Consolidated Directors’ Report & Financial Statements Year Ended 30 June 2024 Chairman’s Statement 2 Chief Executive Officer’s Report 4 Strategic Report 8 Directors’ Report 11 Corporate Governance Statement 15 Independent Auditor’s Report 18 Consolidated Statement of Comprehensive Income 23 Consolidated Statement of Financial Position 24 Consolidated Statement of Changes in Equity 25 Company Statement of Changes in Equity 26 Consolidated Statement of Cash Flows 27 Notes to the Consolidated Financial Statements 28 Company Information 59 Director Profiles 60 Notice of Annual General Meeting 62 Contents Chairman’s Statement I am pleased to present my Chairman’s Statement for the financial year ended 30 June 2024. Despite a challenging economic climate, Aeorema has demonstrated resilience and agility, supported by the strong foundation we have built in recent years. This year, we report revenue of £20.3m and a profit before tax (‘PBT’) of £437,000, compared with £20.2m and £1.0m respectively for last year. This reduction in PBT reflects industry-wide margin pressures driven by a combination of high inflation on third- party costs, wage inflation, and talent shortages, with client budgets unable to absorb these increased costs in the short term. However, it should be noted that our final results show a slight improvement on the figures we forecast in our recent trading update, which reflects an improving trend observed towards the end of the financial year. In response to the challenges faced during the year, we have undertaken necessary adjustments to align our operating model with current market realities. This includes developing a programme to reduce and rebalance costs between the first and second halves of our financial year, and improve operational efficiency. We began implementing this programme after the year end and I am pleased to report that it is already delivering benefits and putting us in a stronger financial position with a more focused, efficient operating model. The full benefit of this programme is expected to be realised by the end of the financial year ending 30 June 2025. During the year, our clients have faced difficult market conditions which have shifted their approach to project planning. Some have postponed projects, while others have experienced prolonged decision-making processes. Nonetheless, Aeorema’s resilience and the investments made in recent years have allowed us to enhance efficiencies, respond to market shifts, offer more strategic and creative solutions, and deepen relationships with our loyal and growing client base. Throughout, we have maintained the high standards of service that our clients expect and trust which is a testament to the hard work and adaptability of our talented employees, and the strong and experienced leadership of our senior team. I would like to thank everyone for their support and contributions during the year. Cannes Lions continues to be a cornerstone of our success. Early signs indicate that the 2025 event will once again see us delivering best-in-class creative activations in the South of France for multiple returning clients, further strengthening our leadership at this premier industry gathering. Building on our success at Cannes Lions, we are focused on expanding our strategic and creative offerings to other key events, which allow us to showcase our expertise on a global stage and deepen our impact within the industry. Accordingly, we are excited to announce that, for the first time, we will have a presence at the World Economic Forum in Davos in January 2025. Securing a foothold at this prestigious global event is a significant milestone for Aeorema, and we anticipate it will provide further opportunities. The U.S. market is a continued priority for Aeorema and our U.S. team at Cheerful Twentyfirst Inc. works closely with our UK team. This has resulted in the Group securing an impressive roster of U.S. based clients which, we feel, fully justifies the cost of us entering the U.S market. In addition to our New York office, we have recently established a presence in Austin, Texas, a vibrant technology hub that aligns with our capabilities. Austin also hosts South by Southwest (‘SXSW’), an annual conglomeration of parallel film, interactive media, music and conferences, and presents another growing global event where we see considerable opportunities. As we approach the second half of the new financial year, we await the finalisation of several contracts and the scheduling of new opportunities. We will update the market as developments unfold. Aeorema has maintained a strong cash position, with cash balances of £1.7m as of the date of this announcement. Consequently, I am delighted to propose a final dividend of 3 pence per share, reflecting the progress we’ve made in difficult markets and our confidence in the future. We also remain open to sensibly priced acquisition opportunities that align with our business and deliver value to our shareholders. Subject to shareholder approval at the upcoming Annual General Meeting (“AGM”), the dividend will be paid on 20 January 2025, with a record date of 27 December 2024 and an ex-dividend date of 24 December 2024. As previously announced, Hannah Luffman, a Non-Executive Director of the Company, will also be stepping down from the Board ahead of the Company’s 2024 AGM. Having originally joined the Company in May 2020, Hannah was appointed to the Board in December 2021, and it has been a pleasure working with her. On behalf of myself and the Board, I would like to thank Hannah for her hard work and contribution to Aeorema’s growth over the last few years. We wish her all the best in her future endeavours. 2 In closing, while economic pressures persist for many of our clients, we anticipate greater stability in the near term, especially after key national elections in our biggest operating markets. We are therefore cautiously optimistic for FY2025 and believe that the most uncertain times may be behind us. Finally, I would like to thank our investors for their ongoing trust and support. We look forward to the year ahead with increased confidence as we continue to build on the strong platform we have established in recent years. M Hale Chairman 8 November 2024 Aeorema Communications plc 3 Chief Executive Officer’s Report As our Chairman noted, this has been a period of significant change, not only for our company but also for our clients. Many have faced economic challenges and uncertainties, resulting in adjustments to project planning and scheduling across the board including some postponements and prolonged decision-making processes. Despite this, we remain cautiously optimistic as we head into 2025, confident that our adaptability and innovation will allow us to thrive in this evolving environment. Building on our successes in the UK and Europe, our North American division has made solid progress. Working in conjunction with our UK team, our presence in the U.S. has allowed us to add several new blue-chip clients to our portfolio and enable us to meet their requirements in both North America and Europe. I want to acknowledge the tenacity and creativity of our team during this period and express my sincere thanks for their outstanding contributions, which have been instrumental in driving this success. Our unique offerings at the major industry event Cannes Lions continue to be a source of immense pride, and we see strong potential for growth in this space, not just for Cannes Lions but also for other major tentpole events in 2025 and beyond. These events allow us to showcase our creative capabilities on a global stage, and we expect to build on our successes with new and exciting opportunities on the horizon. One such opportunity is at the World Economic Forum in Davos which, although smaller in scale than Cannes Lions, represents a significant milestone for us. In the B2E (Business-to-Employee) conference space, we continue to deliver exceptional work for our clients. Although this market has seen some fluctuations, we anticipate a return to normal levels of activity by 2025/2026. Our ability to navigate these market shifts and consistently deliver high-quality experiences positions us well for the future. This year, we have also seen recognition for our achievements by winning several prestigious industry awards. Cheerful Twentyfirst was honoured to win the Experiential Agency Team of the Year award in the Experience category at the renowned Drum Awards Festival. In partnership with Stagwell Inc. (NASDAQ: STGW) and TEAM, Cheerful Twentyfirst was also awarded Best Outdoor Activation at the 22nd Ex Awards in Las Vegas for our exceptional work on the Sport Beach activation at Cannes Lions 2023. These accolades underscore our commitment to excellence and innovation, and I am incredibly proud of all the work our team has accomplished. Within our Group, our cross-agency offering continues to enrich projects and client relationships. Eventful, our boutique venue sourcing and events management agency, deserves recognition and thanks for a significant increase in collaboration and cross-pollination of client projects. Under its Managing Director Claire Gardner, our elevated collaboration has allowed both agencies to seamlessly blend insights and expertise, and supported the expansion of services within the Group. We recognise the Eventful team’s hard work and dedication in making this synergy possible, which lays the foundation for continued success and mutual growth. We are equally proud of our ongoing sustainability initiatives, highlighted by achieving our Silver EcoVadis accreditation, which reflects our commitment to ethical and sustainable business practices. As part of our roadmap to Net Zero, we will be joining the Science Based Targets initiative (“SBTi”) to support our development of a target-based carbon reduction strategy and look forward to sharing this with you. In 2025, we also plan to publish an update to our Corporate Social Responsibility (“CSR”) charter to continue to share the goals and guideposts that form our mission to operate in an environmentally and socially responsible way. 4 As mentioned previously, our CSR strategy is not only a key focus internally but is also a critical part of decision-making when our clients are awarding contracts. In conclusion, our strong client partnerships, innovative event offerings, and commitment to sustainability place us in an excellent position for continued success in FY2025 and beyond. I would also like to thank our shareholders for their ongoing support and look forward to updating the market on our development as FY2025 progresses. Steve Quah Chief Executive Officer 8 November 2024 Aeorema Communications plc 5 Milestones 2023 Q1 23 Growth Two new multinational clients onboarded following a successful Cannes Lions. Momentum New York Office celebrates four year anniversary. Growth Agency delivers first Climate Week conference in New York City. Awards Recognised as C&IT Global Agency of the Year. Growth Agency delivers first conference project in Japan, following client expansion into APAC market. Leadership Strategy Director promoted to Head of Strategy to support consultancy offering and continued new business. Awards Winners of The Drum’s Experiential Agency of the Year. Awards Steve Quah CEO awarded the EVCOM ‘Fellowship for Live Events’ for an exceptional career and his contributions to the communications industry. Growth Agency secures and delivers first project at Art Basel Miami, demonstrating uptick in Group tentpole growth strategy. Q2 23 6 2024 Leadership Agency hosts annual internal conference to align teams in both markets and set the vision for 2024. Leadership Agency begins brand refresh to future-proof USP for Group, crystallising expertise in audience strategy and live experience. Awards Recognised as CN Creative Team of the Year for the sixth year in a row. Cannes Lions 2024 A record number of activations delivered, including the return of the most ambitious beach activation ever seen at Lions. Since then Agency winner of Best Creative Concept at Micebook Awards. Our busiest quarter to date in North America, the UK team delivering four significant projects in New York City over a period of three calendar weeks, from activations at the United Nations General Assembly, to Climate Week, to a private conference hosting over 500 delegates. Awarded new Davos contract in continued tentpole growth strategy. Q3 24 Q4 24 Aeorema Communications plc 7 8 Strategic Report The Board presents its Strategic Report on the Group for the year ended 30 June 2024. Principal activities Aeorema Communications plc does not trade but incurs professional fees associated with its listing on the London Stock Exchange’s AIM Market. Aeorema Limited (trading as Cheerful Twentyfirst) and Cheerful Twentyfirst, Inc. are live events agencies with film capabilities that specialise in devising and delivering corporate communication solutions. Eventful Limited is a consultative, high-touch service, assisting clients with venue sourcing, event management and incentive travel. Collectively all of these businesses are referred to as the “Group”. Business review The results for the year show revenue was £20,288,799 (2023: £20,230,231), operating profit was £440,748 (2023: £1,092,920) and profit before taxation was £436,928 (2023: £1,045,960). The Group had net assets of £2,805,725 at the year-end (2023: £2,814,356) and net current assets of £1,875,372 (2023: £1,761,557). The year ended 30 June 2024 was a challenging year, with the Group’s revenue in line with the previous year, but profit before tax down significantly. Aeorema Limited (t/a Cheerful Twentyfirst) had a successful year, achieving its highest revenue and profit before tax in its history. It delivered a record number of activations at Cannes Lions International Festival of Creativity (“Cannes Lions”) in June 2024, including its largest ever brand activation for Stagwell and TEAM (refer to note 2), building upon the success in the previous year. It also delivered a number of events throughout the year for a range of new clients in the professional services, AdTech and marketing sectors. As a consequence of the growth in revenue, Aeorema Limited’s profits before tax increased 12% to £877,486 compared with £781,754 in the previous year. Cheerful Twentyfirst, Inc’s revenue was down 57% (2023: 13% increase) compared with the previous year, not because of performance challenges but largely due to a shift in where revenue was recorded. Fewer events took place in the U.S. compared to the previous year, and for insurance reasons all Cannes Lions contracts for US clients were managed through Aeorema Limited (t/a