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Registered number: 08145428










BIRMINGHAM BIO POWER LIMITED

AUDITED
ANNUAL REPORT
AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED
31 DECEMBER 2023
 






 



 






 
BIRMINGHAM BIO POWER LIMITED
 

COMPANY INFORMATION


Directors
Mrs S J Johnston (resigned 8 December 2023)
Mr P W Kent (resigned 9 March 2023)
Mr N S Parker 
Mr R A J Wright (resigned 8 December 2023)
Mr I C Gaunt 
Mrs E A Watkins (resigned 4 December 2023)
Mr E B R Simpson (appointed 9 March 2023)
Ms A L Bath (appointed 8 December 2023)
Ms C Marlow (appointed 8 December 2023)




Registered number
08145428



Registered office
24 Savile Row

London

W1S 2ES




Independent auditors
Wellden Turnbull Limited
Chartered Accountants & Statutory Auditors

Albany House

Claremont Lane

Esher

Surrey

KT10 9FQ





 
BIRMINGHAM BIO POWER LIMITED
 

CONTENTS



Page
Strategic Report
 
 
1 - 2
Directors' Report
 
 
3 - 4
Independent Auditors' Report
 
 
5 - 8
Statement of Income and Retained Earnings
 
 
9
Balance Sheet
 
 
10 - 11
Notes to the Financial Statements
 
 
12 - 25


 
BIRMINGHAM BIO POWER LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The Directors present their Strategic Report for Birmingham Bio Power Limited ("the Company") for the year ended 31 December 2023.

Business review
 
The Company's principal activity during the period under review was the operation of a biomass plant utilising the recovery of waste timber to generate electricity.
The Company's turnover during the year amounted to £10,524,000 (2022 - £13,735,000) with a loss after taxation of £7,994,000 (2022 - £1,212,000). As at 31 December 2023 the Company had net liabilities of £18,470,000 (2022 - £10,476,000). The Directors believe the Company is a going concern and in a position to continue to meet its liabilities as they fall due further details of which are set out in note 2.4.

Principal risks and uncertainties
 
In the ordinary course of business, the Company is exposed to and manages a variety of risks in relation to its activities. The management of risk (operational, market, interest rate, liquidity, credit and currency) is fundamental to the Company, with the Board of Directors having responsibility for the overall system of internal control and for reviewing its effectiveness.
The specific principal risks and uncertainties facing the Company are broadly grouped as competitive, legislative, technical, revenue, market and financial instrument risk. Financial instrument risk is separately reviewed in the Directors' Report.
Competitive risks
In the UK, the Company is reliant on certain key suppliers for contracts which are subject to periodic competitive tender. Renewal of these contracts is uncertain and based on financial and performance criteria. The Board continually monitors these arrangements in the continued operation of the business.
Legislative risks
In the UK, the operation of a wood powered biomass plant needs to comply with regulatory standards. These standards are subject to continuous revision and any new directive may have a material impact on the ability of the Company to operate successfully. In addition, compliance imposes costs and failure to comply with the regulatory standards could materially affect the Company's ability to operate.
Technical risks
The Company is exposed to the technical challenges inherent in the operation of a wood powered biomass plant which, if not carefully managed, could impact electricity generation. To mitigate this technical risk the Comapny has employed a team of experienced contractors to monitor performance and advise on appropriate levels of essential spares.
Revenue market risks
The Company is exposed to the unpredictable nature of changing market prices which has a direct impact on the revenue generated from electricity production and hence profitability. These risks are managed by regularly updating revenue forecasts with market prices prepared by reputable consulting companies. The forecasts are also adjusted to reflect the terms of the underlying power purchase agreements.

Financial key performance indicators
 
The key financial performance indicator of the Company is cash flow, which is monitored and managed on a regular basis to ensure that liabilities as a whole can be met as they fall due.

Page 1

 
BIRMINGHAM BIO POWER LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Other key performance indicators
 
The Directors do not consider that there are any other key performance indicators.


This report was approved by the board and signed on its behalf.



Ms A L Bath
Director

Date: 23 December 2024

Page 2

 
BIRMINGHAM BIO POWER LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The Directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the Directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £7,994,000 (2022 - loss £1,212,000).

