NCC Group plc

Annual report and accounts for the year ended 31 May 2023

Protecting clients and helping to build a more secure digital future

NCC Group plc
Annual report and accounts for the year ended 31 May 2023

In this report
NCC Group is a people-powered, tech-enabled global Cyber Security and software escrow business. We harness our collective insight, intelligence and innovation to power end-to-end cyber services that protect our clients from cyber threat.

Strategic report

1 Highlights
2 At a glance
4 Our investment case
5 Our strategic roadmap
6 Chair’s statement
9 CEO’s review
14 Our business model
16 Meet the CTO
18 Market dynamics
24 Our strategy
29 Meet the COO
32 Our solutions
35 Meet the Global Managing Director
40 Stakeholder engagement
42 Culture
46 Non-financial and sustainability information statement
53 TCFD
60 Meet the CFO
61 Financial review
70 Principal risks and uncertainties
81 Viability statement

Governance

84 Chair’s introduction to governance
87 Governance framework
88 Board of Directors
90 Executive Committee
92 Board composition and division of responsibilities
102 Shareholder engagement
103 Audit Committee report
110 Nomination Committee report
113 Cyber Security Committee report
115 Remuneration Committee report
138 Directors’ report
142 Directors’ responsibilities statement

Financial statements

144 Independent auditor’s report
152 Consolidated income statement
152 Consolidated statement of comprehensive (loss)/income
153 Consolidated balance sheet
154 Consolidated cash flow statement
156 Consolidated statement of changes in equity
157 Company balance sheet
158 Company cash flow statement
159 Company statement of changes in equity
160 Notes to the Financial Statements

Additional information

215 Glossary of terms – other terms
217 Other information
218 Financial calendar

Intelligence

Insight

Innovation

Highlights

Net (debt)/cash excluding lease liabilities, Adjusted operating profit and Adjusted EPS are APMs and not IFRS measures. See Note 3 for an explanation of APMs and adjusting items. Further information is also contained within the Chief Financial Officer’s Review on pages 60 to 69.
1
Adjusted operating profit is an APMs and not IFRS measure. See Note 3 for an explanation of APMs and adjusting items. Further information is also contained within the Chief Financial Officer’s Review on pages 60 to 69.

	2023	2022	2021
Revenue (£m)	£335.1m	£314.8m	£270.5m
Net (debt)/cash excluding lease liabilities 1 (£m)	£(49.6m)	£(4.3m)	£83.3m
Adjusted operating profit 1 (£m)	£28.8m	£31.0m	£39.2m
Adjusted EPS 1 (p)	6.1p	7.4p	9.5p
Basic EPS (p)	(1.5p)	4.9p	10.8p

IFRS measures

Alternative Performance Measures

We protect the development, supply and use of business critical technology and software applications:

Buyers are safeguarded from supplier failure, software vulnerabilities and unforeseen technology disruption
Our on-premise and cloud offering can demonstrate robust business continuity and risk mitigation, and suppliers benefit from enhanced credibility and intellectual property rights protection
Escrow contract services secure the long-term availability of business critical software data and applications
Our verification services assure clients that the knowledge and guidance are readily available to manage, maintain or recreate an application from the original source, should it ever be needed
Our cloud integration service helps clients transition to the cloud securely, so they can adopt the latest technology with confidence

NCC Group is a global Cyber Security and Software Resilience business operating across multiple sectors, geographies and technologies. The trend of technological change within increasingly complex, connected ecosystems, means cyber threats continue to evolve and grow at pace. We bring decades of collective experience and expertise across the whole cyber spectrum to assess, manage and deliver cyber resilience for clients in both the public and private sector. We are driven by a collective purpose – to help create a more secure digital future.

Our business

We have two distinct businesses, through which we deliver solutions to support our clients’ operational goals, budgets and risk appetite, providing confidence that their most important assets – business reputation, software and personal data – are safe and secure. As we went to print we concluded the new distinct brand for our Software Resilience business to Escode, which will roll out from January 2024. See page 36 for more about this.

We demystify cyber and ensure clients:

Understand the cyber threats and vulnerabilities across their technology environments, supply chains, processes and products
Maintain their licence to do business, having achieved their governance, compliance and accreditation objectives in a changing regulatory environment
Materially improve their resilience against ever- increasing cyber threats by implementing remediation plans and solutions
Reduce risk and achieve greater resilience for less investment
Can improve their cyber defence operations and increase their confidence in detecting and responding to cyber event

At a glance

Read more on Our solutions on page 32
Read more on Our solutions on page 34

What we do

CYBER SECURITY

Group revenues

North America £133.8m
Europe £57.1m
UK and Asia Pacific £144.2m

We operate as one global business, with in-country delivery tailored to local needs and cultures, as well as a global delivery team to respond quickly to our clients’ challenges. We have a significant market presence in the UK, Europe and North America, and a growing footprint in Asia Pacific, with offices in Australia and Singapore, and our new global delivery and operations centre in Manila, the Philippines.# NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Our offices Key: Where we operate

Cyber Security revenue £270.8m
* Global Professional Services: £199.3m
* Global Managed Services: £67.8m
* Products: £3.7m

Software Resilience revenue £64.3m
* Escrow contracts: £42.8m
* Verification services: £21.5m

Strategic report

Our investment case

With decades of experience and a deep understanding of the cyber threat landscape, we draw on our expertise, capabilities and global footprint to develop sustainable solutions to help our clients meet their current and future cyber security challenges. With the ability to attract top talent with both technical expertise and passion, we continue to deliver results in what is a competitive and dynamic market.

Cyber Security is not optional; increasingly it’s a C-suite and Board issue to operate safely, protect reputation and comply with growing regulatory requirements
The global threat landscape continues to evolve as new technologies enable even more connectivity in our day-to-day lives, creating new, larger and more complex vulnerabilities for threat actors to exploit
Global Cyber Security market is expected to exhibit a CAGR of 10% between 2022 and 2027

Structural growth in an addressable market

Cyber Security: a global footprint protecting companies against an evolving spectrum of cyber threats
Software Resilience: focused on managing commercial risk with software vendors
Underpinned by insight, innovation and intelligence across our whole organisation

Client focused with two distinct businesses

Focused on broadening our Cyber Security offer in priority sectors, ensuring clients address their full Cyber Security lifecycle
Building an alliance ecosystem to enhance routes to market, and developing our global delivery model to better serve client needs in the future
Complemented by a focused acquisition strategy where it makes strategic and financial sense

A strategy to enhance growth by focusing on Cyber Security

Investment in professional development with career paths to promote talent from within
Established next generation talent programme bringing new cyber talent from non-traditional tech backgrounds
Partnerships to enhance diversity and make cyber accessible for all

A hub for both attracting and developing talent and active alumni network

Read more about our Cyber Security business on pages 32 and 33.
Read more about our Software Resilience business on page 34
Read more on page 27
Read more on page 43

www.expertmarketresearch.com/pressrelease/global-cyber-security-market

Our aspiration

Our aspiration is to move beyond our historical strengths to become a truly global Cyber Security and Software Resilience services provider capable of delivering an end-to-end cyber solution that harnesses our strengths in insight, intelligence and innovation and is accompanied by a fantastic client experience. Creating a more secure digital future.

Vision

Purpose

It is essential that we all proactively manage any risk to our safety and security. Our purpose is to help organisations to do this by keeping their personal data, and the technology and devices they use, as well as the critical assets and software they rely on, safe and secure. It’s what drives our strategic roadmap: We have a relentless focus on creating value for our stakeholders. Guided by our purpose, focused on our vision, we will continue to evolve and transform with our new growth strategy focused on four core areas:

Insight
Innovation
Intelligence
Adapt to changing environments and deliver exceptional value for our clients. Creating growth by putting the client experience at the heart of our proposition

Creating value for our clients

Read more on our strategy on pages 24 to 27

Our clients

On the most pressing Cyber Security needs.

Our capabilities

Broader service portfolio addressing the full Cyber Security lifecycle.

Global delivery

Transitioning from an international to a fully global business.

Brands

For Cyber Security and Software Resilience.

Read more on our business model on pages 14 and 15

2022/23 key activities

Developed and communicated the Group’s next chapter strategy
Completed the full operational review of the Software Resilience business to create additional contribution
Commenced a strategic review of Software Resilience
Commenced planning for a new global delivery and operations centre in Manila
Improved Board and executive management diversity and enacted succession planning
Planning the broad restructuring of the business

2023/24 priorities

Realise cost efficiencies across Cyber Security and corporate functions
Implement our next chapter strategy with a renewed focus on priority sectors and development of an end-to-end Cyber Security services
Open the new delivery and operations centre in Manila
Complete the rebrand of both Software Resilience and Cyber Security businesses
Revisit the strategic review of Software Resilience

Chair’s statement

It has been a challenging year for NCC Group.

Chris Stone
Non-Executive Chair

Introduction

It has been a challenging year for NCC Group. Despite the decline in the rate of our revenue growth and the loss for the year, our new strategy, which gives us a clear direction of travel, fills me with optimism that we are on track for a brighter future. This was very much a year of two halves. We enjoyed a strong first half, which saw us post strong revenues and profits, but our North American and UK Cyber Security businesses were materially affected by changes in the macro-economic environment in the second half. We are trusted partners to the most significant businesses on the North American West Coast – and each one of these businesses paused projects as they grappled with their own costs and made extensive layoffs. This led to a reduction in our revenues with a direct impact on utilisation and margins. While this had a considerable effect on our revenues in the year, it validated the next chapter strategy set out in February 2023 by our new CEO Mike Maddison following his appointment in July 2022. It’s a strategy designed to set us up for consistent, global growth creating a sustainable business. By focusing on clients, our capabilities, global delivery and brand, harnessing insight, innovation and intelligence, we’ll be more resilient in the future. A tangible difference to our business will be the creation of more recurring revenues, giving us a more stable base.

There were several positives in the year, and we are pleased with the performance of our Software Resilience business. Our strategic review announced at our half-year results has been stopped and will be revisited later in the calendar year. This ensures a focus on navigating the market conditions for Cyber Security and implementing strategic actions, so the Group is well positioned to return to growth when the market improves. In the meantime, the Software Resilience business continues to grow and reap the benefits of our acquisition of IPM last year – making us the largest software escrow player globally. The operational improvement programme and new management team that we announced last year have delivered the expected benefits, and we will see the consequent improvement in Software Resilience operating profit margins flow through into next year’s results, as well as the benefit we have experienced this year. In our Cyber Security business, while our financial performance was ultimately disappointing due to the drop off in short-term demand from clients in the US West Coast tech sector in the second half, our underlying technical capability and our next chapter strategy give us solid foundations to diversify our client base. There is a reason the biggest brands in the world trust us to manage their security, and the executive team is building on this trust while ensuring our Cyber Security offer is wholly designed around the needs of our clients. This is why the creation of a new global delivery and operations centre is a central element of the strategy, reflecting our focus on adapting to the changing needs of our clients. Further details on our strategy and business model are provided on pages 24 to 27 and pages 14 and 15 respectively

Business performance


currency	£
decreased by 2.7% pts to 39.4% due to reduced revenue contribution from Global Professional Services within Assurance, offset by an improvement in Software Resilience revenue contribution.	£270.8m

NCC Group plc  7

Strategic report

Sustainability

We continue to recognise the importance of an environmental, social and governance (ESG) framework in how we operate and measures our sustainability and ethical impact. The Board had a debrief workshop with our environmental partner Planet Mark as part of developing our net zero journey. We also fully supported the partnership with Ever Sustainable to lead our independent materiality assessment – looking at not only inward but also outward impacts – addressing future requirements to comply with the European Corporate Sustainability Reporting Directive (CSRD). Our sustainability strategy fully supports and will be integral to our business strategy and I am proud of the continuous improvement we make year on year regarding ESG factors. Further information on risk management and the key risk identification procedures is set out on pages 70 to 80.

