IRIS Accounts Production v24.2.0.383 08205335 Board of Directors 1.1.23 31.12.23 31.12.23 a Group holding company. Yü Energy Holding Limited is the main intermediate holding entity of Yü Group PLC, and the parent of the main trading entity in the Group, Yü Energy Retail Limited. In addition to being an intermediate holding entity, the company provides natural gas shipping services to business customers, for one of its subsidiary companies and also provides natural gas shipping services to external third-party energy supply businesses. 0 0 true true false true true false false false true true true true true true true true true true true true true true true true false false false Fair value model Ordinary 0.0500 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pureutr:tonnesutr:kWh082053352022-12-31082053352023-12-31082053352023-01-012023-12-31082053352021-12-31082053352022-01-012022-12-31082053352022-12-3108205335ns15:EnglandWales2023-01-012023-12-3108205335ns14:PoundSterling2023-01-012023-12-3108205335ns10:Director12023-01-012023-12-3108205335ns10:PrivateLimitedCompanyLtd2023-01-012023-12-3108205335ns10:FRS1012023-01-012023-12-3108205335ns10:Audited2023-01-012023-12-3108205335ns10:LargeMedium-sizedCompaniesRegimeForDirectorsReport2023-01-012023-12-3108205335ns10:LargeMedium-sizedCompaniesRegimeForAccounts2023-01-012023-12-3108205335ns10:FullAccounts2023-01-012023-12-310820533512023-01-012023-12-310820533512023-01-012023-12-3108205335ns10:OrdinaryShareClass12023-01-012023-12-3108205335ns10:Director22023-01-012023-12-3108205335ns10:Director32023-01-012023-12-3108205335ns10:Director42023-01-012023-12-3108205335ns10:Director52023-01-012023-12-3108205335ns10:RegisteredOffice2023-01-012023-12-310820533512023-01-012023-12-3108205335ns5:CurrentFinancialInstruments2023-12-3108205335ns5:CurrentFinancialInstruments2022-12-3108205335ns5:ShareCapital2023-12-3108205335ns5:ShareCapital2022-12-3108205335ns5:RetainedEarningsAccumulatedLosses2023-12-3108205335ns5:RetainedEarningsAccumulatedLosses2022-12-3108205335ns5:ShareCapital2021-12-3108205335ns5:RetainedEarningsAccumulatedLosses2021-12-3108205335ns5:RetainedEarningsAccumulatedLosses2022-01-012022-12-3108205335ns5:RetainedEarningsAccumulatedLosses2023-01-012023-12-3108205335ns5:PatentsTrademarksLicencesConcessionsSimilar2023-01-012023-12-310820533512023-01-012023-12-310820533522023-01-012023-12-310820533532023-01-012023-12-3108205335ns10:OrdinaryShareClass12022-01-012022-12-3108205335ns5:PatentsTrademarksLicencesConcessionsSimilar2022-12-3108205335ns5:PatentsTrademarksLicencesConcessionsSimilar2023-12-3108205335ns5:PatentsTrademarksLicencesConcessionsSimilar2022-12-3108205335ns5:Subsidiary12023-01-012023-12-3108205335ns5:Subsidiary112023-01-012023-12-3108205335ns5:CurrentFinancialInstruments2023-01-012023-12-3108205335ns10:OrdinaryShareClass12023-12-310820533522023-01-012023-12-31
REGISTERED NUMBER: 08205335 (England and Wales)



















Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2023

for

Yü Energy Holding Limited

Yü Energy Holding Limited (Registered number: 08205335)






Contents of the Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Statement of Directors' Responsibilities 6

Report of the Independent Auditors 7

Statement of Comprehensive Income 10

Statement of Financial Position 11

Statement of Changes in Equity 12

Notes to the Financial Statements 13


Yü Energy Holding Limited

Company Information
for the Year Ended 31 December 2023







DIRECTORS: B B Kalar
P E Rawson
R F Paynter Bryant
A J Perkins
J C Glasgow





REGISTERED OFFICE: CPK House 2 Horizon Place
Mellors Way
Nottingham Business Park
Nottingham
Nottinghamshire
NG8 6PY





