A_SHADE_GREENER_(F2)_LIMI - Accounts
A_SHADE_GREENER_(F2)_LIMI - Accounts
The directors present their report on the current affairs of A Shade Greener (F2) Ltd (the "Company"), together with the financial statements and auditor's report, for the year ended 31 December 2017.
Principal activities
The principal activity of the Company continued to be that of the production of electricity.
The Company has an operational portfolio of 2,146 rooftop solar systems in and around the Sheffield area which were installed between April 2011 and October 2011. A 25 year lease has been granted to the Company by the householder for the roof of each installation site, an arrangement which passes to the new owner in the event the property is sold.
The main source of income from these installations is the government backed feed in tariff ('FIT') and export tariff ('ET'), both of which are currently protected by UK government legislation and are increased annually in line with the Retail Price Index ('RPI') increases. All income is paid by EON, the FIT licensee, based upon the generation data figures for each installation.
Business review
Revenue is based on the output of electricity generated which is contingent on the intensity and duration of sunlight received. During the period energy generation has exceeded expectations as determined by the industry standard PVgis forecasting tools. Revenue is relatively fixed in real terms as no further systems are to be added by the Company, household leases are for a 25 year period, and both the FIT and ET are currently protected by UK government legislation and are subject to annual Retail Price Index ('RPI') increases.
The Company also has relatively fixed expenses as maintenance, repairs and replacements are provided for an annual maintenance fee on a per system basis, subject to annual indexation adjustments. This is governed by an operation and maintenance service agreement which ensures the continued availability of all systems. Finance costs are also stable having structured fixed lease repayment terms on the lease from HGPE ASG AssetCo Ltd.
The Company's profit for the year after taxation was £761,530 (2016: £1,207,863).
In view of the above factors and considering the credit risk relating to EON is low, the Company is concluded to have minimal risks and uncertainties and has performed to expectations during the year.
Future developments
Other than continuing operations there are presently no plans to expand the operations of the Company nor are there any undertakings of research and development. There have been no other significant events since the balance sheet date to the date of signing of the Annual Report and Financial Statements.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, KPMG LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; and 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.
give a true and fair view of the state of the company’s affairs as at 31 December 2017 and of its profit for the year then ended; have been properly prepared in accordance with UK accounting standards applicable to smaller entities, including Section 1A of FRS 102 ; 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 are described below. We have fulfilled our ethical responsibilities under, and are independent of the company in accordance with, UK ethical requirements including the FRC Ethical Standard, and the provisions available for small entities, in the circumstances set out in note 1 to the financial statements. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Going concern
We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least twelve months from the date of approval of the financial statements. We have nothing to report in these respects.
Directors’ report
The directors are responsible for the directors’ report. Our opinion on the financial statements does not cover that report and we do not express an audit opinion thereon.
Our responsibility is to read the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:
we have not identified material misstatements in the directors’ report;
in our opinion the information given in that report for the financial year is consistent with the financial statements; and
in our opinion that report has been prepared in accordance with the Companies Act 2006.
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; or the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption in preparing the directors’ report and take advantage of the small companies exemption from the requirement to prepare a strategic report.
As explained more fully in their statement set out on page 3, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; 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; 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 they 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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
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.
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.
All activities are derived from continuing operations.
The Company has no recognised gains or losses other than those included in the results above.
A Shade Greener (F2) Ltd is a limited company domiciled and incorporated in England and Wales. The registered office is Craven House, 16 Northumberland Ave, London, WC2N 5AP.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Going concern
The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, thus they continue to adopt the going concern basis in preparing the annual financial statements.
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.
The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements.
Revenue is generated under a UK government scheme associated with electricity exported to the grid, and is recognised when the electricity is physically exported.
Accrued income is estimated based on the value of the electricity which has been generated but is yet to be invoiced, based on the tariff prices in effect at the balance sheet date.
Tangible fixed assets are measured at cost less depreciation and impairment losses.
Determining whether tangible fixed assets are impaired requires an estimation of the value in use of these assets. The value in use calculation requires the Company to estimate the future cash flows expected to arise from the assets and a suitable discount rate in order to calculate the present value. On this basis, no impairment loss has been recognised in the current year.
The actual charge/(credit) 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 deferred tax liability at 31 December 2017 has been calculated at 17% as this is the tax rate at which the reversal of the deferred tax liability is expected to occur.
The Company has provided a single loan to its immediate parent, which is unsecured, interest-free and repayable on demand.
Finance lease payments represent rentals payable by the company for plant and machinery. The average lease term remaining is 19 years and the lease carries an interest rate of 8.8% per annum.
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
There have been no significant events since the balance sheet date to the date of signing of the Annual Report and Financial Statements.
Contingent Liabilities
A clause within the 2,146 rooftop solar system operating lease agreements stipulate that upon expiry of the lease the Company is required to remove the system if requested by the householder. The likelihood of such requests is considered remote and considering the significant uncertainties regarding the number of requests an accurate estimation of future expenditure is not possible, and hence no related contingent liability nor provision has been raised.
The company has taken advantage of the exemption contained within Section 33 of FRS 102 from the requirement to disclose details of transactions within the group.
The immediate parent of the Company is HGPE ASG Limited, whose registered office is Craven House, 16 Northumberland Avenue, London, WC2N 5AP. The ultimate parent is Hermes Infrastructure Fund I LP, whose registered office is 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ.