Annual Financial Report 2024

Annual report and financial statements Registered number SC368538 Year ended 31 December 2024

Directors and Advisers 3

Company Profile and Business Summary 4

Executive Director's Statement 5

Strategic Report 10

Directors' Report 14

Remuneration Committee Report 18

Corporate Governance Statement 20

Statement of Directors' Responsibilities 29

Report of the Audit Committee 30

Independent Auditor's Report 32

Consolidated Statement of Comprehensive Income 39

Statements of Financial Position 40

Statements of Changes in Equity 41

Statements of Cash Flows 43

Notes to the Consolidated Financial Statements 45

Ian Smith (Executive Director)

Matthew Riley (Non-Executive Director) Nicola Chown (Chief Financial Officer)

Delgany Corporate Services Limited

24 Dublin Street Edinburgh EH1 3PP

Cavendish Capital Markets Limited 1 Bartholomew Close

London EC1A 7BL

DAC Beachcroft LLP 25 Walbrook

London EC4N 8AF

Barnes Roffe LLP Charles Lake House Claire Causeway Crossways Business Park Dartford

DA2 6QA

Computershare Investor Services plc 44 North St. Andrew Street Edinburgh EH2 1HJ

Santander UK plc Level 2

Triton Square London

NW1 3AN

The principal activities of Tialis Essential IT PLC ('Company' and 'Group') are the provision of end-to-end solutions to enterprise scale end-customers, public and private, concentrating on end-user device management and on-site support solutions.

The country of incorporation is Scotland; the Company's registered number is SC368538 and the Company is limited by shares. The main country of operation is the United Kingdom.

Further information on the Company can be found at https://www.tialis.com.

• Tialis Essential IT PLC ('Tialis') is a UK based managed services provider delivering outsourced IT services as a strategic technology partner primarily on behalf of system integrators. After a series of acquisitions and divestments, the group is now wholly focused on Tialis Essential IT Manage Limited ('Manage').

• Within its portfolio of services, Tialis specialises in activities including the storage, build, configuration, and shipping of all end-user devices as well as the provision of on-site support engineers, tech bars, server maintenance and fully managed project deployments.

• Its support services have been developed to support clients with all IT requirements, to either complement an existing in-house IT team or act as a fully dedicated IT team on its customers' behalf.

• Revenues from continuing operations were 7% lower in 2024 at £20.8 million (2023: £22.4 million), gross margins decreased by 1% to 29% (2023: 30%) due to the loss of an engineering contract and the decrease in project work from a major customer. Adjusted EBITDA¹ remained steady at £2.0 million (2023: £2.0 million).

¹ Adjustments are as followed; Non underlying items, depreciation, amortisation, impairment, share-based payments, fair value profit on deferred consideration.

I am delighted to report that Tialis has achieved a third consecutive year of Adjusted EBITDA¹ of £2m, driven by the continued development of long-term relationships with third-party system integrators and favourable supply contracts typically with 3 to 5 year terms. We are generating a strong annuity income stream, with a strong pipeline of prospects.

To date Tialis has confirmation of new business, preferred partner and contract extensions totalling approximately £17.8m, marking an excellent start to 2025. Encouragingly a sizeable proportion of the customer wins are 5 year contracts, with multi-million-pound contracts for our lifecycle division.

Leveraging on the continued success of the Allvotec acquisition in 2023, during the year 2024, Tialis was able to agree renewals and extensions of the existing contracts, increasing the deferred and contingent consideration estimate to £1.055 million. Once agreed, this will be paid in shares issued in Tialis Essential IT PLC, at an effective price of 89.2 pence per ordinary share. This increase of £971,243 is shown as a fair value adjustment on the face of the Statement of Comprehensive Income.

Highlights in the year include:

• Significant year on year increase in positive cash generation

• Tialis entered into a £4m Revolving Credit Facility ("RCF") with Santander during the year. The RCF carries an interest rate of SONIA + 3.75 per cent, with a term of 3 years. The RCF was used for early repayment of the loan notes totalling £4.2m which were due for repayment in January and December 2025.

• New business awards with net new partners of £2.5m annual value in 2024

• New business awards of £15m TCV to date in 2025

• A strong current sales pipeline of £8m annual value with a record number of 16 different partners, allowing for good visibility over future growth

• Successful renewals ISO 9001, ISO 14001, ISO 20000-1 & ISO 27001 certifications

• Cyber Essentials & Cyber Essentials Plus re-award

• Silver EcoVadis status awarded for sustainability performance

• Looking forward, revenue for 2025 is expected to be made up of 46% contracted revenue, 28% anticipated contract extensions, and 26% new business

The board is committed to growing Tialis both from M&A activities and organic sales, and we collectively intend the Group to become a cash generating vehicle and will look to implement a progressive dividend policy in the future. The recent acquisition of shares from an existing institution is testament to our commitment, which only adds to the substantial shareholding between Daisy Intermediate Holdings Limited / Matthew Riley and MXC Capital Limited / Ian Smith. Despite recent proposed changes to the IHT legislation we believe that trading AIM equities retain their IHT attractiveness.

As announced on 9 April 2025, the Company created a new subsidiary to house its consultancy operations. Led by Andy Mills and Ian Smith, AI Auxesis Limited (the "Subsidiary"), will be redefining the future of business growth by combining practical strategic consulting with investment. We will partner with early-stage organisations and visionary founders to accelerate innovation, scale intelligent solutions, and unlock long-term value. Our dual approach gives us a unique edge, bridging the gap between investment and execution. We work closely with companies in AI and automation to identify transformative opportunities, offering tailored guidance backed by real capital support. Whether streamlining operations, deploying intelligent systems, or scaling cutting-edge startups, we bring both the expertise and the resources to drive meaningful impact.

¹ Adjustments are as followed; Non underlying items, depreciation, amortisation, impairment, share-based payments, fair value loss / profit on deferred consideration

Executive Director's Statement (continued)

The creation of the Subsidiary required an upfront investment of £250,000 that has been used to fund its first consulting project has started generating revenue. This investment was 50% funded by the Company and the remaining 50% funded by direct contributions of £62,500 made into the Subsidiary by both Ian Smith, Executive Director of the Company, and Andy Mills, in exchange for 25% of the shares each in the Subsidiary. As non-corporate shareholders, both Ian and Andy are entitled to a 10% per shareholder uncapped profit share on any capital gain in the underlying investment in the Subsidiary (the "Profit Share"). The Company contributed £125,000 to the Subsidiary. In order to meet this contribution to the Subsidiary, the Company conducted a direct subscription in the Company's ordinary shares at 60 pence per share, being the mid-market closing price on 8 April 2025 (the "Subscription Shares"). This was then passed on to the Subsidiary. In total the Company issued 208,333 Subscription Shares for cash for a total of approximately £125,000 (the "Subscription"). The subscribers to this fundraise were Ian Smith and Andy Mills in equal proportion to each other at 50% each in return for their respective 25% holdings in the Subsidiary.

On 10 September 2024, Andy Parker stepped down from the Board and his role as Executive Chairman and Nicolas Bedford, previously a Non-Executive Director, was appointed Non-Executive Chairman. Nicolas Bedford subsequently stepped down from the Board on 1 December 2024 following his decision to retire from corporate work. The Group's Chief Financial Officer, Nicola Chown, was appointed as Director on 16 September 2024.

The Board comprises two executive directors and one non-executive director. It will announce the appointment of a new chairman in due course. I welcome the appointment of Nicola and would like to thank both Andy and Nick for their contribution and commitment to the Company during their tenures.

Employee numbers have remained broadly consistent year on year.

