The directors present the strategic report for the year ended 31 December 2024.
Fundamental Media Limited (FML) and its subsidiaries (together the “FM Group” or “Group”) continue to provide media research, planning, buying, consulting, and analytics services to clients in Financial Services and Learning & Development. With a global presence spanning London, Boston, Hong Kong and Sydney, the Group combines global coverage with deep local insight, ensuring clients achieve effective engagement across markets.
The Strategic Report outlines the business model, objectives, risks, financial performance, and non-financial considerations relevant to our stakeholders.
Executive Summary
2024 was defined by both consolidation and forward investment. Having closed to new business in mid-2023 after a surge of client wins, the Group entered 2024 with a strong foundation. However, market conditions saw some larger clients reduce activity, impacting overall budgets. In response, we reopened to new business in mid-2024, secured a significant number of new mandates, and promptly closed again to preserve service standards. These new wins underpin our 2025 forecast which is set to deliver the Group’s largest annual billings to date.
In parallel, we advanced our 5-year plan by investing in technology, talent, and new structures. A highlight of 2024 was the spin-out of the Alphix platform into Alphix Solutions Limited, which is now positioned to serve both financial services clients and new markets. Our sub-brands continued to mature as planned, supported by industry recognition across multiple awards as outlined below.
The Group’s business model is centred on providing strategic marketing support to B2B sectors including asset management, insurance, corporate finance, and learning & development.
A core objective is the development of a centralised marketing performance data set, enabling a “data first” approach that facilitates Artificial Intelligence (“AI”) integration and strengthens client outcomes. In 2024, the Group expanded its application of AI into core client offerings, including search, social, and display. Proprietary semantic and bid optimisation solutions, built internally, enhance targeting precision and performance. These innovations are powered by behavioural modelling drawn from Aureum’s research respondent data, which has been processed into a new persona building and behavioural modelling solution. This solution now underpins both campaign optimisation and future product development.
The success of our approach and technology offerings has been recognised by the following high profile industry awards won during 2024, including:
Investment Week Investment Marketing and Innovation Awards Winners
Agency of the Year- Fundamental Group
Best use of AI – Alphix Solutions
Best use of data and research – Alphix Solutions
Financial Services Forum Awards for Innovation and Transformation Winners
Most innovative company of the year – Fundamental Media
Best digital transformation project – Alphix Solutions
Gramercy Institute Financial Strategy Awards Winners
B2B for Fundamental Media with Columbia Threadneedle
Marketing, Advertising and Sales Excellence Awards (MAX) Winners
Agency of the Year – Fundamental Media
Media Executive of the Year – Fundamental Media
Further details of the awards are available on our website.
Strategic Progress
The Group’s 5-year plan, now in its fourth year, continues to prepare for scaling across multiple disciplines. Progress in 2024 included:
Media planning and buying: After pausing onboarding in 2023, the division reopened in mid-2024, winning 5 out of 6 pitches. These wins secure future growth while maintaining client service quality.
Sonar Studio: Completed rebrand with expanded data-driven creative solutions.
Analytics and Intelligence: Alphix Solutions continued to grow its client base, with enhanced monitoring solutions aligned to evolving regulation.
Research and Consultancy: Integration of Fundamental Research into Aureum completed, unlocking new revenue streams and powering the new persona building and behavioural modelling solution that feeds into our AI optimisation capabilities.
Technology R&D: Fundamental Labs launched AI-driven tools including Trends V2 and LLMO, and delivered production-ready AI enhancements across media channels. These include semantic targeting, automated bid optimisation, and AI-powered audience modelling. Work has also begun on a universal login solution for investment managers, designed to convert anonymous website traffic into logged-in users, strengthening client engagement and data insights
Cross-sector expansion included services to business education, reinsurance, and transaction banking, with further opportunities under consideration.
The Group remains mindful of market uncertainty, inflation, and geopolitical tensions. The rapid rise of AI presents both opportunity and risk, and the Group continues to invest in Alphix and Labs to strengthen competitive advantage.
The leadership team continues to monitor these risks and develop contingency plans where viable.
FM Group operates a transparent, collaborative management structure with decision-making cascaded through the Board, divisional leadership, and working groups. The 5-year plan supports greater autonomy for departments while ensuring accountability through regular reporting.
Strategic Vision
The Group continues to build the B2B agency of the future. The expansion of internally developed AI systems across paid search, social, and display channels, powered by behavioural modelling from Alphix and Aureum, demonstrates the Group’s ability to integrate advanced technologies seamlessly into client delivery. This is the foundation for the 2025–2030 roadmap.
Investment in technology has continued to drive business process improvements, additional services and growth in our workforce.
We monitor the following key performance indicators:
Turnover: £83m (2023: £110m)
Gross Margin: £14.9m (2023: £16.9m)
Group PBT: £0.5m (£2.3m in 2023)
Headcount: 178 (2023: 165)
The decision to close to new business in mid-2023 was taken to protect service levels after a period of rapid growth. In early 2024, budgets from four major clients contracted, reducing billings. In response, the Group reopened to new business in summer 2024, winning all but 1 pitches (5 out of 6) undertaken, and subsequently closed again to maintain service quality.
These wins, combined with ongoing investment in people and technology, set the stage for 2025 to be the Group’s strongest year on record. Despite the lower billings, the decision not to scale back investment ensured that strategic objectives remained on track.
For the purposes of this report, the Directors have identified the following key stakeholder groups: Clients; Media Partners; Employees and our Local Community.
Clients
The Directors and team recognise that delivering an exceptional, high standard and consistent service to our clients is the cornerstone on which the FM Group is built.
Initiatives in 2024 to support our clients included:
Ongoing research into the impact of privacy-focused regulation on marketing and analytics (e.g. IP and UTM obfuscation).
Updated audience research on buying habits and trends.
Analysis of our data sets at scale to identify Trends in audience consumption.
Fundamental Media has a strong relationship with its media suppliers, regularly working with them to deliver media firsts around the world. 2024 initiatives to support our media partners included:
Live data sharing of campaign performance through the Outcome Analytics real-time dashboard.
Free use of the Alphix Solutions platform to support their audience measure and identification requirements.
Employees
Fundamental Media has always sought to create a collegiate, ‘sports-team’ feel to the business.
Despite the Covid era being behind us, the Group has continued to offer:
Flexible and hybrid working, which ensures our team benefits from the combination of in-office collaboration and the advantages to personal well-being of remote working.
Regular leadership updates in the form of CEO communications and quarterly Town Halls ensure our team is kept appropriately informed of the business’s progress and strategy
Regular All Hands meetings allow teams the opportunity to showcase any exceptional work or projects they have been working on to the entire company.
Our bespoke training and development platform (CPD Hub) allows for continued learning and professional development.
We continue to encourage our people in their mental well-being, with our teams around the world marking World Mental Health Day by enjoying breakfast together, encouraging connection and conversation. Our social media pages give regular updates on our teams’ activities.
The new company structure referenced previously provides benefit beyond the ability to accelerate innovation across the breadth of our services. It is also designed to create opportunity for staff to progress within the company along a range of lines from creative to analytics. This approach is intended to encourage staff to view the Fundamental Group as an opportunity for a long-term career as opposed to a short-term role.
The Directors recognise FM Group’s obligations as a responsible corporate citizen.
During 2024 the Group maintained its Ecovadis Sustainability rating of Silver. Ecovadis is a globally recognized assessment platform that rates businesses’ sustainability across four key categories: environmental impact, labour and human rights standards, business ethics, and procurement practices.
In all metrics, we achieved a rating of Good or Advanced, with an overall score placing us in the 86th percentile of Marketing and Advertising agencies assessed by Ecovadis globally.
Environmental measures
We have measured our 2023 GHG emissions and will continue to measure our output using methodologies aligned with the Greenhouse Gas Protocol and PACT (Partnership for Carbon Transparency) frameworks. Our data is matched to GHG databases from national governments and global sources such as EXIOBASE.
Community measures
The FM Group continues to support the asset management industry’s charitable initiatives.
Our employees are given paid time off to support charitable initiatives and are encouraged to give back to the communities through our Charity and Volunteering policies. Events in 2024 included:
Sponsoring employees with their personal charitable activities which included running the London Marathon, the Verbier Ultra Marathon, and raising money for good causes including Papyrus the suicide prevention charity, and the Tom Wilson Memorial Fund for organ donors.
The Group continues to partner with Future Frontiers, an education charity supporting young people by providing mentorship in the transition year at school. 14 members of the London team took part in the mentoring programme over a 5-week period with 18 young people. In May 2024, our Boston team volunteered at the Charles River Conservancy helping to clean an area of the river.
The Boston team continue to support the local community through their volunteering at a local non-profit bookstore called More than Words helping to sort books and working with the young people running the store.
