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

Principal activity

The principal activity of the company is the provision of a national waste logistics service. Trading as HIPPO, the company provides a range of waste solutions including the use of HIPPOBAGs to deliver flexible and convenient waste removal services to householders, businesses, and trade users nationwide. HIPPOBAGs are distributed through DIY retailers and trade merchants and sold direct to customers through the website hippowaste.co.uk, various HIPPO Apps or through the HIPPO Contact Centre. In addition, HIPPO offers a Man & Van service and Skip hire.

Turnover reduced by 4% to £19.7m in 2024 (2023: £20.4m). A gross profit margin of 30% (2023: 30%) was achieved and an operating profit of £0.31m (2023: £1.18m).

The gross profit margin was maintained in 2024 due to tight cost control which helped mitigate the impact of continued increasing cost pressures.

Based upon branded HIPPOBAGs and a fleet of bespoke HGV vehicles and 3.5 tonne vans, HIPPO has grown from a regional business in Hampshire established in 2002, to a national collection service working across the UK with a range of business, trade, and domestic customers. To date, the company has been supported by private shareholders and has received over £20m of investment in the form of equity and shareholder loans.

HIPPO’s key B2B markets include kitchen and bathroom installation businesses, property maintenance, construction, and facility management. Our national collection service, using our own UK fleet, is particularly suited to these sectors, as it delivers several advantages, including waste containment on site, uniform national logistics, reduced cost, an enhanced customer experience and environmental benefits.

Retail HIPPOBAG services include the collection of HIPPOBAGs sold through Retail distribution channels (national DIY chains and independent retailers), Trade distribution channels (national and local builders’ merchants) and Direct Sales through our website and Contact Centre. HIPPOBAGs are ideal for the containment and collection of small volumes of home improvement and trade waste.

We believe our strong brand, reputation, and niche positioning within the waste sector, gives us a competitive advantage and despite the economic and geo-political challenges of recent years, our business model has proved to be extremely resilient. Volume levels of our key B2B customers have not yet returned to pre-pandemic levels and our D2C market has also been impacted by unfavourable macroeconomic factors.

HIPPO continues to reinvest in the business, in people, vehicles, IT and processes. Of note is the on-going investment in a rolling replacement plan for our 26 tonne HGV fleet and 3.5 tonne vans to ensure that efficiency and reliability are not compromised.

The business has been able to supplement working capital as and when required with a confidential invoice discounting funding facility and with Loan Notes.

Position of the business

At the end of the year, the net current liability position was £6,545,661 (2023 net current asset position: £633,745). Net liabilities, including amounts falling due after more than one year, totalled £5,702,066 (2023: £5,445,938).

Collection prices need to be set at a level to meet the costs associated with waste collection and recycling and to ensure they can cover any short-term cost increases. At the same time, HIPPO’s collection services need to be competitive with other waste services. HIPPO regularly monitors the cost of other waste collection services in the UK.

As a waste logistics business, HIPPO needs to ensure it has access to sufficient licensed waste transfer and recycling facilities at convenient locations and at an appropriate cost. HIPPO is constantly reviewing both the operational and commercial terms and capabilities of its suppliers.

HIPPO could be susceptible to any significant changes in waste legislation, regulations and taxes. The company employs several experienced and qualified experts to manage regulatory compliance.

HIPPO maintains a confidential invoice discounting funding facility and has Loan Note arrangements in place with shareholders and investors to ensure that it has sufficient available funds to finance its operations. Loan Note arrangements are in place with redemption dates of 31 December 2028 and 31 December 2030. The Directors monitor rolling forecasts of HIPPO’s liquidity requirements based on a range of scenarios to ensure it has sufficient cash to meet operational needs and regularly reports to its banking partners and periodically to Loan Note investors, informing them of the current business performance and future financing requirements of the company.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

HIPPO needs to have access to working capital to finance the business' operations and the business' principal financial instruments comprise bank balances, trade debtors, trade creditors and finance lease agreements.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of an invoice discounting facility.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. The business is a lessee in respect of finance leased assets. The liquidity risk in respect of these is managed by ensuring that there are sufficient funds to meet the payments.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

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

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.

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.

We have audited the financial statements of Waste Management Systems Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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 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 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in 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.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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.

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.

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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Extent to which 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we 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.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• reviewing minutes of meetings of those charged with governance;

• assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection; 

• reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias. 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  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.

Use of our report

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

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

The company has no recognised gains or losses for the year other than the results above.

Waste Management Systems Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 1000 Lakeside, North Harbour, Portsmouth, Hampshire, PO6 3EN.

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

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 £.

These financial statements have been prepared using the historical cost convention.

Since the company's foundation, it has been able to attract funds in various forms to advance the development of the company and to provide sufficient funding to allow the company to pay its debts as they fall due. true

The D, E, F and G Loan Notes had a redemption date of 31 December 2025. The terms are detailed in note 16 to the financial statements.

Since the year end, it has been agreed that the repayment terms of the loan notes will be amended from 31 December 2025 to 31 December 2030 for Loan Notes D and E. Repayment terms for Loan Notes F and G will be amended to 31 December 2028.

During the year ended 31 December 2024 the company made a loss before tax of £256,128 (2023: profit before tax of £591,417). As at 31 December 2024 the company has net liabilities of £5,702,066 (2023: £5,445,938).

2024 has seen a reduction in turnover to £19,659,864 (2023: £20,395,869), a gross margin of 30% (2023: 30%) and an operating profit of £314,262 (2023: £1,176,528).

The business has been able to fund working capital through cash flow management during the year.

The directors believe that the company will continue to operate as a going concern for the foreseeable future and therefore have prepared the financial statements on a going concern basis. This expectation is based on management forecasts for profitable trading in 2025 and beyond, a positive cashflow forecast, an ability to drawdown on an invoice discounting facility and the continued support of loan note holders.

Turnover comprises the fair value of the consideration received or receivable, net of discounts and value added taxes. Revenue from the sale of goods is recognised when the goods are delivered and titles have passed. Revenue from the provision of services is recognised at the point when the service has been provided.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

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:

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Cash at bank and in hand comprises cash on hand and call deposits.

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. The company does not have any financial instruments that fall under section 12.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

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

Basic financial assets, including trade and other receivables, 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 method.

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

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

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

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

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

Basic financial liabilities, including trade and other payables, bank loans and loan notes, 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 receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

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

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

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

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.

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as an employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

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 an appropriate option pricing 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.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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.

All turnover is generated in the United Kingdom.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023: 4).

The number of directors who exercised share options during the year was nil (2023: 3).

The number of directors who are entitled to receive shares under long term incentive schemes at the year end was 3 (2023: 4).

The highest paid director has been entitled to receive shares under a long term incentive scheme during the year.

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

At the year end, the company has accumulated tax losses of £20,948,483 (2023: £21,171,807)

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Bank overdrafts

The bank overdrafts are secured through fixed and floating charges on the assets of the company.

Other loans

D Loan Notes with a carrying amount of £1,500,000 (2023: £1,500,000) are denominated in pound sterling. The D Loan Notes have been rolled over as at 1 January 2022 with a nominal interest rate of 6% if paid or 9% compounded if accrued until redemption. The final instalment is due on 31 December 2025.

D Loan Notes are repayable at par together with accrued interest on 31 December 2025. The Loan Notes are secured through fixed and floating charges on the assets of the company.

E Loan Notes with a carrying amount of £1,900,000 (2023: £1,900,000) are denominated in pound sterling. The E Loan Notes have been rolled over as at 1 January 2022 with a nominal interest rate of 6% if paid or 9% compounded if accrued until redemption. The final instalment is due on 31 December 2025.

E Loan Notes are repayable at par together with accrued interest on 31 December 2025. The Loan Notes are secured through fixed and floating charges on the assets of the company.

F Loan Notes with a carrying amount of £1,200,000 (2023: £1,200,000) are denominated in pound sterling. The F Loan Notes have been rolled over as at 1 January 2022 with a nominal interest rate of 6.5% if paid or 9.5% compounded if accrued until redemption. The final instalment is due on 31 December 2025.

