The director presents the strategic report for the year ended 31 December 2024.

During 2024 the company continued its core operations of design and construction of camera technology, camera tracking and software to control and enhance the content creation process. As predicted the challenges that appeared in 2023 continued into 2024. This was primarily due to the strikes within the USA and the failure of the market to bounce back once the USA issues were resolved in August of 2024. For this reason, the company has refocused its efforts on Corporations as they have realised that effective communication is essential in today’s digital world, where workplaces, supply chains, and social media are increasingly interconnected. With remote work on the rise, clear and engaging video communication is more critical than ever for businesses, employees, and consumers.

Corporate organisations struggle to produce impactful, cost-effective video content that aligns with their brand values. Traditional broadcast systems solve this challenge but remain too complex and costly for most corporate video teams.

The consequences of poor communication are significant—only 13% of employees feel engaged at work, and 60% lack clarity on their company’s goals, strategies, or tactics (Gallup). This leads to increased turnover, absenteeism, lower productivity, reduced customer loyalty, and diminished shareholder returns.

In the short term, businesses either overspend on outsourcing video production or suffer the costs of ineffective communication. Long-term, they risk ongoing inefficiencies, disengaged employees, and weakened relationships with customers and partners.

Products and Services

People:

Hiring has been kept to a minimum during this period so as not to increase cost, but we have also not made redundancies to maintain the development of the new revolutionary product that Mo-sys will release during 2025.

Technology:

2024 was a pivotal year for the company as it moved away from purely equipment sales to holistic solutions, this is a 14-month program that will result in a market disrupting technology being brought to market in the 3rd quarter of 2025. The new product will make virtual production accessible to all, creating a cost-effective, high-quality solution for content production.

Financial Performance:

As predicted the 2024 performance has been significantly affected by the actions in the USA, coupled uncertainty and disruption throughout the World has resulted in a 30% reduction in turnover to 2023. The investment of LG has allowed the continuing development of the new technology that will be delivered in 3rd quarter 2025.

Industry Risks

• The film and broadcast market not returning to its pre-strike levels due to loss of faith in virtual production. The evangelising of the cost-effective nature of virtual production is something the company has been actively engaged in, speaking at conferences, trade shows and pod casts.

• Technological Disruption: Rapid advancements in technology, such as AI and digital streaming platforms, can reshape content creation and distribution. This creates uncertainty about how to leverage new tools effectively while also facing potential job displacement concerns. Mitigation, Mo-Sys are the disruptors, be first and push the boundaries. Our goal is always to stay ahead.

• Regulatory Changes: Potential new regulations around content creation, distribution, and labour practices can introduce uncertainties that impact production strategies. Mitigation, Virtual Production is at the forefront of how to deal with changes in content creation.

• Global Events Impacting Production: External factors like health crises (e.g., COVID-19), geopolitical instability, and economic downturns can disrupt production schedules and audience access.

• Intellectual Property Risks: With the rise of technology, ensuring copyright protection and managing IP rights has become more complex, leading to potential legal challenges. Mitigation, Mo-Sys is continually patenting its innovation 4% of annual revenue goes on writing new patents and maintaining existing ones.

• Government change to taxation and bringing in new non-company friendly laws.

Economic Risk

• Increased Labour Costs: Ongoing negotiations may result in higher wages and better benefits for talent and crew, which can strain production budgets and reduce profit margins. Mitigation, Mo-Sys bench marks its salaries on a yearly basis to mitigate the loss of the team to competitors.

• Investment Uncertainty: Investors may become cautious in funding new projects due to strikes and economic instability, leading to reduced financing options for productions. Mitigation, in 2024 Mo-Sys secured an investment round to secure the ability to maintain its rate of R&D. This will be supplemented in 2025 to ensure products are brought to market in a timely manner.

• Global Supply Chain Disruptions: Economic disruptions can affect the availability of resources, equipment, and talent needed for production, leading to increased costs and project delays. Mitigation, this is where Mo-Sys can add true value with Virtual Production.

People

Talent Management Risks:

• Skill Gaps: Lack of necessary skills or expertise within the organization, leading to decreased competitiveness.

• Staff Turnover: High attrition rates may affect operations and morale, while recruitment costs can rise.

• Succession Planning: Failure to have effective succession plans in place for critical leadership roles.

• Workforce Morale and Engagement Risks.

• Low Employee Engagement: Decreased productivity, innovation, and loyalty can lead to a decline in overall performance.

• Burnout and Stress: Overworked employees may lead to increased absenteeism, lower productivity, or mistakes.

Talent management is an area that is becoming key to the success of the company and plans to ensure the continuing growth in this area is key.

Workplace Culture and Compliance:

• Cultural Misalignment: Misaligned organizational culture can result in poor decision-making, low morale, and internal conflicts.

• Discrimination or Harassment: Issues of workplace harassment, discrimination, or lack of diversity can damage the company’s reputation and lead to legal actions.

Culture is very important to Mo-Sys, the teamwork and close working relationships is key to the ongoing success of the company.

Health and Safety Risks:

• Workplace Safety: In industries requiring physical labor, accidents and injuries are significant risks, leading to legal liabilities or operational disruptions.

• Pandemics or Health Crises: Illness outbreaks or global health crises may result in work stoppages or reduced productivity.

On behalf of the board

For the financial year ended 31 December 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

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

The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

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

The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true

Mo-Sys Engineering Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ground Floor, Kings House, 101-135 Kings Road, Brentwood, Essex, CM14 4DR.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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:

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:

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 (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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 (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) 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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents 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 bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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 balance sheet when the company becomes party to the contractual provisions of the instrument.

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

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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 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.

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 profit and loss account, 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, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

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.

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 leases asset are consumed.

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.

In the application of the company’s accounting policies, the director is 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 average monthly number of persons (including directors) employed by the company during the year was:

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

Loans with related parties are unsecured and are repayable on demand. No interest has been applied to the outstanding balances.