Summary

Overall, this year and in particular the second half, has been challenging. The drop in value of our business has been disappointing, and the Board and Executive Committee are fully focused on restoring shareholder value. However, this has also been a particularly challenging year for our colleagues, and on behalf of the Board I offer our thanks and appreciation for their unwavering commitment and focus. As always, I am personally very grateful for their continuing commitment to NCC Group. It is through this continued hard work that we will achieve our vision to become the leading Cyber Security and Software Resilience provider globally. We move into this next phase whereby we will realise cost efficiencies across Cyber Security and corporate functions and implement our next chapter strategy.

Chris Stone
Non-Executive Chair
   operating profit, cash conversion and net debt excluding lease liabilities are APMs and not IFRS measures. See Note 3 for an explanation of APMs and adjusting items. Further information is also contained within the Financial Review.

NCC Group plc  8

2022/23 key activities

Completed an operational review of the Software Resilience business to create additional Group contribution
Introduced the next chapter of our strategy
Created a new executive team
Embraced new ways of working including hybrid
Commenced planning for a new global delivery and operations centre in Manila
Planning the Restructuring of the business following H2 FY23 performance

2023/24 priorities

Realise cost efficiencies across Cyber Security and corporate functions
Embed our new strategy with a renewed focus on our clients, priority sectors and development of end-to-end Cyber Security services
Open the new delivery and operations centre in Manila
Continue focus on relevant stakeholder engagement and evolve our sustainability agenda

CEO’s review

  

An ever-changing market

There is only one certainty in our industry: change. I have worked in this space since the 1990s when “computing security” was a niche specialism. Today, Cyber Security is high on the risk registers of every enterprise and government in the world, and this industry will continue to change as Cyber Security becomes even more fundamental to societies and economies. Our lives are becoming more digitally connected each year, cyber criminals and nation states are constantly innovating and improving their attack capabilities, and AI and quantum computing have the potential to cause paradigm shifts that will reverberate around the globe. As a business we have to be alive to the pace of this change. If we stand still, we will be left behind. Our next chapter strategy is designed to address this challenge head on, creating an organisation that gets ahead of its market drivers with foundations that are fit for today and the future. It is relentlessly focused on clients and our ability to address the issues they face. I want to thank colleagues  challenges this year. They  and the resilience they have shown in the circumstances 

Mike Maddison
Chief Executive Officer

An ever-changing market continued

It sees us become even more globally integrated, while confidently telling our story with an energised, simplified brand. This is why  optimistic about where we are heading. NCC Group exists to make the world safer and more secure. This purpose remains unchanged. But the market has changed around us, so as a business we must adapt.

A client-centric approach

When I joined NCC Group I was immediately struck by the breadth and depth of our technical expertise. It is truly world class. Our insight, innovation and intelligence are respected globally. This expertise sits at our core. However, we have to unlock its potential by harnessing it to create solutions that are designed around the needs of our clients. This starts with clarity around the markets we serve. It’s why our strategy sees us focus on our fastest growing sectors – specifically those which are highly regulated and most exposed to cyber risk, like financial services, industrials and technology. We will build deeper relationships at the C-level within those businesses to give us the opportunity to move beyond transactional sales and into the position of trusted advisor. We have brilliant individuals in our business who are already working at this level, but we will invest in the right talent to enable scale. With that in place, we can properly unlock the potential of our expertise and be a true end-to-end Cyber Security services partner that can deliver business outcomes.In practice, this means rather than simply testing a client’s infrastructure annually, we’ll also work with them to address the security vulnerabilities we discover. Rather than providing a one-off incident response to a client following a cyber-attack, we’ll provide consultancy and remediation after the event to enable greater resilience – and then manage their Cyber Security operations 24/7. This is why we are making targeted investments into specific capabilities – like building out our consulting team and enhancing our Managed Services offering. It is all driven by our target customers and their needs. We will have all the constituent parts to continually create these customer journeys. Our strategy sees us knit them together to ensure consistent, consultative client relationships globally – all powered by our unrivalled technical expertise. Further details on this are provided on pages 24 to 27

True global delivery

As our industry continues to change, the way we deliver work is changing too. A standard penetration test – the evaluation of software or hardware to identify security vulnerabilities – is no longer relevant. We are now more efficient, there is more automation, and we can test on a much larger scale. The need for us to continually adapt was underlined during the pandemic. A significant amount of testing that previously took place on site at secure client locations was being delivered remotely. It showed that some low-level testing could be done in a different way, and at a lower cost. Fast forward to 2023 and the cost cutting across the industry, and layoffs led by North American West Coast tech firms accelerated this move and we felt this acutely. Clients still need this service, but they want it delivered in a more cost-effective way. This shift has informed our strategic focus on global delivery and flexible resourcing. We can get better at using capabilities in our geographically distributed centres of expertise for an Australian assignment. Our delivery has been too local and rigid in the past. It’s been a driving factor in our decision to open in September 2023 an offshore delivery and operations centre. Some of the best Cyber Security talent in the world is found in emerging economies. This investment will mean we can harness that talent and complement it with our existing colleagues to be more flexible to our clients’ needs. We are trusted by governments and the most highly regulated organisations to test and manage their security. There will always be demand for in-market talent to work on sensitive, complex programmes of work. Our new delivery and operations centre simply means we can expand our capabilities and provide more value for our clients. Further details on this are provided on pages 24 to 27

Communicating with impact

We also have an opportunity to better tell our story and explain the value we offer. We provide counsel to governments around the world on high level Cyber Security issues. We are handpicked by the most significant businesses globally to protect their digital assets. We are trusted by critical national infrastructure providers to secure their systems and keep them running. This trust has been created through our insight, intelligence and innovation. It has taken years to build. It enables us to act as a convenor of decision makers – on policy, regulation and the macro forces affecting our collective ability to secure our digital future. This credibility and track record should form the core of our messaging. We have a unique position in the market. As a client, this is what you gain access to when you engage with us. Yet we have been reluctant to talk about it. We are going to seize this opportunity, with our new Chief Marketing Officer bringing together our global marketing, communications and public affairs team to deliver on this strategy. It starts through the creation of distinct and relevant brands for Cyber Security and Software Resilience, with clearer, simpler propositions. From here we will focus on boosting our profile through marketing programmes designed around the C-suite in our target sectors. We will become more present, more active and bolder in our marketing and communications. We are trusted by the global organisations to protect their digital assets.

CEO’s review

NCC Group plc

Financial performance summary

It’s been a challenging year for the Group with a decline in the rate of revenue growth and overall profitability, resulting in a loss for the year. Our revenue performance and profitability suffered from the market dynamics within Cyber Security. In particular, the Group experienced buying decision delays and cancellations in the North American tech sector and to a lesser extent in our UK market, effecting our Global Professional Services revenue and overall gross profit performance. These headwinds have further reinforced the need to accelerate the implementation of our next chapter of the Group strategy.

1 Revenue at constant currency is an Alternative Performance Measure and all prior year comparatives have been re-presented on the same basis.

Analysis of results

Group revenues were flat at constant currency 1 (flat at actual rates). In our Cyber Security business, the Europe and UK and APAC businesses grew on a constant currency basis 1 (3% and 1% respectively). The Americas business declined on a constant currency basis 1 (down 8%) primarily due to delays and cancellations in the tech sector spend.

In our Software Resilience business, following the completion of the acquisition of IPM in June 2021, we experienced our first full year of IPM contract renewals which contributed to overall Software Resilience revenue growth of 12% (11% on a constant currency basis 1 ). This was also positively impacted by our new leadership team (appointed in November 2022) driving growth, price rises, and realisation of efficiency contribution targeted at the time of the May 2022 operational review.

Financial performance summary

	Cyber Security £m	Software Resilience £m	Central and head office £m	Group £m	Cyber Security 2022 £m	Software Resilience 2022 £m	Central and head office 2022 £m	Group 2022 £m
Revenue	270.8	64.3	–	335.1	294.1	57.4	–	351.5
Cost of sales	184.7	18.4	–	203.1	201.8	16.3	–	218.1
Gross profit	86.1	45.9	–	132.0	92.3	40.3	–	132.6
Gross margin %	31.8%	71.4%	–	39.4%	31.4%	70.2%	–	37.7%
Adjusted EBITDA^1^	15.4	31.2	–	41.4	39.1	25.0	–	61.5
Adjusted operating profit^1^	6.9	30.6	–	28.8	31.9	22.0	–	49.7
Amortisation of acquired intangibles	3.7	1.6	0.4	5.7	3.4	0.9	0.4	4.7
Share-based payments	0.5	1.2	0.0	1.7	0.7	0.5	0.1	1.3
Individually Significant Items	0.0	0.0	–	0.0	0.0	0.0	–	0.0
Operating (loss)/profit	(10.9)	22.3	(0.4)	1.9	31.0	16.0	(0.4)	45.0
Operating margin %	(4.0%)	34.7%	n/a	0.6%	10.5%	27.9%	n/a	12.8%
Finance costs	12.8	3.3	0.3	16.4	11.0	1.0	0.2	12.2
Taxation	(0.8)	4.0	0.0	3.2	(6.6)	2.7	0.0	(3.9)
EPS Basic EPS	(7.4p)	6.1p		0.1p	7.4p	3.4p		4.1p
Adjusted basic EPS ^1^	(3.0p)	5.0p		1.3p	4.3p	2.9p		6.0p

^1^ Revenue at constant currency is an Alternative Performance Measure (APM) and is stated by reference to statutory information. Further information on APMs and adjusting items, including a reconciliation to statutory information.

2 See Note 3 for an explanation of unaudited proforma total Revenue and a reconciliation of Revenue to the closest IFRS measure. Revenue is an APM and not a IFRS measure.# NCC Group plc

Financial performance summary continued

Administrative expenses excludes depreciation and amortisation, Individually Significant Items, amortisation of acquired intangibles and share-based payments.

Reconciliation of Profit After Taxation to Adjusted Operating Profit and Adjusted EBITDA

	FY23	FY22
Profit after taxation	15.3	68.5
Add back:
Amortisation of acquired intangibles	16.5	15.1
Impairment of North American Goodwill	19.3	0.0
Reorganisation costs	6.9	6.3
Share-based payments charge	4.8	4.4
Other individually significant items (ISIs)	0.7	1.2
Adjusted operating profit	63.5	95.5
Add back:
Depreciation and amortisation (excluding amortisation of acquired intangibles)	19.7	17.5
Adjusted EBITDA	83.2	113.0

The impairment of North American Goodwill has been recognised based on the annual assessment of circumstances as at 31 May 2023. ISIs also include costs associated with the strategic review of our Assurance business following the recent reduction in spend and reorganisation costs as we reshaped the Group to implement the next chapter of the Group’s strategy. These were partially offset by a profit on disposal of a subsidiary.