The management team has made continued progress in simplifying the structure of the business and aligning services better to support our clients. The board would like to recognise and thank its employees who have worked hard to deliver excellent client service and retain existing key clients.

We intend to continue with our organic initiatives that continue to demonstrate positive growth, including the expansion of our partner network and we are also exploring expansion into Europe. The Group is considering growth through acquisition and would consider synergistic targets that would expand and deepen our service offerings.

We are also exploring additional complementary solutions that can be added to our current services portfolio, which would increase our offering to customers in the end user device market. In addition to this, we are also looking at marketing strategies to increase our brand awareness to the direct market, which can deliver quicker turnaround on Request For Proposal (RFP) wins and therefore faster in year revenue recognition. The transformation of traditional on-site support maintenance solutions, to our Lifecycle services is also key, as it improves our margins, reduces costs for our customers and has less risk of margin erosion than traditional people-based services.

We also recognise the importance placed on sustainability and plan to continue to improve on our ESG targets and our offering of carbon neutral solutions to our customers. Please find more details in the Strategic Report under the Environmental Policies.

Trading in the current financial year remains in line with Board expectations. Our in-year pipeline for 2025 stands at £8 million annual value with a broad range of customers and continues to grow, giving us strong visibility over future growth.

Our expectation for the year is that approximately 74% of revenue will come from existing contracts with the remainder through new business wins. This, together with a buoyant pipeline, gives us great confidence in another positive year of strong growth for the Group.

Executive Director's Statement (continued)

The key objective for 2025 will be to continue to increase the focus and utilisation of our lifecycle facility which provides much greater efficiencies for our end-user customer, higher levels of customer satisfaction, together with better margins. Initiatives are underway with our most significant partner to see an increase in this area. Adding three new partners to our partner portfolio provides the company with further opportunities, and we continue to target new partners to expand our channel reach.

Tialis has carved out a unique niche as a provider of support services and contract engineering resources to large Business Process Outsourcers (BPO) operators. The lifecycle solution it has developed is widely admired and is gaining traction quickly both among the new partners and existing end-user customers and is a real differentiator for the Company.

Revenue for the full year was £20.8 million (2023: £22.4 million). Gross profit margin fell by 1%, from 30% to 29% due to the reduction in one-off lifecycle projects in 2024. Resulting gross profit has decreased year-on-year to £6.0 million (2023: £6.7 million). Adjusted EBITDA¹ remained at £2.0 million (2023: Adjusted EBITDA of £2.0 million). The net loss after tax for the year from was £3.2 million (2023: loss £1.5 million), after £2.2 million amortisation and impairment expense and fair value loss on deferred and contingent consideration (2023: £2.2 million amortisation and impairment expense and fair value profit on deferred and contingent consideration)

¹ Adjustments are as followed; Non underlying items, depreciation, amortisation, impairment, share-based payments, fair value loss / profit on deferred consideration

Non-underlying items relating to on-going restructuring and reorganisation amount to £0.7 million in the year (2023: £0.7 million).

After incurring net finance charges of £0.4 million relating to interest and arrangement fees for loan notes, leases and bank debt (2023: £0.6 million), the loss before tax is £3.3 million (2023: loss of £1.8 million).

The utilisation of tax losses and the benefit of the increase in the rate of corporation tax on the deferred tax asset has resulted in a tax credit for the year of £0.1 million (2023: tax credit £0.2 million).

Whilst the underlying trading performance of Manage shows significant positive EBITDA, group costs, finance costs and amortisation charges result in a loss after tax for the year of £3.2 million (2023: £1.5 million), which equates to a basic loss per share of 13.11 pence (2023: loss per share of 6.45 pence).

The Group has property, plant and equipment of £0.7 million (2023: £0.9 million) all of which are subject to depreciation as per the policies set out in the accompanying financial statements. During the year there were additions of £0.2 million (2023: £0.2 million additions).

Further, intangible assets of customer contracts and related relationships are £4.8 million (2023: £7.1 million) and are subject to amortisation as per the policies set out in the accompanying financial statements.

Executive Director's Statement (continued)

Trade and other receivables have decreased to £4.3 million from £5.0 million.

Trade and other payables amounted to £4.1 million (2023: £4.4 million), including trade payables of £1.3 million (2023: £2.4 million), taxation and social security of £1.2 million (2023: £1.0 million) and accruals of £0.6 million (2023: £0.9 million).

The deferred and contingent consideration of £1.05 million (2023: £0.08 million) is included in other payables.

Contract liabilities arise from customers being invoiced in advance of services delivered, in accordance with individual contractual terms, at the balance sheet date this amounted to £0.8 million (2023: £0.7 million).

Net cash generated from operating activities during the year was £1.9 million (2023: £0.7 million). Our Manage business continues to be cash generative and has developed excellent relationships with key strategic partners. The Group invested £0.02 million (2023: £0.08 million) in fixed assets.

During the year, the secured loan notes, which were due for repayment in January and December 2025, were settled early through the drawdown of the new RCF along with a new unsecured convertible loan note with MXC of £0.3m. The unsecured loan note carries an interest rate of 15% and is for a term of 3 years 3 months.

There were no new loans in 2023.

The repayment of lease liabilities consumed £0.3 million (2023: £0.2 million) of cash.

The result is that as at 31 December 2024 there are bank borrowings of £4.0 million, being the drawdown of the RCF, and a cash balance of £0.9 million (2023: there were no bank borrowings and the cash balance was £0.3 million).

As at 31 December 2024, the bank borrowings liability in the balance sheet was £4.0 million and the unsecured convertible loan note liability was £0.3 million. There were no secured loan notes liabilities as there were repaid in September 2024.

There were donations to charities of £1,982 in the year (2023: £nil).

The Directors have produced detailed trading and cashflow forecasts. In reaching their conclusion on the going concern basis of accounting, the Directors note and rely on the improved trading performance, the positive cash generation that the business is now experiencing and the current signed order book. A reverse stress test of the model has been run to determine at what level of shortfall in revenues the Group would run out of cash. Given the committed orders already obtained and the visibility of future revenues, the directors do not consider it likely that revenues could drop to such an extent that the Group would run out of cash. They have also considered the impact of any delayed customer payments and have developed plans to mitigate any such delays to ensure that the group can continue to settle its liabilities as they fall due and operate as a going concern.

The directors therefore have an expectation that the Group and Company have adequate resources available to them to continue in operational existence for a period of at least 12 months from the date of approval of these financial statements. Accordingly, the Group and Company continue to adopt the going concern basis in preparing these consolidated financial statements.

Executive Director's Statement (continued)

The Directors do not propose a dividend in respect of the current financial year (2023: £nil).

A detailed review of the business is set out in the Executive Director's Statement and the Financial Review. The year under review was a positive one for the business with both continuing revenues and gross margin remaining consistent year-on-year and adjusted EBITDA¹ remaining positive, although the Group reported a post-tax loss due to finance costs, impairments, fair value loss / profit on deferred consideration and restructuring. Future developments and current trading and prospects are set out in the Executive Director's Statement and the Financial Review. These reports together with the Corporate Governance Statement are incorporated into this Strategic Report by reference and should be read as part of this report. The Group's strategy is focused on maximising value for stakeholders by increasing revenues and profits by upselling to our current customer base as well as by bringing new customers on board.

At 31 December 2024, the Board comprised three Directors (2023: four) two of whom are male and one female. At 31 December 2024 the Group had 268 employees including Directors (2023: 290) of which 245 were male (2023: 245) and 44 were female

(2023: 45).

¹ Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation, impairment charges, non-underlying items,loss on disposal of fixed assets and share-based payments.

Identifying, evaluating, and managing the principal risks and uncertainties facing the Group is an integral part of the way the Group does business. There are policies and procedures in place throughout the operations, embedded within our management structure and as part of our normal operating processes.

The Board reviews the principal risks on a bi-annual basis. The risks have been amended following the sale of the Connect business with the resultant Group being greatly simplified. The impact, measures in place and tactics to mitigate risks are assessed on a regular basis. The risk categories, set out below, have been identified by the Board as those currently considered to potentially have the most material impact on the Group's future performance. In addition to these risks, note 23 contains details of financial risks.

Customer concentration

The Group has a significant revenue concentration with a single Partner (81%) (2023: 83%). This is mitigated as there are a number of end customers, all with different agreements and contract end dates. The Group has traded with the Partner for over 20 years and has long standing relationships. The Group is also focused on reducing this concentration and is working on several opportunities to achieve this.

Market and Economic Conditions

Market and economic conditions are recognised as one of the principal risks in the current trading environment. Risk is mitigated by the monitoring of trading conditions and changes in government legislation, the development of action plans to address specific legislative changes and the constant search for ways to achieve new efficiencies in the business without impacting service levels.

The Board does not believe the current macro-economic outlook has changed the Group's prospects given the large proportion of the end-customers being in the public sector. The Group has also undertaken stress testing of the detailed trading forecasts and cashflows taking into account inflation and interest rate increases. The Board does not consider that these will change the outlook at present. In relation to interest rates increases, the Group's debt is at a fixed rate.

Reliance on Key Personnel and Management

The success of the Group is dependent on the services of key management and operating personnel. The Directors believe that the Group's future success will be largely dependent on its ability to retain and attract highly skilled and qualified personnel and to train and manage its employee base. During the year, the restructuring programme continued which resulted in more members of staff being made redundant and other members of staff moving into new roles. For those who remain there are several employee benefits and active communication is encouraged within the business to mitigate the risk of losing skilled and qualified individuals. Furthermore, there is an apprenticeship scheme which the Group believes will assist in training and retaining younger individuals going forward.

Strategic Report (continued)

Competition

The Group operates in a highly competitive marketplace and while the Directors believe the Group enjoys certain strengths and advantages in competing for business, some competitors are much larger with considerable scale. The Group monitors competitors' activity and constantly reviews its own services and prices to ensure a competitive position in the market is maintained.

Technology

The market for our services is in a state of constant innovation and change. We devote significant resource to the development of new service lines, ensuring new technologies can be incorporated and integrated with the Group's core services. The nature of the Group's services means that they are exposed to a range of technological risks, such as viruses, hacking and an ever-changing spectrum of security risk. We maintain constant pro-active vigilance against such risks and the Group maintains membership of some of the highest levels of security accreditation as part of the service it offers its customers.

The Directors are aware of their duty under section 172(1) of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:

• The likely consequences of any decision in the long term;

• The interests of the Company's employees;

• The need to foster the Company's business relationships with suppliers, customers and others;

• The impact of the Company's operations on the community and the environment;

• The desirability of the Company maintaining a reputation for high standards of business conduct; and

• The need to act fairly between members of the Company.

The Board recognises that the long-term success of the Company requires positive interaction with its stakeholders. Positive engagement with stakeholders will enable our stakeholders to better understand the activities, needs and challenges of the business and enable the Board to better understand and address relevant stakeholder views which will assist the Board in its decision making and to discharge its duties under Section 172 of the Companies Act 2006.

The Company is committed to operating with an inclusive, transparent, and respectful culture and places particular emphasis on operating to the highest ethical and environmental standards.

The Directors take personal ownership of the policies and maintenance of the necessary exacting standards of business conduct throughout the organisation and for delivering these corporate and social responsibilities.

Recruitment and employee management are undertaken in line with the Company Employment Policy which has committed to a working environment with equal opportunities for all, without discrimination and regardless of sex, sexual orientation, age, race, ethnicity, nationality, religion, or disability.

Strategic Report (continued)

We are committed to being an equal opportunities employer and oppose all forms of unlawful discrimination. We believe that staff members should be treated on their merits and that employment-related decisions should be based on objective job-related criteria such as aptitude and skills. For these reasons, all staff members, and particularly managers with responsibility for employment-related decisions, must comply with the practices described below:

• recruitment;

• pay and benefits;

• promotion and training;

• disciplinary, performance improvement and redundancy procedures.

As part of the induction of all employees and on a recurring annual basis, all employees have to complete a mandatory set of training courses, one of which is on equality, diversity and inclusion in both the workplace and local communities.

We conduct a gender pay analysis annually and the report is published on the Company's website.

Tialis seeks to attract and retain staff by acting as a responsible employer. The health, safety and well-being of employees is important to the Company. All employees have access and are encouraged to use the Employee Assistance Program with a 24-hour helpline.

Furthermore, the Company has committed to continuous development schemes and will support employees to attain the best for themselves and the Company through personal assessment, training and mentoring.

Externally, Tialis has established long-term partnerships that complement its in-house expertise and has built a network of specialised partners within the industry and beyond.

The Directors have committed to promoting a company culture that treats everyone fairly and with respect and this commitment extends to all principal stakeholders including shareholders, employees, consultants, suppliers, customers, and the communities where it is active.

All Directors are encouraged to act in a way they consider, in good faith, to be most likely to promote the success of the Company for the benefit of its shareholders. In doing so, they each have regard to a range of matters when making decisions for the longterm success of the Company.

Tialis Group cares profoundly about the health and safety of our employees, customers and the communities who could be affected by our activities and aims to protect them from any foreseeable hazard or danger arising from our activities. To this end in 2024 the Company completed a series of safety related studies and reviews, including electrical and gas, quantified risk assessments and layer of protection analysis using external experts to review the product risk and the application on our Dartford site. In all instances the findings of the safety risk assessments have demonstrated that the risk arising from the Tialis Group's activities is well within acceptable tolerable risk levels. In 2025 the Company will revisit these assessments to identify any changes that have been introduced which may represent new or variants of risk.

We have a Health and safety policy and as mentioned above all employees have to complete a mandatory set of training courses, which include several health and safety courses, including manual handling, mental health awareness, stress awareness, bullying and harassment, display screen set-up and a general health and safety course.

The Directors recognise that the key to successful health and safety management requires an effective policy, organisation, and arrangements which reflect the commitment of senior management. The executive management team implement the Company's health and safety policy and ensure that the Company Health and Safety (HSE) management system and safety standards are all maintained, monitored, and improved where necessary.

The Company's activities at its Dartford site were delivered HSE incident free in 2024.

The Company's Environmental Policy recognises the importance of our technology from a global challenge perspective. The Company will regularly evaluate the environmental impact of its activities, products, and services, taking all actions necessary to continually improve the Company's and its products' environmental performance.

The Company is proud to have been awarded ISO 14001.

Tialis Group has a Carbon Reduction Strategy which is published on the company website. We at Tialis Group are committed to reducing our impact on the environment in order to help safeguard our planet for future generations. We have committed to a well-below 2 degrees Celsius trajectory and to maintaining our scope 1 and scope 2 greenhouse gas emissions at a level 30% lower than in our base year of 2018. We have invested in an environmental management system certified to ISO 14001 to ensure that we can monitor and manage our activities to meet our targets.

