The directors present the strategic report for the year ended 31 March 2025.

The principal activity of the company is the supply of electricity and gas to business customers.

The company offers highly competitive products, with the opportunity for every new electricity customer to have a smart meter installed. This enables thousands of SME businesses across the UK to exercise greater control over their usage and costs and save on their energy bills.

Business review and future developments

The energy market continues to present a highly challenging environment. Growth in the UK economy has been constrained by geo-political factors, and the aftermath of the “Energy Crisis” has meant wholesale costs are still higher than previous norms.This has led to a substantial number of businesses that have closed, or at least struggled to pay their energy bills.

SmartestEnergy Business Limited has been able to provide a safe haven for its customers during the ongoing instability of the reporting period. Support has been provided through flexible payment options and deferral schemes, which have helped many customers avoid insolvency. This level of service offered to customers, resulted in an overall ‘excellent’ rating from Trustpilot reviews.

The 2024-25 year was one of stabilisation for the business, with steady growth in customer numbers of 6%, following 2 years of significant customer growth (36% in the year to March 2024 and 39% in the year to March 2023). The company embarked on several major change projects during the year, with a focus on upgrading systems and processes. The benefits of this investment will be realised through lower cost-to-serve and an enhanced customer journey in the years to come.

SmartestEnergy Business Limited innovates relentlessly, through its products, technology and sales partner programs. The company operates an industry leading advance-payment system and continues to be at the forefront of the smart meter rollout. With the backing of its shareholder, the business can continue to realise its growth ambition by offering ever more attractive terms to the energy broker sales channel.

The principal risks and uncertainties facing the company relate to volatility in wholesale energy costs, bad debt risk and competitive price pressure. In addition to efficient working capital management, the company has the financial support of the shareholder to deal with short term cash pressure, and to fund its next phase of growth. At the statement of financial position date the company had drawn down £22m of the £40m approved funding package from the shareholder.

The company operates a policy of fully hedging all forward contracted positions through its parent company, which in normal conditions will result in stable and predictable gross margins. This policy remains the best way of mitigating volume and price volatility.

The risk of bad debt is managed in a variety of ways that are integrated within the business model. Smart meter readings reduce the likelihood of estimates and inaccuracies, which can lead to higher levels of default. SmartestEnergy Business Limited has a high proportion of direct debit payers, which helps to reduce the lead time between billing and payment, and also utilises its advance-payment product to counter the potential for growing debtor balances.

Despite a number of supplier failures in recent years, the business energy market is very competitive and SmartestEnergy Business Limited seeks to offer highly attractive prices to new and existing customers. In addition to competitive prices, the company offers further benefits to its customers, such as fixed payment plans, price guarantees, UK Customer Services, and has always led the way in offering free smart meters to its customers.

The company’s key financial and other performance indicators for the year to 31 March 2025 were as follows:

Under section 172 of the Companies Act 2006, there is a requirement for directors to discharge their duties to promote the success of the company for the benefit of its members as a whole. Examples of some of the actions taken across distinct stakeholder groups are as follows:

Shareholder

The company’s Board includes employees of Marubeni Corporation, and there are frequent business review meetings with the Marubeni and SmartestEnergy Limited executive teams. This close interaction enables clear lines of communication and consistent strategic alignment with shareholder objectives.

Staff

The company strives to have a highly engaged workforce and provides regular communication updates via the local management team as well as from the shareholder. Staff welfare is nurtured through a range of tactical activities as well as delivery through corporate benefits and assistance programs. The company embraces the standards in people management outlined by the investors in people organisation with employee engagement a Board reporting scorecard KPI.

Customers

Engagement with customers and brokers allows us to continue to develop and improve our products and service. The principal way of monitoring customer feedback is via the Trustpilot review website, and the strong level of customer engagement is reflected through the company’s ‘excellent’ rating.

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

The results for the year are set out on page 9.

The directors who held office during the year and up to the date of signing the financial statements were as follows:

This information has been included in the Strategic Report as allowable in the Companies Act 2006.

The directors have considered the need to foster the company’s business relationships with suppliers and customers. This was demonstrated by continuing to meet all supplier payment deadlines during the reporting period, and the level of support via payment plans that was provided to customers who were experiencing financial difficulties during these unprecedented times.

The auditor, Ernst & Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The company operates management policies designed to minimise its exposure to financial risk.

Price risk

The company is exposed due to the volatile nature of the energy industry. This is mitigated through detailed analysis of expected energy usage along with the utilisation of forward contracts to fix the future costs of energy to the company.

