Whitchurch Biogas Limited |
Notes to the Accounts |
for the year ended 31 December 2023 |
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1 |
Accounting policies |
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Accounting convention |
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These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view. |
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The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £. |
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The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below. |
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Going concern |
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At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements. The loan note holders have stated that they will not recall the loans to the company whilst it would damage the interests of external creditors. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis. |
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Turnover |
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Turnover represents amounts receivable from the generation of electricity through anaerobic digestion, net of VAT. Turnover from the sale of electricity is recognised when it is exported, that being the point at which the significant risks and rewards of ownership have passed to the buyer. |
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Tangible fixed assets |
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Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Tangible fixed assets other than freehold land are stated at cost less depreciation. Land is not depreciated. Where a substantial period of time is required to bring an asset into use, attributable finance costs are capitalised and included in the cost of the relevant asset. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows: |
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Plant and machinery |
5% straight line |
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Motor vehicles |
20% straight line |
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The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss. |
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Cash at bank and in hand |
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Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less. |
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Financial instruments |
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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. |
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Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. |
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Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
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Basic financial assets |
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Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. |
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Basic financial liabilities |
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Equity instruments |
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Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. |
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Parent loan notes |
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All interest bearing loans are initially recognised at net proceeds. After initial recognition debt is increased by the financial cost in respect of the reporting period and reduced by repayment made in the period. Interest is recognised on an accruals basis |
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Tax |
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The tax expense represents the sum of the tax currently payable and deferred tax. |
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Current Tax |
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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. |
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Deferred tax |
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Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority. |
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Foreign exchange |
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Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period. |
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Leases |
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Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases. Assets held under finance leases are recognised as assets at the lower of the asset's fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the income statement so as to produce a constant periodic rate of interest on the remaining balance of the liability. |
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2 |
Critical accounting judgements and key sources of estimation uncertainty |
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In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. |
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Critical judgements |
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The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. |
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Impairment of Fixed Assets |
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At each reporting period end, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication of impairment. If there is any such indication, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). |
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Deferred Tax |
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The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. |
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3 |
Operating loss |
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2023 |
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2022 |
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Operating loss for the year is stated after charging: |
£ |
£ |
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Fees payable to the company's auditor for the audit of the company's financial statements |
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7,500 |
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7,000 |
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4 |
Employees |
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2023 |
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2022 |
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Average number of persons employed by the company |
- |
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- |
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5 |
Tangible fixed assets |
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Land |
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Plant and machinery |
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Motor vehicles |
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Total |
£ |
£ |
£ |
£ |
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Cost |
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At 1 January 2023 |
250,000 |
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13,338,299 |
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108,940 |
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13,697,239 |
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Additions |
- |
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345,721 |
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114,055 |
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459,776 |
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At 31 December 2023 |
250,000 |
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13,684,020 |
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222,995 |
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14,157,015 |
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Depreciation |
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At 1 January 2023 |
- |
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3,298,131 |
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90,449 |
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3,388,580 |
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Charge for the year |
- |
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777,350 |
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20,096 |
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797,446 |
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At 31 December 2023 |
- |
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4,075,481 |
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110,545 |
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4,186,026 |
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Net book value |
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At 31 December 2023 |
250,000 |
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9,608,539 |
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112,450 |
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9,970,989 |
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At 31 December 2022 |
250,000 |
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10,040,168 |
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18,491 |
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10,308,659 |
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Included within the carrying amount of plant and machinery is loan interest totalling £1,366,969 (2022: £1,464,610). |
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6 |
Debtors |
2023 |
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2022 |
£ |
£ |
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Trade debtors |
681,663 |
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1,183,389 |
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Deferred tax asset |
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- |
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1,115,192 |
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Other debtors |
1,289,250 |
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675,843 |
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1,970,913 |
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2,974,424 |
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7 |
Creditors: amounts falling due within one year |
2023 |
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2022 |
£ |
£ |
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Bank loans and overdrafts |
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9,952 |
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9,707 |
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Trade creditors |
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414,587 |
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144,300 |
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Obligations under finance lease and hire purchase contracts |
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33,344 |
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19,628 |
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Loan notes due within 1 year |
198,101 |
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163,718 |
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Other creditors |
1,024,156 |
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656,960 |
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1,680,140 |
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994,313 |
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8 |
Creditors: amounts falling due after one year |
2023 |
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2022 |
£ |
£ |
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Bank loans |
22,435 |
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32,387 |
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Obligations under finance lease and hire purchase contracts |
63,542 |
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17,703 |
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Loan notes due within 1-5 years |
1,305,336 |
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1,078,791 |
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Loan notes due after 5 years |
18,479,449 |
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18,740,377 |
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19,870,762 |
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19,869,258 |
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At the period end, loans of £19,982,886 (2022: £19,982,886) were due, of which £198,101 (2022: £163,718) was due within 1 year and is included within “loan notes due within 1 year” in note 7. Interest of 8% per annum is payable on the loans. During the period £1,598,631 (2022: £1,570,730) was charged to the income statement. There is a fixed charge in favour of Iona Capital Limited as security trustee, secured over freehold land at Broughall Fields Farm, Ash Road, Whitchurch. There is a floating charge over all the property and undertaking of the company to Iona Capital Limited as security trustee. |
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9 |
Called up share capital |
2023 |
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2022 |
£ |
£ |
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Ordinary share capital Issued and fully paid |
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80 A Ordinary shares of £1 each |
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80 |
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80 |
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20 B Ordinary shares of £1 each |
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20 |
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20 |
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100 |
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100 |
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10 |
Related party transactions |
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During the year, interest of £140,123 (2022: £137,678) was charged on loan notes from Grocott Developments Limited, a company in which David Grocott is a director. As at the year end, the company owes Grocott Developments Limited £1,751,542 (2022: £1,751,542). Interest of £35,319 (2022: £384) has been accrued on the loan from Grocott Developments Limited and is included within "other creditors" in note 7. |
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Transactions with related parties |
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2023 |
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2022 |
£ |
£ |
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Purchases made from entities with common control or common significant influence: |
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Feedstock |
475,452 |
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302,082 |
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Services |
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1,526,432 |
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1,374,819 |
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In addition to the disclosures above, further trading balances due from related parties are set out below: |
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Amounts due to related parties |
306,312 |
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15,725 |
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11 |
Parent Company |
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In the opinion of the directors, the immediate controlling party is Iona Renewable Infrastructure LP due to it being the sole shareholder of the company. During the prior year, Iona Environmental Infrastructure 3 LP changed its name to Iona Renewable Infrastructure LP. Iona Capital Limited is a member of Iona EI (General Partner) 3 LLP, which is the General Partner of Iona Renewable Infrastructure LP. |
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12 |
Other information |
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Whitchurch Biogas Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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123 Pall Mall |
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London |
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SW1Y 5EA |
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13 |
Audit report information |
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As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006: |
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The auditor's report was unqualified. |
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The senior statutory auditor was Kenneth McDowell. |
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The auditor was Saffery LLP. |
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The audit report was signed on |
25 September 2024 |