In addition to committing to maintaining our scope 1 and 2 emissions at 30% less than they were in 2018, we will also work to reduce our overall greenhouse gas emissions (scopes 1, 2 and 3) by 2.5% every year from a 2021 baseline. We have engaged with Science Based Targets (SBTi) to validate our 30% reduction target. SBTi has confirmed that our target of a 30% reduction from 2018 has been accepted and will be published on their website. They have undertaken due diligence on the 2018 information we provided and verified its accuracy. As the work we have done in the last few years has helped us achieve the 30% target already, we will now ensure that we maintain this lower level.

As mentioned above all employees have to complete a mandatory set of training courses, which include an environmental awareness course.

The Group's purpose is to build value for the investors and shareholders through the development of innovative service offerings designed to reduce business IT costs and increase efficiencies for our partners and customers.

We intend to continue with our organic initiatives that continue to demonstrate positive growth, including the expansion of our partner network and we are also exploring expansion into Europe. The Group is considering growth through acquisition and would consider synergistic targets that would expand and deepen our service offerings.

We are also exploring additional complementary solutions that can be added to our current services portfolio, which would increase our offering to customers in the end user device market. In addition to this, we are also looking at marketing strategies to increase our brand awareness to the direct market, which can deliver quicker turnaround on RFP wins and therefore faster in year revenue recognition. The transformation of traditional on-site support maintenance solutions, to our Lifecycle services is also key, as it improves our margins, reduces costs for our customers and has less risk of margin erosion than traditional people-based services.

We also recognise the importance placed on sustainability and plan to continue to improve on our ESG targets and our offering of carbon neutral solutions to our customers.

24 Dublin Street Edinburgh EH1 3PP

The Directors present their report together with the audited consolidated financial statements for the year ended 31 December 2024 for Tialis Essential IT PLC ("Tialis" or the "Company") and its subsidiaries (together, the "Group").

The principal activity of the Group during the year was the provision of end-to-end solutions to enterprise scale end-customers, public and private, concentrating on end-user device management and on-site support solutions. The Company is a holding company.

The review of the year and the Directors' strategy are set out in the Executive Director's Statement and in the separate Strategic Report on pages 10 to 13.

The Company did not pay a dividend during the year ended 31 December 2024 (2023: £nil). The Directors do not recommend the payment of a dividend at 31 December 2024 (2023: £nil).

The Directors who held office during the period and up to the date of the Annual Report are as follows: Ian Smith

Andy Parker (resigned 10 September 2024)

Nicolas Bedford (resigned 1 December 2024) Matthew Riley

Nicola Chown (appointed 16 September 2024)

Delgany Corporate Services Limited

A brief biography of the current Directors can be found below:

Ian Smith - Executive Director

On 1 June 2018, Ian was appointed as Executive Director.

Ian has an extensive track record of investing in and managing technology companies and is co-founder and CEO of MXC Capital Limited. Ian has sat on numerous boards and either led or been involved in a large number of transactions in the TMT sector. Ian led strategic change and value accretion at Redstone PLC and Accumuli PLC and was previously deputy executive chairman and CEO at Castleton Technology PLC.

Ian is CEO and a substantial shareholder of MXC Capital Limited, a substantial shareholder and previous loan note holder in the Company. He also holds approximately 2.2% of the Company's voting rights via his self-invested pension plan. Ian is a member of the Remuneration Committee and the Audit Committee.

Directors' Report (continued)

Matthew Riley - Non-Executive Director

Matthew Riley was appointed as a Non-Executive Director on 1 February 2023 following the purchase of profitable partner contracts from Allvotec, a division of Daisy Group. Matthew was the founder and chairman of Daisy Group and he led Daisy Communications Ltd and Daisy Group through rapid growth to become one of the UK's leading end-to-end business technology and communications service providers. Matthew is an award-winning entrepreneur, winning the Bank of Scotland Entrepreneur Challenge and Ernst & Young's UK Young Entrepreneur of the Year in 2007 and the City Awards Dealmaker of the Year in 2012. He received the Comms Industry Awards Lifetime Achievement Award in 2017 and the ICT Forum Outstanding Achievement Award in 2019.

Matthew is also a director and major shareholder of Daisy Intermediate Holdings Limited, a shareholder of the Company. He also

holds approximately 1% of the Company's voting rights and is a member of the Remuneration Committee and the Audit Committee.

Nicola Chown - Chief Financial Officer

Nicola, a qualified chartered accountant, is a highly experienced finance professional who has over twenty years' experience in finance and business development leadership roles and was appointed to the Board on 16 September 2024. Nicola has been the Chief Financial Officer of Tialis since 2021 and oversees the financial operations of the Group as well as the HR, property and legal teams. She has introduced financial and operational processes and has been central in the integration of new systems and in implementing strategic and cost cutting measures.

Nicola is a member of the Remuneration Committee.

As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third-party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The Company also purchased and maintained Directors' and Officers' liability insurance throughout the financial year in respect of itself and its Directors.

Ian Smith and Matthew Riley will retire in line with best practice set out in the QCA Corporate Governance Code and, being eligible, will offer themselves for re- election at the forthcoming Annual General Meeting ("AGM"). Nicola Chown will stand for election at the forthcoming AGM having been appointed to the Board since the last AGM.

Details of the Directors' service contracts and their respective notice terms are detailed in the Remuneration Committee report.

Directors' Report (continued)

At 31 December 2024, Ian Smith held 543,000 Ordinary Shares in the Company representing 2.23% of the issued ordinary share capital on that date through his Self-Invested Pension Plan. Ian Smith is also Chief Executive Officer and a substantial shareholder of MXC Capital Limited (MXC). MXC owned 75.9% at 31 December 2024 (2023: 75.2%) of the issued share capital of the Company. Together, Ian Smith and MXC owned 78.1% at 31 December 2024 (2023: 74.6%) of the issued share capital of the Company.

At 31 December 2024, Matthew Riley held 250,000 Ordinary Shares in the Company representing 1.03% of the issued ordinary share capital on that date. Matthew Riley is also a director and major shareholder of Daisy Intermediate Holdings Limited ("Daisy") which holds 2,289,295 Ordinary Shares representing 9.41% of the Company's issued ordinary share capital. Matthew Riley and Daisy hold in aggregate 2,539,295 Ordinary Shares, representing 10.44% of the Company's issued ordinary share capital at 31 December 2024.

At 31 December 2024 and at 9 May 2025, being the latest practicable date before the publication of the Annual Report, the Company is aware of the following significant interests in its ordinary, voting share capital:

1. MXC Capital Limited is a related party; Ian Smith, Executive Director, is Chief Executive Officer and a substantial shareholder of MXC Capital Limited.

2. Daisy Intermediate Holdings Limited is a related party; Matthew Riley, Non-Executive Director, is a director and major shareholder of Daisy Intermediate Holdings Limited.

A resolution is to be proposed at the forthcoming AGM for the re-appointment of Barnes Roffe LLP as auditor to the Company, at a rate of remuneration to be determined by the Audit Committee.

The Company's financial risk management objectives and policies are described in note 23 to the financial statements.

The Company has two classes of share capital which is divided into Ordinary shares of 1p each and Deferred shares of 2.49p. Details of the Company's issued share capital can be found in note 25 to the financial statements.

The flow of information to staff has been maintained by our staff email bulletins and staff meetings. Members of the management team regularly discuss matters of current interest and concern to the business with members of staff; in particular in regard to providing information on performance indicators, encouraging employee participation and engendering a common awareness of financial and economic factors which affect the Group's performance.

The Group continues to focus on building channels that ensure the Company is effectively listening and responding to employees. In doing so, we can identify opportunities to better meet employee needs and interests, reflecting these where possible in the principal decisions taken by the Company.

Directors' Report (continued)

The Group is committed to a policy of recruitment and promotion on the basis of aptitude and ability without discrimination of any kind. Management actively pursues both the employment of disabled persons whenever a suitable vacancy arises and the continued employment and retraining of employees who become disabled whilst employed by the company. Particular attention is given to training, career development and promotion of disabled employees with a view to encouraging them to play an active role in our development.

Each of the Directors who was in office on the date of approval of these financial statements, having made enquiries of their fellow Directors, confirms that:

• To the best of each Director's knowledge and belief, there is no information relevant to the preparation of their report of which the Group's auditor is unaware; and

• Each Director has taken all the steps a Director might reasonably be expected to have taken to be aware of relevant audit information and to establish that the Group's auditor is aware of that information.

Future developments and current trading and prospects are set out in the Executive Director's Statement and the Financial Review. On behalf of the Board

Executive Director 9 May 2025

Following the resignation of Andy Parker on 10 September 2024 and Nicolas Bedford on 1 December 2024, the Remuneration Committee comprises Matthew Riley, an existing member who was appointed chair on 25 September 2024, Nicola Chown, appointed on 25 September 2024, and Ian Smith also remains a member.

The Remuneration Committee is responsible for determining and agreeing with the Board the framework for the remuneration of Executive Directors and other designated senior executives and, within agreed terms of reference, determining the total individual remuneration packages of such persons, including, where appropriate, bonuses, incentive payments and share options or other share awards. The remuneration of Non-Executive Directors is a matter for the Executive Directors. No director is involved in any decision as to his or her own remuneration or benefits.

There were two meetings of the Remuneration Committee in September and December 2024 in which the salary of a senior member of the management team and objectives were discussed before a recommendation was made to the Board.

For further details of the Remuneration Committee, please refer to the Corporate Governance report in these financial statements.

The Remuneration Committee is aware that the remuneration package should be sufficiently competitive to attract, retain and motivate individuals capable of achieving the Group's objectives and thereby enhancing shareholder value.

Basic salaries for the Executive Directors are reviewed in January each year. The benefits provided to the Executive Directors may include contributions to a Group defined contribution pension scheme, private medical insurance for themselves, their spouse and their children, life assurance cover of 4 times salary, critical illness and income protection cover, a company car allowance and annual leave of 25 days.

The Remuneration Committee determines the criteria for the award of performance bonuses for the Executive Directors in advance of each year. The bonuses are pensionable. Non-Executive Directors do not receive a bonus.

The Board, within the limits stipulated by the Articles of Association and following recommendations by the Executive Directors, determines Non-Executive Directors' fees. The annual fees are £40,000 (2023: £40,000) for a Non-Executive Director and £156,250 (2023: £156,250) for an Executive Chairman.

Remuneration Committee Report (continued)

For Directors who held office during the year, emoluments are shown for the full for the year ended 31 December 2024, even when the director was appointed during the year, and are as follows:

1. Director's emoluments in respect of Ian Smith were paid to MXC Advisory Limited, a subsidiary of MXC Capital Limited.

2. Andy Parker resigned from the Board on 10 September 2024.

3. Nicola Chown was appointed to the Board on 16 September 2024.

4. Nicolas Bedford resigned from the Board on 1 December 2024.

The Executive Directors' salaries are paid by subsidiary companies within the Group. The Non-Executive Director fees and the fee to MXC Advisory Limited for Ian Smith's services are paid by the Company.

Chair, Remuneration Committee On behalf of the Board

9 May 2025

The Directors attach great importance to maintaining high standards of corporate governance to help achieve the Company's goals. The Company is pleased to be an early adopter of the QCA Corporate Governance Code 2023 (the 'QCA Code') published by the Quoted Companies Alliance, which comprises 10 Principles which was revised in 2023.

The QCA Code explains that companies need to aspire to deliver growth in long-term shareholder value, having regard to the interests of other stakeholders. This requires an efficient, effective and dynamic governance framework and should be accompanied by good communication in order to promote and retain confidence and trust. This aligns with the approach adopted by the Board of Tialis which is responsible for corporate governance.

In usual circumstances, the Chairman is responsible for corporate governance and the overall leadership of the Board and ensuring its effectiveness. This was the case throughout 2024 until 1 December 2024 when the Chairman retired from the Board. The three current directors have assumed the role of implementing good corporate governance between them until a new person is appointed to the role.

We have considered how we apply each principle to the extent that the Board judges these to be appropriate for our circumstances, and below we provide an explanation of the approach taken in relation to each.

We have identified a number of areas where we are not in full compliance with the guidelines of the QCA Code and these are Principle 6, 7, 8 and 9. We explain in detail under the relevant principle why we have departed from the guidelines in these areas.

Our objective is to secure the long-term success of the Group by establishing a sustainable and profitable operating model with an appropriate underlying cost base. The Board believes that applying sensible corporate governance practices can only help achieve our goals.

We operate in the way the Board believes is most suited to the Group at its current stage of development. The Group is lead by an experienced board, supported by a strong leadership team to enable it to focus on growing the business to secure its long-term sustainable success whilst creating long-term value for shareholders and stakeholders alike.

Good corporate governance is about ensuring that the board is set up to make robust decisions and manage risk. To do so requires having the necessary breadth of expertise and perspectives around the board table and for each voice to be appropriately heard. It is increasingly about ensuring that a healthy culture is in place which combines a strong focus on performance and a shared sense of purpose. With the appointment of the Chief Financial Officer to the Board in September 2024, the Group believes it has in place a strong leadership team and an appropriate cost base to enable it to focus on growing the business to secure its longterm sustainable success whilst creating long-term value for shareholders and stakeholders alike.

We trust that the result of our efforts to date provide stakeholders with access to the information they need and the confidence that the Board holds corporate governance compliance in the highest regard.

We set out our compliance with these Principles below. This information can also be found on our website here: https://www.tialis.com/investors/financial-reports/

The Group's purpose is to build value for the investors and shareholders through the development of innovative service offerings designed to reduce business IT costs and increase efficiencies for our partners and customers.

The Group's principal activity is the provision of end-to-end solutions to enterprise scale end customers, both public and private, concentrating on end-user device management and on-site solutions. The Board's objective is to secure long-term success by establishing a sustainable and profitable operating model with an appropriate underlying cost base in order to create long-term value for shareholders and stakeholders. 2025 will see a focus on positive cash generation and building the sales pipeline with a more diverse range of partners and long term contracts. The strategy involves growing the Company with acquisitions and organic initiatives, as well as expanding the partner network.

Corporate Governance Statement (continued)

The Board has set out its purpose, business model and strategy in the Strategic Report of the Annual Report and Financial Statements, giving further information in the Executive Director's Statement and the Financial Review about how we performed against our stated strategy. The Strategic Report includes information on the principal risks and uncertainties faced by the Group and how we have acted to reduce our exposure to risk.

The Strategic Report describes how Tialis' flexible and technically skilled workforce enable the Group to deliver and support critical services and solutions in a highly secure environment and how it seeks to differentiate itself through innovation, reliability and value. This, together with the focus on diversifying the client and partner base, underpins the Board's approach to mitigating risk and securing the Company's long-term future.

The Board will continue to monitor its progress against its stated strategy.

The Board firmly believes that delivery of the strategy and sustained success will best be achieved by adhering to our corporate culture of treating all our stakeholders fairly and with respect.

Accordingly, in dealing with each of the Company's principal stakeholders, we encourage our staff to operate in an honest and respectful manner. The Board believes that achieving a common awareness across all employees plays a major role in maintaining good employee relations. The Group's culture of honesty and respect is reflected in the continued support and dedication shown by employees to deliver value to our customers.

The Company is committed to promoting a culture based on ethical values and behaviours across the business. Policies are in place covering key matters such as bribery, protection of intellectual property and sensitive information, conflicts of interest, whistleblowing and anti-slavery. These are vigorously enforced and monitored.

In 2024, we made significant strides in strengthening our Corporate and Social Responsibility, including engaging external auditors and enhancing several key sustainability and decarbonisation functions within the business.

To reinforce these commitments, we require staff to complete several mandatory online training courses on either an annual or 18-month basis. These cover both compliance and culturally driven values. Current completion rates include:

• Anti-Bribery - 84% of staff up to date

• Bullying and Harassment - 77% up to date

• GDPR (Advanced and Refresher) - 75% up to date

• Equality, Diversity and Inclusion - 70% up to date

Our HR team provides regular reports to managers with course completion data to ensure accountability and continued progress.

Central to the Company's culture and values are Collaboration, Excellence, Ethical, Agile, Honest and Ownership. Information on

how the Company's beliefs are applied to the business is set out on the website here. https://www.tialis.com/careers-at-tialis/

Certifications

The Company is proud to have been awarded ISO/IEC 20000-1, ISO 9001, ISO 27001 and ISO 14001. The Company is proud to have been awarded Cyber Essentials and Cyber Essentials Plus.

This has resulted in a number of external ratings including achieving a silver award from Ecovadis.

Corporate Governance Statement (continued)

Tialis Group is committed to open communication with all its shareholders. With the largest shareholder owning over 75 per cent of the Company's voting rights, the Board is conscious of the need to protect minority shareholders and act in the best interest of all shareholders. The Company's nominated adviser is consulted before any corporate action is undertaken as a further check on meeting the needs of all shareholders.

Copies of the Annual Report and Financial Statements are issued to all shareholders who have requested them and copies are available on the Group's investor website https://www.tialis.com. The Group's interim results are also made available on the website. The Group makes full use of its investor website to provide information to shareholders and other interested parties.

The Board reviews proxy voting reports and any significant dissent is discussed with relevant shareholders and, if necessary, action is taken to resolve any issues. In compliance with best practice, the level of proxy votes (for, against and vote withheld) lodged on each resolution is declared at all general meetings and announced.

The Company values the views of its shareholders and recognises their interest in its strategy and performance. The Board believes it is important to explain business developments and financial results to its shareholders and to understand their concerns. Shareholders are given the opportunity to raise questions at the Annual General Meeting ("AGM") and the Directors are available both before and after the meeting for further discussion with shareholders.

Until December 2024, the Non-Executive Chairman was primarily responsible for communicating with investors. Since the Chairman's resignation from the Company, this responsibility has been assumed by Ian Smith, Executive Director. The role will revert to a new Chairman when appointed.

Meetings via the Company's broker are offered to major institutional shareholders to discuss strategy, financial performance, governance matters and investment activity immediately after the full year and interim results announcements. The Directors are available to meet with major shareholders if such meetings are requested. Feedback from such meetings with shareholders is provided to the Board to ensure the Directors have a balanced understanding of the issues and concerns of major shareholders.

The Board receives share register analysis reports to monitor the Company's shareholder base and help identify the types of

investors on the register.

The Group recognises its employees, customers, suppliers, advisors, banks and shareholders as forming part of the wider stakeholder group. Management identifies key relationships within the business and effort is directed to ensuring these relationships are managed appropriately. Regular reviews are undertaken to ensure any issues are addressed promptly.

The Board reviews its top clients and suppliers in its Board meetings and these are identified in packs provided to the Board.

The Company has a good relationship with its Nomad, broker and other advisers. Feedback from investors is provided by the broker as well as through direct engagement with investors by the Board.

The Company meets frequently with customers and communicates regularly with suppliers. There is a feedback system in place and issues raised can be addressed.

The Company's internal stakeholders are its employees. The Group is committed to employment policies which follow best practice, based on equal opportunities for all employees, irrespective of ethnic origin, religion, political opinion, gender, marital status, disability, age, sex or sexual orientation. The executive directors have regular meetings with senior management and their teams to discuss and monitor new initiatives and training is available.

The Group is committed to delivering solutions and services that create long-term value for all stakeholders, including clients, employees, investors, and wider society. Our approach integrates environmental sustainability, social impact, and ethical business practices into our decision making.

Corporate Governance Statement (continued)

Sustainability & Environmental Responsibility

The Tialis team are experts in delivering high-quality, cost-effective and sustainably focused managed IT solutions for businesses in a range of sectors. The team appreciates the financial and technical limits of organisations and considers the impact of our work on the environment and society. Tialis actively seeks to minimise its own operational footprint, with initiatives focused on reducing energy use, material waste, and carbon emissions.

At Tialis, we are committed to reducing our environmental impact and we are proud of the progress we have made.

In 2023, we achieved ISO 14001 accreditation, a key milestone that reflects our dedication to sustainable practices. Our company car fleet is already made up of hybrid vehicles, and we are aiming for a fully hybrid or electric fleet by 2030.

Our people are at the heart of this commitment. Environmental awareness is part of our culture, with mandatory annual training for all staff. So far, 95% of our team is fully up to date.

The Company's environmental policy is available to view on the website:

https://www.tialis.com/wp-content/uploads/2023/06/Environmental-Policy.pdf

The Company's carbon reduction plan is available to view on the website:

https://www.tialis.com/wp-content/uploads/2024/11/Tialis-Carbon-Reduction-Plan-2023-v1.1.pdf

The Company's waste management policy is available to view on the website:

https://www.tialis.com/wp-content/uploads/2024/09/Tialis-Waste-Management-2023.pdf

Social Responsibility

Tialis, are proud to support our local community.

We recently partnered with a school in Dartford for a creative challenge, inviting students to design artwork inspired by local landmarks. The winning entries now brighten our head office, and to keep the creativity flowing, we also donated art supplies to the school.

We are also proud to back local sport. For the 2024/2025 season, Tialis sponsored a local Under-8s football team, providing brand-new training gear. In September, the team steps up to the Under-9s league and moving into 7-a-side football. Training is now focused on building skills and growing team spirit.

We are proud to be part of their journey and excited to continue supporting our community going forward.

Staff policies

The Group's employment policies are designed to ensure that they meet the statutory, social and market practices in the United Kingdom. The Group systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, so that their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the Group is encouraged, as achieving a common awareness on the part of all employees on the financial and economic factors affecting the Group, plays a major role in maintaining its relationship with its staff.

The Group gives full and fair consideration to applications for employment from disabled persons, having regard to their particular aptitude and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the Group. If members of staff become disabled, the Group continues employment, either in the same or an alternative position, with appropriate retraining being given, if necessary.

The Board believes that its investment in the wider stakeholder network is expected to assist the Company's management in achieving its long-term goals creating an environment of trust and communication which will have positive implications for the longterm success of the Company.

Corporate Governance Statement (continued)

Risk assessment and evaluation is an essential part of the Company's planning and an important aspect of the Group's internal control system. The business and management of the Company and its subsidiaries are the collective responsibility of the Board. At each meeting, the Board considers and reviews the trading performance of the Group. The Board has a formal written schedule of matters reserved for its review and approval. These include the approval of the annual budget, major capital expenditure, investment proposals, the interim and annual results and a review of the overall system of internal control and risk management.

The Board regularly identifies the most critical current and emerging risks and challenges facing the business and to take the necessary steps to mitigate these risks by strengthening its control systems. The revised and refined system of risk management is designed to manage rather than eliminate the risk of failure to achieve business objectives and is explained in the Strategic Report under the heading Principal Risks and Uncertainties. The Board has established a risk register which is bespoke to the Group's business. At least twice a year the risk register is reviewed and the Board considers the appropriateness of the risks identified and the mitigating action taken by management on a risk by risk basis with a particular focus on those deemed most critical. Where required, action is taken to ensure that controls in place are sufficiently robust to manage the identified risks.

The appointment to the Board of the Group's Chief Financial Officer in September 2024 strengthened the Group's approach to risk management, internal controls and assurance activities. Nicola Chown has introduced new financial and operational processes and has been central in the integration of new systems and in implementing strategic and cost cutting measures.

Diversifying the client base and reducing reliance on a single partner has significantly reduced the Group's commercial risk along with developing the LIfeCycle offering.

Tialis follow best security practices and employ cyber security professionals, all access to 365 data is locked down to region and security groups are used to gain access to data using least privilege access. We are 27001 as well as Cyber Essentials Plus certified and have a cyber secure score of 100%.

All access is constantly monitored and reviewed, we implement single sign on and authentication requires a multi factor authentication across all platforms. Data is controlled via labels and we implement Data loss prevention, logs are centrally stored and cyber anomalies are monitored using Microsoft Sentinel.

We promote cyber awareness via mandatory training, all hands communications, email communications and Phishing campaigns.

Our secure facility is alarmed and monitored 24/7, using technologies such as pressure sensors, each area within the facility requires key fobs with controlled access to secure areas. The facility is protected by an uninterrupted power supply and our data communication lines in to the facility are built resilient of failure.

In a meeting of the audit committee in January 2025 in which planning for the audit of the 2024 financial statements was discussed, it was agreed that the appointed auditors met the criteria for auditor independence and no ethical issues were identified. It was noted that the auditor performs the annual audit and review of interim results but does no other work for Tialis. Tialis has a separate independent tax adviser.

Corporate Governance Statement (continued)

Following changes to the board in 2024 including the resignation of its non-executive chairman in December 2024, the Group does not currently have a chairman in place. It intends to appoint a non-executive chairman at the appropriate time. Normally, the Chairman is responsible for corporate governance and the overall leadership of the Board and ensuring its effectiveness and this was the case throughout 2024 until December. Due to the current circumstances, the Group's Executive Director has assumed this role as a short-term measure whilst a new chairman is identified and the Board has responsibility for ensuring that the day-to-day activities and decisions of senior management are focused and aligned with the Group's medium and long-term strategy.

Ian Smith is an Executive Director and he led the Group's strategic and operational review in 2018. Ian is the Chief Executive Officer and a substantial shareholder of MXC Capital which is a substantial shareholder of the Company and as such is not considered to be an independent director. Ian is a member of the Audit and Remuneration Committees.

Nicola Chown, a chartered accountant, has been the Chief Financial Officer of Tialis since 2021 and was appointed to the board in September 2024. She oversees the financial operations of the Group as well as the HR, property and legal teams. is a highly experienced finance professional with over twenty years' experience in finance and business development leadership roles. Nicola has introduced financial and operational processes and has been central in the integration of new systems and in implementing strategic and cost cutting measures. Nicola is a member of the Remuneration Committee.

Matthew Riley was appointed as a Non-Executive Director on 1 February 2023 following the purchase of profitable partner contracts from Allvotec, a division of Daisy group. Matthew was the founder and chairman of Daisy Group and he led Daisy Communications Ltd and Daisy Group through rapid growth to become one of the UK's leading end-to-end business technology and communications service providers. Matthew is an independent director and a chair of the Remuneration Committee and the Audit Committee.

Nicolas Bedford, who was appointed as an independent Non-Executive Director on 3 January 2023, became independent Non-Executive Chairman in September 20204 following the resignation of Andy Parker. Nick Bedford was chairman until December 2024 when he retired from corporate work.

The Board currently comprises one Non-Executive Director and two Executive Directors, supported by senior managers, and it oversees and implements the Company's corporate governance programme. Normally the chairman of Tialis leads the Board and is responsible for the Company's approach to corporate governance and the application of the principles of the QCA Code and this role will be resumed when a new chairman is appointed.

Each board member commits sufficient time to fulfil their duties and obligations to the Board and the Company. They attend regular board meetings and join ad hoc board calls and offer availability for consultation when needed. The contractual arrangements between the Directors and the Company specify the minimum time commitments which are considered sufficient for the proper discharge of their duties. However, in exceptional circumstances all board members understand the need to commit additional time.

Detailed board packs include information on the business units and financial performance and are circulated ahead of board meetings. The format of the board pack has evolved with new metrics added to assist the board in evaluating several performance measures. Key issues are highlighted and explained, providing board members with sufficient information to enable a relevant discussion in the board meeting.

With the adoption of the 2023 QCA Code, all Directors are required to retire by rotation and seek re-election annually.

Corporate Governance Statement (continued)

Departures from the Code

Since December 2024 there has been no chairman and only one independent director on the Board following the resignation of Nicolas Bedford. Until that point, there had been two independent directors in 2024. This means there is currently one independent director in both the Audit Committee and the Remuneration Committee. The Board recognises that this is a departure from the Code and will seek to rectify the situation at the earliest opportunity.

Board and committee meetings

The Board is supported by its Audit Committee and its Remuneration Committee.

Attendances of Directors at Board and committee meetings convened in 2024, and which they were eligible to attend, are set out below:

The principal governance structures and processes of the Company and its subsidiaries are the collective responsibility of the Board and its Committees. At each Board meeting, the Board considers and reviews the trading performance of the Group. The Board has a formal written schedule of matters reserved for its review and approval. These include the approval of the annual budget, major capital expenditure, investment proposals, the interim and annual results and a review of the overall system of internal control and risk management.

Audit Committee

The duties of the Audit Committee include reviewing, in draft form, the Company's annual and half-yearly report and accounts and providing advice to the Board. Members of the Audit Committee are also responsible for reviewing and supervising the financial reporting process and internal control systems of Tialis Group. The Audit Committee is currently comprised of one Non-Executive Director and one Executive Director. Both members have extensive listed company transaction experience.

Remuneration Committee

The Remuneration Committee is responsible for determining the policy for Directors' remuneration and setting remuneration for the Company's chair, executive Directors and senior management including share option schemes and any bonus arrangements. No director plays any role in determining his or her own remuneration. The Remuneration Committee is currently comprised of one Non-Executive Director and two Executive Directors. The Remuneration Committee met twice in 2024 to discuss the pay structure for a senior manager which included a partial increase in salary plus a further increase subject to certain objectives being met. The Remuneration Committee made its recommendation to the Board.

Corporate Governance Statement (continued)

The members of the Board and their experience and skills etc are set out in the Directors' Report and Financial Statements

identifies the members of the Board at the time of publication and describes the relevant experience, skills and qualities they bring.

The Board believes it has a suitable mix of skills and competencies in order to drive the Group's strategy and is best placed to secure the future of the Company and create long-term value for all stakeholders although it acknowledges a new Chairman is required. The directors possess a range of skills with commercial, financial, public markets and technology sector expertise. The directors believe that their combined capabilities enable them to inform and oversee the implementation of the Company's strategy for the benefit of its shareholders.

Board members are encouraged to take on external roles that do not conflict with their directorship. Several directors hold external positions that contribute to their professional development and the company's strategic insights. If required, the Directors are entitled to take independent legal advice.

The nature of the Company's business requires the Directors to keep their skillset up to date. Periodic updates to the Board on regulatory matters are given by Company's professional advisers. The Company retains the services of its financial adviser and Nomad, accountants, tax adviser and lawyers who are consulted on any significant matters where the Board believes external expertise is required. The instances where external advice was sought in 2024 were in relation to compliance with the AIM Rules and various legal matters such as the restructuring of several subsidiary companies.

External advisers attend board meetings as invited by the Chairman to report and/or discuss specific matters relevant to the Company and the markets in which they operate. Additionally, MXC Advisory Limited, which is part of the same group as the significant shareholder MXC Capital Limited, is a retained financial adviser principally focused on acquisitions and provides the services of Ian Smith, Executive Director.

The qualified Company Secretary advises the Board on corporate governance and regulatory matters, attends the Board meetings and reports directly to the Chairman on governance matters. In keeping with best practice as set out the in the QCA guidelines the Company has split the role of Chief Financial Officer (who attends the board whilst not a statutory director) and Company Secretary.

Ian Smith is primarily responsible for communicating with investors. When a chairman is appointed, he or she will share this responsibility.

Departures from the Code

Following the resignation of the independent Non-Executive Chairman in December 2024, there is only one independent director who has joined the Audit Committee and was already a member of the Remuneration Committee, Matthew Riley. The Board recognises that this is a departure from the Code and intends to rectify the situation when a new chairman is appointed.

The Board regularly reviews the effectiveness of its performance as that of its committees and individual Directors, a process that is normally overseen by the Chairman. Board members are encouraged to participate in board meetings by asking questions, discussing issues, challenging others and providing input. The Directors' Report in the Annual Report and Financial Statements identifies the members of the Board at the time of its publication and describes the relevant experience, skills and qualities they bring.

The Remuneration Committee meets when necessary to consider the appointment of new directors and makes recommendations to the Board which has overall responsibility for appointments and succession planning. Board appointments are made after consultation with advisers in all cases and with major shareholders in some cases. The Nomad undertakes due diligence on all new potential board candidates. Board members all have appropriate notice periods so that if a board member indicates his/her intention to step down, there is sufficient time to appoint a replacement, whether internal or external.

Departures from the Code

The Board has not undertaken an externally facilitated review for some years. This is a matter to be considered when a new chair is appointed. The Board accepts it needs to strengthen its succession planning and intends to do so.

The Board firmly believes that sustained success will best be achieved by adhering to our corporate culture of treating all our stakeholders fairly and with respect. To this end, the Board believes it has established a remuneration policy to reflect the Company's purpose, strategy and culture and therefore supports the aim of long-term value creation. The policy is designed to motivate and reward management

The Remuneration Committee is responsible for determining and agreeing with the Board the framework for the remuneration of Executive Directors and other designated senior executives and, within agreed terms of reference, determining the total individual remuneration packages of such persons, including, where appropriate, bonuses, incentive payments and share options or other share awards. The remuneration of Non-Executive Directors is a matter for the Executive Directors. No director is involved in any decision as to his or her own remuneration or benefits.

There were two meetings of the Remuneration Committee in September and December 2024 in which the salary of a senior member of the management team and objectives were discussed before a recommendation was made to the Board.

Remuneration Policy

The Remuneration Committee is aware that the remuneration package should be sufficiently competitive to attract, retain and

motivate individuals capable of achieving the Group's objectives and thereby enhancing shareholder value.

The Company reports formally to its shareholders and the market generally twice each year with the release of its annual and interim and results. The full year results are audited by an external firm of auditors.

The Annual Report and Financial Statements set out how the corporate governance of the Company has been applied in the period

under review. Also included are reviews of the Company's sustainability activities and employee gender analysis.

These reports contain full details of all the principal events of the relevant period together with an assessment of current trading

and future prospects and the reports are made available via the Company's website to anyone who wishes to review them.

The Group maintains a regular dialogue with its key stakeholders including shareholders to enable interested parties to make informed decisions about the Company and its performance with all members of the Board actively involved in this. The Board believes that transparency in its dealings offers a level of comfort to stakeholders and an understanding that their views will be listened to. The Board intends to continue its policy of communication for the mutual benefit of the Company and its stakeholders.

The Board discloses the result of general meetings by way of announcement and discloses the proxy voting numbers to those attending the meetings. In the event that a significant portion of voters vote against a resolution, an explanation of what actions the Board intends to take to understand the reasons behind the vote will be included.

Ian Smith Executive Director Date: 9 May 2025

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance

with applicable law and regulations.

Company law requires the directors to prepare group and company financial statements for each financial year. The directors have elected under company law and are required by the AIM Rules of the London Stock Exchange to prepare the group financial statements in accordance with UK-adopted international Accounting Standards and have elected under company law to prepare the company financial statements in accordance with UK-adopted International Accounting Standards and applicable law.

The group and company financial statements are required by law and UK-adopted International Accounting Standards to present fairly the financial position of the group and the company and the financial performance of the group. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period.

In preparing each of the group and company financial statements, the directors are required to:

1. select suitable accounting policies and then apply them consistently;

2. make judgements and accounting estimates that are reasonable and prudent;

3. state whether they have been prepared in accordance with UK-adopted International Accounting Standards.

4. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and 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 the Company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the group and 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 Tialis Essential IT PLC website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Executive Director

On behalf of the Board 9 May 2025

I am pleased to present the Audit Committee's report for the year ended 31 December 2024. The following pages provide an insight into how the Audit Committee discharged its responsibilities during the year and the key topics that it considered in doing so.

Nicolas Bedford assumed the role of chair of the Audit Committee in 2024 until he retired from the Board on 1 December 2024. Nick, as a chartered accountant, was considered by the Board to have recent and relevant financial experience. The other members of the Audit Committee have competence and experience relevant to the Company's sector of operation. Since the departure of Nick Bedford and Andy Parker, Matthew Riley and Ian Smith form the audit committee, with Matthew appointed as chair. Other members of senior management may also be invited to attend the meetings as guests, including the chief financial officer, Nicola Chown.

The Audit Committee determines and examines any matters relating to the financial affairs of the Group including the terms of engagement of the Group's auditors and, in consultation with the auditors, the scope of the audit. The Audit Committee meets at least twice in each financial year, with two meetings taking place in 2024.

The Audit Committee is responsible for monitoring the integrity of the Company's financial statements, reviewing significant financial reporting issues, reviewing the effectiveness of the Group's internal control and risk management systems. In addition, it considers the financial performance, position and prospects of the Group and the Company and ensures they are properly monitored and reported on. It oversees the relationship with the Auditor (including advising on their appointment, agreeing the scope of the audit and reviewing the audit findings).

The Board and the Audit Committee do not consider it appropriate for the current size of the Group to establish an internal audit function.

The Committee held two dedicated meetings during the year under review and considered the following:

• An overview of the planned work by the external auditors on the 2024 audit including the scope and regulatory requirements of the audit and audit findings;

• The audit completion report for the financial statements for the year ended 31 December 2023.

  The Committee has held one meeting so far in 2025 to discuss the planned work and scope by the external auditors for the audit of these financial results and is planning the following activities during 2025:

• Review the Company's procedures, systems and controls for the prevention of bribery or fraud;

• Review the adequacy and security of the Company's arrangements for its employees to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Committee believe that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action;

• Review the Committee's internal audit role, in the absence of an external provider of an internal audit service.

Barnes Roffe LLP are appointed as the external Auditors of the Group. The continued appointment of Barnes Roffe is to be reviewed by the Committee each year, taking into account relevant legislation, guidance and best practice appropriate for a Company of Tialis' size and nature.

The Committee will consider a number of areas when reviewing the external Auditor appointment, namely its performance in discharging the audit, the scope of the audit and terms of engagement, its independence and objectivity, and its reappointment and remuneration.