Sheppey Energy Limited - Accounts to registrar (filleted) - small 18.2

REGISTERED NUMBER: 10285991 (England and Wales)

Unaudited Financial Statements for the Year Ended 31 March 2021

for

Sheppey Energy Limited

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

4

DIRECTORS:

T J Giles

C F Brown

SECRETARY:

G May

REGISTERED OFFICE:

4th Floor

36 Spital Square

London

E1 6DY

REGISTERED NUMBER:

10285991 (England and Wales)

ACCOUNTANTS:

Hardcastle Burton LLP

Lake House

Market Hill

Royston

Hertfordshire

SG8 9JN

FIXED ASSETS

Tangible assets

4

15,622,897

13,451,341

CURRENT ASSETS

Stocks

369,201

347,964

Debtors

5

1,743,757

318,372

Cash at bank

215,088

44,724

2,328,046

711,060

CREDITORS

Amounts falling due within one year

6

19,778,965

593,575

NET CURRENT (LIABILITIES)/ASSETS

(17,450,919

)

117,485

TOTAL ASSETS LESS CURRENT LIABILITIES

(1,828,022

)

13,568,826

CREDITORS

Amounts falling due after more than one year

7

20,441

13,747,056

NET LIABILITIES

(1,848,463

)

(178,230

)

CAPITAL AND RESERVES

Called up share capital

10

100

100

Retained earnings

11

(1,848,563

)

(178,330

)

SHAREHOLDERS' FUNDS

(1,848,463

)

(178,230

)

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 March 2021.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 March 2021 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a)	ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

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

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 23 March 2022 and were signed on its behalf by:

C F Brown - Director

1.	STATUTORY INFORMATION

Sheppey Energy Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going Concern

On the date of signing these financial statements there was a worldwide pandemic. It is currently unknown how long the pandemic will last and the lasting impact that it will have on the trading activity of the company. The directors believe that the company will continue to operate and will have adequate cash resources in order to pay all of its creditors as they fall due for the foreseeable future and for at least 12 months from the date of signing of these financial statements.

The company is reliant on funding from one of the shareholders who have confirmed that they will continue to provide financial support for a period of at least twelve months from the date of accounts approval. For this reason the directors have confirmed the accounts should be prepared on the going concern basis.

Should the company be unable to continue trading, adjustments would have to be made to adjust the value of the assets to their recoverable amount and to provide for any further liabilities which might arise.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Turnover represents sales of feedstock, electricity units generated, and the value of Renewable Heat Incentives and other subsidies which are recognised upon generation of the electricity.

Tangible fixed assets

The AD plant completed construction and was in full working condition on 1 December 2020. The plant has begun depreciation over an estimated useful life of 20 years from this date.

Depreciation policy for plant and machinery - 33% on cost.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

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 statement of financial position when the company becomes party to the contractual provisions of the instrument.

Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities, including creditors and loans that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 3 (2020 - 3 ) .

4.	TANGIBLE FIXED ASSETS

Plant and

machinery

AD plant

Totals

£

£

£

COST

At 1 April 2020

81,522

13,396,993

13,478,515

Additions

-

2,463,064

2,463,064

At 31 March 2021

81,522

15,860,057

15,941,579

DEPRECIATION

At 1 April 2020

27,174

-

27,174

Charge for year

27,174

264,334

291,508

At 31 March 2021

54,348

264,334

318,682

NET BOOK VALUE

At 31 March 2021

27,174

15,595,723

15,622,897

At 31 March 2020

54,348

13,396,993

13,451,341

The borrowing costs have been capitalised as part of the asset under construction cost until the date the AD plant was brought into use on 1 December 2020. The total interest element capitalised in the production cost of the AD plant was £2,542,436.

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:

Plant and

machinery

£

COST

At 1 April 2020

and 31 March 2021

81,522

DEPRECIATION

At 1 April 2020

27,174

Charge for year

27,174

At 31 March 2021

54,348

NET BOOK VALUE

At 31 March 2021

27,174

At 31 March 2020

54,348

5.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.3.21

31.3.20

£

£

Trade debtors

91,319

251,621

Other debtors

1,652,438

66,751

1,743,757

318,372

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.3.21

31.3.20

£

£

Bank loans and overdrafts

18,208,767

-

Hire purchase contracts (see note 8)

24,457

24,457

Trade creditors

1,346,275

320,263

Amounts owed to group undertakings

2,010

194

Other creditors

197,456

248,661

19,778,965

593,575

7.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.3.21

31.3.20

£

£

Bank loans

-

13,708,273

Hire purchase contracts (see note 8)

20,441

38,783

20,441

13,747,056

8.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Hire purchase contracts

31.3.21

31.3.20

£

£

Net obligations repayable:

Within one year

24,457

24,457

Between one and five years

20,441

38,783

44,898

63,240

Non-cancellable operating

leases

31.3.21

31.3.20

£

£

Within one year

60,000

60,000

Between one and five years

240,000

240,000

In more than five years

1,140,000

1,200,000

1,440,000

1,500,000

The above is in relation to a 27 year lease agreement over the land in which the anaerobic digestion plant resides.

9.	SECURED DEBTS

The following secured debts are included within creditors:

31.3.21

31.3.20

£

£

Bank loans

18,208,767

13,708,273

Hire purchase contracts

44,898

63,240

18,253,665

13,771,513

The bank loan which is secured by way of a fixed and floating charge over all the assets of the company. The bank loan is repayable on 15 February 2022.

The amounts due under Hire purchase contracts are secured over the asset the finance relates to.

10.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.3.21

31.3.20

value:

£

£

715

Ordinary A shares

£0.10

71

82

285

Ordinary B shares

£0.10

29

18

100

100

During the year, as part of financing arrangements in place at the balance sheet date, 110 Ordinary A shares were converted to Ordinary B shares and transferred to the finance provider.

The A shares and the B shares shall rank pari passu, however in the event of there being a "default event" the B shares shall:

1. be entitled to voting rights equivalent to 90% of all the votes exercisable in respect of the entire issue share capital;

2. be entitled to receive 90% of any distribution or dividend declared by the Company;

3. be entitled to receive 90% of any capital to be returned to shareholders on a winding up;

4. shall rank in priority to the other shares in issue.

Default events are set out in the loan agreement referred to in note 10, the most significant being the failure to repay the loan when it becomes due for repayment.

11.

RESERVES

Retained

earnings

£

At 1 April 2020

(178,330

)

Deficit for the year

(1,670,233

)

At 31 March 2021

(1,848,563

)

12.	CAPITAL COMMITMENTS

31.3.21

31.3.20

£

£

Contracted but not provided for in the

financial statements

-

1,157,778

13.	POST BALANCE SHEET EVENTS

On 31 October 2021, Privilege Project Finance acquired 515 A Ordinary shares from the existing majority shareholder, Farm Renewables Limited. From this date Privilege Project Finance became the majority shareholder with 80% holding of the share capital.

14.	ULTIMATE CONTROLLING PARTY

The immediate parent company was Farm Renewables Limited, a company registered in England and Wales until 31 October 2021. After this date the immediate parent company became Privilege Investments Limited