated from investing activities
(176,587)
7,521
Financing activities
Repayment of bank loans
(593,651)
(527,174)
Payment of lease liabilities
(75,072)
(60,279)
Dividends paid
(657,000)
(2,490,592)
Net cash used in financing activities
(1,325,723)
(3,078,045)
Net decrease in cash and cash equivalents
(399,077)
(359,701)
Cash and cash equivalents at beginning of year
1,921,640
2,281,341
Cash and cash equivalents at end of year
1,522,563
1,921,640
STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Stokes Marsh Solar Limited is a private company limited by shares incorporated in England and Wales. The registered office is Gamma Energy Ltd, International House, 1 St. Katharine's Way, London, UK, E1W 1YL. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Accounting convention

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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.

1.2
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany 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.

1.3
Revenue

Turnover represents the fair value of the consideration received or receivable for the provision of services which fall within the company's ordinary activities. All turnover arose within the United Kingdom. Turnover represents amounts recoverable from customers for supply of electricity and is measured as the fair value of 'the consideration received or receivable, stated net of discounts, returns and value added taxes. The company recognises turnover when the amount of turnover can be reliably measured, when it is probable that future economic benefits will flow to the company, and when specific criteria have been met for the company's activities, as described below:

 

Power Supply

 

Turnover for the supply of electricity is based on industry data flows and National Grid data. These include an estimate of power used based on the estimated annual consumption of each customer. Payment is collected either as a direct debit or paid on receipt of bill in arrears. Overdue amounts are reviewed regularly for impairment and provision made as necessary.

 

Renewable Obligation Certificates (ROCs) turnover recognition

 

ROCs are awarded to the partnership from Ofgem based on generation of power. These ROCs are sold on receipt of certificate from Ofgem allowing transfer of title. The amount of turnover recognised on sale is in accordance with a contractual agreement where the pricing is based on Ofgem's minimum ROC value (the buy-out).

 

Renewable energy credits in relation to the recycle element of the final value of ROC is recognised when received due to the uncertainty of this amount.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

 

1.4
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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:

Right of use asset
25 Years
Asset Retirement Obligation
25 Years
Solar Panel
25 Years

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 recognised in the income statement.

Capitalisation and depreciation of property, plant and equipment, including decommissioning costs

As part of the measurement and recognition of assets and liabilities, the company has recognised a provision for decommissioning obligations associated with the solar park. In determining the fair value of the provision, assumptions and estimates are made in relation to the expected cost to dismantle and remove the plant from the site, the expected timing of those costs, and the discount rate. The decommission provision, was revalued during the year following an annual review of the present value of the estimated future costs the following assumptions were used.

 

Expected cost to dismantle and remove the plant from the site

An estimated dismantling cost of £198,020 was used in assessing the present value of the estimated future expenditure. The cost has been assessed by an external evaluator and reflects the current market conditions.

 

Discount rate

A discount rate of 4.4% was used in assessing the present value of the estimated future expenditure. The discount rate has been calculated using the 25 year UK bond yield. If the discount rate were to change by +/- 0.5%, then the impact on the present value of the estimated future expenditure would be between 11-13%.

 

Expected timing

The expected timing of the costs has been determined as the minimum between the minimum between the remaining useful life of the assets and remaining lease period.

 

Any changes in the present value of the estimated expenditure is added or deducted from the costs of the related decommissioning asset. The adjusted depreciable amount of the asset is then depreciated prospectively over its remaining useful life. The unwinding of the discount on the decommissioning provision is included as a finance cost.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks.

1.7
Financial assets

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

 

Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

 

Financial assets are initially measured at fair value plus transaction costs, other than those classified as fair value through profit and loss, which are measured at fair value.

 

For the purpose of subsequent measurement, financial assets are classified in four categories:

•    Financial assets at fair value through profit or loss

•    Loans and receivables

•    Held-to-maturity investments

•    Available-for-sale financial investments

Financial assets held at amortised cost
STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -

Loans and receivables

Trade Receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Impairment of financial assets

Financial assets, other than those measured at fair value through profit or 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 of the investment have been affected.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.8
Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

 

The measurement of financial liabilities depends on their classification.

