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Registered number: 03211154 FALCON INDUSTRIAL SERVICES LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
FALCON INDUSTRIAL SERVICES LIMITED COMPANY INFORMATION
DIRECTORS | F Tenderini
| O G Ayagh
COMPANY SECRETARY | Lea Secretaries Limited
REGISTERED NUMBER | 03211154
REGISTERED OFFICE | 5th Floor North Side 7/10 Chandos Street
| Cavendish Square
| London
| United Kingdom
| W1G 9DQ
INDEPENDENT AUDITORS | Sumer Auditco Limited
| Chartered Accountants & Statutory Auditors
| 14th Floor
| 33 Cavendish Square
| London
| W1G 0PW
FALCON INDUSTRIAL SERVICES LIMITED CONTENTS
| Page
Group strategic report | 1 - 7
Directors' report | 8 - 10
Independent auditors' report | 11 - 14
Consolidated statement of comprehensive income | 15
Consolidated balance sheet | 16 - 17
Company balance sheet | 18 - 19
Consolidated statement of changes in equity | 20 - 21
Company statement of changes in equity | 22
Consolidated statement of cash flows | 23 - 24
Consolidated analysis of net debt | 25
Notes to the financial statements | 26 - 52
FALCON INDUSTRIAL SERVICES LIMITED GROUP STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2024
INTRODUCTION
The directors present the strategic report for the year ended 31 December 2024. The Company’s principal activities remain focused on holding investments in subsidiaries and other entities, as well as real estate investment. Concurrently, the Group companies' operations have continued to emphasize support and administrative management of disputes and litigation, the provision of training courses (CME - Continuing Medical Education), digital services, and comprehensive consultancy for healthcare professionals. The Directors’ assessment of the Company going concern has been performed with reference to the Company and the Group as presented in these consolidated financial statements and based on information available at the date of approval. Any operational and financial forecast of the Consulcesi Group is strictly subject to ongoing review by its own governing bodies and has not been formally approved or agreed by the Directors of Falcon.
BUSINESS REVIEW
In 2024, the Group continued the transformation process initiated in 2023, reshaping its principal business areas. Such large-scale transformations are complex and require time to produce measurable effects on performance and profitability. The ongoing digital transformation, together with the expansion into a new Business to Business market, represents a key strategic step, although its benefits are not yet fully reflected in the year’s results. The Club Business Unit faced a challenging environment, with a decline in users mainly due to fewer doctor subscribers. The launch of the Freemium model and the restructuring of the commercial organization have laid the foundation for customer-centric growth in 2025–2026. The Legal Business Unit performed in line with expectations, fully achieving its targets through established business lines, which continue to provide steady and meaningful contributions to overall results. The B2B segment expanded its client base, supported by Marketing and Omnichannel initiatives, including multi-year contracts. Strategic initiatives such as Homnyaceutical and partnerships with leading pharmaceutical companies strengthened the Group’s market position. In order to reinforce the Group’s position in the publishing sector, in April 2024, the subsidiary Homnya Srl acquired 100% of the shares of Editoriale Giornalidea S.r.l, a leading publishing house in the pharmacy sector with over 30 years of experience in providing information to pharmacists in Italy. Finally, the Group strengthened its financial structure through the entry of financial partners. The subholding Consulcesi Corporate SA signed a Facilities Agreement with Intesa Sanpaolo SpA, Banca Sella SpA, Banca Patrimoni Sella & C. SpA, Deutsche Bank SpA, and Banca dello Stato del Canton Ticino, aimed at partially refinancing the vendor loan and securing funds for the year’s and future M&A activities. Revenue and Gross Margin In 2024, revenue increased to €51,754,693 from €49,207,507 in 2023, representing a growth of approximately 5%. This improvement was partially offset by a significant rise in the cost of sales, which increased from €26,192,011 to €29,592,491. As a result, gross profit slightly decreased from €23,015,496 to €22,162,202. The contraction in gross margin reflects higher direct costs, mainly driven by inflationary pressures and increased operational complexity linked to the Group’s ongoing transformation and expansion of business activities. Exceptional Operating Charges and Administrative Expenses In 2024, exceptional operating charges increased to €2,440,202 from €1,521,280 in 2023, mainly reflecting non-recurring items related to restructuring activities and other extraordinary operational events. Furthermore, administrative expenses rose from €15,285,851 to €16,403,092, indicating the continued strengthening of organizational and support structures required to sustain the Group’s digital transformation and the expansion of Page 1
FALCON INDUSTRIAL SERVICES LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 its business activities. Operating Profit and Net Result Operating profit increased significantly, rising from €4,810,802 in 2023 to €7,102,774 in 2024, reflecting an improvement in operating performance despite higher cost levels. In addition, profit before tax increased from €4,611,919 to €6,080,497, mainly due to profit on disposals of investments and subsidiaries amounting to €1,416,466, despite of higher interest expenses. These factors strengthened the positive operating result and had a material impact on the overall profitability for the year. Profit for the Year and Comprehensive Income The year 2024 ended with a net profit of €4,078,623, compared to a loss of €1,028,655 in 2023, showing a substantial improvement in the overall result. The profit is mainly attributable to the impact of improved operating performance and profit on disposals, partially offset by higher financial charges. The comprehensive income attributable to the owners of the parent company was a profit of €3,908,073, compared to a loss of €1,143,225 in the previous year, while the share of result attributable to non-controlling interests was a profit of €243,878 (2023: profit of €182,931). The overall comprehensive result reflects the combined effect of operating recovery and non-recurring items recorded during the year. Currency Translation Differences Currency translation differences had a positive impact of €73,328 in 2024, compared to a positive effect of €68,361 in 2023. This variation reflects continuous favourable exchange rate movements on the Group’s foreign currency denominated operations compared to the previous year. Summary and Outlook In summary, in 2024 the Group advanced its transformation strategy, focusing on digitalization and expansion into the B2C (Club) and B2B market, though benefits are not yet fully visible. The Club Business Unit faced user declines but introduced a Freemium model and organizational changes to drive future growth. The Legal Business Unit met expectations with steady contributions, while the B2B segment expanded through new clients, marketing, and partnerships, particularly in the pharmaceutical sector. The acquisition of Editoriale Giornalidea strengthened the Group’s publishing presence, and new financial agreements reinforced its structure and supported future M&A plans. The outlook for 2025 remains highly challenging, with limited visibility on a meaningful recovery across the Group’s business units. The Club Business Unit is expected to continue focusing on margin stabilization and customer loyalty initiatives in 2025, in a context characterized by ongoing pressure on average fees and a gradual recovery in customer acquisition. While the rebuilding of a broader and economically sustainable base of paying customers is expected to take longer than initially anticipated, management actions are aimed at progressively improving unit economics and laying the foundations for a more resilient and scalable business model over the medium term. The Legal Business Unit is projected to face a structural and ongoing contraction, with a progressive erosion of its revenue contribution. Although management has initiated strategic repositioning actions, their impact is expected to be gradual and insufficient to offset the underlying decline, resulting in continued pressure on overall performance and cash generation. The B2B Business Unit, while comparatively more resilient, is not expected to deliver significant growth in 2025. Competitive intensity, longer sales cycles and increased operational complexity are likely to limit client base expansion, including in the pharmaceutical sector. Retention initiatives are therefore expected to primarily mitigate downside risks rather than generate material upside. Page 2
FALCON INDUSTRIAL SERVICES LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 As a consequence of the contraction in business volumes and the resulting pressure on cash generation, in 2025 the Consulcesi sub-group required a cash injection, which was provided through a capital increase fully underwritten by the majority shareholder, Falcon Industrial Service Ltd, for a total amount of CHF 12 million. Overall, the growing complexity associated with the development of new initiatives has exposed structural limitations in the current business model and cost base. These constraints have materially delayed the execution of the revised strategic framework and require a comprehensive reassessment of both the operating model and investment priorities, as further detailed in the “Future Developments” section.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's primary financial instruments continue to consist of cash and cash equivalents generated from turnover arising from services provided by the Group companies, as well as short-term financial investments. During 2024, part of the available liquidity was invested in listed and unlisted securities and Exchange Traded Funds (“ETF”), in line with the Group’s treasury and risk management policies. Turnover from the B2C business lines derives from services for which receivables are continuously monitored by the relevant administrative functions. Historically, the rate of non-payment has remained limited and in line with market averages for the reference sector. Trade debtors arising from the provision of B2B services are subject to ongoing monitoring by the finance department in order to ensure the timely recovery of overdue balances. The Group’s B2B customer base is considered to present low credit risk profiles, and no significant concentrations of credit risk have been identified. Creditors and costs are mainly of an operative nature, to run the organisation and all its offices worldwide. The Board continually monitors the cash requirements of the Group to ensure that the Group has ready access to the funds that the Board deem necessary at any time during the year. In addition, the Board continually monitors the cash invested in listed and unlisted securities / bonds and ETF, by ensuring that it is limited to a minor part of the total assets and that the portfolio is well balanced under a risk profile. The monitoring and review of future projections by the Board ensures also that there are adequate cash facilities either in house or on the market readily available from the Group’s finance providers to support the Group's cash flow requirements. Main liquidity and cash flow risks are from investing and financing activities not covered by net cash generated from operating activities (considering that lawsuits promoted by the Group companies in favour of their clients may last for more than one year) as well as real estate and securities market fluctuation. The Group is maintaining a significant cash & cash equivalents positive position to prevent any liquidity risk. Furthermore, the Group is exposed to interest rate risk arising from the Facility Agreement, which accrues variable-rate interest. To mitigate this exposure, the Group has entered into a collar contract designated as a cash flow hedge on the EUR 28,875 thousand variable-rate loan, amortized according to the related plan. The instrument, in force from April 2024 to March 2029, is referenced to six-month EURIBOR (Act/360) and sets a cap of 3.650% and a floor of 3.090%. Page 3
FALCON INDUSTRIAL SERVICES LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
FINANCIAL KEY PERFORMANCE INDICATORS
| 2024 | 2023 | Variance |
| €'000 | €'000 | % |
Turnover | 51,755 | 49,208 | 5 |
Gross profit | 22,162 | 23,015 | (4) |
Operating profit | 7,103 | 4,811 | 48 |
Profit/(Loss) for the financial year | 4,079 | (1,029) | (496) |
Net assets | 54,997 | 63,895 | (14) |
OTHER KEY PERFORMANCE INDICATORS
The Group at the end of 2024 held cash at bank and in hand amounting to €13,016,923, representing an increase of €1,154,745 compared to 2023. This increase was mainly driven by cash generated from operating activities, partially offset by dividend distributions and investments carried out by the subsidiaries during the year. In 2024, the amount of CME courses accredited and published on the platform by the Group companies were 277, of which 55 were new courses produced (compared to 292 CME courses accredited and published on the platform in 2023). The creation of new courses offerings reflect a strategic decision to enhance investment in the Consulcesi Club business line, which provides an ever-growing range of CME tailored for professionals in the sector The Board consistently monitors key business metrics (e.g., new litigation cases undertaken, number of Consulcesi Club clients, course subscriptions, and redemptions) to ensure the business's growth and performance.
DIRECTORS' STATEMENT OF COMPLIANCE WITH DUTY TO PROMOTE THE SUCCESS OF THE GROUP (THE SECTION 172 STATEMENT)
Who we are and what we do The Group is one of the most relevant European providers of services to Healthcare Professionals (HCPs) and Healthcare companies, mainly active in Legal and in the Continuing Medical Education businesses (CME), with solid performances and outstanding profitability consistently over last years. Since its foundation, the main shareholder, the directors and the management team have implemented a successful strategy which led to the development of a distinctive positioning in the reference markets and a superior value proposition. The Group is structured as a network company where each entity is responsible for a specific activity of the value chain, facilitating specialization and vertical knowledge development. The Group along its growth path evolved as a 360-degree service provider for physicians, answering HCPs crucial ‘pain points’: to have a reliable support carrying on collective legal actions (“Class Actions”) and to have a digital base platform acting as single point of contact for Continuous Medical Education (CME), Legal protection and other profession related services. The offering is organized in 3 business lines (Legal, Club and B2B), targeting both B2C and B2B segments and presently has its cornerstone in one of the largest HCPs databases in Italy with privacy agreements. The Database is a key asset for the firm, providing a significant advantage in sales operations and in client management activities. The operating model is kept in-house to grant quality and flexibility, exploiting the ‘network model’ and the specialization of the Group companies in terms of commercial activities, production of contents / delivery of services for B2C clients, internal services and production of contents / delivery of services for B2B clients. Page 4
FALCON INDUSTRIAL SERVICES LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 The Role of the Board The Board’s primary responsibility is to promote the long-term success of the Group by delivering projects that meet the client’s expectations and the shareholders’ targets. This is affected by setting out the Group strategy with the ongoing performance monitoring. The Board (at both Group and local Group companies’ level) holds Board meetings periodically to review the main aspects of the business, including financial reviews and forecasts, resources, internal controls, performance, opportunities and risks. All directors are directly responsible for and involved in all projects with day-to-day management carried out by senior management and must act in the way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard to key issues including the interests of the stakeholders in both the short and long term. 1. The likely consequence of any decision in the long-term Consulcesi is a one-of-a-kind company with distinctive offering centred on HCPs encompassing Legal, Education and other services. The Company has a unique coverage of the legal market Key Success Factors, turning its business model into a winning competitive advantage guaranteeing also a sustainable and distinctive competitive positioning, effectively representing solid market entry barriers. Legal Italian market is composed of heterogeneous players where the Company mainly competes with specialized class actions providers by providing full focus on class actions, leveraging its commercial strength and the specifically designed operating model, supporting clients throughout the process offering favourable conditions unleashing economies of scale. The Company is the only market relevant provider fully focused on collective actions for HCPs. The global continuing medical education (CME) market size reached Eur. 7.35 billion in 2021. Looking forward, the market expectation is to reach Eur. 10.7 billion by 2027, exhibiting a compound annual growth rate (CAGR) of 6.46% during 2022-2027 according Arizton Advisory & Intelligence. All European countries show an evolution path towards the E-Learning Methodology. E-Learning presents the highest expected growth leveraging on digitalization significantly accelerated by COVID-19. Consulcesi is uniquely positioned to continue its strong growth path through multiple value creation levers: • Consolidation of Legal business in Italy • Improvement of Club value proposition through the development of additional value-added services • Growth of B2B segment offering leveraging on Consulcesi brand awareness and distinctive competencies • M&A and partnerships initiatives in Italy • Club business international expansion in selected countries • Additional growth opportunities and investments to be pursued on an opportunistic basis 2. The interest of the Group’s employees The Directors (at both Group and local Group companies’ level) understand the importance of the employees to the long-term success of the business, and being closely involved in the day-to-day operations of the business are familiar with each employee and thus able to assess their performance and provide guidance and further training as necessary. The Group aims to recruit and retain motivated and competent people and believe in promotion as reward for performance and dedication, and to demonstrate a clear path for progression, combined with a well-structured Page 5
FALCON INDUSTRIAL SERVICES LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 and advanced MBO process. The Group has a well-developed intranet allowing the employees to easily access any information that they need, both on a project and corporate basis, and social media channels are developing to enhance communication and employee feedback. 3. The need to foster the Group’s business relationships with suppliers, customers and others The Group has always believed that good business relationships with clients and suppliers, is key to the ongoing success, and the Directors (at both Group and local Group companies’ level) develop close relationships with them to ensure that we fully understand each other’s strategies and objectives and are able to support each other in achieving them. The operating model is based on in-house activities to maximize the client service effectiveness and the process efficiency. The Group has developed over the years a fully dedicated hub to customers care services with superior IT support. 4. The impact of the Group’s operations on the community and environment The Group has developed a high reputation in the community and is keen to maintain it over the time, also through liberalities and promotion of new initiatives. The Group is also committed to protecting the environment. We acknowledge that the pursuit of economic growth and respect for the environment must be closely linked, with sustainable development being an integral part of our business philosophy and processes. We work on the basis that compliance with environmental legislation, and other requirements, is the very minimum that will apply to our activities and services and we are committed to continual environmental performance improvement, the prevention of pollution and having a positive impact on the environment. We work closely with our clients and suppliers, encouraging and educating our employees and supply chain to recognise their responsibilities regarding protecting the environment and achieving our environmental objectives and targets and communicating and consulting with all stakeholders as appropriate. 5. The desirability of the Group maintaining a reputation for high standards of business conduct The Group’s high standards in the way we run the business and deal with all stakeholders, and our commitment to be the best have been the key to the ongoing success. Key to this is the experience and ongoing professionalism and commitment of our employees and we continually strive to make our Company a place where all enjoy their work and have the opportunity to progress. We have a Policy of promoting continual improvement and the setting of quality objectives and improvement programmes within the Group. These objectives address the risks and opportunities within the Group, as determined by Senior Management, and we believe that Quality is critical to the success of our business, and base our approach on the key quality principles of customer focus, leadership, engagement of people, process approach, improvement and relationship management. 6. The need to act fairly as between members of the Group Strategy and decisions by the Board are carefully considered in both the short and long term and the Directors are fully aware of the need to take into account all relevant factors to achieve a fair balance between members of the Group. Page 6
FALCON INDUSTRIAL SERVICES LIMITED GROUP STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 The overriding objective is to ensure that the Group maintains its reputation for quality and integrity so as to continue as a successful and sustainable business for the long-term benefit of the members. This report was approved by the board and signed on its behalf.
................................................ F Tenderini Director
Date: 19 February 2026
Page 7
FALCON INDUSTRIAL SERVICES LIMITED DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 The directors present their report and the financial statements for the year ended 31 December 2024.
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to: ∙select suitable accounting policies for the Group's financial statements and then apply them consistently; ∙make judgements and accounting estimates that are reasonable and prudent; ∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
PRINCIPAL ACTIVITY
The Company’s principal activities remain focused on holding investments in subsidiaries and other entities, as well as real estate investment. Concurrently, the Group companies' operations have continued to emphasize support and administrative management of disputes and litigation, the provision of training courses (CME - Continuing Medical Education), digital services, and comprehensive consultancy for healthcare professionals.
RESULTS AND DIVIDENDS
The profit for the year, after taxation and minority interests, amounted to €3,834,745 (2023 - loss €1,211,586). During the year, the company paid dividends of €11,928,543 (2023: €28,127,465).
DIRECTORS
The directors who served during the year were:
S Catargiu (formerly S Belinghieri) (resigned 22 July 2025)
F Tenderini
O G Ayagh
Page 8
FALCON INDUSTRIAL SERVICES LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
FUTURE DEVELOPMENTS
In light of the persistent macroeconomic uncertainty and the increasing operational complexity affecting the execution of development initiatives across the Group’s main business units, management has identified the need for a comprehensive and non-deferrable revision of the current business model. This process involves a thorough reassessment of the operating framework and a significant restructuring of the cost base, aimed at restoring margin sustainability, strengthening cash generation and realigning the Group’s economic structure with its actual revenue-producing capacity over the coming years. Within this framework, the Group has intensified its focus on cost rationalisation and efficiency enhancement. All departments, organisational structures, personnel and cost categories have been subject to detailed analysis and continuous monitoring by the relevant corporate and operational offices of the Consulcesi Group. Dedicated internal functions regularly review financial and operational data in order to promptly identify deviations from budgeted targets and areas of inefficiency, enabling timely corrective actions. The Directors and senior management have intervened on multiple occasions and will continue to intervene to eliminate or significantly reduce costs that are not strictly functional to the core business and strategic priorities of the Group. Particular attention has been devoted to discretionary expenses, external service costs and organisational layers that do not directly contribute to value creation or revenue generation. This ongoing process is intended to progressively streamline the organisational structure and ensure a more disciplined and sustainable cost profile. At the same time, the Group intends to initiate a negotiation process with its banking counterparties in order to revise existing contractual terms and conditions. These actions are aimed at securing greater financial flexibility and supporting a more balanced and prudent management of financial flows during the transition phase towards the revised operating model. The Group’s strategic objective is not limited to cost containment but also encompasses the creation of the conditions necessary to restart a sustainable growth path. Such growth, however, requires a comprehensive reorganisation of the Group across all its locations and reference personnel, with a clear redefinition of roles, responsibilities and operational processes. This reorganisation is expected to enhance coordination between business units, improve accountability and reinforce managerial control over both costs and performance. The resulting organisational and financial structure is conceived as a foundational element of a medium- to long-term strategic repositioning rather than an immediate driver of growth. While the Group continues to pursue the strengthening of its positioning as an innovative provider of services and digital solutions for healthcare professionals, future expansion is expected to be gradual, selective and strictly aligned with the achievement of sustainable profitability and improved operational efficiency, in response to an evolving and increasingly competitive market environment. As of today, the Board of Directors of the Consulcesi Corporate Services SA (CCSA) Group has not provided any formal documentation regarding the new industrial plan, nor the projected cash flow forecasts for the financial year 2026. Furthermore, no official request has been submitted concerning a potential involvement of Falcon Industrial Services Limited through a new capital contribution to the Consulcesi Group (CCSA), notwithstanding the availability of Falcon Industrial Services Limited, also thanks to the commitment of its shareholder, to continue providing financial support to CCSA, when and if required. In the absence of such information and of a formally approved financial plan, and taking into account the financial commitments undertaken with banking institutions, significant elements of uncertainty remain regarding the ability of the Consulcesi Group to independently ensure business continuity in the short and medium term without the support of Falcon Industrial Services Limited. Page 9
FALCON INDUSTRIAL SERVICES LIMITED DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
MATTERS COVERED IN THE STRATEGIC REPORT
Information regarding the Company's and Group's principal risks and uncertainties is included within the Strategic Report.
DISCLOSURE OF INFORMATION TO AUDITORS
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
AUDITORS
The auditors, Sumer Auditco Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. This report was approved by the board and signed on its behalf.
................................................ F Tenderini Director
Date: 19 February 2026
Page 10
FALCON INDUSTRIAL SERVICES LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FALCON INDUSTRIAL SERVICES LIMITED
OPINION
We have audited the financial statements of Falcon Industrial Services Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated balance sheet, the Company balance sheet, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity and the related notes, including a summary of 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 Group's and of the parent Company's affairs as at 31 December 2024 and of the Group's profit for the year then ended; ∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙have been prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
OTHER INFORMATION
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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 Page 11
FALCON INDUSTRIAL SERVICES LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FALCON INDUSTRIAL SERVICES LIMITED (CONTINUED) 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.
OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or ∙the parent Company 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.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors' responsibilities statement set out on page 8, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
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 Auditors' 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 Group financial statements. Page 12
FALCON INDUSTRIAL SERVICES LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FALCON INDUSTRIAL SERVICES LIMITED (CONTINUED) Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: In order to identify and assess the risks of material misstatements, including fraud and non-compliance with laws and regulations that could be expected to have a material impact on the financial statements, we have considered: ∙the results of our enquiries of management and those charged with governance of their assessment of the risks of fraud and irregularities; ∙the nature of the group, including its management structure and control systems (including the opportunity for management to override such controls); ∙management’s incentives and opportunities for fraudulent manipulation of the financial statements; and ∙the industry and environment in which it operates. We also considered UK tax and pension legislation and laws and regulations relating to employment and the preparation and presentation of the financial statements such as the Companies Act 2006. Based on this understanding we identified the following matters as being of significance to the entity: ∙laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, Company Law, tax and pension legislation and distributable profits legislation; ∙the timing of the recognition of commercial income; ∙compliance with legislation relating to local employment law; ∙management bias in selecting accounting policies and determining estimates; ∙inappropriate journal entries; ∙recoverability of debtors; and ∙the requirement to impair the intangible assets and the fixed asset investments, and the amount of any such impairment. We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and how fraud may occur in the entity, to all engagement team members including the auditors of significant components. Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised: ∙enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; ∙enquiries with the same concerning any actual or potential litigation or claims; ∙discussion with the same regarding any known or suspected instances of non-compliance with laws and regulation and fraud; ∙inspection of relevant legal correspondence; ∙assessment of matters reported to management and the result of the subsequent investigation; ∙obtaining an understanding of the relevant controls during the period; ∙obtaining an understanding of the policies and controls over the recognition of income and testing their implementation during the year; ∙review documentation relating to compliance with the regulations; ∙challenging assumptions made by management in their specific accounting policies and estimates, in particular in relation to costs of the stock; Page 13
FALCON INDUSTRIAL SERVICES LIMITED INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FALCON INDUSTRIAL SERVICES LIMITED (CONTINUED) ∙identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or crediting revenue or cash; ∙assessing the recovery of debtors in the period since the balance sheet date and challenging assumptions made by management regarding the recovery of balances which remain outstanding; ∙challenging key assumptions made by management in their assessment of any impairment to the carrying value of the fixed asset investments and intangible assets; ∙reviewing the financial statements for compliance with the relevant disclosure requirements; ∙performing analytical procedures to identify any unusual or unexpected relationships or unexpected movements in account balances which may be indicative of fraud; ∙reviewing the minutes of Board meetings and correspondence with HMRC; ∙evaluating the underlying business reasons for any unusual transactions; and ∙considered the implementation of controls during the year. No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
USE OF OUR REPORT
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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. Andrew Marks ACA (Senior statutory auditor) for and on behalf of Sumer Auditco Limited Chartered Accountants Statutory Auditors 14th Floor 33 Cavendish Square London W1G 0PW 19 February 2026 Page 14
FALCON INDUSTRIAL SERVICES LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
| 2024 | 2023
Note | € | €
Turnover | 4 | 51,754,693 | 49,207,507
Cost of sales |  | (29,592,491) | (26,192,011)
Gross profit |  | 22,162,202 | 23,015,496
Administrative expenses |  | (16,403,092) | (15,285,851)
Other operating income | 5 | 587,527 | (2,413,869)
Fair value movements | 6 | 3,196,339 | 1,016,306
Exceptional other operating charges | 7 | (2,440,202) | (1,521,280)
Operating profit | 8 | 7,102,774 | 4,810,802
Income from fixed assets investments | 12 | 217,669 | 4,199
Amount written off and profit/(loss) on disposals | 13 | 1,416,466 | (261,914)
Interest receivable and similar income | 14 | 46,492 | 306,603
Interest payable and similar expenses | 15 | (2,702,904) | (247,771)
Profit before taxation |  | 6,080,497 | 4,611,919
Tax on profit | 16 | (2,001,874) | (5,640,574)
Profit/(loss) for the financial year |  | 4,078,623 | (1,028,655)
Currency translation differences on foreign currency net investments |  | 73,328 | 68,361
Other comprehensive income for the year |  | 73,328 | 68,361
Total comprehensive income for the year |  | 4,151,951 | (960,294)
Profit/(loss) for the year attributable to: |  |  |
Non-controlling interests |  | 243,878 | 182,931
Owners of the parent Company |  | 3,834,745 | (1,211,586)
|  | 4,078,623 | (1,028,655)
Total comprehensive income for the year attributable to: |  |  |
Non-controlling interest |  | 243,878 | 182,931
Owners of the parent Company |  | 3,908,073 | (1,143,225)
|  | 4,151,951 | (960,294)
The notes on pages 26 to 52 form part of these financial statements.
Page 15
FALCON INDUSTRIAL SERVICES LIMITED REGISTERED NUMBER: 03211154 CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2024
|  | 2024 |  | 2023
Note |  | € |  | €
Fixed assets |  |  |  |  |
Intangible assets | 18 |  | 11,003,813 |  | 7,465,841
Tangible assets | 19 |  | 5,373,299 |  | 5,128,390
Investments | 20 |  | 16,422,055 |  | 12,927,049
Investment property | 21 |  | 15,957,860 |  | 14,103,747
|  |  | 48,757,027 |  | 39,625,027
Current assets |  |  |  |  |
Stocks | 22 | 9,010,018 |  | 10,987,444 |
Debtors: amounts falling due within one year | 23 | 21,214,603 |  | 15,556,333 |
Current asset investments | 24 | 24,776,958 |  | 11,499,987 |
Cash at bank and in hand | 25 | 13,016,923 |  | 11,862,178 |
|  | 68,018,502 |  | 49,905,942 |
Creditors: amounts falling due within one year | 26 | (31,920,392) |  | (21,875,173) |
Net current assets |  |  | 36,098,110 |  | 28,030,769
Total assets less current liabilities |  |  | 84,855,137 |  | 67,655,796
Creditors: amounts falling due after more than one year | 27 |  | (29,858,581) |  | (3,760,630)
Net assets |  |  | 54,996,556 |  | 63,895,166
Capital and reserves |  |  |  |  |
Called up share capital | 30 |  | 1,888,236 |  | 1,888,236
Foreign exchange reserve | 31 |  | (593,284) |  | (666,612)
Other reserves | 31 |  | 402,296 |  | 339,396
Profit and loss account | 31 |  | 42,950,049 |  | 51,720,012
Equity attributable to owners of the Company |  |  | 44,647,297 |  | 53,281,032
Non-controlling interests |  |  | 10,349,259 |  | 10,614,134
|  |  | 54,996,556 |  | 63,895,166
Page 16
FALCON INDUSTRIAL SERVICES LIMITED REGISTERED NUMBER: 03211154 CONSOLIDATED BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2024 The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................ F Tenderini
Director
Date: 19 February 2026
The notes on pages 26 to 52 form part of these financial statements. Page 17
FALCON INDUSTRIAL SERVICES LIMITED REGISTERED NUMBER: 03211154 COMPANY BALANCE SHEET AS AT 31 DECEMBER 2024
|  | 2024 |  | 2023
Note |  | € |  | €
Fixed assets |  |  |  |  |
Investments | 20 |  | 79,786,624 |  | 104,442,473
|  |  | 79,786,624 |  | 104,442,473
Current assets |  |  |  |  |
Stocks | 22 | 8,996,758 |  | 10,987,444 |
Debtors: amounts falling due within one year | 23 | 789,117 |  | 1,515,454 |
Current asset investments | 24 | 24,755,288 |  | 11,342,615 |
Cash at bank and in hand | 25 | 3,996,285 |  | 1,523,367 |
|  | 38,537,448 |  | 25,368,880 |
Creditors: amounts falling due within one year | 26 | (7,598,519) |  | (8,024,163) |
Net current assets |  |  | 30,938,929 |  | 17,344,717
Total assets less current liabilities |  |  | 110,725,553 |  | 121,787,190
Net assets |  |  | 110,725,553 |  | 121,787,190
Capital and reserves |  |  |  |  |
Called up share capital | 30 |  | 1,888,236 |  | 1,888,236
Foreign exchange reserve | 31 |  | (4,449,338) |  | (4,785,269)
Other reserves | 31 |  | 71,995,423 |  | 71,995,423
Profit and loss account | 31 |  | 41,291,232 |  | 52,688,800
|  |  | 110,725,553 |  | 121,787,190
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit of the parent Company for the year was €534,661 (2023: profit €1,150,670). Page 18
FALCON INDUSTRIAL SERVICES LIMITED REGISTERED NUMBER: 03211154 COMPANY BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2024 The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................ F Tenderini
Director
Date: 19 February 2026
The notes on pages 26 to 52 form part of these financial statements. Page 19

|  | FALCON INDUSTRIAL SERVICES LIMITED |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
|  | Called up share capital | Foreign exchange reserve | Other reserves | Profit and loss account | Equity attributable to owners of parent Company | Non-controlling interests | Total equity
|  | € | € | € | € | € | € | €
| At 1 January 2024 | 1,888,236 | (666,612) | 339,396 | 51,720,012 | 53,281,032 | 10,614,134 | 63,895,166
| Comprehensive income for the year |  |  |  |  |  |  |
| Profit for the year | - | - | - | 3,834,745 | 3,834,745 | 243,878 | 4,078,623
| Currency translation differences on foreign currency net investments | - | 73,328 | - | - | 73,328 | - | 73,328
| Total comprehensive income for the year | - | 73,328 | - | 3,834,745 | 3,908,073 | 243,878 | 4,151,951
| Contributions by and distributions to owners |  |  |  |  |  |  |
| Dividends: Equity capital | - | - | - | (11,928,543) | (11,928,543) | - | (11,928,543)
| Transfer to/from profit and loss account | - | - | 62,900 | (62,900) | - | - | -
| Loss on part disposal and acquisition of shares in subsidiaries | - | - | - | (613,265) | (613,265) | (832,816) | (1,446,081)
| Non-controlling interest from acquisition | - | - | - | - | - | 444,063 | 444,063
| Non-controlling interest dividends | - | - | - | - | - | (120,000) | (120,000)
| At 31 December 2024 | 1,888,236 | (593,284) | 402,296 | 42,950,049 | 44,647,297 | 10,349,259 | 54,996,556
| The notes on pages 26 to 52 form part of these financial statements.
Page 20

|  | FALCON INDUSTRIAL SERVICES LIMITED |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
|  | Called up share capital | Foreign exchange reserve | Other reserves | Profit and loss account | Equity attributable to owners of parent Company | Non-controlling interests | Total equity
|  | € | € | € | € | € | € | €
| At 1 January 2023 | 1,888,236 | (734,973) | 339,396 | 80,435,871 | 81,928,530 | 10,186,395 | 92,114,925
| Comprehensive income for the year |  |  |  |  |  |  |
| Loss for the year | - | - | - | (1,211,586) | (1,211,586) | 182,931 | (1,028,655)
| Currency translation differences on foreign currency net investments | - | 68,361 | - | - | 68,361 | - | 68,361
| Total comprehensive income for the year | - | 68,361 | - | (1,211,586) | (1,143,225) | 182,931 | (960,294)
| Contributions by and distributions to owners |  |  |  |  |  |  |
| Dividends: Equity capital | - | - | - | (28,127,465) | (28,127,465) | - | (28,127,465)
| Gain on part disposal of subsidiaries | - | - | - | 668,957 | 668,957 | 309,043 | 978,000
| Non-controlling interest from acquisition | - | - | - | (45,765) | (45,765) | 45,765 | -
| NCI acquisition of shares in subsidiaries | - | - | - | - | - | (110,000) | (110,000)
| At 31 December 2023 | 1,888,236 | (666,612) | 339,396 | 51,720,012 | 53,281,032 | 10,614,134 | 63,895,166
| The notes on pages 26 to 52 form part of these financial statements.
Page 21

FALCON INDUSTRIAL SERVICES LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
| Called up share capital | Foreign exchange reserve | Other reserves | Profit and loss account | Total equity
| € | € | € | € | €
At 1 January 2023 | 1,888,236 | (5,424,275) | 71,995,423 | 79,665,871 | 148,125,255
Comprehensive income for the year |  |  |  |  |
Profit for the year | - | - | - | 1,150,394 | 1,150,394
Currency translation differences on foreign currency net investments | - | 639,006 | - | - | 639,006
Total comprehensive income for the year | - | 639,006 | - | 1,150,394 | 1,789,400
Contributions by and distributions to owners |  |  |  |  |
Dividends: Equity capital | - | - | - | (28,127,465) | (28,127,465)
At 1 January 2024 | 1,888,236 | (4,785,269) | 71,995,423 | 52,688,800 | 121,787,190
Comprehensive income for the year |  |  |  |  |
Profit for the year | - | - | - | 530,975 | 530,975
Currency translation differences on foreign currency net investments | - | 335,931 | - | - | 335,931
Total comprehensive income for the year | - | 335,931 | - | 530,975 | 866,906
Contributions by and distributions to owners |  |  |  |  |
Dividends: Equity capital | - | - | - | (11,928,543) | (11,928,543)
At 31 December 2024 | 1,888,236 | (4,449,338) | 71,995,423 | 41,291,232 | 110,725,553
| The notes on pages 26 to 52 form part of these financial statements.
Page 22
FALCON INDUSTRIAL SERVICES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024
|  |  | 2024 | 2023
|  |  | € | €
Cash flows from operating activities |  |
Profit for the financial year | 4,078,623 | (1,028,655)
Adjustments for: |  |
Amortisation of intangible assets | 1,746,508 | 1,069,520
Depreciation of tangible assets | 1,031,585 | 1,018,885
Impairments of fixed assets | 398,099 | 100,002
Loss on disposal of tangible assets | 66,557 | 114,021
Interest payable | 2,702,904 | 247,771
Interest received | (46,492) | (306,603)
Taxation charge | 2,001,874 | 5,640,574
Decrease in stocks | 2,002,406 | -
(Increase)/decrease in debtors | (4,431,446) | 7,607,573
Increase in creditors | 3,492,529 | 753,098
Net fair value (gains) recognised in P&L | (3,196,339) | (1,016,306)
Corporation tax (paid) | (3,815,461) | (8,958,081)
Foreign exchange | (4,041) | 66,096
(Profit)/loss on disposal of fixed assets investments | (1,057,183) | 742,994
Loss on disposal of fixed asset investments | - | 2,386,819
Loss on disposal of intangible fixed assets | - | 143,740
Dividends received | (217,669) | -
Profit on disposal of subsidiaries | (757,382) | -
Net cash generated from operating activities | 3,995,072 | 8,581,448
Cash flows from investing activities |  |
Purchase of intangible fixed assets | (3,867,878) | (3,149,244)
Sale of intangible assets | 36,556 | 343,068
Purchase of tangible fixed assets | (860,650) | (1,390,150)
Sale of tangible fixed assets | 94,209 | 42,440
Purchase of investment properties | (1,854,113) | (1,431,222)
Sale of listed investments | 1,305,186 | -
Purchase of unlisted and other investments | (1,855,663) | (72,541)
Sale of unlisted and other investments | 945,267 | -
Purchase of short-term listed investments | (46,400,089) | (16,661,993)
Sale of short-term listed investments | 34,609,617 | 7,620,882
Sale of shares in subsidiaries | - | 1,200,000
Interest received | 46,492 | 306,603
Dividends received | 217,669 | -
Purchase of subsidiaries | (4,644,050) | 74,605
Subsidiaries share subscription/(redemption) | 221,000 | (222,000)
Page 23
FALCON INDUSTRIAL SERVICES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
|  | 2024 | 2023
|  | € | €
Part disposal of subsidiaries | 985,172 | -
Increase of other short term lending | (960,424) | -
Net cash used in investing activities | (21,981,699) | (13,339,552)
Cash flows from financing activities |  |
New secured loans | 33,358,257 | -
Repayment of loans | (440,327) | (948,968)
Dividends paid | (11,928,543) | (28,237,465)
Non-controlling interest dividends paid | (120,000) | -
Interest paid | (1,886,161) | (247,771)
Net cash received from / (used in) financing activities | 18,983,226 | (29,434,204)
Net increase/(decrease) in cash and cash equivalents | 996,599 | (34,192,308)
Cash and cash equivalents at beginning of year | 11,814,767 | 45,938,714
Foreign exchange gains and losses | 73,328 | 68,361
Cash and cash equivalents at the end of year | 12,884,694 | 11,814,767
Cash and cash equivalents at the end of year comprise: |  |
Cash at bank and in hand | 13,016,923 | 11,862,178
Bank overdrafts | (132,229) | (47,411)
| 12,884,694 | 11,814,767
The notes on pages 26 to 52 form part of these financial statements.
Page 24
FALCON INDUSTRIAL SERVICES LIMITED CONSOLIDATED ANALYSIS OF NET DEBT FOR THE YEAR ENDED 31 DECEMBER 2024
| At 1 January 2024 | Cash flows | Acquisition and disposal of subsidiaries | Changes in market value and foreign exchange movements | Other non-cash changes | At 31 December 2024
| € | € | € | € | € | €
Cash at bank and in hand | 11,862,178 | 4,740,295 | (3,658,878) | 73,328 | - | 13,016,923
Bank overdrafts | (47,411) | (84,818) | - | - | - | (132,229)
Debt due after 1 year | (3,760,630) | (33,358,257) | - | (122,795) | 7,383,101 | (29,858,581)
Debt due within 1 year | (3,947,151) | 440,327 | - | - | (7,383,101) | (10,889,925)
Liquid investments | 11,499,987 | 13,012,562 | - | 264,409 | - | 24,776,958
Net debt | 15,606,973 | (15,249,891) | (3,658,878) | 214,942 | - | (3,086,854)
The notes on pages 26 to 52 form part of these financial statements.
Page 25
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
1. | GENERAL INFORMATION
Falcon Industrial Services Limited is a company limited by shares and registered in England and Wales under registration number 03211154. The registered and principal trading office is 5th Floor North Side, 7/10 Chandos Street, Cavendish Square, London, W1G 9DQ. 2.ACCOUNTING POLICIES
| 2.1 | BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3). The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102: - The requirement to present a statement of cash flows and related notes - The total amount of key management personnel compensation - Financial instrument disclosures, including categories of financial instruments, items of income, expenses, gains or losses relating to financial instruments, and exposure to and management of financial risks. The following principal accounting policies have been applied:
| 2.2 | BASIS OF CONSOLIDATION
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full. The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 31 December 2014. Page 26
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.ACCOUNTING POLICIES (CONTINUED)
| 2.3 | FOREIGN CURRENCY TRANSLATION
Functional and presentation currency The Group's functional and presentational currency is Euros. The Company's functional currency is Sterling but the accounts have been presented in Euros. Transactions and balances 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. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'. On consolidation, the results of overseas operations are translated into Euros at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income. Page 27
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.ACCOUNTING POLICIES (CONTINUED)
| 2.4 | REVENUE
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue 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 revenue is recognised: Sale of property Revenue represents the gross proceeds on the sale of properties completed during the year. Rendering of services Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: ∙the amount of revenue can be measured reliably; ∙it is probable that the Group will receive the consideration due under the contract; ∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and ∙the costs incurred and the costs to complete the contract can be measured reliably. The group’s revenue from services arises from a variety of its omni-channel support and information provision to the healthcare and legal sectors and in particular the provision of CME (“Continuing Medical Education”) courses for healthcare professionals. These services are integral to the Group's revenue recognition process, with income derived from various contracts based on the services provided and the stage of completion, as outlined above. Success fees arising from legal class actions are recognised, to the extent they are recoverable, as revenue following formal judgement being received from the foreign court in favour of the company’s customers. Rental income is recognized in accordance with rental agreements with the tenants.
| 2.5 | INTEREST INCOME
Interest income is recognised in profit or loss using the effective interest method.
| 2.6 | FINANCE COSTS
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. Page 28
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.ACCOUNTING POLICIES (CONTINUED)
| 2.7 | TAXATION
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 balance sheet date in the countries where the Company and the Group operate and generate income.
| 2.8 | EXCEPTIONAL ITEMS
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
| 2.9 | INTANGIBLE ASSETS
Goodwill Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life. Other intangible assets Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
| 2.10 | TANGIBLE FIXED ASSETS
Tangible fixed assets under the cost model, other than investment properties, are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical 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. Page 29
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.ACCOUNTING POLICIES (CONTINUED)
| 2.10 | TANGIBLE FIXED ASSETS (continued)
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:
|  |  |  | Freehold property | - | 2% Straight line
|  |  |  | Plant and machinery | - | 12% - 25% Straight line
|  |  |  | Fixtures and fittings | - | 25% Straight line
|  |  |  | Office equipment | - | 25% - 50% Straight line
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.
| 2.11 | IMPAIRMENT OF FIXED ASSETS AND GOODWILL
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
| 2.12 | INVESTMENT PROPERTY
Investment property is carried at fair value determined annually by the directors and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
| 2.13 | VALUATION OF INVESTMENTS
Investments in subsidiaries are measured at cost less accumulated impairment. Investments in unlisted shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Consolidated statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment. Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period. Page 30
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.ACCOUNTING POLICIES (CONTINUED)
| 2.14 | STOCKS
Stock comprises properties, which are valued at the lower of cost and estimated selling price less costs to complete and sell. At each balance sheet date, stock is assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised in the Statement of Comprehensive Income.
| 2.15 | DEBTORS
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
| 2.16 | CASH AND CASH EQUIVALENTS
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
| 2.17 | CREDITORS
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 2.18 | FINANCIAL INSTRUMENTS
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Group's Balance sheet when the Group 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 Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash Page 31
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.ACCOUNTING POLICIES (CONTINUED)
| 2.18 | FINANCIAL INSTRUMENTS (continued)
equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. Other financial assets Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment. Impairment of financial assets At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Basic financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Page 32
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.ACCOUNTING POLICIES (CONTINUED)
| 2.18 | FINANCIAL INSTRUMENTS (continued)
Derecognition of financial instruments Derecognition of financial assets Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained. Derecognition of financial liabilities Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
| 2.19 | DIVIDENDS
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
3. | JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The group makes estimates and assumptions concerning the future. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. The directors consider followings as significant areas of judgments or key sources of estimation uncertainty: Depreciation and amortisation The directors exercise judgement in the determination of the useful economic lives and residual value of all classes of fixed assets. These assets are then depreciated over their useful economic lives to their residual balances. Valuation of investment properties The directors exercise judgement regarding the valuation of investment properties. Valuation of unlisted shares The directors exercise judgement regarding the valuation of unlisted shares when a market value can be relialbe determined. Page 33
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 3.JUDGEMENTS IN APPLYING ACCOUNTING POLICIES (CONTINUED) Bad debt provision The assessment of recoverability of trade receivables, particularly those overdue by more than one year, is based on historical recovery rates and an evaluation of credit risk. Trade receivables deemed irrecoverable after being outstanding for over 12 months are fully provided and recognised as an expense in the income statement. This approach reflects the group's historical experience and aligns with the principle of prudence in financial reporting.
4. | TURNOVER
| An analysis of turnover by class of business is as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Fees for services provided to the healthcare and legal sectors | 47,996,370 | 42,218,924
| Success fees receivable | 3,573,815 | 6,543,579
| Rental income | 184,508 | 445,004
|  | 51,754,693 | 49,207,507
Analysis of turnover by country of destination:
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Switzerland | 41,540,531 | 40,228,435
| Italy | 9,908,541 | 8,336,550
| UK | 106,435 | 361,960
| Other European Countries | 199,186 | 280,562
|  | 51,754,693 | 49,207,507
5. | OTHER OPERATING INCOME
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Other operating income/(loss) | 587,527 | (27,050)
| (Loss) on disposal of investment properties | - | (2,386,819)
|  | 587,527 | (2,413,869)
Page 34
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
6. | FAIR VALUE MOVEMENTS
|  | 2024 | 2023
|  | € | €
| Listed investments - fair value movement | 1,012,092 | 1,012,151
| Unlisted investments - fair value movement | 2,184,247 | -
|  | 3,196,339 | 1,012,151
7. | EXCEPTIONAL ITEMS
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Legal fees payable | 2,440,202 | 1,521,280
|  | 2,440,202 | 1,521,280
| Legal fees payable for advice is related to a foreign tax authority assessment on prior years and group strategic planning.
8. | OPERATING PROFIT
| The operating profit is stated after charging:
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Depreciation of tangible assets | 1,031,585 | 1,018,885
| Amortisation of intangible assets, including goodwill | 1,746,508 | 755,538
| Exchange differences | (82,525) | 726,628
9. | AUDITORS' REMUNERATION
| During the year, the Group obtained the following services from the Company's auditors and their associates:
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements | 78,417 | 60,225
Page 35
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
10. | EMPLOYEES
| Staff costs, including directors' remuneration, were as follows:
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Wages and salaries | 17,536,881 | 16,993,023 | 59,236 | 50,770
| Social security costs | 3,401,886 | 3,285,601 | 4,938 | -
| Cost of defined contribution scheme | 491,795 | 265,411 | - | -
|  | 21,430,562 | 20,544,035 | 64,174 | 50,770
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | Group | Group | Company | Company
|  |  | 2024 | 2023 | 2024 | 2023
|  |  | No. | No. | No. | No.
|  | Sales and administration | 426 | 450 | 3 | 3
11. | DIRECTORS' REMUNERATION
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Directors' emoluments | 59,236 | 50,770
|  | 59,236 | 50,770
| Apart from the directors there were no other key management personnel.
12. | INCOME FROM INVESTMENTS
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Income from listed investments | 25,668 | 4,199
| Dividends received from unlisted investments | 192,001 | -
Page 36
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
13. | AMOUNTS WRITTEN OFF AND PROFIT/(LOSS) ON DISPOSALS ON INVESTMENTS
|  | 2024 | 2023
|  | € | €
| Amount written off on investments | (387,950) | (131,698)
| Impairment - unlisted investments | (10,149) | -
| Profit/(loss) on disposal of fixed assets investments | 1,057,183 | (173,650)
| Profit on disposal of subsidiaries | 757,382 | -
| Profit on disposal of current asset investments | - | 43,434
|  | 1,416,466 | (261,914)
14. | INTEREST RECEIVABLE
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Other interest receivable | 46,492 | 306,603
|  | 46,492 | 306,603
15. | INTEREST PAYABLE AND SIMILAR EXPENSES
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Bank interest payable | 2,453,964 | 47,190
| Other loan interest payable | 248,614 | 199,932
| Other interest payable | 326 | 649
|  | 2,702,904 | 247,771
Page 37
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
16. | TAXATION
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Foreign tax |  |
| Foreign tax on income for the year | 1,973,014 | 2,371,943
| Foreign tax in respect of prior periods | 28,860 | 3,268,631
|  | 2,001,874 | 5,640,574
| Total current tax | 2,001,874 | 5,640,574
| FACTORS AFFECTING TAX CHARGE FOR THE YEAR
| The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - effective rate of 23.52%). The differences are explained below:
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Profit on ordinary activities before tax | 6,080,497 | 4,611,919
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.52%) | 1,520,124 | 1,084,723
| Effects of: |  |
| Effect of taxes on overseas earnings | (871,178) | 857,499
| Adjustments to foreign tax charge in respect of prior periods | 28,860 | (54,746)
| Unrelieved tax losses carried forward | 1,324,068 | 429,721
| Foreign tax authority assessment for prior years | - | 3,323,377
| Total tax charge for the year | 2,001,874 | 5,640,574
| FACTORS THAT MAY AFFECT FUTURE TAX CHARGES
The Company has £11,774,913 (2023: £7,385,046) of tax losses carried forward available to offset against future profits in the relevant jurisdiction. Page 38
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
17. | DIVIDENDS
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
| Interim dividends paid | 11,928,543 | 28,127,465
|  | 11,928,543 | 28,127,465
18. | INTANGIBLE ASSETS
| Group
|  | Patents and other intangible assets | Computer software | Goodwill | Total
|  | € | € | € | €
| Cost |  |  |  |
| At 1 January 2024 | 5,629,697 | 1,571,813 | 4,613,358 | 11,814,868
| Additions | 736,783 | 3,131,095 | 1,977,738 | 5,845,616
| Disposals | (7,791) | (36,556) | - | (44,347)
| Recalssified to tangible assets | (562,168) | - | - | (562,168)
| On acquisition of subsidiaries | - | 37,588 | - | 37,588
| At 31 December 2024 | 5,796,521 | 4,703,940 | 6,591,096 | 17,091,557
| Amortisation |  |  |  |
| At 1 January 2024 | 3,283,501 | 117,075 | 948,451 | 4,349,027
| Charge for the year on owned assets | 809,903 | 340,685 | 595,920 | 1,746,508
| On disposals | (7,791) | - | - | (7,791)
| At 31 December 2024 | 4,085,613 | 457,760 | 1,544,371 | 6,087,744
| Net book value |  |  |  |
| At 31 December 2024 | 1,710,908 | 4,246,180 | 5,046,725 | 11,003,813
| At 31 December 2023 | 2,346,196 | 1,454,738 | 3,664,907 | 7,465,841
Page 39
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
19. | TANGIBLE FIXED ASSETS
| Group
|  | Freehold property | Plant and machinery | Fixtures and fittings | Office equipment | Total
|  | € | € | € | € | €
| Cost |  |  |  |  |
| At 1 January 2024 | 4,057,365 | 5,924,443 | 440,541 | 529,414 | 10,951,763
| Additions | - | 795,949 | 63,647 | 1,054 | 860,650
| Acquisition of subsidiary | - | 14,442 | - | - | 14,442
| Disposals | (53,409) | (413,301) | (90,768) | (27,934) | (585,412)
| Recalssified from intangible fixed assets | - | 562,168 | - | - | 562,168
| At 31 December 2024 | 4,003,956 | 6,883,701 | 413,420 | 502,534 | 11,803,611
| Depreciation |  |  |  |  |
| At 1 January 2024 | 1,242,064 | 3,951,018 | 299,695 | 330,596 | 5,823,373
| Charge for the year on owned assets | 98,111 | 872,107 | 41,708 | 19,659 | 1,031,585
| Disposals | (49,030) | (255,392) | (86,765) | (33,459) | (424,646)
| At 31 December 2024 | 1,291,145 | 4,567,733 | 254,638 | 316,796 | 6,430,312
| Net book value |  |  |  |  |
| At 31 December 2024 | 2,712,811 | 2,315,968 | 158,782 | 185,738 | 5,373,299
| At 31 December 2023 | 2,815,301 | 1,973,425 | 140,846 | 198,818 | 5,128,390
Page 40
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 19.TANGIBLE FIXED ASSETS (CONTINUED)
| Company
|  | Office equipment
|  | €
| Cost |
| At 1 January 2024 | 54,910
| At 31 December 2024 | 54,910
| Depreciation |
| At 1 January 2024 | 54,910
| At 31 December 2024 | 54,910
| Net book value |
| At 31 December 2024 | -
| At 31 December 2023 | -
Page 41
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
20. | FIXED ASSET INVESTMENTS
| Group
|  | Investments in associates | Listed investments | Loans to associates | Unlisted and other fixed asset investments | Total
|  | € | € | € | € | €
| Cost or valuation |  |  |  |  |
| At 1 January 2024 | 860,681 | 2,015,152 | 1,490,376 | 9,763,826 | 14,130,035
| Additions | 19,000 | - | 54,473 | 1,782,190 | 1,855,663
| Disposals | - | (903,962) | - | - | (903,962)
| Foreign exchange movement | - | - | - | (18,325) | (18,325)
| Revaluations | - | 791,664 | - | 2,184,247 | 2,975,911
| Amounts written off | - | - | - | (395,074) | (395,074)
| At 31 December 2024 | 879,681 | 1,902,854 | 1,544,849 | 13,316,864 | 17,644,248
| Impairment |  |  |  |  |
| At 1 January 2024 | - | - | - | 1,202,986 | 1,202,986
| Charge for the period | 71,758 | - | - | 424,549 | 496,307
| Reversal of impairment losses | - | - | - | (477,100) | (477,100)
| Reclassification between group | 238,923 | - | - | (238,923) | -
| At 31 December 2024 | 310,681 | - | - | 911,512 | 1,222,193
| Net book value |  |  |  |  |
| At 31 December 2024 | 569,000 | 1,902,854 | 1,544,849 | 12,405,352 | 16,422,055
| At 31 December 2023 | 860,681 | 2,015,152 | 1,490,376 | 8,560,840 | 12,927,049
Page 42
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
| Company
|  | Invest-ments in subsidiary companies | Invest-ments in associates | Listed invest-ments | Loans to subsidiar-ies | Unlisted and other fixed asset invest-ments | Total
|  | € | € | € | € | € | €
| Cost or valuation |  |  |  |  |  |
| At 1 January 2024 | 1,905,702 | 310,681 | 2,015,152 | 92,310,459 | 9,715,993 | 106,257,987
| Additions | - | - | - | 9,279,884 | 1,782,190 | 11,062,074
| Disposals | - | - | (903,962) | (32,267,000) | - | (33,170,962)
| Foreign exchange movement | - | - | - | 42,385 | (18,325) | 24,060
| Revaluations | - | - | 791,664 | - | 2,184,247 | 2,975,911
| Amounts written off | - | - | - | (4,894,222) | (395,074) | (5,289,296)
| At 31 December 2024 | 1,905,702 | 310,681 | 1,902,854 | 64,471,506 | 13,269,031 | 81,859,774
| Impairment |  |  |  |  |  |
| At 1 January 2024 | 612,528 | - | - | - | 1,202,986 | 1,815,514
| Charge for the period | 238,429 | 71,758 | - | - | 424,549 | 734,736
| Reversal of impairment losses | - | - | - | - | (477,100) | (477,100)
| Reclassification between group | - | 238,923 | - | - | (238,923) | -
| At 31 December 2024 | 850,957 | 310,681 | - | - | 911,512 | 2,073,150
| Net book value |  |  |  |  |  |
| At 31 December 2024 | 1,054,745 | - | 1,902,854 | 64,471,506 | 12,357,519 | 79,786,624
| At 31 December 2023 | 1,293,174 | 310,681 | 2,015,152 | 92,310,459 | 8,513,007 | 104,442,473
| Loans to subsidiaries In order to secure the going concern status of Elystan SA, during the year, the company entered in to a subordinate agreement with the subsidiary for the subordination of an intercompany loan €2,081,810 owed by this subsidiary to the company. Valuation of ulisted shares During the year, an investments in unlisted shares was fair valued during the year based on an agreed price as the result of exercising a sales option after the year end.
Page 43
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
| SUBSIDIARY UNDERTAKINGS
| The following were subsidiary undertakings of the Company:
| Name | Registered office | Principal activity | Class of shares | Holding
| Consulcesi SA^^^ | Switzerland | Medical legal protection and services provider to HPs | Ordinary | 58.8%
| Falcon Productions Limited* | UK | Film Production and CME course production | Ordinary | 100%
| Sanita in Formazione S.P.A ^^^ | Italy | CME provider | Ordinary | 58.8%
| Elystan SA* | Switzerland | Real estate investments | Ordinary | 100%
| Consulcesi Service SHPK*** | Albania | Call centre | Ordinary | 58.8%
| Consulcesi Tech SA^^^ | Switzerland | Analysis, design, development and installation of IT systems | Ordinary | 58.8%
| Consulcesi Sanita'Nel Diritto SRL* | Italy | Call centre management | Ordinary | 100%
| Homnya SRL^^^^ | Italy | Marketing and PR | Ordinary | 55.0%
| Sanitassicura SRL^^^ | Italy | Assurance services | Ordinary | 58.8%
| Consulcesi Corporate SA* | Switzerland | Supply of financial, administrative, technical and promotional services | Ordinary | 58.8%
| Consulcesi Service SRL^^^ | Italy | Supply of financial, administrative, technical and promotional services | Ordinary | 58.8%
| Falcon Bienes Raices SL** | Spain | Real estate investments in Spain | Ordinary | 100%
| Roma 25 SA " | Switzerland | Real estate | Ordinary | 50%
| Kirken Investments SA* | Luxembourg | Financial interests | Ordinary | 99.97%
| ALT SRL""" | Italy | Real estate | Ordinary | 99.97%
| Health Security Management Srl^^^ | Italy | Consulting services in healthcare and life science | Ordinary | 58.8%
| PKE Srl^^^ | Italy | Data management and communication service provider for Italian healthcare professional | Ordinary | 58.8%
| Sics-Soc.It.Di Comunicazione Scientifica E Sanitaria Srl^ | Italy | Health media company | Ordinary | 55.0%
| Quotidiano Sanità SRL^^ | Italy | Health and medicine digital publishing house | Ordinary | 55.0%
| Editoriale Giornalidea SRL^ | Italy | Pharmacy publishing house and CPE course provider | Ordinary | 55%
Page 44
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
| ASSOCIATES
| The following were associates of the Company:
| Name | Registered office | Principal activity | Class of shares | Holding
| Farnese Immobiliare SR"""" | Italy | Property development | Ordinary | 35%
| Ledger Assest Holdings Limited* | England and Wales | Software development | Ordinary | 21%
| The share of the associates results have not been included within the consolidated figures on the basis of materiality. Key: * = Subsidiaries and associates controlled/held directly by Falcon Industrial Services Limited. ** = Elystan SA has 100% shareholding in the company. *** = Consulcesi SA has 100% shareholding in the companies. **** = Consulcesi Tech SA has 100% shareholding in the company. ^ = Homnya SRL has 100% shareholding in the company. ^^ = SICS SRL has 100% shareholding in the company. ^^^ = Consulcesi Corporate SA has 100% shareholding in the company. ^^^^ = Consulcesi Corporate SA has 93.5% shareholding in the company. " = Elystan SA has 50% shareholding in the company. "" = Sanita in Formazione S.P.A has 100% shareholding in the company. """ = Elystan SA has 10% shareholding and Kirken Investments SA has 90% shareholding in the company. """" = ALT SRL has 35% shareholding in the company. During the year, four subsidiaries, Consulceis & Partners Srl, Yes learning Srl, Consulcesi Tech Shpk and Sanità In-Formazione Edukim I Vazhduar Shpk were dissolved.
