The directors present the strategic report for the year ended 31 March 2025.

The Company’s main activity is to act as a software development centre providing services in line with the strategy and products from Avaloq Group AG.

These activities include software engineering, business analysis, technical writing, business consulting, sales and project management.

Avaloq Innovation Ltd has maintained consistent growth in its first 10 years of business and has surpassed 94FTEs. The Company has built local teams which have remained consistent during this time period which has allowed us to strengthen in terms of knowledge and know-how. The Avaloq Group continues to expand its footprint in Avaloq Innovation Ltd by extending parts of the organisation not previously represented. Together, these factors help cement the Company in the future of Avaloq Groups' plans. 

The financial result for 2025 of £1,328,037 has increased significantly from the previous year (2024: £876,273) and the plan for Avaloq Group AG ('the Group') is to keep business activities and profit at this level.

The directors consider the Company's key financial performance indicators are those that communicate the financial performance and strength of the Company as a whole, these being turnover, operating profit and profit before tax. These are monitored on a monthly basis.

The results for the year, as set out from page 10 showing a profit before taxation of £1,365,396 (2024: £1,130,297) while the operating profit margin remained stable at 10.1% (2024: 10.4%) in the year ended 31 March 2025.

The shareholder's funds total £6,634,614 at the year end (2024: £5,306,577).

The Company has performed consistently with previous years and continued to execute its role as development centre in the Group.

Based on these activities it has been deemed by the directors that the performance of the Company has been satisfactory.

The Company's principal financial instruments comprise cash, cash equivalents and other debtors. Other financial assets and liabilities, such as trade creditors and group balances, arise directly from the Group's operating activities. 

The main risk associated with the Company's financial assets and liabilities are set out below.

The Edinburgh market is proving to be one of the fastest-growing tech cities in the UK providing us an opportunity to access a pool of talent.  Considering this, our primary risk is ensuring we have a competitive offering and can attract and retain talent.

Future developments

The Company is considered a pillar in the Avaloq Groups location strategy and anticipates growth over the next few years. That said, in 2025 this is expected to be minor with growth opportunities in 2026 and beyond.   

Financial risk management objectives and policies

Interest rate risk

The Company's exposure is limited by access to a credit facility at Central bank rate (Bank of England plus 0%/0.75%) provided by parent undertakings.

Price risk

The majority of all sales are to companies within the Avaloq Group. As for any people business, the main risk on the purchasing side is related to wage costs. Due to the high resource ramp-up costs, these risks cannot easily be mitigated, but are instead managed.

Credit risk

The Company monitors the exposure to credit risk on an ongoing basis and credit evaluations are performed on customers requiring credit over a certain amount. Credit risks are also minimised by limiting the Company's business partners to entities with high credit worthiness.

Foreign exchange risk

The Company is not exposed to any significant foreign exchange risk.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2025.

The profit for the year, after taxation, amounted to £1,328,037 (2023: £876,273).

No ordinary dividends were paid during the current or prior year. The directors do not recommend payment of a final dividend for the year ended 31 March 2025 (2024: £nil).

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.

Going concern

The financial statements are prepared on the going concern basis, which the directors believe to be appropriate for the following reasons. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic report. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future in its activity to extend the customer base for the Avaloq Group and providing services to third parties.

The Company participates in the Group's centralised treasury arrangements and have account agreements with its parent and ultimate parent company. The directors, having assessed the responses of the directors of the Company's parent to their enquiries, have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of the Group to continue as a going concern or its ability to continue with the current banking arrangements.

The outlook on group level for the financial year ending 31 March 2026 and onwards remains positive with a continuously increasing revenue, gross profit and operating profit. For the financial year ending 31 March 2026 the business plan has foreseen a revenue of 524m GBP (compared to 521m GBP in the financial year ended 31 March 2025) and a operating profit of 96m GBP (compared to 81m GBP in the financial year ended 31 March 2025). At the time of signing, the revenue is expected to grow at an average of 5.9% per year in the next 5 years reaching 695m GBP in the financial year ending 31 March 2030 while the operating profit growth is expected to be at an average of 14.3% per year reaching 148m GBP in the financial year ending 31 March 2030.

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the annual report and financial statements are prepared on the going concern basis.

The Company made no political donations or incurred any political expenditure during the year and the prior year.

Details of the Company's objectives and policies for the financial risk management, and its exposure to funding, foreign currency risk and credit risk, are provided in the Strategic Report, detailing the impact it has had in the current year and future.

A large portion of the Company’s labour cost is channeled into research and development activities to enhance banking software solutions for the wider Avaloq Group.

The directors have highlighted future development considerations in the Strategic Report.

Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG will therefore continue in office.

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.

The directors are responsible for preparing the Directors’ Report, Strategic 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 they have elected to prepare the financial statements in accordance with FRS 101 Reduced Disclosure Framework.

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 year.

In preparing the financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

• use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

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 responsible for such internal controls as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

We have audited the financial statements of Avaloq Innovation Ltd. (‘the Company’) for the year ended 31 March 2025 set out on pages 10 to 27, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, and related notes, including the summary of material accounting policies set out in note 1.

The financial reporting framework that has been applied in their preparation is UK Law and UK accounting standards, including FRS 101 Reduced Disclosure Framework.

In our opinion:

• the financial statements give a true and fair view of the state of the Company’s affairs as at 31 March 2025 and of its profit for the year then ended;

• the financial statements have been properly prepared in accordance with FRS 101 Reduced Disclosure Framework issued by the UK’s Financial Reporting Council; and

• the financial statements 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 ethical requirements that are relevant to our audit of financial statements in the UK, including the Financial Reporting Council (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

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

In our evaluation of the directors' conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.

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 the date 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.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the Company will continue in operation.

Detecting irregularities including fraud

We identified the areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements and risks of material misstatement due to fraud, using our understanding of the entity's industry, regulatory environment and other external factors and inquiry with the directors. In addition, our risk assessment procedures included: inquiring with the directors as to the Company’s policies and procedures regarding compliance with laws and regulations and prevention and detection of fraud; inquiring whether the directors have knowledge of any actual or suspected non-compliance with laws or regulations or alleged fraud; inspecting the Company’s regulatory and legal correspondence; and reading Board minutes.

We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team.

The Company is subject to laws and regulations that directly affect the financial statements including companies and financial reporting legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items, including assessing the financial statement disclosures and agreeing them to supporting documentation when necessary.

The Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, anti-bribery, employment law.

Auditing standards limit the required audit procedures to identify non-compliance with these non-direct laws and regulations to inquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected non-compliance.

We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. As required by auditing standards, we performed procedures to address the risk of management override of controls. On this audit we do not believe there is a fraud risk related to revenue recognition. We did not identify any additional fraud risks.

In response to risk of fraud, we also performed procedures including: identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation; and assessing the disclosures in the financial statements.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

Other information

The directors are responsible for the other information presented in the Annual Report together with the financial statements. The other information comprises the information included in the strategic report and the directors’ report. The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information.

Opinions on other matters prescribed by the Companies Act 2006

Based solely on our work on the other information undertaken during the course of the audit:

• we have not identified material misstatements in the directors' report or the strategic report;

• in our opinion, the information given in the directors’ report and the strategic report is consistent with the financial statements;

• in our opinion, the directors’ report and the strategic report have been prepared in accordance with the Companies Act 2006.

Under the Companies Act 2006 we are required 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.

We have nothing to report in these respects.

As explained more fully in the directors’ responsibilities statement set out on page 5, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; 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 they 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, other irregularities or error, and to issue an opinion in an auditor’s report. 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, other irregularities 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 fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of our audit work and to whom we owe our responsibilities

Our 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 notes on pages 13 to 27 form part of these financial statements.