Other financial liabilities

Other financial liabilities, including debt, are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

 

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition.

 

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.9
Equity instruments

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

1.10
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 income statement 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 is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.

1.11
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event and it is probable that the company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

 

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.12
Leases

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

 

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

1.13
Foreign exchange

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 in the period are included in profit or loss.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.14

Fair value measurement

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that the company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the company. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.

1.15

Current versus non-current classification

The company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:

 

•    expected to be realised or intended to be sold or consumed in normal operating cycle;

•    held primarily for the purpose of trading;

•    expected to be realised within twelve months after the reporting period, or

•    cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

 

All other assets are classified as non-current. A liability is current when:

 

•    it is expected to be settled in normal operating cycle;

•    it is held primarily for the purpose of trading;

•    it is due to be settled within twelve months after the reporting period, or

•    there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

 

The company classifies all other liabilities as non-current.

 

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

 

1.16

Capital risk management

The company's objectives when managing capital are to safeguard the company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

 

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Total capital is calculated as 'equity' as shown in the balance sheet plus net debt. The loan balances represent intercompany and bank loans.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
2
Critical accounting estimates and judgements

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

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements
Revenue from ROC

The director considers that the market for selling power generated by the plant will continue to follow historical experience, based upon experience of the company's own plant and similar solar assets. The director estimates that the plant will continue to produce expected volume of power and that future power prices will increase in line with RPI, estimated at 2.5% over time.

Impairment of solar plant asset

In estimating the value in use of property, plant and equipment for the purpose of impairment review, judgement was applied in estimating the future cash flows and in determining the discount rate. The director's judgements are based on historical experience of operating cash flows of similar solar assets and expected generation and future power prices with the value of the ROC increasing with RPI estimated at 2.5% over time. The director's judgements considered a discount rate that reflects current market assessments of the time value of money and the risk specific to the solar assets.

Asset Retirement Obligation (ARO)

The directors consider that the estimates and judgements applied in ascertaining the expected future value of reinstating the site remain unchanged. In assessing this, the directors have considered the costs incurred by similar projects and the relative costs have been provided based on discounted future fair values.

3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Generation of electricity
2,009,577
4,471,277
STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Revenue
(Continued)
- 20 -
2023
2022
£
£
Revenue analysed by geographical market
UK
2,009,577
4,471,277
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(2,685)
908
Fees payable to the company's auditor for the audit of the company's financial statements
12,060
9,200
Depreciation of property, plant and equipment
673,332
641,148
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
2
2

The directors acting during the period are remunerated by other group companies. No allocation of costs have been made as it is not possible to determine anything other than a trivial allocation.

6
Investment income
2023
2022
£
£
Interest income
Financial instruments measured at amortised cost:
Other interest income on financial assets
34,826
7,521
Income above relates to assets held at amortised cost, unless stated otherwise.
STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
7
Finance costs
2023
2022
£
£
Interest on lease liabilities
88,200
76,602
Other interest payable
477,902
504,501
Total interest expense
566,102
581,103
8
Income tax expense
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
29,163
-
0
Adjustments in respect of prior periods
230,439
-
0
Total UK current tax
259,602
-
0
Total tax charge
259,602
-

The charge for the year can be reconciled to the profit per the income statement as follows:

