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Registered number: 10088491
B & D ENERGY LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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B & D ENERGY LIMITED
COMPANY INFORMATION
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C Richards (resigned 1 May 2025)
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David Lewis Barking Town Hall
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Chartered Accountants & Statutory Auditor
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B & D ENERGY LIMITED
CONTENTS
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Directors' responsibilities statement
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Independent auditor's report
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Statement of profit or loss and other comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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B & D ENERGY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2026
The directors present their report and the financial statements for the year ended 31 March 2026.
The principal activity of the company is the provision of heat and energy supplies to commercial and residential customers.
The profit for the year, after taxation, amounted to £618,186 (2025 - loss £131,386).
The directors who served during the year were:
C Richards (resigned 1 May 2025)
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Summary
B&D Energy (BDE) is now a profitable, robust and sustainable business which is ready to support the next phase of regeneration in Barking.
It has an experienced leadership team which comprises the Board of Directors and its Managing Director which, together, have built a business which has all the necessary systems, process, governance and risk management processes to deliver the next phase of growth in heat and electricity connections over the next three to five years.
A significant programme of long term capital investment into Barking Town Centre is well advanced and the long term supply of heat and hot water to thousands of customers will be secured with the completion of a new Strategic Energy Centre late in 2026.
The business model is technology enabled to maintain a competitive cost base whilst not compromising customer satisfaction or delivery and has consistently delivered high availability of heat and electricity for customers. BDE is ready for the new incoming OFGEM regulations and is looking to take advantage of incoming zoning regulations to connect more customers.
BDE remains focused on the development and delivery of cost effective and reliable District Energy (heat and electricity) Networks in the London Borough of Barking and Dagenham (LBBD). By focusing on core skills and operating the business in a commercial fashion the company is supporting the Council, as the sole shareholder, by returning value for the benefit of the community and supporting their objective to both regenerate and decarbonise the Borough. The Barking Town Centre Heat Network is installed and will have the capacity to support more than 10,000 homes and multiple commercial businesses. In addition, a private wire electricity distribution network is in place to supply approximately 2,000 homes with electricity that will be generated locally. The priority for BDE is to maximise the value from this investment by increasing the connected customer base and delivering high quality services at the lowest possible cost. This focus will ensure that residents are well supported and receive cost effective energy supplies.
The economic environment and increasing legislation for housing development has not been favourable over the last 2-3 years and hence the pace of planned connections has slowed. However there remains a programme of new developments which are being completed year on year and will connect on the Barking Town Centre Heat. In addition BDE will be working to connect existing buildings that are co-located with the heat network. At the end of 2026 there will be approximately 3,500 homes connected and this is planned to increase to around 6,000 by the end of 2031.
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B & D ENERGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
Operational Assets
BDE continues to make significant investment into the infrastructure providing heat and electricity to customers in Barking Town Centre. The main pipework installation is complete and operational. The primary source of heat for the Barking Town Centre Heat Network, the Strategic Energy Centre, continues to progress towards completion and will be complete in 2026. This will provide a large scale resilient heat supply well into the foreseeable future. The initial phase uses gas, to maintain a cost effective and reliable supply of heat for residents.
BDE works collaboratively with Developers to expand the network and to provide straightforward and cost effective connection to the Heat Network. In return for a transparent Connection Fee, BDE will provide a secure connection for the supply of heat and hot water to the new development. It is the preference for BDE that the owner of the completed development subsequently takes a full ESCO service from BDE – thus benefitting from local expertise, cost effective energy provision, strong community focus and guarantees on performance.
Decarbonisation
As the requirement for decarbonised heat becomes a legal requirement for both new developments and heat network operators then BDE will introduce low carbon heating into the system. This work has commenced with the design of a water source heat-pump fed from the River Roding which will be housed in the new Strategic Energy Centre. Installation will commence in 2027 for completion in 2028 ready for new regeneration projects that require heat with a low carbon coefficient to satisfy the requirements of recently updated Future Homes Standard. BDE will provide certification of the required low carbon energy supply for new developments to meet Planning Permission requirements.