21. | INVESTMENT PROPERTY
| Group
|  | Freehold investment property
|  | €
| Valuation |
| At 1 January 2024 | 14,103,747
| Additions at cost | 1,854,113
| At 31 December 2024 | 15,957,860
The directors considered that the 2024 valuation on an open market value for existing use basis were not significantly different from the acquisition costs of the property.
Page 45
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
22. | STOCKS
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Stocks | 13,260 | - | - | -
| Stock of properties | 8,996,758 | 10,987,444 | 8,996,758 | 10,987,444
|  | 9,010,018 | 10,987,444 | 8,996,758 | 10,987,444
| An impairment loss of €1,990,686 (2023 - €Nil) was recognised in cost of sales against stock of properties during the year as a result of reducing selling price in the market.
23. | DEBTORS
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Trade debtors | 8,215,948 | 5,872,193 | 91,290 | 87,229
| Other debtors | 5,144,157 | 7,072,902 | 697,827 | 626,153
| Prepayments and accrued income | 7,001,356 | 1,596,092 | - | 802,072
| Tax recoverable | 853,142 | 1,015,146 | - | -
|  | 21,214,603 | 15,556,333 | 789,117 | 1,515,454
24. | CURRENT ASSET INVESTMENTS
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Listed investments | 24,776,958 | 11,499,987 | 24,755,288 | 11,342,615
|  | 24,776,958 | 11,499,987 | 24,755,288 | 11,342,615
Page 46
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
25. | CASH AND CASH EQUIVALENTS
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Cash at bank and in hand | 13,016,923 | 11,862,178 | 3,996,285 | 1,523,367
| Less: bank overdrafts | (132,229) | (47,411) | (58,440) | (20)
|  | 12,884,694 | 11,814,767 | 3,937,845 | 1,523,347
26. | CREDITORS: Amounts falling due within one year
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Bank overdrafts | 132,229 | 47,411 | 58,440 | 20
| Bank loans | 10,889,925 | 3,947,151 | 2,720,604 | 2,662,968
| Trade creditors | 3,460,041 | 2,484,601 | 87,946 | 38,627
| Amounts owed to group undertakings | - | - | 453,588 | 453,475
| Corporation tax | 2,631,510 | 4,551,324 | - | -
| Other taxation and social security | 171,395 | 99,267 | - | -
| Other creditors | 11,456,294 | 8,762,396 | 1,016,642 | -
| Accruals and deferred income | 3,178,998 | 1,983,023 | 3,261,299 | 4,869,073
|  | 31,920,392 | 21,875,173 | 7,598,519 | 8,024,163
| For details of security provided on bank loans, please refer to Note 28.
27. | CREDITORS: Amounts falling due after more than one year
|  | Group | Group
|  | 2024 | 2023
|  | € | €
| Bank loans | 29,858,581 | 3,760,630
|  | 29,858,581 | 3,760,630
| For details of security provided on bank loans, please refer to Note 28.
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FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
28. | LOANS
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Amounts falling due within one year |  |  |  |
| Bank loans | 10,889,925 | 3,947,151 | 2,720,604 | 2,662,968
| Amounts falling due 1-2 years |  |  |  |
| Bank loans | 7,755,779 | 264,233 | - | -
| Amounts falling due 2-5 years |  |  |  |
| Bank loans | 19,690,768 | 816,899 | - | -
| Amounts falling due after more than 5 years |  |  |  |
| Bank loans | 2,412,034 | 2,679,498 | - | -
|  | 40,748,506 | 7,707,781 | 2,720,604 | 2,662,968
| The bank loans were secured by assets held by the parent company and a subsidiary. In addition, the ultimate controlling party provided a personal guarantee up to €2.5m to a bank loan borrowed by a subsidiary. Amounts falling due after more than 5 years are made up of two loans held within subsidiaries, one being repayable monthly with the final repayment due in 2030, with a variable interest rate of EURIBOR + 1.25%. The other loan is repayable quarterly with the final repayment due in 2036, with a variable interest rate of EURIBOR + 2.25%.
29. | FINANCIAL INSTRUMENTS
|  | Group | Group | Company | Company
|  | 2024 | 2023 | 2024 | 2023
|  | € | € | € | €
| Financial assets |  |  |  |
| Other financial assets measured at fair value through profit or loss | 26,679,812 | 13,737,139 | 26,658,142 | 13,357,767
| Other financial assets measured at fair value through profit or loss comprises an investment portfolio of listed investments.
30. | SHARE CAPITAL
|  |  |  |  | 2024 | 2023
|  |  |  |  | € | €
|  | Authorised, allotted, called up and fully paid |  |
|  | 1,573,530 (2023 - 1,573,530) Ordinary shares of £1.00 each | 1,888,236 | 1,888,236
Page 48
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 30.SHARE CAPITAL (CONTINUED)
31. | RESERVES
Foreign exchange reserve The foreign exchange reserve comprises foreign exchange movements on the retranslation of the Company and overseas subsidiaries whose functional currency is not Euros. Other reserves The consolidated reserves comprise legal reserves in some of the subsidiaries. The company other reserve represents the profit on a group reorganisation which the directors do not consider to be a realised profit. Profit and loss account Includes all current and prior period retained profits and losses. Page 49
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
32. | BUSINESS COMBINATIONS
On 9 April 2024, a subsidiary, Homnya Srl, acquired 100% of the shares of Editoriale Giornalidea S.r.l, a leading publishing house in the pharmacy sector in Italy.
| Acquisition of Editoriale Giornalidea S.r.l
| Recognised amounts of identifiable assets acquired and liabilities assumed
|  |  |  |  | Book value | Fair value
|  |  |  |  | € | €
| Fixed Assets |  |
| Tangible | 14,442 | 14,442
| Intangible | 37,588 | 37,588
|  | 52,030 | 52,030
| Current Assets |  |
| Stocks | 24,980 | 24,980
| Debtors | 536,812 | 536,812
| Current asset investments | 448,769 | 448,769
| Cash at bank and in hand | 528,203 | 528,203
| Total Assets | 1,590,794 | 1,590,794
| Creditors |  |
| Due within one year | (604,469) | (604,469)
| Total Identifiable net assets | 986,325 | 986,325
| Non-controlling interests resulting from non-controlling interests within the Falcon group | (444,063)
| Goodwill | 1,977,738
| Total purchase consideration | 2,520,000
| Consideration
|  |  |  |  | €
| Cash | 2,520,000
| Total purchase consideration | 2,520,000
Page 50
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 32.BUSINESS COMBINATIONS (CONTINUED)
| Cash outflow on acquisition
|  |  |  |  | €
| Purchase consideration settled in cash, as above | 2,520,000
|  | 2,520,000
| Less: Cash and cash equivalents acquired | (528,203)
| Net cash outflow on acquisition | 1,991,797
| The results of Editoriale Giornalidea S.r.l since acquisition are as follows:
|  |  |  | Current period since acquisition
|  |  |  | €
| Turnover | 702,163
| Profit for the period since acquisition | 13,236
33. | COMMITMENTS UNDER OPERATING LEASES
| At 31 December 2024 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  | Group | Group
|  | 2024 | 2023
|  | € | €
| Not later than 1 year | 277,236 | 277,236
| Later than 1 year and not later than 5 years | 254,133 | 531,369
|  | 531,369 | 808,605
Page 51
FALCON INDUSTRIAL SERVICES LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
34. | RELATED PARTY TRANSACTIONS
| The company has taken advantage of the exemption in FRS 102, paragraph 33.1A 'Related party disclosures' whereby it has not disclosed transactions with any wholly owned subsidiary undertakings. Group During the year, the rental income received from the shareholder amounted to €48,000 (2023: €48,000), which is considered by the directors as below the normal commercial basis. Company At the balance sheet date, there was an intercompany loan €45m (2023: €75m) with accrued interest and paid in kind (PIK) interest, €Nil (2023: €490,718) and €Nil (2023: €776,712) respectively, between Falcon Industrial Services Limited and a subsidiary. The loan matures at February 2029, is secured on the assets of the subsidiary and bears an interest rate equal to EURIBOR plus 5.5%. During the year, Falcon Industrial Services Ltd waived the accrued interest brought forward and part of the interest due for the year amounting to €3.6m and received combined interest receivable €2.3m from this loan. During 2023, the Company committed to reimburse a subsidiary €3,323,377 in relation to prior year assessments arising from a foreign tax enquiry. At the balance date, €2,142,732 (2023: €3,323,377) is still owed to the subsidiary and is included as part of accruals balance. The balance is repayable on demand and is interest free. During the year, advances of €9,772 were made to the shareholder. At the balance date, the shareholder owed the company €9,772. The loan to the shareholder is unsecured and interest free. This loan was repaid subsequently after the year end.
35. | CONTROLLING PARTY
The ultimate controlling party is Massimo Tortorella by virtue of his shareholding.
Page 52