REGISTERED NUMBER: SC271325 (Scotland)

GALSON ENERGY LIMITED

Report of the Directors and

Audited Financial Statements for the Year Ended 30 September 2024

Page

Company Information

1

Report of the Directors

2

Independent Auditors' Report

4

Income Statement

8

Balance Sheet

9

Notes to the Financial Statements

10

DIRECTORS:

C M Bell

M Macritchie

A Smith

REGISTERED OFFICE:

Business Centre Tom Na Ba

South Galson

Isle of Lewis

HS2 0SH

REGISTERED NUMBER:

SC271325 (Scotland)

SENIOR STATUTORY AUDITOR:

John E Moffat BA FCA

AUDITORS:

Mann Judd Gordon Ltd

Chartered Accountants

& Statutory Auditors

26 Lewis Street

Stornoway

Isle of Lewis

HS1 2JF

The directors present their report with the financial statements of the company for the year ended 30 September 2024.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the operation of renewable energy projects.

REVIEW OF BUSINESS

During the year under review, the company continued the operation of three wind turbines.

The turbines were financed by loans secured from Triodos Bank and Sminig Energy Society Ltd.

While it was a successful year for wind production and a profit has been made, the year has not been without its challenges. During the year to 30 September 2024, the company was targeted by fraudsters in a sophisticated scam which resulted in the company transferring funds due to a customer to fraudsters in error. The fraud was uncovered during the 2025 year-end. As at the date of sign-off of the financial statements, £368,000 of the £531,352 transferred has been recovered by the company. The remaining £163,352 has not been recovered as of yet. The Company is working with the authorities, the customer and insurance to recover the remaining balance. The outcome of the investigation is not complete at the date of sign-off.

The Company has provided for the unrecovered amount at the year end, and has overhauled their internal controls to avoid this happening again.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 October 2023 to the date of this report.

C M Bell

M Macritchie

A Smith

CHARITABLE PAYMENTS

The company has made a gift aid payment of £1,100,000 (2023 - £1,000,000) to Urras Oighreachd Ghabhsainn to assist with the delivery of the aims and objectives of the charity.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

C M Bell - Director

30 September 2025

Opinion

We have audited the financial statements of Galson Energy Limited (the 'company') for the year ended 30 September 2024 which comprise the Income Statement, Balance Sheet and Notes to the Financial Statements, including a summary of 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 30 September 2024 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 Auditors' 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 the provisions available for small entities, in the circumstances set out in note thirteen to the financial statements, 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Auditors' Report thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Report of the Directors.

We have nothing to report in respect of the following matters where 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 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 from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page two, 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 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.

Auditors' responsibilities for the audit of the financial statements

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 Auditors' 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:

Our approach was as follows:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant are those that relating to the Feed-in Tariff and those relating directly the preparation of the financial statements, that is FRS102 and the Companies Act 2006. We assessed the risks of material misstatement in respect of fraud as follows:

As part of our audit team discussion, we identified if any particular area was more susceptible to misstatement. A list of the known related parties was compiled along with an expectation of transactions between them. We then made fraud enquires of those charged with governance and confirmed our related party list.

Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with such laws and regulations identified above. We corroborated our enquiries of those charged with governance by a review of the board minutes to date, a review of the bank statements to date, and a review of legal fees charged in the year for any evidence of legal or regulatory issues. Other than those already disclosed in the Directors Report and Exceptional Items in the Profit & Loss Statement, our considerations at planning were corroborated and no further legal or regulatory issues were noted.

We considered the risk of fraud through management override. Given the size of the entity, testing of journals for example was considered unnecessary. Instead, a review of the year of bank statements was undertaken, to identify any large or unusual transactions. Given the size of the entity, segregation of duties is limited, so we designed our audit procedures to identify and to address any material misstatements arising from this. Appropriate approval controls for an entity this size were found to be in place however we identified a weakness in the internal controls surrounding updated bank payment details on invoices from customers and suppliers. The Company was targeted by fraudsters during the year (details in the Directors Report) and, as a result of this weakness payments were allowed to be paid to the wrong account. The Company has since over-hauled their controls in this area.

