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

The principal activity of the Company is the provision of tech-enabled Compliance Solutions to Schools, Academies and Multi-Academy Trusts in the United Kingdom. Compliance Solutions include Human Resources, Payroll & Pensions, Consultancy, Leadership & MAT Development, Finance, Safer recruitment and DBS services.

Business review

The year ended 31 December 2024 marks the first full year of trading following the successful management buyout (MBO) completed on 14 December 2023. The Company is now 18 months into this new ownership structure, led by the co-owners alongside the existing leadership team.

Despite reporting a reduction in turnover to £12.79 million (2023: £13.83 million), the business has delivered a strong operational and financial performance, achieving a profit before tax of £49,835 (2023: loss of £558,441). The EBITDA margin increased significantly year-on-year, reflecting a 10% improvement on the prior period.

This growth in profitability was driven by decisive management actions, including a disciplined approach to cost control, optimisation of the workforce structure, and the integration of AI tools into key workflows to improve operational efficiency and reduce delivery costs. As a result, gross margin improved from 41% to 46% year-on-year, and administrative expenses decreased by 6% compared to 2023, despite ongoing investment in technology and staff development.

The Company continues to invest in digital capabilities to enhance its service offering and to ensure long-term scalability and resilience. Key strategic priorities remain focused on client retention, margin protection, innovation in service delivery, and capturing growth opportunities in the education sector.

The leadership team remains confident in the Company’s direction and financial sustainability, supported by a robust funding structure and the commitment of its parent, EPM Holdings Ltd, which provides a centralised treasury function and additional financial flexibility under the £1.7 million facility agreement with Citation Holdings Ltd.

Principal risks and uncertainties

The risks below are the principal risks that may impact the Company achieving its strategic objectives:

Customers

The Directors recognise that the pace of continued growth depends upon the Company continuing to attract new clients for its services, and the renewal and cross sell of its services into its existing customer base. The company has a strong customer base with no specific dependency upon key clients; however, this is a risk of competition from other providers in the sector. To mitigate the customer risk the Company is investing in new leading-edge technology designed specifically for Education and has a continued focus on attracting and retaining exceptional personnel to deliver a first-class service to their clients.

People

The company has a longstanding, experienced team of Directors and employs experienced qualified personnel to deliver high standard levels of service to their client base. Key personnel in a high service-based business is always a risk. To mitigate this risk the Company has implemented a Management Incentive Plan (MIP) to retain and motivate management to achieve the Company’s strategic objectives. The Company are also committed to investing in their people and provide training and development opportunities as well as having a continued high focus on employee engagement. The Company has a glass door score of 4.7 and a lower than industry average staff attrition ratio.

Tech

The Company has seen growing competition with technological advancements from other service providers in the education sector with customers, particularly MATs requiring enhanced reporting and self-service functionality. To mitigate this risk the Company is part way through a strategic project to design and implement a new integrated HR and Payroll platform following investment from their former parent company Citation Holdings Ltd in 2023. The Directors are confident that the new leading-edge technology designed specifically for Education, along with their experienced team of specialists in the sector will drive growth and efficiencies making EPM a strong competitor in the current market. Transferring customers to any new system comes with risk however early indications show current customers are wanting to purchase additional modules on the new software and the current sales pipeline supports this.

Changes in legislation

Changes of government and in subsequent legislation have a significant impact on the Company through updates to client information and the requirement to ensure that all Company staff maintain their comprehensive knowledge of the regulations that could affect clients, and software can be updated in line with the latest legislative changes.

Liquidity risk

The Directors review the Company's liquidity risks both bi-annually, as part of the planning and budgeting process, and on a frequent basis to ensure the Company has sufficient cash resources to meet covenant and funding requirements and liabilities as they fall due. Within the management buyout agreement, short term funding is available from Citation Holdings Ltd should the need arise whilst the Company undergo a period of transformation with the new technology. Short-term and long-term cash flow forecasts are regularly performed and reported to the Directors. The Company's finance team monitor cash positions daily and this is reviewed by the CFO daily.

Credit risk

The Company is exposed to credit risk on financial assets to the extent that it is owed trade and other receivables from customers. Trade receivable exposures are managed in-house by a credit controller. At risk customers are reported to the Directors on an ad-hoc basis and action is taken swiftly to reduce risk. If debt is deemed irrecoverable overdue invoices and any related accrued income balance is written off against the relevant underlying provisions.

Cyber risk

The Company is at risk of a cyber-attack given that it delivers its service offering alongside technology-based platforms. Failure to prevent a cyber-attack or data breach could negatively impact the Company’s customer and employee data, financial reporting systems and stakeholder confidence and could ultimately result in fines levied by ICO. The business continues to proactively manage risks associated with data loss, GDPR non-compliance and data control weaknesses and have a team who ensure data security training programmes are carried out by all Company employees and a team who continually review the Company’s IT structure, systems and procedures to ensure they are fit for purpose. To mitigate this risk the Company now holds all data in the cloud, has regularly tested disaster recovery plans and uses multifactor authentication for all access. The Company is also undertaking a full ISO 27001 Gap analysis, addressing all technical and policy non-conformities and working towards accreditation in 2025.

Environmental matters

The Company is committed to minimising the environmental impact of its activities, products and services and has implemented several strategies within its direct operational management. These strategies have been carefully designed and implemented to ensure that the business is operating in an environmentally responsible manner. Directors regularly evaluate the Company’s policies to ensure compliance with relevant environmental legislation, regulations and other environmental requirements are maintained.

Environmental and energy efficiency initiatives undertaken in the year include:

• Introduction of an Electrical Vehicle (EV) scheme to reduce fuel consumption and minimise carbon emissions.

• Reduction in employee travel through remote selling to and servicing of clients and the use of a hybrid working from home model for employees.

• Implemented waste reduction and recycling programs such as proper segregation of waste, composting of organic materials and recycling initiatives to minimise the amount of waste sent to landfills.

• Prioritised working with suppliers who use sustainable materials, minimise their own carbon emissions and have their own environmental management systems in place.

• Implementing energy efficient technologies and practices, such as LED lighting and thermostatic temperature controls to significantly reduce our energy consumption.

• Adopted water saving technologies and practices to minimise water wastage within the Company premises including the use of water efficient fixtures.

• Explored alternative packaging options for marketing materials that are biodegradable or recyclable to minimise plastic waste and reduction of plastic pollution.

• Actively encourage the use of car share and raising awareness of the cycle to work scheme throughout the Company to reduce fuel consumption and minimise carbon emissions further.

Corporate social responsibility

The Company is committed to taking its corporate social responsibilities very seriously and includes social and environmental issues at the heart of all decision-making processes. Our charity work focuses on community, health and education. We prioritise initiatives which help those in need, and which support the development of young people. We support a range of UK-wide charities each year raising funds for those charities which are usually close to the heart of our team, they’ve included The Rainbow Trust, Children's Liver Disease Foundation, Cancer Research, Magic breakfast and the NSPCC, to name a few. We also support local schools and colleges with supporting and attending open days and providing work experience opportunities for their pupils.

Our employees are at the heart of what we do, and our wellbeing strategy focuses on 5 areas of wellbeing and fosters a culture of inclusivity, work-life balance and continuous development. It is an ongoing commitment to creating a workplace where employees feel valued, supported and empowered, the 5 areas are:

• Physical health and wealth - Offering health assessments, discounted gym memberships and providing healthy food options and snacks in the office as well as nutritional workshops.

• Mental and emotional wellbeing - Providing access to a range of confidential counselling services, various workshops on mindfulness and stress management, mental health first aid team and mental health days.

• Work life balance - Flexible work policies and arrangements, time management workshops and leave policies.

• Personal and professional development - Learning and development, career pathing and mentorship programmes.

• Financial wellbeing - various webinars and talks on financial planning including pensions, discount apps and Bupa cash plans.

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 11.

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:

Going concern

The Company’s business activities, together with the factors likely to affect its future development and position, are outlined in the Directors’ report. The Company is 18 months into a management buyout and within the continuing operations under the MBO, funding facilities of £1.7m were made available by Citation Holdings Ltd to EPM Holdings Ltd to support the existing transformation project. The Company is required to meet certain financial covenants to avoid breaching the terms of this facility agreement.

The Company participates in a centralised treasury arrangement and so shares banking arrangement with its holding company, EPM Holdings Ltd (together ‘the Group’). The Group closely monitors its funding position throughout the year including monitoring continued compliance with covenants and available facilities to ensure it has sufficient headroom to fund operations. Given the intrinsic funding link between the UK group of companies, through the facility arrangements, the Directors of EPM Holdings Ltd have provided a letter of financial support to the Company indicating that they have the ability to, and will, provide such funds as necessary to enable them to meet their liabilities as and when they fall due, to the extent that money is not otherwise available to meet such liabilities, to 31 December 2026.

In assessing the going concern assumption for these financial statements, the Directors have prepared a base case cash flow and profit forecast to 31 December 2026 to consider the Group’s ability to comply with its financial covenant, and to continue to pay its debts as they fall due. As forecasting is inherently difficult in the current environment, and revenues can be potentially impacted by external factors, the Directors have applied sensitivities to the base case, challenging the forecasted values by incorporating severe but plausible downside scenarios which include:

• A 5% reduction in the existing contracted client base; together with

• a 12% decrease in new business/upsells despite heavy investment into new leading-edge technology

Throughout the review period of its assessment, even after sensitising the forecasts for plausible downside scenarios, the UK Group companies maintain sufficient cash reserves to pay its liabilities as they fall due, including interest payments, and complies with its financial covenant.

The Directors are therefore satisfied they have a reasonable basis upon which to conclude that the Company can continue as a going concern to 31 December 2026.

During the year the Company had third party indemnity insurance for the Directors and Officers. This insurance remains in force as at the date of approving the Directors’ report.