No dividends were declared or paid in the year (2022 - £NIL).

Directors

The Directors who served during the year were:

Mrs S J Johnston (resigned 8 December 2023)
Mr P W Kent (resigned 9 March 2023)
Mr N S Parker 
Mr R A J Wright (resigned 8 December 2023)
Mr I C Gaunt 
Mrs E A Watkins (resigned 4 December 2023)
Mr E B R Simpson (appointed 9 March 2023)
Ms A L Bath (appointed 8 December 2023)
Ms C Marlow (appointed 8 December 2023)

Future developments

Management will continue to introduce improvements to electricity generation to ensure the continued profitability of the Group in the long term subject to solar performance, volatility in market energy prices and changes to working capital requirements.

Page 3

 
BIRMINGHAM BIO POWER LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial instruments

The Company has established a risk and financial management framework to protect the Company from events that hinder the achievement of the Company's performance objectives. The objective is to limit undue counterparty exposure, ensure sufficient working capital exists and monitor the management of risk at a business unit level. Steps taken by management to achieve this include reviewing asset performance against forecasts to ensure cash flow generation is in line with expectations; monitoring day to day operations to ensure cash inflows are sufficient to cover expected cash outflows; and reviewing financial information on a monthly basis to ensure appropriate financing is in place and available to be deployed as and when required.
The Company's financial instruments are set out in note 17. The principal risks the Company is exposed to in relation to its financial instruments are set out below.
Credit risk
Credit risk refers to the risk of a loss arising following a customer failing to meet their contractual obligations. The Company manages credit risk by monitoring outstanding amounts due in the context of agreed credit terms.
Liquidity risk
Liquidity risk is the risk that the Company will fail to meet its financial obligations in a timely and cost effective manner due to mismatches in the maturity profile of assets and liabilities. Cash flows generated from operations are used to finance these facilities per the contractual provisions in place.

Qualifying third party indemnity provisions

The Company has an insurance policy in place which covers Directors and Officers claims.

Disclosure of information to auditors

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsWellden Turnbull Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





Ms A L Bath
Director

Date: 23 December 2024

Page 4

 
BIRMINGHAM BIO POWER LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BIRMINGHAM BIO POWER LIMITED
 

Opinion


We have audited the financial statements of Birmingham Bio Power Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.


Material uncertainty related to going concern


We draw attention to note 2.4 of the financial statements that sets out the position of the Company with respect to going concern. The Company had previously defaulted on its third party borrowings, following which the lender exercised their rights under the senior loan note instrument and the Company went into administration. In prior years the Company entered into an agreement with its creditors following which liabilities totalling £42,196,000 were waived in full via an intercreditor deed. On 19 March 2021 the Company successfully exited administration as a going concern and ownership was transferred to Gravis Asset Holdings Limited. 
Whilst the Company's performance has improved since exiting administration, it has generated a loss in the period and remains in a net liability position. These events and conditions, along with the other matters as set forth in note 2.4, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.


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.


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


Page 5

 
BIRMINGHAM BIO POWER LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BIRMINGHAM BIO POWER LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or 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:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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.


Page 6

 
BIRMINGHAM BIO POWER LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BIRMINGHAM BIO POWER LIMITED (CONTINUED)


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.


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. We have identified the greatest risk of a material impact on the financial statements from irregularities, including fraud, to relate to the timing and recognition of revenue and the override of controls by management. We have obtained an understanding of the legal and regulatory frameworks that the Company operates within including both those that directly have an impact on the financial statements and more widely those for which non-compliance could have a significant impact on the Company’s operations and reputation. The Companies Act 2006, the Renewable Obligation Order 2015 and UK company tax law are those we have identified in this regard. Auditing standards limit the required procedures as to non-compliance with laws and regulations to enquiries of those charged with governance and review of any applicable correspondence.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 
Enquiry of management and those charged with governance as to actual and potential litigation and claims;
 
Enquiry of management and those charged with governance to identify any instances of non-compliance with laws and regulations;
 
Assessing the reasonableness of revenue recognised in the period based on contractual terms and obligations and the requirement of accounting standards;
 
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
 
Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business, and reviewing accounting estimates for bias.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 7

 
BIRMINGHAM BIO POWER LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BIRMINGHAM BIO POWER LIMITED (CONTINUED)


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 2006Our 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 Auditors' 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.