Credit risk

The company operates a number of policies and procedures designed to mitigate credit risk. In particular, before entering into transactions with new customers a detailed credit review is undertaken to determine whether or not, in the opinion of the directors, the customer has the ability to meet its debts as they fall due. Security deposits are also taken where necessary.

Liquidity and cash flow risk

The company operates a range of policies to ensure there is sufficient liquidity and cash to meet its liabilities. Regular cash flow forecasts are prepared to ensure the company is able to pay its debts as they fall due.

The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. The financial support of the ultimate shareholder has been extended, to mitigate against the risk of further market volatility. This is provided through a Parental Guarantee from Marubeni Corporation valid until 31 March 2027. This period reflects the formal going concern period assessed by the directors. The guarantee outlines Marubeni Corporation’s commitment to support the company in meeting its liabilities if and when the company cannot meet them itself. The confidence in the backing of Marubeni Corporation is secured further by Marubeni employees who sit on the Board of SmartestEnergy Business Limited. Alongside this support, the directors have independently verified the solid financial standing of the Marubeni Corporation through publicly available information.

The directors have further assessed that the impact of climate risks and potential government action do not create material risk to the company. Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty in continuing to adopt the going concern basis in preparing the accounts.

Environmental reporting

The company has taken the exemption to report streamlined energy and carbon reporting information on the basis the information is included in the consolidated results of the intermediate parent, SmartestEnergy Limited.

In a broader environmental context, the company is well placed to further leverage opportunities from its parent being one of the UK’s largest aggregators of power from renewable and distribution connected generators. This is reflected through a growing share of the company’s customers choosing ‘green’ renewable tariffs.

The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business; and

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of SmartestEnergy Business Limited for the year ended 31 March 2025 which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity, the Statement of cash flows and the related notes 1 to 26, 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 FRS 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 March 2025 and of its loss 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 Auditor’s 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 as of 31 March 2027.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s 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 this 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 the 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 our 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.

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 and the directors' report.

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.

As explained more fully in the directors’ responsibilities statement set out on page 5, 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.

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 auditor’s 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.

Explanation as to what extent the audit was considered 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 irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those relating to the reporting framework (United Kingdom Generally Accepted Accounting Practice and Companies Act 2006), and the relevant direct and indirect tax compliance regulations. In addition, the Company has to comply with laws and regulations relating to its operations including Ofgem regulations, data protection, consumer rights, anti-bribery and corruption, and employee’s health and safety.

• We understood how SmartestEnergy Business Limited is complying with those frameworks by making enquiries with management to understand how the entity maintains and communicates its policies and procedures to ensure compliance. We corroborated this through our review of the company’s board minutes, through enquiry of employees to verify company policies, and through the inspection of employee handbooks. We made enquires of those charged with governance, as well as made enquiries of legal counsel responsible for SmartestEnergy Business Limited and their parent company. We also enquired of the company’s compliance team and received their monthly reporting detailing any incidents of actual or suspected non-compliance with laws and regulations. Where it was deemed applicable, we followed up on these matters with management to reach an appropriate conclusion. Furthermore, we reviewed Ofgem’s website for details of any enforcement actions or open investigations.

• We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur by understanding the potential incentives and pressures for management to manipulate the financial statements, including the executive remuneration schemes in place, and performed procedures to understand the areas in which this would most likely arise. Based on our risk assessment procedures we identified improper recognition of revenue due to the management override of revenue journals as a fraud risk, as well as manipulation of expenses through management override of costs within the period. To address our fraud risk, we have performed journal entry testing with a focus on journals to revenue that met our risk criteria based on our understanding of the business. Alongside these procedures we also performed a ‘proof in total’ calculation by corroborating revenue recognised to cash received in the year and other relevant account movements, as well as testing admin expenses and unrecorded liabilities to lower thresholds and performing additional analytical review procedures over accruals to understand the movements over the period for which the executive remuneration arrangements are assessed.

• Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved enquiries of senior management in departments other than finance to understand compliance monitoring procedures, enquiries of the parent company, a review of board minutes and compliance-based reporting from the companies compliance monitoring team. As well as this we have examined whistle blowing registers performed searches of Ofgem’s website, performed testing over employee compensation balances, ensured disclosures are complete in line with the Companies Act 2006 (as amended) and the Large and Medium-sized companies and groups (Accounts and Reports) regulations 2008 (SI 2008- 410) (as amended) and performing testing of tax balances..