REGISTERED NUMBER: 08205335 (England and Wales)





AUDITORS: RSM UK Audit LLP
10th Floor
103 Colmore Row
Birmingham
West Midlands
B3 3AG

Yü Energy Holding Limited (Registered number: 08205335)

Strategic Report
for the Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The principal activity of the company is that of a group holding company and energy shipper. Yü Energy Holding Limited (the "Company") is the main intermediate holding entity of Yü Group PLC (the "Group"), and the parent of the main trading entity in the Group, Yü Energy Retail Limited. In addition to being an intermediate holding entity, the company provides natural gas shipping services to its subsidiary company, thus generating £17,543,000 of turnover (2022: £17,458,000) in the year ended 31 December 2023.

Financial performance of the Group for the year ended 31 December 2023 delivered above management expectations in revenue, EBITDA and cash, and the Board is confident in continuing this strong trajectory.

The profit for the year of the Company of £417,000 (2022: £813,000) recognised in these financial statements relates mainly to the gas shipping services provided to Yü Energy Retail Limited.

KEY PERFORMANCE INDICATORS
Key performance indicators are determined and reviewed on a Group basis which can be found in the Yü Group PLC accounts (see note 16). The directors do not use key performance indicators to assess the performance of the company and its principal activity is that of a holding company.

STATEMENT IN RELATION TO SECTION 172 OF THE COMPANIES ACT
The Directors consider, both individually and collectively, that they have acted in a way they consider promotes the success of the Company for the longer term. This includes ensuring due regard to the benefit of its members as a whole, and basing decisions after considering the likely consequences across all stakeholders, shareholders, employees, customers, suppliers, regulators, and the community in which the Group operates.

The Company is the main intermediary holding Company of Yü Group PLC. Further details of the wider Groups's engagement with stakeholders is covered in the Yü Group PLC Section 172 statement as part of the Group Annual Report and Accounts.

PRINCIPAL RISKS AND UNCERTAINTIES
Financial and operational risk management is undertaken as part of the Group operations as a whole. Details of the principal risks and uncertainties facing the Group are included in the financial statements of Yü Group PLC, which are available from the Group headquarters, CPK House, 2 Horizon Place, Nottingham Business Park, Mellors Way, Nottingham, NG8 6PY.


Yü Energy Holding Limited (Registered number: 08205335)

Strategic Report
for the Year Ended 31 December 2023

FUTURE DEVELOPMENTS AND OUTLOOK
The Board of Directors are pleased with the progress of this business in its activities as a provider of natural gas shipping services to the external customers of a fellow Group Company. The Directors anticipate this business will continue to grow as the overall Yü Group customer portfolio grows and see the provision of gas shipping services as a core Group activity.

The Company is well placed to continue to follow its stated financial framework to drive significant organic growth, improve profitability and maintain robust cash management.

The approach to commodity hedging continues to deliver despite significant market volatility.

The Board is therefore pleased to report these significantly improved results in 2023 at revenue and profitability, and remain focused on continuing to improve these measures over the short to medium term.

ON BEHALF OF THE BOARD:




P E Rawson - Director


21 June 2024

Yü Energy Holding Limited (Registered number: 08205335)

Report of the Directors
for the Year Ended 31 December 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2023.

DIVIDENDS
An interim dividend of £1.55 per share was paid on 31 December 2023. The directors propose a final dividend in relation to 2023 of £0.80 per ordinary share.

The total distribution of dividends for the year ended 31 December 2023 will be £23,500,000.

EVENTS SINCE THE END OF THE YEAR
Information relating to events since the end of the year is given in the notes to the financial statements.

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

B B Kalar
P E Rawson
R F Paynter Bryant
A J Perkins
J C Glasgow

The company maintains directors' and officers' liability insurance. This insurance cover has been established for all directors to provide appropriate cover for their reasonable actions on behalf of the Group. This was in force during the year ended 31 December 2023 and remains in force at the date of this report.

