ACCOUNTS - Final Accounts

An analysis of turnover by class of business is as follows:

Registered number: 06606245

LOCAL GENERATION LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

LOCAL GENERATION LIMITED

COMPANY INFORMATION

Directors	APS Keeling
	MN Viergutz (resigned 31 January 2025)
	RB Maddan
	CE Stoyell


Registered number	06606245


Registered office	Control Tower
	Hemswell Cliff Industrial Estate
	Hemswell Cliff
	Gainsborough
	DN21 5TU


Independent auditors	Ryecroft Glenton
	Chartered Accountants & Statutory Auditors
	32 Portland Terrace
	Newcastle upon Tyne
	NE2 1QP


Bankers	The Royal Bank of Scotland
	14 - 15 Hereward Cross
	Peterborough
	PE1 1TB

LOCAL GENERATION LIMITED

CONTENTS

	Page
Strategic Report	1 - 2
Directors' Report	3 - 4
Independent Auditors' Report	5 - 8
Statement of Income and Retained Earnings	9
Balance Sheet	10 - 11
Notes to the Financial Statements	12 - 27

LOCAL GENERATION LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

Principal activities

The Company’s principal activity during the year is the operation of a food waste Anaerobic Digestion (AD) Plant. The company provides solutions for food waste recycling which acts as a sustainable alternative to landfill.

Through the AD process this waste is broken down to generate biogas for energy production. The Company generates revenue through a combination of waste processing (gate fees) and energy production, supporting both environmental and commercial objectives

Business review

The Company delivered a strong financial performance during the year ended 31 December 2025, reflecting improvements in both operational efficiency and market conditions.

Turnover increased by 17.5% compared to 2024, driven by a combination of slightly higher average gas prices and a 4% increase in gas production. In addition, the cost of incoming feedstock continued to reduce, reflecting favourable market dynamics and effective procurement strategies.

As a result, gross profit increased to £5.37m (2024: £4.10m), with gross profit margins improving to 44% (2024: 38.7%). EBITDA increased significantly to £2.02m (2024: £0.56m), reflecting both enhanced margins and improved operational performance.

During the year, a scheduled de-gritting of Digester 2 was completed. While this resulted in a period of planned downtime, the work was necessary to maintain long-term plant efficiency and reliability. Despite this interruption, overall production increased, demonstrating the resilience and underlying strength of operations.

Principal risks and uncertainties

Compliance with regulation, legal, health and safety and ethical standards are paramount for the Company. The Group has a dedicated compliance team to ensure that the Company is fully compliant with all legislation.

The volatility of wholesale power prices creates ongoing revenue uncertainty. Pricing and availability of feedstock material remain key risks. The Group manages this through long-term contracts and an experienced commercial team, ensuring a consistent pipeline of economically viable material.

Operational reliability is also a key consideration, with planned maintenance programmes, including periodic digester de-gritting, in place to sustain plant performance and minimise unplanned downtime

Financial key performance indicators

The Company’s financial key performance indicators for the year ended 31 December 2025, compare to the year ended 31 December 2024, are shown below.

2025 2024 Change
Gross Profit £5,365,397 £4,101,619 £1,263,778
Gross Profit Margin 44.0% 38.7% 5.3%
EBITDA £2,021,244 £560,933 £1,460,311

In addition to financial metrics, the Company closely monitors key operational indicators, including plant uptime and feedstock throughput, to ensure consistent performance and efficiency.

Page 1

LOCAL GENERATION LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Future developments

Looking ahead to 2026, the Company will continue to focus on optimising plant performance, maintaining regulatory compliance, and strengthening operational resilience.

Key initiatives include the completion of the remaining digester de-gritting programme, which is expected to further enhance efficiency, improve reliability, and support sustained financial performance. In addition, the replacement of the site bund will ensure continued compliance with environmental regulations.

The Company is well positioned to benefit from increasing demand for sustainable waste management and renewable energy solutions. Management will continue to focus on improving operational efficiency, securing stable feedstock supply, and maximising plant output to drive long-term value creation.

This report was approved by the board on 26 June 2026 and signed on its behalf.

CE Stoyell

Director

Page 2

LOCAL GENERATION LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

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

Directors

The directors who served during the year were:

APS Keeling

MN Viergutz (resigned 31 January 2025)

RB Maddan

CE Stoyell

Results and dividends

The profit for the year, after taxation, amounted to £234,252 (2024 - loss £694,247).

