Acuity RM : Annual Report, December 2024

About this update from Acuity Rm Group Plc

Acuity RM Group plc Building Value in Technology Acuity RM Group plc Report and Accounts For the year ended 31 December 2024 Contents Strategic Report 1 Chairman's Statement 1 Chief Executive's Statement 3 Principal Risks and Uncertainties 5 Governance 6 Board of Directors 6 Corporate Governance Report 8 Audit Committee Report 14 Remuneration Report 16 Directors' Report 18 Financial Statements 23 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ACUITY RM GROUP PLC 23 Group statement of comprehensive income 29 Group statement of financial position 30 Company statement of financial position 31 Group statement of changes in equity 32 Company statement of changes in equity 33 Group statement of cash flows 34 Company statement of cash flows 35 Notes to the Financial Statements 44 Additional Information 59 Advisers and Key Services Providers 59 ‌Strategic Report ‌Chairman's Statement I am pleased to present the results of Acuity RM Group plc ("Company" or "Group") for the year ended 31 December 2024. Acuity RM's STREAM  is a leading Cyber GRC SaaS platform that provides CISOs (Chief Information Security Officer) with instant, actionable intelligence in business-risk terms, enterprise-wide. 2024 was a year of consolidation for the Group, having acquired total ownership of Acuity Risk Management Limited ("Acuity RM") in 2023. There were four notable developments: Sales - Revenues increased because of the organic growth of business, in particular there was significant strengthening of the relationships with our largest customers. Acquisition - in November 2024 a vendor management GRC product Rizikon was acquired, bringing with it new customers and potential new partners. Development - a new version of Acuity RM's software platform, STREAM  , was started, incorporating a range of new features sought by customers such as AI, improving the user experience. In addition, it will give major benefits to Acuity RM, such as easier and faster customer implementations, and lower costs. The new product is now ready for new customers, this includes a new vendor management hub which is the replacement for Rizikon, with additional features for third party vendor management. Changes to the management team - with the appointment of David Rajakovich as Chief Executive and Kate Buchan as Finance Director. There is much to do but the market opportunity for management of cybersecurity risk and GRC is large, and growing strongly because of an increased prevalence of attacks and a greater awareness that the risks, not only financial but other losses for example of assets and reputation, can be devastating for an enterprise or organisation. 74% of large businesses, 70% of smaller businesses and 66% of larger charities suffered cyber-attacks (source UK Government, "Official Statistics, Cyber security breaches survey 2024") Cybersecurity failure is expensive, averaging $5m per breach and may run into $1bn+ of business costs, and it takes an average of 200 days to discover a cybersecurity breach (Sources "Cost of data Breach Report 2024", IBM and "Equifax Data Breach Case Study", BreachSense). The business costs identified in these reports relate to business interruption, post breach customer support, remediation and regulatory fines. A major reason that STREAM is attractive to users is that it continuously monitors and measures to manage risks and ensure compliance and provides reports and alarms in real time. See the Acuity RM website https://www.acuityrm.com There is more detail about Acuity RM and its future plans in the Chief Executive's report which follows this statement. Additional information on the Group is available on the Company's website https://www.acuityrmgroup.com Board and employment I welcome David Rajakovich and Kate Buchan who both joined the Board in 2024. Kate joined as Finance Director in June 2024 and David, having been appointed a non-executive director in November 2024, became Chief Executive in December, replacing Kerry Chambers. I would like to thank Kerry for her contribution and wish her well for the future. David's background is as Chief Executive of high growth software businesses. At his last company, Skill Dynamics Ltd and its predecessor businesses, revenues grew 18 fold over a nine year period. In the period since his appointment David has made significant changes to the operations at Acuity RM with the objective of accelerating growth in 2025, building the business and improving the financial performance. I want to thank our employees, customers, partners, and shareholders for their contribution, continued support and confidence in our vision. Together, we are building a company that is helping organisations around the world become more secure and resilient in the face of evolving cyber threats. Outlook Acuity RM operates in a large, high growth global market with key customers in the UK, Europe, USA and other territories. The opportunity for 2025 is to accelerate the pace of growth by increasing the customer base. This will be achieved both with the internal business development team and through closer relationships with partners. We anticipate the developments in hand will increase the number and value of contracts. This should be key to attaining the financial objectives. I look forward to reporting further progress over the coming months. Angus Forrest Chairman 24 June 2025 ‌Chief Executive's Statement Looking Forward with Confidence As we close another fiscal year, I am pleased to present our annual report highlighting our strategic initiatives, achievements, and vision for the future. I became Chief Executive midway through December 2024, and am enthusiastic about the progress we have already made, and more importantly, delivering results in 2025. When I was first approached about the opportunity to lead this organisation, I was immediately drawn to its innovative approach to solving critical security challenges and the tremendous potential for growth in today's increasingly complex digital landscape. In particular, I was attracted to Acuity RM because it has a strong background in cybersecurity, with its award-winning software platform, STREAM  , having been developed over 20 years. STREAM  can provide risk management in Cyber GRC, Cyber Risk Quantification, Continuous Controls Monitoring, Cybersecurity Continuous Compliance Automation. The STREAM  solution delivers all these capabilities on a single integrated software platform. It is highly configurable and can meet complex organisational needs without additional development. STREAM  provides users with a custom set up exactly matching their profile and systems. 2024 Financial Results Revenue for the 12 months to December 2024 was £2.1m, the prior period was £1.4m, however this was for an 8 month period from date of acquisition. Comparing on a like for like basis, revenue in 2024 has moderately increased, mainly due to upselling to current customers, evident through a net revenue retention (NRR*) percentage of 105% (based on recurring revenue only). Administrative costs in Acuity RM were slightly lower in the 12 months to December 2024 when compared on a like for like basis with the prior period. This is the result of a focus on cost control via a continuous assessment of the cost base throughout 2024, ensuring that resources are used efficiently and effectively. The adjusted loss for the year was £1.2m (2023: £1.0m) before exceptional costs of £141k which predominantly relate to organisational changes and the P&L charge for share based payments of £27k. The reported loss for the year was £1.3m (2023: £1.3m). Forward contracted revenue, (deferred income per the balance sheet and forward contracted revenue*) has continued to grow increasing 17% year-on-year to £3.4m as at the year end (2023: £2.9m). This balance represents revenue that will be released to the profit and loss statement over future periods. Contract renewals for the year ran at 78%. *NRR and forward contracted revenue are not IFRS measures. Cash and debtors at the year end were £1.3m (2023: £1.4m) of which cash was £0.6m (2023: £0.1m). Loans and borrowings at the year end were £0.2m (2023: £0.3m). Strategic Focus on Cyber Security Risk Management In an era where cyber threats continue to evolve at an unprecedented pace, we have made the strategic decision to focus exclusively on cyber security risk management rather than attempting to address enterprise risk management as a whole. This focused approach allows us to deliver specialised solutions that address the challenges our clients face in identifying, assessing, and mitigating cyber risks. By maintaining this focus, we can offer unparalleled expertise and value in an area that continues to be mission-critical for organisations across all sectors. Product Innovation: The Next Generation I am excited to announce that a completely rebuilt version of our flagship product is now ready for new customers. This next-generation platform represents a significant investment in our product capabilities and user experience. Key improvements include: A revamped user interface with intuitive workflows based on extensive user research Simplified integration capabilities with popular security and business tools such as AI Enhanced dashboards and reporting features for greater visibility and insights These improvements directly support our strategic shift toward Product Led Growth (PLG) by making onboarding seamless and intuitive. The new platform has been designed to dramatically reduce time-to-value for new customers, allowing them to experience the benefits of our solution faster and with minimal friction. Revitalised Go-To-Market Strategy We have fundamentally transformed our go-to-market approach to better align with market opportunities and customer needs: Direct sales efforts have been repositioned to focus primarily on mid-market clients where we see the highest conversion rates and fastest adoption The partner network has been rationalised and refocused on a limited number of strategic partnerships to target blue-chip enterprise clients, leveraging our partners' established relationships and implementation capabilities Sales processes have been optimised to reduce cycle times and improve conversion at every stage of the funnel This revised approach is supported by a data-driven framework that enables us to continuously measure effectiveness, identify bottlenecks, and refine our tactics. Early results are promising, which bodes well for improved performance, especially in the latter half of 2025. Organisational Transformation To support our new direction, we have made several key changes to our organisational structure and leadership team. These changes were necessary to better align our resources with our strategic priorities, improve operational efficiency, and reduce costs. While organisational change is never easy, these adjustments have created a more agile, focused team that is better positioned to execute on our vision and deliver value to our customers and shareholders. Strategic Acquisition: Rizikon I am pleased to report that we have successfully completed the acquisition of the Rizikon product, a complementary software GRC tool in the cyber risk assessment space. Rizikon's features are being incorporated into STREAM  . This strategic acquisition provides an immediate opportunity to introduce STREAM  to Rizikon's established client base, creating significant cross-selling and upselling potential. In addition, it has provided the opportunity to enter into direct commercial negotiations with two significant organisations as partners to distribute Acuity RM's STREAM  product. These potential new partners of Acuity RM, one of which is a major defence contractor, have the capability to enable Acuity RM to grow new customer numbers and revenues materially, over and above the Rizikon assets' anticipated contribution to Acuity RM's overall future performance. Looking Ahead As we move forward, I am confident that our strategic focus, product investments, and organisational improvements have positioned us for sustained growth and market leadership. The demand for effective cyber security risk management solutions continues to grow, and our targeted approach puts us in an excellent position to capture significant market share in a largely greenfield market. David Rajakovich Chief Executive 24 June 2025 ‌Principal Risks and Uncertainties The management of the business and the nature of the Group's strategy are subject to risks. The Directors set out below the principal risks identified for the business. Where possible, processes are in place to identify and manage such risks. The Group operates systems of internal control and reporting to provide assurance that the Board is managing risk whilst achieving its business objectives. No system can fully eliminate risk and, therefore, the understanding of operational risk is central to the management process. To enable shareholders to appreciate what the business considers are the main operational risks, they are briefly outlined below: Risk Potential impact Mitigation Performance risk Reliance on one or a few customers The Group fails to perform to budget. Progress of development is below forecast. A material proportion of revenues are lost. It may need additional funding. Value creation may be delayed. This is a risk all growing businesses face and it could impact cash generation and profitability. Monthly reports and meetings monitor performance of all important facets of the business. The Group focuses on KPIs and takes action to manage any deviation and revert to plan. A key objective is to win more customers, so the loss of any one customer is immaterial. Orders are usually for multi-year contracts and the number of larger clients is increasing. The Group operates on a lean cost structure to minimise any such impact. Reliance on people The Group is not able to retain key individuals with critical skills The performance of the Group may deviate from plan. The key executives are rewarded through a combination of competitive salary and incentive plans. Market change Downturn or instability of market Slow new order wins and reduced growth. The Group sells multi-year contracts, so ensuring a certain level of future revenues. Cybersecurity and GRC are growing markets driven by legislation, regulation and best practice. STREAM® is very flexible so can be used to measure a wide range of risks. Cybersecurity Loss of data or damage to data. Damage to credibility and customer confidence. Acuity uses leading global services with advanced security, to hold data and has accredited processes and systems in place. Technology A new product is launched by a competitor. Greater technical competition. The market is large and STREAM® is liked by analysts and users. The Group is developing new technology and product to continue to offer best in class. Liquidity The Company cannot raise new funds. The Croup may not be able to finance the growth and change as planned. May impact the Group's ability to fund its operational costs. The Group engages the services of brokers to assist with fund raising equity and loan as appropriate. The Group intends to maintain material cash balances. The Group may take actions to reduce its cost base. Legal, regulatory and political risk The Group's ability to trade in certain territories. The Group keeps abreast of regulatory and other changes which may affect the Group. The Group seeks regular updates on matters which may impact the legal and regulatory framework. It is increasing its sales in overseas markets. The Group liaises regularly with its relevant advisers. Natural or other widespread disasters The effect of disasters is uncertain and each one is dealt with appropriate action. The impact of disaster is likely to be slower growth and more difficulty making sales. Software as an industry allows employees to work flexibly to an extent that is not available in most other business sectors. Product development, marketing, sales and general management can all be carried out remotely. Interest rates Significant upward changes in interest rates. May affect the ability to raise new funds. At present, the Group has minimal borrowings and intends to maintain an appropriate cash balance. ‌Governance ‌Board of Directors Angus Forrest Chairman Angus has been an investor in the technology sector for more than 30 years, specialising in business-to-business sales driven companies. Angus was the Chief Executive of investment company Billam plc, which he co-founded, 2000-2006. Billam was the lead investor in Cybit plc, which grew from pre-revenue status to become the leading vehicle telematics business in Europe, through both organic growth and by making selective acquisitions. Billam made 17 investments of which 11 were profitable. Billam changed its name to Energiser Investments in 2008, then to Drumz in 2020 when Angus re-established the Company as a technology investment company. It then became Acuity RM Group plc in 2023 when it acquired its principal investment. David Rajakovich Executive director David was Chief Executive at Skill Dynamics for nine years, building this corporate learning and development software company from early stage to serving over 250 blue chip clients worldwide. In doing so he grew revenues c. 18 fold over nine years, made the business profitable and cash generative and led two successful private equity exits. He holds an MBA from the University of Exeter. His early career was spent in the US Army. David joined the board in November 2024 and became Chief Executive in December 2024. Kate Buchan Executive director Kate is a chartered accountant with more than 25 years' post qualifying experience predominantly in the retail and global banking industry. She has led financial reporting teams, undertaken process improvement and project work and has a deep understanding of financial controls and governance. This includes solving a wide variety of complex challenges. Kate is Finance Director and joined the Board in June 2024. Nicholas ("Nick") Clark Non-Executive Director Nick became Chief Executive of AIM-quoted Built Cybernetics plc (LON:BUC) in 2023 following that company's acquisition of Torpedo Factory Group Ltd, a business he founded in 1997. BUC is a smart buildings group growing organically and through acquisitions. Nick is an investor in a number of early stage technology businesses. Prior to starting TFG he obtained a BSc in Physics at Imperial College, followed by an MPhil in Microelectronic Engineering and Semiconductor Physics at the University of Cambridge. Nick is a member of the Remuneration Committee and of the Audit Committee. John Wakefield Senior Independent Non-Executive Director John qualified as a solicitor with McKenna & Co (now CMS) before moving into corporate finance, first with Williams de Broe Limited and then at Rowan Dartington & Co Limited, where he was a founder director and shareholder and head of corporate finance. He was a corporate finance director of WH Ireland Limited until 2016. He has been a member of the AIM Advisory Group, chairman of the London Stock Exchange Regional Advisory Group for the South West and chairman of South West Angel and Investor Network Limited (SWAIN). John is a non-executive director of Petards Group Plc. John is chair of the Remuneration Committee and of the Audit Committee. ‌Corporate Governance Report Introduction As Chairman of the Company, I have overall responsibility for managing the Board, ensuring that corporate governance is embedded within the business. Corporate governance is at the heart of this organisation in order to maintain integrity and to ensure we govern effectively such that we deliver long-term value for our shareholders. Acuity RM Group plc's shares are traded on the AIM Market. The Group recognises the importance of and is committed to high standards of corporate governance. Maintaining high standards through all business activities is reassuring to third parties with which Acuity interacts, so benefitting the business, employees and other stakeholders who understand what is expected and why; and in turn this will be reflected in improving business performance and shareholder rewards. The Company has chosen to adopt the Quoted Companies Alliance's Corporate Governance Code 2023 (the "QCA Code") and has updated its website to include additional disclosures required by the QCA Code and the AIM Rules for Companies. The Board applies the 10 principles of the QCA Code insofar as reasonably practicable, given the Company's nature and size. Further details on compliance with the principles are provided below. The Board believes that the QCA Code provides the Company with a practical and rigorous corporate governance framework to support this strategy and the Group's success. Where our practices depart from expectations of the QCA Code, I have given an explanation as to why, at this time, it is appropriate for the Group to depart from the QCA Code. The 10 principles of the QCA Code are listed below together with a short explanation of how the Company applies each of the principles: This information can also be found on the Group's website https://acuityrmgroup.com/corporate-governance Principle One - Establish a purpose, strategy and business model which promotes long term value for shareholders The creation of shareholder value is based around a business model to develop and build the Acuity business organically and potentially by focused acquisition. The value of the business should be based on its scale, rate of growth, quality of offering and key customers as well as traditional financial metrics, cash generation and profitability. It is described in more detail on pages 2 & 3. The AIM quote is of value to our shareholders as it enables them to trade their shares; and to the Group as it offers a combination of raised profile, the ability to raise additional funds, flexibility to make acquisitions and gives the ability to provide incentives and rewards to management through share schemes. It also provides a regulatory framework appropriate to the business. Principle Two - Promote a corporate culture that is based on ethical values and behaviours The Board recognises the long-term success of the Group is reliant upon the efforts of the employees, partners, contractors, suppliers and regulators. It upholds high ethical and other standards. There are several frameworks to which the Group adheres; including legal and regulatory requirements, adoption of standards and codes of behaviour required by AIM, ISO 27001 and otherwise. It believes maintaining high standards and operating a meritocracy will benefit the Group by creating value in the short, medium and long terms. The Board recognises that the decisions regarding strategy and risk will impact the corporate culture of the Group as a whole and that this will impact the performance of the Group. A large part of the Company's activities is centred on what needs to be an open and respectful dialogue with the subsidiary, Acuity RM. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all the Group activities. The Board assessment of the culture within the Group at the present time is one where there is respect for all individuals, there is open dialogue within the Group and there is a commitment to provide the best service possible to all of Acuity RM's customers and clients. The Company maintains and develops strong processes which promote ethical values and behaviours across all hierarchies. The Board has adopted an anti-corruption and bribery policy which is outlined on the Company's website. The policy which applies to all Directors and employees of the Group sets out their responsibilities in observing and upholding a zero-tolerance position on bribery and corruption, as well as providing guidance to those working for the Group on how to recognise and deal with bribery and corruption issues and the potential consequences. The Company has adopted a code for directors' and employees' dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with rule 21 of the AIM Rules and compliant with MAR. Principle Three - Seek to understand and meet shareholder needs and expectations The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has instigated new methods of communicating with and developing relationships with its shareholders. Presentations to investors with question and answer sessions allow investors the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company's Annual General Meeting. Investors have access to current information on the Company though its website https://www.acuityrmgroup.com , which includes annual and interim financial reports, RNS releases and full AIM Rule 26 disclosures, and via Angus Forrest, who is available to answer investor relations enquiries ( [email protected] ). The website of the trading business Acuity Risk Management Limited is https://www.acuityrm.com Principle Four - Take into account wider stakeholder interest, including social and environmental responsibilities, and their implications for long-term success. The Group manages relationships with regular communications, presentations and on-going dialogue with customers, employees, partners, suppliers, regulators and others. It encourages feedback from all these stakeholders. Management reviews performance of Acuity RM regularly, setting key performance indicators (KPIs) and managing performance against past performance, KPIs, targets and budgets which are also reviewed by the Board at every Board meeting. Environmental AIM quoted companies are required to comply with SECR (Streamlined Energy Carbon Reporting) if they meet the relevant financial thresholds. The Group does not meet these threshold requirements under the SECR. However, as a small software company business energy use is the main area of climate impact and we take appropriate measures to minimise business energy use through the design of the software and a focus on the cost of providing the software to our customers. Social The Board is aware of the Group's responsibilities as a corporate organisation and as an employer and partner to operate to high standards of behaviour both internally and externally. These include social impact standards as well as adherence to laws and regulations. There is a whistleblowing policy in place. Principle Five - Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation The Board regularly reviews the risks facing the Group and seeks to avoid or mitigate those risks as appropriate. The Board is responsible for the monitoring of financial and other performance against budget and forecasts and the formulation of the Group's risk appetite including the identification, assessment and monitoring of the principal risks. Currently, the Group's appetite for risk is medium, based on the strategy of fast growth. The risks are managed by careful management of KPIs, which are used by the management and Board to monitor performance. These are kept under regular review with a comprehensive review of all risks annually. The Board considers that the key risks faced by the Company are set out in the table on page 4. The Board's strategies to mitigate these risks are as follows: Trading to maintain a high level of awareness of performance against budget through the capturing and dissemination of KPIs to all Board members; investment to update STREAM® with the latest technology; and to expand the Group's client base into new organisations, in a few selected geographical territories and to sign multi-year contracts to secure future income streams. Incentivise and retain key people. To maintain cash balances and raise new funding well in advance of it being required. In addition to its other roles and responsibilities the Audit and Compliance Committee is responsible to the Board for ensuring that procedures are in place and are being effectively implemented to identify, evaluate and manage any significant risks faced by the Group. The Directors have established procedures for the purpose of providing a system of internal control, including adherence to frameworks such as ISO 27001 and management of financial risks including reports and segregation of duties. In addition, there are a range of Group policies that are reviewed at least annually by the Board. These policies cover matters including share dealing and insider legislation, conflicts of interest, social media, expenses, treasury, remuneration, risk and compliance. These areas are also included as permanent agenda items for report and review at each regular board meeting. The Board currently takes the view that an internal audit function is not considered necessary or practical due to the size of the Group, segregation of duties and the close day to day control exercised by the executive directors. Principle Six - Establish and maintain the board as a well-functioning, balanced team led by the chair As at 31 December 2024 the Board led by Angus Forrest, included David Rajakovich, Kate Buchan and two non-executive directors, John Wakefield and Nick Clark. The Board considers that John Wakefield is the only independent director; Nick Clark is not considered to be independent, by virtue of his significant shareholding in the Group. The Quoted Company Alliance Corporate Governance Code recommends that there should be at least two independent directors. The Group considers that because of its size one independent director is satisfactory at present. All Directors are encouraged to use their judgement and to challenge matters, whether strategic or operational, enabling the Board to discharge its duties and responsibilities effectively. In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the success of the Group; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a proposed transaction or arrangement. The Board is collectively responsible for the long-term success of the Group and for its leadership, strategy, values, control and management. Board meetings are held at such times as are required for effective monitoring of the Group's operations. All Directors commit the time necessary to fulfil their roles, and this position is kept under review. Given the size of the Board and the scale and nature of the Group's business, the Company does not yet have a separate Nominations Committee. The Directors have diverse backgrounds and qualifications, they have a wide range of experience which they bring to the Group particularly in relation to setting targets, overseeing performance and decision making. The role of the non-executive directors is to bring independent judgement to Board deliberation and decisions. The Board has considerable experience and expertise in the technology sector and the running of publicly traded companies and with the appointment of David Rajakovich, experience of leading and growing a SaaS business. John Wakefield and Nick Clark are non-executive directors. Full biographical details of all directors can be found on pages 6 & 7 and on our website https://www.acuityrmgroup.com . The Board meets regularly and is responsible for formulating, reviewing and approving the Group's strategy, budgets, performance, major capital expenditure and corporate actions. The Board meets at least six times per annum. It has established an Audit Committee and a Remuneration Committee, both comprise solely non-executive directors, particulars of these committee meetings appear hereafter. Board Meetings are open and constructive, with every Director participating fully. Board and Committee attendance During the year, the Company held five scheduled and two unscheduled meetings. The following table shows the attendance of directors at Board and Committee meetings held during the year: Board Meetings Committees Audit Remuneration Angus Forrest 7 Kerry Chambers* 6 Nick Clark 7 2 1 John Wakefield 7 2 1 Kate Buchan ** 4 David Rajakovich** 1 * Kerry Chambers resigned as a director with effect from 31 December 2024. **Kate Buchan and David Rajakovich were appointed to the Board on 14 June 2024 and 4 November 2024 respectively. All the directors are subject to either a service agreement or letter of appointment outlining their duties and responsibilities. The Articles of Association require directors appointed during a year to retire at the first AGM and be put forward to stand for re-appointment by members at that AGM; and each director is required to retire from office and stand for re-election every third year. The QCA Code recommends that shareholders should be given the opportunity to vote annually on the re-election of all the individual directors to the Board. However, the Board does not consider it appropriate to change to an annual vote for all directors because the Company is young and developing and effective management and control requires experienced directors to provide continuity and a true in-depth understanding of the business. The Board has decided that each director should stand for re-election at the AGM every other year. Principle Seven - Maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up to date experience, skills and capabilities The responses to Principle Seven should be read in conjunction with those to Principle Six above. Governance structures The Group is headed by the Board which comprises two executive directors and three non-executive directors. It is supported by Audit and Remuneration Committees, which comprise the non-executive directors. The Board believes that the current balance of skills reflects a broad range of personal, commercial and professional skills and a range of financial and managerial skills. The Chairman maintains ongoing communications and updates with the non-executives between formal Board meetings. The Board has a range of skills and experience related to running AIM companies, including setting and ensuring adherence to good corporate culture. Where the Board lacks appropriate skills, it outsources to relevant experts in the Group and externally as required. The Directors have access to the Company's NOMAD, company secretary, lawyers and auditors as and when required and are able to obtain advice from other external bodies when necessary. If required, the Directors are entitled to take independent legal advice. The instances where external advice was sought in 2024 were in relation to compliance with the AIM Rules and general legal matters. In addition to their general Board responsibilities, non-executive Directors are encouraged to be involved in making inputs in line with their individual areas of expertise. The Board is kept abreast of developments of governance and AIM regulations. The Company's NOMAD provides initial training including the AIM Rules as part of a new Director's on boarding, thereafter when there are relevant updates. The Board as a whole and individual directors receive appropriate on-going professional training to ensure they have the requisite and up to date skills to perform their duties. Board reports - the Board details the information it requires to oversee the management of the business and take appropriate decisions. The Executive produces monthly board reports for the Directors / Board to consider as well as additional information as required. Principle Eight - Evaluation board performance based on clear and relevant objectives, seeking continuous improvement The Directors undertook an evaluation in the year ended 31 December 2024 which resulted in several changes to the executive team which were announced during the year. In the Board meetings, the Directors can discuss any areas where they feel a change might benefit the Company, and the Company Secretary remains on hand to provide impartial advice. No external Board evaluation has been made, nor is one planned. The main reasons are the early stage of the quoted business and the changes which have taken place to improve its performance should be allowed to deliver before it would be appropriate to have an external evaluation. Principle Nine - Establish a remuneration policy which is supportive of long-term value creation and the company's purpose, strategy and culture The Board recognises that the success of the Company is dependent on its employees and it is critical to recruit and retain the best talent appropriate to the business. Therefore, it is important to create an exciting business with significant growth potential, to attract employees, to remunerate people at market rates with commission and bonuses paid for good performance. Also, to grant share options to retain and reward key staff appropriately. A new EMI share option scheme was adopted in 2024, with share options granted and largely exercisable only when the market price has doubled from the price at the date of grant. Remuneration is one of the key drivers for employees, other key motivators include the corporate culture, team atmosphere and opportunity for advancement. It has been decided that an advisory shareholder vote on remuneration is not appropriate for this business at this stage of its development, although this policy will be kept under review. Principle Ten - Communicate how the group is governed and is performing by maintaining a dialogue communicated with shareholders and other key stakeholders 2024 was a year of consolidation following the acquisition of Acuity Risk Management Limited in 2023. Revenues increased mainly because of the organic growth of business with existing customers, a small number of new customers and the Rizikon business was acquired towards the end of the period. The Board closely monitored progress during the year and a change to management was agreed and implemented in December. Remuneration Committee The Remuneration Committee comprises John Wakefield as Chair, and Nick Clark. Other directors attend by invitation. The Committee's primary responsibilities are to review the incentive and reward packages for the Chair, Executive Directors and senior executives to ensure that they are aligned with the Group's strategic objectives and financial performance, and are appropriate to attract, retain and motivate management behaviour in support of the Company's culture and beliefs and the long-term sustainable creation of shareholder value. No Director took part in discussions concerning the determination of their own remuneration. Acuity RM Group plc Audit and Risk Committee The Audit and Risk Committee comprises John Wakefield as Chair, and Nick Clark. Other directors attend by invitation. The Audit and Risk Committee's primary responsibilities are to monitor the financial affairs of the Group, to ensure that the financial performance of the Group is properly measured and reported on, and to review reports from the Group's auditor relating to the accounting and internal controls. The significant issues considered by the Audit and Risk Committee relating to the Group's financial statements include revenue recognition and intangible assets, as detailed in the "Summary of significant accounting policies" on pages 38 to 43 in notes 1 & 10 to the financial statements. The independence and effectiveness of the external auditor is reviewed annually and the Audit Committee meets at least once per financial year with the auditors to discuss their independence and objectivity, the Annual Report, any audit issues arising, internal control processes, auditor appointment and fee levels and other appropriate matters. AGM The AGM allows the Board to update the shareholders on the Company's progress and provides an opportunity for shareholders to pose questions to Directors. In particular, the AGM provides an opportunity for shareholders, particularly private investors, to engage in wider discussion with the Board on issues of concern or interest to them, and to share their thoughts on the Company's strategy and business model. This year's AGM will be held on 30 July 2025. Angus Forrest Chairman 24 June 2025 ‌Audit Committee Report for the year ended 31 December 2024 Chairman's introduction It gives me great pleasure to present the Audit Committee report on behalf of the Audit Committee. Acuity RM Group plc is an AIM quoted company and as such, we are guided by the QCA's Audit Committee Guide. Below we set out the Committee's responsibilities and report on the activities of the Committee during the period ended 31 December 2024. The Board is pleased to propose the re-appointment of PKF Littlejohn LLP as the Company's Auditor at this year's AGM. The role and duties of the Audit Committee The role of the Audit Committee assists the Board with monitoring, reviewing and challenging the integrity of the Company's financial results. The framework of duties is set out in its Terms of Reference which are available on the Company's website. Duties of the Committee The Audit Committee is responsible for ensuring the financial performance of the Company is properly recorded and reported on, including adopting suitable accounting policies and judgements which affect the financial statements. Also, appointing and liaising with the external auditors without the Executives present. Committee membership and attendance Appointments to the Committee, which currently comprises John Wakefield and Nick Clark , are made by the Board, having been deemed to have the appropriate skills and experience. Only members of the Committee have the right to attend meetings, although others may be invited to attend meetings as appropriate. The external auditors also attend the meetings to discuss the planning and conclusions of their work and meet with the members of the Audit Committee without any members of the executive team present after each meeting. The Audit Committee can call for information from management and consults with the external auditors directly if required. Attendance During the year, the Committee held two scheduled meetings and reported on its activities to the Board. The members of the Audit Committee, and their attendance at meetings are detailed on page 11. Activities of the Committee Areas of focus Activities during the period ended 31 December 2024 Financial Statements and narrative reporting Reviewing the financial statements and narrative reporting in the Annual Report and Accounts for 2024 Consideration of reports from the external auditor in respect of the Annual Report and Accounts for 2024 Going Concern A review of the Group as a going concern including methodology, assessment in support of the going concern assumption, concluding the expectation that the Group has adequate resources to continue in operational existence for the foreseeable future Accounting policies and standards A review of the Group's accounting policies and ensuring they are in accordance with International Accounting Standards Consideration of effects of changes in accounting standards to the Group's financial statements Review of external auditor The Audit Committee reviews the performance of the external auditor regularly External Auditor Audit process The Audit Committee liaises with the external auditor prior to the start of the audit, during the audit process and in a review at the end of the audit, including the Auditor's management representation letter. Effectiveness and independence of the external auditor The Audit Committee reviews and monitors the independence and the objectivity of the external auditor. Appointment of the external auditor The Audit Committee advises the Board on the appointment, reappointment and removal of the external auditor. Internal Audit Function Given the size of the Company, internal controls and segregation of tasks it has been decided that it would be impractical to set up an internal audit. This decision will be reviewed from time to time. Whistleblowing Every executive's contract of employment contains a section on whistleblowing and there is a Group procedure in the event that a whistleblower wants to bring a matter to the attention of the Board. John Wakefield Audit Committee Chairman 24 June 2025 ‌Remuneration Report for the year ended 31 December 2024 The policy of the Board is to provide executive remuneration packages designed to attract, motivate, and retain Directors and employees of a sufficiently high calibre such that shareholder value will be enhanced and to reward them accordingly. It aims to provide sufficient levels of remuneration to do this, but also to avoid paying more than is appropriate. Angus Forrest, David Rajakovich and Kate Buchan have service contracts each with a notice period of six months. Main elements of remuneration The three main elements of the Executive Directors' remuneration packages which are a mix of fixed and variable pay: base salary, performance-related bonus and share option incentives. Base salary Base salaries payable to Executive Directors are reviewed annually by the Board. In determining the appropriate levels of remuneration, the Board believes that the Company should offer average levels of base pay reflecting individual responsibilities compared to similar roles in comparable companies. Summary of Directors' remuneration including employer's NI: Salary/ fees Employer's Total Total Pension Contributions 12 Months 12 Months 12 Months 12 Months ended ended ended ended 2024 2024 2024 2023 £'000 £'000 £'000 £'000 Executive A Forrest 136 - 136 53 K Buchan ** 36 2 38 D Rajakovich * 11 12 K Chambers* 206 9 215 97 S Marvell 36 4 40 26 Non-executive N Clark 16 1 17 16 J Wakefield 16 - 16 16 S Bennett - - - 26 N Malde - - - 2 457 16.5 473.5 236 * David Rajakovich was appointed as Chief Executive on 13 December 2024 and Kerry Chambers resigned as a director effective on 31 December 2024. ** Kate Buchan and David Rajakovich were appointed to the board of directors on 14 June 2024 and 4 November 2024 respectively. Non-executive Directors Remuneration for non-executive Directors is determined by the Board. The non-executive Directors each have a Letter of Appointment which can be terminated by either party giving the other three months' prior written notice. Company Share Option Plans A new EMI approved share option scheme was set up during the year and options were granted as shown in the column headed 31 Dec 2024, Approved Scheme. Share options issued prior to 2024 were as part of a Company Unapproved scheme are shown in the columns headed Unapproved Scheme. Directors who held office during any part of the year or prior year held the following options over shares in the Company at the dates shown: 31 Dec 2024 31 December 2023 31 Dec 2024 31 Dec 2023 Approved Scheme Approved Scheme Unapproved Scheme Unapproved Scheme A Forrest * 3,002,564 - 800,000 800,000 K Buchan 1,125,961 - - - K Chambers ** - - - - D Rajakovich ** - - - - N Clark - - - - S Marvell - - - - J Wakefield - - 100,000 100,000 S Bennett - - - 400,000 N Malde - - - 200,000 On 26 June 2024 7,131,088 share options, (under the Approved Scheme) were issued, exercisable at 3.75p. Save for 1,501,282 options granted to Angus Forrest, the options are exercisable in whole or in part at any time for five years from date of grant conditional on the market price (under the rules of the EMI Scheme) of the Company's shares reaching double the exercise price for a period of at least five consecutive trading days. *1,501,282 of the options granted to Angus Forrest have been awarded as a reward for initiating, delivering and successfully integrating the acquisition of Acuity Risk Management Limited in April 2023. These bonus options are not subject to any performance criteria and are exercisable between the first and tenth anniversaries of the date of grant. **2,251,922 of the options issued on 26 June 2024 were granted to Kerry Chambers and lapsed when she left the Company. On 6 February 2025 an equivalent number of options were granted to David Rajakovich on the same terms other than as to date of grant. A total of 1,500,000 share options were issued in 2020 under the Unapproved Scheme, 1,100,000 exercisable at 6.5p and 400,000 at 5.5p, in both cases exercisable at any time in the 10 years from date of grant. During 2024, 600,000 of the options exercisable at 6.5p have lapsed. The Directors' interests in the shares of the Company as at 31 December 2024 are shown in the table on page 18. ON BEHALF OF THE BOARD John Wakefield Chairman of the Remuneration Committee 24 June2025 ‌Directors' Report for the year ended 31 December 2024 The Directors have pleasure in submitting their report, together with the financial statements of the Group and Company, for the year ended 31 December 2024. Principal activity The principal activity of the Group is the provision of risk management software, STREAM and related services. Review of business and dividends A review of the current and future development of the Group's business is given in the Strategic Report on pages 1 to 4 which forms part of, and by reference is incorporated in, this Directors' Report. The principal risks and uncertainties faced by the Group are set out on page 5. Results and Dividends The results of the Group for the period ended 31 December 2024 are set out in the Group Statement of Comprehensive Income. The Directors do not recommend the payment of a dividend for the year. Directors and Directors' interests The Company supports the concept of effective Board leadership and control of the Company. The Board is responsible for approving Company policy and strategy. All Directors have access to advice from the Company Secretary and if necessary, from independent professionals at the Company's expense. The biographical details for the Board members serving as at the date of this report are shown on pages 6 & 7. Those Directors who held office during the year and their interests in the shares of the Company, which include beneficial and family interests, are shown below: As at 31 December 2024 ordinary shares of 0.1p As at 31 December 2023 ordinary shares of 0.1p Kerry Chambers 1 1,245,983 674,555 Nick Clark 2 8,936,000 8,936,000 Angus Forrest 3 5,425,841 4,711,556 Kate Buchan 4 - - David Rajakovic 4 - - John Wakefield 388,822 388,822 1 Kerry Chambers became a director on 3 July 2023 and resigned as a director on 31 December 2024. 2 Nick Clark's holding comprises that of himself and his family, including those held by their pension fund. 3 Angus Forrest's interest in shares includes those held by his pension fund. 4 Kate Buchan became a director on 13 June 2024 and David Rajakovich became a director on 4 November 2024. The notice convening the AGM is sent to shareholders with this report. A separate motion will be put to the meeting on each substantive issue. Accountability and audit The Board endeavours to present a balanced and understandable assessment of the Group's position and prospects in all reports as well as in the information required to be presented by statutory requirements. Going concern The financial statements have been prepared on the going concern basis, the Directors having considered the cash forecasts for the next 12 months from the date of the approval of these financial statements. In doing so they have given due regard to the risks and uncertainties affecting the business as set out in the Strategic Report on pages 1-4. On this basis and considering contracted forward revenues, renewal rates and forecast new business wins and expected costs, the Directors have a reasonable expectation that the funds available to the Group are sufficient to meet the requirements indicated by those forecasts. Corporate Governance The Group has set out its full Corporate Governance Statement on pages 8 to 13. The Corporate Governance Statement forms part of this Directors' report and is incorporated into it by cross reference. The Board has considered the need for an internal audit function but has decided that this is not justified at present given the size of the Group. However, it will keep this decision under review. Significant shareholdings According to the Company's register of substantial shareholdings as at 21 May 2025 the following had notified the Company of their interest in 3% or more of the Company's issued ordinary share capital. The holdings of Directors who served during the year are shown on page 18. Number of shares % Simon Marvell 31,647,998 16.3 Richard Mayall 13,325,173 6.9 Ridgecrest plc 11,428,572 5.9 John Barker 6,446,947 3.3 s.172 Companies Act 2006 and key stakeholders The Company is dependent on a number of stakeholders to enable it to progress towards its objectives of growing and creating value for shareholders. Our key stakeholders are our shareholders, people, portfolio companies, those we transact business with and the Community. L - Long Term C - Colleagues S - Shareholder B - Business conduct I - Investees Co - Community E - Environment Matters considered by the Board in the year Business Review, Performance and Strategy Regular reports from the Chair and Chief Executive Approval of the Group's strategy and new investments Financial Regular accounts and other financial reports compared with budget. Shareholder impact Stakeholder and s172 Companies Act L, C, S, B, I Consideration and approval of the Company's strategy, investments, overall and specific performance L, C, S, I In respect of the above the Board reviews proposals, activity and performance against targets L, C, S, I Dissemination of key financial information to the Board and other executives to assist with understanding and decision making. Approval of the Company's business plan and budget Approval of the full year report and accounts and interim statement L. C, S, I Following the publication of the full year and interim results, dissemination to investors and potential investors. Approval of all trading announcements L, C, S, I Internal controls and risk management Review of internal controls and financial and other performance of the portfolio companies. L, C, S, I Whilst the Company is small, there is a separation of activities to ensure checks and balances. Governance Regular reports to and feedback from the Company's advisers Review of Company against Company values L, C, S, I L, C, S, I, B and Co Feedback for the various stakeholder groups influences and is taken into account when the Board is making its decisions. Financial risk management objectives and policies The Group's financial instruments comprise its investments, cash balances, receivables and payables that arise directly from its operations and derivative instruments. The Group is exposed to market risk through the use of financial instruments and specifically to liquidity risk, market price risk and credit risk, which result from the Group's operating activities. The Board's policy for managing these risks is summarised below. Liquidity risk The Group maintains significant cash balances. The Directors monitor current and future requirements in line with trading so there is time to take action to revise the cost base or raise additional funds. It has the ability to raise funds using its brokers and otherwise. Credit risk The Group's exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date. Capital risk management The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group monitors capital on the basis of carrying an amount of cash and cash equivalents as presented on the face of the Statement of Financial Position and compared to the short and medium term liabilities and expected liabilities. Post balance sheet events On 19 th May 2025, the Company completed a fundraise via a placing and subscription and raised gross proceeds of £411,071 by the issue of 41,107,143 shares at 1p per share. The directors and the largest shareholder Simon Marvell announced their intention to subscribe for 10,500,000 shares at 1p per share to raise a further £105,000, to be effected once this report and accounts has been published. The placing included a broker option and on 21 st May 2025 it was announced that this had raised a further £10,000 through the issue of 1,000,000 shares. For every one shares purchased under the fundraise one warrant will be issued, entitling the holder to subscribe for one share at a price of 1.5p per share exercisable for a period of 12 months. Additionally on 19 May 2025 the Company announced that it was issuing 344,827 shares at a price of 1.45 pence per share to settle £5,000 of deferred consideration for the purchase of a loan note, in accordance with the terms of the purchase, and that it was issuing 1,121,454 shares at a price of 1.45 pence per share to settle £16,261 of a supplier invoice, in accordance with the terms agreed with that supplier at the outset of that supplier being engaged. Share options were issued to David Rajakovich on 6 February 2025 - see page 17 for further details. Disclosure of information to Auditors The Directors confirm that: So far as each Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and The Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. Auditor PKF Littlejohn LLP have been appointed as auditor for the ensuing year in accordance with section 487 of the Companies Act 2006 subject to re-election at the next AGM. Directors' responsibilities statement 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 prepared financial statements in accordance with International Financial Reporting Standards as adopted in the UK. 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 and of the profit or loss of the company and group for that year. 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, for the group and company, UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and 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 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 Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26 regarding the Company's website. The Directors confirm that they have complied with the above requirements in preparing the financial statements. ON BEHALF OF THE BOARD Angus Forrest Chairman 24 June 2025 ‌Financial Statements for the year ended 31 December 2024 ‌INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ACUITY RM GROUP PLC Opinion We have audited the financial statements of Acuity RM Group Plc (the 'parent company') and its subsidiary (the 'group') for the year ended 31 December 2024 which comprise the Group Statement of Comprehensive Income, the Group and Company Statement of Financial Position, the Group and Company Statements of Changes in Equity, the Group and Company Statements 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 UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. In our opinion: the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2024 and of the group's loss for the year then ended; the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and the financial statements 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 as applied to listed entities, 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. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included: We obtained an understanding of the business model, objectives, strategies and related business risk, the measurement and review of the entity's financial performance including forecasting and budgeting processes and the entity's risk assessment process; We assessed Directors' assumptions into the going concern model including the reliability of underlying data used to make the assumptions, whether assumptions and changes to assumptions from prior years are appropriate and consistent with each other; We challenged Directors' plans for future actions in relation to the going concern assessment including whether such plans are feasible in the circumstances; We evaluated the base case of the cash forecast prepared by the Directors and performed appropriate audit procedures around the various scenarios, including sensitising the sales forecast, reviewing correspondence with the lender regarding the debt facility and opportunities for further equity funding. We agreed the year-end cash balance to the opening position within the forecast. We evaluated and compared previous forecasts to actual performance and management information to assess management's forecasting accuracy. We reviewed the Regulatory News Service (RNS) and post balance sheet date Board minutes to ensure any key factors impacting the model were incorporated by the Directors'. We evaluated the reasonableness of the proposed mitigations and Director's ability to implement them within 12 months from the date of approval of the financial statements. We assessed adequacy and appropriateness of disclosures in the financial statements regarding the going concern assessment. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or 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. Our application of materiality For the purposes of determining whether the financial statements are free from material misstatement, we define materiality as a magnitude of misstatement, including omission, that makes it probable that the economic decisions of a reasonably knowledgeab le person, relying on the financial statements, would be changed or influenced. We have also considered those misstatements including omissions that would be material by nature and would impact the economic decisions of a reasonably knowledgeable person based our understanding of the business, industry and complexity involved. We apply the concept of materiality both in planning and throughout the course of audit, and in evaluating the effect of misstatements. Materiality is used to determine the financial statements areas that are included within the scope of our audit and the extent of sample sizes during the audit. We also determine a level of performance materiality which we use to assess the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. In determining materiality and performance materiality, we considered the following factors: our cumulative knowledge of the group and its environment, including industry specific trends; the change in the level of judgement required in respect of the key accounting estimates; significant transactions during the year; the stability in key management personnel; and the level of misstatements identified in prior periods. Materiality for the group financial statements was set at £63,000 (2023 - £80,000). This was calculated based on 5% of loss after taxation for the year (2023 - 7.5% of loss after taxation). Using our professional judgement, we determined loss after taxation to be the principal benchmark within the group financial statements as it was most relevant to stakeholders in assessing the financial performance of the group. Performance materiality for the group financial statements was set at £50,400 (2023 - £56,000) being 80% of headline materiality for the group financial statements as a whole. Materiality for the parent company financial statements was set at £53,000. This was calculated on 1% of net assets (2023 - £38,500 - 1% of net assets). The performance materiality was £42,400 (2023 - £30,800). The materiality and performance materiality thresholds for the material component of the group was calculated considering the same factors as for group and parent company materiality. For each component of the group, we allocated a performance materiality that is less than our overall group materiality. The performance materiality applied to the trading subsidiary financial statements was £40,320. We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified through our audit with a value in excess of £3,150 (2023 - £4,000) and for the parent company a value in excess of £2,650 (2023 - £2,200). We also agreed to report any other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds. Our approach to the audit In designing our audit approach, we determined materiality and assessed the risk of material misstatement in the Group financial statements. In particular, we looked at areas involving significant accounting estimates and judgements by the Directors and considered future events that are inherently uncertain, including the valuation of intangibles assets. Procedures were then performed to address the risks identified and for the most significant assessed risk of misstatement, the procedures performed are outlined below in the key audit matters section of this report. We also assessed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. A full scope audit was performed on the complete financial information of the group. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How our scope addressed this matter Recoverability of Investment in Subsidiary and intercompany Receivable (Parent Company only) (note 13) The Parent Company carries a material investment balance in the subsidiary in its Statement of Financial Position. There is a risk that the carrying value of the investments is greater than the recoverable amount and therefore requires impairment. An entity shall assess at the end of each reporting period whether there is any indication that an asset may be impaired. Given that the estimated recoverable amount of investment is subjective, there is a risk that the related carrying values is overstated. Our work in this area included: Confirmation of ownership of the subsidiary; A review of the impairment assessment prepared by management and challenge the key inputs and estimates included therein; Checking the key assumptions are consistent between this impairment review and other forward-looking projections prepared by management, including the going concern assessment and impairment of intangible assets and goodwill; Re-performing the calculations within management's impairment review; and Ensuring disclosures made in the financial statements in relation to critical accounting judgements are adequate. Carrying value of Intangible Assets and Goodwill (notes 10 & 11) As a result of the acquisition of Acuity Risk Management Limited in the prior year, the Group carries a significant value within intangible assets (£319,000) and goodwill (£5,154,000). The recoverable amount of intangible assets including goodwill is subjective, and as such there is a risk that the carrying value of intangible assets including goodwill may be overstated. Management have undertaken an impairment review of these assets as at the year end. Management have incorporated significant estimations and judgements within their impairment review. There is a risk that these judgements and estimations are subject to bias, mathematical inaccuracies and based on unsupported assumptions. Our work in this area included: Discussing with senior management their future commercial plans for the Group and how both the intangible assets and goodwill form part of those strategies. We also discussed the market for the group's product and services and the group's future development plans; Obtaining management's impairment assessment, including reviewing and challenging management on their key assumptions within the impairment review; Reviewing reasonableness of useful life used by management for amortisation of intangible assets; Performing sensitivity analysis on key assumptions to ascertain the impact of possible changes which would eliminate the headroom over carrying value; Considering whether any other indicators of impairment are present under IAS 36 having reference to internal and external factors; Checking the key assumptions are consistent between this impairment review and other forward-looking projections prepared by management, including the going concern assessment; Comparing the quoted market value of parent company at the year end against the values within the group position of financial position to challenge management on alterative views on valuation of these key assets; Re-performing the calculations within the impairment review; and Reviewing the disclosures in the financial statements, including those relating to estimates and judgements used, and evaluate their completeness in the accounting period. 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 25 . Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explic itly 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 the audit: the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the strategic report and the directors' report have been prepared in accordance with applicable legal requirements. 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 identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or the parent company financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Responsibilities of directors As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the group and parent company 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 group and parent company financial statements, the directors are responsible for assessing the group 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 opera tions, 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 financi al 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 obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management, industry research, and application of cumulative audit knowledge and experience of the sector. We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from UK-adopted International Accounting Standards, Listing rules, the Companies Act 2006, HM Revenue & Customs Tax Legislation and Guidance. We designed our audit procedures to ensure the audit team considered whether there were any indications of noncompliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to: enquiring of management; reviewing of board minutes; reviewing Regulatory News Service announcements; and reviewing legal and regulatory correspondence. We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the potential risk for management bias was in the valuation of investments and carrying value of intangibles assets, including Goodwill. We addressed the risk by challenging the assumptions and judgements made by management when auditing that significant accounting estimate. As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We addressed matters of non-compliance with laws and regulations by reviewing board minutes, enquiring about provisions or contingent liabilities and enquiring about any pending litigation and claims. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located 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 company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Wendy Liang (Senior Statutory Auditor) Wendy Liang (Senior Statutory Auditor) 15 Westferry Circus For and on behalf of PKF Littlejohn LLP Canary Wharf Statutory Auditor London E14 4HD 24 June 2025

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