Company registration number 07020016 (England and Wales)
LILY COMMUNICATIONS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
LILY COMMUNICATIONS LTD
COMPANY INFORMATION
Directors
C J Morrisey
C D Goodman
R Gilbert
Company number
07020016
Registered office
Connect House
Unit A
Millshaw Business Park
Global Avenue
Leeds
LS11 8PR
Auditor
Sumer Auditco Limited
Fourth Floor
Unit 5B, The Parklands
Bolton
BL6 4SD
LILY COMMUNICATIONS LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9 - 10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Company statement of cash flows
14
Notes to the financial statements
15 - 36
LILY COMMUNICATIONS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 1 -

The directors present the strategic report for the year ended 30 September 2025.

Fair Review of the Business

Lily Communications Limited (“Lily”) offers market-leading products and services to support modern SMEs in overcoming their Digital Transformation challenges.

With the support of strategic partnerships with suppliers, we provide leading edge products across Unified Communications and Contact Centres (UCaaS & CCaaS), Data Access, Cyber Security and IT Services, on a B2B basis, to SMEs located throughout the UK.

Our key strategic aim is to be the Managed Service Provider of choice for UK SMEs and to achieve this through a combination of organic growth and acquisitions. This remained the case during FY25.

In FY25 we achieved revenues of £12.1m (FY24 £12.3m); Operating Profit of £0.7 m (FY24 £0.4m) and Profit Before Tax of £688 k (FY24 £127 k) and these items represent our most important KPIs at group level. The improved performance of Operating Profit during the year versus FY24 was largely a function of implementing cost efficiencies in overheads, whilst the operating activities of all three of our wholly owned subsidiaries have now been fully and successfully integrated into Lily Communications Limited.

The UK economic environment remained challenging during the reporting period and the sectors in which we operate continued to be highly competitive, despite which we grew our customer base; our range of product offerings and our Lily brand recognition scores, by successfully executing our corporate strategy and values, as embodied in our publicly stated “Strategy for Success (S4S)”.

Principal Risks and Uncertainties

The most significant risks and uncertainties facing our business include the general economic climate in the UK; our reliance on third party suppliers for our product range; ongoing changes in communications and IT technologies and the manner in which we and our customers adjust to these and certain regulatory risks and uncertainties, in so far as the actions of Ofcom and other UK statutory bodies may affect our operational and/or corporate activities.

Future Developments

We continue to expect that actioning our corporate strategy will result in further profitable growth over the long-term, notwithstanding the challenges referred to above.

Section 172 Statement

Lily Communications Limited’s declared Strategy for Success clearly illustrates the importance to its decision making processes of employee interests (to which regular employee feedback surveys, performance reviews and monthly presentations contribute); critical supplier relationships; our due consideration of the company’s environmental impact; our high regard for professional and ethical conduct and our clear strategic aim: to be the Managed Service Provider of choice for UK SMEs.

On behalf of the board

C J Morrisey
Director
29 June 2026
LILY COMMUNICATIONS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 2 -

The directors present their annual report and financial statements for the year ended 30 September 2025.

Principal activities

The principal activity of the company and group continued to be that of provision of bespoke telecommunications and IT products and services to business throughout the United Kingdom.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £15,000. The directors do not recommend payment of a further dividend.

Directors

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

C J Morrisey
C D Goodman
R Gilbert
Post reporting date events

On 12 December 2025, the company completed a sale and leaseback transaction in respect of its Leeds headquarters property. Following completion of the sale, the company continues to occupy and operate from the premises under a lease agreement entered into with the purchaser.

Future developments

In accordance with s414(c)(11) of the Companies Act, included in the strategic report is information relating to the future developments of the business which would otherwise be required by schedule 7 of the "Large and Medium Sized Company's (Accounts and Reports) Regulations 2008" to be contained in the directors report.

Auditor

The auditor, Sumer Auditco Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

LILY COMMUNICATIONS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 3 -
Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, 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 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 and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Medium-sized companies exemption

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

On behalf of the board
C J Morrisey
Director
29 June 2026
LILY COMMUNICATIONS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LILY COMMUNICATIONS LTD
- 4 -
Opinion

We have audited the financial statements of Lily Communications Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

- give a true and fair view of the state of the group's and the parent company's affairs as at 30 September 202 5 and of the group's loss for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

- T he information given in the strategic report and the directors' r eport 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.

LILY COMMUNICATIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LILY COMMUNICATIONS LTD
- 5 -
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 their environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport.

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' r esponsibilities s tatement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.

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.

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.

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

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

LILY COMMUNICATIONS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LILY COMMUNICATIONS LTD
- 6 -

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:

- Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud

- Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud

- Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud. entity.