In the longer term (five years plus) additional decarbonisation of the network will be required and hence a strategy for this further phase of investment is also under development to ensure BDE meets all necessary legal targets and supports continued sustainable regeneration across Barking and Dagenham for the foreseeable future.
Customers and Regulatory Environment
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A primary objective for BDE is to provide cost effective and reliable energy for our customers. The prices charged to customers for their energy are aligned to the equivalent market rates for gas and electricity available in the market place and limited by the OFGEM price cap. Wherever possible BDE has provided protection for residents from the price volatility because of recent global events such as the Ukraine invasion and Middle East conflict.
In 2025 the Heat Network sector came under Regulatory control under the remit of OFGEM. Authorisation Conditions for Heat Network have been published and BDE is developing a completely updated suite of policies and procedures to ensure compliance with these conditions. In updating processes B&D Energy has undertaken a full redevelopment of IT infrastructure to support high quality, efficient and effective customer services.
The investment in new systems, processes and policies ensures that the Company is managed according to the requirements of compliance and has an effective risk management process in place.
The financial forecasts and the Shareholder approved business plan of BDE continue to improve and shows that with the projected customer base it will generate a positive cashflow each year for the coming 5 years. B&D Energy is therefore able to operate as a going concern without the need of further revenue support from the Shareholder. In the longer term this will support the repayment of Shareholder Loans and ultimately for the release of Dividends to LBBD for investment into services across the Borough. Funding for future capital investments is supported via an agreed Government Grant and a pre-agreed Loan Agreement with LBBD.
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B & D ENERGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the directors are aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the directors have taken all the steps that ought to have been taken as directors in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The auditor, Menzies LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 9 October 2026 and signed on its behalf.
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B & D ENERGY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2026
The directors are responsible for preparing the Directors' report and the financial statements, in accordance with applicable law.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006.
Under Company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS Accounting standards in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements;
∙assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
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B & D ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF B & D ENERGY LIMITED
We have audited the financial statements of B & D Energy Limited for the year ended 31 March 2026 which comprise the Statement of profit or loss and other comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of material accounting policies set out on pages 14 - 17. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006.
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 March 2026 and of its profit for the year then ended;
∙have been properly prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. 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 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
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We draw attention to note 4.1 in the financial statements. The notes highlight a material uncertainty regarding the reliability of financial data on the Company's parent, the London Borough of Barking and Dagenham. Whilst the directors perceive the risk to be low, there is still some uncertainty at the point of the approval of the financial statements.
These events or conditions, along with the other matters as set forth in note 4.1, 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.
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. 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.
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B & D ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF B & D ENERGY LIMITED (CONTINUED)
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors' report has 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 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 on page 4, 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.
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:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
- The Companies Act 2006;
- International Financial Reporting Standards;
- UK Healh and Safety Legislation;
- General Data Protection Regulations
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B & D ENERGY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF B & D ENERGY LIMITED (CONTINUED)
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items including:
We understood how the Company are complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures.
-The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
- Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
- Challenging assumptions and judgments made by management in its significant accounting estimates; and
- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
- Posting of journals to the accounting software which are of a non-routine nature in terms of timing and amount;
- Timing of revenue recognition; and
- Overstatement of asset valuation.
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion forgery, internal omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
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 auditor's report.
Miriam Hanley FCA (Senior statutory auditor)
for and on behalf of
Menzies LLP
Chartered Accountants
Statutory Auditor
2nd Floor, Midas House
62 Goldsworth Road
Woking
Surrey
GU21 6LQ
9 October 2026
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B & D ENERGY LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2026
Profit/(loss) for the year
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Total comprehensive income
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The notes on pages 14 to 27 form part of these financial statements.
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B & D ENERGY LIMITED
REGISTERED NUMBER: 10088491
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2026
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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Trade and other liabilities
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Trade and other liabilities
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Issued capital and reserves
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The financial statements on pages 8 to 27 were approved and authorised for issue by the board of directors on 9 October 2026 and were signed on its behalf by:
The notes on pages 14 to 27 form part of these financial statements.