POLITICAL CONTRIBUTIONS
The Company made no political donations or incurred any political expenditure during the year (2022: £nil).

SUPPLIER PAYMENT POLICY AND PRACTICE
The Group does not operate a standard code in respect of payments to suppliers. The Group agrees terms of payment with suppliers at the start of business and then makes payments in accordance with contractual and other legal obligations. The number of creditor days outstanding at 31 December 2023 was 5 days (2022: 7 days).

CARBON AND ENERGY REPORTING
The Company is a wholly owned subsidiary of Yü Group PLC which includes all relevant carbon reporting disclosures in the consolidated financial statements, which includes the reporting relevant for the company, and as such the company has applied the exemption given in Companies Act 2006 not to present the disclosure in it's individual financial statements.

STRATEGIC REPORT
The Company has chosen, in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) regulations 2013 to set out in the Company's Strategic Report, certain information required by Schedule 7 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the Directors' Report:

- principal risks and uncertainties; and
- an indication of likely future developments in the business of the company

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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Yü Energy Holding Limited (Registered number: 08205335)

Report of the Directors
for the Year Ended 31 December 2023


AUDITORS
Pursuant to section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and RSM UK Audit LLP will therefore continue in office.

ON BEHALF OF THE BOARD:





P E Rawson - Director


21 June 2024

Yü Energy Holding Limited (Registered number: 08205335)

Statement of Directors' Responsibilities
for the Year Ended 31 December 2023

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 they have elected to prepare the financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosures Framework.

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:

a)select suitable accounting policies and then apply them consistently;

b)make judgements and estimates that are reasonable and prudent;

c)state whether applicable UK accounting standards, including FRS 101 have been followed, subject
to any material departures disclosed and explained in the financial statements;

d)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 prevention and detection of fraud and other irregularities.

Report of the Independent Auditors to the Members of
Yü Energy Holding Limited

Opinion
We have audited the financial statements of Yü Energy Holding Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity 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 101 'Reduced Disclosure Framework' (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 2023 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 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 Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors 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 Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Yü Energy Holding Limited


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 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.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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 a Report of the Auditors 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 the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
- obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the company operates in and how the company is complying with the legal and regulatory frameworks;
- inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

Report of the Independent Auditors to the Members of
Yü Energy Holding Limited

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 101, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures, inspecting correspondence with local tax authorities.

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to Ofgem regulation. We performed audit procedures to inquire of management and those charged with governance whether the company is in compliance with these law and regulations and inspected correspondence with licensing or regulatory authorities.

The audit engagement team identified the risk of management override of controls and revenue recognition as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business, challenging judgments and estimates applied in the recognition of revenue.

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 Report of the Auditors.

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 a Report of the Auditors 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.




Ian Wall (Senior Statutory Auditor)
for and on behalf of RSM UK Audit LLP
10th Floor
103 Colmore Row
Birmingham
West Midlands
B3 3AG

21 June 2024

Yü Energy Holding Limited (Registered number: 08205335)

Statement of Comprehensive
Income
for the Year Ended 31 December 2023

2023 2022
Notes £'000 £'000 £'000 £'000

REVENUE 3 17,543 17,458

Cost of sales 16,615 16,542
GROSS PROFIT 928 916

Administrative expenses 14 2
OPERATING PROFIT 914 914

Income from shares in group
undertakings

20,000

-
Interest receivable and similar income 1 -
20,001 -
PROFIT BEFORE TAXATION 5 20,915 914

Tax on profit 6 498 101
PROFIT FOR THE FINANCIAL YEAR 20,417 813


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

20,417

813

Yü Energy Holding Limited (Registered number: 08205335)

Statement of Financial Position
31 December 2023

2023 2022
Notes £'000 £'000 £'000 £'000
NON CURRENT ASSETS
Intangible assets 8 45 47
Investments 9 - -
Deferred tax asset 10 792 1,179
837 1,226