Mark Nelligan FCA (Senior Statutory Auditor)
  
for and on behalf of
Wellden Turnbull Limited
 
Chartered Accountants
Statutory Auditors
  
Albany House
Claremont Lane
Esher
Surrey
KT10 9FQ

23 December 2024
Page 8

 
BIRMINGHAM BIO POWER LIMITED
 

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£000
£000

  

Turnover
 4 
10,524
13,735

Cost of sales
  
(12,117)
(9,007)

Exceptional cost of sales
 11 
(911)
-

Gross (loss)/profit
  
(2,504)
4,728

Administrative expenses
  
(1,037)
(921)

Operating (loss)/profit
  
(3,541)
3,807

Interest receivable and similar income
 8 
106
38

Interest payable and similar expenses
 9 
(4,190)
(4,262)

Loss before tax
  
(7,625)
(417)

Tax on loss
 10 
(369)
(795)

Loss after tax
  
(7,994)
(1,212)

  

  

Retained earnings at the beginning of the year
  
(18,054)
(16,842)

Loss for the year
  
(7,994)
(1,212)

Retained earnings at the end of the year
  
(26,048)
(18,054)
There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of income and retained earnings.

The notes on pages 12 to 25 form part of these financial statements.

Page 9

 
BIRMINGHAM BIO POWER LIMITED
REGISTERED NUMBER: 08145428

BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£000
£000

Fixed assets
  

Tangible assets
 12 
30,434
32,642

Current assets
  

Debtors: amounts falling due within one year
 13 
4,743
5,183

Cash at bank and in hand
 14 
1,029
3,122

  
5,772
8,305

Current liabilities
  

Creditors: amounts falling due within one year
 15 
(1,694)
(3,367)

Net current assets
  
 
 
4,078
 
 
4,938

Total assets less current liabilities
  
34,512
37,580

Creditors: amounts falling due after more than one year
 16 
(50,397)
(45,840)

Provisions for liabilities
  

Deferred tax
 18 
(2,585)
(2,216)

  
 
 
(2,585)
 
 
(2,216)

Net liabilities
  
(18,470)
(10,476)


Capital and reserves
  

Called up share capital 
 19 
-
-

Share premium account
 20 
7,028
7,028

Profit sharing loan note
 20 
550
550

Profit and loss account
 20 
(26,048)
(18,054)

  
(18,470)
(10,476)


Page 10

 
BIRMINGHAM BIO POWER LIMITED
REGISTERED NUMBER: 08145428

BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Ms A L Bath
Director

Date: 23 December 2024

The notes on pages 12 to 25 form part of these financial statements.

Page 11

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Birmingham Bio Power Limited is a private company, limited by shares and incorporated in England and Wales, registration number 08145428. The registered office address is 24 Savile Row, London, W1S 2ES. The principal place of business is Hay Mills, Birmingham, B25 8DW.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. 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.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

These financial statements are presented in sterling which is the functional currency of the Company and rounded to the nearest £'000 unless otherwise stated.

The following principal accounting policies have been applied:

  
2.2

Compliance with accounting standards

The financial statements have been prepared using FRS102, the financial reporting standard applicable in the UK and Republic of Ireland. There were no material departures from that standard.

 
2.3

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Gravis Asset Holdings Limited as at 31 December 2023 and these financial statements may be obtained from Companies House.

Page 12

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Going concern

The Company was loss making in the period and is in a net liability position at the year end date. The financial statements have been prepared on a going concern basis which means that the Company can be expected to meet its liabilities as they fall due for a period of 12 months from the date of signing these financial statements. In assessing the appropriateness of the going concern basis of preparation the Directors have taken into account the key risks of the business, including the Company’s business model and the availability of cash resources.
The Company is engaged in the generation and sale of renewable electricity. In prior years the Company defaulted on its third party borrowings following which the lender exercised their rights under the senior loan note instrument and the Company went into administration. The Company entered into an agreement with its creditors following which liabilities totalling £42,196,000 were waived in full via an intercreditor deed and the senior loans were restructured to ensure the forecast operational cash inflows were in excess of the cash outflows required to fund working capital requirements and third party debt obligations. On 19 March 2021 the Company successfully exited administration as a going concern and ownership was transferred to Gravis Asset Holdings Limited.
Financial models support the viability of the Company as a going concern. Further, the Directors have received a letter of support from the parent company and senior loan note holder confirming their commitment to support the Company for a period of at least 12 months from the date of signing these financial statements.
On this basis, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