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

Use of our report

This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Alex Hesketh (Senior Statutory Auditor)
For and on behalf of Sumer Auditco Limited, Statutory Auditor
Fourth Floor
Unit 5B, The Parklands
Bolton
BL6 4SD
29 June 2026
LILY COMMUNICATIONS LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 7 -
2025
2024
as restated
Notes
£
£
Turnover
4
12,133,693
12,261,150
Cost of sales
(6,886,867)
(6,760,416)
Gross profit
5,246,826
5,500,734
Administrative expenses
(4,532,447)
(5,163,434)
Other operating income
-
0
35,072
Operating profit
5
714,379
372,372
Interest receivable and similar income
8
-
0
3
Interest payable and similar expenses
9
(189,175)
(260,913)
Amounts written off investments
10
162,325
15,421
Profit before taxation
687,529
126,883
Tax on profit
11
(282,793)
(118,528)
Profit for the financial year
404,736
8,355
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
LILY COMMUNICATIONS LTD
GROUP BALANCE SHEET
AS AT
30 SEPTEMBER 2025
30 September 2025
- 8 -
2025
2024
Notes
£
£
£
£
Fixed assets
Goodwill
14
967,347
1,267,910
Other intangible assets
14
87,474
178,200
Total intangible assets
1,054,821
1,446,110
Tangible assets
15
738,463
760,934
Investments
16
1
1
1,793,285
2,207,045
Current assets
Stocks
18
64,480
83,241
Debtors
19
3,901,640
3,285,138
Cash at bank and in hand
449,615
484,846
4,415,735
3,853,225
Creditors: amounts falling due within one year
20
(4,365,744)
(4,890,595)
Net current assets/(liabilities)
49,991
(1,037,370)
Total assets less current liabilities
1,843,276
1,169,675
Creditors: amounts falling due after more than one year
21
(1,595,399)
(1,305,244)
Provisions for liabilities
Deferred tax liability
23
9,392
15,682
(9,392)
(15,682)
Net assets/(liabilities)
238,485
(151,251)
Capital and reserves
Called up share capital
25
134
134
Share premium account
249,968
249,968
Profit and loss reserves
(11,617)
(401,353)
Total equity
238,485
(151,251)

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

The financial statements were approved by the board of directors and authorised for issue on 29 June 2026 and are signed on its behalf by:
29 June 2026
C J Morrisey
Director
Company registration number 07020016 (England and Wales)
LILY COMMUNICATIONS LTD
COMPANY BALANCE SHEET
AS AT 30 SEPTEMBER 2025
30 September 2025
- 9 -
2025
2024
Notes
£
£
£
£
Fixed assets
Goodwill
14
1,125,323
1,267,911
Other intangible assets
14
87,474
178,200
Total intangible assets
1,212,797
1,446,111
Tangible assets
15
738,463
760,934
Investments
16
1
1
1,951,261
2,207,046
Current assets
Stocks
18
64,480
83,241
Debtors
19
3,901,640
3,302,465
Cash at bank and in hand
447,687
472,257
4,413,807
3,857,963
Creditors: amounts falling due within one year
20
(4,364,818)
(4,851,475)
Net current assets/(liabilities)
48,989
(993,512)
Total assets less current liabilities
2,000,250
1,213,534
Creditors: amounts falling due after more than one year
21
(1,595,399)
(1,305,244)
Provisions for liabilities
Deferred tax liability
23
9,392
15,682
(9,392)
(15,682)
Net assets/(liabilities)
395,459
(107,392)
Capital and reserves
Called up share capital
25
134
134
Share premium account
249,968
249,968
Profit and loss reserves
145,357
(357,494)
Total equity
395,459
(107,392)
LILY COMMUNICATIONS LTD
COMPANY BALANCE SHEET (CONTINUED)
AS AT 30 SEPTEMBER 2025
30 September 2025
- 10 -

As permitted by section 408 of the Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £517,851 (2024 - £32,944 loss).

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

The financial statements were approved by the board of directors and authorised for issue on 29 June 2026 and are signed on its behalf by:
29 June 2026
C J Morrisey
Director
Company registration number 07020016 (England and Wales)
LILY COMMUNICATIONS LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 October 2023
134
249,968
(409,708)
(159,606)
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
8,355
8,355
Balance at 30 September 2024
134
249,968
(401,353)
(151,251)
Year ended 30 September 2025:
Profit and total comprehensive income
-
-
404,736
404,736
Dividends
12
-
-
(15,000)
(15,000)
Balance at 30 September 2025
134
249,968
(11,617)
238,485
LILY COMMUNICATIONS LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 October 2023
134
249,968
(324,550)
(74,448)
Year ended 30 September 2024:
Loss and total comprehensive income for the year
-
-
(32,944)
(32,944)
Balance at 30 September 2024
134
249,968
(357,494)
(107,392)
Year ended 30 September 2025:
Profit and total comprehensive income
-
-
517,851
517,851
Dividends
12
-
-
(15,000)
(15,000)
Balance at 30 September 2025
134
249,968
145,357
395,459
LILY COMMUNICATIONS LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 13 -
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
666,678
1,071,480
Interest paid
(189,175)
(260,913)
Income taxes paid
(733,608)
(67,376)
Net cash (outflow)/inflow from operating activities
(256,105)
743,191
Investing activities
Purchase of tangible fixed assets
(13,842)
(24,727)
Proceeds from disposal of tangible fixed assets
-
25,001
Repayment of loans
(283,976)
(529,483)
Interest received
-
0
3
Net cash used in investing activities
(297,818)
(529,206)
Financing activities
Proceeds from borrowings
811,123
-
Repayment of borrowings
-
(114,132)
Repayment of bank loans
(277,431)
(290,394)
Payment of finance leases obligations
-
(28,745)
Dividends paid to equity shareholders
(15,000)
-
0
Net cash generated from/(used in) financing activities
518,692
(433,271)
Net decrease in cash and cash equivalents
(35,231)
(219,286)
Cash and cash equivalents at beginning of year
484,846
704,132
Cash and cash equivalents at end of year
449,615
484,846
LILY COMMUNICATIONS LTD
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 14 -
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
32
635,663
233,783
Interest paid
(189,175)
(259,080)
Income taxes paid
(647,072)
(69,209)
Net cash outflow from operating activities
(200,584)
(94,506)
Investing activities
Purchase of tangible fixed assets
(13,842)
(48,550)
Proceeds from disposal of tangible fixed assets
-
0
25,001
Repayment of loans
(328,836)
(529,483)
Interest received
-
0
3
Dividends received
-
0
889,385
Net cash (used in)/generated from investing activities
(342,678)
336,356
Financing activities
Proceeds from borrowings
811,123
-
0
Repayment of borrowings
-
(116,132)
Repayment of bank loans
(277,431)
(290,394)
Dividends paid to equity shareholders
(15,000)
-
Net cash generated from/(used in) financing activities
518,692
(406,526)
Net decrease in cash and cash equivalents
(24,570)
(164,676)
Cash and cash equivalents at beginning of year
472,257
636,933
Cash and cash equivalents at end of year
447,687
472,257
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 15 -
1
Accounting policies
Company information

