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

The principal activity of the company is the provision of offshore survey and inspection services to the energy and utility industries. The company drives the decarbonisation of offshore services through the development and use of innovative technologies and methodologies, delivering data products with a focus on lower carbon impact solutions in the core markets of site characterisation, offshore construction support and operations & maintenance investigations.

Our rapid growth and success to date has come from using expertise and technology to provide more efficient survey services with a lower carbon footprint to a wide range of global clients, reducing their operational and financial risk. Our business recognises that political instability, the need for domestic energy security and the motivation of energy companies and governments around the world to reduce their CO2 footprint supports our growth ambitions in the energy sector worldwide. Our use of innovative technologies throughout the lifecycle of offshore project development enables organizations to expedite their position to become carbon neutral ahead of the 2050 COP 26 targets.

Our service delivery is supported by 244 staff (2023: 179) across regional bases in the UK, the United States and Asia-Pacific region. As our greatest asset, these individuals are selected for their expertise and alignment with our values, and we empower all our staff to think differently to help deliver the company’s vision. This competence and robust organizational processes allow the group to deliver safe and efficient projects for our clients to the same exacting standards wherever we work in the world. Building long term relationships with our key clients allows us to mature new technologies and continually add value to their projects.

During the year the company delivered turnover of £25.3m which is an increase of 6% on the previous year (2023: £23.8m). There was a reduction in revenue from customers as a result of where the group activity occurred during the financial year with additional contracts won within the Americas and AsiaPac regions but this is offset by the revenue from a fellow subsidiary for the intercompany lease of the vessel owned by the company.

The company is exposed to various risks which are monitored by the board. Appropriate processes are put in place to periodically review and mitigate key business risks. The key business risks which affect the company are set out below:

(a) to finance its operations

(b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and

(c) for trading purposes.

Interest rate risk

• The company monitors interest rates closely in order to minimise the potential exposure it has to any interest rate movements. During the year, the parent entity has entered into new loan agreements with its main shareholders which provide a fixed rate of interest of 14% until 2033.

Credit risk

• The company provides credit to most of its customers and is therefore exposed to the usual credit risk and cash flow risk associated with this form of trading. These risks are managed through ongoing credit control procedures and a broad diversification of client portfolio.

Liquidity risk

• As at 31 December 2024 the company and wider group had a cash balance which the directors believe is sufficient to maintain liquidity and support the growth of the business. The liquidity risk is managed by cash flow forecasting.

Currency rate risk

• The company's activities expose it to the risk of fluctuating foreign exchange rates. This risk is mitigated by forecasting exposure and matching the projected revenues and costs in each currency.

The company uses a range of financial indicators to monitor the company's performance over time. The directors consider turnover, gross profit and earnings before interest, tax, depreciation and amortisation (EBITDA) to be key performance indicators. These are set out below:

On behalf of the board

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

The principal activity of the company continued to be that of provider of innovative survey and inspection services to the offshore energy sector.

The company is committed to increased investment in new technology that will allow us to deliver world-class services to support the entire offshore energy sector at a lower carbon cost. Our focus is on driving efficiency through a combination of next generation uncrewed delivery platforms including USV’s and AUV’s hosting advanced sensor technology payloads, developed in-house and alongside industry leading technology partners, to produce the data products our clients need faster and at a much reduced financial and carbon cost than traditional manned vessel solutions.

The results for the year are set out on page 9.

No ordinary dividends were paid (2023: £nil). The directors do not recommend payment of a final dividend.

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

The company continues to invest in research and development as demonstrated by the increase in development costs capitalised as intangible assets. These will improve and expand the range of offshore survey and inspection services which we offer to the market which will benefit the company, and wider group, in the medium to long term.

On 18 December 2025, new loan notes of £3,865,000 were issued by BGF Investments LP and BGF UK Enterprise Fund 3 LP to the parent company, Sulmara Subsea International Limited, which are subject to interest at 14% per annum with only interest due to commence being repaid from December 2026. These new loan notes are repayable at the same time as the previous loan notes. On this date, they also elected to exercise share warrants for additional C Ordinary Shares.

On 18 December 2025, a short-term loan and interest held by the parent company, Sulmara Subsea International Limited, and owed to a related party were settled with the related party choosing to reinvest with a new loan note of £1,135,000, which is subject to interest at 14% per annum with only interest due to commence being repaid from December 2026. These new loan notes are repayable at the same time as the previous loan notes. On this date, they also elected to exercise share warrants for additional A Ordinary Shares.