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B & D ENERGY LIMITED
REGISTERED NUMBER: 10088491
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2026
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At 1 April 2025 (As restated)
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 14 to 27 form part of these financial statements.
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B & D ENERGY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
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Retained earnings (restated)
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At 1 April 2024 (as previously stated)
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Prior year adjustment - correction of error
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At 1 April 2024 (as restated)
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 14 to 27 form part of these financial statements.
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B & D ENERGY LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
Cash flows from operating activities
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Profit/ (loss) for the year
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Depreciation and amortisation
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Release of government grants
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Cash generated from operations
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(Increase)/ decrease in trade receivables
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(Decrease)/ increase in trade payables
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(Increase)/ decrease in group debtors
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Net cash from operating activities
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Cash flows from investing activities
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Payments for property, plant and equipment
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Net cash used in investing activities
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Cash flows from financing activities
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Net cash (used in)/from financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at the beginning of the year
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Cash and cash equivalents at the end of the year
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The notes on pages 14 to 27 form part of these financial statements.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
B & D Energy Limited (the 'Company') is a limited Company incorporated in England and Wales. The Company's registered office is at David Lewis Barking Town Hall, Town Hall Square, Barking, England, IG11 7LU. The Company's principal activity is the provision of heat and energy supplies to commercial and residential customers.
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 09 October 2026.
Details of the Company's accounting policies, including changes during the year, are included in note 4.
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 3.
The financial statements have been prepared on the historical cost basis.
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2.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 April 2025
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There were no significant changes in accounting policies during the year.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Accounting estimates and judgments
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3.1 Judgment
The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are disclosed below.
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3.2 Estimates and assumptions
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Revenue recognition
The Company determines if a contract exists and whether it is in scope of IFRS 15. The arrangements must create enforceable rights and obligations. At inception the Company assesses the goods and services promised in a contract with a customer. It identifies the performance obligations, contractual promises to transfer distinct services to a customer. For contracts with several components, judgement is necessary to determine the performance obligations by considering whether these promised goods or services are:
a) a service (or bundle of services) that is distinct; or
b) a series of distinct services that are substantially the same and that have the same pattern or transfer to the customer.
For core services provided under most contracts entered into by the Company, management has applied the principles of IFRS 15 and concluded that the promises are not distinct within the context of the contract and as such there are three performance obligations, being the initial connection to the Company's assets, an ongoing capacity reservation change and the supply of heating and electricity.
The Company recognises revenue on a contract-by-contract basis on the satisfaction of performance obligations. Where contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone prices.
4.Accounting policies
The Company is financed from funding provided by its parent (London Borough of Barking and Dagenham), the Company has access to further capital development funding for the expansion of the heat network, however, the directors do not anticipate needing to draw down further cash advances from the parent before March 2027. The parent has confirmed that it will not demand repayment of any amounts owed to the Council except in so far as the income and cashflows of the Company allow for repayment from excess funds in the opinion of the board. Further, the parent has confirmed that it will not seek repayment of the working capital loan or accrued interest before 31 March 2027. The development loan is only repayable once the Company becomes profitable and the parent has committed to working with the board to agree a reprofiling of the loan in accordance with the updated business plan which was approved by LBBD's cabinet in April 2025.
The directors acknowledge the Company's financial dependence on the parent and the risk of being owned and controlled by Local Government during the current financial pressures on the public sector. The London Borough of Barking and Dagenham has only recently approved and had audited its financial statements from 31 March 2023 to 31 March 2025. Notice of conclusions of audit certificates have yet to be issued for the years 31 March 2020 to 31 March 2025. More information on the status of the financial statements and audit report can be found at:
https://www.lbbd.gov .uk/council-and-democracy /performance-and -spending/council -accounts-and-budget
The directors, after making enquiries from its parent, have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date that the financial statements are approved.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
4.Accounting policies (continued)
The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are derecognised when they are discharged or when the contractual term expires. The Company's accouting policies in respect of financial instruments are explained below:
Financial assets
Financial assets arise principally from the provision of goods and services to customers (eg. trade receivables) and do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.
