Source: http://docplayer.net/27391323-Compensation-for-the-indirect-costs-of-the-renewables-obligation-and-small-scale-feed-in-tariffs-guidance-for-applicants.html
Timestamp: 2018-12-17 11:52:27
Document Index: 43130004

Matched Legal Cases: ['art 42', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2']

COMPENSATION FOR THE INDIRECT COSTS OF THE RENEWABLES OBLIGATION AND SMALL SCALE FEED-IN-TARIFFS. Guidance for Applicants - PDF
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1 COMPENSATION FOR THE INDIRECT COSTS OF THE RENEWABLES OBLIGATION AND SMALL SCALE FEED-IN-TARIFFS Guidance for Applicants ANNEX B: Terms of Engagement for Accountants Reports ANNEX C: Proposed form for Accountants Reports FEBRUARY 2016
2 Contents ANNEX B: Terms of Engagement for Accountants Reports... 3 Introduction... 3 The Compensation Applicant s responsibilities... 4 Scope of the Accountant s work... 4 Form of the Accountant s report... 5 Liability provisions... 6 Fees... 7 Quality of service... 7 Providing services to other parties... 7 Applicable law and jurisdiction... 8 Alteration of terms... 8 ANNEX C: Proposed form of Accountant s Report
3 ANNEX B: Terms of Engagement for Accountants Reports Introduction 1. This document provides the pre-agreed terms of engagement on which the Compensation Applicants, engage accountants to perform an agreed-upon procedures engagement and report to the Department for Business, Innovation and Skills ( BIS ), and the Compensation Applicant in connection with the Compensation for Indirect Costs of Renewable Obligation and Small Scale Feed-In Tariffs scheme ( RO/FiTs Compensation Scheme ). In due course, BIS may issue a letter (the Compensation Letter ) to the respective Compensation Applicant setting out the amount of the compensation payable. Any such Compensation Letter will be incorporated into this agreement as at the date on which it is issued. 2. BIS accepts that an agreement between the Compensation Applicant, its reporting accountants and BIS on these terms is formed when the accountants sign and submit to BIS a report as set out in the section C herein. NB: BIS will not need to sign anything. By publishing this document, BIS confirms that these pre-agreed terms form its agreement with the Compensation Applicant and the reporting accountants. Once the accountants report is submitted to BIS in accordance with these terms, BIS will accept that an agreement is formed. If the terms of the standardised engagement letter are to be revised, BIS will need to confirm its acceptance of the new terms before an agreement is formed. BIS can be contacted at: 3. The Compensation Applicant and the accountant may agree additional engagement terms between themselves, but these terms do not affect the rights and obligations of BIS in respect of the Compensation or the Accountant s report. 4. In these terms of engagement: the Compensation Applicant refers to the company that is required to submit the Accountant s report to the BIS; and the accountant refers to the Compensation Applicant s independent reporting accountants. Independent means that the reporting accountants are independent with respect to the Compensation Applicant within the meaning of Part B, s291 of the Code of Ethics for Professional Accountants issued by the International Federation of Accountants, and meet the independence requirements under Part 42 of the Companies Act 2006 for appointment as a company auditor. 5. The Compensation Applicant is required to submit to BIS a report as set out in section C below. It will be provided on the accountant s headed paper and signed by the accountant to provide an agreed upon procedures report. These terms of engagement 3
4 set out the basis on which the accountant will sign the report. A proposed form of the Accountant s Report is set out in Annex C. 6. Compensation Applicants are required to submit independent accountants report, if either of the following conditions is met: a) The Compensation Applicant s average electricity consumption exceeds 10GWh per year over the business financial years in Part 2 of the application. b) The Compensation Applicant s figures for Staff costs or EBITDA for any given business financial year reported in Application Part 2 Form is lower than that the equivalent figure reported in UK statutory Company Accounts or the Company s published UK annual report. The Compensation Applicant s responsibilities 7. The Compensation Applicant is responsible for producing the information, maintaining proper records complying with the terms of any legislation or regulatory requirements, and BIS s terms and conditions of Compensation ( the Compensation conditions ) and providing relevant information to BIS on a basis in accordance with the requirements of the Compensation conditions. The Compensation Applicant is responsible for ensuring that the non-financial records can be reconciled to the financial records. 8. The management of the Compensation Applicant will make available to the accountant all records, correspondence, information and explanations that the accountant considers necessary to enable the accountant to perform the accountant s work. 9. The Compensation Applicant and BIS accept that the ability of the accountant to perform its work effectively depends upon the Compensation Applicant providing full and free access to the financial and other records and the Compensation Applicant shall procure that any such records held by a third party are made available to the accountant. 10. The accountant accepts that, whether or not the Compensation Applicant meets its obligations, the accountant remains under an obligation to BIS to perform its work with reasonable skill and care. The failure by the Compensation Applicant to meet its obligations may cause the accountant to qualify its report or be unable to provide a report. Scope of the Accountant s work 11. The Compensation Applicant will provide the accountant with such information, explanations and documentation that the accountant considers necessary to carry out its responsibilities. The accountant will seek written representations from management in relation to matters for which independent corroboration is not available. The accountant will also seek confirmation that any significant matters of which the accountant should be aware have been brought to the accountant s attention. 12. The accountant will carry the following procedures: 4
