Shire Oak Energy Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pillar & Lucy House, Merchants Road, Gloucester, Gloucestershire, England, GL2 5RG.
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 a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts , on the basis that the group of which this is the parent qualifies as a small group . The financial statements present information about the company as an individual entity and not about its group .
The company is a member of a group whose financial position is closely linked to the status and funding of other group undertakings and related parties. Whilst the company has made losses in both the current and prior year, the shareholder and ultimate controlling party has confirmed their current intention to continue to support the company as required. The directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements, taking account of anticipated support to be provided by the shareholder and ultimate controlling party.
Whilst we believe the going concern basis is appropriate, the nature of other group and related entities' activities mean that there continues to be inherent uncertainty over the timing of certain future cash flows and the availability of alternative finance , should this be required.
However, after making enquiries and considering the uncertainties described above, the directors confirm that they have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and will continue to operate within funds available to it.
In light of the above , the directors have therefore adopted the going concern basis of accounting in preparing the financial statements. If the company were unable to continue to trade, adjustments would have to be made to reduce the value of the assets to their recoverable amounts and to provide for any further liabilities that may arise.
Turnover represents the value of work carried out to date, including the provision of professional services on a consultant by consultant basis in respect of current projects.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated .
Interests in subsidiaries, associates and jointly controlled entities 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. Investments in subsidiaries are accounted for at cost less accumulated impairment losses.
Other investments are accounted for at cost less accumulated impairment losses.
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 paymen ts 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. A m ounts 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 transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
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.
Exceptional items
Exceptional items are those which are separately identified by virtue of their size or nature to allow a full understanding of the underlying performance of the company.
The average monthly number of persons (including directors) employed by the company during the year was 9 (2017 - 8).
Bank loans are secured by a fixed charge against freehold land and property in a subsidiary undertaking.
Commitments in respect of operating leases are disclosed in the operating lease commitments note.
There were no other guarantees, contingencies or commitments as at the balance sheet date (2017: £Nil).
Minimum lease payments under non-cancellable operating leases fall due as follows:
Commitments under operating leases relate to a leased property and are expected to be recovered in full from a related party.
During the year the company entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
These balances are repayable on demand and interest is charged by the director to the c ompany at 10% per annum on the director's loan account .
A director has given a personal guarantee over bank loans provided to the company. At the balance sheet date, the maximum amount guaranteed by the director in relation to these bank loans was £400,000 (2017: n/a).
A subsidiary undertaking has given a guarantee over bank loans provided to the company secured by a fixed charge over freehold land and property held. At the balance sheet date, the maximum amount guaranteed in relation to these bank loans was £400,000 (2017: n/a).