The FM Group continue to support the charitable causes of our industry partners and in 2024 the teams took part in both the JP Morgan Corporate Challenge and Citywire run. Fundamental Media Limited remains a signatory to the UK’s Armed Forces Covenant; supporting the promise made by the nation that those who serve or have served in the Armed Forces, and their families, should be treated fairly and should not face disadvantages when seeking to access public or private goods and services in the UK.
The FM Group of companies is committed to acting ethically, achieving the highest standards of quality, honesty, openness and accountability in all our business activities, including in the appointment of suppliers. We expect suppliers to operate in compliance with all applicable law and regulations and the values which underpin them. These expectations are documented in our Supplier Code of Conduct, which is reflective of the principles laid out in the UN Global Compact and the UN’s Guiding Principles on Business and Human Rights.
Conclusion
2024 was a year of consolidation and preparation. While short-term billing contracted due to client budget reductions, decisive new business wins and continued investment in AI, behavioural modelling, and new digital solutions position the Group for record growth in 2025. The FM Group enters 2025 with strong momentum, clear strategic direction, and confidence in delivering its largest year to date.
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 12.
Ordinary dividends were paid amounting to £1,457,980. 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 objective of the company in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The company expects to meet its financial obligations through operating cash flows.
The company is exposed to currency exchange rate risk due to a significant proportion of its receivables and operating expenses being denominated in non-Sterling currencies. This risk is largely mitigated by the Company's policy to trade only in local currencies. The net exposure of each currency is monitored and managed.
The company may offer credit terms to its customers which allow payment of the debt after delivery of services. The company is at risk to the extent that a customer may be unable to pay the debt on the specified due date. This risk is mitigated by the strong ongoing customer relationships and strong internal credit control and reviews.
The auditors, Grunberg & Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.
Fundamental Media Limited meets the conditions for de minimis exemption from reporting their level of emissions and energy consumption.
This de minimis exemption falls under the Companies and Limited Liability Partnerships Regulations (SI 2018/ 1155) regulations, which states that where energy consumption is 40,000kWh or less in the UK during the financial year there is no requirement to disclose.
How the Directors have had regard to the need to foster the company's business relationships has been discussed in the section 172 Statement of the Strategic Report. Refer to this for more details.
We have audited the financial statements of Fundamental Media Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for 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 group's and parent 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
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
- the nature of the industry and sector and whether the financial results of our client differed from industry trends;
- the legal and regulatory framework that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements;
- the matters discussed among the audit engagement team during the planning process regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
Audit procedures performed included reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; discussions with the directors on their own assessment of the risks that irregularities may occur either as a result of fraud or error, their assessment of compliance with laws and regulations and whether they were aware of any instances of non-compliance, including any potential litigation or claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting business rationale of any significant transactions that are unusual or outside the normal course of business.
As a result of our assessment, it is considered that there are no laws and regulations for which non-compliance may be fundamental to the operating aspects of the business. However, laws and regulations considered to have a direct effect on the financial statements included the UK Companies Act, Employment Laws, Tax and Pensions legislation and Health & Safety legislation.
No instances of material non compliance were identified. However, the likelihood of detecting irregularities, including fraud,is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls , and the nature,timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. There is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with the ISAs (UK).
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.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £793,335 (2023 - £2,439,335 profit).
Fundamental Media Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 100 Cannon Street, 3rd Floor, London, EC4N 6EU.
The group consists of Fundamental Media Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The group financial statements consolidate the financial statements of Fundamental Media Limited and all its subsidiary undertakings drawn up to 31 December 2024. The subsidiaries, where applicable, of the group have taken exemption under FRS102 from preparing individual cash flows.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover represents net invoiced sales of services, excluding Value Added Tax. Turnover is recognised when the risks and rewards of the delivery of service has occurred as follows:
Media consulting or planning services: Sales are recognised according to the contracted delivery criteria.
- Retainer fees: are recognised evenly over the period of the retained services;
- Planning fees: are recognised at the point of delivery of the client-accepted plan.
Media buying:
- Media charges: are recognised on the committed insertion date of the advertising campaign;
- Media buying fees: are recognised on the committed insertion date of the advertising campaign.
- Income from real-time buys: is recognised by reference to the stage of completion of the committed views in the advertising campaign.
Sale of licenses: Revenue from the sale of licences is recognised on a straight-line basis over the period to which the licence relates.
Expenditure on research activities is recognised as an expense in the year in which it is incurred. Development expenditure is also recognised as an expense in the period incurred unless it meets the criteria for capitalisation as set out in Note 1.8 Intangible fixed assets other than goodwill, in which case it is capitalised and amortised over its estimated useful life.
The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.
Useful lives, amortisation methods, and residual values are reviewed annually, and changes are treated as changes in accounting estimates.
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 recognised in the income statement.
In the parent company financial statements, investments in subsidiaries and associates are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
In the individual financial statements interest in subsidiaries and associates are measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Material investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
At each reporting period end date, the group 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.
The Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans to related parties and investments in non-puttable ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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 debtors, 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 less any impairment.
Cash and cash equivalents are represented by cash in hand, deposits held at call with financial institutions, and other short-term highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Basic financial liabilities, including trade and other creditors and loans from related parties, 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. Such instruments are subsequently carried at amortised cost using the effective interest method less any impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group 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.
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 group's contractual obligations expire or are discharged or cancelled.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’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 income statement, 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 if, and only if, there is 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.
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.
The Group has a share option scheme for employees of the Group. Options are exercisable at a price agreed with HMRC prior to the date of grant. The options vest either on a date determined by the directors or upon the sale of the company. Options are forfeited if the employee leaves the Group's employment before the options have fully vested.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the lease term.
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 an average rate of exchange. Exchange differences are taken into account in arriving at the operating result.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the group's foreign operations are translated from their functional currency to sterling using the closing exchange rate. Income and expenses are translated using the average rate for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising on the translation of group companies are recognised in other comprehensive income and not reclassified to profit and loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The directors do not consider there to be any critical judgements made in the process of applying the company’s accounting policies.
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.
Estimates are made for operational accruals where expenditure invoices may not yet have been received but the liability is believed to have been incurred or where a variance in activity has been recorded. The determination of the annual bonus accrual involves a level of estimation due to the inherent uncertainty associated with future events, market conditions and the companies’ performance.
The group capitalises development costs as intangible assets when the criteria under FRS 102 Section 18 Intangible Assets other than Goodwill are met. One of the key areas of estimation relates to the allocation of internal development hours to specific projects that are expected to generate future economic benefits. The assessment involves estimating the number of staff hours attributable to each qualifying development project, based on management estimates.
The value of development costs capitalised is therefore sensitive to the accuracy of these estimations. Management reviews the estimated hours and underlying assumptions at each reporting date to ensure that the capitalised costs continue to meet the recognition criteria.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The Finance Bill 2021 enacted provisions to increase the main rate of corporation tax to 25% from the current rate of 19% from 1 April 2023.The current year therefore had no changes and had a full 25% corporations tax rate.
During the year, no impairment provisions have been made against any class of tangible fixed assets.
Share exchange
On 18 November 2024, the Group entered into a share exchange transaction involving its investment in an associate. The company held a 20% equity interest in Nosible Ltd, represented by 20 Ordinary A shares with a par value of $0.01 per share. Pursuant to the transaction, the company exchanged its entire holding in Nosible Limited for a 20% equity interest in Nosible Incorporated, represented by 2,000,000 ordinary shares with a par value of $0.00001 per share. The transaction did not result in a change in the percentage of ownership but reflects a transfer of the associate.
There is therefore no changes in the fixed asset investment value.
Details of the company's subsidiaries at 31 December 2024 are as follows:
[1] Alphix Solutions Limited became a trading company on 1 January 2024.
Details of the company's investment in associate at 31 December 2024 is as follows:
The investment in associate was not equity accounted in the current year as the amount is wholly immaterial.
During the year, no impairment provisions have been made against any class of debtors.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A Ordinary shares entitle the holders to two votes per share at all general meetings of the Company. All other classes of shares are entitled to one vote per share.
The directors may vote different dividends on each class of share.
Except for voting rights and rights to dividends as specified above,all shares rank pari passu.
Called-up share capital represents the nominal value of shares that have been issued.
Retained earnings includes all current and prior period retained profits and losses, all of which are distributable reserves.
Foreign exchange reserve comprises translation differences arising from the translation of financial statements of the Group's foreign entities into Sterling (£).
Other reserve represents excess of fair value over nominal value of shares issued in consideration received for the acquisition of subsidiaries where statutory merger relief has been applied.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
Dividends totalling £1,279,079 (2023 - £1,910,512) were paid in the year in respect of shares held by the company's directors.
The total amount owed to directors at the year-end was £57,276 (2023: £339,310), of which £145,029 is owed by a director. The movement and interest in respect of this balance are set out in the table below.