5 a) Agree the totals for EBITDA and staff costs disclosed in Table A of the Application Part 2 Form to the Compensation Applicant s workings supporting those totals ( the Supporting Workings ); b) Agree the components of EBITDA and staff costs disclosed in the Supporting Workings to UK statutory accounts for the equivalent time periods or other supporting evidence, reporting in the findings the nature of the supporting evidence; c) Compare the calculations of EBITDA and staff costs in the Supporting Workings with the calculations described in the RO/FITs Compensation Scheme Guidance and report any differences observed; d) Re-perform the calculations of EBITDA and staff costs from the disclosed components to check arithmetical accuracy; e) Agree the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form to the Supporting Workings; f) Agree any underlying components of the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form disclosed in the Supporting Workings to relevant energy bills invoices or electricity generation data supporting evidence, reporting in the findings the nature of the supporting evidence; g) Compare the calculations of the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form in the Supporting Workings with the calculations described in the RO/FITs Compensation Scheme Guidance and report any differences observed; h) Re-perform the calculations of the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form from the disclosed components to check arithmetical accuracy. 13. The accountant will not subject the information provided by the Compensation Applicant to checking or verification except to the extent expressly stated. While the accountant will perform the accountant s work with reasonable skill and care, the accountant s work should not be relied upon to disclose all misstatements, fraud or errors that might exist. Form of the Accountant s report 14. The accountant s reports are prepared on the following bases: 5 a) The accountant s reports are prepared solely for the confidential use of the Compensation Applicant and BIS and solely for the purpose of submission to BIS in connection with BIS s requirements in connection with the RO/FiTs Compensation Scheme. They may not be relied upon by the Compensation Applicant or BIS for any other purpose; b) Without imposing on the accountant and without the accountant assuming (or being perceived as assuming) any duty or responsibility and without imposing or accepting any liability to anyone except the Compensation Applicant and BIS, BIS and the Compensation Applicant may disclose the reports to others who demonstrate statutory or regulatory rights of access to the report;
6 c) Neither the Compensation Applicant, BIS, nor any other parties may rely on any oral or draft reports the accountant provides. The accountant accepts responsibility to the Compensation Applicant and BIS for the accountant s final signed reports only; d) The report will be prepared solely for the confidential use of the Compensation Applicant and BIS, and solely for the purpose of facilitating the Compensation claim. The report will be released to the Compensation Applicant and BIS on the basis that it shall not be copied, referred to or disclosed, in whole or in part (save as otherwise permitted by agreed written terms), without our prior written consent, except where requested by a Minister who is a member of the UK Government, or where there is a legal or statutory right of access, including Freedom of Information Act 2000 (FOIA), the Data Protection Act 1998 (DPA) and the Environmental Information Regulations Without assuming or accepting any responsibility or liability in respect of the report to any party other than the Compensation Applicant and BIS, we acknowledge that the Compensation Applicant and BIS (or one of them) may be required to disclose this report to parties demonstrating a statutory right to see it, to enable such parties to exercise their statutory rights of access to this report; e) To the fullest extent permitted by law, except for the Compensation Applicant and BIS, the firm of accountants, its partners and staff neither owe nor accept any duty to any person (including, without limitation, any person who may use or refer to any of BIS s publications) and shall not be liable for any loss, damage or expense of whatsoever nature which is caused by any person s reliance on the accountant s work or reports. Liability provisions 15. The accountant will owe a duty of care to both the Compensation Applicant and to BIS, and a) the accountant shall be liable to BIS to the extent described in this Section E, without prejudice to: (i) the terms and conditions of the respective contract between the accountant (ii) and the Compensation Applicant, and to BIS entitlement to seek any available relief or remedy (including recovery of all or any part of any compensation payment) from the Compensation Applicant, and b) provided that only BIS or the Compensation Applicant may seek any available relief or remedy from the accountant in respect of the same breach or failure, (so as to avoid any double recovery) and c) the accountant shall be liable without limit to BIS in respect of any: (i) (ii) (iii) death or personal injury caused by or arising from the accountant s negligence, and fraud, deceit, or misrepresentation, and any other liability to the extent that it cannot be excluded or limited by law, and d) subject to paragraph 15 (c) above, the accountant s liability to BIS in respect of any loss, damage, costs, or expenses (of whatever nature) arising from or in connection with this agreement (including by way of negligence or breach of contract) shall be limited to a sum equal to the higher of: 6