The impairment provisions for current and non-current trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for trade receivables. Impairment provisions are recorded in a separate provision account with the loss being recognised in profit or loss. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Financial liabilities
Financial liabilities, which are neither held for trading nor designated as at fair value through the statement of profit or loss and other comprehensive income are initially measured at transaction price (after deducting transaction costs) and subsequently held at amortised cost using the effective interest method.
For all contracts with customers the Company recognises revenue when performance obligations have been satisified. For most of the Company's contracts revenue is recognised over time as the customer receives and consumes the benefits provided by the Company.
IFRS 15 establishes a five-step model which the Company has applied to all sales contracts with customers to identify the revenue which can be recognised. The model is applied at contract inception and on the asumption that the contract will not be cancelled, renewed or modified. After contract inception a change in the scope or price of a contract that is approved by the parties to the contract is considered a contract modification.
Revenues for energy services are generated primarily from the sale of electricity and heat to customers. Revenue from contracts with customers reflects the value of the volume supplied which includes an estimated value of the volume supplied to customers between the last meter reading and the end of the period. This is based on historic meter readings and industry consumption data.
At the reporting date the Company recognises accrued income or deferred income when the revenue recognised is cumulatively higher or lower than the amounts invoiced to the customer.
In respect of long-term contracts, the Company enters into long-term contracts when connecting new customers to the heat and electricity supply facilities. Profit on long-tem contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end by recording tumover and related costs as contract activity progresses. Revenue is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer. A full provision is made for losses on all contracts in the year in which they are first foreseen. The Company recognises connections fees in full at the time of the connection. It does not consider there to be a future obligation contained within the connection contract to supply or extend the network. As such the connection fee on its own represents a separate performance obligation.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
4.Accounting policies (continued)
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Deferred income represents consideration received or invoiced from customers in advance of the Company satisfying its contractual performance obligations. Such amounts are recognised as a contract liability in the statement of financial position until the related goods or services have been delivered to the customer.
Deferred income is recognised as revenue when, or as, the Company satisfies its performance obligations under the relevant customer contract. Where services are provided over a period of time, deferred income is recognised as revenue over the period in which the services are provided, generally on a systematic basis that reflects the transfer of the services to the customer.
Amounts expected to be recognised as revenue within twelve months of the reporting date are classified as current liabilities, with amounts expected to be recognised thereafter classified as non-current liabilities.
At each reporting date, deferred income balances are reviewed to ensure that they appropriately reflect the remaining performance obligations under the relevant contracts.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance costs in the statement of profit or loss and other comprehensive income and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
The tax expense represents the sum of the tax currently payable.
The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the Statement of Profit or Loss and Other Comprehensive Income because it excludes items of income and expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible, the Company's liability for current tax is calculated using tax rates that were applicable at the balance sheet date.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
4.Accounting policies (continued)
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
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Assets under construction
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No depreciation is charged
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Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the 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 end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When 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 the effect of the time value of money is material).
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.
Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company's ordinary share capital is classified as an equity instrument.
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Functional and presentation currency
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These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
During the year, the Company identified errors in the accounting treatment of certain balances relating to prior periods. The comparative amounts have been restated accordingly.
Subcontractor retentions
Subcontractor retentions of £521,589 relating to assets under construction had previously been incorrectly offset against the cost of those assets. The prior year comparatives have been restated to recognise these balances on a gross basis. This adjustment has increased PPE by £521,589 and increased accruals by £521,589. The adjustment has no impact on profit or retained earnings.
Deferred income
The Company identified that, in prior periods, the release of deferred income relating to certain fixed assets had not commenced at the same time as depreciation of the corresponding assets. This resulted in deferred income being overstated.