  
2.5

Revenue

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

 
2.6

Operating leases: the Company as lessee

The fixed element of rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged against profits on a straight-line basis over the period of the lease.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

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

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 13

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


 
2.11

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Biomass plant
-
5%
per annum

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 14

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.13

Impairment of fixed assets

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

  
2.14

Borrowing costs related to the fixed assets

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

 
2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.19

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.

Page 15

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.19
Financial instruments (continued)

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

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 the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.

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

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

Page 16

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements management is required to make judgements, estimates and assumptions which affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. Use of available information and application of judgement are inherent in the formation of estimates, together with past experience and expectations of future events that are believed to be reasonable under the circumstances. Actual results in the future could differ from such estimates.
The following are the Company's key sources of estimation uncertainty.
Valuation of the profit sharing loan note
The profit sharing loan note, with a nominal value of £100, entitles the noteholder to 7.5% of all distributions payable. The fair value has been determined by calculating the present value of the liability component of the compound instrument and the residual amount has been allocated to equity. The fair value of the liability as at 31 December 2023 amounted to £Nil (2022 - £Nil). The equity component of £550,000 (2022 - £550,000) has been determined at the date when the Company issued the profit sharing loan note. The valuation of the instrument is based on management's business model which forecasts the future distributions payable to the noteholder and then discounted at an appropriate rate of interest.
Decommissioning liabilities
A provision has not been recognised in respect of site restoration costs on the basis that the Directors have determined the likelihood of a liability arising is remote based on the assumption that the scrap value of the assets will be sufficient to cover any decommissioning costs. If circumstances change and indicate otherwise, the Company will review the position and recognise either a contingent liability or provision as appropriate.


4.


Turnover

The whole of the turnover is attributable to the Company's principal activity.
All turnover arose within the United Kingdom.


5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2023
2022
£000
£000

Other operating lease rentals
225
223


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£000
£000

Audit of the Company's financial statements
16
15

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 17

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Employees




The Company has no employees other than the Directors, who did not receive any remuneration (2022 - £NIL).


8.


Interest receivable

2023
2022
£000
£000


Other interest receivable
106
38


9.


Interest payable and similar expenses

2023
2022
£000
£000


Senior loan note interest
3,979
4,057

Subordinated loan note interest
211
205

4,190
4,262


10.


Taxation


2023
2022
£000
£000

Corporation tax


Current tax on profits for the year
-
-


-
-


Deferred tax


Origination and reversal of timing differences
369
795

Total deferred tax
369
795


Tax on loss
369
795
Page 18

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

On 1 April 2023 the corporation tax rate increased from 19% to 25%. The effective tax rate for the year was 23.5%. 
The tax assessed for the year is higher than
 (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£000
£000


Loss on ordinary activities before tax
(7,624)
(417)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
(1,792)
(79)

Effects of:


Unrelieved tax losses carried forward
1,792
79

Deferred tax
369
795

Total tax charge for the year
369
795


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


11.


Exceptional items

2023
2022
£000
£000


Termination fee
911
-

During the year the Company terminated an operations and maintenance agreement with a supplier. Per the terms of the underlying agreement, a termination fee of £911,000 was payable.

Page 19

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Tangible fixed assets





Biomass plant

£000



Cost or valuation


At 1 January 2023
56,854



At 31 December 2023

56,854



Depreciation


At 1 January 2023
24,212


Charge for the year on owned assets
2,208



At 31 December 2023

26,420



Net book value



At 31 December 2023
30,434



At 31 December 2022
32,642

Included within the above valuation are capitalised borrowing costs of £12,229,000 (2022 - £12,229,000). 
The senior loan notes issued by the Company are secured by a legal charge over all assets of the Company, present and future.


13.


