Encompass Corporation UK Limited
Annual Report and Financial Statements
For the year ended 31 December 2024
Company Registration No. SC493055 (Scotland)
Encompass Corporation UK Limited
Company Information
Directors
R Carson
W N Johnson
Company number
SC493055
Registered office
First Floor
10 Bothwell Street
Glasgow
Scotland
G2 6LU
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Encompass Corporation UK Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 22
Encompass Corporation UK Limited
Strategic Report
For the year ended 31 December 2024
Page 1
The directors present the strategic report for Encompass Corporation UK Limited (“the Company” or “Encompass”) for the year ended 31 December 2024.
Overview
Encompass enables fast, accurate identity validation and verification of corporate clients, and a gold standard approach to KYC. Our award-winning corporate digital identity (CDI) platform and innovative solutions incorporate real-time data and documents from authoritative global public data sources and private client information, to create and maintain digital risk profiles. With Encompass, the world’s leading banks improve client experience and increase business opportunities through consistent regulatory compliance and risk mitigation.
In a world of surging client expectations and fierce competition, banks must embrace change to stay relevant. Digital transformation is no longer optional: it’s essential for survival. How fast banks can accurately verify the identity of corporate clients is more critical than ever. Outdated manual processes, legacy systems, and a complex web of escalating regulatory demands are negatively impacting the identity verification process, frustrating both banks and clients. By innovating and embracing automation, banks can achieve greater efficiency and client satisfaction while protecting revenue growth, profits, and reputations.
Encompass is delivered as Software as a Service (SaaS) and designed for seamless integration and accessible via an intuitive user interface (UI) or robust API. Digital profiles are available in multiple formats and enable effortless incorporation into existing banking systems including existing or third-party client lifecycle management (CLM) and workflow solutions.
Review of the business
The launch of the Corporate Digital Identity (CDI) category has been a major undertaking by the Encompass team. We are seeing increased recognition of CDI within the industry, in publications and amongst standards bodies. CDI is resonating with banks that need to improve their customer experience, revenue, market share, and reduce costs.
We are poised to broaden the appeal of our CDI platform in 2025. Our strategic plan includes integrating non-KYC specific data and extending CDI's importance across multiple stages of the banking value chain.
The past two years have presented significant challenges for our industry, with top-quartile growth for companies like ours continuing to decline. The headwinds started with the interest rate increases and warnings to banks of challenging times. The restrictive budgeting within the banking sector that followed led to postponed transformation projects and cautious spending.
However, we are seeing promising signs of recovery. Our partners in the global advisory and consulting firms are seeing new major transformation projects commencing and regulators have resumed significant investigations into banks’ regulatory compliance.
We received significant industry recognition for our people, products, and services, most notably:
Included in the RegTech 100 2024
Best Client Onboarding Solution by RegTech Insight Awards USA
Most Trusted Business KYC Solutions Experts in the Singapore Business Awards
Listed as one of the Most Influential Technology Firms of 2024 by The Financial Technologist
Listed on the FinCrime50, Most Influential FinTech Firms 2024, DataTech50 and Chartis RiskTech100
Best KYC & Onboarding Solution by Regulation Asia Awards for Excellence
Shortlisted in British Bank Awards RegTech Partner of the Year
Shortlisted in Scotland’s Financial Technology Awards FinTech of the Year
Encompass Corporation UK Limited
Strategic Report (Continued)
For the year ended 31 December 2024
Page 2
Financial performance
2024 saw our continued focus and determination to remain on the path to profitability with revenue up and expenses down. The tech sector saw wide ranging layoffs and companies fighting to adjust the way they operate. Encompass was no different as we continued to strive toward operating with a lean team and on a path to profitability.
Revenue reported in FY24 is £13.4m, up by 45% from FY23. Our run rate ARR gives us confidence of another year of revenue growth in FY25.
Excluding intragroup re-charges and exceptional items, operating costs were 10% lower. Gross margin on product revenue is 79%, up from 72% in the prior year. This puts us in a strong position to drive toward profitability going forward, with further revenue acquisition.
