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xbrli:pure

Registered number: 02998939 CERTN (UK) LTD. ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
CERTN (UK) LTD. COMPANY INFORMATION
Directors | M Coombs (appointed 11 December 2024, resigned 17 December 2025)
| D Greene (appointed 11 December 2024, resigned 12 December 2025)
| M Whittington (resigned 11 December 2024)
| O Madrick (resigned 11 December 2024)
| S Davidson (appointed 3 December 2025)
Registered number | 02998939
Registered office | 5 New Street Square
| London
| EC4A 3TW
Independent auditor | James Cowper Kreston Audit
| Chartered Accountants and Statutory Auditor
| 201 Cumnor Hill
| Cumnor
| Oxford
| Oxfordshire
| OX2 9PJ
CERTN (UK) LTD. CONTENTS
| Page
Strategic report | 1 - 4
Directors' report | 5 - 6
Independent auditor's report | 7 - 11
Statement of comprehensive income | 12
Balance sheet | 13 - 14
Statement of changes in equity | 15
Notes to the financial statements | 16 - 36
CERTN (UK) LTD. STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2024
Introduction
The Directors present the Strategic Report for Certn (UK) Limited (“the Company”) for the year ended December 31, 2024. The purpose of this report is to provide shareholders with a clear, fair and balanced overview of the Company’s business model, strategy, performance, financial position and future prospects. It also outlines how the Directors have fulfilled their duties under Section 172 of the Companies Act 2006, having regard to: ∙The likely long-term consequences of decisions ∙The interests of employees ∙Relationships with customers and suppliers ∙The impact of operations on the community and environment ∙The desirability of maintaining a reputation for high standards of business conduct ∙The need to act fairly between members of the Company. Certn (UK) Limited is a background screening and workforce intelligence provider operating primarily across the United Kingdom and EMEA. The Company forms part of the wider Certn group and contributes to its international growth strategy. The Company’s mission is to provide fast, compliant and technology-enabled screening solutions that enhance trust in hiring and workforce management processes.
Business review
Business Model The Company generates revenue through the provision of background screening services to employers, staffing agencies and regulated industries. Services include identity verification, criminal record checks, employment and education verification, credit and financial checks, and other compliance-related screening solutions. Revenue is primarily transaction-based. Technology, automation and compliance expertise underpin the Company’s competitive advantage. During the year, the Company launched its new global user interface and fulfilment platform, “Centric”, designed to: ∙Improve turnaround times through automation and workflow optimisation ∙Enhance customer experience via adapted reporting and user-centric design ∙Expand service coverage across jurisdictions ∙Strengthen integration capabilities with enterprise HR systems Centric represents a key strategic differentiator and is expected to enhance scalability and margin performance over time. Strategy The Company’s strategy is focused on: ∙Expanding market share across EMEA, despite macro-economic pressures in Europe. ∙Accelerating growth in the Middle East, capitalising on significant regional transformation programmes, including Vision 2030 initiatives and associated infrastructure, regulatory and workforce developments. ∙Technology-led differentiation, through the continued development and rollout of Centric. ∙Operational efficiency and automation, to reduce turnaround times and improve customer retention. ∙Regulatory excellence, ensuring compliance with UK GDPR, data protection, and sector-specific regulatory frameworks. Macroeconomic conditions across Europe, including inflationary pressures and slower hiring cycles in certain sectors, presented challenges. However, increased regulatory focus on workforce compliance and heightened risk awareness supported demand for robust screening services. Page 1
CERTN (UK) LTD. STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 The Company remains well positioned within a structurally growing industry, driven by: ∙Increased regulatory oversight ∙Cross-border workforce mobility ∙Growth in remote and contingent workforces ∙Rising demand for digital verification solutions Current Position and Future Outlook At the year end, the Company maintained a stable financial position supported by recurring enterprise relationships and strong group backing. Looking ahead, management expects: ∙Continued growth in EMEA market share ∙Significant expansion opportunities in the Middle East ∙Increased operational leverage from Centric ∙Ongoing competitive pressure within the screening market The Director and management remain confident that the Company’s technology investment and geographic expansion strategy will support sustainable long-term value creation.
Principal risks and uncertainties
The Company operates in a regulated and competitive environment. The principal risks and uncertainties that could materially impact the business are outlined below. 1. Regulatory and Compliance Risk Risk: Failure to comply with data protection, employment, or screening regulations (including UK GDPR and international equivalents) could result in fines, reputational damage and operational restrictions. Mitigation: ∙Dedicated compliance and legal oversight ∙Regular regulatory reviews ∙Ongoing staff training ∙Robust data governance controls There has been no material increase in regulatory risk during the year; however, evolving cross-border data regulations continue to require close monitoring. 2. Technology and Platform Risk Risk: Disruption, failure, or delays associated with the Centric platform could impact service delivery and customer satisfaction. Mitigation: ∙Structured rollout and testing procedures ∙Continuous monitoring and cybersecurity controls ∙Investment in infrastructure resilience ∙Dedicated product and engineering teams Risk levels increased moderately during the transition phase of Centric deployment but are expected to reduce as the platform stabilises. Page 2
CERTN (UK) LTD. STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 3. Market and Macroeconomic Risk Risk: Economic slowdown in Europe may reduce hiring volumes, directly impacting screening demand. Mitigation: ∙Diversification across sectors and geographies ∙Expansion into high-growth Middle Eastern markets ∙Enterprise contract focus to stabilise revenue streams Macroeconomic pressure remained elevated compared to the prior year. 4. Competitive Risk Risk: Increased competition from established screening providers and new technology entrants could compress margins. Mitigation: ∙Differentiation through Centric ∙Investment in customer experience ∙Emphasis on turnaround times and service breadth 5. Operational and Third-Party Risk Risk: Dependence on third-party data sources and international partners may impact service quality or turnaround times. Mitigation: ∙Diversified supplier network ∙Service level agreements ∙Ongoing performance monitoring
Financial key performance indicators
Revenue Growth Definition: Year-on-year percentage increase in total revenue. Importance: Indicates market share expansion and demand for services. Performance: Revenue increased by 11% compared with the prior year (£10M vs £11.11M). Commentary: Growth was driven by EMEA expansion and initial Middle East traction, partially offset by softer European hiring markets. Growth Margin Definition: Gross profit as a percentage of revenue. Importance: Reflects pricing strength and operational efficiency. Performance: Gross margin was slightly lower as our product mix shifted (36.2% vs prior year: 38.7%). Commentary: Margin improvement is expected in 2026 from investment in Centric providing significant automation and changes in service mix. Page 3
CERTN (UK) LTD. STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 This report was approved by the board and signed on its behalf.
................................................ S Davidson Director
Date: 6 March 2026
Page 4
CERTN (UK) LTD. 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
The Directors who served during the year were:
M Coombs (appointed 11 December 2024, resigned 17 December 2025)
D Greene (appointed 11 December 2024, resigned 12 December 2025)
M Whittington (resigned 11 December 2024)
O Madrick (resigned 11 December 2024)
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to: ∙select suitable accounting policies and then apply them consistently; ∙make judgments 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 Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Results and dividends
The loss for the year, after taxation, amounted to £2,107,490 (2023 - loss £2,611,692). The Directors do not recommend payment of a dividend (2023: Nil).
Principal risks and uncertainties
The Company’s exposure to financial risks including credit risk, liquidity risk and market risk is managed through group treasury policies and internal controls. Page 5
CERTN (UK) LTD. DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Future developments
The Company will continue to focus on: ∙Expanding EMEA market share ∙Scaling Middle East operations ∙Enhancing the Centric platform ∙Driving operational efficiencies
Going concern
The financial statements have been prepared on a going concern basis. The Director has reviewed forecasts and available resources and is satisfied that the Company has adequate resources and group support to continue operating for the foreseeable future.
Matters covered in the Strategic Report
Certain matters that would otherwise be disclosed in this Directors' Report are disclosed in the Strategic Report.
Disclosure of information to auditor
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's auditor is 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's auditor is aware of that information.
Post balance sheet events
On March 12, 2025, the Company signed an agreement with the landlord to terminate the lease of its UK office effective June 23, 2025. The early termination resulted in the derecognition of the right-of-use asset (£955,025) and lease liability (£1,008,257). The Company received an incentive payment of £190,177, resulting in a gain of £345,175 being recognised in profit and loss. There were no penalties for the early lease termination.
Auditor
The auditor, James Cowper Kreston Audit, replaced S&W Partners Audit Limited as auditor on 16 October 2025 and 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.
................................................ S Davidson Director
Date: 6 March 2026
Page 6
CERTN (UK) LTD. INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CERTN (UK) LTD.
Qualified opinion
We have audited the financial statements of Certn (UK) Ltd. (the 'Company') for the year ended 31 December 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and 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 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice). In our opinion, except for the effects of the matters described in the Basis for qualified opinion section of our report, the financial statements: ∙give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its loss for the year then ended; ∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
At 31 December 2024, the Company has recognised an expected credit loss allowance in respect of trade debtors of £1,348,369 against its trade debtors of £4,479,813. After this expected credit loss allowance, the trade debtors balance recognised in the financial statements is £3,131,444. The charge in respect of the expected credit loss allowance of £1,348,639 as at 31 December 2024 is presented as £842,491 in retained earnings as at 31 December 2023 and £505,878 in administrative expenses during the year ended 31 December 2024. The predecessor auditor was unable to obtain sufficient, appropriate audit evidence on whether the bad debt provision as at 31 December 2023 of £842,491 in accordance with Financial Reporting Standard 102 was complete and accurate. The reason for this was that as at 31 December 2023, the Company had not fully allocated customer receipts after 31 December 2023 against specific customer invoices and, therefore, the predecessor auditor was unable to verify that trade debtors had been settled after 31 December 2023. The predecessor auditor qualified their opinion in relation to the completeness and accuracy of the bad debt provision as at 31 December 2023 in accordance with Financial Reporting Standard 102. The Directors have assessed the provision as at 31 December 2023 in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and assessed the expected credit loss allowance as at 31 December 2023 to be £842,491. Consequently we were unable to determine whether any adjustment to this amount at 31 December 2023 was necessary or whether there was any consequential effect on the administrative expenses for the year ended 31 December 2024. In the course of the audit for the year ended 31 December 2024, we have been unable to obtain sufficient, appropriate audit evidence on whether the expected credit loss allowance as at 31 December 2024 of £1,348,639 is complete and accurate. The reason for this is that the Company has also not fully allocated customer receipts for the period after 31 December 2024 against specific customer invoices, in addition to not having fully allocated customer receipts in 2024 to sales from the year ended 31 December 2022 to 31 December 2024. Consequently, we have been unable to verify the completeness and accuracy of the expected credit loss allowance of £1,348,639 as at 31 December 2024. We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 qualified opinion. Page 7
CERTN (UK) LTD. INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CERTN (UK) LTD. (CONTINUED)
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. As described in the Basis for qualified opinion of our report, our audit opinion is qualified due to not being able to obtain sufficient and appropriate audit evidence relating to the expected credit loss allowance as at 31 December 2024. We have concluded that where the other information refers to the expected credit loss allowance or the financial result for the year, it may be materially misstated for the same reason.
Opinion on other matters prescribed by the Companies Act 2006
As described in the Basis for qualified opinion, we were unable to satisfy ourselves as the completeness and accuracy of the expected credit loss allowance of £1,348,639 as at 31 December 2024. Consequently, we were unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the expected credit loss allowance balance be required, the Directors' Report would also need to be amended. Except for the possible effects of the matter described in the Basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit: • the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Page 8
CERTN (UK) LTD. INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CERTN (UK) LTD. (CONTINUED)
Matters on which we are required to report by exception
Except for the matter described in the Basis for qualified opinion section of our report, in the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report and the Directors' report. Arising solely from the limitation on the scope of our work relating to the expected credit loss allowance referred to above: ∙we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and ∙we were unable to determine whether adequate accounting records have been kept. 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: ∙returns adequate for our audit have not been received from branches not visited by us; or ∙the financial statements are not in agreement with the accounting records and returns; or ∙certain disclosures of directors’ remuneration specified by law are not made.
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement set out on page 5, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Page 9
CERTN (UK) LTD. INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CERTN (UK) LTD. (CONTINUED)
Auditor's 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 Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows: ∙Enquiry of management and those charged with governance around actual and potential litigation and claims; ∙Enquiry of management and those charged with governance to identify any material instances of non-compliance with laws and regulations; ∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; ∙Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias; ∙Reviewing minutes of meetings of those charged with governance. 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 Auditor's report. Page 10
CERTN (UK) LTD. INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CERTN (UK) LTD. (CONTINUED)
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed. Samuel Britton FCCA (Senior statutory auditor) for and on behalf of James Cowper Kreston Audit Chartered Accountants and Statutory Auditor 201 Cumnor Hill Cumnor Oxford Oxfordshire OX2 9PJ 6 March 2026 Page 11
CERTN (UK) LTD. STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
|  | As restated
| 2024 | 2023
Note | £ | £
Turnover | 4 | 11,109,705 | 9,995,725
Cost of sales |  | (7,081,210) | (6,120,930)
Gross profit |  | 4,028,495 | 3,874,795
Distribution costs |  | - | (106,371)
Administrative expenses |  | (8,241,180) | (8,518,305)
Other operating income | 5 | 2,175,012 | 2,246,112
Exceptional administrative expenses | 12 | - | (251,110)
Operating loss | 6 | (2,037,673) | (2,754,879)
Interest payable and similar expenses | 10 | (69,817) | (65,139)
Loss before tax |  | (2,107,490) | (2,820,018)
Tax on loss | 11 | - | 208,326
Loss for the financial year |  | (2,107,490) | (2,611,692)
There was no other comprehensive income for 2024 (2023:£NIL).
The notes on pages 16 to 36 form part of these financial statements.
Page 12
CERTN (UK) LTD. REGISTERED NUMBER: 02998939 BALANCE SHEET AS AT 31 DECEMBER 2024
|  |  |  | As restated
|  | 2024 |  | 2023
Note |  | £ |  | £
Fixed assets |  |  |  |  |
Tangible assets | 13 |  | 1,085,207 |  | 1,333,827
|  |  | 1,085,207 |  | 1,333,827
Current assets |  |  |  |  |
Debtors | 14 | 4,348,790 |  | 4,104,728 |
Cash at bank and in hand | 15 | 617,351 |  | 142,628 |
|  | 4,966,141 |  | 4,247,356 |
Creditors: amounts falling due within one year | 16 | (6,570,814) |  | (4,549,813) |
Net current liabilities |  |  | (1,604,673) |  | (302,457)
Total assets less current liabilities |  |  | (519,466) |  | 1,031,370
Creditors: amounts falling due after more than one year | 17 |  | (885,652) |  | (1,008,257)
|  |  | (1,405,118) |  | 23,113
Provisions for liabilities |  |  |  |  |
Provisions |  | (429,167) |  | - |
|  |  | (429,167) |  | -
Net (liabilities)/assets |  |  | (1,834,285) |  | 23,113
Capital and reserves |  |  |  |  |
Called up share capital | 20 |  | 199,286 |  | 199,286
Share premium account | 21 |  | 21,527 |  | 21,527
Share based payment reserve | 21 |  | 647,448 |  | 397,356
Profit and loss account | 21 |  | (2,702,546) |  | (595,056)
|  |  | (1,834,285) |  | 23,113
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
................................................ S Davidson
Director
Date: 6 March 2026
The notes on pages 16 to 36 form part of these financial statements. Page 13
CERTN (UK) LTD. REGISTERED NUMBER: 02998939 BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2024 Page 14
CERTN (UK) LTD. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
| Called up share capital | Share premium account | Share based payment reseve | Profit and loss account | Total equity
| £ | £ | £ | £ | £
At 1 January 2024 (as previously stated) | 199,286 | 21,527 | 397,356 | (1,163,348) | (545,179)
Prior year adjustment - Correction of error (see note 20) | - | - | - | 568,292 | 568,292
At 1 January 2024 (as restated) | 199,286 | 21,527 | 397,356 | (595,056) | 23,113
Loss for the year | - | - | - | (2,107,490) | (2,107,490)
Share based payment charge | - | - | 250,092 | - | 250,092
At 31 December 2024 | 199,286 | 21,527 | 647,448 | (2,702,546) | (1,834,285)
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
| Called up share capital | Share premium account | Share based payment reseve | Profit and loss account | Total equity
| £ | £ | £ | £ | £
At 1 January 2023 (as previously stated) | 199,286 | 21,527 | - | 1,765,916 | 1,986,729
Transition to FRS 101 (see note 25) | - | - | - | (26,558) | (26,558)
Prior year adjustment - Correction of error (see note 20) | - | - | - | 277,278 | 277,278
At 1 January 2023 (as restated) | 199,286 | 21,527 | - | 2,016,636 | 2,237,449
Loss for the year (as restated) | - | - | - | (2,611,692) | (2,611,692)
Share based payment charge | - | - | 397,356 | - | 397,356
At 31 December 2023 | 199,286 | 21,527 | 397,356 | (595,056) | 23,113
| The notes on pages 16 to 36 form part of these financial statements.
Page 15
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
1. | General information
Certn (UK) Limited ('the Company') is a private company limited by shares and domiciled and Wales. The address of the Company's registered office and place of business is 5 New Street Square, London, United Kingdom, EC4A 3TW. 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 101 'Reduced Disclosure Framework' and the Companies Act 2006. Information on the impact of first-time adoption of FRS 101 is given in note 28. The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3). Monetary amounts in these financial statements are stated in pounds sterling and are rounded to the nearest whole £1, except where otherwise indicated. First time application of FRS 101 In the current year the Company has adopted FRS 101. In previous years the financial statements were prepared in accordance with Financial Reporting Standard 102. This change in the basis of preparation has materially altered the recognition and measurement requirements previously applied in accordance with UK GAAP. An explanation of the impact of the adoption of FRS 101 for the first time is included in the note 28. Page 16
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.2 | Financial Reporting Standard 101 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions under FRS 101: ∙the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share-based payment ∙the requirements of IFRS 7 Financial Instruments: Disclosures ∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers ∙the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases. The requirements of paragraph 58 of IFRS 16, provided that the disclosure of details in indebtedness relating to amounts payable after 5 years required by company law is presented separately for lease liabilities and other liabilities, and in total ∙the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of: - paragraph 79(a)(iv) of IAS 1; - paragraph 73(e) of IAS 16 Property, Plant and Equipment; ∙the requirements of IAS 7 Statement of Cash Flows ∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures ∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member This information is included in the consolidated financial statements of Certn Holding Inc as at 31 December 2024 and these financial statements may be obtained from Suite 300, 1006 Fort Street, Victoria, BC V8V 3K4, Canada.
| 2.3 | Going concern
The Company has made a loss after tax of £2,107,490 (2023 restated: £2,611,692). The Company has net current liabilities of £1,604,673 (2023 restated: £302,457) at the balance sheet date. Included in net current liabilities are amounts due to group companies of £5,327,623 (2023: £3,461,770), which are presented within creditors falling due within one year. The Company has received a letter of support from its parent company, as head of the group, which confirms that these balances will only need to be settled when the Company has the financial resources to permit repayment. The financial statements have been prepared on a going concern basis, which the Directors consider to be appropriate. In making this assessment, the Directors have considered the Company’s current financial position and forecast cash flows for a period of at least 12 months from the date of approval of the financial statements. This review included an evaluation of the business's operating performance, current cash position, and access to existing financing facilities. The Directors have prepared detailed cash flow forecasts which demonstrate that the Company is expected to generate sufficient positive cash flows from operations and maintain adequate liquidity to meet its liabilities as they fall due, save for continued financial support from its parent as outlined above. These forecasts include consideration of reasonably possible changes in trading performance and working capital requirements. Based on this assessment, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. Page 17
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.4 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is GBP. 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 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'.
| 2.5 | Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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: Rendering of services The Company enters into customer contracts to supply background checks on applicants for employment and background checks on prospective tenants for landlords/property managers. The contract is then assessed to determine whether it contains a single combined performance obligation or multiple performance obligations. If applicable, the total transaction price is allocated amongst the various performance obligations based on their relative stand-alone selling prices. The transaction price for a contract excludes any amounts collected on behalf of third parties. Revenue is recognised at the point in time when the Company satisfies performance obligations by transferring the promised goods or services to its customers. Payment of the transaction price is due within stated credit terms upon completion of the service. Customers are invoiced on a monthly basis. Page 18
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.6 | Leases
The Company as a lessee The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise: ∙fixed lease payments (including in-substance fixed payments), less any lease incentives. The lease liability is included in 'Creditors' on the Balance sheet. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are included in the Tangible Assets line on the balance sheet. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has not used this practical expedient.
| 2.7 | 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 19
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.8 | Share-based payments
The Company operates an equity-settled, share-based compensation plan, under which the Company receives services from employees as consideration for equity instruments (options) of Certn Holdings Inc. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. A credit is recognised directly in equity. The total amount to be expensed is determined by reference to the fair value of the options granted. Where share options are awarded to employees, the fair value of non-employee stock options is recorded as an expense at the date the goods or services are received with a corresponding credit to share reserves. The fair value of options is calculated using the Black-Scholes option pricing model. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period if they are beneficial to the employee. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.
| 2.9 | 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 operates and generates income.
| 2.10 | Exceptional items
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
| 2.11 | Tangible fixed assets
Tangible fixed assets under the cost model 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 20
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.11 | 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:
|  |  |  | Long-term leasehold property | - |  | the shorter of the remaining term of the lease, and 20% straight line
|  |  |  | Plant and machinery | - | 33% |
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.
| 2.12 | Debtors
Short-term debtors are measured at transaction price, less any impairment.
| 2.13 | 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.
| 2.14 | Creditors
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
| 2.15 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss.
| 2.16 | Financial instruments
The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below: Financial assets and financial liabilities are initially measured at fair value. Financial assets Page 21
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 2.Accounting policies (continued)
| 2.16 | Financial instruments (continued)
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets. Fair value through profit or loss All of the Company's financial assets are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses being recognised in profit or loss to the extent they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset. Impairment of financial assets The Company always recognises lifetime ECL for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. Financial liabilities Fair value through profit or loss Financial liabilities are classified as at fair value through profit or loss, when the financial liability is held for trading, or is designated as at fair value through profit or loss. This designation may be made if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise, or the financial liability forms part of a group of financial instruments which is managed and its performance is evaluated on a fair value basis, or the financial liability forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at fair value through profit or loss. Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship. At amortised cost Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability. Page 22
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
3. | Judgments in applying accounting policies and key sources of estimation uncertainty
In the application of the Company's accounting policies, management is required to make judgements, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on experience and other factors considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Significant items subject to such assumptions and estimates include: ∙Expected credit loss allowance: The expected credit loss allowance in respect of trade debtors at the year-end is £1,348,369 £842,491). The Directors have recognised a provision based on the expected credit loss allowance treatment in accordance with IFRS 9. Recognition of credit losses is no longer dependent on the Company first identifying a credit loss event. Instead, the Company considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. Measurement of the expected credit losses is determined by a probability weighted estimate of credit losses over the expected life of the financial instrument. ∙Share-based compensation: Stock options issued to employees are measured at fair value at the grant date and are recognised as an expense over the relevant vesting periods with a corresponding credit to share reserves. The fair value of options is calculated using the Black-Scholes option pricing model. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.
4. | Turnover
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Background Screening Revenue | 11,109,705 | 9,995,725
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| United Kingdom | 6,331,175 | 5,829,451
| Rest of Europe | 1,449,581 | 1,560,926
| Rest of the world | 3,328,949 | 2,605,348
|  | 11,109,705 | 9,995,725
Page 23
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
5. | Other operating income
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Support fees for group companies | 2,163,424 | 2,163,424
| Research and development expenditure credit | - | 82,688
| Sundry income | 11,588 | -
6. | Operating loss
| The operating loss is stated after charging:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Depreciation of tangible fixed assets | 158,138 | 139,317
| Depreciation of right-of-use assets | 130,554 | 130,553
| Exchange differences | 86,849 | 39,209
| Share-based payments | 250,092 | 397,356
| Defined contribution pension cost | 69,795 | 132,464
| Termination benefits | 492,451 | 217,996
7. | Auditor's remuneration
| During the year, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 28,500 | 75,634
Page 24
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
8. | Employees
| Staff costs, including Directors' remuneration, were as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Wages and salaries | 7,010,606 | 7,511,437
| Social security costs | 495,529 | 703,355
| Cost of defined contribution scheme | 69,795 | 132,464
|  | 7,575,930 | 8,347,256
| Included in wages and salaries costs are termination benefits of £492,451 (2023: £217,996).
| The average monthly number of employees, including the Directors, during the year was as follows:
|  |  | 2024 | 2023
|  |  | No. | No.
|  | Employees | 157 | 176
9. | Directors' remuneration
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Directors' emoluments | 35,047 | 297,608
| Company contributions to defined contribution pension schemes | - | 39,104
|  | 35,047 | 336,712
| During the year retirement benefits were accruing to no Directors (2023 - 1) in respect of defined contribution pension schemes.
| The highest paid Director received remuneration of £35,047 (2023 - £297,608).
| The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £NIL (2023 - £39,104).
10. | Interest payable and similar expenses
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Other loan interest payable | 10,875 | -
| Interest on lease liabilities | 58,942 | 65,139
|  | 69,817 | 65,139
Page 25
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
11. | Taxation
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Corporation tax |  |
| Research and development tax credit | - | (208,326)
| Tax on loss | - | (208,326)
| 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 - 25%). The differences are explained below:
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Loss on ordinary activities before tax | (2,107,490) | (2,820,018)
| Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 25%) | (526,873) | (705,005)
| Effects of: |  |
| Expenses not deductible for tax purposes | 81,154 | -
| Capital allowances for year in excess of depreciation | - | 65,768
| Income not taxable for tax purposes | (11,813) | -
| Additional deduction for R&D expenditure | - | (263,287)
| Surrender of tax losses for R&D tax credit refund | - | 341,661
| R&D expenditure credits | - | 19,449
| Movement in deferred tax not recognised | 304,584 | 333,088
| Other differences leading to an increase (decrease) in the tax charge | 152,948 | -
| Total tax credit for the year | - | (208,326)
| The Company has not recognised a deferred tax asset in respect of taxable losses of £2,656,095 (2023: £1,870,457) as the Directors do not consider it probable that these will be utilised in future periods.
12. | Exceptional items
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Impairment of goodwill | - | 251,110
Page 26
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
13. | Tangible fixed assets
|  | Leasehold Improvements | Plant and machinery | Right of use of assets | Total
|  | £ | £ | £ | £
| Cost or valuation |  |  |  |
| At 1 January 2024 (as previously stated) | 219,238 | 428,458 | - | 647,696
| Impact of transition to FRS 101 | - | - | 1,338,171 | 1,338,171
| At 1 January 2024 (as restated) | 219,238 | 428,458 | 1,338,171 | 1,985,867
| Additions | - | 41,512 | - | 41,512
| Disposals | - | (45,600) | - | (45,600)
| At 31 December 2024 | 219,238 | 424,370 | 1,338,171 | 1,981,779
| Depreciation |  |  |  |
| At 1 January 2024 (as previously stated) | 166,539 | 224,395 | - | 390,934
| Impact of transition to FRS 101 | - | - | 261,106 | 261,106
| At 1 January 2024 (as restated) | 166,539 | 224,395 | 261,106 | 652,040
| Charge for the year on owned assets | 44,185 | 113,953 | - | 158,138
| Charge for the year on right-of-use assets | - | - | 130,554 | 130,554
| Disposals | - | (44,160) | - | (44,160)
| At 31 December 2024 | 210,724 | 294,188 | 391,660 | 896,572
| Net book value |  |  |  |
| At 31 December 2024 | 8,514 | 130,182 | 946,511 | 1,085,207
| At 31 December 2023 (as restated) | 52,699 | 204,063 | 1,077,065 | 1,333,827
| The net book value of owned and leased assets included as "Tangible fixed assets" in the Balance sheet is as follows:
|  | 2024 | 2023
|  | £ | £
| Tangible fixed assets owned | 138,696 | 256,762
| Right-of-use tangible fixed assets | 946,511 | 1,077,065
|  | 1,085,207 | 1,333,827
Page 27
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 13.Tangible fixed assets (continued)
| Information about right-of-use assets is summarised below:
| Net book value
|  |  |  | 2024 | 2023
|  |  |  | £ | £
| Property | 946,511 | 1,077,065
| Depreciation charge for the year ended
|  |  |  | 2024 | 2023
|  |  |  | £ | £
| Property | 130,554 | 130,553
14. | Debtors
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Trade debtors | 3,131,444 | 2,520,439
| Amounts owed by group undertakings | 694,722 | 379,816
| Other debtors | 5,367 | 185,015
| Prepayments and accrued income | 226,243 | 451,166
| Tax recoverable | 291,014 | 568,292
|  | 4,348,790 | 4,104,728
| Amounts owed by group undertakings are unsecured, non-interest bearing and repayable on demand.
15. | Cash and cash equivalents
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Cash at bank and in hand | 617,351 | 142,628
Page 28
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
16. | Creditors: Amounts falling due within one year
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Trade creditors | 339,804 | 332,783
| Amounts owed to group undertakings | 5,327,623 | 3,461,770
| Other taxation and social security | 515,325 | 291,432
| Lease liabilities | 122,605 | 116,058
| Other creditors | 34,535 | 170,844
| Accruals and deferred income | 230,922 | 176,926
|  | 6,570,814 | 4,549,813
| Amounts owed to group undertakings are unsecured, non-interest bearing and repayable on demand.
17. | Creditors: Amounts falling due after more than one year
|  |  |  |  |  | As restated
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Lease liabilities | 885,652 | 1,008,257
Page 29
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
18. | Leases
| Company as a lessee
| The Company leases office space under a 10-year agreement commencing January 19, 2022. The lease is recognised as a right-of-use asset and a corresponding lease liability, measured using an incremental borrowing rate of 5.5%. Total undiscounted lease payments are £1,740,385, paid quarterly in GBP. There are no purchase options, guarantees, or significant restrictions under the lease. No options to extend or terminate early are included.
| Lease liabilities are due as follows:
|  |  |  |  | As restated
|  |  |  | 2024 | 2023
|  |  |  | £ | £
| Not later than one year | 122,605 | 116,058
| Between one year and five years | 595,644 | 563,590
| Later than five years | 290,008 | 444,667
|  | 1,008,257 | 1,124,315
| The following amounts in respect of leases, where the Company is a lessee, have been recognised in profit or loss:
|  |  |  |  | As restated
|  |  |  | 2024 | 2023
|  |  |  | £ | £
| Interest expense on lease liabilities | 58,942 | 65,139
| Total cash outflows on leases for the year ended 31 December 2024 are £175,000 (2023: £175,000).
19. | Provisions
|  | Termination benefit provision
|  | £
| Charged to profit or loss | 429,167
| At 31 December 2024 | 429,167
| This provision represents the Company's estimate of redundancy benefits due to certain employees as at 31 December 2024. The provision is to be utilised in the year ended 31 December 2025.
Page 30
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
20. | Share capital
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 58,392 (2023 - 58,392) Ordinary shares shares of £1.00 each | 58,392 | 58,392
|  | 842 (2023 - 842) Ordinary B shares of £1.00 each | 842 | 842
|  | 52 (2023 - 52) Ordinary C shares of £1.00 each | 52 | 52
|  | 140,000 (2023 - 140,000) Ordinary E shares of £1.00 each | 140,000 | 140,000
|  |  | 199,286 | 199,286
| The Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption. The Ordinary B shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption. The Ordinary C shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption. The Ordinary E shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption.
21. | Reserves
Share based payment reseve The share based payment reserve is the Company's accumulated share based payment charges at the year end. Profit and loss account The profit and loss account is the Company's accumulated retained profits or losses at the year end. Page 31
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
22. | Share-based payments
| Certain employees of the Company have been granted options in the share option scheme of the parent company, Certn Holdings Inc. for the primary purpose of providing incentives to selected employees. Under the scheme, the board of directors of the parent company may grant options to eligible employees of the Company to subscribe for shares in the parent company. With the exception of one granted set of options to an employee in a prior period, all options granted vest and become exercisable at the rate of 25% on the first anniversary of the vesting commencement date, and 1/48 per month thereafter to the fourth anniversary of the vesting commencement date. The other set of options granted were modified such that 47,000 out of 107,000 options vested immediately and the remaining 60,000 options vested thereafter to the fourth anniversary of the modified vesting commencement date. The exercise price is not less than the fair market value of the parent company's common share on the date of grant. The right to exercise the option expires on the tenth anniversary of the vesting commencement date. The Black-Scholes option pricing model has been used to calculate the value of the options granted. THe Directors have estimated the number of options that will not be exercised due to employees forfeiting their options is 31.23% (2023: 26.00%). Details of the number of options granted, exercised and cancelled or forfeited during the year are as follows:
|  | Weighted average exercise price (pence) 2024 | Number 2024 | Weighted average exercise price (pence) 2023 | Number 2023
| Outstanding at the beginning of the year | 166 | 940,294 |  | -
| Granted during the year | 224 | 242,750 | 174 | 1,132,050
| Forfeited during the year | 122 | (149,000) | 164 | (172,960)
| Exercised during the year | 66 | (54,744) | 164 | (18,796)
| Outstanding at the end of the year | 179 | 979,300 | 166 | 940,294
| The number of options exercisable at the end of the year is 566,842 (2023: 356,985).
|  |  |  |  | 2024 | 2023
| Option pricing model used | Black-Scholes | Black-Scholes
| Weighted average share price (pence) | 492 to 624 | 460 to 492
| Weighted average exercise price (pence) | 560 to 624 | 149 to 280
| Weighted average contractual life (years) | 7 | 4
| Expected volatility (%) | 36.90 | 37.70 - 39.06
| Expected dividend growth rate (%) | 0 | 0
| Risk-free interest rate (%) | 3.25 | 3.17 to 3.5
Page 32
CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 22.Share-based payments (continued)
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Equity-settled schemes | 250,092 | 397,356
23. | Prior year adjustment
During the preparation of the financial statements, the Directors identified that research and development tax credits and research and development expenditure credits had not been recognised in the period they related to. To correct for this, a prior year adjustment has been recognised. The impact of this adjustment is to increase retained earnings as at 1 January 2023 by £277,278, an increase to tax receivable as at 31 December 2023 of £568,294 and an increase to loss for the year ended 31 December 2023 of £291,014.
24. | Pension commitments
The Company operates a defined contribution pension scheme. The pension charge for the period represents contributions payable by the Company to the fund and amounted to £69,795 (2023: £132,464). Contributions amounting to £29,008 (2023: £29,311) were payable to the fund at the period end and are included within creditors.
25. | Related party transactions
| The Company is exempt under paragraph 17 and 18A of IAS 24 Related Party Disclosures of FRS 101 from disclosing related party transactions with wholly owned entities that are part of the group headed by Certn Holdings Inc.
26. | Post balance sheet events
On March 12, 2025, the Company signed an agreement with the landlord to terminate the lease of its UK office effective June 23, 2025. The early termination resulted in the derecognition of the right-of-use asset (£955,025) and lease liability (£1,008,257). The Company received an incentive payment of £190,177, resulting in a gain of £345,175 being recognised in profit and loss. There were no penalties for the early lease termination.
27. | Controlling party
The Company is a wholly owned subsidiary of Certn Holdings Inc. which is established and registered in Canada. The results of the group are included in the consolidated financial statements of Certn Holdings Inc. Copies of the financial statements for Certn Holdings Inc. are available on request from the parent company's office at Suite 300, 1006 Fort Street, Victoria, BC V8V 3K4, Canada. Page 33

|  | CERTN (UK) LTD. |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
28. | First time adoption of FRS 101
| The Company transitioned to FRS 101 from previously extant UK GAAP as at 1 January 2023. The impact of the transition to FRS 101 is as follows:
|  | As previously stated 31 December 2023 (after prior year adjustment -see note 20) | Effect of transition 31 December 2023 | FRS 101 (as restated) 31 December 2023
|  | £ | £ | £
|  | Fixed assets |  | 256,762 | 1,077,065 | 1,333,827
|  | Current assets |  | 4,247,356 | - | 4,247,356
|  | Creditors: amounts falling due within one year |  | (4,433,755) | (116,058) | (4,549,813)
|  | Net current assets/(liabilities) |  | (186,399) | (116,058) | (302,457)
|  | Total assets less current liabilities |  | 70,363 | 961,007 | 1,031,370
|  | Creditors: amounts falling due after more than one year |  | - | (1,008,257) | (1,008,257)
|  | Net assets |  | 70,363 | (47,250) | 23,113
|  | Capital and reserves |  | 70,363 | (47,250) | 23,113
Page 34

|  | CERTN (UK) LTD. |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
28.First time adoption of FRS 101 (continued)
|  |  | As previously stated 31 December 2023 | Effect of transition 31 December 2023 | FRS 101 (as restated) 31 December 2023
|  |  | £ | £ | £
|  | Turnover |  | 9,995,725 | - | 9,995,725
|  | Cost of sales |  | (6,120,930) | - | (6,120,930)
|  |  |  | 3,874,795 | - | 3,874,795
|  | Distribution expenses |  | (106,371) | - | (106,371)
|  | Administrative expenses |  | (8,562,752) | 44,447 | (8,518,305)
|  | Other operating income, net of exceptional expenditure |  | 1,995,002 | - | 1,995,002
|  | Operating profit |  | (2,799,326) | 44,447 | (2,754,879)
|  | Interest payable and similar charges |  | - | (65,139) | (65,139)
|  | Taxation |  | 208,326 | - | 208,326
|  | Loss on ordinary activities after taxation and for the financial year |  | (2,591,000) | (20,692) | (2,611,692)
Page 35

CERTN (UK) LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 28.First time adoption of FRS 101 (continued) Explanation of changes to previously reported profit and equity:
| 1 | The only material impact to the Company on transition to FRS 101 is the adoption of IFRS 16 Leases which require the Company to capitalise any assets previously held under operating leases in accordance with IFRS 16. There has been no impact to the Company's cash flow from this transition.
Page 36