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

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

SmartestEnergy Business Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ridgeworth House, Liverpool Gardens, Worthing, West Sussex, BN11 1RY.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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 £ '000.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. The financial support of the ultimate shareholder has been extended, to mitigate against the risk of further market volatility. This is provided through a Parental Guarantee from Marubeni Corporation valid until 31 March 2027. This period reflects the formal going concern period assessed by the directors. The guarantee outlines Marubeni Corporation’s commitment to support the company in meeting its liabilities if and when the company cannot meet them itself. The confidence in the backing of Marubeni Corporation is secured further by Marubeni employees who sit on the Board of SmartestEnergy Business Limited. Alongside this support, the directors have independently verified the solid financial standing of the Marubeni Corporation through publicly available information.true

The directors have further assessed that the impact of climate risks and potential government action do not create material risk to the company. Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty in continuing to adopt the going concern basis in preparing the accounts.

Electricity and gas revenue represent amounts receivable for the provision of electricity and gas services net of VAT, climate change levy and trade discounts. Revenue is recognised on the basis of actual and estimated usage by customers in the relevant period, including usage that has not been invoiced at the year end date. The uninvoiced usage is estimated by the directors as a percentage of monthly billing and is based on historical data.

Any variance in units charged to customers and billed by suppliers due to estimated bills is recognised in the statement of financial position until actual data is available.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Inventories are Renewable Obligation Certificates (“ROCs”) which are initially recognised at cost and subsequently measured at the lower of cost and net realisable value (NRV).

Cash and cash equivalents are basic financial assets and include deposits held at call with banks.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position 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.

The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and certain other accounts receivable and payable and loans from related parties.

Debt instruments like loans and other accounts receivable and payable are initially measured at the transaction price (including transaction costs) and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

The company uses commodity purchase contracts to protect its exposure to fluctuations in electricity commodity prices. When commodity purchase contracts have been entered into and continue to be held for the purpose of receipt or delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements, they are considered to be eligible for the 'own use exemption'. As a result these contracts fall outside the scope of sections 11 and 12 of FRS 102 and are therefore not accounted for as derivatives.

‘Renewable Obligation Certificates (ROCs) are green certificates used by energy suppliers to demonstrate that they are able to meet their obligation to source a certain proportion of the electricity they supply from renewable sources. As these ROCs do not meet the definition of a financial instrument, and they are purchased by the company solely to meet their renewable energy obligations each year, they are classified within the financial statements as inventories.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Derivatives, including interest rate swaps and forward commodity contracts which are not eligible for the own use exemption, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate. The fair value of the forward contracts is calculated by reference to latest market price and the volumes which are required to be settled with the industry.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions.

Renewable obligations certificates

The company holds Renewable Obligation Certificates (“ROCs”) to meet regulatory obligations associated with the supply of energy to customers; this obligation arises as the company must sell a specific ratio of electricity sales volume to its customers from renewable sources. This is achieved through the purchase of ROCs. These certificates are not held for trading or speculative purposes and are accounted for as inventory under Section 13 of FRS 102. ROCs are initially recognised at cost and subsequently measured at the lower of cost and net realisable value (NRV). At the reporting date, the company held ROCs with a carrying value of £25,912k. (2024 - £13,120k)

The company accrues for its renewable obligation liability based on the energy it supplies to customers. The inventories are then surrendered, and the provision is released at the end of the compliance period reflecting the consumption of the economic benefit.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The directors have reviewed the long term forward commercial agreements which the company has in place for the supply of electricity and gas. It is considered that these contracts were entered into and are held for the purpose of the delivery of electricity and gas, which is a non-financial item, in accordance with the company's expected future purchase and sale requirements. These contracts are entered into solely for the purchase of electricity and gas for the company's own use to supply to its customers.

On this basis, the directors consider that these contracts ordinarily fall outside the scope of Section 12 of FRS 102 and the ‘own use’ exemption has been applied to the contracts on which this applies. Therefore these contracts have not been treated as financial instruments and are not required to be fair valued at the statement of financial position date.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Revenue derived from the sale of energy includes an estimate of the value of electricity and gas supplied to customers between the dates of the last meter reading and the end of the reporting period. Estimates of the number of units consumed but not yet processed through the settlement process are based on historic data until final reconciliation data is received.

Similarly purchase volumes are also subject to the same degree of estimation, with associated settlement costs dependent on the receipt of final reconciliation data.

The company assesses the recoverability of trade and other receivables using the expected credit loss (ECL) model. The model is based on historical credit loss experience, including analysis of past default rates and customer payment behaviour.

Management applies a provision matrix to estimate expected credit losses across different ageing categories of receivables. The allowance is reviewed periodically to ensure it remains appropriate based on observed trends and credit risk. Adjustments to the ECL allowance are recognised in the profit and loss account. Where actual credit losses differ from previous estimates, the carrying amount of receivables is updated accordingly.