The Company's main financial instruments are cash and receivables and payables carried at amortised cost. The Company does not use derivative financial instruments.

Disabled employees are given full and fair consideration for all types of vacancy. Should an existing employee become disabled, such steps as are practical and reasonable are taken to retain him or her in employment. Where appropriate, assistance with rehabilitation and suitable training are given. Disabled persons have equal opportunities for training, career development and promotion, except insofar as such opportunities are constrained by the practical limitations of their disability.

Within the bounds of commercial confidentiality, staff at all levels are kept fully informed of matters that affect the progress of the Company and are of interest to them as employees. This is carried out by the Directors who present a companywide update over MS Teams monthly. A heavy emphasis is placed on providing an engaging and rewarding environment for our employees to thrive, develop their skills, and contribute meaningfully to the success of the organisation. The Company have development schemes in place to take all level of employees through professional qualifications. The Company measures employee engagement using the robust measure of the Gallup Q12 and places in the top quartile in the UK for employee engagement.

The Company is continuing with its strategy of developing and implementing its new leading-edge technology into the Education sector and adding additional products and services to its current suite available for its education customers. As part of its forward-thinking strategy, the company is adopting the use of AI technologies to enhance operational performance and support its people through smarter, more efficient ways of working.

The auditor, Fisher Phillips LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

We have audited the financial statements of Education Personnel Management Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, 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 profit 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.

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.

Based on our understanding of the company and its industry, we identified the principal risks of non-compliance with laws and regulations related to company law applicable in England and Wales, 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 preparation of the financial statements such as the Companies Act 2006, tax legislation regarding payroll, VAT and corporation tax.

We evaluated the management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk to override controls), and performed the following audit procedures:

- Enquiry with senior management and those charged with governance about known or suspected instances of non-compliance with laws and regulations and fraud.

- Reviewing correspondence and minutes of relevant meetings of those charged with governance.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business

There are inherent limitations in the audit procedures described above. We are less likely to be aware of instances on 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 misstatements 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 misrepresentation, or through collusion.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Education Personnel Management Limited is a private company limited by shares incorporated in England and Wales. The registered office is Spencer House, Ermine Business Park, Huntingdon, PE29 6EP.

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.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

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

The company offers a diverse range of products and services and applies various revenue recognition methods in accordance with the principles of FRS 102. For contractual revenue, income is recognised based on the delivery of services to customers over the duration of the contract, which typically spans 12 months but may extend up to 36 months depending on the nature of the product or service.

The costs associated with service delivery are allocated to the specific performance obligations outlined in the contract. Revenue is recognised in line with this cost allocation, as and when these performance obligations are satisfied throughout the contract term.

Non-contractual revenue is recognised at the point in time when control of the service is transferred to the customer.

Where invoices are issued on a schedule that does not align with the timing of revenue recognition based on service delivery, appropriate adjustments are made through accrued or deferred income. Deferred income commonly arises where customers pay in advance on an annual, termly, or quarterly basis.

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

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

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially 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.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

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 company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

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

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

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 expire 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.

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

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

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

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

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.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The preparation of financial statements in compliance with FRS102 requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities at the year end and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The estimates that have had the most significant effect on amounts recognised in the financial statements are:

The Company determines a reliable estimate of the useful life of intangible assets based on various factors, including the expected use of the asset, the anticipated useful life of the cash-generating units to which the asset is allocated, and any legal, regulatory, or contractual provisions that may limit its useful life. The estimate also considers assumptions that market participants would make regarding similar 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 where necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

The Company recognises accrued income when it has earned revenue for services rendered but has not yet received payment by the end of the reporting period. This income is recorded based on the Company’s reliable estimate of the amount expected to be received, considering contractual terms, historical collection patterns, and the probability of receipt.

The Company recognises deferred income when payments are received in advance of rendering services. This income is initially recorded as a liability and subsequently recognised as revenue in the period in which the related services are delivered, in accordance with the terms of the underlying agreement and relevant FRS 102 revenue recognition principles.

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

Their aggregate remuneration comprised:

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

The other tax reliefs represent a claim for SME Research and Development repayable tax credit of £168,014.

Reversals of previous impairment losses have been recognised in profit or loss as follows:

An impairment charge of £690,000 was recognised in the financial year 2021 relating to capitalised development costs for Project Nextgen, which aimed to implement the Atlas HR platform within EPM. The project was subsequently discontinued in early financial year 2022. Following a detailed reconciliation and review, the correct impairment journal was identified and posted during the year. As a result, the original £690,000 impairment charge has been reversed during the year.

More information on impairment movements in the year is given in note 8.

Financial assets that are debt instruments measured at amortised cost comprise trade debtors, other debtors, and amount owed from group undertakings.

Financial liabilities measured at amortised cost comprise trade creditors, amount owed to group undertakings, other creditors and accruals.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The Company is controlled by EPM Holdings Limited, having its registered office at Spencer House, Ermine Business Park, Huntingdon, Cambridgeshire, United Kingdom. PE29 6EP.