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

∙make judgments and accounting estimates that are reasonable and prudent;

∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

∙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 to 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.

Page 3

LOCAL GENERATION LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Going concern

At 31 December 2025 the Company had net current liabilities of £2,103,995 (2024: £3,382,365) and net assets of £5,127,987 (2024: £4,893,735). The Company is dependent upon the funds provided by GVO B-1 Limited, the 77% shareholder of the Company. GVO B-1 Limited has been provided with a letter of support from its parent company, Hansa Aktiengesellschaft, that will allow it to make available such funds as are needed by the Company to continue in operational existence for at least 12 months from signing off, so the Company can meet its liabilities that fall due for payment, should it be needed.

Having reviewed the Company's current position and forecasts for the next twelve months which shows promising results, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis was adopted in preparing the financial statements.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditors, Ryecroft Glenton, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 26 June 2026 and signed on its behalf.

CE Stoyell

Director

Page 4

LOCAL GENERATION LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOCAL GENERATION LIMITED

Opinion

We have audited the financial statements of Local Generation Limited (the 'Company') for the year ended 31 December 2025, which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes, 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 31 December 2025 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 United Kingdom, including the Financial Reporting Council's Ethical Standard 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.

Page 5

LOCAL GENERATION LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOCAL GENERATION LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.

Opinion 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 Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

∙the Strategic Report and the Directors' Report have 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 Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which 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.

Responsibilities of directors

As explained more fully in the Directors' Responsibilities 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, and for such internal control as the directors determine is 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.

Page 6

LOCAL GENERATION LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOCAL GENERATION LIMITED (CONTINUED)

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

∙the Responsible Individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

∙we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the waste to energy sector;

∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation, employment legislation, environment legislation such as environmental permits, PAS110 and ISCC EU regulations, and health and safety legislation such as CHAS accreditations;

∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence where available; and

∙we ensured that the identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

∙making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud; and

∙carrying out walkthrough testing and documenting the relevant controls in place; and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

∙performed analytical procedures to identify any unusual or unexpected relationships;

∙tested journal entries to identify unusual transactions;

∙considered the control environment and raised recommendations on areas of weakness as appropriate; and

∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

∙agreeing financial statement disclosures to underlying supporting documentation;

∙enquiring of management as to actual and potential litigation and claims;

∙discussing laws and regulations with legal team and those responsible for monitoring compliance and issues;

Page 7

LOCAL GENERATION LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LOCAL GENERATION LIMITED (CONTINUED)

∙reviewing government websites, such as the Environmental Agency to assess whether there have been any breaches; and

∙reviewing correspondence with HMRC, and the Company’s legal advisors where appropriate, along with discussing laws and regulations with those who are responsible for compliance.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Andrew Cameron (Senior Statutory Auditor)

for and on behalf of

Ryecroft Glenton

Chartered Accountants

Statutory Auditors

32 Portland Terrace

Newcastle upon Tyne

NE2 1QP

26 June 2026

Page 8

LOCAL GENERATION LIMITED

STATEMENT OF INCOME AND RETAINED EARNINGS

FOR THE YEAR ENDED 31 DECEMBER 2025

	2025	2024
Note	£	£


Turnover	4	12,183,622	10,369,227
Cost of sales		(6,818,225)	(6,358,608)
Gross profit		5,365,397	4,010,619
Administrative expenses		(4,902,413)	(4,943,775)
Exceptional administrative expenses	11	(340,201)	-
Other operating income	5	260,937	71,250
Operating profit/(loss)	6	383,720	(861,906)
Interest payable and similar expenses	9	(9,914)	(13,499)
Profit/(loss) before tax		373,806	(875,405)
Tax on profit/(loss)	10	(139,554)	181,158
Profit/(loss) after tax		234,252	(694,247)



Retained earnings at the beginning of the year	(841,434)	(147,187)
	(841,434)	(147,187)
Profit/(loss) for the year	234,252	(694,247)
Retained earnings at the end of the year	(607,182)	(841,434)

There were no recognised gains and losses for 2025 or 2024 other than those included in the statement of income and retained earnings.

