REGISTERED NUMBER: 07311129 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

FOR

CLARASYS LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditor

6

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Company Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTORS:

M Cheung

C Hamilton

C Meyer-Scott

REGISTERED OFFICE:

7 Bell Yard

London

WC2A 2JR

REGISTERED NUMBER:

07311129 (England and Wales)

AUDITOR:

mgr Audit Limited

Chartered Accountants

Statutory Auditors

55 Loudoun Road

St John's Wood

London

NW8 0DL

BANKERS:

HSBC UK Bank plc

1 Centenary Square

Birmingham

B1 1HQ

The directors present their strategic report of the company and the group for the year ended 31 December 2025.

REVIEW OF BUSINESS

The result and position of the Group for the year ended 31 December 2025 are set out in the statement of comprehensive income, balance sheet and statement of changes in equity on pages 11, 12 and 14 respectively.

The directors report an improved trading performance in 2025. Group turnover increased to £23,342,461 from £21,661,056 in the prior year, with gross profit increasing to £7,364,468 from £6,640,002. The Group generated an operating profit of £542,957 for the year compared with an operating loss of £117,979 in 2024.

The improvement in performance reflects the benefits of cost management actions undertaken during the year, together with stronger client demand, improved utilisation and a strong resurgence in the US business, particularly in the second half.

The directors note that improved trading and cash generation strengthened the Group's overall financial position during the year. While the balance sheet remains an area of focus, the progress achieved during the year provides a stronger platform for the Group going forward.

The directors believe the Group remains well positioned for future growth. The business continues to benefit from a diversified client base across the private and public sectors, an established market presence in the UK, and continued expansion of its US operations.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider the principal risks and uncertainties facing the Group to include people, utilisation and delivery capacity; demand and market conditions; and reputation, quality, information security and data protection.

People, utilisation and delivery risk

The long-term success and sustainability of Clarasys depends on its ability to attract, retain and develop high-quality people, while maintaining appropriate utilisation and delivery quality. A shortfall in recruitment, retention or deployment could affect delivery capability, margin and growth.

The Group mitigates this risk by continuing to invest in recruitment, learning and development, employee engagement and delivery assurance. Clarasys places emphasis on maintaining a strong employer brand, providing competitive remuneration and meaningful incentives, and offering complex and challenging work that enables employees to build the specialist skills required to deliver value to clients and support future growth.

Demand, market and procurement risk

Demand for consultancy services can be affected by macroeconomic uncertainty, client budget pressures, procurement delays and changes in discretionary spending, particularly in consulting and transformation programmes.

The Group mitigates this risk through diversification of its client base across sectors and geographies, maintaining a balance between public and private sector work, and active pipeline management. This approach helps to reduce dependency on any one client, market or region.

PRINCIPAL RISKS AND UNCERTAINTIES - CONTINUED

Reputation, quality , information security and data protection risk

Given the nature of the Group's work, maintaining client trust, operational resilience, data security and consistently high delivery standards remains critical. Any material delivery failure, cyber incident or data breach could damage the Group's reputation and affect client retention and future contract awards.

The Group mitigates this risk through project delivery assurance, investment in specialist capability, continued focus on client satisfaction, and established quality, service management, environmental and information security controls. The firm's commitment to quality is reflected in consistently high levels of client satisfaction. The Group currently holds four ISO certifications: ISO 27001, ISO 9001, ISO 14001 and ISO 20000-1. In addition, cyber security and client data protection remain at the forefront. The firm maintains its Cyber Essentials Plus certification and continues to strengthen its cyber resilience to ensure compliance and safeguard client trust.

DEVELOPMENT AND PERFORMANCE

The Group delivered a stronger financial performance in 2025 than in the prior year, with revenue growth, improved profitability and improved cash generation.

Key performance indicators used by management to monitor the business include turnover, gross profit and operating profit.

- Turnover: £23,342,461 (2024: £21,661,056)

- Gross profit: £7,364,468 (2024: £6,640,002)

- Operating profit: £542,957 (2024: operating loss £117,979)

Other non-financial key performance indicators are tracked regularly. These include employee retention, client satisfaction, employee satisfaction and consultant utilisation.

The directors' financial objective remains the achievement of sustainable growth through profitable delivery, disciplined cost management and continued investment in the firm's capability and market position.

ON BEHALF OF THE BOARD:

M Cheung - Director

9 September 2026

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2025.

PRINCIPAL ACTIVITY

The principal activity of the Group continued to be that of management consultancy.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2025.

The directors do not recommend payment of a dividend.

FUTURE DEVELOPMENTS

The directors' focus for the future development of the business remains the sustainable growth of the firm. The Board will continue to focus on profitable growth, cash generation and the development of existing and adjacent capabilities to better serve clients and respond to market demand. The Group also intends to continue growing its US business while maintaining disciplined oversight of cost and working capital. The directors also remain focused on reducing reliance on working capital debt over time, with the aim of strengthening the balance sheet and reducing finance costs.

DIRECTORS

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

M Cheung

C Hamilton

C Meyer-Scott

FINANCIAL INSTRUMENTS

The group has a normal level of exposure to price, credit, liquidity and cash flow risk arising from trading activities which are conducted in sterling and US dollars.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditor is unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditor is aware of that information.

AUDITOR

The auditors, mgr Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M Cheung - Director

9 September 2026

Opinion

We have audited the financial statements of Clarasys Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement, Company Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2025 and of the group's profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditor thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where 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 Statement of Directors' Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditor 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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.

As part of our planning of the audit work required we obtained an understanding of the legal and regulatory frameworks that are applicable to the entity via enquiries of the company’s management, carried out analytical procedures, held discussions amongst the engagement team and using knowledge of the sector determined that the most significant laws and regulation are those that relate to:

- Health and safety regulations.

- Employment law including right to work in the UK and US.

- Data Protection Laws (GDPR).

- UK Tax legislation.

We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as FRS 102 and the Companies Act 2006.

Based on the results of our risk assessment we designed our audit procedures to identify non-compliance with the laws and regulations and the fraud risks identified. This included enquiries with management to understand their policies and procedures for compliance with those regulations and we completed the following tests:

- Obtained an understanding of relevant controls.

- Reviewed the company’s risk assessments, procedures and IT systems.

- Checked samples of documentation including insurance policies and right to work in the UK documentation.

We also assessed the risks of material misstatement in respect of fraud as follows:

- Revenue fraud.

- Management override of controls.

- Related party fraud.

- Loan covenant compliance and reporting.

Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatements in relation to fraud. This included the risk of management bias relating to judgements and assumptions used in provisions along with testing journals.

No significant issues were identified during our testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non – detection of irregularities, as these may could involve collusions, forgery, intentional omissions, misrepresentations or the override of internal controls.

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 Report of the Auditor.

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 a Report of the Auditor 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.

Nigel Walfisz FCA (Senior Statutory Auditor)

for and on behalf of mgr Audit Limited

Chartered Accountants

Statutory Auditors

55 Loudoun Road

St John's Wood

London

NW8 0DL

9 September 2026

TURNOVER

3

23,342,461

21,661,056

Cost of sales

(15,977,993

)

(15,021,054

)

GROSS PROFIT

7,364,468

6,640,002

Administrative expenses

(7,293,397

)

(7,214,145

)

71,071

(574,143

)

Other operating income

471,886

456,164

OPERATING PROFIT/(LOSS)

5

542,957

(117,979

)

Interest receivable and similar income

92,757

-

635,714

(117,979

)

Gain/loss on revaluation of investments

220,236

180,106

855,950

62,127

Interest payable and similar expenses

7

(455,563

)

(267,272

)

PROFIT/(LOSS) BEFORE TAXATION

400,387

(205,145

)

Tax on profit/(loss)

8

(91,601

)

(56,373

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

308,786

(261,518

)

Profit/(loss) attributable to:

Owners of the parent

222,084

(261,518

)

Non-controlling interests

86,702

-

308,786

(261,518

)

PROFIT/(LOSS) FOR THE YEAR

308,786

(261,518

)

OTHER COMPREHENSIVE INCOME

Currency translation differences

(2,373

)

(22,235

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(2,373

)

(22,235

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

306,413

Prior year adjustment

(30,955

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(314,708

)

Total comprehensive income attributable to:

Owners of the parent

204,897

(314,708

)

Non-controlling interests

101,516

-

306,413

(314,708

)

FIXED ASSETS

Intangible assets

10

2,076

5,351

Tangible assets

11

392,621

455,622

Investments

12

436,053

215,817

830,750

676,790

CURRENT ASSETS

Debtors: amounts falling due within one year

13

4,077,578

4,403,466

Debtors: amounts falling due after more than one year

13

715,134

715,134

Cash at bank

583,303

225,974

5,376,015

5,344,574

CREDITORS

Amounts falling due within one year

14

(6,054,433

)

(6,029,924

)

NET CURRENT LIABILITIES

(678,418

)

(685,350

)

TOTAL ASSETS LESS CURRENT LIABILITIES

152,332

(8,560

)

CREDITORS

Amounts falling due after more than one year

15

(184,910

)

(212,372

)

PROVISIONS FOR LIABILITIES

18

(22,127

)

-

NET LIABILITIES

(54,705

)

(220,932

)

CAPITAL AND RESERVES

Called up share capital

19

303

303

Retained earnings

86,115

(221,235

)

SHAREHOLDERS' FUNDS

86,418

(220,932

)

NON-CONTROLLING INTERESTS

(141,123

)

-

TOTAL EQUITY

(54,705

)

(220,932

)

The financial statements were approved by the Board of Directors and authorised for issue on 9 September 2026 and were signed on its behalf by:

M Cheung - Director

FIXED ASSETS

Intangible assets

10

-

2,863

Tangible assets

11

373,387

451,311

Investments

12

436,053

215,817

809,440

669,991

CURRENT ASSETS

Debtors: amounts falling due within one year

13

4,446,124

5,151,718

Debtors: amounts falling due after more than one year

13

715,134

715,134

Cash at bank

465,091

154,996

5,626,349

6,021,848

CREDITORS

Amounts falling due within one year

14

(5,520,077

)

(5,548,178

)

NET CURRENT ASSETS

106,272

473,670

TOTAL ASSETS LESS CURRENT LIABILITIES

915,712

1,143,661

CREDITORS

Amounts falling due after more than one year

15

(184,910

)

(212,372

)

PROVISIONS FOR LIABILITIES

18

(22,127

)

-

NET ASSETS

708,675

931,289

CAPITAL AND RESERVES

Called up share capital

19

303

303

Retained earnings

708,372

930,986

SHAREHOLDERS' FUNDS

708,675

931,289

Company's (loss)/profit for the financial year

(67,614

)

204,222

The financial statements were approved by the Board of Directors and authorised for issue on 9 September 2026 and were signed on its behalf by:

M Cheung - Director

Called up

share

Retained

Non-controlling

Total

capital

earnings

Total

interests

equity

£

£

£

£

£

Balance at 1 January 2024

303

485,091

485,394

-

485,394

Prior year adjustment

-

(30,955

)

(30,955

)

-

(30,955

)

As restated

303

454,136

454,439

-

454,439

Changes in equity

Deficit for the year

-

(261,518

)

(261,518

)

-

(261,518

)

Other comprehensive income

-

(22,235

)

(22,235

)

-

(22,235

)

Total comprehensive income

-

(283,753

)

(283,753

)

-

(283,753

)

Contributions to the EOT

-

(391,618

)

(391,618

)

-

(391,618

)

Balance at 31 December 2024

303

(221,235

)

(220,932

)

-

(220,932

)

Changes in equity

Profit for the year

-

222,084

222,084

86,702

308,786

Other comprehensive income

-

(2,373

)

(2,373

)

14,814

12,441

Total comprehensive income

-

219,711

219,711

101,516

321,227

Allocation of opening reserves

-

242,639

242,639

(242,639

)

-

Contributions to the EOT

-

(155,000

)

(155,000

)

-

(155,000

)

Balance at 31 December 2025

303

86,115

86,418

(141,123

)

(54,705

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

303

1,149,337

1,149,640

Prior year adjustment

-

(30,955

)

(30,955

)

As restated

303

1,118,382

1,118,685

Changes in equity

Profit for the year

-

204,222

204,222

Total comprehensive income

-

204,222

204,222

Contributions to the EOT

-

(391,618

)

(391,618

)

Balance at 31 December 2024

303

930,986

931,289

Changes in equity

Deficit for the year

-

(67,614

)

(67,614

)

Total comprehensive income

-

(67,614

)

(67,614

)

Contributions to the EOT

-

(155,000

)

(155,000

)

Balance at 31 December 2025

303

708,372

708,675

Cash flows from operating activities

Cash generated from operations

22

1,182,755

24,456

Interest paid

(452,761

)

(265,325

)

Interest element of finance lease payments paid

(2,802

)

(1,947

)

Tax paid

(190,546

)

5,192

Net cash from operating activities

536,646

(237,624

)

Cash flows from investing activities

Purchase of tangible fixed assets

(23,185

)

(5,534

)

Sale of tangible fixed assets

(929

)

200

Interest received

92,757

-

Net cash from investing activities

68,643

(5,334

)

Cash flows from financing activities

New loans in year

2,245,000

720,000

Loan repayments in year

(2,283,596

)

(395,071

)

Payment of finance lease obligations

(26,752

)

(22,360

)

Contributions paid to EOT

(155,000

)

(391,618

)

Net cash from financing activities

(220,348

)

(89,049

)

Increase/(decrease) in cash and cash equivalents

384,941

(332,007

)

Cash and cash equivalents at beginning of year

23

225,974

580,262

Effect of foreign exchange rate changes

(27,612

)

(22,281

)

Cash and cash equivalents at end of year

23

583,303

225,974

Cash flows from operating activities

Cash generated from operations

22

1,053,201

29,498

Interest paid

(421,272

)

(226,079

)

Interest element of finance lease payments paid

(2,802

)

(1,947

)

Tax paid

(190,546

)

829

Net cash from operating activities

438,581

(197,699

)

Cash flows from investing activities

Purchase of tangible fixed assets

-

(5,534

)

Sale of tangible fixed assets

(895

)

-

Interest received

92,757

-

Net cash from investing activities

91,862

(5,534

)

Cash flows from financing activities

New loans in year

2,245,000

720,000

Loan repayments in year

(2,283,596

)

(401,709

)

Payment of finance lease obligations

(26,752

)

(22,360

)

Contributions paid to the EOT

(155,000

)

(391,618

)

Net cash from financing activities

(220,348

)

(95,687

)

Increase/(decrease) in cash and cash equivalents

310,095

(298,920

)

Cash and cash equivalents at beginning of year

23

154,996

453,916

Cash and cash equivalents at end of year

23

465,091

154,996