CURRENT ASSETS
Trade and other receivables 11 35,887 3,832
Cash at bank 199 308
36,086 4,140
LIABILITIES
Amounts falling due within one year 12 35,823 9,183
NET CURRENT ASSETS/(LIABILITIES) 263 (5,043 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

1,100

(3,817

)

CAPITAL AND RESERVES
Called up share capital 13 50 50
Retained earnings 1,050 (3,867 )
SHAREHOLDERS' FUNDS 1,100 (3,817 )

The financial statements were approved by the Board of Directors and authorised for issue on 21 June 2024 and were signed on its behalf by:





P E Rawson - Director


Yü Energy Holding Limited (Registered number: 08205335)

Statement of Changes in Equity
for the Year Ended 31 December 2023

Called up
share Retained Total
capital earnings equity
£'000 £'000 £'000
Balance at 1 January 2022 50 (4,680 ) (4,630 )

Changes in equity
Total comprehensive income - 813 813
Balance at 31 December 2022 50 (3,867 ) (3,817 )

Changes in equity
Dividends - (15,500 ) (15,500 )
Total comprehensive income - 20,417 20,417
Balance at 31 December 2023 50 1,050 1,100

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements
for the Year Ended 31 December 2023

1. STATUTORY INFORMATION

Yü Energy Holding Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparation
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS101), under the historical cost convention.

In preparing these financial statements, the Company applies the recognition and measurement requirements of UK-adopted International Accounting Standards (IFRS), but makes amendments where necessary in order to comply with Companies Act 2006.

The financial statements are presented in British pounds sterling (£   s).

The Company is exempt by virtue of s400 of the Companies Act 2006 from the requirement to prepare group financial statements. These financial statements present information about the Company as an individual undertaking and not about its group.

The Company's ultimate parent undertaking, Yü Group PLC, includes the Company in its consolidated financial statements. The consolidated financial statements of Yü Group PLC are prepared in accordance with International Financial Reporting Standards and are available to the public and may be obtained from CPK House, 2 Horizon Place, Nottingham Business Park, Mellors Way, Nottingham, NG8 6PY.

The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements and, where relevant, equivalent disclosures have been made in the Group accounts of the parent, in accordance with FRS101:

- Presentation of a Cash Flow Statement and related notes;
- Disclosures in respect of transactions with the parent or wholly owned subsidiaries;
- IFRS 7, Financial Instruments Disclosures;
- Disclosures in respect of capital management;
- Disclosures in respect of the compensation of Key Management Personnel;
- Comparative period reconciliations for share capital;
- Disclosure of the future impact of new International Financial Reporting Standards in issue
but yet effective at the reporting date.
- Revenue disclosures
- Certain disclosures in respect of share based payment arrangements
- Additonal comparative information as per IAS 1 Presentation of Financial Statements paragraph
38 in respect of reconciliations of the carrying amounts of property, plant and equipment,
intangible assets and investment property at the start and the end of the prior period.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Going concern
The financial statements are prepared on a going concern basis. The Directors assessment of going concern is based upon the going concern status of the Group headed up by Yü Group PLC and as such has received a signed letter of support to the Company to confirm the ongoing availability of such financial support and liquidity as is required for 12 months from the date of signing of these financial statements to enable the Company to meet its obligations as they fall due.
At 31 December 2023 the Group had net assets of £46.8m (2022: £14.8m) and cash of £32.5m (2022: £19.0m). The Group also had £49.8m of cash collateral posted with the Group's previous commodity trading counterparty, SmartestEnergy Ltd.

The Company continues to demonstrate significant progress in its results. Yü Energy Holding Limited as a standalone entity made a profit for the year of £20.4m (2022: £0.8m) and at 31 December 2023 had net assets of £1.1m (2022: net liabilities of £3.8m).

Management prepares detailed budgets and forecasts of financial performance and cash flow (including capital commitments) over the coming 12 months. The Board has confidence in achieving such targets and forecasts and has performed comprehensive analysis of various risks (including those set out in the Strategic Report) and sensitivities in relation to performance, the energy market and the wider economy.