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

As at 31 December 2024 the company has net current liabilities of £2,931k (2023: net current assets of £271k) meaning it does not have sufficient funds to continue to meet its current liabilities as they fall due over the next 12 months. However, there are significant intercompany liabilities of £26,546k, which are repayable on demand as at 31 December 2024. The majority of the balance, is due to the parent company as a result of the novation in 2022 and has not been settled at the date of approving the financial statements. As a result of this, the company requires the support of the parent company, Sulmara Subsea International Limited, and confirmation has been provided that the parent company has the ability to provide the necessary support. As disclosed above, there has been additional investment in the group and the parent company and other subsidiaries will not seek repayment of these liabilities unless there is freely available cash to do so.

Assurances have been obtained by the parent company from its shareholders, BGF Investments LP and BGF UK Enterprise Fund 3 LP, that they remain supportive of the group and will consider providing additional investment if required in the next 12 months to allow the group to continue as a going concern but do not currently consider that this is required based on the latest forecasts. They have also confirmed that they have no intention to seek early repayment of any long-term amounts due or seeking repayment of any short-term funding provided to the detriment of other creditors.

As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this will continue although, at the date of approval of these financial statements, they have no reason to believe that this support will not continue for a period of at least 12 months from the date of approval of the financial statements.

On that basis, and along with recent results and forecasts, the directors have a reasonable expectation that it is appropriate to adopt the going concern basis in the preparation of the financial statements and are confident that the group and company will have sufficient funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements.

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.

We have audited the financial statements of Sulmara Subsea 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 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

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

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

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

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

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

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

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

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

• Reviewing minutes of meetings of those charged with governance;

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

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

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

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

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

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

Sulmara Subsea Limited is a private company limited by shares incorporated in Scotland. The registered office is 28 Albyn Place, Aberdeen, United Kingdom, AB10 1YL. The principal place of business is Pavillion 11, Kingshill Park, Venture Drive, Westhill, Aberdeenshire, United Kingdom, AB32 6FL. The company's registered number is SC606923.

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 £ 000.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Sulmara Subsea International Limited. These consolidated financial statements are available from its registered office, 28 Albyn Place, Aberdeen, United Kingdom, AB10 1YL.

As at 31 December 2024 the company has net current liabilities of £2,931k (2023: net current assets of £271k) meaning it does not have sufficient funds to continue to meet its current liabilities as they fall due over the next 12 months. However, there are significant intercompany liabilities of £26,546k, which are repayable on demand as at 31 December 2024. The majority of the balance, is due to the parent company as a result of the novation in 2022 and has not been settled at the date of approving the financial statements. As a result of this, the company requires the support of the parent company, Sulmara Subsea International Limited, and confirmation has been provided that the parent company has the ability to provide the necessary support. As disclosed in the events after the reporting date note, there has been additional investment in the group and the parent company and other subsidiaries will not seek repayment of these liabilities unless there is freely available cash to do so. true

Assurances have been obtained by the parent company from its shareholders, BGF Investments LP and BGF UK Enterprise Fund 3 LP, that they remain supportive of the group and will consider providing additional investment if required in the next 12 months to allow the group to continue as a going concern but do not currently consider that this is required based on the latest forecasts. They have also confirmed that they have no intention to seek early repayment of any long-term amounts due or seeking repayment of any short-term funding provided to the detriment of other creditors.

As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this will continue although, at the date of approval of these financial statements, they have no reason to believe that this support will not continue for a period of at least 12 months from the date of approval of the financial statements.

On that basis, and along with recent results and forecasts, the directors have a reasonable expectation that it is appropriate to adopt the going concern basis in the preparation of the financial statements and are confident that the group and company will have sufficient funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and 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.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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

Development costs that are directly attributable to the design and testing of identifiable and unique projects controlled by the company are recognised as intangible assets when the following criteria are met:

• it is technically feasible to complete the project so that its findings and new surveying methodologies will be available for use;

• management intends to complete the project and use the findings and new surveying methodologies or sell them;

• there is an ability to adopt the findings and new surveying methodologies;

• it can be demonstrated how the findings and new surveying methodologies will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to adopt or sell the findings and new surveying methodologies are available; and

• the expenditure attributable to the project during its development can be reliably measured.