Key Financial Metrics

	FY23	FY22
Adjusted operating profit	63.5	95.5
Net debt	36.9	55.9
(excluding lease liabilities)
Total borrowings (including lease liabilities) offset by cash and cash equivalents	36.9	55.9
Earnings per share (EPS) - basic	6.1p	25.0p
At 31 May 2023, our cash conversion	19.4	34.1
Net debt	36.9	55.9
(excluding lease liabilities)
Total borrowings (including lease liabilities) offset by cash and cash equivalents	36.9	55.9

Financial performance summary continued

	FY23	FY22
Adjusted operating profit	63.5	95.5
Less: Profit on disposal of subsidiary	(0.8)	(0.0)
Add: Impairment of North American Goodwill	19.3	0.0
Add: Reorganisation costs	6.9	6.3
Add: Other individually significant items (ISIs)	0.7	1.2
Add: Amortisation of acquired intangibles	16.5	15.1
Add: Share-based payments charge	4.8	4.4
Profit after taxation	15.3	68.5
Adjusted operating profit performance, increased ISIs (mainly the impairment of North American Assurance Goodwill) and increased borrowing costs offset by a profit on disposal of a subsidiary and improved profit performance.

CEO’s review

We have faced a number of challenges this year. We’ve had to make some difficult decisions to ensure we are set up to achieve our purpose – to create a more secure digital future. I want to thank colleagues for their support during the challenges this year. They have been truly remarkable and the resilience they have shown in the circumstances has been inspiring. And it’s this resilience, which provides the foundations for us to execute our strategy and make NCC Group the global leader in Cyber Security, and Escrow Software Resilience services. We will emerge as a more confident and sustainable business built around the needs of our clients – one that is set up to adapt to our ever-changing industry. This confidence is already starting to emerge as our strategic, relentless focus on being a global, agile and client focused business led by my new leadership team with recognised deep cyber industry experience, is resonating with our stakeholders. I’m particularly proud of the efforts of a multi-disciplinary team, who have enabled our new global operations and delivery centre in Manila to launched in September 2023. Not only do we have a fully staffed business ready to go, led by Saira Acuna, who previously ran our sales and client experience team in the APAC region, but we’ve also won work that we wouldn’t previously have won as a result. This is just one example of the progress being made across the strategy and if we continue to execute on what we said we would do – the future is bright.

FY24 current trading

Current trading in line with expectations with:

Cost efficiencies across Cyber Security and corporate functions already being realised
Global Professional Services sales orders stabilised, no material clients lost, however North America revenue performance experienced in H2 FY23 is currently annualising through H1 FY24 giving rise to YoY double digit Q1 revenue decline
YoY double digit Q1 revenue growth in Global Managed Services
YoY single digit Q1 revenue growth in Software Resilience against a low comparator

Outlook

The Board expects FY24 to be a period of considerable change for the Group, targeting a modest improvement in Group Adjusted Operating profit driven by both the Cyber Security and Software Resilience businesses

In Cyber Security:

We expect low single digit revenue growth driven by stronger Security) and corporate functions as announced in the June 2023 trading update and are on track to meet these. This will offset the annualisation of the sales declines in North American Professional Services and UK Professional Services experienced during H2 FY23.
We will see increased utilisation of our Cyber Security consulting services and a greater volume of advisory work with clients, which will drive our revenue growth.

In Software Resilience:

We expect revenue growth in low single digits, underpinned by sustainable actions successfully taken on pricing and sales execution. The operating profit growth will be delivered net of in-year systems investments that will realise newly identified capabilities.

The Board is confident that continued execution of the strategy will deliver double-digit revenue growth and mid-teens operating profit margins from FY26 onwards.

Strategy

Execution of the Next Chapter strategy progressing well following key leadership appointments with deep industry recognised expertise
New global delivery and operations centre opened in Manila in September 2023
New distinct brand for our Software Resilience business will roll out early in 2024

Mike Maddison
Chief Executive Officer
25 October 2023

Strategic report

Our business model

We draw on our expertise, capabilities and global footprint to develop solutions tailored to sectors most at risk to meet current and future cyber challenges. We help to educate policymakers and regulators and we give back to protect our local communities. To address the changing landscape NCC Group needs to continually evolve. In February 2023 we launched our next chapter strategy, resetting how we go to market aligned with our clients’ changing needs. Read more on market dynamics on page 16

Sustainable growth strategy

In a fast-moving and complex environment, our strategy puts clients’ needs first, with a roadmap of investments designed to develop future capabilities and a global delivery model to provide clients with the best solution.

People-powered, tech-enabled

We are a diverse global community of talented and creative individuals, working together and united by the same goal – to make the digital world safer and more secure.

Culture of innovation

With our roots stretching back to the 1990s we have a track record of being at the cutting edge of innovation. NCC Group was created in 1999 when the National Computing Centre sold its commercial divisions to its existing management; from there we continued to grow through acquisitions. And while history is important, so is the future, with innovation, insights and intelligence the core elements driving our client propositions.

Stronger partner relationships

We are active members of the global cyber community, working in collaboration and in partnership with key industry players. Many successful global partnerships have delivered integrated, seamless solutions to clients.

Market-leading reputation

We understand our clients’ challenges and the risks to their business. We continually enhance our global delivery model to bring our insights, intelligence and innovation together to help clients understand and improve the cyber resilience posture. Read more on our strategy on pages 24 to 27

environments and deliver exceptional value for our clients. At the heart of our proposition is a global delivery model, from our new state of the art centre in the Philippines, to our hubs in Australia, Europe, North America, Singapore and the United Kingdom. This enables us to deliver our complete range of cyber and escrow services in the most efficient and cost effective way for our clients.

Intelligence	Innovation	Escrow	Managed Services	Consulting & Implementation	Technical Assurance	Cyber Incident Response	Insight

How we create value

Inputs

NCC Group plc

Colleagues

We strive to create a safe and respectful environment where everyone is empowered to be their very best, able to follow their vocation and say with conviction that what they do helps make our digital society safe and secure.# Clients

Our resilience solutions enable clients to confidently innovate and embrace new technologies, and build responsible, sustainable and resilient organisations that thrive and succeed.

Our network

We engage proactively to ensure our insights and vision deliver the best societal outcomes in support of our mission. Our expertise provides access to basic cyber knowledge for the communities we live and work in.

Shareholders

We operate responsibly aiming to create an inclusive and diverse workplace, taking action to reduce our impact on the environment. We strive to be an ethical, responsible employer and supply chain partner to ensure future long-term growth and return on investment opportunity for our shareholders. Read more on stakeholder engagement on pages 40 and 41

Value creation

We operate two distinct businesses offering clients a range of services to help secure their digital assets:

Specialist solutions that protect business critical technology and software applications. Our proposition safeguards buyers from various risks, provides robust business continuity, secures long-term availability of essential business software, and offers assurance and guidance for application management. And with our Escrow-as-a-Service proposition, we facilitate a secure transition to the cloud, enabling clients to adopt cutting-edge technology with confidence. Read more on page 34
Providing clients with a clear understanding of cyber threats and vulnerabilities. We help them maintain their licence to operate, by achieving governance, compliance and accreditation objectives. By implementing remediation plans and solutions, we enhance their resilience against cyber threats. We offer the option to outsource cyber defence operations, as well as complementing existing resources, to reduce risk, achieve greater resilience and give confidence in detecting and responding to cyber threats. Read more on pages 32 to 33

CYBER SECURITY

Meet the CTO

Q&A with Siân John

Siân John was appointed Chief Technology Officer NCC Group from Microsoft and is the current Chair of techUK’s Cyber Security Management Committee and a council member for the Engineering and Physical Sciences funding body for engineering and physical sciences research in the UK. She was awarded an MBE in 2018 for services to Cyber Security.

Q. Tell us a bit about your career so far

I’ve been immersed in technology for over 30 years and 25 of those in cyber, starting off in the Houses of Parliament looking after IT for the guys who carry the mace. I’ve since worked for a number of major technology businesses, most recently with Microsoft where I had a range of strategic Cyber Security roles. The pace of change in the industry has been relentless, which is one of the reasons I find this space so fascinating.

Q. What is your overall approach and ethos when it comes to Cyber Security?

Security is often seen as a barrier to growth because of a consensus that you can either be secure or productive. But that’s simply not true. If we bake security into our products and processes in a way that reflects the right level of risk, it will actually unlock productivity. Security becomes a competitive advantage. I think it’s incumbent on us as Cyber Security advisors to have digital empathy – and by that, I mean a real understanding of the impact security measures have on the user. If we start from that perspective, we typically end up with better solutions to challenges that businesses face.

Q. What attracted you to NCC Group?

This is a business that is so well respected in our industry because of the quality of its people. NCC Group is known for having technical abilities at the bleeding edge, and so the opportunity to work with some of the brightest minds globally was one I simply couldn’t turn down.

Q. Talk to us about NCC Group’s insight, intelligence and innovation

This is what gives us a position in the market that no one else can match, and an offer to our clients that is incredibly strong. Firstly, insight. We work with thousands of clients across the world. We see directly the challenges they are facing. We understand their pressures. We have a deep understanding of what’s happening today, and where it might go tomorrow. And we bring this to every client engagement. We then add intelligence – our ability to see what threats are out there in the wild in real time. What are our adversaries doing? What techniques are they using? And what is the impact? This means our advice to clients is solely focused on the risks that matter. And finally, innovation. This is where we drive the market forward through our research – shaped by the challenges we see our clients facing and the passions of our experts. This is a combination that is unique to NCC Group and what gives me so much confidence about our future.

Siân John
CTO

The ever-changing threat landscape

The ever-changing threat landscape and exponential digital transformation, coupled with society’s continued reliance on digital technologies and increasing regulatory and legislative requirements, mean investment in Cyber Security and Software Resilience is not optional and NCC Group’s addressable market continues to grow.

A changing threat landscape

2022 was another year that kept us on our toes. The threat landscape was heavily influenced by the conflict between Russia and Ukraine, during which we have seen the whole arsenal of offensive cyber capabilities, deployed by criminals, hacktivists and nation state groups. Though perhaps not the “cybergeddon” that some expected from the next big global conflict, we have seen state-sponsored attacks ramp up, with cyber warfare proving to be critical across this hybrid cyber-kinetic battlefield. The threat from ransomware will remain. However, we are seeing an evolution in the way groups operate not only because of law enforcement intervention but also co-operation among governments and regulations to tackle the problem. Groups will continue to diversify operations and we have started to see less focus on encryption of data and more emphasis on exfiltration of data along with an increase in the use of distributed denial of service attacks. Threats will persist and organisations must remain vigilant and understand how they could be exposed and take steps to mitigate any risk.


Ransomware: 40%	Coin mining: 13%
Business email	Banking malware: 7%
Data breach: 7%	Total hack and leak cases year on year

Number of hack and leak cases


Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2021	2022

Market dynamics

Society’s ever-growing reliance on digital technologies

There is no slowdown of the exponential digital transformation, with investment continuing to be made in technologies, from the increasingly ubiquitous use of machine learning and large language models to significant public and private investment in future supply chains upon which our connected environment depends are complex and interdependent, a reality that’s been driven home, too, by heightened geopolitical tensions and conflicts.

Increasing regulatory and legislative requirements

Governments around the world are trying to respond to a threat landscape that is more dynamic than ever. We are seeing significant growth in regulations and legislation globally, creating an ever more complex environment for organisations to navigate and make sense of, and we expect them to focus their cyber investments on meeting growing regulatory requirements. What is more, we expect the trend of growing cyber regulation to continue as thinking converges that: improved cyber resilience is ultimately an issue of national security; the rising cost of cyber crime needs to be tackled; and (better) regulation should unlock growth, as the assured safety and security of digital technology will drive trust, confidence and therefore uptake. As a result, we expect to see more coherence and co-ordination of policy and regulatory initiatives across like-minded governments around the world. For example, the governments of the UK, Canada and Singapore published a joint statement of intent on Cyber Security for Internet connected products. It signalled the three governments’ intention to promote global alignment on standards and security requirements, reducing “duplication of testing and similar assessments and the challenge for industry of needing to apply to multiple schemes underpinned by identical or very similar requirements”. See pages 22 to 23 for how we are contributing to the changes to cyber-related policies and regulations across the world.