Page 9

LOCAL GENERATION LIMITED

REGISTERED NUMBER: 06606245

BALANCE SHEET

AS AT 31 DECEMBER 2025

		2025		2024
Note		£		£

Fixed assets
Tangible assets	12		8,274,405		9,310,892
			8,274,405		9,310,892
Current assets
Stocks	13	102,976		69,634
Debtors: amounts falling due within one year	14	5,716,238		3,132,985
Cash at bank and in hand	15	627,322		141,431
		6,446,536		3,344,050
Creditors: amounts falling due within one year	16	(8,550,531)		(6,726,415)
Net current liabilities			(2,103,995)		(3,382,365)
Total assets less current liabilities			6,170,410		5,928,527
Creditors: amounts falling due after more than one year	17		(385,714)		(517,637)
Provisions for liabilities
Deferred tax	21	(656,709)		(517,155)
			(656,709)		(517,155)
Net assets			5,127,987		4,893,735

Capital and reserves
Called up share capital	22	14,313	14,313
Share premium account	23	5,720,856	5,720,856
Profit and loss account	23	(607,182)	(841,434)
		5,127,987	4,893,735

Page 10

LOCAL GENERATION LIMITED

REGISTERED NUMBER: 06606245

BALANCE SHEET (CONTINUED)

AS AT 31 DECEMBER 2025

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 26 June 2026.

CE Stoyell

Director

The notes on pages 12 to 27 form part of these financial statements.

Page 11

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

1.	General information

Local Generation Limited is a private company limited by shares, incorporated in England and Wales (Registration number: 06606245). The registered office address is Control Tower, Hemswell Cliff Industrial Estate, Hemswell Cliff, Gainsborough, DN21 5TU.

The principal activity of the company is the operation of a food waste Anaerobic Digestion (AD) Plant. The company provides solutions for food waste recycling which acts as a sustainable alternative to landfill. Through the AD process this waste is broken down to generate biogas for energy production.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

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 in accordance with FRS102 as published by the Financial Reporting Council 31 January 2022 and amendments to that standard effective for periods up to 31 December 2025. They do not (and are not required to) comply with the amendment published 27 March 2024, effective for periods commencing 1 January 2026, or the current version of FRS102 published 10 September 2024. Early adoption of those standards is permitted, but the directors have chosen not to do so and will adopt them from the effective date of 1 January 2026.

The following principal accounting policies have been applied:

2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

∙the requirements of Section 7 Statement of Cash Flows;

∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);

∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of GVO B-1 Limited as at 31 December 2025 and these financial statements may be obtained from Companies House, Cardiff.

Page 12

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.3

Going concern

2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Income and Retained Earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 13

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue from the sale of energy is recognised at the point at which the energy is produced. Revenue from energy sales that is contingent on future notification of past events is recognised when notification is received.

Revenue from sales of food waste services (gate fees) is recognised on the date that food waste is received.

2.6

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to the Statement of Comprehensive Income at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.

The amount of government grants receivable is presented in deferred income and is credited to the Profit and Loss Account over the useful economic lives of the assets to which the grants relate.

2.7

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

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LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.10

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.12

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.13

Tangible fixed assets (continued)

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Capital works in progress are not depreciated until they are completed and revenue generating.

Depreciation is provided on the following basis:

Freehold land and buildings	-	10 to 20 years
Plant and machinery	-	5 to 20 years
Combined heat and power generation engine	-	5 to 20 years
Fixtures, fittings and office equipment	-	5 to 10 years
Capital works in progress	-	nil until complete

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Included in Freehold property is land at a value of £1,374,921 which is not depreciated.

2.14

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

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LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.

Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.

Increases in provisions are generally charged as an expense to profit or loss.

2.19

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

The estimates and judgements that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the financial period are as follows:

Depreciation
Tangible fixed assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. Residual values consider matters such as future market conditions, the remaining estimated life of the asset and the discount required to apply cash flows on estimated disposal values to calculate their net present values.

Page 17

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Supply of energy	6,990,210	6,181,862
Gate fees	4,939,648	3,840,441
Intercompany sales	253,764	346,924
	12,183,622	10,369,227

All turnover arose within the United Kingdom.

5.	Other operating income
		2025	2024
		£	£

Government grants receivable	71,250	71,250
Sundry income	189,687	-
	260,937	71,250

	Exchange differences	20	8
	Other operating lease rentals	9,469	8,617

Fees payable to the Company's auditors for the audit of the Company's financial statements

18,500

17,760

Page 18

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Wages and salaries	922,788	861,906
Social security costs	110,689	89,060
Cost of defined contribution scheme	17,354	17,790
	1,050,831	968,756

The average monthly number of employees, including the directors, during the year was as follows:

	2025	2024
	No.	No.