Cheerful Twentyfirst) in 2024 (rather than Cheerful Twentyfirst Inc., as was the case in 2023). Due to these changes and continued investment in the US operation, including employing a US President, Cheerful Twentyfirst Inc. reported an overall loss before tax of £176,631 for the year, compared with a £317,467 profit before tax in the previous year. Eventful Limited experienced a difficult year both in terms of revenue, which was down 12% compared with the previous year (2023: 138% increase), and profits before tax of £13,139 (2023: £205,559). The year ended 30 June 2023 represented the first full year that was unaffected by the global pandemic and associated travel and social distancing restrictions. Eventful Limited therefore experienced a surge in demand in 2023. However, for the year ended 30 June 2024 demand returned to ‘normal’ levels with a reduction in client spending. The Group’s gross profit margin has decreased from 21% in 2023 to 19% in 2024. As noted in the Chairman’s Statement, the reduction in gross profit margin is a consequence of industry wide inflationary pressures on third party costs and wages, and pressure from clients on budgets. The Group also hired, on average, an additional eleven employees compared with the previous year, putting further pressure on the Groups margins. Looking ahead, the Board has identified that it needs to reduce costs and has implemented an ongoing programme to significantly reduce and rebalance costs, including a reduction in headcount (both direct and indirect). The reduction in costs has been implemented to drive growth in profits and efficiencies, with its full benefit expected to materialise by the end of the financial year ending 30 June 2025. Aeorema Communications plc 9 Key performance indicators Year 2024 £ 2023 £ 2022 £ 2021 £ Revenue 20,288,799 20,230,231 12,207,253 5,094,518 Operating profit / (loss) 440,748 1,092,920 871,176 (188,105) Profit / (loss) before taxation 436,928 1,045,960 843,564 (159,698) The Group’s revenue was in line with the previous year. During the year the Group’s largest client accounted for 19% of revenue (2023: 12%), and its three largest clients accounted for 38% of revenue (2023: 38%). Please refer to note 2. Event revenue increased by 2% when compared with the previous year (2023: 77% increase). The Group delivered a record number of activations at Cannes Lions in 2024, including the activation for Stagwell and TEAM. The Group also delivered a number of large events for both existing and new clients. Film revenue decreased by 15% when compared with the previous year (2023: 6% decrease). This was due to a number of large projects in the previous year not being repeated in the current year. Cashflows Net cash inflow from operating activities was £1,205,470 compared with a net cash inflow of £1,456,588 for the year ended 30 June 2023. The cash position increased by £675,253 to £3,119,353 (2023: increase by £729,683 to £2,444,100). Capital expenditure Total capital expenditure, including expenditure on tangible assets, was £54,711 compared with £325,027 for the year ended 30 June 2023. Employees Our priority is to attract and retain talented employees and to harness their creativity to drive growth through development and delivery of services that bring value to our customers’ business operations. We continue to focus on ensuring that the performance of staff is measured against clear, business focused objectives and behavioural criteria through continual appraisals. Reward The Group benchmarks employee salaries against the market and reviews salaries annually to ensure that we are paying at a level to attract and retain high-quality employees. Key employees are offered access to a share option scheme, further details of which are provided in note 23 to the financial statements. Strategic Report continued 10 Strategic Report continued Equal opportunities We are committed to ensuring equal opportunities for our staff. We have introduced training which covers equal opportunities legislation and best practice. Our policy in respect of employment of disabled persons is the same as that relating to all other employees in matters of training, career development and promotion. Should employees become disabled during the course of their employment, we will make every effort to make reasonable adjustments to their working environment to enable their continued employment. Safety, health and environment The commitment and participation of all employees is vital to efficient and effective occupational risk control. In order to meet our responsibility to protect the environment, staff and the business, the Group continues to focus on maintaining a risk aware culture. We believe the Group maintains a low environmental impact. We therefore continue to work on the potential environmental impacts of energy consumption, waste and travel. Directors’ policies for managing principal risks There is an ongoing process for identifying, evaluating and managing the significant risks faced by the business. Risk reviews are undertaken regularly by the respective business areas throughout the year to identify and assess the key risks associated with the achievement of our business objective. Key risks of a financial nature The principal risks and uncertainties facing the Group are linked to customer dependency. Though the Group has a very diverse customer base in certain market sectors, key customers can represent a significant amount of revenue (see note 2). Key customer relationships are closely monitored but the loss of a key client could have an adverse effect on the Group’s performance. Further details of risks, uncertainties and financial instruments are contained in note 26. Key risks of a non-financial nature The Group is operating in a highly competitive global market that is undergoing continual change. The Group’s ability to respond to many competitive factors including, but not limited to technological innovations, product quality, customer service and employment of qualified personnel will be key in the achievement of its objectives, but its ultimate success will depend on the purchase spends of its customers and the buoyancy of the market. On behalf of the Board S Haffner Director 8 November 2024 Aeorema Communications plc 11 The directors present their annual report and financial statements for the year ended 30 June 2024. The financial statements are for Aeorema Communications plc (“the Company”) and its subsidiaries (together, “the Group”). Directors The following directors have held office since 1 July 2023: M Hale S Quah R Owen S Haffner A Harvey H Luffman (resigning 30 November 2024) In accordance with regulation 122 of the Company’s Articles of Association, one third of the directors retire by rotation, or if their number is not three, or a multiple of three, the nearest to but not exceeding one third, and, being eligible, offer themselves for re-election. Dividend Declaration The Board is proposing a dividend of 3 pence per share, subject to shareholder approval at the forthcoming AGM, to be paid on 20 January 2025 to shareholders on the register on 27 December 2024. The ex-dividend date for the final dividend will be 24 December 2024. Financial instruments Details of financial instruments are given in note 26 to the financial statements Directors’ Report 12 Shareholdings At 8 November 2024, the directors were aware that the following were directors with an interest in the Company and/or the beneficial owners of 3% or more of the Company’s issued share capital: Directors Number of shares Percentages held M Hale 1,945,000 20.4 S Quah 721,514 7.6 R Owen 150,000 1.6 A Harvey 140,000 1.5 H Luffman 12,437 0.1 S Haffner 11,765 0.1 Other shareholders with more than 3% Number of shares Percentages held B Geary 805,489 8.5 S Perring 474,666 5.0 Barnard Nominees Ltd 434,666 4.6 A Charlton 401,130 4.2 M Lauber 370,000 3.9 J Curry 295,000 3.8 B Smith 300,000 3.2 Directors’ Report continued Aeorema Communications plc 13 Going concern After making appropriate enquiries, the directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the Group’s financial statements. See note 1 for further information. Statement of disclosure to auditor So far as the directors are aware, there is no relevant audit information of which the Company’s auditors are unaware. Additionally, they have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all the relevant audit information and to establish that the Company’s auditors are aware of that information. A resolution to reappoint Hazlewoods LLP as auditor for the ensuing year will be proposed at the forthcoming annual general meeting. Directors’ responsibilities The directors are responsible for preparing the Strategic Report and the Directors’ Report, and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Group and Company financial statements for each financial year. The directors are required by the AIM Rules of the London Stock Exchange to prepare Group financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the United Kingdom (“UK”) and have elected under Company law to prepare the Company financial statements in accordance with IFRS as adopted by the UK. The financial statements are required by law and IFRS adopted by the UK to present fairly the financial position of the Group and the Company and the financial performance of the Group and the Company. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and the Company for that period. In preparing the Group and Company financial statements, the directors are required to: ◆ select suitable accounting policies and then apply them consistently; ◆ make judgements and accounting estimates that are reasonable and prudent; ◆ state whether they have been prepared in accordance with IFRSs adopted by the UK; ◆ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the Company will continue in business. Directors’ Report continued 14 Directors’ Report continued The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Aeorema Communications plc website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Section 172(1) of the Companies Act 2006 The Directors believe that they have effectively implemented their duties under section 172 of the Companies Act 2006. The Company has considered the long-term strategy of the business below and considers that this strategy will continue to deliver long term success to the business and its stakeholders. The Group is committed to maintaining an excellent reputation and strives to achieve high standards. We are highly selective about which co-contractors and freelancers are used to deliver best value while maintaining an awareness of the environmental impact of the work that they do and strive to reduce their carbon footprint. The Directors recognise the importance of wider stakeholders in delivering their strategy and achieving sustainability within the business. The main stakeholders in the company are considered to be the employees, suppliers and customers. Their importance to the business is considered below in the Corporate Governance Statement. In ensuring that all our stakeholders are considered as part of every decision process we believe we act fairly between all members of the Company. On behalf of the Board S Haffner Director 8 November 2024 Aeorema Communications plc 15 The Board recognises the importance of good corporate governance and has adopted the QCA (Quoted Companies Alliance) Corporate Governance Code. This document sets out how the Group complies with the QCA Corporate Governance Code and the Group’s compliance with the code will be reviewed annually by the board. My role as Chairman is to lead the board and to oversee its function and direction. I have ultimate responsibility for implementing the Group’s corporate governance arrangements and am accountable to shareholders for the Group’s delivery on its strategy. The Group is committed to delivering returns for shareholders whilst looking after its stakeholders and recognises the importance of a culture which encourages ethical and fair behaviour. This culture is driven by the Group’s senior management team. This document sets out how we consider that Aeorema currently complies with the QCA Corporate Governance Code and explains areas in which we depart from this code. We consider that our approach is appropriate for a group of our size and stage of development and will endeavour to evolve our corporate governance arrangements in line with our growth as a group. We do not consider that any key governance related matters have occurred during the year. Mike Hale, Non-Executive Chairman Overview The Board is focusing on two key areas of growth within the current strategy and business model. One area is to increase revenue streams within the Group’s operating companies (Aeorema Limited, Eventful Limited and Cheerful Twentyfirst, Inc.) through key hires, focused account management and new business development. The other area is to grow the PLC’s portfolio of companies through acquisitions and mergers. The organic challenge relies on retaining key accounts and maintaining the balance between building internal delivery teams and growing revenue streams and profits. Attracting the right talent on both a permanent and freelance basis is critical for creating the right impact for all clients and ensuring growth is sustainable. The Board has made a commitment to shareholders to ensure that any merger or acquisition is completed at the right price and benefits the future of the organisation. Therefore, due diligence and a sensible approach to valuations is key to achieving the right result for the Group. Communication will continue with shareholders on several levels. The Chairman is available to speak to directly and the Group’s broker will set up key shareholder meetings or conference calls following the announcement of half year and full year results. The Board considers that this approach to shareholder engagement has worked well and was pleased to see a good attendance of shareholders at its last AGM. The Company also utilises digital platforms to deliver investor presentations and Q&A sessions. Announcements will continue to be released through regulatory channels and added to the aeorema.com website. The business is focused on building strong relationships with clients, staff, suppliers and freelancers. Account managers/directors continually gain feedback from clients and report back to management. Staff appraisals are regularly held, but the Group also has an open-door policy for staff feedback direct to management. Suppliers and freelancers are reviewed on an annual basis and relevant feedback is reported back to management. Management and heads of departments