INGENIOUS_RENEWABLE_ENERG - Accounts

The directors present the Strategic report for Ingenious Renewable Energy Enterprises Limited ("the Company") for the year ended 31 December 2022.

The principal activity of the Company is the investment in, and provision of consultancy services to, companies which operate renewable energy installations ("Renewable Projects") to generate renewable electricity.

During the year, the Company disposed of all but one of its investments in Renewable Projects. The sales of the investments in the year resulted in gains arising upon disposal of £19,402,595. The Company achieved a profit before taxation of £12,761,166(2021: £2,250,696), driven primarily by the gains made upon sale of investee Renewable Projects. Significant administrative expenditure was incurred as part of the disposals, in line with the director’s expectations. The disposals were for cash consideration, and no contingent or deferred consideration remains due to the Company at the reporting date in respect of such disposals. Please refer to note 10 to the financial statements for more information on the disposals made during the year.

Following the sale of its investee companies in the current year, and post year end, the directors believe the Company has now eliminated its exposure to the various risks associated with being an investment company.

The directors still consider the credit and liquidity risk attached to its outstanding balances due from debtors and due to creditors and are confident that support from the wider group remains available should the Company need assistance to meet its liabilities as they fall due.

Risks associated with the ongoing war in Ukraine remain relevant to the wider energy sector, but the Company’s direct and indirect exposure to these risks have again been eliminated following the disposal of the Company’s interests in Renewable Energy Projects.

The Company has disposed of its final Renewable Project in 2023, and as detailed in the Directors’ Report, at the time of signing the financial statements, the Company is no longer considered to be a going concern, as it is the intention of management to begin winding the Company up in the near future.

As the Company operates an investment company. The directors believe that key performance indicators for the Company as a standalone entity are not relevant. The directors actively manage key performance indicators for the Investee Companies.

The key performance indicators of the Group assessed by management are considered to be:

• Turnover, which increased slightly from £0.95m to £0.97m, due to the consultancy fee received from disposed entity for a previous period.

• Operating profit, which decreased significantly from £0.12m profit to a loss of £6.9m,due to disposals of operational investments mid way through the year reported.

• Profit before taxation, which rose sharply to £12.8m from £2.25m in the prior year. The reason for the large increase was due to the accounting profits recognised upon disposals of subsidiaries during the year, for which more information can be seen in note 10.

• Gross assets, which decreased significantly from £78.6m to £11.4m, again due to the impairment of investment, tangible assets and other assets of subsidiaries following their disposal.

• Net current assets or liabilities remain a key indicator of the Company's short term liquidity, and the Company shifted to current assets of £4.14m from a net current liability position of £9.4m due to the profits generated in the year and the settlement of significant creditor balances previously due within 1 year of the reporting dates.

At the reporting date, the Company had loans payable to the parent undertaking, IEP Infrastructure HoldCo Limited, which formed part of the financing of the Company whilst it held investments in Renewable Projects. The loans have since been settled post year end.

The Company also made loan investments to its Renewable Projects, which were settled as part of disposals made. At the reporting date, one loan receivable remained to the residual Renewable Project investee company, which has also since been settled post year end.

The Company did not undertake any significant R&D projects during the year.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2022.

The principal activity of the company is the investment in, and provision of consultancy services to, companies which operate renewable energy installations ("Renewable Projects") to generate renewable electricity.

The results for the year are set out on page 8.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The auditor, Shipleys LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Information regarding the risks and uncertainties of the business and future developments are disclosed within the Strategic Report.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The financial statements for the year ended 31 December 2022 have been prepared on basis other than going concern, as it is the intention of management to wind up the company in the near future, following the disposal of its final investments in 2023.

We have audited the financial statements of Ingenious Renewable Energy Enterprises Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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 2022 and of its profit 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Financial statements prepared on a basis other than going concern

In forming our opinion, we have considered the adequacy of the disclosures made in the notes of the financial statements regarding the Company’s ability to continue as a going concern, the note highlights that the financial statements have not been prepared on a going concern basis. In view of this disclosure, we consider it should be drawn to your attention, but our opinion is not qualified in this respect.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• 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.

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 remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We obtained an understanding of the Company's business, controls, legal and regulatory frameworks, laws and regulations and assessed the susceptibility of the Company's financial statements to material misstatements from irregularities, including fraud, and instances of non-compliance with laws and regulations.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on this understanding we designed our audit procedures to detect irregularities, including fraud. Testing undertaken included making enquiries of the management; journal entry testing; review of board minutes; reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error.

Testing undertaken included making enquiries of the management, journal entry testing, review of bank audit letters, review of board minutes; reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Ingenious Renewable Energy Enterprises Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1010 Eskdale Road, Winnersh Triangle, Wokingham, Berkshire, RG41 5TS.