Lily Communications Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Connect House, Unit A, Millshaw Business Park, Global Avenue, Leeds, LS11 8PR.

The group consists of Lily Communications Ltd and all of its subsidiaries.

1.1
Basis of preparation

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties at fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, t he cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. I nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Lily Communications Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 30 September 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
1
Accounting policies
(Continued)
- 16 -
1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

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

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

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Intangible fixed assets other than goodwill

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

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

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

Patents & licences
Over estimated useful life of 5 years
1.8
Tangible fixed assets

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

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
1
Accounting policies
(Continued)
- 17 -

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

Freehold land and buildings
Not provided
Plant and equipment
20% straight line
Fixtures and fittings
20% reducing balance
Computers
33% reducing balance
Motor vehicles
20% reducing balance

Freehold land and buildings are held under the revaluation model. As the freehold property was recently revalued, management have not considered it necessary to depreciate the buildings element of the freehold property this year.

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

1.9
Fixed asset investments

Equity in vest ments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

I n the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

1.10
Impairment of fixed assets

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

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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

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

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
1
Accounting policies
(Continued)
- 18 -

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

1.11
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.12
Cash and cash equivalents

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

1.13
Financial instruments

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

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

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

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
1
Accounting policies
(Continued)
- 19 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of 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 deducting all of its liabilities.

Basic financial liabilities

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

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

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

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value th r ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
1
Accounting policies
(Continued)
- 20 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.14
Equity instruments

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

1.15
Taxation

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

Current tax

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

Deferred tax

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

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

1.16
Employee benefits

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

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

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

1.17
Retirement benefits

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

1.18
Leases

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

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 21 -
2
Judgements and key sources of estimation uncertainty

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

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

Key sources of estimation uncertainty

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

Valuation of freehold property

Properties are valued. There is an inevitable degree of judgement involved in that each property is unique and value can ultimately only be reliably tested in the market itself. The directors use professional valuations to assist in their assessment which are undertaken on an existing use basis.

At the balance sheet date, the net book value of freehold property was £675,000 (2024: £691,380).

Refer to note 15 to show the carrying value of freehold land and buildings impacted by this accounting estimate.

Prepayments

Prepayments are recognised where costs relate to future accounting periods. Estimation uncertainty arises in determining the appropriate period over which such costs should be recognised. The carrying amount is sensitive to assumptions regarding the timing of the related economic benefit. No significant changes have been made to assumptions used in prior periods.

At the balance sheet date, prepayments totalled £319,890 (2024: £253,210), see note 19.

Deferred income

Deferred income represents amounts received in advance of the related goods or services being provided. Estimation uncertainty arises in determining the appropriate period over which income should be recognised. The carrying amount is sensitive to assumptions regarding the timing of performance obligations, although management does not consider there to be a material risk of significant adjustment within the next financial year. Estimates are reviewed regularly and updated where necessary.

At the balance sheet date, deferred income totalled £657,355 (2024: £554,047), see note 20.

Bill and collect creditor

The bill and collect creditor represents amounts due to a supplier under a bill and collect arrangement, where the company invoices customers on behalf of the supplier and settlement is made following collection by the supplier. Estimation uncertainty arises in determining the timing and completeness of amounts outstanding at the reporting date due to the timing lag between invoicing and collection. The carrying amount is sensitive to assumptions regarding customer billing and subsequent settlement, although management does not consider there to be a material risk of significant adjustment within the next financial year. Estimates are reviewed regularly and updated where necessary.

At the balance sheet date, the bill and collect creditor totalled £601,860 (2024: £573,937), see note 20.

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 22 -
3
Prior period adjustment
Reconciliation of changes in equity - group
The prior period adjustments do not give rise to any effect upon equity.
Reconciliation of changes in profit for the previous financial period
2024
£
Adjustments to prior year
Total adjustments
-
Profit as previously reported
8,355
Profit as adjusted
8,355
Reconciliation of changes in equity - company
The prior period adjustments do not give rise to any effect upon equity.
Telecommunications
1
-
-
Reconciliation of changes in loss for the previous financial period
2024
£
Adjustments to prior year
Telecommunications
1
-
Loss as previously reported
(32,944)
Loss as adjusted
(32,944)
Notes to reconciliation
1. Telecommunications

A prior year adjustment has been made to reclassify telecommunications costs totalling £201,367, previously included within administrative expenses, to cost of sales. The impact of the adjustment on the profit and loss for the year, and equity, is £nil.

4
Turnover and other revenue
2025
2024
£
£
Other revenue
Interest income
-
3
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 23 -
5
Operating profit
2025
2024
£
£
Operating profit for the year is stated after charging/(crediting):
Fees payable to the group's auditor for the audit of the group's financial statements
51,150
27,250
Depreciation of owned tangible fixed assets
18,609
21,164
Impairment of owned tangible fixed assets
16,380
-
Loss/(profit) on disposal of tangible fixed assets
1,324
(3,181)
Amortisation of intangible assets
391,289
276,374
Operating lease charges
97,877
111,167
6
Employees

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

Group
Company
2025
2024
2025
2024
Number
Number
Number
Number
81
89
81
89

Their aggregate remuneration comprised:

Group
Company
2025
2024
2025
2024
£
£
£
£
Wages and salaries
3,471,826
3,773,249
3,471,826
3,773,249
Social security costs
425,333
486,002
425,333
486,002
Pension costs
83,107
110,170
83,107
110,170
3,980,266
4,369,421
3,980,266
4,369,421
7
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
217,780
225,583
Company pension contributions to defined contribution schemes
5,264
13,094
223,044
238,677

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024 - 1).

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
7
Directors' remuneration
(Continued)
- 24 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2025
2024
£
£
Remuneration for qualifying services
217,780
148,517
Company pension contributions to defined contribution schemes
5,264
13,094
8
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
-
0
3
2025
2024
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
-
3
9
Interest payable and similar expenses
2025
2024
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
148,542
167,854
Other finance costs:
Interest on finance leases and hire purchase contracts
-
3
Other interest
40,633
93,056
Total finance costs
189,175
260,913
10
Amounts written off investments
2025
2024
£
£
Impairment of deferred consideration
162,325
17,421
Other gains and losses
-
(2,000)
162,325
15,421

The deferred consideration payable relating to a historical acquisition was renegotiated during the year. As a result, the liability was reduced to the renegotiated settlement amount.

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 25 -
11
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
289,083
125,454
Adjustments in respect of prior periods
-
0
1,880
Total current tax
289,083
127,334
Deferred tax
Origination and reversal of timing differences
(6,290)
(8,806)
Total tax charge
282,793
118,528

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

2025
2024
£
£
Profit before taxation
687,529
126,883
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
171,882
31,721
Tax effect of expenses that are not deductible in determining taxable profit
110,636
318,364
Tax effect of income not taxable in determining taxable profit
-
0
(226,970)
Adjustments in respect of prior years
-
0
1,880
Permanent capital allowances in excess of depreciation
-
(6,467)
Depreciation on assets not qualifying for tax allowances
275
-
0
Taxation charge
282,793
118,528
12
Dividends
2025
2024
Recognised as distributions to equity holders:
£
£
Interim paid
15,000
-
Dividends paid during the year were declared by the Parent Company from its distributable reserves as determined by reference to its individual financial statements. Although the Group's consolidated retained earnings were in deficit at the reporting date, this does not affect the legality of dividends declared by the Parent Company under the Companies Act 2006.
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 26 -
13
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2025
2024
Notes
£
£
In respect of:
Property, plant and equipment
15
16,380
-
Fixed asset investments
16
-
2,000
Recognised in:
Administrative expenses
16,380
-
Amounts written off investments
-
2,000

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

14
Intangible fixed assets
Group
Goodwill
Patents & licences
Total
£
£
£
Cost
At 1 October 2024
1,586,532
708,830
2,295,362
Disposals
(147,000)
-
0
(147,000)
At 30 September 2025
1,439,532
708,830
2,148,362
Amortisation and impairment
At 1 October 2024
318,622
530,630
849,252
Amortisation charged for the year
300,563
90,726
391,289
Disposals
(147,000)
-
0
(147,000)
At 30 September 2025
472,185
621,356
1,093,541
Carrying amount
At 30 September 2025
967,347
87,474
1,054,821
At 30 September 2024
1,267,910
178,200
1,446,110
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
14
Intangible fixed assets
(Continued)
- 27 -
Company
Goodwill
Patents & licences
Total
£
£
£
Cost
At 1 October 2024 and 30 September 2025
1,425,885
708,830
2,134,715
Amortisation and impairment
At 1 October 2024
157,974
530,630
688,604
Amortisation charged for the year
142,588
90,726
233,314
At 30 September 2025
300,562
621,356
921,918
Carrying amount
At 30 September 2025
1,125,323
87,474
1,212,797
At 30 September 2024
1,267,911
178,200
1,446,111
15
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 October 2024
691,380
11,321
207,133
129,156
4,680
1,043,670
Additions
-
0
-
0
-
0
13,842
-
0
13,842
Disposals
-
0
(2,001)
(5,860)
-
0
-
0
(7,861)
At 30 September 2025
691,380
9,320
201,273
142,998
4,680
1,049,651
Depreciation and impairment
At 1 October 2024
-
0
9,997
170,845
101,036
858
282,736
Depreciation charged in the year
-
0
-
0
7,259
10,586
764
18,609
Impairment losses
16,380
-
0
-
0
-
0
-
0
16,380
Eliminated in respect of disposals
-
0
(677)
(5,860)
-
0
-
0
(6,537)
At 30 September 2025
16,380
9,320
172,244
111,622
1,622
311,188
Carrying amount
At 30 September 2025
675,000
-
0
29,029
31,376
3,058
738,463
At 30 September 2024
691,380
1,324
36,288
28,120
3,822
760,934
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
15
Tangible fixed assets
(Continued)
- 28 -
Company
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 October 2024
691,380
2,003
206,849
129,156
4,680
1,034,068
Additions
-
0
-
0
-
0
13,842
-
0
13,842
Disposals
-
0
(2,001)
-
0
-
0
-
0
(2,001)
At 30 September 2025
691,380
2
206,849
142,998
4,680
1,045,909
Depreciation and impairment
At 1 October 2024
-
0
679
170,561
101,036
858
273,134
Depreciation charged in the year
-
0
-
0
7,259
10,586
764
18,609
Impairment losses
16,380
-
0
-
0
-
0
-
0
16,380
Eliminated in respect of disposals
-
0
(677)
-
0
-
0
-
0
(677)
At 30 September 2025
16,380
2
177,820
111,622
1,622
307,446
Carrying amount
At 30 September 2025
675,000
-
0
29,029
31,376
3,058
738,463
At 30 September 2024
691,380
1,324
36,288
28,120
3,822
760,934

More information on impairment movements in the year is given in note 13.

Land and buildings with a brought forward carrying amount of £691,380 were revalued at 4 October 2024 to £675,000 by Tapp Chartered Surveyors, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

The following asse t s are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
15
Tangible fixed assets
(Continued)
- 29 -
Freehold land and buildings
2025
2024
£
£
Group
Cost
691,360
691,360
Accumulated depreciation
(72,593)
(62,222)
Carrying value
618,767
629,138
Company
Cost
691,360
691,360
Accumulated depreciation
(72,593)
(62,222)
Carrying value
618,767
629,138
16
Fixed asset investments
Group
Company
2025
2024
2025
2024
£
£
£
£
Other investments
1
1
1
1
Movements in fixed asset investments
Group
Other
£
Cost or valuation
At 1 October 2024 and 30 September 2025
1
Carrying amount
At 30 September 2025
1
At 30 September 2024
1
Movements in fixed asset investments
Company
Other
£
Cost or valuation
At 1 October 2024 and 30 September 2025
1
Carrying amount
At 30 September 2025
1
At 30 September 2024
1
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 30 -
17
Subsidiaries

Details of the company's subsidiaries at 30 September 2025 are as follows:

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Digiquip Group Limited
1
IT & Telecommunications
Ordinary
100.00
Hicel Limited
1
IT & Telecommunications
Ordinary
100.00
Intellia Ltd
2
IT & Telecommunications
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

1
Connect House, Unit A, Millshaw Business Park, Global Avenue, Leeds, England, LS11 8PR
2
Connect House, Unit A, Millshaw Business Park, Global Avenue, Leeds, England, LS11 8PR
3
41 Charlotte Square, Edinburgh, Scotland, EH2 4 HQ

All of the subsidiaries are exempt from audit under the provisions of s479a of the Companies Act 2006. Lily Communications Ltd, the ultimate parent company, has provided a guarantee for the liabilities of all of the subsidiaries in connection with the financial period ended 30 September 2025.

18
Stocks
Group
Company
2025
2024
2025
2024
£
£
£
£
Finished goods and goods for resale
64,480
83,241
64,480
83,241
19
Debtors
Group
Company
2025
2024
2025
2024
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,465,422
1,315,649
1,465,422
1,315,649
Corporation tax recoverable
528,018
432,988
528,018
432,988
Amounts owed by group undertakings
-
0
-
0
-
0
18,374
Other debtors
1,588,310
1,283,291
1,588,310
1,282,244
Prepayments and accrued income
319,890
253,210
319,890
253,210
3,901,640
3,285,138
3,901,640
3,302,465
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 31 -
20
Creditors: amounts falling due within one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans
22
268,041
272,617
268,041
272,617
Other borrowings
22
126,881
113,558
126,881
113,558
Trade creditors
725,194
920,111
725,194
920,111
Amounts owed to group undertakings
-
0
-
0
58,352
112,580
Corporation tax payable
445,410
794,905
386,132
649,091
Other taxation and social security
1,323,561
1,086,218
1,323,561
1,080,666
Other creditors
652,066
958,640
652,066
958,306
Accruals and deferred income
824,591
744,546
824,591
744,546
4,365,744
4,890,595
4,364,818
4,851,475
21
Creditors: amounts falling due after more than one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans and overdrafts
22
632,367
905,222
632,367
905,222
Other borrowings
22
963,032
327,557
963,032
327,557
Other creditors
-
0
72,465
-
0
72,465
1,595,399
1,305,244
1,595,399
1,305,244
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
282,712
-
282,712
22
Loans and overdrafts
Group
Company
2025
2024
2025
2024
£
£
£
£
Bank loans
900,408
1,177,839
900,408
1,177,839
Loans from related parties
763,348
-
0
763,348
-
0
Other loans
326,565
441,115
326,565
441,115
1,990,321
1,618,954
1,990,321
1,618,954
Payable within one year
394,922
386,175
394,922
386,175
Payable after one year
1,595,399
1,232,779
1,595,399
1,232,779
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
22
Loans and overdrafts
(Continued)
- 32 -

The bank loans are secured by a legal mortgage over the freehold property, fixed and floating charge over all assets of the company and a personal guarantee from a director.

A loan from a supplier totaling £326,565 at the year end (2024: £441,141) was secured by way of a personal guarantee from a director.

23
Deferred taxation

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

Liabilities
Liabilities
2025
2024
Group
£
£
Accelerated capital allowances
10,671
15,682
Retirement benefit obligations
(1,279)
-
9,392
15,682
Liabilities
Liabilities
2025
2024
Company
£
£
Accelerated capital allowances
10,671
15,682
Retirement benefit obligations
(1,279)
-
9,392
15,682
Group
Company
2025
2025
Movements in the year:
£
£
Liability at 1 October 2024
15,682
15,682
Credit to profit or loss
(6,290)
(6,290)
Liability at 30 September 2025
9,392
9,392

T he deferred tax liability relates to accelerated capital allowances. It is uncertain when the entire balance is expected to reverse.

24
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
83,107
110,170
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
24
Retirement benefit schemes
(Continued)
- 33 -

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

25
Share capital
Group and company
2025
2024
2025
2024
Ordinary share capital
Number
Number
£
£
Issued and fully paid
13,400 Ordinary shares of £0.01 each
13,400
13,400
134
134
26
Operating lease commitments
Lessee

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

Group
Company
2025
2024
2025
2024
£
£
£
£
Within one year
62,730
60,827
62,730
60,827
Between two and five years
39,410
63,842
39,410
63,842
102,140
124,669
102,140
124,669
27
Events after the reporting date

In accordance with Section 32 of FRS 102, the following non-adjusting event occurred after the reporting date and prior to the approval of the financial statements.

On 12 December 2025, the company entered into a sale and leaseback arrangement in respect of its Leeds headquarters property. The property was sold for and simultaneously leased back to the company for continued operational use.

28
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2025
2024
£
£
Aggregate compensation
201,267
149,980
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
28
Related party transactions
(Continued)
- 34 -
Other information

During the year ended 30 September 2025, the company made purchases of £44,826 (2024: £41,715) from Focus 4 U Ltd, a company with common directorship. Sales to Focus 4 U Ltd during the year totalled £35,986 (2024: £37,574). At the year end, amounts owed by Focus 4 U Ltd totalled £4,175 (2024: £2,119 creditor).

Included within creditors is a loan due to Focus 4 U Ltd of £763,348 (2024: £nil). The loan is repayable on demand and interest is charged at a rate of 8% per annum.

During the year, the company made a charitable donation of £950 (2024: £1,000) to Focus Foundation, a charity in which a director of the company is a trustee. The amounts owed to Focus Foundation at the year end totalled £nil (2024: £1,000).

At the year end, a shareholder owed £719,516 (2024: £616,431) to the company. The loan provided to the shareholder is interest free and repayable on demand.

29
Directors' transactions

The loans provided to / (from) the directors are interest free and repayable on demand.

Advances or credits have been granted by the group to its directors as follows:

Advances
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
C J Morrisey -
-
558,047
222,567
(41,677)
738,937
C D Goodman -
-
53,898
-
-
53,898
R Gilbert -
-
53,869
-
-
53,869
665,814
222,567
(41,677)
846,704
30
Controlling party

The ultimate controlling party is Mr C Morrisey by virtue of his shareholding.

LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 35 -
31
Cash generated from group operations
2025
2024
£
£
Profit after taxation
404,736
8,355
Adjustments for:
Taxation charged
282,793
118,528
Finance costs
189,175
260,913
Investment income
-
0
(3)
Loss/(gain) on disposal of tangible fixed assets
1,324
(3,181)
Amortisation and impairment of intangible assets
391,289
276,374
Depreciation and impairment of tangible fixed assets
34,989
21,164
Other gains and losses
(162,325)
(15,421)
Movements in working capital:
Decrease in stocks
18,761
51,642
Increase in debtors
(237,496)
(43,613)
(Decrease)/increase in creditors
(256,568)
396,722
Cash generated from operations
666,678
1,071,480
32
Cash generated from operations - company
2025
2024
£
£
Profit/(loss) after taxation
517,851
(32,944)
Adjustments for:
Taxation charged
282,793
124,485
Finance costs
189,175
259,080
Investment income
-
0
(889,388)
Loss/(gain) on disposal of tangible fixed assets
1,324
(3,181)
Amortisation and impairment of intangible assets
233,314
276,373
Depreciation and impairment of tangible fixed assets
34,989
21,164
Other gains and losses
(117,465)
911,140
Movements in working capital:
Decrease in stocks
18,761
51,642
Increase in debtors
(220,169)
(202,249)
Decrease in creditors
(304,910)
(282,339)
Cash generated from operations
635,663
233,783
LILY COMMUNICATIONS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
- 36 -
33
Analysis of changes in net debt - group
1 October 2024
Cash flows
Other non-cash changes
30 September 2025
£
£
£
£
Cash at bank and in hand
484,846
(35,231)
-
449,615
Borrowings excluding overdrafts
(1,618,954)
(533,692)
162,325
(1,990,321)
(1,134,108)
(568,923)
162,325
(1,540,706)
34
Analysis of changes in net debt - company
1 October 2024
Cash flows
Other non-cash changes
30 September 2025
£
£
£
£
Cash at bank and in hand
472,257
(24,570)
-
447,687
Borrowings excluding overdrafts
(1,618,954)
(533,692)
162,325
(1,990,321)
(1,146,697)
(558,262)
162,325
(1,542,634)
2025-09-30 2024-10-01 false false CCH Software CCH Accounts Production 2026.100 C J Morrisey C D Goodman R Gilbert false 07020016 bus:Consolidated 2024-10-01 2025-09-30 07020016 2024-10-01 2025-09-30 07020016 bus:Director1 2024-10-01 2025-09-30 07020016 bus:Director2 2024-10-01 2025-09-30 07020016 bus:Director3 2024-10-01 2025-09-30 07020016 bus:RegisteredOffice 2024-10-01 2025-09-30 07020016 2025-09-30 07020016 bus:Consolidated 2025-09-30 07020016 bus:Consolidated 2023-10-01 2024-09-30 07020016 2023-10-01 2024-09-30 07020016 core:Goodwill bus:Consolidated 2025-09-30 07020016 core:Goodwill bus:Consolidated 2024-09-30 07020016 core:IntangibleAssetsOtherThanGoodwill bus:Consolidated 2025-09-30 07020016 core:IntangibleAssetsOtherThanGoodwill bus:Consolidated 2024-09-30 07020016 bus:Consolidated 2024-09-30 07020016 core:Goodwill 2025-09-30 07020016 core:Goodwill 2024-09-30 07020016 core:IntangibleAssetsOtherThanGoodwill 2025-09-30 07020016 core:IntangibleAssetsOtherThanGoodwill 2024-09-30 07020016 2024-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar bus:Consolidated 2025-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar bus:Consolidated 2024-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar 2025-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar 2024-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets bus:Consolidated 2025-09-30 07020016 core:PlantMachinery bus:Consolidated 2025-09-30 07020016 core:FurnitureFittings bus:Consolidated 2025-09-30 07020016 core:ComputerEquipment bus:Consolidated 2025-09-30 07020016 core:MotorVehicles bus:Consolidated 2025-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets bus:Consolidated 2024-09-30 07020016 core:PlantMachinery bus:Consolidated 2024-09-30 07020016 core:FurnitureFittings bus:Consolidated 2024-09-30 07020016 core:ComputerEquipment bus:Consolidated 2024-09-30 07020016 core:MotorVehicles bus:Consolidated 2024-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets 2025-09-30 07020016 core:PlantMachinery 2025-09-30 07020016 core:FurnitureFittings 2025-09-30 07020016 core:ComputerEquipment 2025-09-30 07020016 core:MotorVehicles 2025-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets 2024-09-30 07020016 core:PlantMachinery 2024-09-30 07020016 core:FurnitureFittings 2024-09-30 07020016 core:ComputerEquipment 2024-09-30 07020016 core:MotorVehicles 2024-09-30 07020016 core:CurrentFinancialInstruments core:WithinOneYear bus:Consolidated 2025-09-30 07020016 core:CurrentFinancialInstruments bus:Consolidated 2024-09-30 07020016 core:ShareCapital bus:Consolidated 2025-09-30 07020016 core:ShareCapital bus:Consolidated 2024-09-30 07020016 core:SharePremium bus:Consolidated 2025-09-30 07020016 core:SharePremium bus:Consolidated 2024-09-30 07020016 core:RetainedEarningsAccumulatedLosses bus:Consolidated 2025-09-30 07020016 core:RetainedEarningsAccumulatedLosses bus:Consolidated 2024-09-30 07020016 core:ShareCapital 2025-09-30 07020016 core:ShareCapital 2024-09-30 07020016 core:SharePremium 2025-09-30 07020016 core:SharePremium 2024-09-30 07020016 core:RetainedEarningsAccumulatedLosses 2025-09-30 07020016 core:RetainedEarningsAccumulatedLosses 2024-09-30 07020016 core:ShareCapital bus:Consolidated 2023-09-30 07020016 core:SharePremium bus:Consolidated 2023-09-30 07020016 2023-09-30 07020016 core:ShareCapital 2023-09-30 07020016 core:SharePremium 2023-09-30 07020016 core:RetainedEarningsAccumulatedLosses 2023-09-30 07020016 bus:Consolidated 2023-09-30 07020016 core:Goodwill 2024-10-01 2025-09-30 07020016 core:IntangibleAssetsOtherThanGoodwill 2024-10-01 2025-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar 2024-10-01 2025-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets 2024-10-01 2025-09-30 07020016 core:PlantMachinery 2024-10-01 2025-09-30 07020016 core:FurnitureFittings 2024-10-01 2025-09-30 07020016 core:ComputerEquipment 2024-10-01 2025-09-30 07020016 core:MotorVehicles 2024-10-01 2025-09-30 07020016 core:UKTax bus:Consolidated 2024-10-01 2025-09-30 07020016 core:UKTax bus:Consolidated 2023-10-01 2024-09-30 07020016 core:Goodwill bus:Consolidated 2024-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar bus:Consolidated 2024-09-30 07020016 bus:Consolidated 2024-09-30 07020016 core:Goodwill 2024-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar 2024-09-30 07020016 2024-09-30 07020016 core:Goodwill bus:Consolidated 2024-10-01 2025-09-30 07020016 core:PatentsTrademarksLicencesConcessionsSimilar bus:Consolidated 2024-10-01 2025-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets bus:Consolidated 2024-09-30 07020016 core:PlantMachinery bus:Consolidated 2024-09-30 07020016 core:FurnitureFittings bus:Consolidated 2024-09-30 07020016 core:ComputerEquipment bus:Consolidated 2024-09-30 07020016 core:MotorVehicles bus:Consolidated 2024-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets 2024-09-30 07020016 core:PlantMachinery 2024-09-30 07020016 core:FurnitureFittings 2024-09-30 07020016 core:ComputerEquipment 2024-09-30 07020016 core:MotorVehicles 2024-09-30 07020016 core:LandBuildings core:OwnedOrFreeholdAssets bus:Consolidated 2024-10-01 2025-09-30 07020016 core:PlantMachinery bus:Consolidated 2024-10-01 2025-09-30 07020016 core:FurnitureFittings bus:Consolidated 2024-10-01 2025-09-30 07020016 core:ComputerEquipment bus:Consolidated 2024-10-01 2025-09-30 07020016 core:MotorVehicles bus:Consolidated 2024-10-01 2025-09-30 07020016 core:Subsidiary1 2024-10-01 2025-09-30 07020016 core:Subsidiary2 2024-10-01 2025-09-30 07020016 core:Subsidiary3 2024-10-01 2025-09-30 07020016 core:Subsidiary1 1 2024-10-01 2025-09-30 07020016 core:Subsidiary2 2 2024-10-01 2025-09-30 07020016 core:Subsidiary3 3 2024-10-01 2025-09-30 07020016 core:CurrentFinancialInstruments bus:Consolidated 2025-09-30 07020016 core:CurrentFinancialInstruments 2025-09-30 07020016 core:CurrentFinancialInstruments 2024-09-30 07020016 core:CurrentFinancialInstruments bus:Consolidated 1 2025-09-30 07020016 core:CurrentFinancialInstruments bus:Consolidated 1 2024-09-30 07020016 core:CurrentFinancialInstruments 2 2025-09-30 07020016 core:CurrentFinancialInstruments 2 2024-09-30 07020016 core:WithinOneYear bus:Consolidated 2025-09-30 07020016 core:WithinOneYear bus:Consolidated 2024-09-30 07020016 core:CurrentFinancialInstruments core:WithinOneYear 2025-09-30 07020016 core:CurrentFinancialInstruments core:WithinOneYear 2024-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear bus:Consolidated 2025-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear bus:Consolidated 2024-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear 2025-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear 2024-09-30 07020016 core:Non-currentFinancialInstruments bus:Consolidated 2025-09-30 07020016 core:Non-currentFinancialInstruments bus:Consolidated 2024-09-30 07020016 core:Non-currentFinancialInstruments 2025-09-30 07020016 core:Non-currentFinancialInstruments 2024-09-30 07020016 core:CurrentFinancialInstruments core:WithinOneYear bus:Consolidated 2024-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear bus:Consolidated 1 2025-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear bus:Consolidated 1 2024-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear 2 2025-09-30 07020016 core:Non-currentFinancialInstruments core:AfterOneYear 2 2024-09-30 07020016 bus:PrivateLimitedCompanyLtd 2024-10-01 2025-09-30 07020016 bus:FRS102 2024-10-01 2025-09-30 07020016 bus:Audited 2024-10-01 2025-09-30 07020016 bus:ConsolidatedGroupCompanyAccounts 2024-10-01 2025-09-30 07020016 bus:FullAccounts 2024-10-01 2025-09-30 xbrli:pure xbrli:shares iso4217:GBP