Some of the Cost of Sales are subject to updates over a period of time in line with industry settlement routines; it can take up to 14 months for these costs to be finalised. The estimates and associated costs are therefore based on historical experience and sound understanding of the likely movements in costs, as well as other factors that are considered to be relevant. Actual results may differ from these estimates.

The company operates in one principal area of activity, that of the rendering of services, which is wholly undertaken in the United Kingdom. Revenue therefore incorporates the fees receivable in relation to the rendering of these services as well as grant revenue.

In the current and comparative year grant income received from government schemes - the Energy Bill Relief Scheme (EBRS) and Energy Bill Discount Scheme (EBDS) - has been treated as government grant income within other revenue. The split of the revenue streams is shown on the face of the statement of comprehensive income.

The EBRS and EBDS enabled suppliers to pass on a discount to customers that were paying market prices higher than a government mandated level. The discounts were applied to customer bills and were then recovered by the supplier from the government.

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

Their aggregate remuneration comprised:

Of the 4 directors noted, only 2 (2024: 2) are paid by SmartestEnergy Business Limited. Of the remaining 2 the services provided by 1 is recharged by a group company and therefore these costs are included in the disclosure amounts noted. The services provided by the remaining director are deemed inconsequential to the entity and therefore not disclosed in the employee numbers and remuneration figures above.

The Company operates an executive long-term incentive plan ("LTIP") whereby the senior leadership of the Company, as determined by the Company's Remuneration Committee, may be eligible to receive cash awards at the end of the three-year period between 1 April 2022 and 31 March 2025. The cash awards will be earned based on the participant's continued service during this period and the achievement of financial targets (based on profit after tax metrics) for the for the three financial years covered by the plan. The Company is recognising the cost of the expected payout on a straight-line basis across the three-year period ending 31 March 2025, adjusting the expected payout amount each period based on the actual and forecasted financial performance of the Company. During the year ended 31 March 2025, the Company recognised £0.3 million of expense (2024: £0.3 million) related to the LTIP, which is presented within the subtotal for wages and salaries above. As of 31 March 2025, the Company held a liability of £0.9 million (2024: £0.6 million) related to the LTIP, which is presented within trade and other payables in the statement of financial position.

Directors are considered to be the only key management personnel of the company.

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

Inventories represent Renewable Obligation Certificates (ROCs) held which are purchased by the company solely to meet their own renewable energy obligations each year. These certificates are held for own use purposes and not held for trading or speculative purposes. These ROCs are initially recognised at cost and subsequently measured at the lower of cost and net realisable value (NRV).

During the year the directors have concluded it was appropriate to change the classification of ROCs held from ‘other receivables’ as they were classified in the comparative period to ‘inventories’ in the current period. This reclassification has been enacted to ensure consistency of reporting with group policies and to ensure correct classification in line with the applicable reporting standards. There has been no change to reported profit, current or net assets as a result of this reclassification and the directors have not restated the prior year figures on the grounds of qualitative materiality.

The trade receivables balance as at 31 March 2025 is shown net of a bad debt provision of £24,998k (2024: £51,114k).

Included within prepayments and accrued income due less than and greater than one year is £18,461k (2024: £19,267k) relating to commissions prepayments paid to brokers in respect of customers expected future energy use. These amounts are prepaid to future periods to match the expected usage.

During the year the company renewed a revolving credit facility which increased the maximum principal amount to £40m (2024 : £20m) provided by its parent, SmartestEnergy Limited. As of 31 March 2025, £22m (2024: £nil) of the facility had been drawn down. No security has been provided.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. As at the year end date, contributions of £nil were outstanding (2024: £nil).

Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.

The company has issued 1 ordinary share of £1, fully paid. Due to rounding presentation to the nearest £1,000, the amount is shown as £0 in these financial statements.

Includes all current and prior year retained profits and losses.

As at the year end date, the company has agreed forward contracts totalling £207,568k (2024: £146,307k) for the purchase of electricity to supply to its customers.

As at the year end date, the company has agreed forward contracts totalling £21,824k (2024: £44,716k) for the purchase of gas to supply to its customers.

As at the year end date, the company has agreed forward contracts totalling £8,637k (2024: £46,152k) for the purchase of renewable obligation contracts.

The operating lease commitments represent the lease liability payable by the company to third parties. The lease has been transferred to the company in the current period.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Transactions and balances with fellow group companies have not been disclosed in accordance with FRS 102 Section 33.1.A.

The immediate parent company is SmartestEnergy Limited, a company incorporated in the UK. The ultimate parent company is Marubeni Corporation, a company incorporated and listed in Japan.

Marubeni Corporation prepares group financial statements and copies can be obtained from 4-2, Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-8088, Japan.