Debtors

2023
2022
£000
£000


Trade debtors
1,313
18

Other debtors
19
18

Prepayments and accrued income
3,411
5,147

4,743
5,183



14.


Cash and cash equivalents

2023
2022
£000
£000

Cash at bank and in hand
1,029
3,122


Page 20

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Creditors: Amounts falling due within one year

2023
2022
£000
£000

Senior loan notes
-
2,273

Trade creditors
975
330

Other taxation and social security
175
166

Other creditors
522
572

Accruals and deferred income
22
26

1,694
3,367


Senior loan notes
Refer to note 16 for details.

Page 21

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Creditors: Amounts falling due after more than one year

2023
2022
£000
£000

Senior loan notes
47,045
42,793

Subordinated loan notes
2,352
2,047

Other creditors
1,000
1,000

50,397
45,840


Senior loan notes
Senior loan notes are accounted for at amortised cost, are interest bearing and are repayable in instalments by 2036.
Senior loan notes are secured by debenture over all assets of the Company, present and future.
Subordinated loan notes
Subordinated loan notes are accounted for at amortised cost, are interest bearing and are repayable in instalments once the senior loan has been fully repaid.
Subordinated loan notes are unsecured.
Other creditors
Other creditors comprises an amount of £1,000,000 (2022 - £1,000,000) due to a previous contractor of the Company. The amount is repayable as and when the Company has the funds available to pay distributions to its shareholders. Based on current projections the Directors estimate the amount will be repayable more than five years after the balance sheet date.

The aggregate amount of liabilities repayable wholly or in part more than five years after the balance sheet date is:

2023
2022
£000
£000


Repayable by instalments
47,405
35,020

Repayable other than by instalments
1,000
1,000

48,405
36,020



Page 22

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Financial instruments

2023
2022
£000
£000

Financial assets


Financial assets measured at amortised cost
5,055
7,389


Financial liabilities


Financial liabilities measured at amortised cost
51,372
48,443


Financial assets measured at amortised cost comprise cash at bank, trade debtors, accrued income and other debtors.


Financial liabilities measured at amortised cost comprise senior loan notes, subordinated loan notes, trade creditors and other creditors.


18.


Deferred taxation




2023
2022


£000

£000






At beginning of year
(2,216)
(1,421)


Charged to profit or loss
(369)
(795)



At end of year
(2,585)
(2,216)

The provision for deferred taxation is made up as follows:

2023
2022
£000
£000


Accelerated capital allowances
(2,585)
(2,216)

Page 23

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



1,000 (2022 - 1,000) Ordinary shares of £0.01 each
10
10



20.


Reserves

Share premium account

The share premium account contains the premium arising on the issue of equity shares, net of issue expenses.

Profit sharing loan note

The profit sharing loan note relates to the equity component of the loan note. This was determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This was recognised and included in equity on initial recognition and is not subsequently remeasured.

Profit and loss account

The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.


21.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£000
£000


Not later than 1 year
205
181

Later than 1 year and not later than 5 years
819
819

Later than 5 years
3,953
4,158

4,977
5,158




 

Page 24

 
BIRMINGHAM BIO POWER LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.Financial commitments

At 31 December 2023, the Company had entered into the following financial commitments. The commitments have been calculated based on the non-cancellable period set out in the underlying contracts. The amounts stated represent the base charges. Actual payments will be adjusted for inflation indexation and are therefore greater than the amounts stated below.

Total commitment
£000



Management Service Agreement
9

Operations and Maintenance Agreement
143

Other agreements
4

156

Total commitments are due less than one year.


23.


Related party transactions

The Company is exempt under the terms of Financial Reporting Standard 102 (FRS102) Section 33 paragraph 1A, from disclosing related party transactions with other group companies, on the grounds that the Company is wholly owned within the Group.


24.


Controlling party

The Company's immediate and ultimate parent company is Gravis Asset Holdings Limited, a company incorporated in England and Wales.
The smallest and largest group of undertakings into which the results of the Company are consolidated is headed by Gravis Asset Holdings Limited.
The registered office address of Gravis Asset Holdings Limited is 24 Savile Row, London, United Kingdom, W1S 2ES. The consolidated financial statements are available from the registered office address and Companies House.

Page 25