REGISTERED NUMBER: 05648705 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

AIIMI LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Independent Auditors' Report

8

Statement of Comprehensive Income

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

T M P O'Farrell

S P Salvin

D P Sproson

SECRETARY:

L K S Salvin

REGISTERED OFFICE:

100 Avebury Boulevard

Milton Keynes

Buckinghamshire

MK9 1FH

REGISTERED NUMBER:

05648705 (England and Wales)

INDEPENDENT AUDITORS:

Magma Audit LLP

16 Davy Court

Castle Mound Way

Rugby, CV23 0UZ

Magma Audit LLP is part

Of the Dains Group

The directors present their strategic report for the year ended 31 December 2024.

REVIEW OF BUSINESS

The principal activity of the Company continued to be the provision of expert consulting services (Aiimi Services) specialising in digital, data and AI transformation, alongside the development and delivery of our Workplace AI platform (Aiimi Software), which enables our customers to operationalise AI and address complex data governance challenges.

Financial Performance

In 2024, Aiimi delivered total revenue of £16.92m (2023: £19.16m), reflecting an 11.7% year-on-year decline. This was primarily driven by sector-specific challenges in the UK water and government markets. Revenue from Aiimi Services was £14.98m (2023: £17.42m), representing a 14% decline, while Aiimi Software achieved growth of 12%, reaching £1.95m (2023: £1.74m), underlining increasing demand for our AI-powered platform.

The Company reported a loss before tax of £2.84m (2023: £98.4k). Despite this, the Company remains in a strong financial position with Net Assets and Shareholders' Funds of £3.30m (2023: £4.67m) and a healthy cash balance of £2.86m (2023: £5.45m), reflecting continued investment in future growth.

Market Challenges and Sector Opportunities

UK Water Sector

Aiimi has an established presence in the UK water industry, delivering high-value digital and data solutions. In 2024, water utilities entered the transitional phase between AMP7 (2020-2025) and AMP8 (2025-2030), a period marked by regulatory uncertainty and financial constraints. With several utilities appealing their AMP8 settlements to the Competition and Markets Authority (CMA), investment decisions were delayed or deferred, directly impacting customer spending on transformation initiatives.

Despite this, Aiimi remains bullish about the future. All major water companies are planning substantial increases in capital investment during AMP8, with an emphasis on data, digital, and AI capabilities. Confident in the sector's rebound, we made the strategic decision to maintain a higher-than-usual bench in the second half of 2024, positioning Aiimi to capitalise on renewed demand in 2025 and beyond.

UK Government

In 2024, Aiimi expanded its sales and marketing efforts to grow our footprint in the UK public sector. However, this ambition was hindered by a range of external factors:

-

The snap general election in July 2024 and the resulting purdah period paused decision-making across departments.

-

Continued fiscal tightening caused delays and cancellations in several large-scale programmes.

-

Ongoing procurement reform added complexity to bidding processes and increased the time to contract.

Despite these challenges, we see long-term opportunity. Government policy has placed increasing emphasis on the role of data and AI in driving national productivity and public sector efficiency - a direction that aligns perfectly with Aiimi's capabilities. We are already seeing momentum building into 2025 and have invested to ensure we are well-positioned to support this transformation.

Growth and Strategic Progress

Customer Growth

Despite tough trading conditions, Aiimi secured a record number of net new customers in 2024 - 14 new services clients and 10 new software clients. This growth highlights sustained demand for our unique combination of cutting-edge technology, expert consulting, and proven domain knowledge. As AI adoption accelerates across industries, Aiimi's offering remains highly relevant and differentiated.

Strategic Investments

To position the business for long-term success, Aiimi made targeted investments across people, technology, and go-to-market capabilities. Key initiatives in 2024 included:

-

Hiring two new senior salespeople to drive commercial growth.

-

Launching a new pre-sales function to improve success on UK government frameworks.

-

Increasing investment in SEO, PR, digital campaigns, events, and strategic partnerships to expand our pipeline.

-

Expanding our software engineering and QA teams to accelerate product innovation.