Other salaried staff	25	27

9.	Interest payable and similar expenses
		2025	2024
		£	£

	Finance leases and hire purchase contracts	9,914	13,499
		9,914	13,499



Total current tax	-	-

Deferred tax
Origination and reversal of timing differences	139,554	(181,158)
Total deferred tax	139,554	(181,158)


	Tax on profit/(loss)	139,554	(181,158)

Page 19

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

10.Taxation (continued)

Profit/(loss) on ordinary activities before tax

373,806

(875,405)

Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)	93,452	(218,851)
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	(192)	7,106
Capital allowances for year in excess of depreciation	192,522	120,602
Unrelieved tax losses carried forward	(258,533)	91,143
Deferred tax movement	139,554	(181,158)
Research and development credits	(38,393)	-
Intercompany amounts written off	11,144	-
Total tax charge for the year	139,554	(181,158)

Factors that may affect future tax charges

There were no factors that may affect future tax charges.

11.	Exceptional items
		2025	2024
		£	£

	Impairment of oil separation units	340,201	-
		340,201	-

During the year, the Company recognised an exceptional charge of £340,201 relating to the impairment of oil separation units. This charge has been recognised as an exceptional item due to its material nature and non-recurring character. The impairment charge relates to the write-down of oil separation units to their recoverable amount following a review of their operational efficiency and market conditions.

Page 20

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

12.	Tangible fixed assets

	Freehold land and buildings	Combined Heat & Power Generation Engine	Plant and machinery	Fixtures, fittings and office equipment	Capital works in progress	Total
	£	£	£	£	£	£
Cost or valuation
At 1 January 2025	3,874,532	1,277,119	13,372,693	170,809	98,038	18,793,191
Additions	-	-	525,204	-	76,533	601,737
Transfers between classes	-	-	98,038	-	(98,038)	-
At 31 December 2025	3,874,532	1,277,119	13,995,935	170,809	76,533	19,394,928
Depreciation
At 1 January 2025	1,185,349	835,832	7,375,918	85,200	-	9,482,299
Charge for the year on owned assets	125,299	119,286	1,030,138	7,065	-	1,281,788
Charge for the year on financed assets	-	-	-	16,235	-	16,235
Impairment charge	-	-	340,201	-	-	340,201
At 31 December 2025	1,310,648	955,118	8,746,257	108,500	-	11,120,523
Net book value
At 31 December 2025	2,563,884	322,001	5,249,678	62,309	76,533	8,274,405
At 31 December 2024	2,689,183	441,287	5,996,775	85,609	98,038	9,310,892

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
	2025	2024
	£	£


Plant and machinery	205,528	237,980
Fixtures, fittings and office equipment	33,983	49,086
	239,511	287,066

Page 21

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

13.	Stocks
		2025	2024
		£	£

Finished goods	102,976	69,634
	102,976	69,634

14.

Debtors

					2025	2024
					£	£


Trade debtors	2,106,974	1,651,259
Amounts owed by group undertakings	2,687,461	589,850
Other debtors	66,594	202,019
Prepayments and accrued income	701,639	689,857
Tax recoverable	153,570	-
	5,716,238	3,132,985

Details of amounts owed by group undertakings and related parties are included below in Note 26.

15.	Cash and cash equivalents
		2025	2024
		£	£

Cash at bank and in hand	627,322	141,431
	627,322	141,431

Page 22

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

16.	Creditors: Amounts falling due within one year
		2025	2024
		£	£

Other loans (Note 18)	793,801	793,801
Trade creditors	1,292,745	1,615,852
Amounts owed to group undertakings	4,923,945	3,815,557
Amounts owed to joint ventures	13,508	70,435
Corporation tax	2,857	2,857
Other taxation and social security	187,008	44,298
Obligations under finance lease and hire purchase contracts	60,673	57,088
Other creditors	4,266	5,009
Accruals and deferred income	1,271,728	321,518
	8,550,531	6,726,415

Details of amounts owed to group undertakings and related parties are included below in Note 26.

The Company signed a loan agreement with its parent company on 31 December 2021. The loan becomes repayable from the 10th anniversary of the loan agreement date. Repayments of up to £5,000,000 and not less than £1,000,000 can be requested by the parent entity from any individual borrower within any 12-month period upon no less than 9 months prior written notice from the parent to the borrower, therefore the balance is due as under 1 year. The loan is unsecured and interest free.