Hotspot map representing concentration of global attacks

events over the whole of 2022.# NCC Group plc 2023 Annual Report and Accounts

19 Strategic report

Other common trends include:

Shifting the “burden for security” to those with the broadest shoulders: The US National Cyber Security Strategy announced a clear shift in responsibility for cyber to software vendors and manufacturers in March.
More confident regulatory interventions to define dynamically what constitutes critical national infrastructure in the digital sphere and make it more secure and resilient: The UK announced plans to move forward with legislation extending its scope to managed service providers, and giving the government powers to extend the scope of NIS more easily.
Efforts around improving incident reporting, driven by the desire to improve visibility and situational awareness of the threat landscape more holistically: The Australian government launched an updated Critical Infrastructure Resilience Strategy and Plan in February, outlining those activities the Cyber and community will pursue to enhance resilience, with a clear focus on a greater role for the Trusted Information Sharing.
Greater emphasis on developing frameworks and principles for regulating technologies rather than detailed regulatory proposals per se: Initiatives are underway in many jurisdictions – a common trend appears to be the desire to open AI decision making to greater scrutiny, as seen in the UK’s AI Paper, the US blueprint for an AI Bill of Rights, and the AI Risk Management Framework and the proposals. Similarly, many jurisdictions are working on plans to develop (and regulate) central bank digital currencies, while global initiatives are underway by the Financial Stability Board, and the.

NCC Group’s continued portfolio evolution and differentiation

As Cyber Security threats change and technology develops to counter them, organisations are demanding fewer, more comprehensive solutions rather than having to manage an increasing number of interdependent but separate tools. As client needs change in this fast moving, evolving threat, technology and regulatory landscape, we are staying agile to best serve them – and deliver on our purpose. We are investing in our cyber capabilities. Above all, that means a broader portfolio addressing the full Cyber Security lifecycle:

Maintain our high quality of Incident Response services to help clients at their critical moments
Enhance the suite of Managed Services we offer to deliver a global, high quality managed security service that is led with world-class threat intelligence capability, provides transparent value, and is delivered through a consistent technology stack and operating model
Invest in our core Technical Assurance capabilities, such as continuous, always-on cyber threat detection and penetration testing
Building additional Consulting & Implementation services proposition to help C-suite buyers confidently meet increasing Cyber Security requirements

US National Cyber Security Strategy

Significant shift away from voluntary measures to regulation.

Digital Operational Resilience Act

Enacted.

NIS2

Enacted.

Cyber Resilience Act

In progress.

Cyber Solidarity Act

In progress.

Increase in regulatory developments across our key operating regions

Discussion paper on Australia’s Privacy Act review	Security of Critical Infrastructure	Product Security & Telecommunications Infrastructure Act	NIS Regulations Reforms progressing slowly.	App: Code of Practice	Consulting on software regulation

Market dynamics continued

20

As client needs change in this evolving threat, technology and regulatory landscape, we are staying agile to best serve them – and deliver on our purpose. We are investing in our cyber capabilities.

21 Strategic report

It’s in our DNA

We understand the sectors our clients operate in, including market trends, regulatory and overall business environment, and the specific threat landscape. We do this by investing in research and data analysis, listening to clients to understand the intricate details in their field of operation. The value to clients is solutions, which are relevant and personalised and anticipate their current and future requirements. Through our global capability we provide unique perspectives and strategic advice to help clients make more informed decisions and ultimately grow their business responsibly and sustainably.

22 NCC Group plc — Annual report and accounts for the year ended 31 May 2023

How insight supports our strategy

Strategic report In focus

The looming threat of a nation-state attack over the coming years, UK telecoms providers are under pressure to enhance their security.

While the UK is, in some ways, leading the charge with its TSA, it’s actually part of an overall trend in global policymaking aimed at creating a more secure and resilient telecommunications infrastructure. Across the globe, governments in Europe, Canada, the United States, Australia and Singapore have moved, or are moving quickly, to implement telecoms security standards affecting thousands of industry businesses. Beyond mandatory compliance, there’s also a compelling business case for organisations to use the TSA, and its international equivalents, as an opportunity to build more secure, resilient infrastructure. Working with NCC Group’s government affairs team, and our industry partners, our global team brings cyber expertise within the context of telecoms and cloud services, to simplify these new regulations, and explain not only what’s required but how achieving compliance proactively can be a competitive differentiator.

Mike Maddison CEO

Strategic report 23

NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Our strategy

Our clients pressing Cyber Security and Software Resilience needs.

Our capabilities Offering a broader service portfolio addressing the full Cyber Security lifecycle. Read more on page 25

Global delivery Transitioning from an international to a fully global business. Read more on page 26

Brands Creating distinct and relevant brands for our Cyber Security and Escrow Software Resilience businesses. Read more on page 26

In February 2023 we announced our new strategy, signalling the next chapter of NCC Group’s story and focused on:

This section provides more information on these four elements, what we’ve achieved so far, how we will measure progress, and our FY24 priorities in service of our vision to become a truly global Cyber Security and Software Resilience services provider capable of delivering an end-to-end cyber solution that harnesses our strengths in insights, intelligence and innovation, accompanied by a fantastic client experience. Read more on our risks on pages 70 to 80 Read more on our business model on pages 14 and 15

To be more client centric and operate as a global firm, we are restructuring how we operate. This will help us achieve our ambition, providing clients with not only the best, but also the breadth of NCC Group’s ever-advancing Cyber Security and Software Resilience solutions. We are engaging colleagues, helping them to get excited about NCC Group’s future, building on the past, and identifying the role they play in delivering for our clients. Every single person at NCC Group takes responsibility for client delivery. To co-ordinate, execute and track progress, we have created a modest transformation office – bringing together, for the first time, central co-ordination of strategy delivery for the Group. This will help us continue to deliver value – creating a bright new future for colleagues, clients and shareholders alike. Over the next couple of pages, we outline each of our strategic pillars, what we’ve achieved since the launch in February 2023 and what is coming up in the near to mid-term future.

Diji Akinwale Director of Strategy and Transformation

NCC Group plc

24

Deeper client engagement on the most pressing Cyber Security and Software Resilience needs

What we said we would do:

In February 2023 we announced our plan to concentrate on the rapidly growing, highly regulated sectors most vulnerable to cyber risk. These sectors include financial services, technology, media, telecommunications, government and public sector, infrastructure, and industrials. To implement this we are restructuring the organisation. This means moving away from the previous regional P&L model to establishing a global, revenue-focused team, aligned by regions and the sectors identified above.The aim of this restructure is to enhance our client relationships through targeted expertise, while consistently assessing our impact across different regions. This strategy will expand our range of services within existing client relationships and better capture the global scale of the insight, innovation and intelligence we have historically delivered to clients.

What we have done: Since initiating our strategy in February 2023, we’ve streamlined our market approach by implementing a sales structure that aligns our major regions by verticals. We have successfully established this vertical alignment in the UK, and the same structure is currently being scaled in North America. For our smaller regions, we’ve strategically aligned them with a country-centric focus, incorporating elements of the vertical structure where suitable. This restructuring forms a crucial part of our commitment to meet our clients’ needs more effectively across various geographies and sectors. We have also invested in Cheltenham and New York offices to ensure our property portfolio echoes our commitment to client service and reflects both the needs of our business and our colleagues . We have also further established our strategic partnerships. We have accelerated our strategic relationship with Microsoft ‘Global Validation’ status from Microsoft, enabling greater access to discount and Microsoft sellers and been awarded a ‘managed account’ status by Microsoft, recognising our investment and growth. Beyond Microsoft, we have now signed a global partnership with Splunk that enables better pricing for our clients and access to wider Splunk sales teams.

Link to risks:
A Strategy
B Cyber and information security
D People and partners
E Market and competition
F Brand and reputation
G Quality and delivery
H

Offering broader service portfolio addressing the full cyber security lifecycle

What we said we would do:
We proposed that in the coming years, we would look to build out a broader service portfolio addressing the full cyber security lifecycle, including:
• Continuing to invest in our core Technical Assurance capabilities
• Maintaining high quality of Incident Response services to help clients at their critical moments
• Further development of our Managed Services offering,
• Building an additional Consulting & Implementation services proposition to help C-suite confidently meet increasing cyber security requirements

What we have done: Since February 2023, when we announced our next chapter strategy, we’ve actively sought to enhance global alignment across our cyber security capabilities by establishing three global capability groups, spearheaded by our new Chief Operating Officer, Kevin Brown; see page 29. This structural shift aims to better manage our global cyber security capabilities and our global delivery and operations centre in Manila (see global delivery pillar). This setup plays a vital role in driving global growth by creating the capacity and ability to cater to our clients’ needs. Our Managed Services sector was the first to align globally, and has seen revenue growth of c.16% in FY23. This underpins the positive impact of a more globally centred focus, particularly in the second half of the financial year. Our ongoing reputation for cyber can be seen in our recent announcement to be one of the first six providers for the UK NCSC’s new Level 2 Cyber Incident Response scheme. This recognises our ability to help private and public sector organisations (big or small) as well as charities recover from cyber-attacks and should give buyers confidence about the breadth of our capabilities. Read more about this story on our newsroom: www.newsroom.nccgroup. com/news/ncc-group-announced-as-an-assured-service-provider-in- latest-ncsc-cyber-incident-response-cir-scheme-470825

Link to risks:
A Strategy
B Cyber and information security
C Innovation and product development
D People and partners
E Market and competition
F Brand and reputation
G Quality and delivery
H

NCC Group plc

25 Strategic report

Our strategy continued

Transitioning from an international to a fully global business

What we said we would do:
We promised we would globalise our delivery capabilities. This would allow us to move from an international to a truly global business and would involve building a global delivery organisation with new leadership tasked with developing the best skills through flexible resourcing, including a new global delivery and operations centre, with implementation in FY24.

What we have done:
We have concluded our search process for a new global delivery and operations centre and selected Manila as the location for our new office. A sustainable site has been secured, with recruitment (both internally and externally) underway and on track to be operational in 2023. To drive this accelerated launch, our experienced leadership and implementation team have developed local relationships with universities to attract the best skills that will complement recruitment of experienced hires, alongside our global delivery capability, and help deliver existing and new services to clients. This launch of a global delivery centre has required us to rollout a new scheduling system, Kantata, to our US region as the precursor to a global rollout. Putting this system in place will allow us to seamless schedule and allocate work from clients in any region to any of our global delivery colleagues, whether they are based in Manchester or Manilla.

Link to risks:
A Strategy
B Cyber and information security
D People and partners
G Quality and delivery

Creating distinct and relevant brands for our Cyber Security and Escrow businesses

What we said we would do:
In February 2023, we announced we would create distinct and relevant go-to-market brands for both our Cyber Security and Software Resilience businesses. These would help to us to differentiate and grow our brand profile. As part of our broader brand and marketing programme, we said we would increase our focus at key industry events and be more visible in market, and invest in sustained activity to build and strengthen relationships at C-suite level in our target markets. Finally, we said that we would better leverage our world-class insight and intelligence, such as our regular research from consultants or monthly Threat Intelligence reports.

What we have done:
We undertook the work to rebrand the Software Resilience business and it will rollout from January 2024. You can read more about this on page 34. Work is also underway for our Cyber Security rebrand. We’ve invested in significant presence at key cyber events such as Gartner’s EU Risk and Security Summit 2023, and Black Hat USA 2023 with bolt-on relationship building activity planned. In the autumn of 2023, we will launch our own events programme, for example, featuring our Global Head of Threat Intelligence, among others, to add value to our clients and the broader cyber community.