The notes on pages 13 to 27 form part of these financial statements.

The notes on pages 13 to 27 form part of these financial statements.

Avaloq Innovation Ltd. ("the Company") is a private company incorporated, domiciled and registered in Scotland in the UK. The registered office is One Lochrin Square, 92 Fountainbridge, Edinburgh, United Kingdom, EH3 9QA.

The Company's principal activities and nature of its operations are disclosed in the Strategic report.

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101").

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted international accounting standards ("UK-adopted IFRSs"), but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates and figures in the financial statements have been presented to the nearest thousand.

The Company’s ultimate parent undertaking, NEC Corporation includes the Company in its consolidated financial statements. The consolidated financial statements of NEC Corporation are prepared in accordance with International Financial Reporting Standards and are available to the public and may be obtained from www.nec.com.

In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:

• Cash Flow Statement and related notes;

• Certain disclosures regarding revenue;

• Certain disclosures regarding leases;

• Comparative period reconciliations for tangible fixed assets;

• Disclosures in respect of transactions with wholly owned subsidiaries;

• Disclosures in respect of capital management;

• The effects of new but not yet effective IFRSs;

• Disclosures in respect of the compensation of Key Management Personnel; and

• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

As the consolidated financial statements of NEC Corporation include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures:

• Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures.

The material accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.

Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 3 below.

Measurement convention

The financial statements are prepared on the historical cost basis.

The financial statements are prepared on the going concern basis, which the directors believe to be appropriate for the following reasons. The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic report. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future in its activity to extend the customer base for the Avaloq Group and providing services to third parties.true

The Company participates in the Group's centralised treasury arrangements and have account agreements with its parent and ultimate parent company. The directors, having assessed the responses of the directors of the Company's parent to their enquiries, have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of the Group to continue as a going concern or its ability to continue with the current banking arrangements.

The outlook on group level for the financial year ending 31 March 2026 and onwards remains positive with a continuously increasing revenue, gross profit and operating profit. For the financial year ending 31 March 2026 the business plan has foreseen a revenue of 524m GBP (compared to 521m GBP in the financial year ended 31 March 2025) and a operating profit of 96m GBP (compared to 81m GBP in the financial year ended 31 March 2025). At the time of signing, the revenue is expected to grow at an average of 5.9% per year in the next 5 years reaching 695m GBP in the financial year ending 31 March 2030 while the operating profit growth is expected to be at an average of 14.3% per year reaching 148m GBP in the financial year ending 31 March 2030.

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the annual report and financial statements are prepared on the going concern basis.

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Turnover represents income earned in the year from the Parent company for software development under a service contract agreement for a mark up of costs plus 8% for contract research and development activities.

Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Property, plant and equipment (continued)

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

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Financial assets and financial liabilities are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

On initial recognition, a financial asset is classified as measured at: amortised cost or fair value through profit and loss (FVTPL).

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All financial assets not classified as measured at amortised cost as described above are measured at FVTPL.

Trade and other receivables

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using effective interest method, less any appropriate provision for impairment.

The Company always recognises lifetime ECL for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

They are included in current assets, except for payment terms greater than twelve months after the end of the reporting period. These are classified as non-current assets.

Contract assets

Contract assets are recognised when the Company has transferred goods or services to the customer but where the Company is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment purposes.

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

Financial liabilities – Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss.

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

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

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the statement of financial position date in the countries where the Company operates and generates income.

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

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

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

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Provisions are recognised when the Company has a legal or constructive present obligation as a result of a past event and it is probable that the Company will be required to settle that 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 reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

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 inventories or non-current 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.

A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of comprehensive income in the periods during which services are rendered by employees.

The Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

• fixed lease payments (including in-substance fixed payments), less any lease incentives;

• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• the amount expected to be payable by the lessee under residual value guarantees; and

• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is included in 'Creditors' on the 'Statement of Financial Position'.