As the subsidiary of Sminig Energy Society Limited, we have considered any instance of non-compliance by the parent company and subsequent effect on the group. We are auditors for all entities within the group.

The engagement partner's assessment of whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations concluded that the overall risk was of fraud and misstatement was low and the experience of the audit team assigned was sufficient and no specialists were required. An appropriate level of materiality has been calculated in consideration of the inherent difficulty in detecting irregularities along with the perceived level of risk.

There are inherent limitations in the audit procedures described above that result in an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with International Standards on Auditing (UK). The further removed non-compliance with laws and regulations is from the events and financial transactions in the financial statements, the less likely the auditor is to become aware of it or recognise non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment through forgery, collusion, omission or misrepresentation. The primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.

John E Moffat BA FCA (Senior Statutory Auditor)

for and on behalf of Mann Judd Gordon Ltd

Chartered Accountants

& Statutory Auditors

26 Lewis Street

Stornoway

Isle of Lewis

HS1 2JF

30 September 2025

TURNOVER

2,062,769

2,069,546

Cost of sales

208,587

179,280

GROSS PROFIT

1,854,182

1,890,266

Administrative expenses

1,521,452

1,255,446

332,730

634,820

Other operating income

-

56,795

OPERATING PROFIT

4

332,730

691,615

Interest receivable and similar income

15,993

5,741

348,723

697,356

Interest payable and similar expenses

114,725

179,196

PROFIT BEFORE TAXATION

233,998

518,160

Tax on profit

122,353

-

PROFIT FOR THE FINANCIAL YEAR

111,645

518,160

FIXED ASSETS

Tangible assets

6

2,236,900

2,457,928

CURRENT ASSETS

Debtors

7

312,669

442,159

Cash at bank

1,769,119

1,030,296

2,081,788

1,472,455

CREDITORS

Amounts falling due within one year

8

1,228,231

524,480

NET CURRENT ASSETS

853,557

947,975

TOTAL ASSETS LESS CURRENT LIABILITIES

3,090,457

3,405,903

CREDITORS

Amounts falling due after more than one year

9

916,385

1,343,476

NET ASSETS

2,174,072

2,062,427

CAPITAL AND RESERVES

Called up share capital

1

1

Retained earnings

2,174,071

2,062,426

SHAREHOLDERS' FUNDS

2,174,072

2,062,427

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

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

C M Bell - Director

1.	STATUTORY INFORMATION

Galson Energy Limited is a private company, limited by shares , registered in Scotland. 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 (£) and are rounded to the nearest £.

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

Management have prepared projections for the period to September 2024 which the directors have reviewed the projections and, based on this review, have a reasonable expectation that the company has adequate resources to continue in operation for a period of at least 12 months from the approval of the financial statements.

The company therefore continues to adopt the going concern basis in preparing its financial statements.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions that affect the amounts reported for assets, liabilities, income and expenditure.

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 assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods should it affect future periods.

The estimates and assumptions which carry a higher degree of risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Useful economic lives of tangible fixed assets

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. They are amended when necessary to reflect current estimates, future investment, economic utilisation and the physical condition of the assets. See note 6 for details of the values of tangible fixed assets.

Turnover

Turnover represents the value of electricity generation income and feed in tariff in the period, excluding value added tax. Turnover is recognised when the risks and rewards associated with the transaction have transferred to the purchaser.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery

-

5% depreciation on cost and Straight line over 7 years

Equipment

-

20% depreciation on cost

Finance costs incurred during the construction phase of the project are capitalised and amortised over useful life of the windfarm.

Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. Where there are related or matching forward contracts in respect of trading transactions, the rates of exchange specified in those contracts have been used.

Grants

Grants of a revenue nature are taken to the Profit and Loss Account in the year in which the related expenditure is undertaken. Grants received which are related to capital expenditure are capitalised in the Balance Sheet under Creditors due after more than one year until the project is complete. At that point these grants are released to the Profit and Loss Account on the same basis as the related capital expenditure is depreciated.

Debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2023 - NIL).

4.	OPERATING PROFIT

The operating profit is stated after charging:

30.9.24

30.9.23

£

£

Depreciation - owned assets

221,028

221,029

5.	EXCEPTIONAL ITEMS

30.9.24

30.9.23

£

£

Exceptional items

(163,352

)

-

During the year to 30 September 2024, the company was targeted by fraudsters in a sophisticated scam which resulted in the company transferring funds due to a customer to fraudsters in error. The fraud was uncovered during the 2025 year-end. As at the date of sign-off of the financial statements, £368,000 of the £531,352 transferred has been recovered by the company. The remaining £163,352 has not been recovered as of yet. The Company is working with the authorities, the customer and insurance to recover the remaining balance. The outcome of the investigation is not complete at the date of sign-off.

6.	TANGIBLE FIXED ASSETS

Plant and

machinery

Equipment

Totals

£

£

£

COST

At 1 October 2023

and 30 September 2024

4,420,569

895

4,421,464

DEPRECIATION

At 1 October 2023

1,962,641

895

1,963,536

Charge for year

221,028

-

221,028

At 30 September 2024

2,183,669

895

2,184,564

NET BOOK VALUE

At 30 September 2024

2,236,900

-

2,236,900

At 30 September 2023

2,457,928

-

2,457,928

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

30.9.24

30.9.23

£

£

Other debtors

312,669

442,159

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

30.9.24

30.9.23

£

£

Bank loans and overdrafts

327,848

327,848

Trade creditors

562,119

2

Amounts owed to group undertakings

25,441

79,402

Taxation and social security

145,607

110,220

Other creditors

167,216

7,008

1,228,231

524,480

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

30.9.24

30.9.23

£

£

Bank loans

651,327

1,052,937

Amounts owed to group undertakings

254,409

260,842

Other creditors

10,649

29,697

916,385

1,343,476

10.	SECURED DEBTS

The following secured debts are included within creditors:

30.9.24

30.9.23

£

£

Bank loans

979,175

1,380,785

The bank overdraft and loans are secured by a standard security over the lease of the wind turbine site at Ballantrushal, Isle of Lewis, by a floating charge over the company's assets and undertakings, by an assignation in security of certain contracts relating to the wind farm development, by an assignment and charge of contracts relating to the wind farm development and by a charge of deposit in respect of certain bank accounts.

11.	OTHER FINANCIAL COMMITMENTS

The total amount of commitments, guarantees and contingencies is £30,000.

12.	RELATED PARTY DISCLOSURES

The company is a wholly owned subsidiary of Sminig Energy Society Limited, a community benefit society registered under the Co-operative and Community Benefit Societies Act 2014.

The company received loans from Sminig Energy Society Limited to assist with the development of a community wind energy project. The loan is repayable over 20 years by capital and interest repayments and bears interest at the rate of 6.25%. The balance of this loan at 30 September 2024 was £279,850 (2023 - £340,244). Interest paid on the loan during the year was £19,007 (2023 - £23,070)

The company received a loan from Urras Oighreachd Ghabhsainn to assist with the development of a community wind energy project. The loan is repayable over 10 years by capital and interest repayments. The balance of this loan at 30 September 2024 was £10,649 (2023 - £29,697). Interest paid on the loan during the year was £29,480 (2023 - £68,329).

The company has made a gift aid payment of £1,100,000 (2023 - £1,000,000) to Urras Oighreachd Ghabhsainn to assist with the delivery of the aims and objectives of the charity.

Sminig Energy Society Limited has granted a fixed charge in favour of Triodos Bank NV over the issued share capital of Galson Energy Limited.

13.	FRC ETHICAL STANDARD - PROVISIONS AVAILABLE FOR SMALL ENTITIES

In common with many other businesses of our size and nature we use our auditors to prepare and submit returns to the tax authorities and assist with the preparation of the financial statements.