Full year results and Notice of AGM

RNS Number : 1889L

itim Group PLC

12 May 2022

 

12 May 2022

itim Group plc

("itim" or "the Company" and together with its subsidiaries "the Group")

Full year results for the year ended 31 December 2021 and Notice of AGM

itim Group plc, a SaaS based technology company that enables store-based retailers to optimise their businesses to improve financial performance, is pleased to announce its audited results for the year ended 31 December 2021.

Financial Highlights

·	Group revenues increased by 14% to £13.5 million (2020: £11.8 million)
·	Annual recurring revenue ("ARR") is £11.1m (2020: £9.6 million)
·	Group Adjusted EBITDA* increased by 47% to £2.2 million (2020: £1.5 million)
·	Adjusted EBITDA* margin increased by 17% up 4 percentage points ("PPT") (2020: 13%)
·	Adjusted Earnings per share** 3.75 pence (2020: 4.10 pence)
·	Closing cash balances were £6.2 million at 31 December 2021, up from £2.1 million at 31 December 2020

Operational Highlights

·	Completed successful IPO in June 2021 raising £8m before expenses
·	Broader product offering to provide a range of services to more than 50 major retailers including John Lewis, Sainsbury's, JD Sports, WH Smith and Majestic Wine amongst many others
·	New retail advisory committee established including Justin King and Lee Williams, as well as a number of other high-profile advisors including Beth Butterwick, CEO of Jigsaw, Simon Forster, former CEO at Selfridges
·	Launch of Chameleon 360 is an Omni-channel store-centric solution that combines full Omni-channel capabilities at POS, with in-store mobile apps, consumer apps, fully integrated with ecommerce platforms
·	Significant new customer wins in the fashion, electronics and pharmaceutical retail sectors

* EBITDA has been adjusted to exclude share-based payment charges, exceptional items, along with depreciation, amortisation, interest and tax from the measure of profit.

** The profit measure has been adjusted to exclude exceptional items and share option charge

Ali Athar, CEO of itim Group plc, said: "We are very pleased with our performance in 2021. This was not only our first year as a public company but also a transformational year for itim, in which we have delivered strong growth and strategic progress. The opportunities that continue to present themselves provide us with great confidence that there is considerable demand for our products.

"Trading so far this year has started well, we have seen new customer wins and extensions of existing contracts as well as the creation of our new retail advisory committee, with what we believe are some of the most successful leaders in retail. I look forward to the remainder of 2022 with optimism and will updating the market on progress in due course."

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Enquiries:

Itim Group plc	Ali Athar, CEO Ian Hayes CFO	0207 598 7700
WH Ireland (NOMAD & Broker)	Katy Mitchell Harry Ansell Darshan Patel	0207 220 1666
IFC Advisory	Graham Herring Florence Chandler	020 3934 6630

ABOUT ITIM

itim was established in 1993 by its founder, and current Chief Executive Officer, Ali Athar. itim was initially formed as a consulting business, helping retailers effect operational improvement. From 1999 the Company began to expand into the provision of proprietary software solutions and by 2004 the Company was focused exclusively on digital technology. itim has grown both organically and through a series of acquisitions of small, legacy retail software systems and associated applications which itim has redeveloped to create a fully integrated end to end Omni-channel platform.

CHAIRMAN'S STATEMENT

Against what has been a challenging backdrop for everyone, I am pleased to be in a position to update shareholders on a momentous year for itim, characterised by achievement and growth.

Despite the impact of the pandemic on the ability of bricks and mortar retail stores to trade for long periods of time during the year, the Group delivered on its strategy in continuing to grow operational profits while investing in strengthening its platform offering, which led to the Group being quoted on AIM, a market of the London Stock Exchange in June 2021, raising £8m of new investment in the process.

Moreover, our Optimisation platform continues to expand geographically with further international, new customer wins in the USA along with wins in Brazil, Argentina and Uruguay.

Financial results

Overall, we believe the benefits of the Group's high-quality SaaS business model can be seen in the robust financial performance in the year. The Group's high levels of recurring revenue (approx. 77% of revenues), low customer churn and continuing transition to an ARR model has led to increased revenue visibility and better-quality earnings which delivered double-digit revenue growth of 14% to £13.5m (FY20: £11.8m). Careful management of the cost base, in line with the Group's revenue profile, alongside continued investment in the product resulted in an increase in adjusted EBITDA for the year of 47% to £2.2m (FY20: £1.5m) and an increased adjusted EBITDA margin of 17% (FY20: 13%).

People

Despite disruption to normal office operations during Covid-19, we have continued to deliver product innovation and high levels of service to our customers with our colleagues working remotely. Whilst we are a technology-driven company, we are also a people-led business. Our culture of innovation is driven from personal interaction across the Group and with customers. Remote working had the potential to present a unique set of challenges. However, across the organisation, our people tackled each day with enthusiasm, diligence and a positive outlook. It has been an impressive response and underlines why our team continues to be our most valuable asset. I would like to personally thank them all.

Outlook

We enter 2022 in a solid financial position, delivering greater subscription revenues and good levels of interest in both existing and new client activity. The Board is excited about the growth opportunities presented by both The Retail Suite and Profimetrics platforms, the performance of which is being underpinned by new marketing initiatives for both products and the ongoing strengthening of the associated delivery teams.

However, we are continually seeing increases in salary levels across the technology sector and labour shortages but looking to overcome this with selective overseas outsourcing.  There is no doubt with the headcount increases planned in 2022 it will put short-term pressure on profits as expected.

But with a strong cash position, no debt and a well-proven business model we are well positioned to continue to thrive in 2022.

In conclusion, 2021 has been a landmark year for the Group and I would like to extend my appreciation to everyone in the Company, our partners and our customers. Our ongoing growth in such a challenging environment, a pipeline of market-leading innovations and the delivery of a successful IPO are significant achievements. Without exception, everyone in the business has contributed to this success and ensured that we are an agile, fast-growing organisation, with customers that see us as integral to their futures and a robust balance sheet. Importantly, we now have the vision, technologies and capabilities we need to achieve our long-term, global ambitions for growth.

Michael Jackson

Chairman

11th May 2022

CHIEF EXECUTIVE'S REVIEW

The year to 31^st December 2021 was one of excellent progress for itim. We delivered on our strategic goals for the year, becoming a public company in June 2021 and delivering a pipeline of innovative products onto our platform that create further value for our customers whilst dealing with the challenges of the pandemic as we come to terms with the new ways of conducting business remotely.

All this was achieved whilst delivering a strong set of results for the year that met market expectations and positive sales momentum as we move into 2022.

Market opportunity

We believe the Covid-19 pandemic has accelerated market forces that were already changing the retail market forever, and itim is ideally placed to leverage these trends and ensure its customers adapt and thrive in this environment. At its core, it is our view that the retail sector is restructuring around consumer commerce, where consumer expectations dictate the business model. The volume and pace with which consumers are moving online requires a radical response from traditional retailers, who must adapt the relationship between their physical and digital business models, enhance their digital capabilities and reinvent their value proposition for this digital-first world. At the same time, there are growing trends that are seeing consumers looking to test products before purchasing online; demanding a seamless process for returns; seeking a wider choice of delivery options and asking for increased levels of face-to-face contact for customer service.

Whilst the term omni-channel retail has been around for some years, it is really only now being understood as a fully-integrated approach to commerce, providing shoppers with a unified experience across all channels or touchpoints. This encompasses traditional stores, e-commerce and mobile apps.

We believe that retailers with stores who embrace this integrated, end-to-end omni-channel retail model can offer greater consumer choice, enhanced service standards, and levels of convenience that outstrip their online-only competitors.

In the post-pandemic landscape, traditional retailers have the opportunity to not only compete effectively with pure play online retailers in this new digital world but leverage significant advantages to win market share. In order to realise this potential they need to leverage technology systems that efficiently deliver cross-channel experiences for consumers; whilst continuing to differentiate from online-only offerings through more diverse delivery options and a more personalised service.

In essence, omni-channel retailing provides a seamless, personalised shopping experience, no matter the channel or location across a unified platform beginning with the supply base. This will enable:

1.	Customers to be able to shop online at a local store in addition to the central warehouse;
2.	Customers to see exactly what is in stock at a local store to enable 30-minute click and collect and provide retailers with the opportunity to upsell whilst customers are in store;
3.	Same day delivery through the growth of local courier networks; and
4.	The ability to leverage customer relationships through the store network and to focus on 'VIP' customers.
5.	Curated Orders and subscription revenue streams. As retailers build a database of customers' individual information, and begin to understand customer preferences, they have no need to wait for an order. They send what they believe the consumer needs, whether it is a curated basket from the local store or from their warehouse in exchange for a monthly subscription fee.

Whilst this sounds relatively simple at a high level, only a minority of retailers have achieved a true omni-channel solution to date. However, we believe this has now become an imperative for retailers to achieve in a post Covid-19 world.

The advent of omni-channel retailing - on-trend and given a boost

In the last six months, following our IPO, we have been pleased to see those retailers who have been taking omni-channel strategies seriously report strong market performances.  Businesses such as M&S, JD Sport and Next, have invested significantly in their digital capabilities and positive results have followed.  Although these are the large publicly visible retailers, they are reflective of a trend across the whole retailing industry.

We understand most retailers are now looking to follow suit.

However, we believe Covid 19, supply chain problems, and inflation have placed huge pressures on many retailers' balance sheets, reducing the capital available to make the kind of investments traditionally required to transform at this pace and scale.

itim's game-changing omni-channel platform enables its customers to reposition their businesses for today's consumer but without the need for significant upfront investment or vast internal digital capabilities. We consider itim's unique solutions to be at the vanguard of efforts to transition retailers to these new models and with it re-establish store-based organisations at the cutting-edge of the sector.

Product development and uniqueness

There are 5 areas where we demonstrate competitive advantage which is critical to the transition to omni-channel excellence.

Unified commerce platform

Unlike other vendors, we provide a single sales platform, across online, stores and wholesale with a single view of customers, single view of product and stock and unified marketing engine.  This is crucial to our customers as they transform from product-centric to customer-centric businesses. This evolution is critical in a digital-first world. Importantly, it allows us to turn stores into assets in the fight for customer loyalty and spend by allowing multiple, complex customer journeys, including seamlessly integrating services such as 30-minute click and collect and 1-hour despatch from store.

Price Optimisation

Competing on price is now a basic requirement for a successful retailer as price transparency becomes so easy for consumers. Yet it is our view that genuine price optimisation capabilities remain challenging and elusive in the sector. Powering retailers' price competitiveness, whilst leveraging gains from a world class approach to optimisation of promotions and markdowns is becoming ever more critical to retaining profitability in a digital world and a key component of the itim armoury.

Stock and Range Optimisation

Omni-channel retailing is opening up huge opportunities for businesses to gain critical steps towards greater profitability through stock optimisation. Itim underpins its customers' ability to route an order to where stock is. Digitally-led retailers do not need to hold all their stock in stores, but can distribute it intelligently up the supply chain, all the way back to suppliers.  Optimising stock this way means you can have bigger ranges with smaller stock investments.

Integrated Order Management

At the heart of omni-channel retailing is the concept of sophisticated order management.  This is about being able to route customer orders to stock/service locations which are convenient to customers and profitable for retailers.  We have pioneered ideas such as shop local, which allows consumers to shop the stock in their local store in addition to shopping the stock in the web warehouse.

Supplier Collaboration

To be a profitable omni-channel retailer in the modern world, we believe you need the help/collaboration of your suppliers. That means you need suppliers to be tightly digitally-integrated with your business, and you need them to do more of the work for you.  Launching new business models like 'marketplaces' will only be possible if you can collaborate digitally with your suppliers. Consignment stock and drop-ship models are becoming more important tools in a retailers' offering.  Ensuring accurate product information and fast product introductions is now critical to achieving a competitive advantage.

These are the 5 areas in which we continue to make major investments in R&D.

Outlook

The business has continued to thrive over the last year as evidenced by our financial and operational performance, proving that our strategy continues to deliver. Looking ahead, costs will inevitably rise as we face rising levels of inflation and pressure on recruitment and wages. However, our high-levels of customer retention, excellent customer references and increasingly positive mix of recurring revenues positions the Group well.

We also are expanding internationally with international markets now accounting for 36% of our revenues from territories such as Southern Europe, South America and North America.

Ali Athar
Chief Executive officer

11^th May 2022

CHIEF FINANCIAL OFFICER'S REVIEW

Income Statement

Revenue

The Group achieved revenue growth of 14% despite the impact of the global pandemic on the retail sector with stores being periodically locked down. Revenue was £13.5m for the year (2020: £11.8m) with the quality of revenue growth being evidenced by increased Annual Recurring Revenue (ARR) of 16% to £11.1m at the year-end (2020: £9.6m). These numbers were achieved despite the impact on our overseas ARR contracts with sterling strengthening against the currencies in which we trade. (See foreign exchange rates below).

The transition to a subscription revenue model continues at pace with 77% (2020: 72%) of the Groups revenues in the year derived from recurring revenues.

Gross profit

The gross margin for the Group was 41% (2020:39.8%). Inevitably as the Group transitions to a subscription-based revenue model there is a degradation in margin until the ARR for the year is booked in full, especially when the cost base has already been geared up to deliver the ARR. Gross margin on booked recurring revenue is up 3% to 66% (2020: 63%).

Operating expenses

The operating expenditure has increased for two main reasons. Firstly due to the inclusion of the EDI Plus costs on a full year basis following its acquisition in June 2020. But secondly due to the extra costs associated with fulfilling our governance requirements, adding three Non Executives to the board along with the additional costs of being a listed business which were not required as a private company.

Despite this and the global uncertainties caused by the COVID-19 pandemic which continued into 2021, the Group chose to carefully manage its cost base in line with our existing and forecast revenue profile.

Foreign exchange rates

The table below sets out the percentage of annual contracts in the foreign currencies we trade in and the impacts of those foreign currencies at the Balance Sheet date and the average movements over the course of the year for P&L purposes.

FX Rates	31-Dec-20	31-Dec-21	31-Dec-21	2020 Average	2021 Average	2021
(% of ARR at year end)	FX rate	FX rate	Variance %	FX rate	FX rate	Variance %
£GBP/Euro (ARR 10%)	1.123	1.191	6%	1.125	1.163	3%
£GBP/BRL (ARR 18%)	7.057	7.612	8%	6.607	7.42	12%
£GBP/USD (ARR 7%)	1.366	1.354	-1%	1.283	1.376	7%

Foreign exchange rates have remained volatile during the year with an overall strengthening of Sterling against a number of currencies throughout the year. The most significant movement for itim has been the 8% depreciation of the Brazilian Real against Sterling between December 2020 and December 2021 where 18% of our contracts are in Reals. The Sterling to Euro rate has experienced similar volatility with Sterling ending the year 6% stronger at 31^st December 2021 when compared to 31^st December 2020 with 10% of our contracts in Euro's.

Phasing of movements over the current and prior year mean that the weighted monthly average exchange rate to translate the Euro and Brazilian Real trading results in some currencies is less volatile. The impact on the weighted monthly average exchange rate used to translate the Euro reflected only a 3% depreciation of the Euro based on a weighted monthly average rate of 1.163 for the year ended 31^st December 2021 (2020: 1.125). However, the Brazilian Real depreciated significantly by 12% based on a monthly average rate of 7.42 for the year ended 31^st December 2021 (2020: 6.607).

Financing costs

Total net interest costs in the year were £67k (2020:£114k).

The reduction in interest payable on external loans was driven by repayments of borrowings during the year ended 31^st December 2021.

Exceptional items

Exceptional costs of £0.7m (2020: nil) were incurred during the year. These costs related to the initial public offering and admission to AIM which could not be directly attributed to the raising of new equity and therefore were expensed through the P&L. IPO costs written off against share premium amount to £0.5m (2020: nil)

Taxation

The Group continues to take advantage of R&D tax credits as it continues to innovate its technology offering. The current year tax credit is made of up of a net current tax credit of £0.26m (2020:£0.45m) and a deferred tax charge of £0.2m (2020: £0m).

Earnings per share

Basic EPS for the year was 0.88p (2020:3.74p) and the diluted EPS was 0.78p (2020:3.31p).

On an adjusted profit basis after adjusting for exceptional items and the share option charge the adjusted earnings basic EPS was 3.75p (2020:4.10p) and the adjusted earnings diluted EPS was 3.32p (2020:3.63p).

Dividend

The Board does not propose to pay a dividend in respect of the financial year (2020:£nil).

Group Statement of Financial position

The Group had net assets of £13m at 31^st December 2021 (2020:£5m) an increase of £8m which was derived from the new equity raised, along with the profit for the year.

Cash flow and working capital

The Group ended the year with a cash balance of £6.2m (2020: £2.1m).

Cash generated from operating activities for the year amounted to £2.1m (2020: £2.1m) with further inflows from the net proceeds of new equity and exercise of options of £7.7m (2020: nil). Cash expended was on capitalised new product development of £1.4m (2020: £1.2m) and payment of debt and interest of £4.3m (2020:£0.2m). Which taken together with our opening cash balance of £2.1m gives the closing cash balance at the year-end.

A £6.2m cash balance at the year-end provides a strong basis to execute our strategy in 2022.

IPO and admission to AIM

In June 2021 itim was admitted to AIM, a market of the London Stock Exchange after a successful initial public offering raising £8m (gross) to support its growth strategy as it continues to transition to a subscription-based revenue model.

Equity

On the 28^th June 2021 the Company issued 5,194,806 new 5p shares at 154p each raising £8m in new equity.

In May 2021 as part of the listing process, the Company purchased 110,251,743 deferred shares for 1p and subsequently cancelled that class of share whilst creating a capital redemption reserve of the same value.

Additionally, the Company undertook a capital reduction transferring £10,468,919 of share premium to retained earnings.

Ian Hayes

Chief Financial Officer

11^th May 2022

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2021

					Total		Total
	Note				2021		2020
					£'000		£'000
Revenue	4,5				13,474		11,820
Cost of sales					(7,953)		(7,114)
Gross profit					5,521		4,706
Other income					-		202
Administrative expenses					(3,297)		(3,374)
EBITDA					2,224		1,534
Amortisation of intangible assets	13				(746)		(515)
Share option charge	24				(151)		(91)
Depreciation	14				(38)		(45)
Depreciation of right-of-use assets	20				(297)		(231)
Profit/(Loss) on disposal of right-of-use assets	20				10		(9)
Profit from operations					1,002		643
Finance costs	10				(67)		(114)
Other interest - right of use assets	20				(42)		(67)
Exceptional items	6				(667)		-
Profit on ordinary activities before taxation	6				226		462
Taxation	11				26		494
Profit for the year					252		956
Other comprehensive income
Exchange differences on retranslation of foreign operations					(119)		63
Total comprehensive income for the year net of tax					133		1,019
Earnings per Share
Basic	12				0.88p		3.74p
Diluted	12				0.78p		3.31p

All comprehensive income for continuing operations is shown above.

 Consolidated Statement of Changes in Equity

For the year ended 31 December 2021

			Share	Capital	Foreign
	Share	Share	options	redemption	exchange	Retained
	capital	premium	reserve	reserve	reserve	losses	Total
	£000	£000	£000	£000	£000	£000	£000
At 1 January 2020 as restated	2,379	10,469	213	-	82	(9,239)	3,904
Comprehensive income for the year	-	-	-	-	-	956	956
Foreign exchange movement	-	-	-	-	63	-	63
Total comprehensive income	-	-	-	-	63	956	1,019
Share option charge	-	-	91	-	-	-	91
At 31 December 2020	2,379	10,469	304	-	145	(8,283)	5,014
Comprehensive income for the year	-	-	-	-	-	252	252
Foreign exchange movement	-	-	-	-	(119)	-	(119)
Total comprehensive income	-	-	-	-	(119)	252	133
Share option charge	-	-	151	-	-	-	151
Share buyback of deferred shares	(1,103)	-	-	1,103	-	-	-
Cancellation of share premium	-	(10,469)	-	-	-	10,469	-
Shares issued in the period - IPO	260	7,740	-	-	-	-	8,000
Share option conversion	25	156	-	-	-	-	181
IPO expenses	-	(498)	-	-	-	-	(498)
At 31 December 2021	1,561	7,398	455	1,103	26	2,438	12,981

Consolidated Statement of Financial Position

As at 31 December 2021

	Note		2021   £'000		2020   £'000
Non-current assets
Intangible assets	13		8,733		8,206
Plant and equipment	14		280		53
Right-of-use assets	20		649		897
Deferred tax	11		65		298
Total non-current assets			9,727		9,454
Current assets
Trade and other receivables	16		3,702		3,492
Cash and cash equivalents			6,172		2,127
Total current assets			9,874		5,619
Total assets			19,601		15,073
Current liabilities
Trade and other payables	17		(5,218)		(4,570)
Right-of-use liability	20		(290)		(248)
Total current liabilities			(5,508)		(4,818)
Non-current liabilities
Trade and other payables due in more than one year	18		(176)		(4,011)
Right-of-use liability	20		(434)		(729)
Deferred tax	11		(502)		(501)
Total non-current liabilities			(1,112)		(5,241)
Total liabilities			(6,620)		(10,059)
Net assets			12,981		5,014
Capital and reserves
Called up share capital	22	1,561		2,379
Share premium account	23	7,398		10,469
Share options reserve	23	455		304
Capital redemption reserve	23	1,103		-
Foreign exchange reserve	23	26		145
Retained profit/(loss)	23	2,438		(8,283)
Shareholders' funds			12,981		5,014

These financial statements were approved and authorised for issue by the Board of Directors on 11^th May 2022 

Signed on behalf of the Board of Directors

I D Hayes
Director

Company Statement of Financial Position

As at 31 December 2021

	Note		2021   £'000		2020   £'000
Non-current assets
Intangible assets	13		-		-
Plant and equipment	14		213		-
Investments	15		5,071		5,071
Deferred tax	11		55		-
			5,339		5,071
Current assets
Trade and other receivables	16		10,738		9,903
Cash and cash equivalents			3,209		157
			13,947		10,060
Total assets			19,286		15,131
Current liabilities
Trade and other payables	17		(498)		(90)
Non-current liabilities
Trade and other payables due in more than one year	18		(176)		(3,762)
Total liabilities			(674)		(3,852)
Net assets			18,612		11,279
Equity
Called up share capital	22,25		1,561		2,379
Share premium account	23,25		7,398		10,469
Share options reserve	23,25		455		304
Capital redemption reserve	23,25		1,103		-
Retained profit/(loss)	23,25		8,095		(1,873)
Equity shareholders' funds			18,612		11,279

These financial statements were approved and authorised for issue by the Board of Directors on 11^th May 2022. 

Signed on behalf of the Board of Directors

I D Hayes
Director itim Group plc

Consolidated Cash Flow Statement

Year ended 31 December 2021

		Note		2021 £'000	2020 £'000
Cash flows from operating activities
Profit after taxation				252	956
Adjustments for:
Taxation		11		(26)	(494)
Finance costs		10		67	114
Share option charge		24		151	91
Other interest on leases		20		42	67
Exchange gain/(loss)				-	49
Amortisation and depreciation		13,14, 20		1,081	791
(Profit)/Loss on disposal of right-of-use assets		20		(10)	9
Cash flows from operations before changes in working capital				1,557	1,583
Movement in trade and other receivables		16		(354)	275
Movement in trade and other payables		17		335	60
Cash generated from operations				1,538	1,918
Finance costs		10		(4)	(69)
Corporation tax				543	285
Net cash flows from operating activities				2,077	2,134
Cash flows from investing activities
Capital expenditure on intangible assets		13		(1,361)	(1,227)
Purchase of plant and equipment		14		(49)	(17)
Cash acquired with subsidiary				-	277
Payment to acquire subsidiary				-	(223)
Proceeds from shares issued - IPO		22		8,000	-
Proceeds from share option conversion		22		181	-
IPO expenses		22		(498)	-
Net cash flows from investing activities				6,273	(1,190)
Cash flows from financing activities Loan repayments		19		(3,659)	-
Interest repayments		19		(98)	-
Payment of lease liabilities		20		(335)	(457)
New bank loan				-	250
Loan issued		16		(210)	-
Net cash flows from financing activities				(4,302)	(207)
Net increase in cash and cash equivalents				4,048	737
Cash and cash equivalents at beginning of year				2,127	1,390
Exchange gains/(losses) on cash and cash equivalents		29		(3)	-
Cash and cash equivalents at end of year				6,172	2,127

Company Cash Flow Statement

Year ended 31 December 2021

				2021 £'000	2020 £'000
Cash flows from operating activities
Profit after taxation				(501)	1,189
Adjustments for:
Taxation		11		40	-
Depreciation		14		5	-
Finance costs		10		63	108
Finance income				(18)	(20)
Share option charge		24		151	91
Cash flows from operations before changes in working capital				(260)	1,369
Movement in trade and other receivables		16		(721)	(977)
Movement in trade and other payables		17		49	(20)
Cash generated from operations				(932)	372
Finance costs		10		-	(61)
Finance income				18	20
Net cash flows from operating activities				(914)	331
Cash flows from investing activities
Payment to acquire subsidiary				-	(223)
Proceeds from share capital issued - IPO		22		8,000	-
Proceeds from share option conversion		22		181	-
IPO expenses		22		(498)	-
Net cash flows from investing activities				7,683	(223)
Cash flows from financing activities
Loan repayments		19		(3,409)	-
Interest paid		19		(98)	-
Loan issued		16		(210)	-
Net cash flows from financing activities				(3,717)	-
Net increase in cash and cash equivalents				3,052	108
Cash and cash equivalents at beginning of year				157	49
Cash and cash equivalents at end of year				3,209	157

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate Information

The consolidated financial statements of ITIM Group plc and its subsidiaries (collectively, the Group) for the year ended 31 December 2021 were authorised for issue in accordance with a resolution of the directors on 10^th May 2022. itim Group plc ("the Company") is a public limited company incorporated and domiciled in the UK. The nature of the operations and principal activities of the Company and its subsidiary undertakings (the "Group") are set out in the Strategic Report on pages 4 to 11 and the Directors' report on pages 23 to 25.

The Company re-registered as a PLC on 13 May 2021.

2. Basis of preparation

The consolidated financial statements of the Group are prepared under IFRS and International Financial Reporting Interpretations Committee ("IFRIC") interpretations in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 applicable to companies reporting under IFRS.

The Company's financial statements have been prepared under IFRS and International Financial Reporting Interpretations Committee ("IFRIC") interpretations in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 and as permitted by section 408 of the Companies Act 2006, no income statement is presented for the company. The Company made a profit of £501,537 for the year ended 31 December 2021 (2020: £1,189,338)

The financial statements are presented in GBP, which is also the company's functional currency.

Amounts are rounded to the nearest thousand, unless otherwise stated.

The financial statements have been prepared on the going concern basis.

3. Summary of significant accounting policies

Basis of consolidation

The Group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December each year. The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed. Acquisitions are accounted for under the acquisition method.

Subsidiaries

Subsidiaries are all entities over which the Group has the ability to exercise control and are accounted for as subsidiaries. The results of subsidiaries are included in the Group income statement from the date of acquisition until the date that such control ceases. Intercompany transactions and balances between Group companies are eliminated upon consolidation.

Revenue recognition

Revenue was recognised to the extent that it was probable that the economic benefits would flow to the Group and the revenue could be reliably measured.

Revenue represents the amounts (excluding value added tax) derived from the provision of goods and services to third party customers during the year by the group. Revenue is derived from the Group's principal activity and excludes VAT.

The Group derives revenue from two principal sources as noted below:

1.  Recurring revenue

Recurring revenue consists of:

·	Subscriptions - revenue from subscriptions derive from the Group's hosted software-as-a-service subscription application, which allows customers to use hosted software over the contract period without taking possession of the software. Revenue is recognised over the contract period, commencing on the date of the service go live which gives the customer the right-to-use and access the platform.
·	Support and maintenance - derive from support services and software upgrades offered to customers using the Group's software products. Revenue is recognised over the contract period, commencing on the go-live date of the implementation which gives the customer the right to access support services and the right to receive upgrades.

2.  One off revenue

One off revenue consists of:

·	Licences - the performance obligation for the provision of licences is considered to be satisfied when the agreement is signed by the customer and they are given access to the related software intellectual property ("IP") without any requirement to provide updates. It is recognised in full at the transaction price and over the period of implementation before the go live date of the implementation.
·	Services - Services revenue relate to design and implementation services for each customer. Services enhance an asset that the customer controls and the Group creates specific fit for purpose assets which cannot be used elsewhere. The transaction price is the amount determined by fixed price contracts or on a time and materials basis where the Group has a right for consideration for work performed to date. Under the terms of the contracts, the Group has a right to invoice at the achievement of various milestones in the contract.
·	Services are recognised over time and management consider the time spent as a proportion of total time expected is the most appropriate basis for recognition of this revenue stream as staff time is the main input into the delivery of the service. Any differences to the revenue measured by the above method and the amounts invoiced are included in the balance sheet. Further information on the contracts assets or contract liabilities are included in note 4.

Intangible assets - Goodwill

Goodwill is not amortised but tested for impairment annually and whenever impairment indicators require. In most cases the Group identified its cash generating units as one level below that of an operating segment. Cash flows at this level are substantially independent from other cash flows and this is the lowest level at which goodwill is monitored. A goodwill impairment loss is recognised in the Statement of Comprehensive Income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit's recoverable amount, which is the greater of value in use and fair value less cost to sell.

Negative goodwill relating to intangible fixed assets requires immediate recognition in the Statement of Comprehensive Income.

In calculating goodwill, the total consideration, both actual and deferred, is taken into account. Where the deferred consideration is contingent and dependent upon future trading performance, an estimate of the present value of the likely consideration payable is made. This contingent consideration is re-assessed annually.  The difference between the present value and the total amount payable at a future date gives rise to a finance charge which is charged to the Statement of Comprehensive Income and credited to the liability over the period in which the consideration is deferred.  The discount used approximates to market rates.

Intangible assets - research and development expenditure

Research expenditure is written off as incurred. Internally generated development expenditure is also written off, except where the directors are satisfied as to the technical, commercial and financial viability of individual projects. In such cases, the identifiable expenditure is capitalised and amortised over the period during which the group is expected to benefit. This period is seven years. Provisions are made for any impairment.

Intangible assets - other

Other intangible assets recognised in these financial statements consist of Customer contracts and relationships and Intellectual Property Rights acquired on the acquisition of EDI Plus Limited.

Amortisation is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:

Customer contracts and relationships	- straight line over 10 years
Intellectual Property Rights	- straight line over 10 years

The amortisation of intangible fixed assets is shown as a separate line in the Consolidated Statement of Comprehensive Income.

The carrying values of intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Impairment non-current assets

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.

Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

Foreign currencies

Transactions denominated in a foreign currency are translated into sterling at the rate of exchange ruling at the date of the transaction.  At the balance sheet date, monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at that date.  All exchange differences are dealt with in the Statement of Comprehensive Income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.

For consolidation purposes, the assets and liabilities of overseas subsidiary undertakings are translated at the functional currency at the rate of exchange ruling at the reporting date.  Profit and loss accounts of such undertakings are consolidated at the average rate of exchange during the year.  Exchange differences arising are included in a separate component of equity.

Plant and equipment

Plant and equipment is carried at cost less accumulated depreciation and any recognised impairment in value. Cost comprises the aggregate amount paid to acquire asset and includes costs directly attributable to making the asset capable of operating as intended.

Depreciation of plant and equipment is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:

Computer equipment	- straight line over 3 years
Office equipment	- straight line over 3 years

Fixtures and fittings - straight line over 3 years

The assets' residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate on an annual basis. An asset is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the period that the asset is derecognised. The carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.

Fixed asset investments

Subsidiaries are measured at cost less impairment.

Investments are reviewed for impairment at the end of the first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable. Provision is made for any impairment.

Trade and other receivables

Trade and other receivables are initially stated at their fair value plus transaction costs, then subsequently at amortised cost using the effective interest method if applicable, less impairment losses. Provisions against trade and other receivables are made when there is objective evidence that the Group will not be able to collect all amounts due to them in accordance with the original terms of those receivables. The amount of the write down is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and short-term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of cash management are included as components of cash and cash equivalents for the purposes of the cash flow statement.

Trade and other payables

Trade and other payables are recognised at original cost.

Loans and borrowings

Loans and borrowings are recorded at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance cost in the statement of comprehensive income.

Leases - as a lessee

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed lease payments. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset with similar terms, security and conditions.

Lease payments are allocated between principal and finance costs. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease incentives received, and any initial direct costs.

Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Payments associated with low-value items and leases of a duration less than 1 year are recognised as an expense in profit or loss on a straight-line basis.

Income taxes

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities based on the tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax is calculated on an undiscounted basis at the tax rates that are expected to apply in the period when the liability is settled based on the tax rates and tax laws enacted or substantively enacted by the balance sheet date.

Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Finance costs

Finance costs comprise interest payable on loans from directors and third parties and are recognised on an accruals basis.

Share-based payments

The group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group's estimate of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions

Fair value is measured by use of the Black Scholes Model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

Pension contributions

The company operates a defined contribution scheme for its employees.  Contributions are charged to the Statement of Comprehensive Income in the year they are payable. The assets of the scheme are held separately from those of the group.

Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred.

A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed. The other income included in the Consolidated Statement of Profit or Loss and Other Comprehensive Income relates entirely to government support through the furlough scheme.

Where the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

Use of assumptions and estimates

The Group makes judgements, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses. The resulting accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience and expectations of future events. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period, or in the period of revision and future periods if the revision effects both current and future periods.

The judgements and key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are discussed below.

Useful economic lives of intangible assets

Intangible assets are amortised over their useful lives. Useful lives are based on management's estimates, which are periodically reviewed for continued appropriateness. Changes to estimates can result in variations in the carrying values and amounts charged to the statement of comprehensive income in specific periods.

Change in accounting policies

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1st January 2021.

(a)  New and amended standards adopted by the Company:

There are no new standards which have had a material impact in the annual financial statements for the year ended 31 December 2021.

(b)  New standards, interpretations, and amendments not yet effective:

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early. These include:

·	Annual Improvements to IFRS Standards 2018-2020 Cycle - IFRS 9 Financial Instruments and IFRS 16 Leases
·	Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies
·	Amendments to IAS 8 - Definition of Accounting Estimates
·	Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction

4. Segmental reporting

The chief operating decision maker ("CODM") for the purpose of IFRS 8 is the Board. Segments are determined by reference to the internal reports reviewed by the Board. The group's operations relate to the provision of technology solutions to help clients drive revenues and profit.

The Group measures the performance of its operating segments through a measure of segment profit or loss which is referred to as EBITDA. This measure is reported to the CODM for the purposes of resource allocation and assessment of performance. The measure is the same as reported in the historic financial information.

Information about geographic location by key segments

	Year ended 31 December 2021
	UK	Portugal	Total
	£000	£000	£000
Revenue	9,191	4,283	13,474
Non-current assets	8,219	1,508	9,727
	Year ended 31 December 2020
	UK	Portugal	Total
	£000	£000	£000
Revenue	7,013	4,807	11,820
Non-current assets	7,701	1,455	9,156

Information about major customers

Transactions with a single customer exceeding 10% of total revenue amounted to £2,541k in the year (2020: £1,780k) and related to one customer (2020: 1).

5.  Revenue 

The analysis of the Group's revenue by geographical destination is set out below.

		2021	2020
		£'000	£'000
United Kingdom		8,611	6,506
Europe		271	520
Rest of World		4,592	4,794
		13,474	11,820
		\

A breakdown of revenue by the two revenue streams as detailed in accounting policies is shown below:

		2021	2020
		£'000	£'000
Recurring revenue		10,324	8,566
One off revenue		3,150	3,254
		13,474	11,820

Revenue is either recognised at a point in time or over the period of the contract in line with the accounting policy (note 2).

		2021	2020
		£'000	£'000
Contract assets		418	99
Contract liabilities		2,498	1,809
		\

The following table provides information on contract assets and contract liabilities from contracts with customers:

Contract assets ("accrued income") are recognised where there are excess of revenues earned over billings. 

Contracts are classified assets when only the act of invoice is pending, there is an unconditional right to receive cash and only the passage of time is required as per contractual terms.

Contract liabilities ("deferred income") are recognised when there are billings in excess of revenues. Contracts are classified as liabilities when there is an obligation to transfer goods or services to a customer for which the Group has received consideration from the customer (or the payment is due) but the transfer has not yet completed. These arise based on the billing cycle of the Group's revenues and all are expected to be reversed in under one year.

6.   Profit on operating activities before taxation

Profit on ordinary activities before taxation is stated after charging:

		2021	2020
		£'000	£'000
Share based payments		151	91
Exceptional items		667	-
Deprecation of tangible fixed assets
-  owned		38	45
Depreciation of right-of-use assets		297	231
Amortisation of intangible assets		746	515
(Profit)/Loss on disposal of right-of-use assets		(10)	9
Auditors' remuneration (see note 7)		139	27

Exceptional items relate to costs incurred in relation to the initial public offering and the admission to the AIM Market of the London Stock Exchange.

7.   Auditors remuneration

  The analysis of auditors' remuneration is as follows:

		2021 £'000	2020 £'000
Fees payable to the company's auditors for the audit of the company's annual accounts		13	2

Fees payable to the company's auditors and their associates for other services to the group
-  The audit of the company's subsidiaries pursuant to legislation		27	20
-  Tax compliance services		3	3
-  Other fees		96	2
Total other services		126	25

8.  Employee information

  Their aggregate emoluments were:

				2021 £'000	2020 £'000
Wages and salaries				6,549	6,200
Social security costs				987	923
Other pension costs				210	202
Other benefits				340	286
				8,086	7,611

The average monthly number of employees (including directors) during the year for the group was as follows:

				2021 No.	2020 No.
Selling and administration				22	25
Technical				138	132
				160	157

9.  Directors' emoluments

				2021 £'000	2020 £'000
Aggregate emoluments				896	891
Pension contributions (money purchase schemes)				41	49
				937	940

Total directors' emoluments disclosed above is equivalent to total key management personnel compensation in the period.

Directors' emoluments disclosed above include the following payments to the highest director:

				2021 £'000	2020 £'000
Aggregate emoluments				269	232
Pension contributions (money purchase schemes)				13	11
				282	243

			2021 No.	2020 No.
Number of directors to whom relevant benefits are accruing under:
Money purchase schemes			4	4

The above is equivalent to total key management personnel compensation. There were no other key management personnel other than the Directors.

Further details of Directors remuneration can be found in the remuneration report on pages 21 to 22.

Share based compensation

The Group operates an equity-settled share based compensation plan for Directors and executives. In accordance with IFRS 1, the Group has elected to implement the measurement requirements of IFRS 2 in respect of only those equity-settled share options that were granted after 7 November 2002 and that had not vested as at 1 January 2005. The fair value of the employee services received in exchange for the grant of options is recognised as an expense over the vesting period. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted at the grant date.

At each year end date, the Group revises its estimate of the number of options that are expected to vest. It recognises the impact of the revision of original estimates, if any, in the Statement of Consolidated Income, and a corresponding adjustment to equity over the remaining vesting period. When share options are cancelled the Group accounts for the cancellation as an acceleration of vesting and therefore recognises immediately the amount that otherwise would have been recognised for services received over the remainder of the vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. The fair value of share options has been assessed using the Black Scholes Model.

No share options were granted to Directors in the period (2020 - 2,000,000).

Included on the face of the Statement of Comprehensive Income, is a total charge for share based payments of £151,000 (2020: £91,000) which arises wholly from transactions accounted for as equity settled share based payments.

10.   Finance costs

				2021 £'000	2020 £'000
Other interest and similar charges				67	114

11.   Taxation

(a)  Taxation charge:

		2021 £'000	2020 £'000
Total current income tax credit charged in the income statement
Research and development tax credit Portugal corporate tax		(300) 40	(443) 56
Adjustment in respect of prior years		-	(63)
Total current income tax		(260)	(450)
Deferred tax (income) / expense
Current year		234	(44)
		234	(44)
Total income tax		(26)	(494)

(b)  Taxation reconciliation:

The current income tax credit for the year is explained below:

		2021 £'000	2020 £'000
Profit before tax		226	462
Profit at the standard UK income tax rate of 19% (2020: 19%)		43	88
Effects of:
Expenses not deductible for tax purposes		253	17
Capital allowances in excess of depreciation		(45)	2
Tax losses utilised as part of research and development tax credit		(300)	(443)
Unrelieved tax losses and other deductions arising in the year		(112)	-
B/fwd losses group relieved		(72)	-
Adjustment in respect of earlier year		-	(63)
Difference in overseas tax rates and temporary GAAP differences		(27)	(63)
Recognition of deferred tax asset in respect of losses		92	(116)
Other deferred tax timing differences		142	84
Total income tax credited in the income statement		(26)	(494)

(c)  Deferred tax

Deferred tax balances consist of the following timing differences

		Group		Company
		2021	2020	2021	2020
		£'000	£'000	£'000	£'000
Deferred tax asset
Acceleration capital allowances-UK		(466)	(326)	(40)	-
Tax losses available for carry forward - UK		528	621	95	-
Other timing differences-UK		3	3	-	-
		65	298	55	-

		Group		Company
		2021	2020	2021	2020
		£'000	£'000	£'000	£'000
Deferred tax asset
Acceleration capital allowances-Portugal		(292)	(266)	-	-
Arising on business combinations - UK		(210)	(235)	-	-
		(502)	(501)	-	-

The Group has not recognised all deferred tax assets in respect of tax losses due to timing uncertainty regarding the recoverability against future profits. If all tax losses were recognised the deferred tax asset would increase as below in each year.

					2021		2020
					£'000		£'000
Deferred tax asset
Acceleration capital allowances-UK					(467)		(325)
Tax losses available for carry forward - UK					1,817		1,939
Other timing differences-UK					3		3
Deferred tax asset					1,353		1,617

Increase in deferred tax asset if all losses recognised

1,288

1,319

The movement in deferred tax assets during the period are:

Group

Deferred tax assets	Accelerated capital allowances on PPE- UK	Accelerated capital allowances on Development costs- UK	Tax losses available for carry forward- UK	Other timing differences- UK	Total
At 31 December 2019 (as restated)	(1)	(253)	433	3	182
Charged to profit and loss account	2	(73)	187	0	116
At 31 December 2020	1	(326)	620	3	298
Charged to profit and loss account	(47)	(94)	(92)	0	(233)
At 31 December 2021	(46)	(420)	528	3	65

Company

Deferred tax assets	Accelerated capital allowances on PPE- UK	Tax losses available for carry forward- UK	Total
At 31 December 2020	-	-	-
Charged to profit and loss account	(40)	-	(40)
Transferred from Itim Ltd		95	95
At 31 December 2021	(40)	95	55

The movement in deferred tax liabilities during the period are:
	Accelerated capital allowances on Development costs- Portugal		Timing differences on acquired intangible assets- UK	Total
Deferred tax liabilities
At 31 December 2019 (as restated)	(182)		-	(182)
Arising on business combination	-		(247)	(247)
Charged to profit and loss account	(84)		12	(72)
At 31 December 2020	(266)		(235)	(501)
Charged to profit and loss account	(26)		25	(1)
At 31 December 2021	(292)		(210)	(502)

12.  Earnings per share

Basic and diluted loss per share is calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares in issue during the period. For the avoidance of doubt the deferred shares have been excluded as they have no rights to profits or capital. Additionally, the Company's ordinary shares were subject to a share consolidation where 5 ordinary shares were converted into 1 ordinary share. The comparative period weighted average number of shares has been adjusted for this to aid comparison. The Company's share options have a dilutive effect over the two year period.

					2021		2020
					£'000		£'000
Profit after tax for the year					252		956
Exceptional items					667		-
Share option charge					151		91
Adjusted Profit after tax for the year					1,070		1,047
Weighted average number of shares:
Basic - 000					28,536		25,534
Potentially dilutive share options - 000					3,668		3,318
Diluted average number of shares - 000					32,204		28,852
Earnings per share:
Basic - pence on continuing operations					0.88		3.74
Diluted - pence on continuing operations					0.78		3.31
Adjusted earnings - Basic - pence on continuing operations					3.75		4.10
Adjusted Diluted - pence on continuing operations					3.32		3.63

13.  Intangible assets

Group	Development cost		Goodwill	Acquired intellectual property rights	Customer contracts	Total
	£000		£000	£000	£000	£000
Cost
At 1 January 2021	12,185		8,712	300	1,000	22,197
Foreign exchange differences	(150)		-	-	-	(150)
Additions	1,351		-	-	-	1,351
At 31 December 2021	13,386		8,712	300	1,000	23,398
Amortisation
At 1 January 2021	9,167	4,759		15	50	13,991
Foreign exchange differences	(72)	-		-	-	(72)
Charge for the period	616	-		30	100	746
At 31 December 2021	9,711	4,759		45	150	14,665
Net book value
At 31 December 2021	3,675	3,953		255	850	8,733
At 31 December 2020	3,018	3,953		285	950	8,206

Goodwill arising prior to 1 January 2020 relates to acquisition prior to the date of transition to IFRS of 1 January 2015 and therefore the exemption for business combinations completed before that date has been applied and the amounts not restated.

The Board consider that there is only one Cash Generating Unit.  In accordance with the accounting policy, goodwill is tested annually for impairment, Management have used a fair value less cost of sales methodology supported by offers for the Group and consider that the value supports the carrying value of goodwill at each period end.

Company		Development costs	Total
		£000	£000
Cost
At 1 January 2021 and at 31 December 2021		13	13
Amortisation
At 1 January 2021 and at 31 December 2021		13	13
Net book value
At 31 December 2021		-	-
At 31 December 2020		-	-

Development costs for The Retail Suite have been capitalised in accordance with IAS 38 "Intangible assets". Production commenced in 2008, from which date the related costs were written off over 7 years.

14.   Plant and equipment

Group			Fixtures and equipment	Total
			£000	£000
Cost
At 1 January 2021			987	987
Foreign exchange differences			(7)	(7)
Additions			266	266
Disposals			(11)	(11)
At 31 December 2021			1,235	1,235
Depreciation
At 1 January 2021			934	934
Foreign exchange differences			(6)	(6)
Charge for the period			38	38
Disposals			(11)	(11)
At 31 December 2021			955	955
Net book value
At 31 December 2021			280	280
At 31 December 2020			53	53

Company			Fixtures and equipment	Total
			£000	£000
Cost
At 1 January 2021			16	16
Additions			217	217
At 31 December 2021			233	233
Depreciation
At 1 January 2021			15	15
Charge for the period			5	5
At 31 December 2021			20	20
Net book value
At 31 December 2021			213	213
At 31 December 2020			1	1

15.  Investments

The principal subsidiaries of itim Group plc, all of which have been included in these consolidated financial statements, are as follows:

Company					Shares in group undertaking	Other investments	Total
					£000	£000	£000
Cost
At 1 January 2021 and at 31 December 2021					8,005	46	8,051
Provision for impairment
At 1 January 2021 and at 31 December 2021					2,934	46	2,980
Net book value
At 31 December 2021					5,071	-	5,071
At 31 December 2020					5,071	-	5,071

The company holds more than 20% of the share capital of the following companies:

Subsidiary undertakings	Country of Incorporation	Percentage holding	Class of share	Principal activity	Profit/ (loss) £'000	Net assets/ (liabilities) £'000
ITIM Limited	England and  Wales	100%	Ordinary 'A' Ordinary Deferred	Software consultancy and supply	198	(6,952)
EDI Plus Limited	England and  Wales	100%	Ordinary	Data exchange services	377	921
Profimetrics Software Solutions S.A	Portugal	100%	Ordinary Preferred	Development and distribution of software	285	1,579

The registered address of ITIM limited and EDI Plus Limited are same as ITIM Group Plc.

The registered address of Profimetrics Software Solutions S.A. is R. Lionesa 446, Edifício C Loja L, 4465-671 Leça do Balio, Portugal.

16. Trade and other receivables

		Group		Company
		2021 £'000	2020 £'000	2021 £'000	2020 £'000
Trade receivables		2,133	2,369	-	-
Corporation tax		324	596
Amounts owed by group undertakings due within one year		-	-	8,359	7,995
Amounts owed by group undertakings due in greater than one year		-	-	1,908	1,908
Other receivables		333	229	235	-
Loan receivables		210	-	210
Prepayments and accrued income		702	298	26	-
		3,702	3,492	10,738	9,903

17.  Trade and other payables

	Group		Company
	2021 £'000	2020 £'000	2021 £'000	2020 £'000
Trade payables	687	592	21	1
Corporation tax	40	-	-	-
Other taxation and social security	650	1,438	55	89
Other payables	96	27	41	-
Loans and borrowings (see note 19 below)	318	-	318	-
Accruals	929	704	63	-
Deferred income	2,498	1,809	-	-
	5,218	4,570	498	90

18.  Trade and other payables due in more than one year

	Group		Company
	2021 £'000	2020 £'000	2021 £'000	2020 £'000
Other payables	176	-	176	-
Loans and borrowings (see note 19 below)	-	4,011	-	3,762
	176	4,011	176	3,762

19.  Loans and borrowings

	Group		Company
	2021 £'000	2020 £'000	2021 £'000	2020 £'000
Loans	-	3,658	-	3,408
Accrued interest	318	353	318	354
	318	4,011	318	3,762

Loans comprise of:

Secured liabilities - Group

	2021 £'000	2020 £'000
External investor	-	450
Directors	-	770
Unsecured liabilities - Group
External investor	-	-
Bank loan - CBILs scheme	-	250
Deferred considerations	-	2,088
Directors	-	100
	-	3,658

The loans from Directors, the external investor and the bank bears interest at rates between bank base plus and 3% and LIBOR plus 9%. No interest is charged on the deferred consideration loan in respect of the EDI Plus Limited acquisition.

Analysis of maturity of loans and borrowings

		Group		Company
	2021 £'000		2020 £'000	2021 £'000	2020 £'000
Amounts payable
Within one year	318		-	318	-
Within two and five years	-		4,011	-	3,762
	318		4,011	318	3,762

Net obligations  under finance leases are secured by fixed charges on the assets concerned.

20.   Leases

The Group leases five units within properties from which it operates and also leases computer equipment for the hosting centre. Lease payments are fixed throughout   the contract period.

	Right-of-use - Property £'000	Right-of-use - Equipment £'000	Total £
Cost
At 1 January 2021	1,118	225	1,343
Foreign exchange differences	(18)	-	(18)
Additions	128	9	137
Disposals	(50)	-	(50)
At 31 December 2021	1,178	234	1,412
Depreciation
At 1 January 2021	422	24	446
Foreign exchange differences	(7)	-	(7)
Charge for the year	301	65	366
Disposals	(42)	-	(42)
At 31 December 2021	674	89	763
Net book value
At 31 December 2021	504	145	649
At 31 December 2020	696	201	897

Lease liabilities:

		2021   £'000	2020   £'000
At 1 January		977	1,737
Foreign exchange movement		(11)	-
Interest expense		42	67
Lease payments		(335)	(457)
Additions		51	204
Disposals		-	(574)
At 31 December 2021		724	977

Amounts payable are as follows:

		2021   £	2020   £
Due within 1 year		290	248
Due 2-5 years		404	681
Due over 5 years		30	48
Total		724	977

The Company's right of use assets consist of the Company's premises, data centres' and sundry office equipment.  The expiry of the leases varies between 1 and 8 years.

21.    Financial instruments

Financial risk factors

The Group's financial assets comprise cash and cash equivalents, trade receivables and accrued income. These are all measured at amortised cost. The financial liabilities comprise loans and borrowings, trade payables and accruals, lease liabilities and deferred consideration payable for acquisitions of subsidiaries.  These are measured at amortised cost.

The majority of the financial instruments arise directly from the operations with the exception of loans and borrowings and lease liabilities which have been used to finance the operations.

Fair values of financial instruments

For the following financial assets and liabilities: trade and other payables, trade and other receivables and cash at bank and in hand, the carrying amount approximates the fair value of the instrument due to the short-term nature of the instrument. The Directors consider that there is no material difference between book value and fair value for any of the financial instruments held.

Financial risk management

The Group's activities expose the Group to a number of risks including capital management risk, interest rate risk, foreign exchange risk, credit risk and liquidity risk.

It is the Group's policy that no trading in financial instruments should be undertaken.

There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. The Board receives monthly reports from the Finance Department through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Interest rate risk

The Group's interest rate exposure arises mainly from the interest bearing borrowings as disclosed in note 19. All the Group's facilities were at floating rates, which exposed the entity to cash flow risk. However, given the low level of borrowings this is not considered material.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The Group's largest financial assets are the cash balances held in banks and it is exposed to credit risk on those balances. It is the Group's policy only to make deposits with banks with an acceptable credit rating.

The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices. An ageing analysis of trade receivables is detailed below:

2021	Total £'000	Current £'000	30-60 days £'000	> 60 days £'000
Trade and other receivables	2,133	1,642	117	374
Contract assets	418	418	-	-
	2,551	2,060	117	374
2020	Total £'000	Current £'000	30-60 days £'000	> 60 days £'000
Trade and other receivables	2,369	1,512	336	521
Contract assets	99	99	-	-
	2,468	1,611	336	521

Trade receivables are recognised initially at the transaction price. They are subsequently measured less any provision for impairment in relation to expected credit losses. At each reporting date the Group assesses the expected credit losses and changes in credit risk since initial recognition of the receivable and a provision for impairment is recognised when considered necessary. The Group considers the ageing to be reasonable and has no history of significant bad debts. No provisions have been made in in these financial statements. The Board do not consider the credit risk to be significant for the financial assets currently held.

Foreign exchange risk

Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency other than their functional currency. The Group's policy is, where possible, to allow Group entities to settle liabilities denominated in their functional (currency). Where Group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere within the Group.

The Group's main exposure to foreign currency risk is on the trade receivables in the Portuguese subsidiary which are not held in Euros. The Directors have considered the balances at year end and based on the level of foreign currency balances and the expected timing of settlement of those amounts that the foreign exchange risk is not material.

Liquidity risk

Liquidity risk is the risk that ITIM Group may encounter difficulty in meeting its obligations associated with the financial liabilities that are settled by delivering cash or other financial assets.  The Group actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the Group has sufficient available funds for operations and planned expansions.

The Group would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows through effective cash management. The maturity analysis of the financial liabilities are included below:

As at 31 December 2021	Carrying amount £'000	1 year or less £'000	1<2 years £'000	2-5years £'000	5 years £'000
Trade and other payables	1,888	1,712	176	-	-
Right of use liability	724	290	269	135	30
Other loans and borrowings	318	318	-	-	-
	2,930	2.320	445	135	30

As at 31 December 2020	Carrying amount £'000	1 year or less £'000	1<2 years £'000	2-5years £'000	5 years £'000
Trade and other payables	1,323	1,323	-	-	-
Right of use liability	977	248	391	253	85
Other loans and borrowings	4,012	-	3,911	101	-
	6,312	1,571	4,302	354	85

Capital management risk

The Group's main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue to trade for the foreseeable future. The Group also aims to optimise its capital structure of debt and equity so as to minimise its cost of capital. The Group in particular reviews its levels of borrowing and the repayment dates, setting these out against forecast cash flows and reviewing the level of available funds.

22.  Share capital

		2021 £'000	2020 £'000
Authorised:
37,949,651 Ordinary shares of 5p each		1,898	-
189,748,257 Ordinary shares of 1p each		-	1,898
110,251,743 Deferred shares of 1p each		-	1,102
		1,898	3,000
Allotted, called up and fully paid:		2021 £'000	2020 £'000
31,210,607 Ordinary shares of 5p each		1,561	-
127,671,264 Ordinary shares of 1p each		-	1,277
110,251,743 Deferred shares of 1p each		-	1,102
		1,561	2,379

In May 2021, the Company bought back 110,251,743 deferred shares of £0.01 each for £0.01 which were then subsequently cancelled. This reduced share capital by £1,102,517 and created a capital redemption reserve of the same value. At the same time, the share premium account was reduced by £10,469,000 and this was credited to the Company's profit and loss reserve.

On 18^th June 2021 250,000 £0.05 Ordinary shares were issued for consideration of £19,938. The share premium on the issue was £7,438.

On 28^th June 2021 231,548 £0.05 Ordinary shares were issued for consideration of £160,000. The share premium on the issue was £148,422.

On 28^th June 2021 5,194,806 £0.05 Ordinary shares were issued for consideration of £8,000,001. The share premium on the issue was £7,740,261.

IPO expenses on the new share issue of £497,641 were written off against the share premium account.

A summary of the rights of the different classes of share is given below:

Voting

All Ordinary shares are entitled to one vote each. The holders of deferred shares are not entitled to receive notice of, to attend, to speak or to vote at any general meeting of the Company.

Dividends 

The profits of the Company available for distribution shall be used to pay dividends to the holders of Ordinary Shares a dividend equivalent to such amounts as the Directors may determine and as is approved by the Ordinary Shareholders in general meeting.

23.  Reserves

Share premium

This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Share options reserve

The share options reserves represent the fair value of equity-settled share options granted using the Black Scholes model.

Capital redemption reserve

This reserve arises on the purchase of the company's own shares.

Foreign exchange reserve

This reserve includes any exchange differences arising on the retranslation of foreign subsidiaries on consolidation.

Retained earnings

This balance represents the cumulative profit and loss made by the Group net of distributions to owners.

24.  Share-based payments

Share options

The Company has a share option scheme for certain employees of the Group. Options are granted with a fixed exercise price. The vesting period varies from vesting immediately to vesting over 2 years from the date of grant. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the employee leaves the Group before the options vest.

Details of equity settled share options outstanding during the year are as follows:

Year ended 31 December 2021

Grant date	Outstanding at 1 January 2021	Share Consolidation	Granted	Exercised	Lapsed	Outstanding at 31 December 2021	Exercise period	Exercise price
08/08/2011	1,250,000	(1,000,000)	-	(250,000)	-	-	10 years	1.595p
14/04/2015	750,000	(600,000)	-	-	-	150,000	10 years	1.595p
10/04/2017	13,075,000	(10,460,000)	-	-	-	2,615,000	10 years	3.000p
31/03/2021	2,000,000	(1,600,000)	-	-	-	400,000	10 years	14.000p
19/04/2021	-	-	723,589	(231,548)	-	492,041	10 years	70.000p
	17,075,000	(13,660,000)	723,589	(481,548)	-	3,657,041

Year ended 31 December 2020

Grant date	Outstanding at 1 January 2020	Granted	Exercised	Lapsed	Outstanding at 31 December 2020	Exercise period	Exercise price
08/08/2011	1,250,000	-	-	-	1,250,000	10 years	1.595p
14/04/2015	750,000	-	-	-	750,000	10 years	1.595p
10/04/2017	13,075,000	-	-	-	13,075,000	10 years	3.000p
31/03/2021	-	2,000,000	-	-	2,000,000	10 years	14.000p
	15,075,000	2,000,000	-	-	17,075,000

Details of the share options and weighted average exercise price (WAEP) during the years are as follows:

	31 December 2021		31 December 2020
	Number	WAEP	Number	WAEP
Outstanding at the beginning of the year	17,075,000	4.124p	15,075,000	2.814p
Share consolidation	(13,660,000)	0.000p	-	-
Granted during the year	723,589	70.000p	2,000,000	14.000p
Exercised during the year	(481,548)	(37.79)	-	-
Lapsed during the year	-	-	-	-
Forfeited during the year	-	-	-	-
	3,657,041	28.13p	17,075,000	4.124p

The weighted average contractual life of share options outstanding as at 31 December 2021 was 6 years (31 December 2020: 6 years).

ITIM recognises equity settled share-based payment expenses based on the fair value determined by the Black Scholes model. The model is internationally recognised as being appropriate to value employee share options schemes. The inputs into the option issues were as follows:

		Year ended 31 December 2021	Year ended 31 December 2020
		£000	£000
Share price		78p	14p
Exercise price		69p	14p
Expected volatility		25%	25%
Expected life		10 years	10 years
Risk free rate		0.5%	0.5%

Risk-free rate

The risk-free interest rate is based on the lower of the Bank of England's base rate and 0.5%.

Volatility

The measure of volatility is based management's estimate after considering the historical volatility of guideline companies operating within the same industry as ITIM Group, over a 10-year time period.

25.  Company statement of changes in equity

	Share capital £'000	Share premium £'000	Share options reserve £'000	Capital Redemption Reserve £'000	Retained losses £'000	Total £000
At 1 January 2020	2,379	10,469	213	-	(3,062)	9,999
Total comprehensive income for the year	-	-	-	-	1,189	1,189
Share options exercised	-	-	91	-	-	91
At 1 January 2021	2,379	10,469	304	-	(1,873)	11,279
Total comprehensive income for the year	-	-	-	-	(501)	(501)
Share option charge	-	-	151	-	-	151
Share buyback of deferred shares	(1,103)	-	-	1,103	-	-
Cancellation of share premium	-	(10,469)	-	-	10,469	-
Shares issued in the period - IPO	260	7,740	-	-	-	8,000
Share option conversion	25	156	-	-	-	181
IPO expenses	-	(498)	-	-	-	(498)
At 31 December 2021	1,561	7,398	455	1,103	8,095	18,612

The profit for the year dealt with in the financial statements of the parent company is shown above. As permitted by section 408 of the Companies Act 2006, no separate income statement is presented in respect of the parent company.

26.   Pension commitments

The group makes contributions to individual pension schemes (money purchase).  The amount paid during the year was £209,553 (2020: £186,920). Outstanding contributions at the balance sheet date amounted to £26,042 (2020: £23,148).

27.   Contingent liabilities

itim Group plc and its subsidiary undertakings have given cross guarantees and been granted rights to set-off in respect of group undertaking overdrafts and loans. 

The Company is party to a cross guarantee for amounts payable to R M Frosell of £Nil (2020: £350,000) by the Group.

28.   Related party transactions

The Group has taken advantage of the exemption available under IAS 2 Related Party Disclosures not to disclose details of transactions between Group undertakings which are eliminated on consolidation.

The loans made from the Directors are detailed in note 19.

29.   Supporting statement for cash flows

Year ended 31 December 2021	Brought forward	Cash flow	Non cash	Carried forward
Loans and borrowings	(4,011)	3,757	(64)	(318)
Leases	(977)	355	(102)	(724)
	(2,861)	8,160	(169)	5,130

Year ended 31 December 2020	Brought forward	Cash flow	Non cash	Acquisition of sub	New loans	Carried forward
Loans and borrowings	(1,627)	-	(46)	(2,088)	(250)	(4,011)
Leases	(1,737)	457	303	-	-	(977)

30.   Controlling party

  There is no single ultimate controlling party.

Notice of Annual General Meeting

Registered number: 03486926

ITIM GROUP PLC

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of itim Group plc (the "Company") will be held at the offices of DMH Stallard LLP, 6 New Street Square, London EC4A 3BF on 20 June 2022 at 10.00 a.m. to consider and, if thought fit, to pass the following resolutions, of which resolutions 1 to 11 (inclusive) will be proposed as ordinary resolutions and resolutions 12 and 13 will be proposed as special resolutions. Resolutions 12 to 13 (inclusive) are items of special business.

ORDINARY RESOLUTIONS

1.	To receive the Company's annual accounts for the financial year ended 31 December 2021 together with the directors' report, the directors' remuneration report and the auditors' report on those accounts.
2.	To re-appoint RPG Crouch Chapman LLP as auditors of the Company to hold office until the conclusion of the next annual general meeting of the Company to be held in 2023 and to authorise the directors to fix their remuneration.
3.	To re-elect Sandra Ribeiro who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers herself for re-election as a director.
4.	To re-elect Michael Jackson who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers himself for re-election as a director.
5.	To re-elect Justin King who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers himself for re-election as a director.
6.	To re-elect Lee Williams who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers himself for re-election as a director.
7.	To re-elect Frank Lewis who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers himself for re-election as a director.
8.	To re-elect Ian Hayes who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers himself for re-election as a director.
9.	To re-elect Mahmood Ali Athar who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers himself for re-election as a director.
10.	To re-elect Robert Frosell who, having been appointed since the Company's last annual general meeting, retires in accordance with article 77 of the articles of association of the Company and who, being eligible, offers himself for re-election as a director.
11.	That, in substitution for any equivalent existing and unexercised authorities and powers, the directors of the Company be and they are hereby generally and unconditionally authorised for the purpose of section 551 of the Companies Act 2006 (the "Act") to exercise all or any of the powers of the Company to allot shares of the Company or to grant rights to subscribe for, or to convert any security into, shares of the Company up to an aggregate nominal value of £520,177 to such persons at such times and generally on such terms and conditions as the directors may determine (subject always to the articles of association of the Company), provided that this authority shall, unless previously renewed, varied or revoked by the Company in general meeting, expire at the conclusion of the next annual general meeting of the Company to be held in 2023 or, if earlier, 20 September 2023, save that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require such securities to be allotted after the expiry of such period and the directors of the Company may allot such securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired.

SPECIAL RESOLUTIONS

12.	That, subject to and conditional upon the passing of resolution 11 and in substitution for any equivalent existing and unexercised authorities and powers, the directors of the Company be and are hereby empowered pursuant to sections 570 and 573 of the Act to allot equity securities (as defined in section 560(1) of the Act) for cash pursuant to the authority conferred upon them by resolution 11 and/or where the allotment constitutes an allotment of equity securities by virtue of section 560(3) of the Act, as if section 561 of the Act did not apply to any such allotment provided that this authority and power shall be limited to the allotment of equity securities up to an aggregate nominal amount of £78,027 (representing approximately 5 per cent. of the current issued share capital of the Company) provided that this authority shall, unless previously renewed, varied or revoked by the Company in general meeting, expire at the conclusion of the next annual general meeting of the Company to be held in 2023 or, if earlier, 20 September 2023, save that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require such securities to be allotted after the expiry of such period and the directors of the Company may allot such securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired.
13.	That the Company be and is hereby generally and unconditionally authorised for the purpose of section 701 of the Act to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares in the capital of the Company ("Ordinary Shares") provided that:
a)		the maximum aggregate number of Ordinary Shares which may be purchased is 3,121,060 (representing approximately 10 per cent. of the Company's existing issued share capital);
b)		the minimum price (exclusive of expenses) which may be paid for each Ordinary Share is £0.05 (being its nominal value);
c)		the maximum price (exclusive of expenses) which may be paid for each Ordinary Share is the higher of: (i) an amount equal to 105 per cent. of the average of the middle market quotations for an Ordinary Share as derived from the Daily Official List of the London Stock Exchange plc for the 5 business days immediately preceding the day on which the Ordinary Share in question is purchased; and (ii) the value of an Ordinary Share calculated on the basis of the higher of the price quoted for the last independent trade of an Ordinary Share and the highest current independent bid for an Ordinary Share as derived from the London Stock Exchange Trading System;
d)		unless previously renewed, revoked or varied, the authority hereby conferred shall expire at the conclusion of the next annual general meeting of the Company to be held in 2023 or, if earlier, 20 September 2023; and
e)		the Company may make a contract or contracts to purchase Ordinary Shares under the authority hereby conferred prior to the expiry of such authority which contract or contracts will or may be executed wholly or partly after the expiry of such authority, and may make a purchase of Ordinary Shares in pursuance

BY ORDER OF THE BOARD

Ian Hayes

Secretary

Date : 11^th May 2022

Registered office: 2^nd Floor Atlas House, 173 Victoria Street, London, SW1E 5NH

NOTES:

1.	Pursuant to the Company's Articles of Association, a member of the Company entitled to attend and vote at the meeting convened by this notice is entitled to appoint one or more proxies to exercise any of his rights to attend, speak and vote at that meeting on his behalf.
2.	If a member appoints more than one proxy, each proxy must be entitled to exercise the rights attached to different shares. If you submit more than one valid proxy appointment in respect of the same shares, the appointment received last before the latest time for the receipt of proxies will take precedence.
3.	A proxy may only be appointed using the procedures set out in these notes and the notes to the form of proxy. To validly appoint a proxy, a member must complete, sign and date the enclosed form of proxy and deposit it at the office of the Company's registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD, by 10.00 a.m. on 16 June 2022 (or, in the event that the meeting is adjourned, not less than 48 hours, excluding non-working days, before the time fixed for the holding of the adjourned meeting). Any power of attorney or any other authority under which the form of proxy is signed (or a duly certified copy of such power or authority) must be enclosed with the form of proxy.
4.	In order to revoke a proxy appointment, a member must sign and date a notice clearly stating his intention to revoke his proxy appointment and deposit it at the office of the Company's registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD prior to commencement of the meeting. If the revocation is received after the time specified, the original proxy appointment will remain valid unless the member attends the meeting and votes in person.
5.	Pursuant to the Articles of Association, any corporation which is a member of the Company may authorise one or more persons (who need not be a member of the Company) to attend, speak and vote at the meeting as the representative of that corporation. A certified copy of the board resolution of the corporation appointing the relevant person as the representative of that corporation in connection with the meeting must be deposited at the office of the Company's registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD prior to the commencement of the meeting. If the revocation is received after the time specified, the original corporate representative appointment will remain valid unless the member attends the meeting and votes in person.
6.	In the case of joint holders, where more than one of the joint holders purports to appoint a proxy in respect of the same shares, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first named being the most senior).
7.	The right to vote at the meeting shall be determined by reference to the register of members of the Company. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended), only those persons whose names are entered on the register of members of the Company at 6.00 p.m. on 16 June 2022 (or, in the event of any adjournment, at 6.00 p.m. on the date which is two business days prior to the adjourned meeting) shall be entitled to attend and vote in respect of the number of shares registered in their names at that time. Changes to entries on the register of members after that time shall be disregarded in determining the rights of any person to vote at the meeting.
8.	CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual (available via www.euroclear.com ). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
9.	In order for a proxy appointment or instruction made by means of the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's ("Euroclear") specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the Company's agent (ID 7RA11) by the latest time for proxy appointments set out in paragraph 3 above. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the Company's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
10.	CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001 (as amended).
11.	As at 10th May 2022, the latest practicable date prior to the date of this notice, the Company's issued share capital consisted of 31,210,607 ordinary shares of £0.05 each, carrying one vote each and, therefore, the total number of voting rights in the Company as at 10th May 2022 were 31,210,607.
12.	You may not use any electronic address (within the meaning of section 333(4) of the Companies Act 2006) provided in this notice or in any related documents (including the form of proxy and the annual report and accounts) to communicate with the Company for any purposes other than those expressly stated.
13.	Your personal data includes all data provided by you, or on your behalf, which related to you as a shareholder, including your name and contact details, the votes you cast and your reference number (as attributed to you by the Company or its registrars). The Company determines the purposes for which, and the manner in which, your personal data is to be processed. The Company and any third party to which it discloses the data (including the Company's registrars) may process your personal data for the purposes of compiling and updating the Company's records, fulfilling its legal obligations and processing the shareholder rights you exercise.

EXPLANATORY NOTES:

Resolutions 1 to 11 (inclusive) are proposed as ordinary resolutions. For each of these to be passed, more than half of the votes cast must be in favour of the relevant resolution.

Resolutions 12 and 13 are proposed as special resolutions. For each of these resolutions to be passed, at least three quarters of the votes cast must be in favour of the resolution. An explanation of each of the resolutions is set out below:

Resolution 1 - Annual Report and Accounts

The Directors are required to present to the annual general meeting the audited accounts and the Directors' and Auditors' Reports for the financial year ended 31 December 2021.

Resolutions 2 - Auditors

The Company is required to appoint an auditor at every general meeting of the Company at which accounts are presented to shareholders. The appointment of RPG Crouch Chapman LLP. Accordingly, this resolution proposes the re-appointment of RPG Crouch Chapman LLP as the auditors of the Company. It is normal practice for a company's directors to be authorised to agree how much the auditors should be paid and Resolution 2 grants this authority to the directors.

Resolutions 3 to 10 - Re-election of Directors

Article 77 of the Company's articles of association requires any directors who have been appointed by the Board since the last annual general meeting and any directors who were not appointed or reappointed at one of the preceding two annual general meetings to retire from office. Any such director is entitled to offer himself for re-election.

Resolutions 11 and 12 - Directors' general power to allot relevant securities

Resolution 11 is proposed to renew the directors' power to allot shares.

Resolution 11 seeks to grant the directors authority to allot, pursuant to section 551 of the Act, shares or grant rights to subscribe for or to convert any security into shares in the Company up an aggregate nominal value of £520,177 which is equal to one third of the nominal value of the current issued ordinary share capital of the Company as at 10^th May 2022 (being the latest practicable date prior to the publication of this notice). Unless previously renewed, revoked or varied, the authorities sought under this resolution will expire at the conclusion of the next annual general meeting of the Company next annual general meeting of the Company to be held in 2023 or 20 September 2023 (whichever is the earlier). The Directors have no present intention of exercising either of the authorities under this resolution, but the Board wishes to ensure that the Company has maximum flexibility in managing the financial resources of the Company. As at the date of this notice, no shares are held by the Company in treasury.

Resolution 12 is to approve the partial disapplication of pre-emption rights in respect of the allotment of equity securities for cash. The passing of this resolution (together with resolution 11) would allow the directors to allot shares for cash and/or sell treasury shares without first having to offer such shares to existing shareholders in proportion to their existing holdings. The authority would be limited to allotments or sales up to an aggregate nominal amount of £78,027 which represents approximately 5 per cent. of the nominal value of the current issued ordinary share capital of the Company as at 10^th May 2022 (being the latest practicable date prior to the publication of this notice). Unless previously renewed, revoked or varied, the authorities sought under this resolution will expire at the conclusion of the next annual general meeting of the Company next annual general meeting of the Company to be held in 2023 or 20 September 2023 (whichever is the earlier).

Resolution 13 - Authority for the market purchase by the Company of its own shares

The authority sought by resolution 13 limits the number of shares that could be purchased to a maximum of 3,121,060 ordinary shares (equivalent to 10 per cent. of the Company's issued ordinary share capital as at 10^th May 2022 (being the latest practicable date prior to the publication of this notice)) and sets a minimum and maximum price. Unless previously renewed, revoked or varied, the authority will expire at the conclusion of the annual general meeting of the Company to be held in 2023 or 20 September 2023 (whichever is the earlier). The Directors have no present intention of exercising the authority to purchase the Company's ordinary shares but will keep the matter under review, taking into account the financial resources of the Company, the Company's share price and future funding opportunities. The Directors will exercise this authority only when to do so would be in the best interests of the Company and of its shareholders generally, and could be expected to result in an increase in earnings per share of the Company. Any purchases of ordinary shares would be by means of market purchase through the London Stock Exchange plc. Any shares the Company buys under this authority may either be cancelled or held in treasury. Treasury shares can be re-sold for cash, cancelled or used for the purposes of employee share schemes. No dividends are paid on shares whilst held in treasury and no voting rights attach to treasury shares. The Directors believe that it is desirable for the Company to have this choice as holding the purchased shares as treasury shares would give the Company the ability to re-sell or transfer them in the future and so provide the Company with additional flexibility in the management of its capital base.

 

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