As the error arose in periods prior to the comparative year, the correction has been recognised as an adjustment to opening retained earnings. The adjustment has reduced deferred income by £333,734 and increased opening retained earnings by £333,734. There is no impact on the profit for the comparative year.
The effect of these prior year adjustments on the comparative financial statements is summarised below:
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Opening retained earnings
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Revenue from contracts with customers
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The Company has disaggregated revenue into various categories in the following table which is intended to depict how the nature, amount, timing and uncertainty and revenue and cash flows are affected by the economic date.
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Sales - Commercial customers
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Sales - Residential customers
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Included within Commercial customers is £400,000 relating to connection charges.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Recognised in profit or loss
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Interest on bank overdrafts and borrowings
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Net finance expense recognised in profit or loss
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Energy costs for the production and supply of gas and electricity
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Premises, operational and maintenance costs
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Agency, support and consultancy fees
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Bad debt provision and write offs
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Legal and other professional fees
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Depreciation of plant and machinery
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Depreciation of motor vehicles
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Government grants receivable
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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The aggregate payroll costs (excluding directors' remuneration) were as follows:
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Defined contribution pension cost
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The average number of persons employed by the Company (including directors) during the year, analysed by category was as follows:
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Administration and support
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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14.1 Income tax recognised in profit or loss
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:
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Profit/(loss) for the year
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Profit/(loss) before income taxes
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Tax using the Company's domestic tax rate of 25% (2025: 25%)
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Utilisation of tax losses b/fwd
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Property, plant and equipment
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Assets under construction
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At 1 April 2024 (as previously stated)
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At 1 April 2024 (as restated)
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Transfers between classes
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At 31 March 2025 (as restated)
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
15.Property, plant and equipment (continued)
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Assets under construction
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Accumulated depreciation and impairment
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Charge owned for the year
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At 31 March 2025 (as restated)
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Trade and other receivables
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Receivables from related parties
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Prepayments and accrued income
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Total trade and other receivables
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Cash and cash equivalents
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Cash at bank available on demand
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Cash and cash equivalents in the statement of cash flows
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Total non-current trade and other payables
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Other payables - tax and social security payments
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Total current trade and other payables
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Grant amortisation of £192,820 (2025: £128,170) was recognised in the statement of Profit or Loss and Other Comprehensive Income.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Loans from related parties
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Total loans and borrowings
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Working capital loan
The Company has a £1,255,425 (2025: £1,172,814) working capital loan facility with its parent, the London Borough of Barking and Dagenham. The loan facility is available for 10 years which commenced on 1 April 2017. Interest is charged at 3% above the Bank of England base rate. The parent has confirmed that they will not seek repayment of the loan or the accrued interest before 31 March 2027.
Capital loans
The Company has a capital loan facility of £2,567,895 with its parent (2025: £2,398,919) which commenced on 1 April 2017 for a term of 25 years, interest is charged at 3% above the Bank of England base rate. A further loan of £11,371,057 (2025: £10,825,718) which commenced on 28 February 2022 for a term of 25 years and has a fixed interest rate of 4.5%. The purpose of the loans is to fund capital costs incurred in the development of district energy schemes. Total interest of £796,925 (2025: £442,544) was accrued, of which £571,657 (2025: £279,609) was accrued in respect of the loan facilities employed during the year. At the year end date the balance outstanding on the capital loans including interest was £13,938,952 (2025: £13,224,637). Loan repayments become due when the Company becomes profitable, the parent has committed to working with the board to agree a reprofiling of the loan in accordance with the updated business plan.
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Ordinary shares of £1.00 each
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Financial instruments - risk management
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21.1 Interest rate risk management
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The LBBD loan facilities currently in place act as a combined revolving credit facility on a variable interest rate basis. As a consquence, the Company is exposed to interest rate risk due to fluctuations in the prevailing market As a result the Company is exposed to changes in prevailing interest rates on the remaining balance of its borrowing detailed in note 19. Having assessed the level of risk the directors have concluded that is within acceptable limits. The interest profile of the Company's financial assets and financial liabilities after the impact of the interest rate contracts at the year end are as follows:
Interest rate sensitivity analysis
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Trade and other receivables
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Cash and cash equivalents
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Loan borrowings: related party
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Trade and other receivables
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Cash and cash equivalents
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Loan borrowings: related party
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21.2 Credit risk management
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Credit risk is the risk that an issuer or counterparty to an asset will be unable or unwilling to meet a commitment that its entered into with the Company.