-

Delivering a company-wide leadership training programme.

-

Advancing our internal transformation initiative - "Drinking Our Own Champagne" - to operationalise AI across our business via a world-class internal data platform.

-

Restructuring Aiimi Services into expert practices supported by people operations managers, to drive operational excellence.

-

Entering new international markets via partners, with projects delivered in the Middle East, South Africa, and North America.

Recognition and Responsibility

We are proud to have recertified to ISO27001 and Cyber Essentials Plus, reaffirming our commitment to security and compliance. We also continue to pursue best practices in environmental responsibility, maintaining our Carbon Neutral status and progressing adoption of ISO14064, ISO14068, and IWA42 with BSI.

Our commitment to diversity, equity, inclusion, and social impact remains central to our business. In 2024 we continued to support Harry's Rainbow, YMCA MK, and Transition Town MK, and launched a grant scheme with England Squash to promote access to sport in memory of a much-loved colleague. We also achieved Silver status under the Armed Forces Covenant, with ambitions to progress to Gold.

Outlook

The Directors are pleased with Aiimi's resilience and strategic progress in what has been a tough year for the industry. We enter 2025 with optimism, underpinned by a strong pipeline, a highly capable team, and increasing market demand for AI and data-driven transformation.

Our core belief - that AI, when responsibly deployed, has the power to solve complex challenges and unlock new value - continues to guide our strategy. With the foundations laid in 2024, we are confident Aiimi is well-positioned for a return to growth and long-term success.

PRINCIPAL RISKS AND UNCERTAINTIES

The board of directors and the wider management team continually monitor the key risks facing the Company, and assess the appropriate controls to manage those risks. Effective risk-management is fundamental to delivering the Company's strategic objectives. These are the principal risks and uncertainties facing the Company:

1.

Recruitment and employee retention:

Our people remain crucial to our success and the continued high demand for talent means it is essential

that we have a strong Talent & Retention strategy. The Aiimi People strategy has developed significantly

over the past 24 months; we have grown our Talent team, further invested in our Early Careers

programme continuing with our Degree Apprenticeships, Level 4 Apprenticeships, Internship and

Graduate & work experience programmes, allowing us to continue to grow our own Talent.In 2024 we

re-configured the largest part of our business, Aiimi Services, to ensure we have a 3-pronged approach

to support our employees on their journey within Aiimi - from delivery to career development and

wellbeing. This has blended mentorship, coaching and management into the support structure to further

enhance our retention with a committed view to roll this out to the entire business moving forward.The

candidate market has continued to steady throughout 2024 and into the new year, with a more realistic

expectation around compensation packages and a focus on company culture/long term career planning -

allowing us to continue to hire successfully based on aligned values.In early 2025 we have also updated

and created new policies that will ensure Aiimi is better protected as well as de-risking potential liabilities.

2.

Market growth and competition:

The Insight Engines Market is projected to reach to USD 9.1 billion by 2030, at a compound growth rate

(CAGR) of 25% from 2023 to 2030 (Source: Meticulous Research). Due to the explosion of Generative AI

and Large Language Models from vendors such as OpenAI (ChatGPT) and Meta (Llama2), the broader

capability of AI is better understood by organisations as they seek to operationalise the technology to

harness its strategic and operational advantages and better decision-making across the enterprise.

Research suggests that two thirds of organisations expect to increase their AI investment over the next

three years and in 2024 65% of respondents reported their organisation is using AI - this is double the

percentage from 2023 (McKinsey - The State of AI in 2023 and the state of AI in early 2024).

Organisations are navigating security and privacy concerns and AI's legal, ethical, and societal

implications. The discovery of data, its quality and how data is governed is foundational to the successful

implementation of AI initiatives which presents a huge market opportunity for Aiimi and its Insight Engine

as a complimentary technology that extends that capability across the enterprise and beyond.

3.