We continued to invest in product development, particularly on the back of the CoorpID and Blacksmith acquisitions, where we made solid progress towards announcing the new EC360 product offering in early 2025. We also continued to invest in revenue accretive areas - marketing and commercial teams - as well as business critical functions such as security
People
Headcount decreased to an average of 90 (2023: 105) and ended the year with 74 members of staff, as we sought to achieve efficiencies across the business.
During the year, our Executive team has undergone significant changes aimed at enhancing strategic direction and operational efficiency. Key leadership roles have been restructured, with internal promotions filling the roles of Chief Financial Officer and Chief Revenue Officer. New appointments were made in the executive positions of VP Customer Operations and Chief Technology Officer. These changes are designed to bring fresh perspectives and drive innovation, ensuring the company remains competitive in a rapidly evolving market. Our executive team brings a wealth of experience and a proven track record of success, which is expected to contribute positively to the company's long-term growth and stability.
We also made senior level hires in Security, with the appointment of our first Chief Information Security Officer, and in commercial teams with new management appointed in Europe and the UK.
Principal uncertainties and risks
Cybersecurity and information security
Data and information integrity and security are crucially important to the success of Encompass. Cybersecurity incidents or the perceived threat thereof could lead to customer and revenue loss as well as material legal liability. The complexity and sophistication of organized crime present significant challenges, requiring constant updates to detection and prevention strategies. Additionally, the integration of advanced technologies like AI also introduces risks related to explainability and regulatory alignment.
Our Chief Information Security Officer ensures companywide adherence to all information security policies and procedures as well as the safety, compliance and operational efficiency of the platform servicing our customers. Encompass retains it’s ISO27001 accreditation and is working towards SOC 2 compliance during the financial year.
Encompass Corporation UK Limited
Strategic Report (Continued)
For the year ended 31 December 2024
Page 3
Macroeconomic climate
Geopolitical factors and economic instability can impact the company's operations and strategic planning. Challenging economic conditions and periods of uncertainty may impact the demand for our software and services. Budgets may be tightened, and sales cycles could increase.
Our customer priorities may shift, but given our automation software can reduce cost, improve regulatory compliance, and reduce time to revenue, we believe that we are well positioned to thrive in challenging market conditions.
The economic climate may make it more challenging to raise capital. Encompass continues to operate at a loss whilst we invest in growth. Our ability to raise capital is important to enable us to continue to grow the business.
Currency and treasury risk
Given our global presence, we may be exposed to fluctuations in foreign exchange which could impact the business.
When the need arises, the Group holds/sells cash held in other currencies to reduce its exposure to fluctuations in foreign exchange rates.
Uncertainty in banking markets heightens the risk in treasury management. We will continue to conduct risk management and mitigation strategies, including diversifying our liquid assets across multiple banking partners, currencies, and group companies.
Outlook and future developments
The financial statements have been prepared on a going concern basis, which assumes that the Company will continue in business for the forthcoming twelve-month period.
Looking ahead, Encompass is committed to driving sustainable growth and creating long-term shareholder and customer value through strategic innovation and market expansion. The launch of our EC360 platform and suite of solutions in early 2025 will introduce a fresh look and feel to our brand, tailored to the C-suite and our Tier 1 banking and global partner client base. Our focus on operational excellence will ensure we maintain a competitive edge in the market. Additionally, we plan to explore new revenue streams and strategic partnerships that align with our core competencies and growth objectives. By fostering a culture of continuous improvement and leveraging our talented workforce, we are well-positioned to capitalize on emerging opportunities and deliver robust financial performance & profitability.
W N Johnson
Director
27 July 2025
Encompass Corporation UK Limited
Directors' Report
For the year ended 31 December 2024
Page 4
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company continued to be the development and provision of a software as a service platform to assist customers with their know your customer (KYC) and anti-money laundering (AML) compliance obligations.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Carson
W N Johnson
Auditor
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
Encompass Corporation UK Limited
Directors' Report (Continued)
For the year ended 31 December 2024
Page 5
Statement of disclosure to auditor
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.
On behalf of the board
W N Johnson
Director
27 July 2025
Encompass Corporation UK Limited
Independent Auditor's Report
To the Members of Encompass Corporation UK Limited
Page 6
Opinion
We have audited the financial statements of Encompass Corporation UK Limited (the 'company') for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 December 2024 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.
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 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.
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 our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Encompass Corporation UK Limited
Independent Auditor's Report (Continued)
To the Members of Encompass Corporation UK Limited
Page 7
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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement, 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.
Encompass Corporation UK Limited
Independent Auditor's Report (Continued)
To the Members of Encompass Corporation UK Limited
Page 8
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Encompass Corporation UK Limited
Independent Auditor's Report (Continued)
To the Members of Encompass Corporation UK Limited
Page 9
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 material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks 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 to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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.
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.
Jamie Sherman
(Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
28 July 2025
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Encompass Corporation UK Limited
Statement of Comprehensive Income
For the year ended 31 December 2024
Page 10
2024
2023
Notes
£
£
Turnover
3
13,414,189
9,266,478
Cost of sales
(2,977,426)
(2,794,598)
Gross profit
10,436,763
6,471,880
Administrative expenses
(26,818,802)
(23,176,973)
Other operating income
431,027
Operating loss
4
(16,382,039)
(16,274,066)
Interest receivable and similar income
7
72
25,000
Interest payable and similar expenses
8
(58,735)
Loss before taxation
(16,440,702)
(16,249,066)
Tax on loss
9
157,666
375,112
Loss for the financial year
(16,283,036)
(15,873,954)
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Encompass Corporation UK Limited
Balance Sheet
As at 31 December 2024
Page 11
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
89,650
100,874
Current assets
Debtors
11
9,674,326
3,190,233
Cash at bank and in hand
188,377
5,519,242
9,862,703
8,709,475
Creditors: amounts falling due within one year
12
(11,969,131)
(9,539,148)
Net current liabilities
(2,106,428)
(829,673)
Net liabilities
(2,016,778)
(728,799)
Capital and reserves
Called up share capital
14
50,001
50,001
Capital contribution reserve
15
72,601,976
57,875,774
Profit and loss reserves
(74,668,755)
(58,654,574)
Total equity
(2,016,778)
(728,799)
The financial statements were approved by the board of directors and authorised for issue on 27 July 2025 and are signed on its behalf by:
W N Johnson
Director
Company Registration No. SC493055
Encompass Corporation UK Limited
Statement of Changes in Equity
For the year ended 31 December 2024
Page 12
Share capital
Capital contribution reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2023
50,001
(43,578,775)
(43,528,774)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(15,873,954)
(15,873,954)
Credit to equity for equity settled share-based payments
-
-
798,155
798,155
Waiver of amounts due to group undertakings
14
57,875,774
57,875,774
Balance at 31 December 2023
50,001
57,875,774
(58,654,574)
(728,799)
Year ended 31 December 2024:
Loss and total comprehensive income for the year
-
-
(16,283,036)
(16,283,036)
Credit to equity for equity settled share-based payments
-
-
268,855
268,855
Waiver of amounts due to group undertakings
14,726,202
14,726,202
Balance at 31 December 2024
50,001
72,601,976
(74,668,755)
(2,016,778)
Encompass Corporation UK Limited
Notes to the Financial Statements
For the year ended 31 December 2024
Page 13
1
Accounting policies
Company information
Encompass Corporation UK Limited is a private company limited by shares incorporated in Scotland. The registered office is First Floor, 10 Bothwell Street, Glasgow, Scotland, G2 6LU.
1.1
Accounting convention
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Encompass Corporation Group Holdings Limited. These consolidated financial statements are available from its registered office.
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
1
Accounting policies
(Continued)
Page 14
1.2
Going concern
The company generated a loss of £16,283,036 (2023: loss of £15,873,954) for the year ended 31 December 2024. At the balance sheet date the company had net liabilities of £2,016,778 (2023: £728,799). The company's assets included cash at bank at the balance sheet date of £188,377 (2023: £5,519,242). The company has no external debt and is reliant on support from it’s parent company. During 2024 loans were novated from Encompass Corporation AU PTY Ltd and Encompass Corporation PTY Ltd to Encompass Corporation Group Holdings Limited resulting in a balance of £14,726,202 due from Encompass Corporation UK Limited. Encompass Group Holdings Limited made the decision during the year to then waive this balance and as such this balance was written off and has been included in a capital contribution reserve within the financial statements. As at 31 December 2024, there is a total balance of £605,063 owing to group companies. The group companies have confirmed their support and the fact that the loans will not be recalled for at least 12 months from the date of approving the financial statements.true
Since incorporation the company has undertaken a series of successful equity fund raisings to fund the growth of the business. In addition, the group have been given access to a financing facility from an external banking partner for a total of £10,000,000. The full balance has been drawn down prior to the approval of these financial statements. Additional funds of £5,579,997 have been received following investment from an external partner. With these new funds factored in, the directors forecast sufficient cash to be available for the group to meet its liabilities as they fall due for at least 12 months from the date of approval even when factoring in some prudent downsides. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents net invoiced sales of services, excluding value added tax, together with any amounts recoverable on contracts. Turnover includes subscription income, which is recognised over the period of the service provided on a straight line basis, as well as professional services revenue which is recognised on a milestone basis.
1.4
Tangible fixed assets
Tangible fixed assets 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:
Fixtures and fittings
10% straight line
Computers
33% straight line
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.
1.5
Impairment of fixed assets
If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount. An impairment loss shall be recognised immediately in the statement of profit and loss.
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
1
Accounting policies
(Continued)
Page 15
1.6
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and credit cards facilities. Credit cards facilities are shown within borrowings in current liabilities.
A fixed charge of £10,000 held with the bank as a deposit for credit card facilities was satisfied in full during the year, and the deposit refunded in full to the company.
1.7
Financial instruments
The company only has basic financial instruments measured at amortised cost, with no financial instruments classified as other or basic instruments measured at fair value.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
1.9
Taxation
The tax expense/credit represents the sum of the tax currently payable and deferred tax, less any R&D tax credits that have been claimed.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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. Any R&D tax credits claimed are then credited to the profit and loss account.
Deferred tax
Deferred tax liabilities are 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. No asset is recognised in respect of losses carried forward.
1.10
Employee benefits
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
1
Accounting policies
(Continued)
Page 16
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Research and development tax credits
The directors have identified relevant expenditure upon which to claim research and development tax credits in the UK. Qualifying costs have been estimated by the Directors under the guidance and advice of external professional R&D advisors. The Directors are comfortable that the amounts included in the financial statements accurately represent the anticipated repayments from relevant tax authorities.
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 17
Key sources of estimation uncertainty
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.
Bad debt provision
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, the directors consider factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
Share Based Payments
The value of the share-based payments charge and reserve is derived on the basis of estimations and assumptions regarding the fair value of share options at the year-end. The company uses the Black Scholes model to arrive at the fair value. The company also applies an estimate as to the share options that will eventually vest and therefore applies a 29% discount which factors in leavers from the scheme. This discount has been arrived at using historical data.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Subscription fees
12,695,440
8,436,646
Onboarding & Implementation Fees
303,113
467,504
Data Fees
415,636
362,328
13,414,189
9,266,478
2024
2023
£
£
Turnover analysed by geographical market
EMEA
8,485,031
5,527,003
APAC
2,165,358
2,437,550
North America
2,763,800
1,301,925
13,414,189
9,266,478
2024
2023
£
£
Other significant revenue
Interest income
72
25,000
Grants received
-
204,870
Research and Development Tax Income - RDEC
-
226,157
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
Page 18
4
Operating loss
2024
2023
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange gains
(24,824)
(534,001)
Government grants
-
(204,870)
Depreciation of owned tangible fixed assets
54,226
80,729
Research and development costs
847,666
1,747,422
Share-based payments
268,855
798,155
Operating lease charges
427,587
472,140
Intra group management charge
12,025,577
6,621,651
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Sales and Marketing
29
39
Product and Development
43
45
General and Administration
18
21
Total
90
105
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
9,431,764
11,456,091
Social security costs
996,392
1,156,758
Pension costs
498,003
544,367
10,926,159
13,157,216
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
Page 19
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
125,194
108,333
Company pension contributions to defined contribution schemes
13,771
11,492
Directors fees
120,000
80,000
258,965
199,825
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
78,666
108,333
Company pension contributions to defined contribution schemes
8,653
11,492
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on R&D refund
5,111
Other interest income
72
19,889
Total income
72
25,000
8
Interest payable and similar expenses
2024
2023
£
£
Other interest on financial liabilities
58,735
9
Taxation
2024
2023
£
£
Current tax
Research and development tax credit- SME
(157,666)
(418,146)
Tax on RDEC income - see note 3
-
43,034
Total current tax
(157,666)
(375,112)
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
9
Taxation
(Continued)
Page 20
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Loss before taxation
(16,440,702)
(16,249,066)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.50%)
(4,110,176)
(3,818,531)
Unutilised tax losses carried forward
4,042,962
3,857,121
Research and development tax credit
(157,666)
(601,269)
Share based payment charge
67,214
187,567
Taxation credit for the year
(157,666)
(375,112)
10
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2024
61,114
356,778
417,892
Additions
80,824
80,824
Disposals
(48,354)
(1,014)
(49,368)
At 31 December 2024
12,760
436,588
449,348
Depreciation
At 1 January 2024
12,115
304,903
317,018
Depreciation charged in the year
4,903
49,323
54,226
Eliminated in respect of disposals
(10,532)
(1,014)
(11,546)
At 31 December 2024
6,486
353,212
359,698
Carrying amount
At 31 December 2024
6,274
83,376
89,650
At 31 December 2023
48,999
51,875
100,874
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
Page 21
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
7,853,185
1,303,412
Corporation tax recoverable
730,246
572,580
Amounts owed by group undertakings
405,099
331,300
Other debtors
256,835
215,767
Prepayments and accrued income
428,961
767,174
9,674,326
3,190,233
12
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
605,639
935,145
Amounts owed to group undertakings
667,063
930,815
Taxation and social security
235,805
375,362
Deferred income
10,094,453
6,743,263
Other creditors
33,104
Accruals
366,171
521,459
11,969,131
9,539,148
There is a fixed and floating charge held over the assets of the company relating to the Virgin Money loan.
13
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
498,003
544,367
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.
14
Share capital
2024
2023
Ordinary share capital
£
£
Issued and fully paid
Ordinary Share of £1 each
50,001
50,001
The company has one class of ordinary shares and each share has full rights in the company with respect to voting, dividends and distributions.
Encompass Corporation UK Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2024
Page 22
15
Capital contribution reserve
The capital contribution reserve relates to the intercompany loan balances waived between Encompass Corporation UK Limited and Encompass Corporation Group Holdings Limited in 2023 and 2024.
16
Operating lease commitments
Lessee
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:
2024
2023
£
£
Within one year
214,186
305,716
Between two and five years
36,770
214,186
342,486
17
Events after the reporting date
Subsequent to the reporting date the group have drawn down the remaining £4,000,000 of a financing facility from an external banking partner. A fixed and floating charge was already held over the company's assets in respect of this facility.
18
Related party transactions
The company has taken advantage of the exemption in Paragraph 33.1A of FRS 102 from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company. There are no other related party transactions to disclose.
19
Ultimate controlling party
The immediate controlling company is Encompass Corporation Euorpe Limited, a company registered in Scotland, by virtue of its controlling stake in Encompass Corporation UK Limited.
The ultimate controlling parent company is Encompass Corporation Group Holdings Limited, registered in England and Wales, by virtue of its stake in Encompass Corporation Europe Ltd.
Results of Encompass Corporation UK Limited are included in the consolidated accounts of Encompass Corporation Group Holdings Limited.
Copies of the accounts for Encompass Corporation Group Holdings Limited are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
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