2023
2022
£
£
Profit before taxation
227,254
2,733,458
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
53,450
519,357
Utilisation of tax losses not previously recognised
-
0
(218,719)
Group relief
-
0
(270,227)
Under/(over) provided in prior years
230,439
-
0
Capital allowances in deficit/(excess) of depreciation
(24,287)
(30,411)
Taxation charge for the year
259,602
-
STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
9
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
Ordinary Share
Interim dividend paid
65,700.00
24,905.92
657,000
2,490,592
10
Property, plant and equipment
Right of use asset
Solar Panel
Asset Retirement Obligation
Total
£
£
£
£
Cost
At 1 January 2022
1,986,172
20,225,189
198,020
22,409,381
Additions
48,943
-
0
-
0
48,943
At 31 December 2022
2,035,115
20,225,189
198,020
22,458,324
Additions
323,201
211,413
-
0
534,614
At 31 December 2023
2,358,316
20,436,602
198,020
22,992,938
Accumulated depreciation and impairment
At 1 January 2022
461,368
10,174,328
46,295
10,681,991
Charge for the year
82,829
550,733
7,586
641,148
At 31 December 2022
544,197
10,725,061
53,881
11,323,139
Charge for the year
100,783
564,964
7,585
673,332
At 31 December 2023
644,980
11,290,025
61,466
11,996,471
Carrying amount
At 31 December 2023
1,713,336
9,146,577
136,554
10,996,467
At 31 December 2022
1,490,918
9,500,128
144,139
11,135,185

In 2021, the directors engaged an independent firm of experts specializing in the dismantling of solar plants. Following their detailed review and recommendations, the ARO assets and provision were incorporated into the previous years accounts.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
11
Trade and other receivables
2023
2022
£
£
Trade receivables
410,355
1,179,987
Amount owed by parent undertaking
-
0
140,482
Amounts owed by fellow group undertakings
79,986
79,986
Other receivables
-
9,669
Prepayments
172,987
102,137
663,328
1,512,261

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

12
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

13
Borrowings
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Bank loans
714,636
631,537
8,183,010
8,859,760

The company's loan facilities with Triodos Bank are secured by way of fixed and floating charge over the company's assets.

 

The amounts due to the company's parent company and related parties are unsecured, interest free and repayable on demand.

 

 

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
14
Trade and other payables
2023
2022
£
£
Trade payables
76,662
69,342
Amounts owed to fellow group undertakings
155,670
292,592
Accruals
-
0
6,166
Social security and other taxation
39,716
291,461
272,048
659,561
15
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
163,272
136,881
In two to five years
653,087
547,523
In over five years
1,959,260
1,779,450
Total undiscounted liabilities
2,775,619
2,463,854
Future finance charges and other adjustments
(851,153)
(787,517)
Lease liabilities in the financial statements
1,924,466
1,676,337

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

2023
2022
£
£
Current liabilities
78,383
62,938
Non-current liabilities
1,846,083
1,613,399
1,924,466
1,676,337
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
88,200
76,602

The fair value of the company's lease obligations is approximately equal to their carrying amount.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Lease liabilities
(Continued)
- 25 -
Other leasing information is included in note 19.
16
Provisions for liabilities
2023
2022
£
£
222,874
216,382
All provisions are expected to be settled after more than 12 months from the reporting date.
Movements on provisions:
£
At 1 January 2023 and 31 December 2023
222,874

In 2021, the directors engaged with an independent firm of experts specialising in the dismantling of solar plants. Following their detailed review and recommendations, the ARO asset and provision have been revised accordingly. The Asset Retirement Obligation arises from the company's legal obligations associated with the retirement of tangible long-lived assets once the lease is terminated and the plant must be dismantled. The asset retirement obligation is recognised at fair value as the liability is incurred with a corresponding increase in the carrying amount of the related long lived asset, referred to as an asset retirement cost. The incremental increase in the carrying amount of the asset is depreciated over the remaining useful life of the asset.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Share of £1 each
100
100
100
100
18
Contingent liabilities

The director is not aware of any contingent liabilities at the reporting date.

STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
19
Other leasing information
Lessee

Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:

2023
2022
£
£
Expense relating to short-term leases
-
42,699
Information relating to lease liabilities is included in note 15.
20
Capital risk management

The company is not subject to any externally imposed capital requirements.

21
Related party transactions

During the year the company entered into the following transactions with related parties:

Purchase of services
2023
2022
£
£
Gamma Energy Limited (O&M)
575,158
168,117
Diggia Solution S.L
98,003
129,495
673,161
297,612

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Diggia Solutions S.L
-
0
212,210
Gamma Energy Limited
-
0
80,382
-
292,592
STOKES MARSH SOLAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Related party transactions
(Continued)
- 27 -

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Parent company
155,670
140,484
Gamma Energy
-
0
79,986
155,670
220,470
Other information

No guarantees have been given or received.