review strategy and use appropriate key performance indicators to monitor performance on a regular basis and the Board is informed with regular business updates at each board meeting. Corporate Governance Statement 16 Corporate Governance Statement continued The aim of the Board is to function at the head of the Group’s management structures, leading and controlling its activities and setting a strategy for enhancing shareholder value. The Board currently consists of two executive directors and four non-executive directors. However, as announced post year end, Hannah Luffman, a non-executive director, has resigned and will be departing on 30 November 2024. The Group does not have a Nomination Committee; the board collectively undertakes the functions of such a committee. The details of each board member along with their background and their role is listed on the website aeorema.com. Stephen Haffner, Richard Owen and Hannah Luffman exercise independent judgement in all matters relating to the Company. Mike Hale is not considered to be independent due to the size of his shareholding. The CEO and Managing Director work full-time in the business and have no other significant outside business commitments. The Non-Executive Directors are required to be available to attend Board meetings and to deal with both regular and ad hoc matters. All Non-Executive Directors have confirmed and demonstrated that they have adequate time available to meet the requirements of the role and they have no conflicts of interest. The Board and the Group’s senior management team have a mix of relevant industry experience, public company experience and financial expertise which enables them to deliver on their strategy. Directors keep their skillsets up to date by attending relevant industry seminars as well as reviewing regulatory and accounting updates provided by the Group’s professional advisers. The Board undertakes an annual review of risk management across the business. Forecasting is reviewed monthly to ensure the staffing levels and overheads are aligned to expected revenue and profit. The board regularly reviews management accounts and forecasts. Contingency plans are reviewed regularly throughout the year and a business continuation plan is updated annually. There is an Audit Committee consisting of Non-Executive Chairman Michael Hale, Non-Executive Director Stephen Haffner and Non-Executive Director Richard Owen. The terms of reference of the Audit Committee are to assist the board in the discharge of its responsibilities for corporate governance, financial reporting and internal control. Its duties include maintaining an appropriate relationship with the company’s auditors, keeping under review the scope and the results of the audit and its effectiveness. The audit last went out to tender for the financial year ended June 2019 and will be reviewed annually. Currently the tender process will occur every ten years. As well as overseeing the tender process and reviewing the scope and effectiveness of the audit, the Audit Committee review the full year and interim financial statements, consider the impact of new accounting standards under IFRS on the Group’s financial statements, as well as the implications of any significant events or circumstances that occur in the accounting period. The Audit Committee reviews the Group’s financial performance throughout the year and monitors the integrity of any formal market announcements. They also monitor the Group’s internal financial controls, ensuring all internal financial controls and risk management systems are effective, and suggest improvements where necessary. The Remuneration Committee consists of Non-Executive Chairman Michael Hale, Non-Executive Director Stephen Haffner and Non-Executive Director Richard Owen, and meetings are held at least once a year. The Remuneration Committee is responsible for reviewing the performance of the executives of the Group and for setting the scale and structure of their remuneration, paying due regard to the interests of shareholders as a whole and the performance of the Group. This involves setting and approving the performance measures on which the pay scales are based. Richard Owen chairs the Remuneration Committee. Details of Directors’ remuneration is set out in note 21 to the financial statements. Aeorema Communications plc 17 Corporate Governance Statement continued The Board will continue to meet at least six times a year to review, formulate and approve the Group’s strategy, budget, corporate actions and major items of capital expenditure. During the financial year ended 30 June 2024, the board met on 10 occasions. The Board’s attendance record for the year ended 30 June 2024 was as follows; Mike Hale – 100% Richard Owen – 100% Stephen Haffner – 70% Andrew Harvey – 100% Steve Quah – 100% Hannah Luffman – 90% The Group currently departs from the QCA Code in a number of respects, and in particular: (i) Board evaluation: the Board currently runs a self-evaluation process on board effectiveness. It is intended that in the future the board will create a more formal process with annual reviews which will focus more closely on objectives and targets for improving performance; (ii) Induction, training and succession planning: the Group receives advice from its nominated adviser and external lawyers. The board will consider the introduction of a facility for directors to receive training on relevant new developments on a more regular basis. The Group has not adopted a policy on succession planning but made changes to its board in 2017 whereby two members of senior management joined the board as Joint Managing Directors in replacement of the existing founders of the business. The Board proposes, to further consider succession planning as part of its regular review of board effectiveness; (iii) Board diversity: the Group is committed to a culture of equal opportunities for all employees regardless of gender and considers that it has a diverse workforce. The board aims to reflect this diversity over time in terms of its range of cultures, nationalities, gender and international experience. (iv) Senior Independent Director: the Group does not have a director designated as a Senior Independent Director. In light of the size of the board, and the Group’s stage of development, the Board does not consider it necessary to appoint a Senior Independent Director at this stage, but will nevertheless keep this under review as part of the board’s evaluation on board effectiveness. The Board also recognises that Richard Owen’s length of service exceeds the QCA’s guidelines regarding independence but nevertheless believes that he brings independent judgement to bear on all matters concerning the Group. The Board intends to monitor its governance framework as the Group grows and will consider introducing additional board committees such as a nominations committee and potentially expanding its investor relations capabilities. 18 Opinion We have audited the financial statements of Aeorema Communications Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2024 which comprise the consolidated Statement of Comprehensive Income, the consolidated and company Statements of Financial Position, the consolidated and company Statements of Changes in Equity, the consolidated Statements of Cash Flows and notes 1 – 29 in the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. In our opinion: ◆ the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 June 2024 and of its profit for the year then ended; ◆ the group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; ◆ the financial statements have been prepared in accordance with the provisions of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. In making this assessment we have considered the directors’ procedures for overseeing the activities of the Parent Company and the Group, and reviewing its results and forecasts. The application of those procedures has been supported by us reviewing Board minutes and other accessible documentation which confirm that the directors regularly benchmark key performance indicators which include but is not restricted to, reviewing the revenue pipeline and the frequent monitoring of available funds, anticipated cash outflows and financial headroom. In conjunction with the evaluation of management’s assessment of going concern, we have observed that resources are carefully planned and managed with the intention of ensuring that the Parent Company and the Group have sufficient resources available and accessible to ensure that the Parent Company’s and the Group’s commitments and obligations are capable of being met as they fall due. Our procedures also included an assessment of whether the going concern disclosure in note 1 to the financial statements gives a complete and accurate description of the directors’ assessment of going concern. Independent Auditor’s Report to the Members of Aeorema Communications plc Aeorema Communications plc 19 Independent Auditor’s Report to the Members of Aeorema Communications plc continued Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Parent Company’s and the Group’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Parent Company and the Group will continue in operation. In relation to the Parent Company’s and the Group’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ Statement of Responsibilities in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Below is not a complete list of all risks identified by our audit. Key audit matter – group How our audit addressed the key audit matter Revenue recognition The Group generates revenue facilitating live events, film production and through event management services. Revenue is recognised based on the satisfaction of performance obligations and an assessment of when control is transferred to customers. In applying this policy, a certain amount of judgement is required. Incomplete, non-occurring and inaccurate income recognition could have a material impact on the Group’s earnings and we identified revenue recognition as a risk that required particular audit attention. We reviewed a sample of projects, including those with significant revenue recognised in the year and/or with significant contract assets or liabilities, to confirm that revenue had been recognised in a manner consistent with the Group’s accounting policy, the principles of IFRSs as adopted by the UK and the commercial substance of the contracts. We confirmed the Group’s recognition of revenue, and associated contract balances, to documentary evidence including correspondence between the Group, its customers and its contractors, as well as publicly available press releases made by the Group’s customers. In addition, we performed analytical review and cut off testing to ensure that revenue is properly recognised and recorded in the correct accounting period. Our testing did not identify any material misstatements in the revenue recognition. 20 Independent Auditor’s Report to the Members of Aeorema Communications plc continued Our application of materiality We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified misstatements and in forming our opinion. For the purpose of determining whether the financial statements are free from material misstatement, we define materiality as the magnitude of a misstatement or an omission from the financial statements or related disclosures that would make it probable that the judgement of a reasonable person, relying on the information would have been changed or influenced by the misstatement or omission. We also determine a level of performance materiality, which we use to determine the extent of testing needed, to reduce to an appropriately low-level the probability that the aggregate of uncorrected and undetected misstatements exceed materiality for the financial statements as a whole. We established materiality for the financial statements as a whole to be £304,000, which is 1.5% of the turnover of the Group. This is the amount representing the total magnitude of misstatements that we expect to influence the economic decisions of the users of these financial statements. A key judgement in determining materiality (and performance materiality) is the appropriate benchmark to select. We considered which benchmarks and key performance indicators have the greatest bearing on shareholder decisions. We determined that the turnover of the Group is the key benchmark to use in setting materiality given the Group’s objective to increase its trading and markets. When using turnover to determine overall materiality, our approach is to apply a percentage between 0.5% and 2% to the amount. In setting overall materiality, although the Parent Company is listed, we applied a rate of 1.5 % which is towards the higher end of the allowable percentage range, being not regulated. We have considered performance materiality at a level of 80% of materiality for the Group’s financial statements as a whole, which equates to £244,000. We applied this percentage in our determination of performance materiality given that there were no significant adjustments made in prior years. Audit misstatement posting threshold is determined to be £16,000, which is 5% of materiality. This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative point of view. We may become aware of differences below this threshold which could alter the nature, timing and scope of our audit procedures, for example if we identify smaller differences which are indicators of fraud. An overview of the scope of our audit Our audit scope included all components and was performed to Group materiality. Our audit work therefore covered 100% of group revenue, group profit and total group assets and liabilities. It was performed to the materiality levels set out above. Other information The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Aeorema Communications plc 21 Independent Auditor’s Report to the Members of Aeorema Communications plc continued Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: ◆ the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and ◆ the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the Parent Company and the Group, and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: ◆ adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or ◆ the financial statements are not in agreement with the accounting records and returns; or ◆ certain disclosures of directors’ remuneration specified by law are not made; or ◆ we have not received all the information and explanations we require for our audit. Responsibilities of directors As explained more fully in the directors’ responsibilities statement set out on pages 13 and 14, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Extent to which the audit was capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We considered the nature of the Parent Company’s and the Group’s industry and its control environment and reviewed the Parent Company’s and the Group’s documentation of its policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities. 22 Independent Auditor’s Report to the Members of Aeorema Communications plc continued We obtained an understanding of the legal and regulatory framework that the Parent Company and the Group operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Parent Company’s and the Group’s ability to operate or to avoid a material penalty. We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgments made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business. In addition to the above, our procedures to respond to the risks identified included the following: ◆ reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; ◆ performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud; ◆ enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and ◆ reading minutes of meetings of those charged with governance. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of this report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Scott Lawrence (Senior Statutory Auditor) For and on behalf of Hazlewoods LLP, Statutory Auditor Staverton Court Staverton Cheltenham GL51 0UX 8 November 2024 Aeorema Communications plc 23 Notes 2024 £ 2023 £ Continuing operations Revenue 2 20,288,799 20,230,231 Cost of sales (16,513,827) (16,016,766) Gross profit 3,774,972 4,213,465 Administrative expenses (3,334,224) (3,120,545) Operating profit 3 440,748 1,092,920 Finance income 4 35,967 215 Finance costs 5 (39,787) (47,175) Profit before taxation 436,928 1,045,960 Taxation 6 (140,221) (288,780) Profit for the year 296,707 757,180 Other comprehensive income Items that may be reclassified to profit or loss Exchange differences on translation of foreign entities (88,632) (119,547) Other comprehensive income for the year (88,632) (119,547) Total comprehensive income for the year attributable to owners of the parent 208,075 637,633 Profit per ordinary share: Total basic earnings per share 9 3.11078p 8.04398p Total diluted earnings per share 9 2.68976p 6.83499p The notes on pages 28 to 58 are an integral part of these financial statements. Consolidated Statement of Comprehensive Income For the year ended 30 June 2024 24 Consolidated Statement of Financial Position As at 30 June 2024 Group Company Notes 2024 £ 2023 £ 2024 £ 2023 £ Non-current assets Intangible assets 10 564,348 566,431 - - Property, plant and equipment 11 344,827 428,509 - - Right-of-use assets 12 570,182 696,986 - - Investments in subsidiaries 13 - - 1,363,002 1,293,568 Deferred taxation 7 - 14,844 - - Total non-current assets 1,479,357 1,706,770 1,363,002 1,293,568 Current assets Trade and other receivables 14 4,422,020 3,502,522 832,531 713,588 Cash and cash equivalents 15 3,119,353 2,444,100 117,816 135,548 Total current assets 7,541,373 5,946,622 950,347 849,136 Total assets 9,020,730 7,653,392 2,313,349 2,142,704 Current liabilities Trade and other payables 16 (5,371,049) (3,882,938) (114,107) (104,459) Bank loans 17 (27,778) (83,333) - - Lease liabilities 18 (113,201) (109,058) - - Current tax payable (118,973) (74,736) - - Provisions 19 (35,000) (35,000) - - Total current liabilities (5,666,001) (4,185,065) (114,107) (104,459) Non-current liabilities Bank loans 17 - (27,778) - - Lease liabilities 18 (500,814) (612,693) - - Provisions 19 (22,500) (13,500) - - Deferred taxation 7 (22,690) - - - Total non-current liabilities (549,004) (653,971) - - Total liabilities (6,215,005) (4,839,036) (114,107) (104,459) Net assets 2,805,725 2,814,356 2,199,242 2,038,245 Equity Share capital 20 1,192,250 1,192,250 1,192,250 1,192,250 Share premium 21,876 21,876 21,876 21,876 Merger reserve 16,650 16,650 16,650 16,650 Other reserve 302,809 233,375 302,809 233,375 Capital redemption reserve 257,812 257,812 257,812 257,812 Foreign translation reserve (176,876) (88,244) - - Retained earnings 1,191,204 1,180,637 407,845 316,282 Equity attributable to owners of the parent 2,805,725 2,814,356 2,199,242 2,038,245 The notes on pages 28 to 58 are an integral part of these financial statements. The profit for the financial year of the holding company was £377,703 (2023: £338,795). The financial statements were approved and authorised by the board of directors on 8 November 2024 and were signed on its behalf by A Harvey S Haffner Director Director Company Registration No. 04314540 Aeorema Communications plc 25 Group Share capital £ Share premium £ Merger reserve £ Other reserve £ Capital redemption reserve £ Foreign translation reserve £ Retained earnings £ Total equity £ At 30 June 2022 1,154,750 9,876 16,650 168,956 257,812 31,303 614,217 2,253,564 Comprehensive income for the year, net of tax - - - - - - 757,180 757,180 Dividend paid - - - - - - (190,760) (190,760) Foreign currency translation - - - - - (119,547) - (119,547) Share-based payment - - - 64,419 - - - 64,419 Share issue 37,500 12,000 - - - - - 49,500 At 30 June 2023 1,192,250 21,876 16,650 233,375 257,812 (88,244) 1,180,637 2,814,356 Comprehensive income for the year, net of tax - - - - - - 296,707 296,707 Dividend paid - - - - - - (286,140) (286,140) Foreign currency translation - - - - - (88,632) - (88,632) Share-based payment - - - 69,434 - - - 69,434 At 30 June 2024 1,192,250 21,876 16,650 302,809 257,812 (176,876) 1,191,204 2,805,725 Share premium represents the value of shares issued in excess of their nominal value. In accordance with section 612 of the Companies Act 2006, the premium on ordinary shares issued in relation to acquisitions is recorded as a merger reserve. The reserve is not distributable. Other reserves represent equity settled share-based employee remuneration, as detailed in note 23. Capital redemption reserve represents a statutory non-distributable reserve into which amounts are transferred following redemption or purchase of a company’s own shares. Foreign translation reserve represents the accumulated gain or loss resulting from the translation of financial statements denominated in a foreign currency into the Group’s reporting currency. The notes on pages 28 to 58 are an integral part of these financial statements. Consolidated Statement of Changes in Equity As at 30 June 2024 26 Company Statement of Changes in Equity For the year ended 30 June 2024 Company Share capital £ Share premium £ Merger reserve £ Other reserve £ Capital redemption reserve £ Retained earnings £ Total equity £ At 30 June 2022 1,154,750 9,876 16,650 168,956 257,812 168,247 1,776,291 Comprehensive income for the year, net of tax - - - - - 338,795 338,795 Dividend paid - - - - - (190,760) (190,760) Share-based payment - - - 64,419 - - 64,419 Share issue 37,500 12,000 - - - - 49,500 At 30 June 2023 1,192,250 21,876 16,650 233,375 257,812 316,282 2,038,245 Comprehensive income for the year, net of tax - - - - - 377,703 377,703 Dividend paid - - - - - (286,140) (286,140) Share-based payment - - - 69,434 - - 69,434 At 30 June 2024 1,192,250 21,876 16,650 302,809 257,812 407,845 2,199,242 Share premium represents the value of shares issued in excess of their nominal value. In accordance with section 612 of the Companies Act 2006, the premium on ordinary shares issued in relation to acquisitions is recorded as a merger reserve. The reserve is not distributable. Other reserves represent equity settled share-based employee remuneration, as detailed in note 23. Capital redemption reserve represents a statutory non-distributable reserve into which amounts are transferred following redemption or purchase of a company’s own shares. The notes on pages 28 to 58 are an integral part of these financial statements. Aeorema Communications plc 27 Group Notes 2024 £ 2023 £ Net cash flow from operating activities 25 1,205,470 1,456,588 Cash flows from investing activities Finance income 4 35,967 215 Purchase of property, plant and equipment 11 (54,711) (325,027) Repayment of leasing liabilities (142,000) (177,500) Cash used in investing activities (160,744) (502,312) Cash flows from financing activities Repayment of borrowings (83,333) (83,333) Dividends paid to owners of the company (286,140) (190,760) Shares issued - 49,500 Cash used in financing activities (369,473) (224,593) Net increase in cash and cash equivalents 675,253 729,683 Cash and cash equivalents at beginning of year 2,444,100 1,714,417 Cash and cash equivalents at end of year 3,119,353 2,444,100 Group At 1 July 2023 £ Cashflow £ At 30 June 2024 £ Net Cash Cash at bank and in hand 2,444,100 675,253 3,119,353 2,444,100 675,253 3,119,353 Debt Debts falling due within one year 83,333 (55,555) 27,778 Debts falling due after one year 27,778 (27,778) - 111,111 (83,333) 27,778 The notes on page 28 to 58 are an integral part of these financial statements. Consolidated Statement of Cash Flows For the year ended 30 June 2024 28 1 Accounting policies Aeorema Communications plc is a public limited company incorporated in the United Kingdom and registered in England and Wales. The Company is domiciled in the United Kingdom and its principal place of business is 87 New Cavendish Street, London, W1W 6XD. The Company’s Ordinary Shares are traded on the AIM Market. The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated. The presentation currency is £ sterling. Going concern The Board has reviewed the Group’s detailed forecasts for the next financial year, other medium term plans, the impact of the war in Ukraine and conflict in the Middle East, and economic and political uncertainties both in the UK and globally, as well as considering the risks outlined in note 26. After doing so, the Directors, at the time of approving the financial statements, have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and have therefore used the going concern basis in preparing the financial statements. Basis of Preparation The following new standards, amendments or interpretations to existing standards adopted in the United Kingdom, and are mandatory for the Group’s accounting periods beginning on or after 1 January 2024 are as follows: ◆ Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Amendment to IAS 1); ◆ Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2); ◆ Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12); and ◆ Definition of Accounting Estimates (Amendments to IAS 8). The Group did not early adopt the above new standards, amendments, or interpretations for 30 June 2024 year end. Notes to the Consolidated Financial Statements For the year ended 30 June 2024 Aeorema Communications plc 29 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Future standards in place but not yet effective The following new standards, amendments or interpretations to existing standards adopted in the United Kingdom, and are mandatory for the Group’s accounting periods beginning on or after 1 January 2025 are as follows: ◆ Lack of Exchangeability (Amendments to IAS 21) ◆ Classification and Measurement of Financial Instruments (Amendment to IFRS 9 and IFRS 7) The Group did not early adopt the above new standards, amendments, or interpretations for 30 June 2025 year end. Basis of consolidation The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 30 June 2024. Subsidiaries are all entities (including structured entities) over which the Group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are consolidated until the date that control ceases. Intra-group transactions, balances and unrealised gains and losses on transactions between group companies are eliminated. The merger reserve is used where more than 90% of the shares in a subsidiary are acquired and the consideration includes the issue of new shares by the Company, thereby attracting merger relief under the Companies Act 2006. 30 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Revenue Revenue represents amounts (excluding value added tax) derived from the provision of services to third party customers in the course of the Group’s ordinary activities. As a result of providing these services, the Group may from time to time receive commissions from other third parties. These commissions are included within revenue on the same basis as that arising from the contract with the underlying third party customer. The revenue and profits recognised in any period are based on the satisfaction of performance obligations and an assessment of when control is transferred to the customer. For most contracts with customers, there is a single distinct performance obligation and revenue is recognised when the event has taken place or control of the content or video has been transferred to the customer. Where a contract contains more than one distinct performance obligation (multiple film productions, or a project involving both build construction and event production) revenue is recognised as each performance obligation is satisfied. The transaction price is substantially agreed at the outset of the contract, along with a project brief and payment schedule (full payment in arrears for smaller contracts; part payment(s) in advance and final payment in arrears for significant contracts). Due to the detailed nature of project briefs agreed in advance for significant contracts, management does not consider that significant estimates or judgements are required to distinguish the performance obligation(s) within a contract. For contracts to prepare multiple film productions, the transaction price is allocated to constituent performance obligations using an output method in line with agreements with the customer. For other contracts with multiple performance obligations, management’s judgement is required to allocate the transaction price for the contract to constituent performance obligations using an input method using detailed budgets which are prepared at outset and subsequently revised for actual costs incurred and any changes to costs expected to be incurred. The Group does not consider any disaggregation of revenue from contracts with customers necessary to depict how the nature, amount, timing and uncertainty of the Group’s revenue and cash flows are affected by economic factors. Where payments made are greater than the revenue recognised at the reporting date, the Group recognises deferred income (a contract liability) for this difference. Where payments made are less than the revenue recognised at the reporting date, the Group recognises accrued income (a contract asset) for this difference. A receivable is recognised in relation to a contract for amounts invoiced, as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. At each reporting date, the Group assesses whether there is any indication that accrued income assets may be impaired by assessing whether it is possible that a revenue reversal will occur. Where an indicator of impairment exists, the Group makes a formal estimate of the asset’s recoverable amount. Where the carrying value of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Aeorema Communications plc 31 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Intangible assets - goodwill All business combinations are accounted for by applying the acquisition method. Goodwill acquired represents the excess of the fair value of the consideration and associated costs over the fair value of the identifiable net assets acquired. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. At the date of acquisition, the goodwill is allocated to cash generating units, usually at business segment level or statutory company level as the case may be, for the purpose of impairment testing and is tested at least annually for impairment. On subsequent disposal or termination of a business acquired, the profit or loss on termination is calculated after charging the carrying value of any related goodwill. Intangible assets - other Intangible assets are stated in the financial statements at cost less accumulated amortisation and any impairment value. Amortisation is provided to write off the cost less estimated residual value of intangible assets over its expected useful life (which is reviewed at least at each financial year end), as follows: Intellectual property 25% straight line Any gain or loss arising on the derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Comprehensive Income in the year that the asset is derecognised. Fully amortised assets still in use are retained in the financial statements. Property, plant and equipment Property, plant and equipment is stated in the financial statements at cost less accumulated depreciation and any impairment value. Depreciation is provided to write off the cost less estimated residual value of property, plant and equipment over its expected useful life (which is reviewed at least at each financial year end), as follows: Leasehold land and buildings Straight line over the life of the lease Fixtures, fittings and equipment Straight line over four years Any gain or loss arising on the derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Comprehensive Income in the year that the asset is derecognised. Fully depreciated assets still in use are retained in the financial statements. Impairment The carrying amounts of the Group’s assets are reviewed at each period end to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amount is estimated. For goodwill and intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each annual period end date and whenever there is an indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Comprehensive Income in those expense categories consistent with the function of the impaired asset. 32 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Investments Fixed asset investments are stated at cost less provision for diminution in value. Leases In applying IFRS 16, for all leases (except as noted below), the Group: a) recognises right-of-use assets and lease liabilities in the statement of financial position, initially measured at the present value of future lease payments; b) recognises depreciation of right-of-use assets and interest on lease liabilities in the statement of profit or loss; and c) separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within operating activities) in the statement of cash flows. Lease incentives (e.g. free rent period) are recognised as part of the measurement of the right-of-use assets and lease liabilities whereas under IAS 17 they resulted in the recognition of a lease incentive liability, amortised as a reduction of rental expense on a straight-line basis. Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets. This replaces the previous requirement to recognise a provision for onerous lease contracts. For short term leases (lease term of 12 months or less) and leases of low-value assets (such as photocopiers), the Group has opted to recognise a lease expense on a straight-line basis as permitted by IFRS 16. This expense is presented within administrative expenses in the consolidated statement of comprehensive income. Trade and other receivables Trade and other receivables are stated initially at fair value and subsequently measured at amortised cost less any provision for impairment. Trade and other payables Trade payables are recognised initially at fair value and subsequently measured at amortised cost. Cash and cash equivalents Cash comprises, for the purpose of the Statement of Cash Flows, cash in hand and deposits payable on demand. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value. Cash equivalents normally have a date of maturity of 3 months or less from the acquisition date. Bank loans and overdrafts comprise amounts due on demand. Finance income Finance income consists of interest receivable on funds invested. It is recognised in the Statement of Comprehensive Income as it accrues. Aeorema Communications plc 33 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Taxation Income tax on the profit or loss for the periods presented comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax is provided on temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; the differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax assets and liabilities are not discounted. Pension costs The Group operates a pension scheme for its employees. It also makes contributions to the private pension arrangements of certain employees. These arrangements are of the money purchase type and the amount charged to the Statement of Comprehensive Income represents the contributions payable by the Group for the period. Financial instruments The Group does not enter into derivative transactions and does not trade in financial instruments. Financial assets and liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the contractual provision of the instrument. Equity An equity instrument is a contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. The Group’s equity instruments comprise ‘share capital’ in the Statement of Financial Position. Foreign currency translation Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the end of the reporting period. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the Statement of Comprehensive Income. 34 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Share-based awards The Group issues equity settled 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 is estimated using option pricing models and is dependent on factors such as the exercise price, expected volatility, option price and risk free interest rate. The fair value is then amortised through the Statement of Comprehensive Income on a straight-line basis over the vesting period. Expected volatility is determined based on the historical share price volatility for the Company. Further information is given in note 23 to the financial statements. Significant judgements and estimates The preparation of the Group’s financial statements in conforming with IFRS required management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. These judgements and estimates are based on management’s best knowledge of the relevant facts and circumstances. Information about such judgements and estimation is contained in the accounting policies and / or notes to the financial statements. For critical judgements that the directors have made in the process of applying the Group’s accounting policies, see note 10 on goodwill impairment and note 12 on discount rate used to calculate right of use assets and lease liability. Aeorema Communications plc 35 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 2 Revenue and segment information The Group uses several factors in identifying and analysing reportable segments, including the basis of organisation, such as differences in products and geographical areas. The Board of directors, being the Chief Operating Decision Makers, have determined that for the year ending 30 June 2024 there is only a single reportable segment. All revenue represents sales to external customers. One customer (2023: three) is defined as major customers by revenue, contributing more than 10% of the Group revenue. 2024 £ 2023 £ Customer One 3,833,237 2,474,089 Major customers in the current year 3,833,237 2,474,089 Major customers in the prior year 5,274,833 7,748,922 The geographical analysis of revenue from continuing operations by geographical location of customer is as follows: 2024 £ 2023 £ United Kingdom 8,905,513 11,491,547 United States 3,580,432 6,821,433 Rest of the World 7,802,854 1,917,251 20,288,799 20,230,231 2024 £ 2023 £ Revenue from contracts with customers – Events 18,360,490 17,915,369 Revenue from contracts with customers – Film 1,418,029 1,675,186 Other revenue 510,280 639,676 Total revenue 20,288,799 20,230,231 Contract assets and liabilities from contracts with customers have been recognised as follows: 2024 £ 2023 £ Deferred income 1,500,546 809,774 Accrued income 1,672,081 1,350,233 Deferred income at the beginning of the period has been recognised as revenue during the period. Deferred income carried forward at the year end will be recognised within the next year. 36 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 3 Operating profit Operating profit is stated after charging or crediting: 2024 £ 2023 £ Cost of sales Depreciation of fixtures, fittings and equipment 97,891 75,521 Amortisation of intangible assets 2,083 2,500 Staff costs (see note 22) 3,432,192 3,181,251 Administrative expenses Depreciation of right-of-use assets 126,804 126,786 Depreciation of leasehold land and buildings 39,214 34,243 (Profit) / loss on foreign exchange differences 73,171 31,888 Fees payable to the Company’s auditor in respect of: Audit of the Company’s annual accounts 14,000 12,600 Audit of the Company’s subsidiaries 33,163 23,366 Interest on lease liabilities 34,264 39,212 Staff costs (see note 22) 1,605,180 1,201,148 4 Finance income Finance income 2024 £ 2023 £ Bank interest received 35,967 215 5 Finance costs Finance costs 2024 £ 2023 £ Coronavirus business interruption loan interest 5,523 7,963 Lease interest 34,264 39,212 39,787 47,175 Aeorema Communications plc 37 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 6 Taxation 2024 £ 2023 £ The tax charge comprises: Current tax Current year 99,687 277,699 99,687 277,699 Deferred tax (see note 8) Current year 40,534 11,081 40,534 11,081 Total tax charge in the statement of comprehensive income 140,221 288,780 Factors affecting the tax charge for the year Profit on ordinary activities before taxation from continuing operations 436,928 1,045,960 Profit on ordinary activities before taxation multiplied by standard rate 109,232 214,422 of UK corporation tax of 25% (2023: 20.5%) Effects of: Non-deductible expenses 30,989 74,358 30,989 74,358 Total tax charge 140,221 288,780 The Group has estimated losses of £375,762 (2023: £375,762) available to carry forward against future trading profits. Losses totalling £375,762 are in Aeorema Communications plc which is not currently making taxable profits, as all trading is undertaken by its subsidiaries Aeorema Limited, Eventful Limited and Cheerful Twentyfirst, Inc., therefore no deferred tax asset has been recognised in respect of this amount. Effective 1 April 2023, the enacted tax rate increased to 25%. 38 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 7 Deferred taxation Group 2024 £ 2023 £ Property, plant and equipment temporary differences 59,613 (83,481) Temporary differences (85,303) 98,325 (25,690) 14,844 At 1 July 14,844 25,925 Transfer to Statement of Comprehensive Income (40,534) (11,081) At 30 June (25,690) 14,844 8 Profit attributable to members of the parent company As permitted by section 408 of the Companies Act 2006, the parent Company’s Statement of Comprehensive Income has not been included in these financial statements. The profit for the financial year of the holding company was £377,703 (2023: £338,795). 9 Earnings per ordinary share Basic earnings per share are calculated by dividing the profit or loss attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share are calculated by dividing the profit or loss attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares. The following reflects the income and share data used and dilutive earnings per share computations: 2024 £ 2023 £ Basic earnings per share Profit for the year attributable to owners of the Company 296,707 757,180 Basic weighted average number of shares 9,538,000 9,413,000 Dilutive potential ordinary shares: Employee share options 1,493,000 1,665,000 Diluted weighted average number of shares 11,031,000 11,078,000 Aeorema Communications plc 39 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 10 Intangible fixed assets Group Goodwill £ Intellectual Property £ Total £ Cost At 30 June 2022 2,927,486 10,000 2,937,486 At 30 June 2023 2,927,486 10,000 2,937,486 At 30 June 2024 2,927,486 10,000 2,937,486 Impairments and amortisation At 30 June 2022 2,363,138 5,417 2,368,555 Charge for the year - 2,500 2,500 At 30 June 2023 2,363,138 7,917 2,371,055 Charge for the year - 2,083 2,083 At 30 June 2024 2,363,138 10,000 2,373,138 Net book value At 30 June 2022 564,348 4,583 568,931 At 30 June 2023 564,348 2,083 566,431 At 30 June 2024 564,348 - 564,348 Goodwill arose for the Group on consolidation of its subsidiaries, Aeorema Limited and Eventful Limited. Impairment – Aeorema Limited and Eventful Limited Goodwill arises on acquisition of a business combination and represents the difference between the fair value of the consideration paid and the aggregate fair value of identifiable assets and liabilities acquired. Goodwill is tested annually for impairment, goodwill is impaired when the value in use exceeds the net asset value of the group’s cash generating units (CGUs).The CGUs represent Aeorema Limited and Eventful Limited, being the lowest level within the group at which goodwill is monitored for internal management purposes. The value in use has been calculated on a discounted cash flow basis using the 2024-25 budgeted figures as approved by the Board of directors, extended in perpetuity to calculate the terminal value and discounted at a rate of 10%. It is assumed that future growth will be 1% for venue sourcing activities and 3% for event and moving image production activities. Using these assumptions, which are based on past experience and future expectations, the recoverable amount of goodwill of £12,975,301 was determined to be higher than its carrying value, hence no impairment in the year. 40 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Sensitivity Analysis If the assumptions used in the impairment review were changed to greater extent than as presented in the following table, the changes would, in isolation, lead to impairment loss being recognised for 0% growth rate. Aeorema Limited 3% Growth £ 0% Growth £ Discount Rate of 5% £ Discount Rate of 15% £ Value in use calculations 12,269,423 9,621,639 22,102,599 8,560,433 Carrying amount in financial statements 365,154 365,154 365,154 365,154 Difference 11,904,269 9,256,485 21,737,445 8,195,279 Eventful Limited 1% Growth £ 0% Growth £ Discount Rate of 5% £ Discount Rate of 15% £ Value in use calculations 705,878 622,209 1,180,557 513,486 Carrying amount in financial statements 199,194 199,194 199,194 199,194 Difference 506,684 423,015 981,363 314,292 Combined 4% Growth £ 0% Growth £ Discount Rate of 5% £ Discount Rate of 15% £ Value in use calculations 12,975,301 10,243,848 23,283,156 9,073,919 Carrying amount in financial statements 564,348 564,348 564,348 564,348 Difference 12,410,953 9,679,500 22,718,808 8,509,571 Aeorema Communications plc 41 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 11 Property, plant and equipment Group Leasehold land and buildings £ Fixtures, fittings and equipment £ Total £ Cost At 30 June 2022 98,821 304,895 403,716 Additions 154,068 170,959 325,027 Disposals - (72,449) (72,449) Foreign exchange movement - (143) (143) At 30 June 2023 252,889 403,262 656,151 Additions 4,524 50,187 54,711 Disposals - (1,344) (1,344) At 30 June 2024 257,413 452,105 709,518 Depreciation At 30 June 2022 1,935 179,302 181,237 Charge for the year 34,243 75,521 109,764 Eliminated on disposal - (63,308) (63,308) Foreign exchange movement - (51) (51) At 30 June 2023 36,178 191,464 227,642 Charge for the year 39,214 97,891 137,105 Eliminated on disposal - (56) (56) At 30 June 2024 75,392 289,299 364,691 Net book value At 30 June 2022 96,886 125,593 222,479 At 30 June 2023 216,711 211,798 428,509 At 30 June 2024 182,021 162,806 344,827 42 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 12 Right-of-use assets Group Leasehold Property £ Cost At 30 June 2022 887,138 At 30 June 2023 887,138 At 30 June 2024 887,138 Depreciation At 30 June 2022 63,366 Charge for the year 126,786 At 30 June 2023 190,152 Charge for the year 126,804 At 30 June 2024 316,956 Net book value At 30 June 2022 823,772 At 30 June 2023 696,986 At 30 June 2024 570,182 The right-of-use asset addition during the year relates to the Group’s leasehold property at 87 New Cavendish Street, London, W1W 6XD. The Group entered the new leasehold in January 2022. The right-of-use asset is calculated on the assumption that the Group will remain in the premises for the duration of the 7 year lease agreement. A discount rate of 5% was used to calculate the right-of-use asset. 5% was considered an appropriate rate based on the Group’s weighted average cost of capital. Aeorema Communications plc 43 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 13 Non-current assets - Investments Company Shares in subsidiary £ Cost At 30 June 2022 3,923,361 Increase in respect of share-based payments 64,419 Incorporation of subsidiary 1 At 30 June 2023 3,987,781 Increase in respect of share-based payments 69,434 At 30 June 2024 4,057,215 Provision At 30 June 2022 2,694,213 At 30 June 2023 2,694,213 At 30 June 2024 2,694,213 Net book value At 30 June 2022 1,229,148 At 30 June 2023 1,293,568 At 30 June 2024 1,363,002 44 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Holdings of more than 20% The Company holds more than 20% of the share capital of the following companies: Subsidiary undertakings Country of registration or incorporation Shares held Profit / (loss) before tax for the year ended 30 June 2024 Net assets at year ended 30 June 2024 Class % £ £ Aeorema Limited England and Wales Ordinary 100 877,486 1,253,042 Eventful Limited England and Wales Ordinary 100 13,139 101,788 Twentyfirst Limited (Dormant) England and Wales Ordinary 100 - 1,362 Cheerful Twentyfirst, Inc. United States of America Ordinary 100 (176,631) 296,666 Cheerful Twentyfirst B.V. The Netherlands Ordinary 100 (4,767) (13,949) The registered address of Aeorema Limited, Eventful Limited and Twentyfirst Limited is 101 New Cavendish Street, 1st Floor South, London, W1W 6XH. The registered address of Cheerful Twentyfirst, Inc. is 85 Broad Street, Floor 16, New York, NY, 10004. The registered address of Cheerful Twentyfirst B.V. is Strawinskylaan 569, 1077 XX, Amsterdam. Aeorema Communications plc 45 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 14 Trade and other receivables Group Company 2024 £ 2023 £ 2024 £ 2023 £ Trade receivables 1,608,713 1,649,905 - - Related party receivables - - 811,427 689,087 Other receivables 413,560 170,188 5,951 8,819 Prepayments and accrued income 2,399,747 1,682,429 15,153 15,682 4,422,020 3,502,522 832,531 713,588 All trade and other receivables are expected to be recovered within 12 months of the end of the reporting period. The fair value of trade and other receivables is the same as the carrying values shown above. Trade and other receivables are assessed for impairment based upon the expected credit losses model. The credit losses historically incurred have been immaterial and as such the risk profile of the trade receivables has not been presented. At the year end, trade receivables of £139,047 (2023: £308,531) were past due but not impaired. These amounts are still considered recoverable. The ageing of these trade receivables is as follows: Group 2024 £ 2023 £ Less than 90 days overdue 4,892 160,286 More than 90 days overdue 134,155 148,245 139,047 308,531 15 Cash at bank and in hand Group Company 2024 £ 2023 £ 2024 £ 2023 £ Bank balances 3,119,353 2,444,100 117,816 135,548 3,119,353 2,444,100 117,816 135,548 46 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 16 Trade and other payables Group Company 2024 £ 2023 £ 2024 £ 2023 £ Trade payables 2,127,981 1,587,052 27,203 21,604 Related party payables - - 67,355 67,355 Taxes and social security costs 3,316 36,528 - - Other payables 118,158 121,581 - - Accruals and deferred income 3,121,594 2,137,777 19,549 15,500 5,371,049 3,882,938 114,107 104,459 All trade and other payables are expected to be settled within 12 months of the end of the reporting period. The fair value of trade and other payables is the same as the carrying values shown above. 17 Bank Loans 2024 £ 2023 £ Bank Loan Current 27,778 83,333 Non-current - 27,778 27,778 111,111 On 15 October 2020 the company received a Floating Rate Basis Coronavirus Business Interruption Loan (CBIL) of £250,000 from Barclays Bank UK PLC to cover the company’s working capital commitments during the COVID-19 pandemic. For the first twelve months interest on the loan is paid by the UK government, after this point interest will be paid at a margin of 2.28%, in addition to monthly capital repayments of £6,944 to the final repayment date of 15 October 2024. Under IFRS 9, the loan should be initially recognised at fair value and subsequently accounted for at amortised cost. However, the difference between the nominal value and fair value is not material, therefore the full nominal value of the loan is recognised with the interest charge for the period of £5,523 being charged to profit and loss. This is offset by the equal amount of government grant income being recognised. The bank loan is secured by a fixed and floating charge over the company’s present and future assets. Aeorema Communications plc 47 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 18 Leases Group 2024 £ 2023 £ Right-of-use assets Buildings 570,182 696,986 570,182 696,986 Group 2024 £ 2023 £ Lease liabilities Current 113,201 109,058 Non-current 500,814 612,693 614,015 721,751 Group 2024 £ 2023 £ Maturity analysis – contractual undiscounted cash flows Less than one year 142,000 142,000 One to five years 497,000 639,000 More than five years - - 639,000 781,000 Group 2024 £ 2023 £ Interest on lease liabilities 34,264 39,212 34,264 39,212 48 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 19 Provisions Group Leasehold dilapidations £ Total £ At 1 July 2022 39,500 39,500 Charged to statement of comprehensive income 9,000 9,000 At 30 June 2023 48,500 48,500 Charged to statement of comprehensive income 9,000 9,000 At 30 June 2024 57,500 57,500 Group Leasehold dilapidations £ Total £ Current 35,000 35,000 Non-current 22,500 22,500 57,500 57,500 Leasehold dilapidations relate to the estimated cost of returning a leasehold property to its original state at the end of the lease in accordance with the lease terms. The main uncertainty relates to estimating the cost that will be incurred at the end of the lease. Aeorema Communications plc 49 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 20 Share capital 2024 £ 2023 £ Authorised 28,000,000 Ordinary shares of 12.5p each 3,500,000 3,500,000 Allotted, called up and fully paid Number Ordinary shares £ At 30 June 2022 9,238,000 1,154,750 Shares issued during the year 300,000 37,500 At 30 June 2023 9,538,000 1,192,250 At 30 June 2024 9,538,000 1,192,250 Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the company. See note 23 for details of share options outstanding. 21 Directors’ emoluments The remuneration of directors of the Company is set out below. Salary, fees, bonuses and benefits in kind 2024 £ Salary, fees, bonuses and benefits in kind 2023 £ Pensions 2024 £ Pensions 2023 £ Total 2024 £ Total 2023 £ M Hale - - - - - - S Haffner 20,000 16,250 - - 20,000 16,250 R Owen 20,000 20,000 - - 20,000 20,000 S Quah 243,231 219,375 10,000 9,375 253,231 228,750 A Harvey 179,487 165,000 8,000 7,657 187,487 172,657 H Luffman 20,000 16,250 - - 20,000 16,250 482,718 436,875 18,000 17,032 500,718 453,907 During the year M Hale waived his right to fees of £20,000 (2023: £15,000) 50 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued The share options held by directors who served during the year are summarised below: Name Grant date Number awarded Exercise price Earliest exercise date Expiry date S Quah 22 August 2018 300,000 29.00p 17 November 2020 22 August 2028 A Harvey 22 August 2018 300,000 29.00p 17 November 2020 22 August 2028 S Quah 29 April 2021 100,000 31.00p 5 November 2023 29 April 2031 A Harvey 29 April 2021 100,000 31.00p 5 November 2023 29 April 2031 S Quah 29 April 2021 100,000 50.00p 5 November 2023 29 April 2031 A Harvey 29 April 2021 100,000 50.00p 5 November 2023 29 April 2031 S Quah 29 April 2021 100,000 70.00p 5 November 2023 29 April 2031 A Harvey 29 April 2021 100,000 70.00p 5 November 2023 29 April 2031 Fees for S Haffner are charged by Harris & Trotter LLP, a firm in which he is a member (see note 24). 22 Employee information The average monthly number of employees (including directors) employed by the Group during the year was: Group Company Number of employees 2024 Number 2023 Number 2024 Number 2023 Number Administration and production 74 63 5 5 The aggregate payroll costs of these employees charged in the Statement of Comprehensive Income was as follows: Group Company Employment costs 2024 £ 2023 £ 2024 £ 2023 £ Wages and salaries 4,272,587 3,759,340 60,000 52,500 Social security costs 524,751 429,412 - - Pension costs 170,600 129,228 - - Share-based payments 69,434 64,419 - - 5,037,372 4,382,399 60,000 52,500 Aeorema Communications plc 51 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 23 Share-based payments The Group operates an EMI share option scheme for key employees. Options are granted to key employees at an exercise price equal to the market price of the Company’s shares at the date of grant. Options are exercisable from the third anniversary of the date of grant and lapse if they remain unexercised at the tenth anniversary or upon cessation of employment. The following option arrangements exist over the Company’s shares: Exercise period Number of options 2024 Number of options 2023 Date of grant Exercise price From To 22 August 2018 29.0p 17 November 2020 22 August 2028 600,000 600,000 14 June 2019 26.0p 14 June 2022 14 June 2029 120,000 120,000 29 April 2021 31.0p 5 November 2023 29 April 2031 200,000 200,000 29 April 2021 50.0p 5 November 2023 29 April 2031 200,000 200,000 29 April 2021 70.0p 5 November 2023 29 April 2031 200,000 200,000 23 May 2022 60.0p 23 May 2025 23 May 2032 100,000 100,000 19 October 2022 71.0p 19 October 2025 19 October 2032 110,000 110,000 11 October 2023 78.5p 11 October 2026 11 October 2033 240,000 - 1,770,000 1,530,000 Details of the number of share options and the weighted average exercise price outstanding during the year are as follows: Number of options 2024 Weighted average exercise price 2024 £ Number of options 2023 Weighted average exercise price 2023 £ Outstanding at beginning of the year 1,530,000 0.48 1,770,000 0.40 Granted during the year 240,000 0.79 110,000 0.71 Cancelled during the year - - (50,000) (0.60) Exercised during the year - - (300,000) (0.17) Outstanding at end of the year 1,770,000 0.52 1,530,000 0.48 Exercisable at the end of the year 1,320,000 0.41 720,000 0.28 The exercise price of options outstanding at the year-end was £0.519 (2023: £0.481) and their weighted average contractual life was 6.3 years (2023: 6.8 years). 52 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Equity-settled share-based payments are measured at fair value at the date of grant. The fair value as determined at the grant date of 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. The estimated fair value of the options is measured using an option pricing model. The inputs into the model are as follows: Grant date 22 August 2018 Model used Black-Scholes Share price at grant date 29.0p Exercise price 29.0p Contractual life 10 years Risk free rate 0.75% Expected volatility 40.33% Expected dividend rate 0% Fair value option 14.800p Grant date 14 June 2019 Model used Black-Scholes Share price at grant date 26.0p Exercise price 26.0p Contractual life 10 years Risk free rate 0.75% Expected volatility 40.33% Expected dividend rate 0% Fair value option 12.894p Grant date 29 April 2021 Model used Black-Scholes Share price at grant date 30.5p Exercise price 31.0p Contractual life 10 years Risk free rate 0.84% Expected volatility 153.96% Expected dividend rate 0% Fair value option 30.060p Aeorema Communications plc 53 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Grant date 29 April 2021 Model used Black-Scholes Share price at grant date 30.5p Exercise price 50.0p Contractual life 10 years Risk free rate 0.84% Expected volatility 153.96% Expected dividend rate 0% Fair value option 29.943p Grant date 29 April 2021 Model used Black-Scholes Share price at grant date 30.5p Exercise price 70.0p Contractual life 10 years Risk free rate 0.84% Expected volatility 153.96% Expected dividend rate 0% Fair value option 29.845p Grant date 23 May 2022 Model used Black-Scholes Share price at grant date 60.0p Exercise price 60.0p Contractual life 10 years Risk free rate 2.31% Expected volatility 175.63% Expected dividend rate 0% Fair value option 59.707p 54 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Grant date 19 October 2022 Model used Black-Scholes Share price at grant date 71.0p Exercise price 71.0p Contractual life 10 years Risk free rate 3.87% Expected volatility 177.03% Expected dividend rate 0% Fair value option 26.581p Grant date 11 October 2023 Model used Black-Scholes Share price at grant date 78.5p Exercise price 78.5p Contractual life 10 years Risk free rate 4.33% Expected volatility 146.09% Expected dividend rate 3.00% Fair value option 77.184p The expected volatility is determined by calculating the historical volatility of the parent company’s share price. For the share options issued prior to the year ended 30 June 2021 the historical volatility of the parent company’s share price is calculated over the last three years. For share options issued after 1 July 2021 the historical volatility is calculated over the last 10 years. The method used to determine the historical volatility of the parent company’s share price changed in the prior year as a consequence of the COVID-19 pandemic. The impact of the COVID-19 pandemic on the parent company’s share price was significant and not considered an appropriate measure of the parent company’s share price volatility. The extension of the period to 10 years was considered appropriate. The risk free rate is based on the yield from gilt strip government bonds with a similar life to the expected life of the options. The Group recognised the following charges in the Statement of Comprehensive Income in respect of its share-based payment plans: 2024 £ 2023 £ Share-based payment charge 69,434 64,419 Aeorema Communications plc 55 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 24 Related party transactions The Group has a related party relationship with its subsidiaries and its key management personnel (including directors). Details of transactions between the Company and its subsidiaries are as follows: 2024 £ 2023 £ Amounts owed by subsidiaries Total amount owed by subsidiaries 811,427 689,087 Amounts owed to subsidiaries Total amount owed to subsidiaries 67,355 67,355 Aeorema Limited The company received dividends totalling £550,000 during the year (2023: £350,000) from its subsidiary, Aeorema Limited. The company transferred a VAT receivable of £42,088 (2023: £33,245) to Aeorema Limited due to being part of a common VAT group. Aeorema Limited transferred a net amount of expenses to Aeorema Communications plc during the year of £40,000 (2023: £36,250). Aeorema Limited paid expenses totalling £242,634 (2023: £237,135) on behalf of Aeorema Communications plc during the year. During the year, Aeorema Limited made a net transfer of cash of £37,113 to Aeorema Communications plc (2023: £186,800). Cheerful Twentyfirst, Inc. The company received dividends totalling £50,000 during the year (2023: £150,000) from its subsidiary, Cheerful Twentyfirst, Inc. Eventful Limited The company received dividends totalling £50,000 during the year (2023: £100,000) from its subsidiary, Eventful Limited. Compensation of key management The compensation of key management (including directors) of the Group is as follows: 2024 £ 2023 £ Short-term employee benefits 482,718 442,158 Post-employment benefits 18,000 17,032 500,718 459,190 56 The share options held by directors of the Company are disclosed in note 23. During the year, a charge of £17,501 (2023: £49,905) was recognised in the Consolidated Statement of Comprehensive Income in respect of these share options. During the previous year S Quah received an interest-free loan of £50,000. At the year end, £10,000 (2023: £10,000) was outstanding. Harris and Trotter LLP is a firm in which S Haffner is a member. The amounts charged to the Group for professional services are as follows: Harris and Trotter LLP – charged during the year 2024 £ 2023 £ Aeorema Communications plc 20,000 16,250 Aeorema Limited 14,400 11,450 34,400 27,700 At the year end, the Group had an outstanding trade payable balance to Harris and Trotter LLP of £6,000 (2023: £5,000). 25 Cash flows Group 2024 £ 2023 £ Cash flows from operating activities Profit / (loss) before taxation 436,928 1,045,960 Depreciation of property, plant and equipment 137,105 109,764 Depreciation of right-of-use assets 126,804 126,786 Amortisation of intangible fixed assets 2,083 2,500 Loss on disposal of fixed assets 1,288 9,141 Share-based payment expense 69,434 64,419 Finance income (35,967) (215) Interest on lease liabilities 34,264 39,212 Exchange rate differences on translation (88,632) (119,455) 683,307 1,278,112 Increase in trade and other payables 1,497,111 931,716 Increase in trade and other receivables (919,497) (372,487) Taxation paid (55,451) (380,753) Cash generated from operating activities 1,205,470 1,456,588 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Aeorema Communications plc 57 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued 26 Financial instruments Financial instruments recognised in the consolidated statement of financial position All financial instruments are recognised initially at their transaction cost and subsequently measured at amortised cost. Group Company 2024 £ 2023 £ 2024 £ 2023 £ Financial Assets Trade and other receivables 3,694,354 3,170,326 811,428 589,087 Cash and cash equivalents 3,119,353 2,444,100 117,816 135,548 Investments in subsidiaries - - 1,363,002 1,293,567 Total 6,813,707 5,614,426 2,292,246 2,018,202 Financial Liabilities Trade and other payables 2,273,917 1,819,744 94,557 88,959 Accruals 1,621,048 1,328,001 19,550 17,000 Total 3,894,965 3,147,745 114,107 105,959 The Group is exposed to risks that arise from its use of financial instruments. There have been no significant changes in the Group’s exposure to financial instrument risk, its objectives, policies and processes for managing those from previous periods. The principal financial instruments used by the Group, from which financial instrument risk arises, are trade receivables, cash and cash equivalents and trade and other payables. Credit risk Credit risk arises principally from the Group’s trade receivables. It is the risk that the counterparty fails to discharge its obligation in respect of the instrument. The maximum exposure to credit risk at 30 June 2024 was £1,608,713 (2023: £1,649,905). Trade receivables are managed by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The credit risk associated with trade receivables is minimal as invoices are based on contractual agreements with long-standing customers. Credit losses historically incurred by the Group have consequently been immaterial. Liquidity risk Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group’s policy is to meet its liabilities when they fall due. The Group monitors cash flow on a regular basis. At the year end, the Group has sufficient liquid resources to meet its obligations of £3,989,476 (2023: £3,147,899). Market risk Market risk arises from the Group’s use of interest bearing financial instruments. It is the risk that the fair value of future cash flows of a financial instrument will fluctuate. At the year end, the cash and cash equivalents of the Group net of bank overdrafts was £3,119,353 (2023: £2,444,100). The Group ensures that its cash deposits earn interest at a reasonable rate. 58 Notes to the Consolidated Financial Statements For the year ended 30 June 2024 continued Capital risk The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern while maximising the return to stakeholders. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained earnings as disclosed in the Consolidated Statement of Changes in Equity. At the year end, total equity was £2,805,725 (2023: £2,814,356). 27 Pension costs defined contribution The Group makes pre-defined contributions to employees’ personal pension plans. Contributions payable by the Group for the year were £170,429 (2023: £129,228). At the end of the reporting period £8,779 (2023: £17,475) of contributions were due in respect of the period. 28 Dividends In respect of the current year, the directors propose that a final dividend of 3 pence per share (2023: 3 pence) be paid to shareholders on 20 January 2025. The dividends are subject to approval by shareholders at the Annual General Meeting and have not been included as liabilities in these consolidated financial statements. The proposed dividends are payable to all shareholders on the Register of Members on 27 December 2024. The total estimated dividend to be paid is £286,140. The payment of this dividend will not have any tax consequences for the Group. . 29 Contingent liability Company The Company is a member of a group VAT registration with all other companies in the Aeorema Communications group and, under the terms of the registration, is jointly and severally liable for the VAT payable by all members of the group. At 30 June 2024 the Company had no potential liability under the terms of the registration. Aeorema Communications plc 59 Company Information Directors M Hale (Non-Executive Chairman) S Haffner (Non-Executive Director) R Owen (Non-Executive Director) H Luffman (Non-Executive Director) S Quah (Chief Executive Officer) A Harvey (Managing Director) Secretary S Haffner Company number 04314540 Registered office 101 New Cavendish Street 1st Floor South London W1W 6XH Financial advisers Harris & Trotter LLP 101 New Cavendish Street 1st Floor South London W1W 6XH Nominated adviser and broker Allenby Capital Limited 5 St. Helens Place London EC3A 6AB Auditors Hazlewoods LLP Staverton Court Staverton GL50 0UX Solicitors Howard Kennedy LLP No. 1 London Bridge London SE1 9BG Bankers Barclays Bank plc P O Box 32106 London NW1 2ZH Registrar Link Asset Services The Registry 34 Beckenham Road Beckenham, Kent BR3 4TU 60 Mike Hale Non-Executive Chairman Mike Hale has spent most of his career in the marketing and advertising sectors. His roles have included Chairman and CEO of Young and Rubicam Australia, Chairman and CEO of FCB Australia and Board Director of Saatchi and Saatchi UK. He also established his own eponymous agency which he built into one of Australia’s leading independent agencies and which he sold. He has also been involved with business and strategic planning for major Australian and international companies including British Airways, Unilever, Epson, Toshiba, NRMA and BMW. His extensive marketing and advertising experience with blue- chip companies, both in the UK and Australia, will be highly beneficial to the Company’s plans for growth and expansion. Director Profiles Stephen Haffner Non-Executive Director Steve Haffner has over 35 years’ accounting experience having qualified as a chartered accountant in 1989. He has spent over 30 years at Harris and Trotter LLP, during which time he became Head of the Audit Department. He was appointed as Partner to the firm in 1994. Steve joined Aeorema as Company Secretary in 2014 and as a Director in 2015. He is a Fellow of The Institute of Chartered Accountants in England and Wales. Richard Owen Non-Executive Director Richard was formerly Executive Chairman of AIM listed Insig Ai (INSG) Plc and an Executive Director of its subsidiary Pantheon Leisure Plc. Richard has extensive involvement and experience in corporate and strategic planning, acquisitions and finance. Richard holds various other private company directorships. Aeorema Communications plc 61 Steve Quah Chief Executive Officer Steve Quah is a founder and Chief Executive Director at Cheerful Twentyfirst and oversees the management of all events. With extensive expertise in both theatrical and digital brand experiences, Steve is the driving force behind the company’s strong creative service ethos. Steve brings over thirty years of unique insight, innovation and experience to the company and continues to focus the team on delivering game changing events for all clients. With a passion for creating award winning brand experiences, Steve has produced over 400 corporate productions and numerous live events for some of the world’s largest brands including Vodafone, Google, KPMG, Clifford Chance, LG, Disney, BBC, News UK and Microsoft to name but a few. Hannah Luffman Non-Executive Director Hannah has 15 years of experience in marketing and commercial strategy across both global brands and fast- growing, challenger agencies. Hannah is Director of Global Marketing for a large cloud data firm, headquartered in North America. Hannah’s extensive experience in marketing and events and development into new markets will be highly beneficial to the company’s ambitious growth plans, as well providing research and insights to the corporate marketing landscape. Andrew Harvey Managing Director Andrew Harvey is the Managing Director and has over twenty five years’ experience producing events, branded content and interactive projects. Andrew joined Cheerful Twentyfirst in 1999 and helped significantly grow the branded content division winning numerous awards. Andrew has worked at many levels within the company including Account Manager, Head of Moving Image, Senior Event Producer and Director of Operations. Andrew has delivered award winning projects for global brands including HSBC, Nokia, McKinsey & Company, Mars Wrigley, White & Case, GE Alstom, Oliver Wyman, PubMatic and Babcock. Andrew currently oversees all aspects of the agency’s operations. 62 NOTICE IS HEREBY GIVEN that the Annual General Meeting of Aeorema Communications plc will be held at the offices of Aeorema Communications plc, 87 New Cavendish Street, London W1W 6XD on 12 December 2024 at 11.00 a.m. for the transaction of the following business: As Ordinary Business to consider and, if thought fit, pass the following resolutions which will be proposed as Ordinary Resolutions: 1. To receive and adopt the report of the directors of the Company and the audited accounts for the Company for the year ended 30 June 2024. 2. To re-appoint Michael Hale as a Director of the Company, who retires in accordance with Article 22 of the Company’s Articles of Association. 3. To re-appoint Stephen Haffner as a Director of the Company, who retires in accordance with Article 22 of the Company’s Articles of Association. 4. To re-appoint Hazlewoods LLP as auditors of the Company and to authorise the Directors to fix their remuneration. 5. To declare a final dividend on the ordinary shares of 12.5 pence each in the capital of the Company for the year ended 30 June 2024 of 3 pence per ordinary share. As Special Business to consider and, if thought fit, pass the following resolutions of which Resolution 6 will be proposed as an Ordinary Resolution and Resolutions 7 and 8 will be proposed as Special Resolutions: 6. 6. That the directors of the Company (the “Directors”) be generally and unconditionally authorised pursuant to and in accordance with section 551 of the Companies Act 2006 (the “Act”) to exercise all the powers of the Company to allot shares in the Company and/or to grant rights to subscribe for, or to convert any security into, shares in the Company (“Rights”) up to a maximum nominal amount of £397,416.625, provided that this authority shall expire at the end of the next annual general meeting of the Company to be held after the date of the passing of this Resolution or, if earlier, fifteen months from the date of the passing of this Resolution save that the Company may prior to the expiry of such period make any offer or agreement which would or might require shares to be allotted or Rights to be granted after such expiry and the Directors shall be entitled to allot shares in the Company and to grant Rights pursuant to any such offer or agreement as if this authority had not expired. 7. That, subject to the passing of Resolution 6 set out above, the Directors be empowered pursuant to section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority conferred on them by Resolution 6 above, as if section 561(1) of the Act did not apply to such allotment provided this power shall be limited to: (i) the allotment of equity securities in connection with a rights issue, open offer or other offer of equity securities open for acceptance for a period fixed by the Directors to holders of equity securities on the register on a fixed record date where the equity securities respectively attributable to the interests of such holders are proportionate (as nearly as may be practicable) to their respective holdings of such equity securities or in accordance with the rights attached thereto (but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to treasury shares, fractional entitlements or legal or practical problems under the laws of, or the requirements of any recognised body or stock exchange in, any territory or by virtue of shares being represented by depositary receipts or any other matter); and (ii) the allotment to any person or persons (otherwise than pursuant to sub-paragraph (i) of this Resolution above) of equity securities up to an aggregate nominal amount of £119,225, provided that the power given by this Resolution shall expire at the end of the next annual general meeting of the Company to be held after the date of the passing of this Resolution or, if earlier, fifteen months from the date of the passing of this Resolution, save that the Directors shall be entitled to make offers or agreements before the expiry of such power which would or might require equity securities to be allotted after such expiry and the Directors shall be entitled to allot equity securities pursuant to any such offers or agreements as if the power conferred hereby had not expired. Notice of Annual General Meeting Aeorema Communications plc (Incorporated and registered in England and Wales with company number 4314540) Aeorema Communications plc 63 Notice of Annual General Meeting continued Aeorema Communications plc (Incorporated and registered in England and Wales with company number 4314540) 8. That the Company be and is hereby generally and unconditionally authorised in accordance with Section 701 of the Act to make market purchases (within the meaning of Section 693(4) of the Act) on the AIM Market of the London Stock Exchange plc of ordinary shares of 12.5 pence each in the capital of the Company (“Ordinary Shares”) provided that: (i) the maximum number of Ordinary Shares hereby authorised to be purchased is 953,800 Ordinary Shares; (ii) the minimum price (exclusive of expenses) which may be paid for an Ordinary Share is 1 pence; (iii) the maximum price (exclusive of expenses) which shall be paid for an Ordinary Share shall be an amount equal to 105 per cent. of the average middle market quotations taken from the AIM Appendix to the Daily Official List of the London Stock Exchange for the five business days immediately preceding the day on which the Ordinary Share is contracted to be purchased; (iv) unless renewed the authority hereby conferred shall expire on the earlier of the Company’s Annual General Meeting in 2025 or eighteen months from the passing of this Resolution unless such authority is renewed, varied or revoked prior to such time; and (v) 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 will or may be executed wholly or partly after the expiry of such authority and may make a purchase of Ordinary Shares in pursuance of any such contract or contracts. By order of the Board Stephen Haffner Company Secretary Registered Office: 101 New Cavendish Street London W1W 6XH Dated: 18 November 2024 64 (1) A member entitled to attend and vote at the above- mentioned annual general meeting (the “Meeting”) is entitled to appoint a proxy or proxies to exercise any or all of his rights to attend, speak and vote at the Meeting instead of him. All members are entitled to attend and vote at the Meeting, whether or not they have returned a form of proxy. (2) Please note that a hard copy form of proxy is not included with this notice. You can vote either: ◆ by logging on to https://investorcentre.linkgroup. co.uk/Login/Login and following the instructions (Please refer to note 3 for additional information). ◆ you may request a hard copy form of proxy directly from the registrars, Link Group, via email at shareholderenquiries@linkgroup.co.uk or on Tel: 0371 664 0300 Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. We are open between 09:00 - 17:30, Monday to Friday excluding public holidays in England and Wales. ◆ in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out below. The instrument appointing a proxy must reach the Company’s registrars, Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL not less than 48 hours before the time of holding of the Meeting or adjourned meeting (excluding any part of a day that is not a working day). (3) Link Investor Centre is a free app for smartphone and tablet provided by Link Group (the company’s registrar). It allows you to securely manage and monitor your shareholdings in real time, take part in online voting, keep your details up to date, access a range of information including payment history and much more. The app is available to download on both the Apple App Store and Google Play, or by scanning the relevant QR code below. Alternatively, you may access the Link Investor Centre via a web browser at: https:// investorcentre.linkgroup.co.uk/Login/Login. (4) 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 of the Meeting) by using the procedures described in the CREST Manual (available from www.euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a 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. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & International Limited (“Euroclear”) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer’s agent (ID RA10) (not less than 48 hours before the time of the Meeting or adjourned meeting (excluding any part of a day that is not a working day). For this purpose, the time of receipt will be taken to mean the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer’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. 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 message. 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 system 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. Notes Aeorema Communications plc 65 (5) Unless otherwise indicated on the Form of Proxy, CREST voting or any other electronic voting channel instruction, the proxy will vote as they think fit or, at their discretion, withhold from voting. (6) Pursuant to Regulation 41 of The Uncertificated Securities Regulations 2001, the Company specifies that only those members of the Company on the register 48 hours before the time set for the Meeting shall be entitled to attend or vote at the Meeting in respect of the number of shares registered in their name at the time. Changes to the register of members after that time will be disregarded in determining the rights of any person to attend or vote at the Meeting. (7) A copy of the register of Directors’ interests in shares in the Company and copies of the Directors’ service contracts of more than one year’s duration will be available for inspection at the registered office of the Company during office hours only on any weekday (excluding Saturdays, Sundays and public holidays) from the date of this notice until the date of the Meeting and at the place of the Meeting for at least 15 minutes prior to and during the Meeting Notes continued 66 This year, eight Resolutions are proposed at the Annual General Meeting and the purpose of each of the Resolutions is as follows: Ordinary Business Resolution 1: The Accounts and Reports The directors of the Company (the “Directors”) will present their report and the audited financial statements for year ended 30 June 2024, together with the auditors’ report thereon. Resolutions 2 and 3: Re-election of retiring directors The existing articles of association of the Company (the “Articles”) require that a proportion of the Directors are to retire at each Annual General Meeting. Accordingly Michael Hale and Stephen Haffner are therefore retiring and offering themselves for re-appointment. Resolution 4: Appointment of Auditors The Company is required to appoint auditors at each Annual General Meeting at which accounts are laid before shareholders, to hold office until the next such meeting. This Resolution proposes that Hazlewoods LLP be re- appointed as auditors for the current year and to authorise the Directors to fix their remuneration. Resolution 5: Approval of Declaration of Dividend The Board is proposing a dividend of 3p pence per share, subject to shareholder approval at the AGM, to be paid on 20 January 2025 to shareholders on the register on 27 December 2024. The ex-dividend date for the final dividend will be 24 December 2024. Special Business Resolution 6: Directors’ power to allot securities Section 549 of the Companies Act 2006 (the “Act”) stipulates that the Directors cannot allot shares or rights to subscribe for shares in the Company (other than the shares allotted in accordance with an employee share scheme) unless they are authorised to do so by the shareholders in a general meeting. The Directors’ general authority to allot shares was granted at the annual general meeting held in 2023 and is due to expire at the conclusion of the Annual General Meeting in 2024. Resolution 6 seeks a new general authority from shareholders for the Directors to allot ordinary shares up to an aggregate nominal value of £397,416.625 (being 3,179,333 ordinary shares), representing approximately 33.3 percent of the nominal value of the issued ordinary share capital of the Company as at the date of the notice. The Directors do not have any present intention of exercising this authority, but they consider it desirable that the specified amount of ordinary shares be available for issue so that they can more readily take advantage of possible opportunities. Unless renewed, revoked, varied or extended, this authority will expire at the earlier of the date which is 15 months from the passing of this resolution and the conclusion of the next Annual General Meeting of the Company. Explanatory Notes to the Notice of Annual General Meeting Aeorema Communications plc 67 Resolution 7: Disapplication of pre-emption rights If the Directors wish to allot any shares for cash in accordance with the authority proposed in Resolution 6, the Act requires that new shares must generally be offered first to shareholders in proportion to their existing holdings. These are the pre-emption rights of shareholders. In certain circumstances, it may be in the interests of the Company for the Directors to be able to allot some shares for cash without having to offer them first to existing shareholders. In line with common practice, Resolution 7 therefore seeks approval for an authority to empower the Directors to allot shares for cash other than in accordance with the statutory pre-emption rights, in connection with a rights issue and other pre-emptive offers and otherwise up to a maximum nominal amount of £119,225 (being 953,800 ordinary shares) representing approximately 10 percent of the nominal value of the issued ordinary share capital of the Company. In addition, there are legal, regulatory and practical reasons why it may not always be possible to issue new shares under a rights issue to some shareholders, particularly those resident outside the UK. To cater for this, this Resolution also permits the Directors to make appropriate exclusions or arrangements to deal with such difficulties. Unless renewed, revoked, varied or extended, this authority will expire at the earlier of the date which is 15 months from the passing of this resolution and the conclusion of the next Annual General Meeting of the Company. Resolution 8 – Share buybacks This resolution is to renew the authority for the Directors to purchase the Company’s own ordinary shares under certain stringent conditions. This resolution specifies the maximum number of ordinary shares which may be acquired (being 953,800 ordinary shares which are approximately 10 percent of the Company’s issued ordinary share capital as at 15 November 2024) and the maximum and minimum prices at which shares may be bought. The Directors do not have any present intention of using the authority which will be used only when the Directors consider that it would be in the best interests of the shareholders generally and the effect would be to enhance earnings per share. Shares purchased will be cancelled or held as treasury shares as defined in section 724(5) of the Act. At 15 November 2024, no treasury shares were held by the Company. Recommendation The Directors believe that the proposals in Resolutions 1 to 8 are in the best interests of the Company and its shareholders as a whole. Accordingly, the Directors recommend that shareholders vote in favour of each Resolution as they intend to do in respect of their own beneficial shareholdings. Explanatory Notes to the Notice of Annual General Meeting continued This page has been intentionally left blank.