The Group continues to demonstrate significant progress in its results. This has led to profit before tax in 2023 of £39.7m (2022: £5.8m), which continues the very strong momentum in the Group's results occurring since 2018. Management is confident in continuing this improvement in profitability based on its business model. The Board has secured the full return of the £49.8m of cash collateral in 2024, providing further confidence.

The profitability delivered in 2023 has been achieved by robust and disciplined management of gross margin; continued growth in the number of meters and volumes of energy supplied to customers, and an ongoing focus on controlling bad debt outcomes. The Group has continued its prudent hedging policy, protecting it from the significant commodity market price volatility.

Profitability metrics have been improved in 2023 due to increased gross margin as the Group leverages its differentiated offer and analytics to optimise its commercial position. Bad debt has decreased, and the Group's investment in Digital by Default is set to enable more efficient cost to acquire and cost to serve, as well as further returns over the short to medium term.

Cash liquidity at the operational level has remained strong, with the key outflow related to energy commodity arrangements as covered below. The Group had significant cash reserves as at 31 December 2023 of £32.5m (2022: £19.0m).

The Board has assessed risks and sensitivities and potential mitigation steps available to it in detail and continues to monitor risk and mitigation strategies in the normal course of business.

Customer receivables and bad debt
The Board considers customer receivable risks in view of the wider market, the energy price environment and the Group's ability to contract and protect its position in respect of late or non-payment. The performance for 2023 has improved significantly as a result of improvements to processes, including new analysis, changes in contracting strategies, increase in teams and the expansion of the Group's smart meter rollout to improve customer outcomes.

The Board performed sensitivities on material changes to customer payment behaviour including the timing of payments or if bad debt levels were to increase.


Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued
The Group has extensive mitigating actions in place. This includes credit checks at point of sale and throughout the customer lifecycle, the requirement for some customers to pay reasonable security deposits at the point of sale, and the offering (ensuring compliance with regulation and good industry practice) of pay as you go products which enable certain customers to access more favourable tariffs. The Group also supports customers with payment plan arrangements, for those customers who will, when able, provide payment, and will ultimately (for some customers, as appropriate based on the circumstances) progress legal and/or disconnection proceedings to mitigate further bad debt.

The Board also notes that the prices now being quoted to customers are back to a more normalised level, broadly equivalent to tariffs charged prior to the rapid increase in global commodity markets experienced in 2021 and 2022.

In view of the reduced market prices, and the Group's ability to manage debt through various mitigating actions, the Board is confident that there will be no material impact relevant to the going concern assumption.

Hedging arrangements and new Trading Agreement
A new five-year commodity trading arrangement between Shell Energy Europe Limited ("SEEL") and certain trading entities of the Group was signed in February 2024 ("the Trading Agreement"), which enables the Group to purchase electricity and gas on forward commodity markets. The Trading Agreement enables forecasted customer demand to be hedged in accordance with an agreed risk mandate (further detailed in the Company's risks and uncertainties reporting in the Strategic Report). This hedging position and the Board defined risk strategy has mitigated, and is expected to continue to mitigate, the impact on the Group from underlying movements in global commodity markets.

As part of the Trading Agreement, SEEL provides exclusive access to commodity products and holds security over the main trading assets of certain Group companies, including those of the Company, which could, ultimately and in extreme and limited circumstances, lead to a claim on some or all of the assets of the Company. In return, SEEL provides market access without the need to post cash collateral in the normal course of operation. The new arrangement with SEEL provides significant advantages to the Group's arrangements in effect at 31 December 2023. The significant benefits of transacting with a major energy company such as SEEL includes support to the Group cash liquidity through the release of the £49.8m of collateral which was prepaid under legacy arrangements.

The Board carefully modelled in detail, and continues to monitor, certain covenants related to profitability, net worth and liquidity associated with the new Trading Agreement to assess the likelihood of any breach of such agreement and the impact any such breach would likely have. Such scenarios include reduced gross margin and increased bad debt, and the impact this would have on the ability to maintain compliance with covenants.