Other development expenditures which do not meet these criteria are recognised as an expense when incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

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.

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 and deposits held at call with banks.

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 and loans from fellow group companies, 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.

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.

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.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, 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 the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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.

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes pricing model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity as a capital contribution as the options are for shares in the parent company, Sulmara Subsea International Limited.

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

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

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

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

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Interest payable

Interest payable is recognised using the effective interest rate method. In calculating interest payable, the effective interest rate is applied to the amortised cost of the liability.

Interest receivable

Interest receivable is recognised using the effective interest rate method. In calculating interest receivable, the effective interest rate is applied to the gross carrying amount of the asset where the asset has not been impaired. For financial assets that have been impaired after initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer impaired the interest income calculation reverts to the gross carrying amount.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The total amount of trade debtors at the balance sheet date is £2,270k (2023: £3,605k) and the total amount of loans receivable (including accrued interest) at the balance sheet date is £9,808k (2023: £8,585k). Management use estimates based on historical experience and current information available in determining the level of any debts for which an impairment is required. The level of the impairment required is reviewed on an ongoing basis.

At the balance sheet date management makes an assessment of the carrying value and existence of the intangible assets by considering various factors including the feasibility and commerciality of the systems being developed and their capacity to generate future revenue streams to the company. Management believe that the value of all development costs included in note 11 can be upheld due to future revenue forecasted to flow to the company. The existence of the development costs is based on expenditure which is capitalised in line with FRS 102 and supported by appropriate back up retained by management.

The whole of turnover is attributable to the rendering of services.

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

Their aggregate remuneration comprised:

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

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

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

Amounts included in loans receivable of £9,808,390 (2023: £8,585,297) relates to three loans and accrued interest to the same company. Loan 1 is subject to interest at 18% and loans 2 & 3 are subject to interest at 15%. All loans are subject to additional interest of 5% on outstanding balances not paid before their due date. These loans were due for repayment in April 2022, however this was extended on a repayment on demand basis as the parties renegotiated the terms of the loans.

In April 2025 the parties agreed to an amount of £6,700,000 being repaid to the company with the remaining £3,600,000 being refinanced under a new loan agreement. This new loan agreement is subject to interest at 14% and is due for repayment by 31 March 2026.

The directors are satisfied that the remaining amounts will be repaid in full.

The bank loan is repayable in monthly instalments and is subject to interest at 2.5%. The final repayment is due to be made in December 2026.

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

The bank loan is repayable in monthly instalments and is subject to interest at 2.5%. The final repayment is due to be made in December 2026.

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

The bank loan is repayable in monthly instalments and is subject to interest at 2.5%. The final repayment is due to be made in December 2026.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

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.

The company participates in a group share based payment plan, and recognises and measures its share based payment expense on the basis of a reasonable allocation of the expense recognised for the group. The allocation is based on the number of employees benefiting from the share based payment plan employed by each group entity.

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:

On 18 December 2025, new loan notes of £3,865,000 were issued by BGF Investments LP and BGF UK Enterprise Fund 3 LP to the parent company, Sulmara Subsea International Limited, which are subject to interest at 14% per annum with only interest due to commence being repaid from December 2026. These new loan notes are repayable at the same time as the previous loan notes. On this date, they also elected to exercise share warrants for additional C Ordinary Shares.

On 18 December 2025, a short-term loan and interest held by the parent company, Sulmara Subsea International Limited, and owed to a related party were settled with the related party choosing to reinvest with a new loan note of £1,135,000, which is subject to interest at 14% per annum with only interest due to commence being repaid from December 2026. These new loan notes are repayable at the same time as the previous loan notes. On this date, they also elected to exercise share warrants for additional A Ordinary Shares.

During the current year, there were no transactions with related parties and no balances with related parties at the year end.

In the prior year; an outstanding loan due to a related party was novated to the parent company in March 2023. The transactions during the prior year with this related party were the repayment of loan capital of £1,300,000 and the accrual of interest payable of £159,326.

The ultimate parent company is Sulmara Subsea International Limited, a company incorporated in Scotland whose address of its registered office is 28 Albyn Place, Aberdeen, United Kingdom, AB10 1YL. Sulmara Subsea International Limited is controlled by it's directors, who are also shareholders.

The largest group in which the results of the company are included is that headed by Sulmara Subsea International Limited. The consolidated financial statements of this company are available from the registered office noted above.