In the event of default by a commercial or residential customer, the Company will suffer a revenue shortfall and incur additional costs including legal expenses. The directors monitor customer late payments in order to anticpate and minimise the impact of defaults by customers.
The carrying amount of financial assets, including cash balances, amounts due from commercial and residential customers and other receivables recorded in the financial statements, respresents the Company's maximum exposure to credit risk. The carrying amount of these assets at 31 March 2026 was £8,219,995 (2025: £8,106,768).
Impairment
There were no financial assets that were considered impaired as at 31 March 2026 (2025: £NiI). All of the Company's cash is placed with financial institutions with an S&P long-term credit rating of A+ or better. Bankruptcy or insolvency of such financial institutions may cause the Company's ability to access cash placed on deposit to be delayed or limited. Should the credit quality or the financial position of the banks currently employed significantly deteriorate cash holdings would be moved to another bank.
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
21.Financial instruments - risk management (continued)
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21.3 Liquidity risk management
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Liquidity risk is the risk that the Company will encounter in realising assets or otherwise raising funds to meet financial commitments. The Company's prime trading revenue streams are with commercial customers with long dated service agreements. The residential supply agreements are across a broad customer base reducing the impact of default by any one customer. Contracts are mainly entered into with other London Borough of Barking and Dagenham (LBBD) enterprises and the expectation of default is considered Iow. The Company has funding in place to meet overhead and capital costs on long term loans with LBBD and the Company has access to Government Grant funding. The Company's liquidity risk is managed on an ongoing basis by the directors. In order to mitigate liquidity risk the Company aims to have sufficient cash balances, or to access funds from its parent to ensure that the Company is able to meet its obligations for a period of twelve months.
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Liquidity and interest risk tables
At the reporting date, the maturity profile of the Company's financial assets and financial liabilities were (on a contractual basis) as follows:
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Trade and other receivables
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Cash and cash equivalents
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Loan borrowings: related party
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Trade and other receivables
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Loan borrowings: related party
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B & D ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Related party transactions
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Details of transactions between the Company and its related parties are disclosed below.
London Borough of Barking and Dagenham (LBBD)
The Company has loan facilities provided by its parent, London Borough of Barking and Dagenham. During the year net funds of £nil (2025: £nil) were drawn on the facilities. Interest of £796,925 (2025: £722,153) was charged in the year. At the year end the Company owed LBBD £15,194,376 (2025: £14,397,451).
Included in trade creditors is a balance due to LBBD of £35,248 (2025: £5,224).
Included within trade debtors is a balance due from LBBD of £945,220 (2025: £2,334,541).
The Company provides heat and energy supplies to group entities owned and controlled by LBBD. These entities act as landlords to customers in residential developments connected to the district energy schemes operated by the Company. Maintenance service costs related to these supplies are also charged to the group entities.
At the year end the Company was owed:
B&D Reside Weavers LLP
During the year, the energy standing charge to Weavers LLP is £354,723 (2025: Maintenance charge of £47,425). At the year end the balance outstanding from Weavers LLP and included in trade debtors is £59,370 (2025: £8,618).
Reside Regeneration Limited
At the year end the balance outstanding from Reside Regeneration Limited included in trade debtors is £78,137 (2025: £Nil).
BD Homes Limited
At the year end the balance outstanding from BD Homes Limited and included in trade debtors is £20,120 (2025: £Nil).
The Company is a wholly owned subsidiary of London Borough of Barking and Dagenham.
The ultimate parent which produces group financial statements is London Borough of Barking and Dagenham, copies of the group accounts can be obtained from lbbd.gov.uk
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