17.	Creditors: Amounts falling due after more than one year
		2025	2024
		£	£

Net obligations under finance leases and hire purchase contracts	79,267	139,940
Government grants received	306,447	377,697
	385,714	517,637

Page 23

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Amounts falling due within one year
Other loans	793,801	793,801
	793,801	793,801



	793,801	793,801

Within one year	60,673	57,088
Between 1-5 years	64,258	60,673
Over 5 years	15,009	79,267
	139,940	197,028

Hire purchase contracts are secured over the assets being financed.

Page 24

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

20.	Financial instruments
		2025	2024
		£	£

	Financial assets
	Financial assets measured at fair value through profit or loss	4,861,029	2,443,128

	Financial liabilities
	Financial liabilities measured at fair value through profit or loss	8,295,727	6,617,163

	Financial assets that are debt instruments measured at amortised cost within the company comprise trade and other debtors, amounts owed by group companies and joint ventures.
	Financial liabilities measured at amortised cost within the group comprise trade creditors, accruals, bank and other loans, amounts owed to group and amounts owed to joint ventures.

21.	Deferred taxation

		2025
		£

	At beginning of year	(517,155)
	Charged to profit or loss	(139,554)
	At end of year	(656,709)

The provision for deferred taxation is made up as follows:
	2025	2024
	£	£

Accelerated capital allowances	(769,795)	(930,992)
Tax losses carried forward	112,775	413,100
Short term timing differences	311	737
	(656,709)	(517,155)

Page 25

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

22.	Share capital
		2025	2024
		£	£

Allotted, called up and fully paid

14,313 (2024 - 14,313) Ordinary shares of £1.00 each	14,313	14,313

23.

Reserves

Share premium account

This presents the excess amounts paid on issue of ordinary shares over their nominal value.

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses.

24.	Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable to the Company to the fund and amounted to £17,354 (2024: £17,790). Contributions totalling £4,266 (2024: £5,333) were payable to the fund at the balance sheet date and are included in creditors.

Not later than 1 year	2,281	7,820
Later than 1 year and not later than 5 years	-	2,281
	2,281	10,101

Page 26

LOCAL GENERATION LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

26.

Related party transactions

The Company is a member of a group headed by GVO B-1 Limited.

The Company has received loans from its Parent, GVO B-1, the balance of which at the year end was £2,421,460 (2024: £2,398,960). Amounts owed to group undertakings are unsecured, interest free and repayable from the 10th anniversary of the loan agreement date. Repayments of up to £5,000,000 and not less than £1,000,000 can be requested by the parent entity from any individual borrower within any 12-month period upon no less than 9 months prior written notice from the parent to the borrower, therefore the balance is due as under 1 year.

Sales to the parent company totalled £nil (2024: £1,112). At the year end, included within amounts owed from group undertakings is £4,292 (2024: £4,292). Purchases totalled £nil (2024: £160,413). At the year end, included within amounts owed to group undertakings is £53,471 (2024: £160,413).

The Company had transactions with fellow subsidiary companies during the year. Sales totalled £918,409 (2024: £346,924). Purchases totalled £1,895,810 (2024: £2,163,007). The amount outstanding from fellow subsidiaries at the year end was £2,687,461 (2024: £585,557) and the amount owing to these subsidiaries was £2,449,014 (2024: £1,256,185). Amounts due between related parties and group undertakings are unsecured, interest free, and repayable on demand. No amounts with related parties have been waived or written off.

During the year, the Company had transactions with a joint venture which have all been concluded under normal market conditions. Purchases totalled £72,518 (2024: £878,547) in the year and at the year end, £13,508 (2024: £70,435) was owed.

The above balances can be seen in Notes 14 and 16 respectively as amounts owed by/to group undertakings.

27.	Controlling party

The parent undertaking at the balance sheet date is GVO B-1 Limited, by virtue of its majority shareholding in the company. The registered office of GVO B-1 is Control Tower Hemswell Cliff Industrial Estate, Hemswell Cliff, Gainsborough, DN21 5TU.

In April 2025, Hansa Aktiengesellschaft, a Swiss company limited by shares, acquired the majority shareholding in GVO B-1 Limited. Prior to this date, Emily Von Opel was the ultimate controlling party.

At the balance sheet date, Georg Von Opel was the company's ultimate controlling party by virtue of his majority shareholding in Hansa Aktiengesellschaft via various Trust Holdings.

Page 27