After a detailed review, the Board has concluded that there are no liquidity issues likely to arise in relation to the hedging arrangements and current market context, and the new Trading Agreement should materially improve Group cash liquidity and prospects for the future.

Summary
Following extensive review of the Group's forward business plan and associated risks and sensitivities to these base forecasts (and available mitigation strategies), the Board concludes that it is appropriate to prepare the financial statements on a going concern basis. The Board also considers that there is sufficient headroom to ensure the Group meets covenants based on various downside scenarios assessed.

Revenue
The company provides gas shipping services to Yü Energy Retail Limited. Revenue is recognised in line with the consumption by the end user, being the point at which the transfer of goods or services to the customer takes place and based on an assessment of the extent to which performance obligations have been achieved.

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Intangible assets
Intangible assets that are acquired by the company are stated at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of the intangible assets, unless such lives are indefinite. The estimated useful lives are as follows:

- Electricity licence 35 years

Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reserve in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

Basic financial instruments
Non-derivative financial instruments comprise trade and other debtors and trade and other creditors.

Trade and other receivables

Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses.

Trade and other payables

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

Investments
Investments in subsidiary undertakings, associates and joint ventures are stated at cost (less amounts written off).

Gas shipping related costs
The Company provides gas shipping services for a fellow Group Company, Yü Energy Retail Limited. The costs relate to the cost of shipping gas to business customers on behalf of Yü Energy Retail Limited and are recognised in relation to the relevant periods of gas consumption.

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

2. ACCOUNTING POLICIES - continued

Intra-group financial instruments
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the company considers these to be insurance arrangements and accounts for them as such. In this respect, the company treats the guarantee contract as a contingent liability until such time as it becomes probable that the company will be required to make payment under the guarantee.

Use of estimates and judgements
The preparation of the financial statements in conformity with adopted IFRSs requires the use of estimates and judgements. Although these estimates are based on management's best knowledge, actual results ultimately may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The key areas of estimation and judgement are:
- the estimated amounts of natural gas shipped (in lieu of accurate meter readings) to customers;
- the recoverability of deferred tax assets.

Revenue estimates are based on industry knowledge or source information, where available, and can therefore represent estimates which are lower or higher than the actual out-turn of energy consumption once accurate meter readings are obtained.

Deferred tax asset recoverability is assessed based on directors' judgement of the recoverability of the tax losses by the realisation of future profits over the short to medium term, which inherently is based on estimates.

Revenue Recognition
The Company enters into contracts to ship natural gas to customers. Revenue represents the fair value of the consideration received or receivable from the shipping of actual and estimated gas supplied during the year. Revenue is recognised on consumption, being the point at which the transfer of the goods or services to the customer takes place, and based on an assessment of the extent to which performance obligations have been achieved.

Due to the nature of the gas supply industry and its reliance upon estimated meter readings, gas shipping revenue includes the directors' best estimate of volumes of gas shipped. The company makes estimates of customer consumption based on available industry data, and also seasonal usage curves that have been estimated through historical actual usage data. It also considers any adjustments expected where an estimated meter reading (using industry data) is expected to be different to the consumption pattern of the customer.

3. REVENUE

All turnover arose within the United Kingdom.

4. DIRECTORS' REMUNERATION

All of the directors are also directors of a fellow Group company, Yü Energy Retail Limited. Their remuneration of £1,808,000 (2022: £1,045,000) was paid by Yü Energy Retail Limited and no allocation was made for services to the Company.

There are no other employees employed by the company.

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

5. PROFIT BEFORE TAXATION

The profit before taxation is stated after charging:
2023 2022
£'000 £'000
Electricity licence amortisation 2 2
Cost of gas shipping services 16,615 16,542

Auditors remuneration of £10,000 for the year to 31 December 2023 (2022: £10,000) was borne by another group entity.