Brands

Link to risks:
A Strategy
C Innovation and product development
E Market and competition
F Brand and reputation
G Quality and delivery

NCC Group plc
26

Part of the vision for NCC Group is to become a go-to provider of cyber services for decision makers through a greater focus on clients, capabilities, global delivery and differentiated brands. This means being able to leverage the moments when we add value for our new and existing clients to create greater impact through offering a broader range of services. We demonstrate this with a case where we were brought in to support an international organisation possessing a complex on-premise and multi-cloud architecture. They had experienced multiple Cyber Security incidents in recent years and brought us in to provide consultancy services to consolidate and enhance their Cyber Security posture quickly. As part of the consulting services initially requested, our team conducted a compromise assessment, where we deployed tools to identify indicators of compromise that threat actors leave during an attack. This led to us carrying out a high level review of its whole infrastructure to identify any vulnerabilities that would present a critical risk to its business operations, examining its external attack surface (including its public cloud services) for potential exposure of data or vulnerable services, analysing data sets related to previous breaches for evidence of undetected data exfiltration. As a result of this consulting work, the client was able to move forward with confidence that there were no urgent issues to address before thinking about the long-term requirements. One of the long-term critical gaps identified during the consulting review was the lack of ongoing protective monitoring. Through our development of Managed Services, we were perfectly placed to plan and implement a rapid deployment of our NCC Group Managed XDR service using Microsoft Sentinel and Defender. The initial launch of this service was completed within five weeks and addressed the on-premise and high priority cloud infrastructure organisation and the client is moving forward with its programme of security improvement in the knowledge its starting position is not critical, and any new threats will be identified quickly if they arise through protective monitoring. We expect in future that much of our growth will come from our ability to offer and embed a greater variety of services with our clients.Our strategy enables this by ensuring that our expanding range of capabilities can be delivered to clients across the globe. This allows us to build on our historical strengths and create greater impact for our clients across the full lifecycle of Cyber Security decisions that they will make. Read more on our cyber solutions pages 32 and 33

Strategic report

NCC Group plc

We are a Company with a unique perspective. Most Cyber Security business’s operate from the outside in – they attempt to sell and advise without having a real understanding of what’s going on within a business’s technology infrastructure. But we operate from the inside out. We are often in privileged positions where we gain an intimate knowledge of our clients’ challenges through our world-class incident response capability or ongoing penetration testing. We are trusted to hold the “tip of the spear”. And this means the subsequent consultancy and end-to-end support we deliver is designed around the specific needs of each client. This really sets us apart.

Kevin Brown
COO

NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Meet the COO

Q&A

Kevin Brown was appointed COO in June 2023. He spent 20 years in high level UK policing before moving to BT in 2012, where he built a $1bn managed security services business. Most recently, he has been resident CISO for private equity firm Insight Partners, leading its “C-suite in residence” programme and working with cyber companies to challenge and refine their strategies.

Q. What attracted you to NCC Group?

I gave a lot of thought to what I wanted in my next role. I was looking for three things. Firstly, I only wanted to join a pure-play Cyber Security business. This is where my passion lies. Secondly, I was looking for a company with a clear vision and going for growth. And finally, it had to have the right culture – somewhere that people were supported to do brilliant work. I found all three at NCC Group so in end it was an easy decision to make.

Q. What makes NCC Group different?

We are a company with a unique perspective. Most Cyber Security businesses operate from the outside in – they attempt to sell and advise without having a real understanding of what’s going on within a business’s technology infrastructure. But we operate from the inside out. We are often in privileged positions where we gain an intimate knowledge of our clients’ challenges through our world-class incident response capability or ongoing penetration testing. We are trusted to hold the “tip of the spear”. And this means the subsequent consultancy and end-to-end support we deliver is designed around the specific needs of each client. This really sets us apart.

Q. Where do you see the biggest opportunities?

We are building out a set of services that will act as a natural flywheel. There’s a sequential nature to what we do – one informs the other and allows us to create deeper relationships with our clients. We have all the constituent parts, as well as from some of the most significant businesses globally. This is simply about knitting each element together – and we are already taking some very meaningful steps forward.

Q. How do you view the global opportunity for NCC Group?

We are already an international business. We have fantastic client relationships and incredible talent in every major market. The opportunity for us lies in greater global consistency – ensuring shared best practice across markets – and flexibility in resourcing, both of which will result in an even better service for clients. Our new global delivery centre in Manila is a prime example of how a global approach can make our business more efficient, agile and scalable.

It’s in our DNA

The world around us continuously evolves and so must how we operate to stay at the cutting edge of our industry. We think forward, we adapt and we’re not afraid to take calculated risks. For our clients this means access to the latest Cyber Security solutions that offer them peace of mind, knowing that, working in collaboration, we’ll always be scanning and preparing for threats to ensure their business stays operational.

In focus

NCC Group drives for innovation, to improve the security of the industry, our capabilities and the way that we support our clients.

Strategic partnership

Innovation thrives in the land of collaboration, which is why we have built strategic relationships with industry leaders, allowing us to quickly integrate cutting-edge technologies and capabilities into our solutions providing well-rounded competitive offerings.

Expert Cyber Security professionals

Our Company strengths lie in the proficiency of our Cyber Security experts. We lean upon this core strength to innovate our product and services to provide continuous consultant-led solutions. As an example of this, we continue to evolve our threat intelligence capability to help our clients and the broader cyber community dealing with the rapidly changing risk landscape. Our insights have been cited in the press and clients are increasingly looking to us for intelligence and advice and insights on their exposure and response. This has culminated in our newest threat intelligence service, Online Exposure Monitoring.

Online Exposure Monitoring is an example of how we’ve built a partnership, fed requirements and utilised our internal experts to create a new innovative service that fits with our wider portfolio to solve multiple client problems. Online Exposure Monitoring provides a lens that looks from the inside out, creating continuous visibility into a client’s digital risk.

Our Company strengths

Siân John
CTO

How innovation supports our strategy

Our solutions

INCIDENT RESPONSE

Our global response capability provides immediate support to clients under attack and in preparing for attacks. In the event of an attack our service minimises disruption to their business, mitigates threats, protects valuable data, reduces financial loss and safeguards reputation by swiftly identifying, containing and recovering from cyber attacks.

Impact
* Sector: IT/technology
* Challenge: Highly sophisticated threat actor had maintained elevated access over considerable part of the environment for months.
* Solution: NCC Group enabled the client to increase its visibility in the environment while tracking the threat actor’s activity and reverse engineer its custom tooling to achieve a successful eradication outcome.
* Value: The full extent of the compromise was identified, and the threat actor was successfully removed from the environment. The client improved its overall security posture and additional recommendations to further fortify the environment were provided, as well as additional reports to satisfy any enquiring authorities.

Revenue sources
* Non-recurring revenue but is an entry point for other services that we offer

Strategic objectives
* Continue to evolve and maintain the high quality we have today of this critical, niche service

MANAGED SERVICES

Our managed security services are known for delivering high quality, consistent protection, informed by our world-class threat intelligence. Our clients can expect us to deliver solutions fit for their unique environment, presented transparently. The outcome is real time threat protection against a very sophisticated group of bad actors.

Impact
* Sector: Education
* Challenge: Ireland’s National Education and Research Network organisation, HEAnet, was looking for a partner to support the Irish education sector’s fight against cyber crime.
* Solution: Building on a similar engagement for the UK’s education sector, we have brought our leading cyber security expertise to support HEAnet by providing managed security services and rapid intelligence sharing.
* Value: We provide a critical support service to HEAnet’s offering to over 30 educational institutions in its network. With our integrated, collaborative alert system, and ongoing monitoring, HEAnet is able to provide institutions with the knowledge they need to build strong defences and quickly respond to evolving threats.

Revenue sources
* Largely recurring revenue

Strategic objectives
* As a future growth driver we are investing to enhance our offer to increase annual recurring revenues, and gain a larger share of our client’s Cyber Security spend

CONSULTING & IMPLEMENTATION

Our Cyber Security experts work in collaboration with our clients to identify potential vulnerabilities, develop a strategy to mitigate these weaknesses, and then execute the plan to strengthen the overall security posture to protect valuable assets from potential threats.

Impact
* Sector: IT/technology
* Challenge: Group executives lacked confidence in an external security review and wanted an expert technical opinion to drive security spend.
* Solution: We baselined their technical capability and researched their threat landscape. We expanded our review into a comprehensive understanding of their system security and produced a roadmap for security investment and capability development.
* Value: Provided peace of mind and a solution to reduce the client’s attack surface, removed system vulnerabilities, increased security awareness, and improved its ability to monitor for and respond to threats.

TECHNICAL ASSURANCE# Our solutions continued

Revenue sources

Non-recurring revenue but with potential for other services

Strategic objectives

As a future growth driver, we are investing in broadening our portfolio of Cyber Security consulting services so that we can better advise clients on their cyber risk strategy and then help them implement technologies and supporting processes that mitigate their cyber risk

We provide clients with proactive defence of their digital assets through vulnerability assessment, penetration testing, sophisticated adversary simulation, staff training, third party assurance, and constant compliance and security monitoring to enhance their system resilience and data protection.

Impact
* Sector: Technology
* Challenge: The client lacked security coverage and needed a partner to provide manual testing services and manage critical vulnerabilities with remediation testing to verify fixes were in place.
* Solution: We provided the client with 24/7 coverage from our global team, focusing on security testing and providing reliable and effective coverage to help maintain the security of its applications, as an extension to the in-house security team covering multiple time zones and technical specialities.
* Value: The client had access to a global team of skilled testers bringing diverse expertise and knowledge to address potential security vulnerabilities. As a result it reduced pressure on the in-house team and avoided costly recruitment costs by outsourcing the capability.

Revenue sources

Non-recurring revenue but with potential for other services

Strategic objectives

Invest in our core Technical Assurance capability, including our continuous, always-on testing proposition

NCC Group plc 33

ESCROW AGREEMENT

ESCROW VERIFICATION

An Escrow Agreement is a simple and effective tri-party arrangement with mutually agreed terms between the software customer, software supplier and NCC Group. Under the Escrow Agreement, the supplier periodically deposits a copy of the software source code and associated materials for secure storage within NCC Group’s secure physical or virtual vaults, ensuring that the material can be accessed and released should the need arise. In the event of a release, the software customer can utilise the escrow deposit to maintain the software, working from the source code, whether that be in house or by engaging with another supplier.

Impact
* Sector: Renewable energy
* Challenge: When solar energy pioneer BrightSource wanted to develop large-scale innovative projects, its partners and bankers needed insurance against any potential risks that may disrupt the smooth construction and operation of its plants.
 IP escrow and verification added a level of reassurance at every stage with key project milestones included tied to the release of project funding.
* Solution: To meet the needs of both BrightSource and investors, NCC Group and BrightSource worked together to develop a tailor-made business continuity and risk management solution to allow investors to witness important developmental stages themselves and to have access to important documentation should the need arise.

Revenue sources

Recurring annual revenue through contract renewal

Strategic objectives

Increase our footprint in key growth areas of North America, Australia and the critical infrastructure market

Software Escrow Verification tests the source code and material held under the Software Escrow Agreement to ensure it is correct and complete and can be rebuilt into the working application, providing a higher level of resilience and business continuity assurance.

