UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1          GENERAL INFORMATION

             Adsure Services PLC ("the Company"), Registered Number: 14514054, is a public company, limited by shares, and incorporated and domiciled in the United Kingdom. The Company was incorporated on 29 November 2022 and was listed on the Aquis Growth Market (AQSE: ADS) on 30 October 2023.

On 6 September 2023, the Company acquired the entire issued share capital of TIAA Limited (together "the Group") via a share-for-share exchange.

             The address of its registered office and the principal place of business are located at Artillery House, Fort Fareham, Newgate Lane, Fareham, PO14 1AH.

2          BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

These consolidated interim results (Interim Financial Statements) of Adsure Services PLC comprise the results of the Group for the 6 months ended 30 September 2024.

The Interim Financial Statements are presented in Sterling, which is the functional currency of the company. Monetary amounts in these Interim Financial Statements are rounded to the nearest £.

2.1       Accounting convention

The Interim Financial Statements included in this half-yearly financial report have been prepared in accordance with UK adopted International Accounting Standard 34, Interim Financial Reporting and the Disclosure and Transparency Rules of the Financial Conduct Authority.

These Interim Financial Statements do not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 and should be read in conjunction with the company's audited consolidated financial statements for the twelve months ended 31 March 2024, which were prepared in accordance with International Financial Reporting Standards (IFRS) and are filed with Companies House.

The information presented for the 6-month period ended 30 September 2024 (and comparatives presented for the 6-month period ended 30 September 2023) have not been audited.

2.2       Merger accounting basis (Business combination)

On 6 September 2023, the Company acquired the entire issued share capital of TIAA Limited (together "the Group") via a share-for-share exchange.

The insertion of the Company as a holding company on top of the pre-existing trading entity, TIAA Limited ("TIAA") does not constitute a business combination under IFRS 3 Business Combinations. This transaction has been deemed to be a merger in line with guidance from the Interpretations Committee (IFRIC) and as such the consolidated accounts for the Group are treated as a continuation of the accounts of TIAA.

Under the principles of merger accounting (continuation accounting) the consolidated financial statement of the newly formed Group must reflect:

·      The assets and liabilities of TIAA as pre-combination carrying amounts.

·      The retained earnings and other equity balance of TIAA at pre-combination carrying amounts.

·      The assets and liabilities of the Company at fair value.

·      The share capital of the Company.

The consolidated reserves of the Group were adjusted in the previous period following the share-for-share exchange to reflect the share capital of the Company with the difference giving rise to a merger reserve.

2.3       Going concern

At the time of approving the financial statements, the directors, after considering all available information

about the future, making enquiries and reviewing the forecasts and projections, have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and to discharge its liabilities as they fall due for a period covering at least twelve months from the date of the approval of the financial statements. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

2.4       Revenue

Revenue is recognised to the extent that the Group obtains the right to consideration in exchange for its performance. Revenue is measured at the fair value of the consideration receivable for the performance provided in the period, excluding VAT.

Revenue is recognised over time if the contract with the customer ensures the Group is entitled to payment for its performance to date throughout the contract period, otherwise Revenue is recognised at a point in time as the company satisfies the performance obligations by providing the specific services to its customer, typically on delivery of reports to the customer.

The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts within creditors. Similarly, if the company satisfies a performance obligation before it receives the consideration, the company recognises either a contract asset or a receivable within debtors.

In obtaining these contracts with customers, the Group incurs a number of incremental costs directly attributable to the planning and necessary performance of the contract. In accordance with IFRS 15 these contract costs are capitalised within contract assets and amortised over the performance of the contract.

2.5       Intangible assets

Intangible assets comprise software and development costs, are costs capitalised in respect of the development of the company's 'Assure' management system. Assure is designed to provide the company with better monitoring capabilities of the performance of the company's contracts, and to assist in its audit delivery. Included within the costs capitalised are labour costs that are directly attributable to bringing the Assure management system into working condition for its intended use. Initial capitalisation of costs was based on management's judgement that technical economic feasibility was confirmed. Management also determines the period over which intangible asset is then amortised straight line over on its expected useful life of 2-4 years from commencement of its use.

2.6       Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Fixtures, fittings & equipment              Straight line over 3 years

Computer equipment                             Straight line over 2 to 5 years

Right-of-use assets - Vehicles                Straight line over the lease period (typically 3-4 years)

Right-of-use assets - Properties            Straight line over the lease period

2.7       Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

​ 

2.8       Trade and other receivables

Trade and other receivables are stated at estimated realisable value after each debt has been considered individually. Where the payment of a debt becomes doubtful a provision is made and charged to the income statement.

2.9       Trade and other payables

Trade and other payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

2.10    Taxation

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

Current tax

The Group's liability for current tax is calculated using tax rates that have been enacted by the reporting period date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

2.11    Retirement benefit schemes

The Group makes payments to defined contribution pension schemes in respect of its employees, and also participates in certain defined benefit pension schemes.

             Defined contribution pensions

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

             Defined benefit pensions

           The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method and is based on actuarial advice.

The net defined benefit pension asset or liability in the balance sheet comprises the total of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price.

             The actuary's remeasurement of the defined benefit plan, is performed annually, for the purpose of its valuation and disclosure in the statutory accounts prepared to 31 March each year. Hence the value of the Retirement benefit obligations has not been remeasured within the Interim Financial Statements.

2.12    Leases

             Leases are accounted for in accordance with IFRS 16. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, initially measured at cost, and subsequently depreciated on a straight-line basis over the lease term. The lease liability is measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease.

3          EARNINGS PER SHARE

             Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Underlying EPS is calculated using underling EBITDA (earnings before interest, tax, depreciation, amortisation and non-recurring expenditure), which excludes costs relating to the Listing on Aquis Stock Exchange.

The calculation is based on Adsure share capital, as all TIAA shares were acquired on a share-for-share basis on 6 September 2023.

4          SHARE CAPITAL

             On 6 September 2023, in line with the signed share transfer agreement, Adsure Services PLC acquired all of the issued share capital in TIAA Limited, comprising 96,204 Ordinary A shares of 5p each, for total consideration of £52,912 settled by the issue of 10,582,430 Ordinary shares of 0.5p each.

The Company's issued share capital at 30 September 2024 comprises 10,582,440 Ordinary shares of 0.5p each.

During September 2024 the Company granted share options to certain directors and employees of the Group, enabling them to acquire up to 893,040 shares in the Company before September 2034, at an exercise price of 30p, subject to certain performance conditions being met.