6. TAXATION

Analysis of tax charge/ (credit) 2023 2022
£    £   
Current tax charge
Current year 107 -
Adjustment in respect of prior years 4 -
111 -
Deferred tax charge
Current year 611 101
Adjustment in respect of prior years (224 ) -
387 101
Total tax charge 498 101

Reconciliation of effective tax rate
Profit before tax 20,915 914
Tax at UK corporate tax rate of 23.5% (2022: 19%) 4,915 174
Income not taxable (4,700 ) -
Adjustments in respect of prior periods (220 ) -
Utilisation of tax losses brought forward - (224 )
Group relief provided 495 -
Movement in tax rate on deferred tax balances 8 151
Total tax charge 498 101

Deferred taxes at 31 December 2023 and 31 December 2022 have been measured using the enacted tax rates at that date and are reflected in these financial statements on that basis. Following the March 2021 Budget, the tax effective from 1 April 2023 increased from 19% to 25%.

7. DIVIDENDS
2023 2022
£'000 £'000
Ordinary shares of £0.005 each
Interim 15,500 -

The directors propose a final dividend in relation to 2023 of £0.80 per ordinary share (2022: nil per share).

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

8. INTANGIBLE FIXED ASSETS
Electricity
licence
£'000
COST
At 1 January 2023
and 31 December 2023 63
AMORTISATION
At 1 January 2023 16
Amortisation for year 2
At 31 December 2023 18
NET BOOK VALUE
At 31 December 2023 45
At 31 December 2022 47

The amortisation charge is recognised in administrative costs on the income statement.

9. INVESTMENTS

The company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Yü Energy Retail Limited
Registered office: CPK House, 2 Horizon Place, Nottingham Business Park, Mellors Way, Nottingham, NG8 6PY
Nature of business: Supply of gas and electricity to SME's
%
Class of shares: holding
Ordinary 100.00

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

10. DEFERRED TAX ASSET

Total
£   

At 1 January 20231,179
Movement in year(387)
At 31 December 2023792

At 31 December 20221,179

Recognised deferred tax asset
20232022
£   £   

Tax value of loss carry-forwards7921,179
7921,179


Movement in deferred tax in the year

1 JanuaryRecognised31 December
2023in income2023
£   £   £   

Tax value of loss carry-forwards1,179(387)792
1,179(387)792

The deferred tax asset is expected to be utilised by the Company in the coming years and there is no time limit to utilisation of such losses. The Board forecasts sufficient taxable income as a result of the growth in the customer base and the increased profitability against which it will utilise these deferred tax assets.

11. RECEIVABLES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£'000 £'000
Trade receivables 2 2
Amounts owed by group undertakings 35,133 2,036
Other receivables 752 1,794
35,887 3,832

Amounts due from group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

Yü Energy Holding Limited (Registered number: 08205335)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

12. LIABILITIES: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£'000 £'000
Trade payables 223 1,458
Amounts owed to group undertakings 22,697 -
Tax 108 -
Accruals 12,795 7,725
35,823 9,183

Amounts due to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

13. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £'000 £'000
10,000,000 Ordinary £0.00 5 50 50

The Company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at general meetings of the Company.

Retained earnings comprises the Company's cumulative annual profits and losses net of distribution to owners.

14. CAPITAL COMMITMENTS

The company had no capital commitments at 31 December 2023 (2022: £nil).

15. SUBSEQUENT EVENTS

The Group and Company entered into the Trading Agreement with Shell Group in February 2024, and terminated its legacy arrangements with the previous trading counterparty.

There are no other significant post-balance sheet events.

16. ULTIMATE CONTROLLING PARTY

The Company's ultimate parent and controlling party Yü Group PLC, a Company incorporated in the
United Kingdom.

The largest and smallest group in which the results of the Company are consolidated is that headed by Yü Group PLC. No other group financial statements include the results of the Company. Copies of Group accounts can be obtained from the parent company at CPK House, 2 Horizon Place, Mellors Way, Nottingham, NG8 6PY.