Impact
* Sector: Financial services
* Challenge: One of our customers, a multinational systemic bank, had two challenges:
 scenarios where supplier was no longer able to provide support for software deployed in house
 process was a successfully stressed exit plan as required by the PRA SS2/21 outsourcing and third party regulation
* Solution: An Escrow Agreement had been in place for several years, but the appropriate level of verification had not yet been completed. To meet the requirements of the PRA SS2/21 regulation, a complete end-to-end Escrow Verification was completed. This was conducted in a clean environment at NCC Group, without reliance on the software owner’s infrastructure, using the deposit materials collated as a result of an Entry Level Verification.
* Value: All results were documented in a comprehensive report and distributed to all stakeholders. Successfully delivering this verification demonstrates the scenario of a release event and ensured that the application could be built from the source code. With the escrow arrangement and the confirmation of the Independent Build Verification, the bank has the peace of mind that it is compliant with the PRA requirements and has a tried and tested plan, should anything happen to its supplier.

Revenue sources

Recurring annual revenue through contract renewal and a schedule of verification tests

Strategic objectives

Continue to increase our verification attach rate to Escrow Agreements

NCC Group plc  34

Meet the Global Managing Director



Q&

Andrew was appointed as Global Managing Director for NCC Group’s Software  business in November 2022. Before joining NCC Group, Andrew was CEO of the then AIM-listed Tungsten Network, and Group Chief Strategy and Transformation Officer of IWG plc (formerly Regus). Prior to that, Andrew held a variety of leadership roles within the technology sector, at Dell Computer Corporation and Toshiba Information Systems, having begun his career with IBM.

Q. What have you learned since joining NCC Group?

My greatest learning has been that the Software Resilience business has more untapped opportunity than I realised. In any business where revenue has plateaued, you expect to find operating model inefficiencies. The ability to address these comes down to the support from the Board, from the ExCom, our people and our clients. I have found that in abundance, with everyone becoming involved in, and committed to, delivering sustainable growth through a plan that addresses those operating inefficiencies to build the right foundations that underpin growth. The future growth of the Software  client at the centre of all that we do, radically simplifying our processes and utilising new and emerging technology to deliver an enhanced client experience.

Q. What are your achievements of note since stepping into the role?

As a team, I am proud that we returned the business to growth in H2 FY23 by focusing our sales and delivery teams on a single objective – which was to meet the needs and requirements of our clients. Overburdened with priorities, this was achieved through identifying and focusing on the “critical few actions”, which are transformative to our business, our bottom line and our client experience. These included improving internal communications, developing and launching a roadmap to simplify our processes, and building and implementing a credible growth plan. We have witnessed a strong increase in colleague engagement over the period and I am incredibly proud of not only what the team has achieved, but the drive to be innovative in what we deliver to our clients. Today, we have a team who believe in themselves and in the value they are adding and who are passionately committed to our clients and to achieving growth.

Q. What makes NCC Group’s Software Resilience business different?

Without question our people, our offerings and our clients. At the heart of our organisation are the teams that sell to, support and deliver for our clients. I have spent a great deal of time getting to know the team and listening to their input, which has been used to help shape our change agenda. The commitment and passion the team show continues to make me proud to have each of them within the organisation. Our product portfolio is impressive, not just software escrow, but extending into many related products and offerings, which are some of our best kept secrets. In FY24, we need to be far more vocal about what we offer and what we can do to meet our clients’ needs. Our clients are highly innovative and working with them has enabled us to change the way that we work to help deliver the right solutions to them at the right time. At the end of the day, our clients want to feel protected, safe and reassured that they are receiving the best levels of service and that their needs matter and are being answered.

Q. Where do you see the opportunity for Software Resilience?

I believe the future for Software Resilience is bright. There is opportunity within our existing client base and within the existing market whitespace for acquiring new clients, and within new and emerging markets, and we have new and emerging products. What we need to maintain is a planned and focused approach, which gives a rigorous approach to the way we manage and develop our business. We will deliver on our simplified, scalable business model to underpin our ability to realise the market opportunities.

Q. What are the key initiatives for FY24?

In FY24, we will continue to invest in simplifying our processes; we will retire several duplicated systems, enabling us to have a simplified and more effective client journey. We will build out our presence in our existing markets, while also growing our presence in both Europe and Asia.

35 NCC Group plc — Annual report and accounts for the year ended 31 May 2023Another focus area for us will be to expand our product portfolio and identify key market adjacencies to further drive growth. Added to this, we will launch our new brand, which will see us move away from the Software Resilience name, amplifying our brand presence and creating a distinct and separate brand from NCC Group’s Cyber Security business. In all, FY24 will be an exciting year for the business, as we demonstrate what the team is truly capable of.

Q. How would you describe how the Software Resilience business contributes to the performance of the Group?

Our profitability and recent flat revenue performance clearly make us a cash cow for the Group; however, with our team, our client base and our growth plan, we can be so much more!

Q. How well known is Software Resilience in the market?

It’s a little-known fact that NCC Group is the creator of software escrow as a service, and today we are the world’s largest software escrow provider. We protect and verify code for some of the world’s leading companies and Government organisations. But we don’t tell people enough – now all that’s about to change! Back in February 2023, Mike Maddison, our CEO, said that NCC Group would create distinct brands for both the Cyber and Software Resilience businesses. I’m pleased to say that as of now, we are on the cusp of rolling out our new brand for escrow.

Q. What will be the new brand for Software Resilience, and what difference do you think it will make?

I’m really excited about our own distinctive brand, Escode, that I think will help us to differentiate and stand out in the market. Visually it’s striking, but a brand is so much more than that. This creates the opportunity for us to build our own identity, to reconnect, and to engage with customers past and present, helping us to build a better connection and creating an opportunity to tell our story.

Q. When will we start to see the new brand in the market?

We unveiled our new brand to colleagues in September 2023, and expect Escode to be rolled out, including a new website, early in 2024. Exciting times!

Meet the Global Managing Director

I believe the future for Software Resilience is bright. There is opportunity within whitespace for acquiring new clients, and within to build on our existing success.

36 NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Our new centre in Manila

37 NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Strategic report

It’s in our DNA

We use, analyse and interpret the vast amount of data we collate to make strategic decisions – for our own business and that of our clients through the solutions we offer. We use technology, data and machine learning to make smarter, data- driven decisions, to operate efficiently and predict trends. The value to our client comes from our ability to turn that intelligence into smart solutions. And while we utilise artificial intelligence and other technologies to deliver services at a faster rate, and lower cost, it’s still the unique combination of our people and the quality of our analysis that allows us to provide a higher quality and trusted service to our clients.

38 NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Strategic report

In focus

We’re constantly assessing, investigating and aggregating threat intelligence from the dark web, research and our learned insights from client engagements across the globe. Our intelligence provides for the deployment of defences against the latest attacker techniques and IOCs. Our clients are able to leverage NCC Group’s advanced threat intelligence which feeds directly into our custom threat detections. With a local presence in all continents around the world, we are able to provide a comprehensive and global cyber security service to our clients.

Siân John CTO

39 NCC Group plc — Annual report and accounts for the year ended 31 May 2023

We believe we have a responsibility to listen to our stakeholders, considering all their needs, and using insights and learnings to improve how we make important decisions. Our Code of Ethics guides us, informing and helping us to build enduring and trusted relationships. Listening insights are used to inform decision making at every level of the organisation.

Stakeholder engagement

Link to strategy: Our clients Our capabilities Global delivery

Colleagues

The opportunity

Know they are contributing to our success
Feel confident they have the skills to do their job or are supported to learn on the job
Know what is expected of them through structured and fair performance management process
Have the opportunity to grow their career through our learning and development offering
Spend quality time with their line manager and feel listened to

How we listen and engage

Regular virtual and in-person meetings at different levels in the organisation with line managers and Executives
Internal news and collaboration channels to connect colleagues to what is happening and also enabling them to easily share approved content
Regularly sharing business updates and strategy via internal channels and Town Halls where appropriate
Providing opportunities for colleagues to participate in external networking and collaboration events.

Highlights in 2022/23

Launch of new Talent Partnership Framework to attract diverse talent – entering into partnerships with Women in Cyber, Code First Girls, and Tech Returners.
Launch of a global Speak Up policy to provide clear guidance and signposting to colleagues across our global teams
Scoped and planned launch of gathering of diversity data, due to launch in FY24

We are a people-led, tech-enabled business and our colleagues around the world each play an important role in helping to make the digital world safer and more secure.

Clients

The opportunity

Using our research and intelligence expertise to understand the threat and how that affects our customers’ operations in their sector
Using our insights to develop “right-fit” solutions, which improve and enhance our customers’ current and future cyber resilience
The ability to work collaboratively with our clients, their partners and broader supply chains
Horizon scanning regulations and legislation, and contributing to government consultations based on understanding of future market needs

How we listen and engage

Active account management
Client satisfaction surveys and complaints procedure in place
Industry collaboration with investment in sector-based approach to understand and mitigate risks of current and future technologies

Highlights in 2022/23

Streamlined our market approach implementing a sales structure aligning our major regions by verticals. Smaller regions have been strategically aligned with a country-centric focus incorporating elements of the vertical structure where suitable. This forms a crucial part of our commitment to meet our clients’ needs more effectively across various geographies and sectors

Rooted in our sector knowledge, we develop solutions tailored to the unique needs of our clients. Bringing our in-depth understanding of the threat and regulatory landscape, we assist our clients in addressing their complex Cyber Security challenges.

40 Shareholders

Our network

Financial performance
Sustainable growth
Responsible long-term sustainable strategy
Sound corporate governance and stewardship
Strategic and financial updates issued via RNS Reach and RNS respectively
Regular meetings with investor relations, management and Board members
Investor roadshows after the full and half-year results
Open-door policy with investors
AGM
Completed a successful investor relations refresh in January 2023
Implementation of investor management system – to enable more focused and productive engagement with both shareholders and analysts
New strategy launched in February 2023, with investor roadshow to build deeper understanding of our vision
Following our trading update in March 2023, the management team offered shareholders the opportunity to meet to discuss what had happened and further engage how the new strategy would address concerns
Building on our technology heritage and our role as trusted advisors to governments and regulators we provide independent, technical expertise to improve cyber resilience policies
By understanding and shaping new and emerging regulations and policy proposals we can develop the right solutions to prepare for our clients’ future needs and requirements
Building alliances with global think tanks and foundations, trade associations and campaign groups to pool resources, amplify our messages and maximise impact
Strategic relationships with national technical authorities, and support for government initiatives across all our regions through direct engagement
Representation on senior government advisory panels
Engaged with regulators around the world to advocate for the responsible development of cyber security policy and legislation in Canada, Switzerland, the UK and India, paving the way for greater consistency and clarity for our clients and support compliance
Joined the United Nations’ intersessional consultation on a new cyber crime convention, making# Strategic report

Culture

At NCC Group we embrace difference and are connected by our purpose to make the digital world safer and more secure. Across our global operations we form a phenomenal network, working together, collaborating and innovating to support our clients. We are guided by our Code of Ethics and our values, which define our behaviours – treating everyone and everything with respect. This is the foundation of our culture and we strive to create an environment where everyone is welcome, feels safe and can be successful.

Our mission unites us as a global community. We serve many of the world’s leading businesses. Our focus is on enabling them to be their very best, and they feel empowered with managers and leaders who inspire them. We provide clarity on their role and as Above all, we give colleagues the opportunity to follow their vocation and say with conviction that what they do makes the digital world safer and

Michelle Porteus
Chief People Officer

Our values

We work together
We have each other’s back
We are brilliantly creative
We look at things differently
We embrace difference
We respect each other
We take responsibility
We get things done in the right way

Wellbeing

Our work can be exciting and intense, delivered by passionate, committed teams. We recognise the level of focus required to deliver to high standards, and acknowledge that the pressures of external and internal factors, when combined, can lead to burnout. We’ve come through a pandemic where the focus was very much on mental and physical wellbeing, into some challenging economic headwinds – not just for NCC Group but also personally for colleagues. This year we enhanced our wellbeing programme to cover financial wellbeing too. As we headed into the Group’s first redundancy programme in February 2023, the support was welcomed by those impacted, and their teammates who remained.