Cybersecurity:

According to 2024 research by the Department for Science, Innovation and Technology, half of

businesses (50%) report having experienced some form of cyber security breach or attack in the last 12

months. This is much higher for medium businesses (70%) and large businesses (74%). As Aiimi grows,

the threat landscape becomes more challenging. Our profile and our customer base therefore require a

focus on defending against cyber-attacks by constantly improving the ISO27001 Certified Information

Security Management System. In late 2024 we achieved re-accreditation of ISO27001, with no major or

minor nonconformities and recertification of Cyber Essentials Plus; highlighting our focus and attention to

this very real threat. 75% of attacks are malware free (Crowdstrike 2024 Global Threat Report), such as

credentials theft through phishing emails. To counter this threat, in 2024 we hired our first cyber security

officer; this role has proven valuable, and Aiimi's estate and enterprise is more resilient than ever before.

The Company also conducts monthly phishing simulations and training to improve staff awareness and

vigilance. We actively monitor technical and security feeds and sources for intelligence, maintaining an

ever-growing toolset of monitoring and response software to counter these threats.

4.

Business Interruption:

With the continued war in Ukraine, and new governments in the UK and US, combined with uncertainty in

world markets, steep rises in energy prices and the cost-of-living crisis, we must consider not only the

impact on our business and our employees, but any potential impact on our customers that could

potentially affect their ability to trade. We recognise it is crucial to maintain a close business relationship

with our customers, to ensure complete transparency. Similarly, the impact on our suppliers, particularly

our Strategic Technology Partners. As Aiimi relies heavily on outsourced IT service provision (SaaS,

IaaS, PaaS), our focus for the last and coming 12-month periods has been on resiliency planning in the

event of supplier failure. Continued work on our business continuity plans and disaster recovery for all

keep systems and applications, leaves us in a strong position should an event occur.

KEY PERFORMANCE INDICATORS

The board of directors and wider management team regularly review key performance indicators for the Company. This enables the Company to track performance and make necessary changes when needed to ensure we achieve our strategic objectives. Here are our key performance indicators to manage performance:

Main

1.

Gross Margin:

Gross margin for 2024 was 48.45%, equating to a decline of 3.37% on prior year (2023: 51.82%).

2.

EBITDA (Earnings before Interest, taxes, depreciation and amortization):

Whilst we aim to increase EBITDA year on year, the impact of a challenging economic environment, coupled with a shift in the political landscape resulted in EBITDA of -£2,491k, representing a 701.61% decline against prior year (2023: £414.0k).

3.

PBIT (Profit before interest and tax):

Profitability is held as a key metric within the business. In line with a declined EBITDA, we posted a loss for 2024 of £2,786k (2023: PBIT of £158k).

4.

Cash at Bank:

A strong cash balance continues to be a key part of our strategy. Despite posting a loss, our cash reserves remain strong, and we closed 2024 with £2.86m of cash in the bank (2023: £5.45m).

5.

Working Capital:

We aim to maintain a high working capital ratio, as a good indicator of overall financial health. This has been achieved with a ratio of 1.58, a decrease on the prior year (2023: 2.08).

6.

Debtors Days:

Debtor days have remained consistent at 42.1 days (2023: 40.9 days) reflecting our diligence in our cash collection - we endeavour to ensure our cash is collected within our customer terms, and continue to be extra vigilant particularly with new customers on board.

Other

7.

Consulting revenue by customer

8.

Software recurring subscription revenue

9.

Average charge rate for consulting services

10.

Consulting resource utilisation

11.

Employee engagement

12.

Customer satisfaction

13.

Carbon footprint

14.

Gender and ethnic pay gap

ON BEHALF OF THE BOARD:

S P Salvin - Director

10 July 2025

The directors present their report with the financial statements of the company for the year ended 31 December 2024.

PRINCIPAL ACTIVITIES

The principal activities of the company in the year under review were those of the provision of Business and IT Consulting services.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2024 was £nil (2023: £230,000).

RESEARCH AND DEVELOPMENT

The company continues to fund development of existing processes to enhance customer service.