The principal activity of the company is the investment in, and provision of consultancy services to, companies which operate renewable energy installations ("Renewable Projects") to generate renewable electricity.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

Ingenious Renewable Energy Enterprises Limited is a wholly owned subsidiary of IEP Infrastructure Topco Limited and the results of Ingenious Renewable Energy Enterprises Limited are included in the consolidated financial statements of IEP Infrastructure Topco Limited which are available from 1010 Eskdale Road, Winnersh Triangle, Wokingham, United Kingdom, RG41 5TS.

Following the disposal of the Company's final subsidiary investment in 2023, it is the intention of management to make final distributions to shareholders and wind up the Company. This is expected to happen within 12 months of the date of signing these financial statements. As such, the entity is no longer considered to be a going concern.

Turnover is generated through the provision of consultancy services to renewable energy companies, and is stated net of value added tax.

Turnover is derived from activities in the United Kingdom.

Turnover is recognised at the fair value of the right to consideration and is not recognised until there is certainty over the right to consideration. Turnover which has been recognised but not invoiced by the balance sheet date is included within accrued income.

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

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

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Basic financial liabilities, including creditors, loans from fellow group companies 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.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Loans

Non-derivative financial liabilities with fixed or determinable repayments that are not quoted in an active market are classified as loans. Loans are initially recognised at fair value of the consideration received plus directly related transaction costs. They are subsequently measured at amortised cost using the effective interest method. Arrangement fees and interest payable on financial liabilities that are classified as loans, are charged to the statement of comprehensive income.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest payable over the expected life of the liability. The effective interest rate is the rate that exactly discounts estimated future cashflows to the instrument's initial carrying amount. Calculation of the effective interest rate takes into account fees payable, that are an integral part of the instrument yield and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows.

A financial liability is removed from the statement of comprehensive income when the obligation is discharged, or cancelled, or expires.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Impairment and recoverability of investments (judgement)

The Company assesses all of its investments for indicators of impairment and recoverability at the reporting date. This involves making judgements about the recoverable value of such assets achieved either through use or sale of the asset, to assess for any impairment required to the carrying value stated within the financial statements. Recoverability is assessed through a combination of reviewing the net asset values of the investee businesses concerned and their ability to generate future economic benefits and cash flows for the Company.

All turnover arose within the United Kingdom

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

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The company has no tax losses (2021: nil) available to carry forward against future trading profits.

The current corporation tax rate of 19% generally applies to all companies whatever their size. From 1 April 2023, this rate will cease to apply and will be replaced by variable rates ranging from 19% to 25%. The expected future impact of this is an increase in current taxation charges applicable to taxable profits arising.

During the year, the company disposed of the following subsidiary investments:

• IREEL Solar HoldCo Limited and its subsidiaries on 10 May 2022 for consideration of £5,797,795.

• IREEL FiT TopCo Limited and its subsidiaries on 10 May 2022 for consideration of £1.

• Crockbaravally Wind HoldCo Limited and its subsidiaries on 10 May 2022 for consideration of £5,639,610.

• IREEL Wind TopCo Limited and its subsidiaries on 10 May 2022 for consideration of £8,341,066.

Total consideration of £19,778,472 was received for the disposals and the net book value of the investments disposed was £375,878, resulting in an accounting profit on disposal of £19,402,594.

The consideration was satisfied in cash and no contingent or deferred consideration is payable in the future under the terms of the disposals.

Details of the company's subsidiaries at 31 December 2022 are as follows:

Amounts owed by group undertakings consist of loan receivables owed by subsidiary undertakings. The loans are unsecured, repayable on demand and carry interest at 8.5% (2021: 8.50%). The carrying value of the loans are stated net of accumulated impairments of £9,788,463 (2021: £8,632,967).

Amounts owed to group undertakings include loans payable to the parent company, IEP Infrastructure Holdco Limited, of £7,028,403 (2021: £86,173,758). The loan is unsecured, repayable on demand and carries interest at 5.5% (2021: 2.25%). Also, included is an intercompany loan of £159,250 (2021: £nil) which is unsecured, repayable on demand and bears no interest.

The Ordinary share has attached to it full voting, dividend and capital distribution (including on winding up) rights. It does not confer any rights of redemption.

The profit and loss account represents the cumulative profits or losses, net of dividends paid and other adjustments.

At 31 December 2022, the immediate parent company, registered at 1010 Eskdale Road, Winnersh Triangle, Wokingham, United Kingdom, RG41 5TS was IEP Infrastructure Holdco Limited.

At 31 December 2022, the ultimate parent company was Ingenious Estate Planning Limited, registered at Parcels Building, 14 Bird Street, London, United Kingdom, W1U 1BU.

There is not considered to be an ultimate controlling party.

After the reporting date, but prior to the date of signing these financial statements, the Company disposed of 100% of its subsidiary investment in Fairfields Farm Energy Limited. Consideration of £1 was received for the disposal of the Company's equity interest in the subsidiary.

Following this disposal, it is the intention of management to make final distributions to shareholders and wind up the Company. This will be expected to happen within 12 months of the date of signing these financial statements and as such the entity is no longer considered to be a going concern.