Mental wellbeing

We have a global network of trained Mental Health First Aiders, who provide support to their colleagues as required or requested. We ensure that there are clear and comprehensive wellbeing policies in place for colleagues around the world, as well as on the ground support through the people team. All managers are offered training in mental health awareness and throughout the year we run various colleague engagement campaigns to ensure that it’s always okay to talk about mental health.

Physical wellbeing

As we continue to evolve how we work, we have made decisions to close offices and embrace hybrid working practices for those close to our main office hubs. Colleagues are supported financially to set up their homeworking space, to ensure they are operating in a safe environment. In the US, we changed the policy for new colleagues, to enable them to access negative vacation of up to 40 hours within their first six months (a period that is normally used to accrue future time off) and putting emphasis on the balance of work and time away from the business, ensuring they are empowered to take time off to rest and recharge as needed. In addition, colleagues are able to access a number of benefits to support their financial wellbeing, for example, through our Share Purchase Save – to enable colleagues to purchase up to five percent of their salary, and our Share Incentive Plan (SIP) which allows colleagues to buy shares at a discounted rate, with any dividends reinvested into the plan.

In addition, long-service colleagues received additional days off added to their annual allowance with the first milestone for an additional day being four years.

Financial wellbeing

In the US we ran our first financial wellbeing week providing colleagues with an extensive programme of support on personal budgeting, saving for the future, retirement and much more. We also introduced a wellness bundle that supports financial, physical and mental wellness. Our UK financial wellbeing programme included introducing new mortgage broker benefits and free one-to-one pension adviser meetings as well as a host of other internal and external resources for colleagues to access. In Spain we ran two external training sessions to help colleagues learn how to manage stress and build financial resilience. Bringing it all together we also launched Perkbox, a global discounts and perks app which also includes access to a wellbeing hub.

Professional development

NCC Group has become a hub for talent, a place where people can develop personally and professionally. We offer a broad range of career options across our technology, sales and professional practices. We strive to create an inclusive environment to grow, and we have an embedded transparent performance management process to support this.

Performance management

Colleagues and their managers are encouraged to meet on a regular basis to review performance, with a formal documented review at the half and full year. The performance review plays an important role in supporting colleagues’ personal development opportunities, while providing role purpose and clarity. Career paths guide options, and our commitment to internal mobility and the open approach to vacancies support our ambition to retain our talented teams and enhance careers within the Group.

64 colleagues took up new roles within the organisation, with a focus on developing our next generation of leaders. We also continued to embed our talent review process across the business, ensuring that high potential colleagues are identified and developed through a range of interventions and activities.

Learning and development

In FY23 we brought the local training teams together as one global team to enhance our learning and development programme. The team is focused on building capabilities to support our move to a global operating model – we’ll continue to invest in career paths and equipping colleagues with the tools and knowledge to develop their own careers, supported by our performance management process.

Colleague engagement

In 2022 we decided to move away from the annual colleague survey to a more progressive way of measuring sentiment on a quarterly basis. We partnered with Glint, the LinkedIn engagement programme, with the benefits of managers having direct access to results (while still preserving anonymity of participants) and being empowered to own the results, the conversation and actions locally with their teams. This regular pulse is critical while NCC Group moves through this phase of transformation in the next chapter of the strategy and provides the executive team with a rounded view on how colleagues are feeling.

Other sources of feedback are also sought, and this includes regular and very successful listening sessions hosted by the executive team and members of the senior leadership team, regular deep dives with key business units, employee resource group forums, with the information can be located and answers any questions as they arise. In the UK, Spain and Australia we operate colleague forums, where colleagues are elected by their peers to meet with management on a regular basis to discuss what’s on their minds. And in the Netherlands, colleagues have appointed representatives forming a Works Council.# Non-financial and sustainability information statement

With the implementation of our new strategy and changing colleague recognition scheme with the aim of relaunching it in the second half of FY24.

Diversity and inclusion

We want to create an environment where all colleagues feel psychologically, emotionally and physically safe to be authentic, share their personal experiences and have equal opportunities to achieve, and that is representative of the diversity of the world they live in. In 2020 we established our colleague resource groups in support of Race and Ethnicity, and in 2022 we also launched an Accessibility group. Each of the groups has a people team partner who supports it in running engagement activities and making change happen.

Our colleague resource groups have been actively engaged in:

Reviewing and editing our US and Canada Colleague Handbook
Enabling the choice in use of pronouns in Workday – our HR platform for global employees and across our Microsoft tools
Providing input into the company’s strategy for climate impact, to ensure that our commitments to sustainability enable us to benchmark where we are today and track year on year improvement
Changing the US holiday calendar from 2024 to enable Juneteenth to be observed from 2022

Colleague Resource Groups continue to actively create engagement opportunities for the wider community, bringing everyone together to learn, embrace and celebrate differences.

Gender diversity

As a UK-based company we see the requirement to publish gender pay gap figures as a positive indicator of our progress towards a fully inclusive workplace. From 2022 we extended this practice to include North America and the Netherlands. We are seeing steady progress but not as fast we would like it to be. Pay gaps exist because genders are not represented equally at different levels in the Company – not because we’re not paying equally. NCC Group still has too few women at senior levels of the organisation and while female representation has significantly improved, and we see women moving from lower pay quartiles to upper pay quartiles, we know there’s still much more to do. Improving gender representation really matters to us. Overcoming the barriers of inclusion to achieve a gender-balanced workplace will take time and sustained effort, underpinned by a plan to drive change. We remain committed to progress on inclusion for the longer term, both for our current colleagues and future talent coming into our industry.

	Male	Female	Undisclosed
* Includes the CEO and CFO. Direct reports to the Executive Committee	45%	55%
Board	37%	63%
Executive Committee*	44%	56%
Group	25%	73%	2%
New hires in FY22	26%	9%	65%

NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Championing sustainability through strategic action

NCC Group has become a hub for talent, a place where people can develop personally and professionally.

As a part of our commitment to bolstering sustainability, this year marks an important milestone in our journey. We partnered with Ever Sustainable to undertake a comprehensive materiality assessment. This initiative has granted us the chance to engage directly with our colleagues, clients and shareholders, and the broader industry to benchmark our current standing, define our future priorities and integrate sustainability deeply into our operations. Upon completion of the materiality assessment, we proudly present our inaugural sustainability strategy, available in our detailed launch report.

Making the digital world safer and more secure

We recognise the paramount importance of Cyber Security as the world becomes more connected and relies on technology to progress. As a people-driven, technology-empowered global Cyber Security and Software Resilience business, we provide solutions that aim to make the digital world more secure and resilient. Our focus extends from cutting-edge technologies critical to achieving net zero transition plans, to fortifying existing technologies against potential cyber threats. It’s what we do every day for our clients. To further share our expertise, we developed a global giving back programme. This initiative empowers our colleagues to actively protect our local communities and fosters the next generation of cyber talent through partnerships and sponsorships.

Delve into our business model on pages 14 and 15
Explore our sustainability strategy launch report

The change begins within

Recognising the vital role of sustainability, we assigned a Board member, Non-Executive Director and Head of the Audit Committee Lynn Fordham, to be responsible for sustainability in January 2023. Last summer, the Board took part in a workshop with our climate partner, Planet Mark, and now, with our new sustainability strategy in place, we are ready to enhance sustainability engagement at every level of our organisation. Expanding our Climate Change Working Group to support TCFD reporting, we are setting in motion a structure wherein each key area identified in our sustainability launch report has executive ownership and associated KPIs. This will enable us to measure, track and report our progress, in alignment with our overarching business strategy.

Read more on our strategy on pages 24 to 28

We are wholly committed to doing our part to create a better world for our colleagues, our clients, our communities and our planet.

Mike Maddison
Chief Executive Officer

NCC Group plc 46

In preparation for reporting against the European Union Corporate Sustainability Reporting Directive (CSRD) and to ensure we continue to embed sustainability into our business strategy, we appointed an independent materiality assessment that sought to understand the most significant topics for stakeholders. The assessment took a ‘double materiality’ approach, considering both the impact of the Company’s activities on the environment and society, and the impact of external sustainability matters on the Company’s development, performance and future prospects. It also ensures we understand how NCC Group’s business activities have an external impact. This double materiality approach enables us to consider both the risk and the opportunity.

Methodology

Based on the insights we have gained over the past few years from our stakeholders – from rating agencies to colleague surveys and client bid requests – we decided to assess impact against 26 topics across environmental, social and governance factors. It was important to us that we didn’t restrict this list or close out any risks or opportunities, and we gave stakeholders further opportunity to comment on anything they thought was missing. The assessment process sought to integrate industry research, risk, opportunity and impact analysis and insights gained from the stakeholder engagement process. These were then converted into quantitative scores where possible.

NCC Group plc 47

Key:

Environmental:
* GHG emissions
* Energy management
* Waste and e-waste
* Biodiversity loss
* Climate adaptation

Social:
* Data privacy and ethics
* Professional development
* Cyber Security
* Employee mental health and wellbeing
* Employee engagement
* Labour practices and human rights
* Social value
* Product accessibility and inclusion
* Community outreach
* Selling practices and product labelling

Governance:
* Anti-bribery and corruption
* Product security
* Product design and lifecycle management
* Product innovation and impact
* Digital capabilities and access
* Executive remuneration and incentivisation
* Opportunities in cleantech
* Supply chain management
* Sustainability awareness and capability
* Systemic risk management

Taking a multidimensional approach to materiality

1. MAXIMISE
2. MITIGATE
3. MANAGE
4. MONITOR

	Social	Governance	Environmental
1. MAXIMISE	Employee engagement, Employee mental health and wellbeing, Data privacy and ethics, Diversity and inclusion, Professional development	Executive remuneration and incentivisation, Product innovation and impact, Opportunities in cleantech, Sustainability awareness and capability, Systemic risk management	GHG emissions, Climate adaptation
2. MITIGATE	Cyber Security, Labour practices and human rights	Anti-bribery and corruption, Product security, Supply chain management	Energy management, Waste and e-waste, Biodiversity loss
3. MANAGE	Social value, Product accessibility and inclusion, Community outreach, Selling practices and product labelling	Product design and lifecycle management, Digital capabilities and access
4. MONITOR

Taking a multidimensional approach to materiality continued

In assessing the relative importance of the topics in our materiality assessment we used the following process:

Prioritising topics

Step 1 Define and decide the final list of topics keeping scope broad enough to capture the best possible picture.

Assigning values

Step 2 Identify the main risks, opportunities and impacts of each topic.
Step 3 Assign values for outward and inward impacts and a likelihood rating for risks and opportunities associated with each topic, combining to define a final impact value to plot on the X-axis.

Setting the scope

Step 4 Input outcome of stakeholder engagement with each topic scored on its significance to the stakeholder group, weighted on importance and size of the sample group.
Step 5 Map each topic onto a matrix to help visualise the relative importance.# Step 6 Prioritise the topics, linking to the NCC Group purpose, vision and strategy to determine where resources should be allocated to have the greatest impact, minimise risks and maximise opportunities for the business. Using materiality to drive strategy and impact

The materiality assessment helped us to identify what environmental, social and governance issues were most material and significant to our business and stakeholders. We looked at the topics plotted on the matrix through four lenses to do this and to identify areas to maximise, mitigate, monitor and manage.