FUTURE DEVELOPMENTS

Information relating to future developments is given in the Strategic Report.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

T M P O'Farrell

S P Salvin

D P Sproson

FINANCIAL INSTRUMENTS

The principal financial instruments of the company comprise bank balances and borrowings, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations and to finance its continuing operations. Liquidity risk is managed by the use of bank balances along with efficient monitoring and forecasting of cash flow to ensure there are sufficient funds to meet liabilities. Trade debtors are managed in respect of credit and cash flow risk by policies monitoring the credit offered to customers and regular monitoring of amounts outstanding for both time and credit limits.

CHARITABLE DONATIONS

During the year the company made £37,624 of charitable donations (2023 - £29,383).

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies 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.

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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Magma Audit LLP, has expressed its willingness to remain in office as auditors.

ON BEHALF OF THE BOARD:

S P Salvin - Director

10 July 2025

Opinion

We have audited the financial statements of Aiimi Limited (the 'company') for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Auditors' Report thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we identified the principal risks of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed included:

-

discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

-

challenging assumptions made by management in their significant accounting estimates, in particular in relation to accrued and deferred income, the dilapidation provision, the useful economic lives of tangible fixed assets and the valuation of share options; and

-

identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, journal entries crediting cash and journal entries with specific defined descriptions.

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.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Ryan Parkin (Senior Statutory Auditor)

for and on behalf of Magma Audit LLP

16 Davy Court

Castle Mound Way

Rugby, CV23 0UZ

Magma Audit LLP is part

Of the Dains Group

10 July 2025

TURNOVER

4

16,924,848

19,158,138

Cost of sales

(8,724,095

)

(9,230,815

)

GROSS PROFIT

8,200,753

9,927,323

Administrative expenses

(11,057,928

)

(9,747,359

)

(2,857,175

)

179,964

Other operating income

5

47,137

47,937

OPERATING (LOSS)/PROFIT

7

(2,810,038

)

227,901

Interest receivable and similar income

22,424

-

(2,787,614

)

227,901

Interest payable and similar expenses

9

(49,004

)

(129,493

)

(LOSS)/PROFIT BEFORE TAXATION

(2,836,618

)

98,408

Tax on (loss)/profit

10

1,462,651

1,043,363

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(1,373,967

)

1,141,771

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,373,967

)

1,141,771

FIXED ASSETS

Intangible assets

12

27,090

14,817

Tangible assets

13

730,904

796,340

757,994

811,157

CURRENT ASSETS

Debtors

14

5,157,596

4,043,017

Cash at bank

2,863,137

5,448,802

8,020,733

9,491,819

CREDITORS

Amounts falling due within one year

15

(5,064,079

)

(4,554,877

)

NET CURRENT ASSETS

2,956,654

4,936,942

TOTAL ASSETS LESS CURRENT LIABILITIES

3,714,648

5,748,099

CREDITORS

Amounts falling due after more than one year

16

(218,094

)

(900,807

)

PROVISIONS FOR LIABILITIES

20

(200,000

)

(175,000

)

NET ASSETS

3,296,554

4,672,292

CAPITAL AND RESERVES

Called up share capital

21

1

1

Capital contribution

22

321,274

323,045

Retained earnings

22

2,975,279

4,349,246

SHAREHOLDERS' FUNDS

3,296,554

4,672,292

The financial statements were approved by the Board of Directors and authorised for issue on 10 July 2025 and were signed on its behalf by:

S P Salvin - Director

Called up

share

Retained

Capital

Total

capital

earnings

contribution

equity

£

£

£

£

Balance at 1 January 2023

1

3,437,475

253,140

3,690,616

Changes in equity

Fair value of share options

-

-

69,905

69,905

Dividends

-

(230,000

)

-

(230,000

)

Total comprehensive income

-

1,141,771

-

1,141,771

Balance at 31 December 2023

1

4,349,246

323,045

4,672,292

Changes in equity

Fair value of share options

-

-

(1,771

)

(1,771

)

Total comprehensive income

-

(1,373,967

)

-

(1,373,967

)

Balance at 31 December 2024

1

2,975,279

321,274

3,296,554

1.	STATUTORY INFORMATION

Aiimi Limited is a private company, limited by shares, registered in England and Wales. The company's registered number is 05648705 and its registered office is 100 Avebury Boulevard, Milton Keynes, Buckinghamshire, MK9 1FH.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The principal accounting policies applied in the preparation of these financial statements are set out below.

These policies have been consistently applied to all years presented, unless otherwise stated.

The financial statements are presented in £ Sterling.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of paragraph 33.7.

Turnover

Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the Company will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of three years.

Tangible fixed assets

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

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using either a straight line or reducing balance method, as indicated below.

Depreciation is provided on the following basis:

Fixtures & Fittings

-

20% to 33% straight line

Computer Equipment

-

33% straight line

Short Leasehold Land & Buildings

-

10% straight line

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

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.

Financial instruments

(i) Financial assets

Basic financial assets, including trade and other debtors, cash and bank balances are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest rate method.

(ii) Financial liabilities

Basic financial liabilities, including trade and other creditors 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.

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

Taxation

The tax expense for the year comprises current and deferred tax.

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

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

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

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

Both current and deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Research and development

Research expenditure is written off to the statement of comprehensive income in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Operating leases

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the statement of comprehensive income on a straight line basis over the period of the lease.

Incentives received to enter into an operating lease are credited to the statement of comprehensive income, to reduce the lease expense, on a straight-line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company contributes to a define contribution plan for the benefit of its employees. Contributions are recognised in profit or loss as they become payable.

Share capital

Ordinary shares are classified as equity.

Dilapidation provision

Provision is made for the net present value of the estimated future costs at the end of the rental agreement. The provision is calculated using estimated costs, and these estimates have been arrived at by consideration of the expected costs of contracts to remove the installed fixtures and fittings. The estimates are discounted at a rate that reflects current market assessments of the time value of money. A corresponding asset is recognised and included within the short leasehold land & buildings and is depreciated over the life of the lease. The estimated future costs are regularly reviewed and adjusted as appropriate for new circumstances.

Share based payments

The company employees benefit from share options issued by its ultimate parent company, Medina House Ltd. The Share based payment expense is recorded in the statement of comprehensive income with a corresponding amount held in the Capital contribution reserve.

3.	CRITICAL ACCOUNTING 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.

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:

i) Provisions

Provisions are made for dilapidations and contingencies. These provisions require management's best estimate of the costs that will be incurred based on legislative and contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish the net present value of the obligations require management's judgement.

ii) Accrued and deferred income

Accrued income is estimated based on the value of unbilled time worked by consultants at the reporting date. Management estimate accrued income based on days worked by consultants on each project multiplied by the agreed day rate stipulated in contracts with customers. Deferred income is recognised where the value of invoices to date exceed the value of days worked by consultants on a contract and management estimate that more time will be required to fulfill the obligations of the contract.

iii) Valuation of share options

Share options in the parent undertaking are offered to employees of the company. The fair value of share options are assessed by management with reference to vesting conditions.

iv) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

4.

TURNOVER

The turnover and loss (2023 - profit) before taxation are attributable to the principal activities of the company.

An analysis of turnover by class of business is given below:

2024

2023

£

£

Software

1,947,930

1,738,755

Services

14,976,918

17,419,383

16,924,848

19,158,138

An analysis of turnover by geographical market is given below:

2024

2023

£

£

United Kingdom

16,392,840

17,673,189

Europe

532,008

1,484,949

16,924,848

19,158,138

5.	OTHER OPERATING INCOME

2024

2023

£

£

Lease incentives

40,937

40,937

Other income

3,950

-

Government grants

2,250

7,000

47,137

47,937

6.	EMPLOYEES AND DIRECTORS

2024

2023

£

£

Wages and salaries

11,477,664

10,692,706

Social security costs

1,457,593

1,258,839

Other pension costs

862,673

720,401

13,797,930

12,671,946

The average number of employees during the year was as follows:

2024

2023

Staff

162

152

Directors

3

3

165

155

2024

2023

£

£

Directors' remuneration

691,158

647,735

Directors' pension contributions to money purchase schemes

33,300

28,800