7 (i) (ii) 500% of the fees paid or payable by the Compensation Applicant to the accountant, or 1m. 16. The Compensation Applicant and BIS agree that they will not bring any claims or proceedings against any individual partners, members, directors or employees of the accountant. This clause is intended to benefit such partners, members, directors and employees who may enforce this clause pursuant to the Contracts (Rights of Third Parties) Act 1999 ( the Act ). Notwithstanding any benefits or rights conferred by this agreement on any third party by virtue of the Act, the parties to this agreement may agree to vary or rescind this agreement without any third party s consent. Other than as expressly provided in these terms, the Act is excluded. 17. Any claims, whether in contract, negligence or otherwise, must be formally commenced within 4 years after the party bringing the claim becomes aware (or ought reasonably to have become aware) of the facts which give rise to the action and in any event no later than 6 years after the relevant report was issued (or, if no report was issued, when the accountant accepted the engagement in writing). This expressly overrides any statutory provision which would otherwise apply. 18. This engagement is separate from and unrelated to the accountant s audit work on the financial statements of the Compensation Applicant for the purposes of any applicable statutory or regulatory or other auditing framework and nothing herein creates obligations or liabilities regarding the accountant s audit work, which would not otherwise exist. Fees 19. The accountant s fees, together with VAT and out-of-pocket expenses, will be agreed with and billed to the Compensation Applicant. BIS is not liable to pay the accountant s fees. Quality of service 20. The accountant will investigate all complaints from BIS or the Compensation Applicant. BIS or the Compensation Applicant have the right to take any complaint to the ICAEW. BIS or the Compensation Applicant may obtain an explanation of the mechanisms that operate in respect of a complaint to the ICAEW at or by writing to the ICAEW at the ICAEW Professional Standards Office, Metropolitan House, 321 Avebury Boulevard, Milton Keynes MK9 2FZ UK. Providing services to other parties 21. The accountant will not be prevented or restricted by virtue of the accountant s relationship with the Compensation Applicant and BIS, including anything in these Standard Terms, from providing services to other clients. The accountant s standard internal procedures are designed to ensure that confidential information communicated to the accountant during the course of an assignment will be maintained confidentially. 7
8 Applicable law and jurisdiction 22. This agreement shall be governed by, and interpreted and construed in accordance with English law. 23. The Compensation Applicant, BIS and the accountant irrevocably agree that the courts of England shall have exclusive jurisdiction to settle any dispute (including claims for set-off and counterclaims) which may arise on any basis in connection with the validity, effect, interpretation or performance of, or the legal relationship established by this agreement or otherwise arising in connection with this agreement. Alteration of terms 24. All additions, amendments and variations to these terms of engagement shall be binding only if in writing and signed by the duly authorised representatives of the parties. These terms supersede any previous agreements and representations (unless based on fraud) between the parties in respect of the scope of the accountant s work and the accountant s report or the obligations of any of the parties relating thereto (whether oral or written) and (save to the extent that the Compensation Applicant and the accountant agree additional engagement terms between themselves) represents the entire agreement and understanding between the parties. Any such additional terms will not affect BIS rights under these terms of engagement. 8
9 ANNEX C: Proposed form of Accountant s Report Proposed form of Accountant s Report of [name of accountancy firm] to the directors of [name of Applicant] and The Secretary of State for Business, Innovation and Skills ( BIS ) for Application for Compensation for Indirect Costs of Renewable Obligation and Small Scale Feed-In Tariffs scheme [Date] Dear Sir/Madam, Report of the Independent Accountant [Name LLP] to [name of Applicant] and The Secretary of State for Business, Innovation and Skills ( BIS ) of factual findings in relation to the Application for Compensation for Indirect Costs of Renewable Obligation and Small Scale Feed-In Tariffs scheme 1. [Name of Third Party Accountant] ( we ) has examined the enclosed application forms from [the Compensation Applicant] (the Company ) for the period from [date] to [date] in accordance with BIS Standardised Terms of Engagement for Accountants Reports dated [date] [and the supplementary terms of our agreement with the Compensation Applicant dated [date]], having regard to the Guidance for Applicants for Compensation for the indirect costs of the Renewables Obligation and Small Scale Feed-In Tariffs (the Scheme Guidance ) dated [date]. 