F Loan Notes are repayable at par together with accrued interest on 31 December 2025.

G Loan Notes with a carrying amount of £758,803 (2023: £1,517,605) are denominated in pound sterling. The G Loan Notes have been rolled over as at 1 January 2022 with a nominal interest rate of 6.5% if paid or 9.5% compounded if accrued until redemption. The final instalment is due on 31 December 2025.

G Loan Notes are repayable at par together with accrued interest on 31 December 2025.

The obligations under finance leases are secured against the assets to which they relate.

After the year a new lease agreement was signed for a period of 10 years for an inital rent of £92,666 per annum.

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme.

EMI option scheme - details and movements

The company operates an EMI option scheme for eligible employees and directors. The options vest on the occurrence of a takeover or other material event.  The options were granted in 2021 and are exercisable at £0.01.  Options are forfeited if the employee leaves the company and expire 10 years after the grant date.

The share options have been valued at fair value using a Black-Scholes model. The fair value of the share options has been calculated as £nil (2023: £nil). Therefore no charge has been recognised in the profit and loss account.

Effect of share-based payments on profit or loss and financial position

The total expenses recognised in profit or loss for the year was £nil (2023: £nil).

The total carrying amount of the liabilities arising from share-based payments at the end of the year was £nil (2023: £nil).

The shares have full voting and equity rights. The shares do not confer any rights to redemption.

The owners of the Ordinary C Shares in issue collectively own 97% of the equity rights.

Included within prepayments and accrued income is £65,245 (2023: £65,578) in respect of deposits paid for the acquisition of tangible fixed assets.

Loan note Amendment

At a meeting of the Board of Directors on 24th September 2025, it was agreed to amend the repayment terms of Loan Notes D and E from 31st December 2025 to 31st December 2030. Loan Notes F and G repayment terms were amended from 31st December 2025 to 31st December 2028.

The Board have agreed to prepay 50% of the £1,200,000 F Loan notes, an amount of £600,000 plus interest on the F loan notes accrued up to 15th September 2025, totalling £238,346 to Loan note holders in September 2025.

Share Buyback

The Board have agreed that 37,083 Ordinary C shares of £0.01, would be purchased by the company from the shareholder Stephen Noar.

Summary of transactions with directors

At the year end the key management of the business were holding options to purchase 44,592 (2023 - 61,604) shares in company. These options have an exercise price of £0.01. The share options have been valued at fair value using a Black-Scholes model. The fair value of the share options has been calculated as £nil (2023: £nil).

Loan Notes from directors are repaid over the agreed period with interest as detailed in note 16. Interest charged during the year on Loan Notes advanced by directors totalled £182,407 (2023: £191,306). Interest paid during the year in respect of these Loan Notes totalled £76,101 (2023: £76,225). Loan notes repaid during the year was £435,000 (2023: £Nil). The amount due to directors in respect of these Loan Notes at the year end was £2,274,228 (2023: £2,602,922).

Summary of transactions with other related parties

Purchases from other related parties are made at normal market prices. With the exception of the Loan Notes, outstanding balances with entities are unsecured, interest free, cash settlement and expected to be repaid within the normal credit terms.

Services totalling £6,900 (2023: £24,696) were purchased from other related parties during the year. The amount due to other related parties in respect of these services at the year end was £nil (2023: £7,656).

Loan Notes from other related parties are repaid over the agreed period with interest as detailed in note 16. Interest charged during the year on Loan Notes advanced by other related parties totalled £203,507 (2023: £196,655). Interest paid during the year in respect of these Loan Notes totalled £59,447 (2023: £51,631). Loan notes repaid during the year was £125,000 (2023: £Nil). The amount due to other related parties in respect of these Loan Notes at the year end was £2,581,077 (2023: £2,562,017).

The company has not provided or benefited from any guarantees for any other related party receivables or payables.

In the opinion of the directors, there is no one controlling party.