22
Controlling party

As at 31 December 2023, the company's immediate parent company is Nordian UK Limited, a company incorporated in the UK. The ultimate parent company is Diggia Solutions, S.L, a company incorporated in Spain.

 

As at 31 December 2023, the ultimate parent's shareholders were Jose Manuel Zorrilla and Cesar Gonzalez.

23
Cash generated from operations
2023
2022
£
£
Profit for the year before income tax
227,254
2,733,458
Adjustments for:
Finance costs
566,102
581,103
Investment income
(34,826)
(7,521)
Depreciation and impairment of property, plant and equipment
673,332
641,148
Increase in provisions
6,492
6,302
Movements in working capital:
Decrease/(increase) in trade and other receivables
848,933
(986,988)
(Decrease)/increase in trade and other payables
(387,513)
324,424
Cash generated from operations
1,899,774
3,291,926
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.210Mr Cesar Gonzalez OtaloraMr Jose Manuel Zorrilla Astudillofalse082112412023-01-012023-12-3108211241bus:Director12023-01-012023-12-3108211241bus:Director22023-01-012023-12-3108211241bus:RegisteredOffice2023-01-012023-12-31082112412023-12-3108211241core:ContinuingOperations2023-01-012023-12-31082112412022-01-012022-12-3108211241core:ContinuingOperations2022-01-012022-12-3108211241core:RetainedEarningsAccumulatedLosses2023-01-012023-12-3108211241core:RetainedEarningsAccumulatedLosses2022-01-012022-12-31082112412022-12-31082112412022-12-31082112412021-12-3108211241core:CurrentFinancialInstruments2023-12-3108211241core:CurrentFinancialInstruments2022-12-3108211241core:Non-currentFinancialInstruments2023-12-3108211241core:Non-currentFinancialInstruments2022-12-3108211241core:ShareCapital2023-12-3108211241core:ShareCapital2022-12-3108211241core:RetainedEarningsAccumulatedLosses2023-12-3108211241core:RetainedEarningsAccumulatedLosses2022-12-3108211241core:OtherMiscellaneousReserve2021-12-310821124112023-01-012023-12-310821124112022-01-012022-12-3108211241core:LoansReceivables2023-01-012023-12-3108211241core:UKTax2023-01-012023-12-3108211241core:UKTax2022-01-012022-12-310821124122023-01-012023-12-310821124122022-01-012022-12-3108211241core:LandBuildingscore:LeasedAssetsHeldAsLessee2021-12-3108211241core:PlantMachinery2021-12-3108211241core:FurnitureFittings2021-12-3108211241core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3108211241core:PlantMachinery2022-12-3108211241core:FurnitureFittings2022-12-3108211241core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-12-3108211241core:PlantMachinery2023-12-3108211241core:FurnitureFittings2023-12-3108211241core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-01-012022-12-3108211241core:PlantMachinery2022-01-012022-12-3108211241core:FurnitureFittings2022-01-012022-12-3108211241core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-01-012023-12-3108211241core:PlantMachinery2023-01-012023-12-3108211241core:FurnitureFittings2023-01-012023-12-3108211241core:CurrentFinancialInstrumentscore:ValueBeforeAllowanceForImpairmentLoss2023-12-3108211241core:CurrentFinancialInstrumentscore:ValueBeforeAllowanceForImpairmentLoss2022-12-3108211241core:ParentEntities2023-12-3108211241core:ParentEntities2022-12-3108211241core:OtherRelatedParties2023-12-3108211241core:OtherRelatedParties2022-12-3108211241core:AllSubsidiaries2023-12-3108211241bus:PrivateLimitedCompanyLtd2023-01-012023-12-3108211241bus:Audited2023-01-012023-12-3108211241bus:FullIFRS2023-01-012023-12-3108211241bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP