Aquis Exchange Regulatory News (AQX)

30 March 2023

Aquis Exchange PLC

("Aquis", the "Company" or the "Group")

Final results for the year ended 31 December 2022

24% increase in net revenue marks continuation along growth trajectory

Aquis Exchange PLC (AQX.L), the creator and facilitator of next-generation financial markets, is pleased to announce its audited results for the year ended 31 December 2022.

Financial highlights:

Business highlights:

Post-period highlights:

*Underlying profit refers to profit before tax plus other comprehensive income. This measure has been calculated in order to make appropriate comparison with FY21, taking into account an adjustment made for FX arising on consolidation since the publication of FY21's ARA.

Alasdair Haynes, Chief Executive Officer of Aquis, commented:

"I am very pleased to be reporting another year of significant growth for Aquis, with net revenue up 24% and underlying profit increased by 41% from FY21. The Group profited from significant growth in the technologies division, along with strong performances in pan-European secondary market trading, the primary market activities of Aquis Stock Exchange and data revenue.

From the fledgling pan-European secondary market equities trading platform that we launched a decade ago, it is edifying to see Aquis transform into a profitable and growing Group that creates and facilitates next-generation financial markets. In 2022, we saw milestones reached in each division with the launch and growth of the Aquis Matching Pool (AMP); significant interest in Aquis Technologies' pioneering exchange technology and particularly its cloud-native and 24/7 functionality, and an impressive 22 new listings on the Aquis Stock Exchange - the most of any growth exchange in the UK.

Amidst changing market dynamics in the UK and abroad, there are significant opportunities for Aquis across all divisions, and we are looking forward to continuing our growth strategy. Trading so far has been in line with market expectations."

An overview of the results from Alasdair Haynes, CEO, is available to view on this link: https://bit.ly/3lRH3DG

The Group will be hosting webinars for analysts and retail investors today at 09.30 and 16.00 respectively.

If you would like to register for the analyst webinar, please contact aquis@almapr.co.uk. Investors who would like to attend the retail investor webinar can sign up to Investor Meet Company for free and add themselves to the meeting via https://www.investormeetcompany.com/aquis-exchange-plc/register-investor. Investors who have already registered will be automatically invited.

Enquiries:

Notes to editors:

About Aquis Exchange PLC

Aquis Exchange PLC ("Aquis") is a creator and facilitator of next-generation financial markets, through the provision of accessible, simple and efficient stock exchanges, trading venues and technology.

Aquis consists of three divisions: Aquis Markets, a subscription-based exchange offering pan-European cash equities trading; Aquis Technologies, which develops and licenses next-generation exchange technology globally; and Aquis Stock Exchange, a growth and regulated primary exchange delivering capital to companies via the listing and trading of shares.

Aquis Markets operates lit and dark order books, covering 16 European markets. For its lit books, Aquis uses a subscription pricing model which works by charging users according to the message traffic they generate, rather than a percentage of the value of each stock that they trade and does not allow aggressive non-client proprietary trading, which has resulted in lower market impact and signalling risk on Aquis than other trading venues in Europe.

Aquis Technologies is the software and technology division of Aquis. It focuses on building better markets via the creation and licensing of cutting-edge, cost-effective exchange infrastructure technology and services, including matching engine and trade surveillance solutions.

Aquis Stock Exchange (AQSE) is a stock market providing primary and secondary markets for equity and debt products. It is authorised as a Recognised Investment Exchange, which allows it to operate a regulated listings venue. The AQSE Growth Market is divided into two segments 'Access' and 'Apex', with different levels of admission criteria. The Access market focuses on earlier stage growth companies, while Apex is the intended market for larger, more established businesses.

Aquis is authorised and regulated by the UK Financial Conduct Authority and France's Autorité de contrôle prudentiel et de résolution and Autorité des Marchés Financiers to operate Multilateral Trading Facility businesses in the UK & Switzerland markets and in EU27 markets respectively. Aquis Exchange PLC is quoted on the Aquis Stock Exchange and on the Alternative Investment Market of the LSE (AIM) market. For more information, please go to www.aquis.eu.

Chairman's statement

Overview

I have now completed my first year as Chair of Aquis Exchange PLC (AQXE) and it is with great pleasure that I am able to report that the Group continues to make significant progress underpinned by strong performances from each of the Group's three business activities. These results were particularly noteworthy given the macro-economic challenges resulting primarily from the war in Ukraine, residual adverse effects from COVID-19 and the requirement to handle the impact of the UK's exit from the EU.

During 2022 net revenue increased by 24% to £20.1m and profit before tax by 27% to £4.5m. There were significant increases in technology licensing revenue, whilst AQSE generated a profit ahead of schedule. Pan-European secondary market trading was strengthened through the launch of AMP, our new dark pool activity. We continued to develop our presence in Europe and enhance client relationships within the EU 27 markets.

We have also continued to invest in our technology making further significant progress through the development of 24/7 capability and exchange grade cloud platforms.

Board and Governance

We further strengthened the Aquis Exchange PLC Board ("the Board") during 2022 through the appointment of Fields Wicker-Miurin as Senior Independent Director and Chair of the Nominations & Remuneration Committee and Ruth Wandhöfer as independent non-executive director and member of the Audit & Risk Committee and the Aquis Europe subsidiary Board. Richard Fisher joined the Board as CFO at the AGM in April 2022.

Fields has a distinguished career with over 40 years' experience as an executive in financial services, a social entrepreneur focused on leadership, and a non-executive director and committee chair of the boards of both global companies and government departments. From 1994-7 she led the transformation of the London Stock Exchange (LSE) and the London equity markets while CFO and Strategy Director, and from 2006-7 she was the only non-US member of the NASDAQ Technical Advisory Council. Fields was one of only 6 experts (and the only British one) advising the EU Parliament on financial services harmonisation in the lead-up to the Prospectus Directive.

She currently serves as a non-executive director, member and chair of key committees of the main boards of BNP Paribas (the Eurozone's largest bank) and Scor (the world's 4th largest reinsurance company) and is Deputy Chair of the Royal College of Art & Design.

Ruth has considerable financial services experience. Following a senior executive career at Citibank, she has served on a number of Boards as an Independent Non-Executive Director including the London Stock Exchange from 2018 to 2020 and is currently serving on the board of Gresham Technologies PLC and Permanent TSB PLC in Ireland.

Prior to joining Aquis as Director of Finance in April 2021, Richard was the Director of Finance at Redwood Bank and prior to that held a number of senior roles within RBS. Richard qualified as an accountant (ICAEW) with PwC.

Richard Bennett retired from the Board with effect from 31st December 2022 and Mark Spanbroek will retire on 27th April 2023. Richard served for nine years and Mark for ten years. On behalf of the whole Company I would like to thank them both for their service to Aquis.

Culture, Stakeholder Engagement and Section 172 Duties

The Board continued its engagement with key stakeholders, particularly focusing on employees and shareholders. We hosted a very successful Capital Markets Day in November and Fields Wicker-Miurin and myself consulted with shareholders in advance of the renewal of our Directors' Remuneration Policy at the 2023 AGM.

During the year I assumed responsibility as the appointed representative of the Board to liaise with employees. We also undertook our third annual employee engagement survey and once again overall feedback was positive.

Environment, Social and Corporate Responsibility

The Board is focussed on the Company's responsibility to continue to grow and operate on a sustainable basis whilst playing the role as an exchange operator in bringing issuers and investors together to create a sustainable ecosystem where capital flows and investment can occur. This offers us an opportunity to make a difference not only through our own actions but also by creating an environment for other companies and investors to make a wider contribution.

From the outset, Aquis has been committed to improving the efficiency of markets through transparency and innovation. In addition, we aim to stimulate growth in the economy by listening to the needs of issuers and creating a supportive, fair and low-cost environment for capital raisers to list instruments, particularly for innovative young companies.

We continue to make progress on our ESG plans through integrating diversity objectives into our business plans and reducing our environmental impact, details of which are set out in the Strategic Report.

We remain committed to further improving our gender balance, making progress towards meeting the Hampton Alexander guidelines on female representation on the Board (3 out of 9 after the 2023 AGM), and further improving the gender pay gap measure of female seniority in the company to 24% on base salary and 29% on base salary plus annual bonus. Our target remains to be better than the average in UK financial services on these measures.

Our focus for the year ahead

We are confident that we have the resources and technology to support further profitable growth across all our business activities and we will continue to invest for future growth. We have strengthened the Board and it is now scaled appropriately to meet the opportunities ahead. However, we will continue to monitor closely the skills and experience of the Board Directors to ensure that we are able to continue to focus on ensuring the business delivers on its strategy across all the aspects of the business.

Glenn Collinson

Chair

Chief Executive's Report

Overview

During 2022 Aquis celebrated its 10th anniversary. It has already been an amazing journey from building a fledgling pan-European secondary market equities trading platform into a profitable Group covering primary and secondary trading and technology licensing activities. I am confident that the next decade will be equally, if not more, successful than the first.

There were some major economic headwinds during the year, yet the Group dealt comfortably with these adverse conditions, despite the significant negative effects they caused across the financial services industry.

The Group profited from significant growth in the technologies division along with strong performances in pan-European secondary market trading, the primary market activities of AQSE and data revenue. This growth demonstrates the resilience of the diversified business model that Aquis has created. It also managed to maintain market share of the pan-European equities secondary market trading in excess of 5% whilst diversifying its product offering through the launch of the Aquis Matching Pool (AMP).

This overall performance resulted in the Group reporting a 24% growth in net revenue to £20.1m (net of provisions) and a profit before tax of £4.5m in 2022 compared to a profit before tax of £3.6m in 2021. On an underlying basis including FX movements reported through other comprehensive income this equates to a 41% increase in underlying profit from £3.3m to £4.7m. This increase demonstrates the continued progress made during the last 12 months and provides the Group with the profitable platform to continue to invest and further strengthen the synergies across its principal business activities.

Reflecting the increasing diversification across three business units and four revenue streams, we have successfully completed a rebrand post-period, in Q1 2023. The Group now consists of Aquis Markets (formerly the Aquis Exchange business), Aquis Technologies, and Aquis Stock Exchange.

It is difficult to predict if market conditions will become more stable in 2023, following a difficult 2022; however, I do believe that our strong team and technology platform should enable us to overcome these and any future challenges.

Aquis Markets

Over the period, the secondary market multilateral trading facility ("MTF") platforms operated by the Group in London and Paris continued to grow despite challenging economic and regulatory conditions. The number of trading members grew from 38 to 41 and a number of members increased their activity levels, leading Aquis Markets revenue to increase by 15% to £12.4m.

The market share of all pan-European trading including auctions and dark pools was maintained through the year with the launch of AMP, the Aquis dark pool offering offsetting a decrease in Lit volumes. We are confident that with new innovative order types planned to be introduced in 2023, our lower toxicity and high available liquidity will ultimately underpin long-term market growth. Our Market at Close ("MaC") order type, made a material contribution to trading volumes on the platform and we anticipate it will grow further during 2023. As the MaC allows members to enter orders for matching on the Aquis platform at the closing price of the primary market, we now operate across a larger cross-section of all available trading.

Aquis Markets offered clients the ability to trade in excess of 2,000 stocks and ETFs across 16 European Markets as at the end of December 2022. Overall, the available liquidity, equal to approximately 23% of total pan-European equity liquidity should underpin future market share growth.

Aquis Technologies

During 2022 Aquis made significant progress in its technology division. This activity, where Aquis licenses its leading exchange related technology to a variety of international financial services clients across different asset classes, has a strong pipeline and offers material future growth opportunities. Net revenue from technology licensing in 2022 grew 51% to £5.2m, reflecting the increasing interest in our high-calibre, in-house technology.

In 2022, Aquis Technologies extended one contract and secured two new contracts, bringing the total to seven.

Aquis Technologies continues to develop its technology platforms to support growth across different asset classes internationally, delivered the first exchange grade 24/7 platform and made further progress in the plan to create a cloud native exchange.

Aquis Market Data

Data revenues increased 29% in 2022 to reach £3.0m as the Group continued to benefit from the implementation of a harmonised data structure. Data is a key pillar of the Aquis strategic plan, and we expect that it will continue to make a significant contribution to the Group.

In addition to the contribution data brings to the Group results, it may increase further in importance in the long-term if consolidated tapes for the UK and Europe are implemented. Introducing consolidated tapes for Equities should improve the quality and pricing of market data and lead to a fairer distribution of data fees across the various European trading venues. Progress was made during the year in the UK and in Europe where the European Council has recently agreed a mandate to negotiate with the European Parliament on reforms that include the establishment of a consolidated tape.

Aquis Stock Exchange (AQSE)

AQSE had a very successful 2022, moving to profitability ahead of schedule.

The exchange attracted a further 22 IPOs during the year: the most of any growth company exchange in the UK. The business also made good progress in integrating with the main retail investor platforms thereby ensuring access to its broad range of companies and continuing to attract additional market makers, corporate advisers and brokers.

Underpinned by the Group's proven, disruptive technology and a track record of transparency and innovation, we have already made material progress in building AQSE into a competitive primary marketplace, particularly as MiFID II and the FCA Wholesale Markets Review continues to put the traditional business model of national exchanges under pressure.

I believe that we have a unique opportunity to build a pan-European, technology-driven, listing exchange for growth companies, overcoming several issues faced by small and mid-cap market participants today.

Further Investment in Research and Development (R&D)

The Group continued to invest in R&D throughout 2022 and will continue this investment during 2023 in order to maintain and enhance the quality of its technology and its ability to be able to deliver new products and platform enhancements to its clients.

Our proven trading platform has been developed in-house and is based on proprietary technology, which does not rely on third party software suppliers. The quality and flexibility of our technology was demonstrated through the launch

of AMP, the creation of the first ever exchange grade 24/7 market and underpins our Group strategy. It is the principal reason for the growth in our technology licensing business.

I believe this structure and continued investment in R&D gives us a significant competitive advantage on functionality, price and ability to deliver. Aquis' technology organisation ensures expeditious product development and, together with Aquis' further investment, will allow the Group to react quickly to dynamic market conditions. We intend to continue to work on further developments which will foster future growth.

Resources

During 2022 we continued to invest in personnel resources across a number of departments with headcount across

the London and Paris offices increasing by 16% and we will continue to further strengthen our team in particular in support of the sales and technology activities.

Outlook

In November 2022 we held our first Capital Markets Day (CMD) which enabled us to present some of the exciting initiatives that we will pursue over the next few years and how we believe we can remain at the forefront of exchange technological invention.

Following the successful launch of AMP we will continue to develop this activity and anticipate further product development in this area during 2023.

There remains some macro-economic uncertainty; however, I believe that our strong team and technology platform should enable us to overcome this and any future challenges. Our technology systems have dealt efficiently with significantly higher messaging volumes caused by increased volatility. Although it is difficult to forecast, with any degree of certainty, the effect of these events on the broader Group for the time being, I remain confident in our unique proposition and our readiness to achieve the next level of operational, financial and strategic success.

There has been an encouraging start to the current financial year and so far in 2023 trading continues in line with market expectations.

We are already delivering on our vision of a transformation of primary markets for small and mid-cap stocks through Aquis Stock Exchange where we have a pipeline of 50-60 companies looking to IPO and expect the growth of the Exchange to continue at pace throughout 2023.

We continue to invest in our business to ensure that we maintain our ability to grow. This investment will support the broadening of our market position through innovation and excellence. We will continue to promote the Aquis values of transparency, fairness and simplicity, enabling our end customers to get better performance and results.

Our principal aim in the future remains to deliver robust and sustainable returns for the benefit of shareholders and all our other stakeholders in the medium and long term. Our highly capable and experienced management team remains focused on serving our clients as we grasp the opportunities ahead and, in particular, on delivering our shared goals and our vision for transforming primary markets for small and mid-cap stocks.

Alasdair Haynes

Chief Executive Officer

Strategic Report

Overview of the business

Aquis Exchange PLC ("Aquis" or "the Company"), is the principal operating company and the holding company of the Aquis exchange activities ("the Group") which operates three principal divisions: Aquis Markets, Aquis Technologies and Aquis Stock  Exchange.

The Company also has a French subsidiary, Aquis Exchange Europe SAS, ("AQEU"), an MTF established to enable European clients to continue to trade EU stocks, which provides secondary market trading in EU 27 stocks listed on other exchanges.

The Company and AQSE are regulated by the UK Financial Conduct Authority ("FCA"), while AQEU is regulated by the Autorité de Contrôle Prudentiel et de Resolution ("ACPR") and the Autorité des Marchés Financiers ("AMF").

The Group has made significant progress in the development of its activities since the IPO in June 2018 and is well positioned to be recognised as one of the leading technology-led, international exchanges driving improved transparency and fairness in the securities trading market through the introduction and enhancement of competition and innovation. With these guiding principles the Group's main focus is to:

The trading platform for all Group entities is run on the same trading technology and all entities apply a unique subscription-based pricing model based on electronic messaging traffic for the lit market. This means that the dealing price prior to the trade is transparent to the whole market. This is in contrast to pricing on dark and grey markets, where price discovery is only available to the market post-trade. For AMP (the Aquis dark pool market) clients are charged a percentage of the value of each transaction.

AQXE and AQEU MTFs apply a non-aggressive trading model, which means that certain types of trading behaviour are not allowed, and it encourages more passive trades to rest in its order book. This creates greater depth of liquidity and less potential for information leakage or "toxicity" in the market. Independent studies have verified that Aquis' non-aggressive trading model has materially lower toxicity than its competitors, which reduces adverse price movements thereby lowering the implicit costs of trading for the end investor. This is a significant positive differentiating factor.

AQSE is focused on creating a primary market for growth company issuers and a secondary market for the trading of their stocks.

Clients and Competitive Landscape

The client base of all three entities consists, principally, of investment banks and brokers acting on behalf of institutions such as pension funds, asset managers and retail brokers to execute their orders and, in the case of AQSE, it includes the issuers who wish to raise capital on the platform.

The principal competitors to Aquis' business are the incumbent national exchanges and other pan-European trading venues. In secondary markets they charge customers on a per transaction model to allow fully aggressive trading.

During 2022 Aquis has consolidated its market position commanding 5.2% market share (Q4 average) of all EU secondary markets trading underpinned by a more diversified product offering following the launch of AMP. This business is well positioned to benefit from further product development and any future regulatory changes. The institutional support for greater transparency in European equities trading also supports future business growth.

Aquis' matching engine and surveillance technology has been operating successfully for a number of years. It has been developed for multi-asset class trading and is attracting customers wishing to license the technology as the trading engine for a broad range of instruments. The Company's principal technology customers are new equity trading venues where the market is opening up to competition as well as exchanges specialising in digital assets, MTF operators across asset classes and market participants requiring real time market surveillance. Aquis delivered a proof of concept for cloud-based exchange technology in partnership with AWS and the Singapore Stock Exchange and continues to see significant interest in this space. Competitors of the licensing business are other matching engine providers and surveillance software providers.

We are a strong supporter of the regulatory principles such as best execution and greater transparency for markets that have been introduced and we are committed to complying with market regulation. We believe that we are well placed to manage any regulatory divergence between the UK and EU given our robust and agile business model, our lean cost structure and our technology leadership.

As a growth company the Key Performance Indicators (KPIs) for the Group are principally (i) the continued growth in revenue (See the Table below showing Group Revenue) and also (ii) the continued growth in Profit Before Tax (PBT). In building out these KPIs significant focus is made to the key drivers of revenue and profitability which include for example the market share of pan European secondary market trading. The delivery against these principal KPIs are fundamental to the success of the Group.

In support of these KPIs the Board has established for the senior Executives clear financial and non-financial objectives for the Group. For 2022 these were revenue, profit before taxation, market share of pan-European secondary market trading, quality of technology, planning, sustainability and compliance with regulations and corporate governance, allowing clear performance measurement against the most important targets set by the Board. Financial objectives represent 70% and non-financial 30%. The financial KPIs are based on target net revenue and profit before tax. The non- financial KPIs address strategy, resources, information and communication. Further details are given in the FY22 Annual Report.

Financial Review

It has been a year of very strong revenue growth during 2022. The breakdown of the principal revenue activities is as follows:

The Group generated a profit before taxation for the year of £4.5m compared to £3.6m in the previous year. The continued growth in profits during 2022 is primarily attributable to increased exchange revenue through the launch of AMP and as members' subscriptions have risen as a result of increased trading levels, as well as increased revenue from data, technology licensing and issuer fees.

The trade receivables resulting from revenue from licensing technology contracts attract an IFRS 9 (Expected Credit Loss on the trade receivables arising from contract assets). This year the application of IFRS 9 has resulted in a net impairment provision release during the year of £133k (2021: charge (£972k)).

Profit before tax increased 27% to £4.5m and EPS (fully diluted) remained at 16p per share. The profit before taxation is after applying amortisation charges to internally generated intangible assets, as well as depreciation and finance charges, which reflect the accounting treatment of leases under IFRS 16.

The Group generated an income tax credit of £157k which was driven by an increase of £301k in deferred tax assets, offset by an overseas corporation tax charge of £144k.

In May 2022 Aquis relocated its London office. The lease liabilities arising are amortised over the life of the leases, attracting a net finance expense charge amounting to £53k for 2022, whereas the right of use assets are depreciated on a straight-line basis over the life of the lease, attracting a depreciation charge of £397k for 2022.

The Group's cash and cash equivalents as at 31 December 2022 were £14.2m (2021: £14.0m) maintaining the Group's strong cash conversion rate which allowed the continued investments as set out below. Over the year the Group deployed £1.95m of cash to purchase treasury shares used to service the various employee share schemes.

Group investments, productivity and capital management

The Group has continued to invest in its technology offering, including the creation and enhancement of new order types, enhancements to the surveillance system and auction systems and further technical development to enable licencees to enter different asset classes. In addition, the Group has made further investment in personnel as it continues to develop capability and brand awareness.

The Group is required to maintain sufficient capital to meet the regulatory obligations for all entities. These are calculated and updated annually. At 31 December 2022 the Company ICARA requirement amounted to £4.7m (2021 £3.9m). The individual entities of the Group meet the respective FCA and ACPR capital adequacy requirements with plenty of headroom for further investment in business operations.

The Board considers that its investments have contributed to the Group's ability to gain new clients, broaden its customer base and increase revenue. The Group recognises the importance of continuing to enhance productivity, and the commitment to future investment, both technically and in terms of resource training and development. The Group has established both short- and long-term incentive plans based on performance for all employees, which are set out in more detail in the FY22 Annual Report and aligns the employees' interests with the long-term strategic objectives of the Group.

In deciding its investment plans, Group management receive a detailed analysis of the exchange and client technical opportunities and related time requirements on a quarterly basis and then determine the personnel and other resources that it wishes to allocate to these opportunities. This information also includes an estimate of the deployment cost.

Future development of the business

In order to support its long-term vision and in order to strategically position for continued growth, Aquis

has invested significantly in its business differentiators, R&D in the technology platform, brand and personnel resources. The Group is cognisant of the importance of such investments to maintain innovation and strong quality delivery.

AQSE

During 2022, the Group has invested significant time and resource into AQSE re-building the market presence and brand and has started to realise some of the anticipated synergies across the Group's exchange memberships, data offering and use of technology.

Compliance with Section 172 (1) of the Companies Act 2006

Section 172 of the Companies Act 2006 requires a Director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. As such, Section 172 requires a Director to have regard, amongst other matters, to the:

We set out below some examples of how the Directors have had regard to the matters set out in Section 172(1) when discharging their Section 172 duty and the effect of that on certain of the decisions taken by them.

Stakeholder Management

The Group complies with the requirements prescribed by S172 of the Companies Act to disclose how the Company promotes its success for the benefit of all stakeholders.

The Board is acutely aware that the Group's long-term success and sustainable value creation is critically reliant on maintaining good relations with all stakeholders and ensuring that decisions are made after taking account of the principal stakeholders' interests. Specific stakeholder considerations undertaken by the Board this year included, but were not limited to, the Group's handling of the fallout from the war in Ukraine.

In arriving at these decisions, the Board has assessed the likely consequences of any decision in the long term, the interests of the Group's employees, the need to foster the Group's business relationships with suppliers, customers and others, the impact of the Group's operations on the broader community, the desirability of the Group maintaining a reputation for high standards of business conduct, and the need to act fairly between shareholders of the Company.

Details on how Aquis and its Board engage with its principal stakeholders, are given below.

Clients

Management proactively gathers regular feedback from clients, both positive and negative, in order to understand their ever-evolving needs, identify any improvements that would result in better client outcomes or satisfaction and to foster good client relations. This is regularly fed to the Board at meetings or on an ad hoc basis, if required.

Shareholders

Executive Management meet with the key shareholders at appropriate times during the year and provide feedback to the Board.

Additionally, the Chair and other Non-Executive Directors continued, where possible, to engage with a subset of key shareholders through one-on-one meetings. The latest round took place in January 2023. Shareholders have been extremely appreciative of these meetings and feedback is provided to the Board in both written and verbal updates.

Employees

The Group promotes a positive and inclusive culture. Team meetings and Group briefings are held on a regular basis to ensure all personnel are informed of the Group's performance and key strategic objectives and goals. Throughout the year Glenn Collinson has held the responsibility as the Board's nominated representative for employee engagement and facilitated meetings with employees so as to ensure that their voices are heard through an independent ear from the Board.

This was complemented by the annual employee engagement survey, which allowed employees to provide feedback in confidence. This the 4th consecutive year that the Group has run the employee engagement survey and results have been consistently positive. The Executive develops an action plan to address the key areas highlighted with particular emphasis on our core values and on investing further in employee training and career development.

Suppliers

The Group has identified key suppliers that include suppliers of office hardware and consumables, as well as suppliers such as liquidity providers and advisers such as auditors, brokers, recruitment agents, legal advisers and PR consultants. The Group seeks the independent and experienced view of its key advisers on various matters as and when required. Sometimes this is directly with the Board, or the Board will ensure that the Executive reports on advice provided to the Group when needed.

Regulators

The Group takes an open and co-operative approach with its regulators and positively embraces the FCA's 11 principles of business. The Group submits regular returns to the FCA, the ACPR and the AMF, and employees whose roles encompass compliance activities are encouraged to attend regular external presentations and workshops arranged by the regulators on topical issues, and also receive regular professional update training. All new and existing employees and advisers are made aware of the FCA, ACPR and AMF's principles of business, and undergo training required by finance professionals working at an equities exchange group. The Group arranges regular compliance assessments to provide assurance that the Group is meeting the requirements of the regulator.

During the year the Board undertook training, which covered reminders of Directors' duties in the UK and Europe with regards to the regulation and oversight of financial market infrastructures.

Board Effectiveness and High Standards of Business Conduct

The Board remains committed to high standards of corporate and regulatory governance. During the year the Board undertook training, which covered reminders of directors' duties under UK law, under the UK Corporate Governance Code and also under UK and European regulation with regards to the oversight of financial market infrastructures. Additionally, it explored how to improve the Group's cyber security risk management frameworks and became more informed about the policy-making environment for financial markets in Europe.

Consequences of Long-Term Decisions

Considerable time was spent focusing on the Group's strategy and challenging management to think about the longer-term impact of decisions, how those decisions were in line with the Group's values, the long-term sustainability of the Company and its subsidiaries and the desire to maintain its reputation.

The Board has also made further progress in its succession planning both for the Executive and the Board. Glenn Collinson was appointed Chair with effect from 1st January 2022. The Board appointed two new NEDs, Fields

Wicker-Miurin and Ruth Wandhöfer in anticipation of the scheduled retirement of Richard Bennett on

31st December 2022 and Mark Spanbroek on 29th April 2023. In addition the Board promoted Richard Fisher to the Board in March 2022 as CFO. The Board operates a skills matrix to map the requirements of the organisation against the current skills and composition of the Group Board and the skills and composition gaps that will be created as the Group evolves and directors move off the Board. This matrix is updated at least annually and was used effectively in the search for the latest additions to the Boards of both Aquis and AQSE.

Management plan to recruit additional employees, in particular in the technology area in the UK and France during 2023.

COVID-19 and The Interests of Employees

The impact of COVID-19 decreased dramatically during 2022; however the Board continued to monitor the day-to-day operations, the business continuity plans and the employees' well-being carefully throughout the

year. This included work from home issues and the office environment.

The Board has also ensured engagement with employees through the engagement survey and the nomination of a Board representative to meet with employees when possible.

Our ESG journey

Our Purpose

In its role as a disruptor, Aquis' aim has always been to improve financial markets by maintaining the utmost transparency and least market toxicity for the benefit of the end investor. In this way it reduces both the explicit and implicit costs of trading that are borne by investors.

In addition, the Group is also focused on stimulating growth in the economy by listening to the needs of issuers and creating a supportive, fair and low-cost environment for capital raisers to list instruments, particularly for innovative growth companies while ensuring an appropriate balance of investor protection. Aquis also recognises the pivotal role it has to play in educating those issuers about ESG and how they can set and achieve goals and facilitating their disclosures to investors.

Our Culture, Diversity and Employee Well-being

The Group is committed to ethical business conduct and expects the highest standards of integrity to be followed by the Directors and all employees. The Aquis Group culture is underpinned by the following core values:

Despite a further increase in employee numbers in 2022 the Group has a relatively small resource base, and therefore has concentrated on recruiting personnel with a high degree of specialist skills. The Group provides on- going training and support with the aim of ensuring that personnel retain and enhance their technical skills and that employees feel that there is opportunity to develop within the Group. The Group also operates a flexible working policy to ensure it takes account of individual employee requirements.

The Group has a Diversity and Inclusion Policy that emphasises Aquis' desire to create a supportive and inclusive culture amongst the whole workforce. We believe it is in the best interests of the Company and the wider community to promote diversity and eliminate discrimination in the workplace. Our aim is to ensure that all employees and job applicants are given equal opportunity and that our organisation is representative of all sections of society. Each employee will be respected and valued and able to give their best as a result.

The policy reinforces our commitment to providing equality and fairness to all in our employment and not providing less favourable facilities or treatment on the grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, ethnic origin, colour, nationality, national origin, religion or belief, or sex and sexual orientation.

We are opposed to all forms of unlawful and unfair discrimination. All employees, management, agency, casual workers, and independent contractors no matter whether they are part-time, full-time, or temporary, will be treated fairly and with respect. When Aquis selects candidates for employment, promotion, training, or any other benefit, it will be on the basis of their aptitude and ability. All employees will be given help and encouragement to develop their full potential and utilise their unique talents. Therefore, the skills and resources of our organisation will be fully utilised, and we will maximise the efficiency of our whole workforce. Aquis' commitments  are:

Aquis has implemented an equality, diversity and inclusion policy which has been communicated to all employees emphasising that they are obligated to comply with all its requirements and promote fairness in the workplace. The policy is also be drawn to the attention of agents, stakeholders, customers and job applicants. It is therefore very pleasing to report that gender and non-gender diversity strengthened further during the course of the year and we believe our diversity and inclusion policies will have a positive impact on the successful execution of the Group strategy.

This year the Group has established aspirational 3-year diversity targets for the Board and for the employees. These targets have been established to underpin the importance the Board places on this issue and to provide clear guidance and focus on these aspirations. The Board had established a target to increase the overall female NED ratio and this was achieved during the year. The employee targets are set out below.

These are to:

In addition, the Group has established targets over the next three years (i.e. to 2025) where the aspirations are to:

The Group runs an annual anonymous employee survey and arranges regular meetings with the Board nominated employee representative. In addition, employees have regular one-to-one sessions with their immediate line manager and annual reviews where development plans are discussed to ensure individuals' objectives are aligned to the business strategy and to improve levels of employee engagement.

The Group has a commitment towards preventing slavery and human trafficking throughout our supply agreements: the Group complies with the Modern Slavery Act 2015 (MSA) and adopts a zero-tolerance approach towards slavery and human trafficking and expects all those in our supply chain (and contractors) to comply with the MSA.

Consumption and The Environment

The Directors endeavour to promote the consumption of resources in a manner that fosters the long-term sustainability of the business and the environment in which it operates and are conscious of the requirement to monitor these activities.

Although the Group has a small number of personnel and associated office space, it recognises that it contributes directly to carbon emissions through its consumption of energy, waste and water, through staff travel and, indirectly, through its consumption of supplies and equipment including office hardware.

During the year the Group continued to promote the target of reduced carbon emissions associated with employees commuting to the office. In addition, the building electricity provider for the current Aquis office obtains energy from 100% renewable electricity and carbon neutral gas and the two data centres used by Aquis are both powered by 100% renewable energy.

We have also continued progress on the target to deliver a cloud native exchange. While most major financial exchanges operate using physical data centres, the infrastructure required to run a trading environment is not beneficial to the environment because of the fact that servers must always be "on" and significant duplicative processing occurs. If trading firms could leverage all the benefits of running a cloud-based solution, the cost optimisation, scalability and resiliency would make a positive contribution to reducing the impact on the environment.

Governance

When Aquis listed in 2018, it voluntarily chose to follow the highest standards of corporate governance when it committed to adhering to the UK Corporate Governance Code and the Directors have implemented appropriate measures which have allowed Aquis to comply with all provisions of the Code during the accounting period and up to the date of this report.

Aquis and AQSE are directly authorised and regulated by the FCA and AQEU is regulated by the ACPR and the

AMF. The Group fully complies with the relevant rules and guidelines in all respects and monitors that compliance throughout the year.

The Group's objective is to establish an open and cooperative relationship with all regulators, and it positively embraces the FCA's 11 principles of business. The Group submits regular returns to the FCA, and employees whose roles encompass compliance activities are encouraged to attend regular external presentations and workshops arranged by the FCA on topical issues, and also receive regular professional update training. All new and existing employees and advisers are made aware of the FCA's principles of business, and undergo training required by finance professionals working at an equities exchange group. The Group arranges regular compliance assessments to provide assurance that the Group is meeting the requirements of the regulator.

The wider community

Aquis has been involved in a number of charitable and community enhancing initiatives in the year. In 2022, Aquis partnered with Ravens Wood School in Bromley to spearhead an 'Investment Club' scheme with A-Level Economics and Business students. Aimed at increasing financial literacy and accessibility, students received tailored talks and presentations from members of Aquis staff on aspects of the financial services industry, public markets and career advice. Students then created their own mock-up AQSE universe portfolios with an imaginary starting value of £50,000 using an app developed by Aquis fed with real price data. Aquis intends to continue with and expand this programme in future. Aquis also participated in the London Youth Rowing Race the Thames project and employees have shown their desire to make a difference.

Knowledge Transfer Project

Aquis has made significant progress with the University of Derby partnership: a two-thirds government funded

Knowledge Transfer Project ("KTP") that involves industry- led research and development on Artificial Intelligence for trading platform surveillance alerts to develop an efficient and accurate market abuse monitoring system.

Current surveillance systems are deterministic, handcrafted, generate a high percentage of false positive alerts and run a high risk of human fatigue and/or boredom. Consequently, market abuse events may often be missed when analysing a large number of false positives. As part of our mission to improve transparency in financial markets, this partnership will publish research papers on machine learning techniques that will mitigate human error in detecting fraudulent trading practices that harm the integrity of, and trust in, financial systems that are critical for the modern economy.

As part of our mandate to strive for innovation, we are excited for what the future holds for machine learning and artificial intelligence in the trading industry and are encouraged by the widespread support for this project.

Next Steps in Our ESG Journey

During the strategic planning process, we assessed a number of potential ESG initiatives Our short-term goal is to complete the assessment of the sustainability risk factors of the Group's day-to-day activities and translate them into a meaningful Group-wide ESG strategy that can be woven into our main strategic goals.

In addition, during 2023 we aim to:

Principal risks and uncertainties

The identification and management of risk is an integral part of the execution of Aquis' strategic vision and operations. The below provides an overview of the principal risks facing the Group:

STRATEGIC RISKS

OPERATIONAL RISKS

FINANCIAL RISKS

The Group's current assets comprise cash and liquid resources including trade receivables arising directly from its operations. The main financial risks are capital, credit, liquidity and foreign currency risks. The Group has approved FX hedging policies in place and as at 31 December 2022 actively managed the balance sheet and risks without the use of any financial derivatives. Previously all revenues were GBP denominated but at the end of 2022 the Group entered into the first contract denominated in a foreign currency. To manage the FX risk going forward the Group entered into forward FX trades and will continue to do so in the future where any further contracts are non-GBP denominated.

The Group has continued to increase its profits during 2022 demonstrating that it has been able to manage strategic and operational risks; however, future results could be negatively impacted if any of the risks outlined above were to occur. Financial risk management disclosures have been made in Note 6 of the Group Financial Statements accompanying this report.

Viability statement

The Directors have undertaken a detailed review of the Group's prospects, taking account of the Group's current position and principal underlying business risks and its prospects for the period January 2023 - December 2027. These include considering the impact during 2022 and potential future impact due to Ukraine, COVID-19 and Brexit. The Directors consider this to be an appropriate period considering the target business and revenue growth, and the objective to maintain and enhance profitability during this period.

The Group maintains a strong equity capital position which has been strengthened during 2022 as profitability has been enhanced. This result complemented by the Group achieving and in certain areas exceeding its goals and taking account of its ability to execute successfully its principal strategic objectives and operating goals during continued challenging circumstances, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

This assessment has concentrated in particular on the key differentiating factors that the Group has established, the quality and resiliency of the Group's technology, the brand and market position, and the reputation and quality of the experience of its key personnel resources.

This Strategic Report was approved by the Board of Directors on 29 March 2023 and is signed on its behalf by Alasdair Haynes, CEO, and Richard Fisher, CFO.

Consolidated and Company Statements of Comprehensive Income

For the year ended 31 December 2022

Consolidated Statement of Financial Position

As at 31 December 2022

Company Statement of Financial Position

As at 31 December 2022

Consolidated Statement of Changes in Equity

For the year ended 31 December 2022

Company Statement of Changes in Equity

For the year ended 31 December 2022

Consolidated and Company Statements of Cash Flows

For the year ended 31 December 2022

Notes to the Financial Statements

1 SIGNIFICANT CHANGES IN THE REPORTING PERIOD

The following events and transactions had an impact on the financial position and performance of the Group and/or Company during the period:

Data revenues earned are now apportioned between Aquis Exchange PLC where the underlying trade activity has arisen in the UK and within Aquis Exchange SAS where that revenue has been derived within the EU27 countries. There is no impact at a Group level.

2 BASIS OF PREPARATION AND ACCOUNTING POLICIES

Company information

Aquis Exchange PLC is a public limited company which is incorporated and domiciled in the United Kingdom. Its registered office is located at 63 Queen Victoria Street, London, EC4N 4UA. The Company Number is 07909192.

Accounting convention

The Group's consolidated and the Company's financial statements are prepared in accordance with UK-adopted international accounting standards and the Companies Act 2006 requirements.

The financial statements have been prepared on the historical cost basis.

The Group does not hold any financial instruments at fair value through profit or loss.

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Going concern

At the time of approving the financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and thus continue to adopt the going concern basis of accounting in preparing the financial statements.

The Group has made an increased profit in 2022 against prior year and has substantial cash reserves and a strong balance sheet, due to high levels of investment within the Group. There has been a growth in revenue between the current year and comparative years. Additional revenue growth is projected for 2023, with profits forecasted for future years.

The Russia-Ukraine conflict has resulted in extremely volatile market and there is no certainty as to when this conflict will be resolved, however at this stage, the Directors do not believe that this could have a material adverse effect on the group.

Taking the above into account in light of the Group's current position and principal risks as discussed in the Strategic Report section of this annual report, the Directors have assessed the prospects of the Group for the foreseeable future and there is no material uncertainty as to the Group's ability to continue to adopt the going concern basis of accounting in preparing the financial statements over a period from the date of approval of these financial statements to 31 March 2024.

Consolidation

In preparing these financial statements, the group has applied the consolidation principles in IFRS 10, Consolidated Financial Statements. This requires the Group to consolidate subsidiary entities it controls. Control is determined based on the ability to direct the activities of the entity that significantly affect its returns.

The Group assesses control on a continuing basis and includes entities it controls as of the end of the reporting period. The financial statements of the consolidated entities are prepared using consistent accounting policies and are presented as if they were a single economic entity. Intercompany transactions, balances, and unrealized gains and losses on transactions between consolidated entities are eliminated in full.

The Group consolidated financial statements also include treasury shares and cash held by two separate trusts ("the Trusts") that administers the Company's employee share incentive plan and also hold shares purchased by the Group in preparation for future settlement of employee share awards made to date. The Trusts have been consolidated based on the IFRS 10 criteria for control over the Trust being met:

· The Trusts were established to (i) facilitate the acquisition and holding of shares under the Aquis Exchange PLC Share Incentive Plan and (ii) facilitate the acquisition and holding of shares under the Aquis Exchange PLC Restricted Share Plan.

· The activities of the Trusts are limited by the agreements in place; and

· The Trusts do not have any assets outside of the partnership share money received and the shares purchased. The use of any shares or cash that remain in the Trust funds once the trustee no longer holds any shares relating to the SIP,RSP or PPO, is directed by the company. The Trust itself has no rights to any dividends.

Accounting Policies

Revenue

Revenue comprises amounts derived from the provision of services which fall within the Company's ordinary activities. It represents amounts receivable for subscription fees, the licensing of software, the provision of data to third-party vendors, and fees relating to listings on the Aquis Stock Exchange (AQSE), all of which are net of value added tax. Revenue is recognised once the performance obligations for each activity have been satisfied.

All the revenue streams are generated by contracts with customers and revenue is therefore recognised in accordance with IFRS 15.

Revenue from exchange subscription-based services is recognised over time when the services are rendered.

Revenue from licensing contracts is assessed for each contract and split into three performance obligations:

· Project fees and maintenance fees which are recognised over time as the obligations are met; and

· Licensing for which fees are considered a "right to use" licence under IFRS 15 and are therefore recognised at a point in time when control of the licence passes to the customer.

Revenue from the provision of data to third-party vendors is comprised of the annual fees paid by the redistributors, member firms and multi-media firms for access to real time and/or end of day data, and is recognised over time. An additional monthly fee is received based on the number of users the vendors provide the data to each month, variable based on usage for the prior month, is charged in arrears and is recognised in the month it is incurred.

Revenue from AQSE issuer fees is comprised of initial application and admission fees, annual fees, and further issue fees, these are all recognised over time under IFRS 15 except further issue fees which are recognised at a point in time.

Application and admission fees are charged upfront to prospective companies admitted to AQSE markets. These are recognised monthly over the average expected life of company admission periods (see further details about this estimate in the following section).

Annual fees are paid upfront annually by companies with securities listed on AQSE and are recognised over the year.

Further issue fees are incurred by existing issuers who have already contributed an application and admission fee, and are recognised at a point in time on the date the new security is available for trade on AQSE.

Estimated listing period for Aquis Stock Exchange securities

In recognising application and admission fees, the Company determines the expected length of time each new security will be listed on AQSE. The estimate is based on historical analysis of listing durations in respect of the companies listed on AQSE. The length of time a security remains listed incorporates significant uncertainty as it is based on factors outside the control of the Company and which are inherently difficult to predict.

Based on the available information and incorporating management's predictions, it is currently estimated that an average security will remain listed for a period of 9 years. Application and admission fees are recognised monthly over this period.

It is estimated that a one year increase/ decrease in the deferral period would cause a £6k decrease /£7k increase in annual revenue released respectively. The estimated listing periods will be reassessed at each reporting date to ensure they reflect the best estimates of the Group.

Intangible assets other than goodwill

Internally developed intangible assets arising from the capitalisation of Research and Development expenditures are recognised in the financial statements when all of the following criteria are met:

· The technical feasibility of completing the intangible asset so that it will be available for use or sale is established;

· There is an intention to complete the intangible asset and use or sell it;

· The Group has the ability to use or sell the intangible asset;

· The existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset can be demonstrated;

· Adequate technical, financial and other resources are available to complete the development and to use or sell the intangible asset; and

· The Group has the ability to measure reliably the expenditure attributable to the intangible asset during its development.

Where the above criteria are not met, costs incurred in research and development are recognised in the Statement of Comprehensive Income as incurred.

Amortisation is recognised in order to write off the cost or valuation of the assets, less their residual values over their useful lives. The development of trading platforms has been amortised over 3 years on a straight-line basis reflecting management's estimate of the useful life of the technology, the rationale of which is discussed in Note 5.

Business Combination

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at fair value. Acquisition-related costs are expensed as incurred and recognised as non-underlying transaction costs in the income statement.

Goodwill

In March 2020 the acquisition of AQSE gave rise to goodwill in the consolidated financial statements. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred over the net identifiable assets acquired and liabilities assumed. Goodwill is assessed for impairment annually. Note 18 provides further detail on the impairment assessment for goodwill as at 31 December 2022.

Goodwill is initially measured at cost being the amount by which the aggregate of the consideration transferred that exceeds the net identifiable assets acquired and liabilities assumed. The Group assess for impairment of goodwill on an annual basis with any impairment charge recognised in the statement of comprehensive income.

Property, plant and equipment (excluding right-of-use assets)

All property, plant and equipment are stated at historical cost less depreciation or impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent expenditure is included in the asset's carrying amount or is recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance costs are charged to the income statement during the financial period in which they are incurred.

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

· Fixtures, fittings and equipment: 5 years straight line.

· Computer equipment: 3 years straight line.

Impairment of tangible and intangible assets

At each reporting end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Cash and cash equivalents

Cash and cash equivalents include cash at bank.

Financial assets

Trade and other receivables

Trade receivables are amounts due from customers for services performed in the ordinary course of business. Other receivables are defined as amounts due that are outside the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer) they are classified as current assets. Otherwise they are presented as non-current assets.

Contract assets

Contract assets are recognised for licensing fees recognised at inception of a licensing contract but not yet billed under IFRS 15. Contract assets are initially measured at fair value and subsequently measured at amortised cost and are stated net of any expected credit loss provision (ECL) recognised in accordance with IFRS 9, as detailed in Note 12. Contract assets are presented on the Statement of Financial Position as trade receivables. The right to consideration becomes unconditional once the customer has been billed.

Rent deposit asset

Under IFRS 16 a rent deposit is accounted for as a financial asset if:

· The collateral provided to the lessor is not a payment relating to the right to use the underlying assets and hence is not a lease payment as defined;

· The difference between the nominal amount and fair value of the rent deposit at the commencement date represents an additional lease payment which is prepaid and is included in initial carrying amount of the Right of Use (RoU) asset; and

· The prepaid RoU portion is subsequently measured in terms of IFRS 16 i.e. is depreciated over the term of the lease.

Further disclosures are provided in Note 25.

Impairment of financial assets

The Group has considered the impact of the application of an expected credit loss model when calculating impairment losses on current and non-current contract assets and other financial assets at amortised cost (presented within trade and other receivables). In applying IFRS 9 the Group must consider the probability of a default occurring over the contractual life of its trade receivables and contract asset balances on initial recognition of those assets. Note 12 details the Group's credit risk assessment procedures.

Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. In 2022 the Group did not hold any Financial liabilities beyond Trade and other payables and the lease liabilities recognised under IFRS 16 as described in the "Leases" sub-section below.

Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade and other payables are not interest bearing and are initially recognised at fair value.

Equity instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are charged against the share premium account.

Earnings per share

The earnings per share (EPS) calculations are based on basic earnings per ordinary share as well as diluted earnings per ordinary share. The basic EPS is calculated by dividing the profit after tax of the Group by the weighted average number of ordinary shares that were in issue during the year. The diluted EPS takes into account the dilution effects which would arise on conversion of all outstanding share options and share awards under the Employee Share Incentive Plan.

Taxation

The tax expense/(credit) represents the sum of the tax currently payable/(repayable) and deferred tax.

An R&D tax credit is claimed annually from HMRC based on the employee costs involved in developing Aquis' systems and technology.

Current tax

The current income tax charge/ (credit) is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country where the company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future measurable taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities (note 15) are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of group developed trading platforms.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits, as set out within IAS 19.

Retirement benefits

Pension obligations

The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Share-based payments

EMI Options

Equity-settled share-based payments were measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the US Options Binomial model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the originalshare-based payment. The share-based payment expense is adjusted if the modified fair value is less than the original fair value. Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

Employee share incentive plan

Shares purchased under the share incentive plan are recognised as share-based payments under IFRS 2. Partnership shares are purchased by employees and matching shares are those purchased by Aquis at a ratio of 2:1. The shares are held in a trust ("the Trust"), with matching shares required to be held for three years before being transferred to the employee. The fair value of both the partnership and matching shares are recognised in the share-based payment reserve.

Partnership shares vest immediately while matching shares will vest over the three-year holding period. The market value of shares when they are purchased is assumed to approximate the fair value of the shares.

The cash transferred to the Trust is recognised as an investment in the Company's accounts. In line with IFRS 10 guidance, the Trust is consolidated in the Group accounts with the fair value of the shares held in the trust recognised as a debit entry within equity.

Restricted share plan

The Restricted share plan is share based and will vest three years after the grant date subject to continued employment. Similar to share-based payments they are measured at fair value determined at the grant date using the Black Scholes model. The fair value is expensed on a straight-line basis over the vesting period, with the corresponding adjustment being made to reserves.

Company Share Option Plan

The company share option plan is a share based scheme awarded to staff and has a vesting period of three years subject to continued employment. Similar to share-based payments they are measured at fair value determined at the grant date using the Black Scholes model. The fair value is expensed on a straight-line basis over the vesting period, with the corresponding adjustment being made to reserves.

Premium Priced Options Plan

The PPO scheme is option based and they will vest three years after the grant date subject to continued employment. Similar to share-based payments they are measured at fair value determined at the grant date using the Black Scholes model. The fair value is expensed on a straight-line basis over the vesting period, with the corresponding adjustment being made to reserves.

Leases

The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognises a right of use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. Lease payments included in the measurement of the lease liability comprise:

· Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

· Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

· The amount expected to be payable by the lessee under residual value guarantees;

· The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

· Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the consolidated statement of financial position and is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

· The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

· The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

· A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. The right-of-use assets are included in property, plant and equipment in the consolidated statement of financial position and are depreciated over the term of the lease. The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the 'Impairment of tangible and intangible assets' policy. Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset.

Foreign exchange

Functional and presentation currency

Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in UK Pound Sterling (£), which is the Group's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised in profit or loss.

All foreign exchange gains and losses recognised in the income statement are presented net within 'operating expenses'. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a foreign exchange translation reserve.

On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in a foreign exchange translation reserve in respect of that operation attributable to the owners of the Group are reclassified to profit or loss.

3 Restatement of Prior Year Comparatives

i) AQEU has been consolidated as a EUR functional currency subsidiary. In 2022 it was noted that certain consolidation adjustments since incorporation should be treated differently and this has led to a life to date adjustment of £195k between Foreign Currency Translation Reserve (FCTR) and Retained Earnings, with the 2021 comparative for expenses reduced by a corresponding amount from £11,902k to £11,560k and a resultant increase in Group PBT for 2021 of £342k to £3,564k. The restatement does not impact net cash flows generated by the group.

ii) In 2020 Aquis Exchange Europe (AQEU) was established as a 100% owned subsidiary of Aquis Exchange PLC to allow the trading of EU stocks post the Brexit transition period. In 2021 AQEU reflected Exchange Fees of £5,857k that arose through the trading of the underlying EU27 stocks. In 2022 in agreement with the local French regulator it has been decided to reflect that element of data revenue which is derived from EU stocks within the results for AQEU. In 2022 this reflects £760k. Consequently, the 2021 Company comparatives have been adjusted by £211k to reflect that element of data revenue that is now reported within AQEU. The restatement does not impact the Company's net operating cash flows in note 28.

4 ADOPTION OF NEW AND REVISED STANDARDS AND CHANGES IN ACCOUNTING POLICIES

New IFRS Standards that are effective for the current year

There were no new standards effective during the year ended 31 December 2022. Three standards have been amended and are effective as of 2022 as set out below. These have not impacted the current year financial statements.

Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue. The Directors do not expect that the adoption of the Standards listed below will have any impact on the financial statements of the Group in future periods:

There have been no changes to any accounting policies in the year.

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In applying the Group's accounting policies, which are described in Note 2, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. Management has shown these matters as judgements where they relate to a significant policy and the judgement has a material impact on the reported balance. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements

The following are the critical judgements, apart from those involving estimations (which are presented separately below), that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

Judgements in relation to performance obligations

In making their judgement, the Directors considered the detailed criteria for the recognition of revenue set out in IFRS 15, and in particular, whether revenue is recognised at a point in time or over time. Following an assessment of the technology licensing contract portfolio, and the obligations that Aquis has under each contract, the Directors are satisfied that obligations contained therein be split into the following performance obligations, and that the revenue from each licensing contract should be assessed individually. The identified performance obligations and the timing of revenue recognition on delivering the licence contracts as follows:

· Implementation/ project fees: these are upfront, non-refundable fees that a customer pays in order to obtain the user agreement. Even if the user acceptance certificate is never issued, the implementation fee cannot be reclaimed and so the revenue is guaranteed and can be recognised from the time of invoice as Aquis becomes unconditionally entitled to payment but in practice recognition will often be deferred until the work is completed.

· Licensing fees: The customer is liable to pay the monthly licensing fee from the date of signing the user acceptance agreement (contract inception date). At this point in time Aquis has fulfilled its promise to deliver the licence (i.e. the system has been deployed in the client's production environment) and this performance obligation is fulfilled. Management uses judgement when assessing the recoverability of the licencing fees, and recognises them only when their collection is assumed to be highly probable. This assessment takes into consideration the current status of the client's business, including whether the exchange system is active with products/ securities added and members trading on it. The licensing fees are recognised at a point in time, which occurs after the contract is signed and once Aquis is satisfied that receiving the licencing fees is highly probable.

· Maintenance fees: fees to maintain the system are recognised over the course of the licensing contract as Aquis fulfils its performance obligation to maintain the system. Management have estimated a fixed annual amount per contract, which reflects the time spent supporting the client's platform and upgrading the software in accordance with the contractual terms.

Changes in identification of performance obligations could impact the timing of revenue recognition for licensing contract assets and is thus a critical accounting judgement.

Capitalisation of internally generated intangible assets resulting from Research and Development

Internally generated intangible assets are capitalised when, in management's judgement, the criteria for capitalisation under IAS 38 (listed in Note 2) have been met. The direct costs incurred in the research and development of Aquis' exchange platform and associated technology and systems are capitalised. Management reviews the time spent by the development team in developing and maintaining the systems used internally by Aquis when determining the amount to be capitalised within each period.

Critical accounting estimates

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Estimating the useful life of intangible assets

The expected useful life of an intangible asset is estimated to be 3 years. In making this judgement management have taken into account product upgrade cycles, the pace of change of regulation as well as benchmarking against other companies with internal systems and technology research and development.

Expected credit loss of contract assets

An impairment for the expected credit loss of contract assets that arise as a result of applying IFRS 15 to licensing revenue is required under IFRS 9. This impairment is an accounting estimate which is calculated based on the Directors' best estimates of the probability of default and loss given default. The quantification of the assumptions and stresses for the year are disclosed in Note 12 of the financial statements.

In arriving at these estimates, the Directors have assessed the range of possible outcomes using reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other.

Aquis' assessment of the credit risk associated with a licensing customer is conducted at inception of the contract (but before the user agreement is signed) and includes factors that are specific to the customer, general economic conditions and an assessment of both the current as well as the forecast direction of these conditions.

The credit risk assessment is conducted by means of a take-on assessment which comprises of a series of relevant criteria for a licensing contract that are scored according to the specific circumstances of the customer, with scores for each parameter typically ranging from 1-5. The assessment evaluates the following:

· Level of funding;

· Regulatory approvals;

· Market, industry and business model;

· Macro-economic forecasts;

· Corporate governance/ Group management;

· Whether the client is revenue generating;

· Level of client profitability;

· Contract length and the associated range of economic scenarios therein;

· Payment history; and

· External credit ratings.

The above assessment will determine the customer category upon inception of the contract, and the inputs to the expected credit loss model is determined thereon.

The credit risk assessment and associated inputs to the expected credit loss model (probability of default and loss given default) are critical assessments that could impact both the provision for expected credit losses as well as the movement in the provision reflected in the income statement.

Deferred tax asset

Deferred tax assets (note 15) are recognised to the extent that their utilisation is probable. The utilisation of deferred tax assets will depend on whether it is possible to generate sufficient taxable income in the respective tax type and jurisdiction. A total net deferred tax asset is recognised in the current period, since profitability is expected to continue for at least the next 3 years. The deferred tax asset is calculated based on expected profitability over this period as Aquis is a high growth company and there is considerable uncertainty in estimating financial performance beyond this length of time.

Various factors are used to assess the probability of the future utilisation of deferred tax assets, including, operational plans and loss-carry forward periods. To reflect the uncertainty in the accuracy of business forecasts, the model uses modest growth rates and applies a probability weighting to each type of revenue.

Share-based payments

The US binomial model and Black Scholes model are used to estimate the value of the EMI, CSOP, RSP and PPO options. The resulting values are recognised straight-line over the vesting period as an expense, with the corresponding amounts recognised as equity in the balance sheet. The model requires the following inputs: grant date, exercise price, expiry, expected life of options, expected volatility, and the risk-free interest rate. The expected life and expected volatility require the use of estimates. Volatility is estimated based on the historical average for the available data up to the grant date, while the expected life of the options is based on management's judgement of when the options will be exercised, which is assumed to be an average of 5 years

6 FINANCIAL RISK MANAGEMENT

The Group seeks to protect its financial performance and the value of its business from exposure to adverse changes in capital commitments, as well as credit, liquidity and foreign exchange risks.

The Group's financial risk management approach is not speculative. The Group's Audit, Risk and Compliance Committee provides assurance that the governance and operational controls are effective to manage risks within the Board-approved risk appetite, supporting a robust Group risk management framework.

The Group's objectives when managing these risks are detailed below.

Capital risk management and capital commitments

Credit risk

Liquidity Risk

Interest Rate Risk

FX Risk

The following tables detail the Group and Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group or Company can be required to pay.

Both the Group and the Company have no derivative financial liabilities as at 31 December 2022.

7 OPERATING SEGMENTS

The Aquis Group can be split into 3 operating segments, each offering multiple products and services and benefitting from Group synergies. The specific focus of these activities are:

1) Aquis Markets - operator of MTF and related services. The Group operates two MTFs: Aquis Markets (AQXE), which is UK regulated and Aquis Exchange Europe (AQEU), which is French regulated. Another revenue stream for this division is the provision of data services to third party vendors;

2) Aquis Stock Exchange (AQSE) - primary listings and trading business. Within this division is AQSE Main Market, AQSE Growth Market, AQSE Trading and the provision of data services;

3) Aquis Technologies - developer of exchange technology and services. The product offering includes Aquis Matching Engine, Aquis Market Surveillance, Aquis Market Gateway and related services including market surveillance and operations.

Aquis Exchange PLC is the parent company and comprises AQXE and Aquis Technologies. It owns 100% of its two subsidiaries, AQEU and AQSE. Management monitors the Group's overall performance regularly using a set of established Key Performance Indicators including revenue, net profit and EBITDA. When monitoring the performance of each operating segment individually, management examines the discrete financial information available which will normally include revenue and gross profit for each division. Assets and liabilities, income tax and IFRS 2 charges are not reported internally to Chief Operating Decision Maker. In line with IFRS 8 the operating segments are reported separately as follows:

The tables above represent the segment-level information that is monitored by the Chief Operating Decision Makers, which are the Chief Executive Officer, Chief Operating Officer and the Chief Financial Officer. All non-current assets are held centrally by Aquis Exchange PLC, other than the lease for the Paris office assigned to AQEU. The geographical analysis of the non-current assets is as follows; UK: £1,815k, Singapore: £3,471k and South Africa: £1,815k, Total: £7,461k. Gross revenue from one customer amounted to £3,383k (2020: £3,785k) arising from license and maintenance fees. There are no other customers with revenue greater than 10% of total revenue for the Group.

8 EMPLOYEES

The monthly average number of persons (including directors) employed by the Group during the year was:

Their aggregate remuneration was comprised of:

9 RETIREMENT BENEFIT SCHEME

Defined contribution schemes

The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

10 DIRECTORS REMUNERATION

Detail on Directors remuneration are included within the Directors Report in the FY22 Annual Report.

Remuneration disclosed above include the following amounts paid to the highest paid director:

11 REVENUE

An analysis of the company's revenue is as follows:

Revenues from customers by class of business is as follows:

Revenues from customers attributable to each of the following countries