2. The enclosed application forms have been prepared by the directors of the Company ( the Directors ). The Directors are solely responsible for preparing the application form[s] in accordance with the Scheme Guidance dated [date]. The Directors are responsible for producing the information included in the application forms, maintaining proper records complying with the terms of any legislation or regulatory requirements, and BIS s terms and conditions of Compensation ( the Compensation conditions ) and providing relevant information to BIS on a basis in accordance with the requirements of the Compensation conditions. The Directors are also responsible for ensuring that the non-financial records can be reconciled to the financial records. 3. Our engagement was undertaken [in accordance with/having regard to] 1 International Standard on Related Services 4400 Engagements to Perform Agreed-upon Procedures Regarding Financial Information. The procedures performed were as follows: EBITDA and Staff Costs 1 If the procedures are performed over non-financial information, replace in accordance with with having regard to. 9
10 a) Agree the totals for EBITDA and staff costs disclosed in Table A of the Application Part 2 Form to the Compensation Applicant s workings supporting those totals ( the Supporting Workings ). b) Agree the components of EBITDA and staff costs disclosed in the Supporting Workings to UK statutory accounts for the equivalent time periods or other supporting evidence, reporting in the findings the nature of the supporting evidence. c) Compare the calculations of EBITDA and staff costs in the Supporting Workings with the calculations described in the RO/FITs Compensation Scheme Guidance [date] and report any differences observed; d) Re-perform the calculations of EBITDA and staff costs from the disclosed components to check arithmetical accuracy; Electricity Consumption a) Agree the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form to the Supporting Workings; b) Agree any underlying components of the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form disclosed in the Supporting Workings to relevant energy bills invoices or electricity generation data supporting evidence, reporting in the findings the nature of the supporting evidence. c) Compare the calculations of the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form in the Supporting Workings with the calculations described in the RO/FITs Compensation Scheme Guidance [date] and report any differences observed; d) Re-perform the calculations of the totals for electricity consumption data in Table A and grid electricity consumption data in Table B of Application Part 2 Form from the disclosed components to check arithmetical accuracy; Factual findings 4. We report our findings below: [With respect to procedure (i) we found [no]/[the following] exceptions [list]] [or, list specific outcome of each procedure performed, e.g. A was agreed to B.] [For those procedures which require the accountant to provide details of the sources of data used in testing, tables should be included e.g. Electricity consumption data as reported in Table A of the Application Part 2 Form been reconciled with the following sources of data: 10
11 Date Source of data Electricity Consumption (MWh) Grid electricity consumption data as reported in Table B of Application Part 2 Form has been reconciled with the following sources of data: Date Source of data Electricity Consumption (MWh) The Company has maintained adequate records to enable us to carry out the agreed-upon procedures and report our factual findings on this application. Because the above procedures do not constitute either an audit or a review or other assurance engagement in accordance with International Standards on Auditing (UK and Ireland), International Standards on Review Engagements (UK and Ireland) or International Standards for Assurance Engagements, we do not express any assurance on [what, described precisely]. Had we been engaged to perform, and had performed, additional procedures, an audit or a review or other assurance engagement in accordance with International Standards on Auditing (UK and Ireland), International Standards on Review Engagements (UK and 11
12 Ireland), or International Standards on Assurance Engagements, other matters might have come to our attention that would have been reported to you. 5. Our report is prepared solely for the confidential use of the Company and BIS and solely for the purpose of providing comfort over the specified information included on the application form. It may not be relied upon by the Company or BIS for any other purpose whatsoever. Our report must not be recited or referred to in whole or in part in any other published document without our written permission except where disclosure is required as a result of a statutory obligation. Our report must not be made available, copied or recited to any other party without our express written permission in every case except that the Company or BIS may disclose the report where it has a statutory obligation to do so. Other than to the Company and BIS, [Name of Third Party Accountant] do not have any duty to any other party to whom this report may be disclosed. 6. The engagement to report on these application forms is separate from, and unrelated to, the audit of the annual financial statements of the Company and that the report relates only to the matters specified and that it does not extend to the Compensation Applicant's annual financial statements taken as a whole. 7. Name and signature of the reporting accountant. 8. Date of the report. 9. Name for enquiries. 12