Leases (continued)

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate;

• the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used); and

• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. The costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Property, plant and equipment' in the statement of financial position.

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Interest receivable

Interest income is recognised in profit or loss as it accrues using the effective interest method. Other interest receivable includes net foreign exchange gains.

Interest payable

Interest payable is recognised in profit or loss as it accrues, using the effective interest method. Interest payable and similar expenses include interest payable, finance expense on lease liabilities recognised in profit or loss using the effective interest method and net foreign exchange losses that are recognised in the statement of comprehensive income (see foreign currency accounting policy). Foreign currency gains and losses are reported on a net basis.

UK-Adopted IFRSs that were effective for accounting periods ending on or before 31 December 2024, have

been applied in the preparation of these financial statements. The following standards, amendments, and

interpretations were effective for accounting periods beginning on or after 1 January 2025 and these have

been adopted in these financial statements where relevant:

• Amendments to IAS 1 - Classification of liabilities as current and non-current

• Amendments to IAS 1 - Non-current liabilities with covenants

• Amendments to IFRS 16 - Lease liability in a sale and leaseback

• Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements

The adoption of the above did not have a material effect on these financial statements.

No significant impact on the Company’s financial statements has been identified because of these additional

standards and amendments.

In the application of the Company’s accounting policies, which are described in note 1, 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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Company's accounting policies

The directors do not consider there to be any critical judgements surrounding the application of the Company's accounting policies.

Key sources of estimation uncertainty

The directors do not consider there to be any key sources of estimation uncertainty and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities in the financial statements.

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

Staff costs, including directors remuneration, were as follows:

Pension costs above relate to contributions to defined contribution scheme in the current year and prior year.

Retirement benefits did not accrue to any of the Company's directors during the current or prior year.

The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:

Property, plant and equipment includes right-of-use assets, as follows:

The Company leases buildings. The average lease term is 10 years (2024: 10 years).

Amounts owed by parent and group undertakings are unsecured, interest free (besides group company current account with an interest rate according to Central bank rate (Bank of England) + 0% / 0.75% and payable on demand. We aligned the interest calculation with NEC Capital (UK). Deposits pay Central bank rate + 0%. Overdrawns pay Central bank rate + 0.75%. Balances are denominated in GBP.

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

The Company does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Company's treasury function.

The total cash outflow for leases during the year amounted to £1,238,657 (2024: £699,255).

The following are the major deferred tax liabilities and assets recognised by the Company and movements thereon during the current and prior reporting year.

Deferred tax assets were disclosed and presented within trade and other receivables as a current asset in the prior year. This has been appropriately reclassified and disclosed on the face of the statement of financial position as non-current assets for both the current and prior year.

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 funds under the control of trustees. Where there are employees who leave the schemes prior to vesting fully in the contributions, the contributions payable by the Company are reduced by the amount of forfeited contributions.

As at 31 March 2025, contributions of £88,486 (2024: £nil) were due in respect of the current reporting period, had not been paid over to the schemes.

The Company has only one class of shares which carry no right to fixed income.

Retained earnings

The retained earnings account represents cumulative profits or losses net of dividends paid and other adjustments.

There have been no significant events subsequent to the year end that would require adjustments in these financial statements.

As stated in note 1.1 of these financial statements, the Company has taken exemption from disclosing related party transactions with other wholly owned members of the Group, of which the Company is a member.

The Company's intermediate parent company is Avaloq Group AG, a Company incorporated in Switzerland. The directors consider NEC Corporation, a Company incorporated in Tokyo, to be the Company’s ultimate parent and controlling party.

The financial statements of Avaloq Group AG are the smallest group of consolidated financial statements which include the Company and can be obtained from the following address: Avaloq Group AG, Allmendstrasse 140, 8027 Zurich, Switzerland, web address www.avaloq.ch.

The financial statements of NEC Corporation, the Company’s ultimate parent and controlling party are the largest group of consolidated financial statements which include the Company and can be obtained from web address www.nec.com.