The directors present their annual report and financial statements for the year ended 31 March 2025.

The principal activity of the company is the storage and distribution of electricity.

The Directors shown below have held office during the period from 1 April 2024 to the date of this report.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

The income statement has been prepared on the basis that all operations are continuing operations.

For the financial year ended 31 March 2025 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

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

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Lower 48 Energy BESS Ltd is a private company limited by shares incorporated in England. The Registered Office is 33 Bedford Place, Bedford Square, London, WC1B 5JU. The nature of the Company's operations and its principal activities are set out in the Directors' Report. The Company's financial statements have been prepared in accordance with Financial Reporting Standard Number 102 (FRS 102), issued by the Financial Reporting Council, including the early adoption of the Periodic Review 2024 dated 27 March 2024.

Basis of preparation

The financial statements of Lower 48 Energy BESS Ltd were approved for issue by the Board of Directors on 24 December 2025. The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with applicable accounting standards.

The functional currency of Lower 48 Energy BESS Ltd is considered to be Pounds Sterling because that is the currency of the primary economic environment in which the Company operates. The financial statements are presented in Pounds Sterling.

Summary of disclosure exemptions

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 parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

Lower 48 Energy Bess Ltd meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemption available to it in respect to the presentation of a cash flow statement.

Foreign currency transactions and balances

Transactions in foreign currencies are translated into sterling and recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into sterling and recorded at the rates of exchange prevailing at that date.

Tangible fixed assets are stated at cost net of depreciation and any provision for impairment.

Depreciation is charged so as to write off the cost of assets, other than land and projects in construction over their estimated useful lives, as follows:

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Ordinary shares are classified as equity. The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses. The profit and loss reserve represents cumulative profits or losses, net of dividends paid and other adjustments.

Projects in development

The main aspects to address during the development stage of a project are obtaining a site, planning consent, and grid connection. Costs which are directly attributable to the development stage, including feasibility and application fees, are capitalised as projects in development.

Once a site has been secured, achieved planning consent, received approval for grid connection and obtained investment approval from the Board of Directors, the project in development costs are transferred to projects in construction under tangible fixed assets.

Projects in development are continuously reviewed and if at any stage a project ceases to be viable all capitalised costs are expensed.

Short-term debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at the transaction price. Any losses arising from impairment are recognised in the income statement in other operating expenses.

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

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred at the balance sheet date. Timing differences are differences between the Company's taxable profits and total comprehensive income and its results as stated in the financial statements, that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that had been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are negotiated on an individual basis and contain a wide variety of different terms and conditions such as purchase options and escalation clauses. The Company assesses whether a contract is or contains a lease at inception of the contract. A lease conveys the right to direct the use and obtain substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration.

Measurement and recognition of leases

At lease commencement date, the Company recognises a right-of-use asset and a lease liability in its balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Company depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the Company’s incremental borrowing rate because as the lease contracts are negotiated with third parties it is not possible to determine the interest rate that is implicit in the lease. The incremental borrowing rate is the estimated rate that the Company would have to pay to borrow the same amount over a similar term, and with similar security to obtain an asset of equivalent value. This rate is adjusted should the lessee entity have a different risk profile to that of the Company.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced by lease payments that are allocated between repayments of principal and finance costs. The finance cost is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. The lease liability is reassessed when there is a change in the lease payments. Changes in lease payments arising from a change in the lease term or a change in the assessment of an option to purchase a leased asset. The revised lease payments are discounted using the Company’s incremental borrowing rate at the date of reassessment when the rate implicit in the lease cannot be readily determined. The amount of the remeasurement of the lease liability is reflected as an adjustment to the carrying amount of the right-of-use asset. The exception being when the carrying amount of the right-of-use asset has been reduced to zero then any excess is recognised in profit or loss.

Payments under leases can also change when there is either a change in the amounts expected to be paid under residual value guarantees or when future payments change through an index or a rate used to determine those payments, including changes in market rental rates following a market rent review. The lease liability is remeasured only when the adjustment to lease payments takes effect and the revised contractual payments for the remainder of the lease term are discounted using an unchanged discount rate. Except for where the change in lease payments results from a change in floating interest rates, in which case the discount rate is amended to reflect the change in interest rates.

The Company has elected to account for short-term leases and leases of low-value assets using practical expedients. These leases relate to items of office equipment such as desks, chairs, and certain IT equipment. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.

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.

At various stages in the development and operation of a site significant management judgement is required to decide if each site remains a viable project. The following are the critical judgements taken into consideration, apart from those involving estimations, that the Directors have made in applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements:

•    Recoverability of project costs incurred to date.

•    Expected future costs to be spent to the completion of a productive site.

•    Expected profitability over the site’s economic life.

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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The following are the Group's key sources of estimation uncertainty:

•    Determination of the company's incremental borrowing rate of interest for the purpose of calculation of the right-of-use lease liabilities..

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

Their aggregate remuneration comprised:

The Company operates a defined contribution pension scheme for the benefit of the employees and directors. The assets of the scheme are administered by an independent pensions provider. Pension payments recognized as an expense during the year amount to £65,777 (2024: Nil).

The Company paid £16,923 into defined contribution pension schemes in relation to Directors’ remuneration (2024: Nil).

During the year retirement benefits accrued to one director (2024: zero) in respect of defined contribution pension schemes.

Renumeration to the highest paid director totalled £356,713. Company pension contributions of £16,923 were made to a pension scheme on his behalf.

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

The Company has trading losses carried forward of £6,891,687 (2024 - £985,010). At the balance sheet date, the Company has recognised a deferred tax asset of £1,716,968 (2024: £nil), primarily arising from tax losses carried forward and provisions not yet deductible for tax purposes.

Projects in development represents accumulated legal and professional costs associated with the preparation of a site for battery storage, including land dealing, surveying, local planning fees, grid connection feasibility and application, and other legal fees.

Tangible fixed assets includes right-of-use assets, as follows:

Trade creditors includes a stage payment in relation to a battery supply contract. Accruals includes £3,250,000 provision in relation to an option notice issued to the Company for a share buyback.

During the year, minority shareholder Action Group Holdings K.S.C(C). exercised a put option to sell 1,000,000 ordinary shares back to the Company. The shares were repurchased by the Company post year-end.

At year end related party receivables totaling £15,161 with a former minority shareholder, Lower 48 Limited, were written off to P&L.

Related party receivables relate to payments made on behalf of subsidiary Lower 48 Barton Bess Ltd.

As of 30 June 2025, the Company’s immediate parent, and controlling shareholder, is S4 Energy B.V. incorporated in the Netherlands and subject to the general company law of the Netherlands. The registered office of S4 Energy B.V. is Hildegard Von Bingenstraat 24, 1081 LH Amsterdam, Netherlands.

The ultimate parent undertaking and controlling entity is Castleton Commodities International LLC (“CCI”), incorporated in the United States under the laws of the State of Delaware and the smallest and largest group of undertakings for which consolidated accounts are drawn up. CCI’s financial statements are available at its registered office at c/o Corporate Service Company, 251 Little Falls Drive, Wilmington, Delaware, 19808.

The Company has a 100% shareholding in subsidiary Lower 48 Barton Bess Ltd, comprising of one ordinary share as at 31st March 2025. The registered office of Lower 48 Barton Bess Ltd. is 33 Bedford Place, London, WC1B 5JU.

Subsequent to year end, on the 30th April 2025 the Company approved an allotment of 5,743,846 Ordinary shares to raise capital to continue to fund the operations of the business.

On the 4th June 2025, the Company participated in a share buyback and subsequent cancellation of 1,000,000 ordinary shares.