Significance to stakeholders

Impact on the business/external impact

3. Manage
- Engage with stakeholders to gather views on the issue
- Disclosure level determined by regulation/stakeholder feedback
1. Maximise
- Issues that are core to the sustainability strategy
- High level of disclosure to demonstrate ambition and progress
4. Monitor
- Monitor the issue for changes to materiality
- Lower level of disclosure
2. Mitigate
- Build understanding and internal capability to mitigate potential impacts
- Transparent disclosure needed

NCC Group plc 48

The materiality assessment is just the start, and we will now develop specific goals and targets within our control in line with our business objectives and stakeholder expectations. Enhancing our approach to sustainability enables us to mitigate  growth and innovation – something that is at the heart of NCC Group’s DNA.

 page 16

With a new framework, informed by the materiality assessment, we will continue to improve not only how we report and adhere to reporting regulations, but more importantly how we continue to drive responsible business practice. The full detail of this and how that led to our new framework can be found in the sustainability strategy launch report.

Securing our future

We firmly believe that our purpose and approach to sustainability are intertwined, ultimately securing our future as a business. Central to our purpose is the drive to make the digital world safer and more secure, building a global Cyber Security and Software Resilience capability that enhances and advances sustainable development. Sustainable development relies on the adoption of digital technologies. The transition to a greener, more equitable and inclusive society manifests through the development of innovative solutions such as smart cities, renewable energy grids and clean transportation, as well as the accessibility and widespread adoption of remote education and healthcare solutions. However, these transformative benefits can only be fully realised when these digital solutions are resilient and trusted, which requires robust Cyber Security measures. By advancing Cyber Security solutions and capacity building, we are facilitating a secure digital space that allows for the full potential of these sustainable initiatives to be unleashed. This makes Cyber Security not merely a defensive measure but a proactive enabler of progress and development. Our purpose to make the digital world safer and secure transcends all five pillars of The United Nations Global Goals – peace, prosperity, people, the planet and partnerships. Digital transformation is a   safer, fairer world for everyone, in our increasingly digital lives. Our purpose and our vision as a people-led, tech-enabled business position us as an essential partner in digital transformation and sustainable development.

NCC Group plc 49

Strategic report

Climate action

Non-financial and sustainability information statement continued

  and Scope 3 emissions were calculated and verified by Planet Mark in line with the GHG Protocol Corporate Standard. Planet Mark calculated this from verified third party data and invoices as part of our overall carbon certification. Note the certification has not been independently audited by KPMG. Scope 3 emissions for transmission and distribution, and travel distances were calculated using the units of energy consumption and travel distances provided respectively, multiplied by the relevant BEIS emissions factors. Some conversions were used,     colleagues but neither received the response rate required to provide accurate benchmark data for their respective calculations. Our priority in FY24 is to improve on this with an engagement plan. In FY23 we committed to improving the data collection process required from landlords. We significantly improved the number of offices in our calculations through improved landlord engagement, as well as extending coverage of our external data centres. We have outlined our commitment to decarbonisation and our continuing net zero journey in our new sustainability strategy - and this includes focusing on including the relevant Scope 3 categories in future reporting. Once we have an accurate report on our emissions, we can then work with Planet Mark, and other experts where applicable, to set credible, science-based targets to achieve net zero before 2050. The reporting period is aligned with our financial reporting year  for which NCC Group is directly responsible. Having considered the production metrics within the business, we have concluded that annual turnover is the most appropriate to achieve a benchmark, which aligns with the carbon reduction policy and methodology we will work towards in FY24. Our benchmark was set against a year still impacted by restrictions on travel caused by the global pandemic, and therefore this year we’ve observed an increase in travel and office usage. This has led to a temporary rise in our overall carbon intensity. As a people-led business, this revitalisation of travel and face-to-face time was essential, and this is something impacting other businesses too. Despite the overall increase in emissions we were successful in reducing emissions per colleague by 4.6%, which is one of our metrics as we mature our carbon disclosure reporting capability. Our focus continues on improving data, to fully understand the source of our emissions, and to enable us to set credible, science-based reductions to achieve net zero before 2050. By net zero, we follow the guidance from Planet Mark, which is a ligned to the principles of the Science Based Targets initiative  absolute emissions across all three Scopes by at least 90%. Read more on our journey to net zero in our sustainability strategy launch report 2020/21 999 2021/22 298 2022/23 979

Electricity and heat and steam (tCO₂e)
2020/21	125
2021/22	80
2022/23	189

Gas (tCO₂e)
2020/21	72
2021/22
2022/23

Company owned cars (tCO₂e)
2020/21	47
2021/22	135
2022/23

Business travel (tCO₂e)
2020/21	29
2021/22
2022/23


Electricity: 74%
Heat and steam: 1%
Natural gas: 9%
Company car travel: 6%
Business travel: 10%

 Emissions by type  | 13 | 67 |

NCC Group plc 50

Strategic report

Non-financial and sustainability information statement continued

Total GHG (tCO₂e)	Source	2022	2023	tCO₂e change from previous year	% change from previous year
Scope 1
	Gas	80.0	124.7		
	Company vehicles
	Diesel	22.6	5.2		
	Petrol	24.2	12.3		485%
	Hybrid	—	4.0		
	Fleet fuel – petrol	—	43.0	43.0	—
		58.3	47.0	
Total Scope 1		200.4	183.0		
Scope 2
	Electricity	297.8	924.5	979.0	54.5
	Heat and steam	—	4.9	19.8	
	Company vehicles – electric	—		13.7	
Total Scope 2		297.8	924.5	1,012.5	
Total Scope 1 and 2		424.6	1,195.5	63.8	6%
Scope 3
	Business travel		66.7	134.7	68.0
	Transmission and distribution losses	—	54.9	52.9	
	Heat and steam transmission and distribution losses	—	0.3	—	
	Fleet transmission and distribution losses	—	—	0.3	0.3
Total Scope 3			121.9	187.9	66.0
Total Scope 1, 2 and 3		453.7	1,383.4		

Underlying energy use

The table below shows the proportion of energy use that occurs in the UK and non-UK countries alongside the total carbon emissions. In FY23, 43% of the Group’s energy consumption and 35% of carbon emissions arose from the UK.

Area	kWh	% of global energy use	Total emissions (tCO₂e)	% of global emissions
UK	2,201,099	43%	484.5	35%
Non-UK	2,925,189	57%	898.9	65%
Total	5,126,288	100%	1,383.4	100%

Intensity metric

	Amount	Turnover (£m)	Total emissions (tCO₂e)	Intensity per turnover (tCO₂e)
	335	4.00		
				

Comparison	15.10%	6.30%	10.40%	2.50%

 carbon report on our website

NCC Group plc 51

Strategic report

Non-financial and sustainability information statement continued

Disclosure index

  Directive requirements contained in sections 414CA and 414CB of the Companies Act 2006.# Reporting topic Policies and standards

Climate-related disclosures

Section reference	Page	Website resources
• Environmental policy	53
• Sustainability report	70
• TCFD report	40
• Principal risks and uncertainties
• Stakeholder engagement
• Sustainability strategy launch report	40
• Planet Mark certification
• Streamlined Energy Carbon Report
Colleagues	42
• Whistle-blowing policy
• Code of Ethics
• Disciplinary and grievance policy
• Sustainability report
• Stakeholder engagement
• Remuneration Committee report
• Our culture
Social and community matters	40
• Modern slavery statement
• Code of Ethics
• Supply chain Code of Conduct
• Giving back policy
• Matched funding policy
• Sustainability report
• Stakeholder engagement
• Sustainability strategy launch report	40
Respect for human rights	42
• Modern slavery statement
• Data privacy policy
• Global equal opportunities and diversity policy
• Sustainability report
• Stakeholder engagement
• Culture
• Sustainability strategy launch report	40
Anti-bribery and corruption
• Anti-bribery and corruption policy
• Gifts and entertainment policy
• Sustainability report
• Audit Committee Report
• Sustainability strategy launch report
Business model
• N/A
• Our business model
Principal risks and uncertainties	70
• Risk register
• Principal risks and uncertainties
• Audit Committee Report

TCFD reporting helps organisations like ours disclose climate-related financial risks and opportunities in a structured way. The UK government mandates climate-related disclosure for all UK listed companies – we have produced a comprehensive TCFD Report. Our report focuses on the four pillars of the TCFD framework: Governance, Strategy, Risk management, and Metrics/targets.

To ensure consistency across our report, we adhered to section C of the TCFD Annex, titled “Guidance for All Sectors”. As a result the following are documented as partially compliant with further detail available within this report:

Governance: We have started to incorporate the financial implications of climate scenarios into our financial planning and in the next reporting period will look to develop a quantitative scenario analysis and integrate into financial planning.
Strategy: We have started to measure and manage our Scope 1 and 2 emissions, including business travel, electricity and distribution losses, heat and steam transmission and distribution losses. We continue to improve data collection from suppliers and understanding of colleague commuting impacts to enhance our reporting across other Scope 3 categories, through various planned engagement activities in the next period.

Each pillar of our report includes a table detailing our current disclosure and areas of focus for 2024. Our assessment indicates a low risk of exposure to physical and transitional climate changes, thanks to our business model. However, we acknowledge the high importance of mitigating greenhouse gas emissions, which emerged as a priority from stakeholder feedback in our recent materiality assessment. We continue to partner with Planet Mark, a leading sustainability certification organisation, to calculate, verify and target reductions in our carbon footprint and support our commitment towards net zero before 2050. We recognise the considerable opportunities presented by the growing climate-focused market. Our collaborations with clients in industries such as electric vehicles, renewable energy, operational technology and other climate-friendly technologies underscore our readiness to seize these opportunities for sustainable growth.

Evolving our sustainability agenda

We are pleased to present NCC Group’s second annual report in accordance with the TCFD recommendations.

Governance

TCFD recommended disclosure	Compliance	NCC Group disclosure	Focus areas for FY24
A. Describe the Board’s oversight of climate-related risks and opportunities	Compliant	• The Board has appointed the Head of the Audit Committee as the lead Non-Executive Director responsible for sustainability. Monthly updates are provided via the CFO report to the Board as well as directly from the Director of Investor Relations and Sustainability with the full Board, including an update on progress against the Group’s goals and targets where appropriate. • The Board takes overall accountability for the management of climate-related risks and opportunities and considers them as part of its overall risk review processes. For example, the Board (and management undertook detailed analysis of various ESG and climate-related criteria to facilitate conscious decision making on the location of NCC Group’s new global delivery centre to support execution of the strategy. • We are in the process of incorporating ESG criteria into the Group’s budgetary planning process and financial planning for FY25. • From the 2023 materiality assessment, set goals for FY24, with at least quarterly updates through the CFO report, to show progress against the plan and continue to mature the process by which the Board will oversee progress against the targets for addressing climate-related issues. • Meet at least quarterly with the nominated NED responsible for sustainability to reflect, discuss and ensure actions are being taken. • Continue to develop NCC Group’s net zero journey and broader sustainability strategy with oversight and input from the Board.

Strategic report

How ERM fits into the Group Committee structure

Internal audit	External and ISO auditors	Board Audit Committee	Cyber Security Committee	Enterprise Risk Management Committee	ExCom
				• The above diagram shows how the Enterprise Risk Management Committee feeds into the Audit and Cyber Security Committees, which in turn reports to the Board. Actions are also driven back down from the Board as reflected in the above diagram.

Governance continued

TCFD recommended disclosure	Compliance	NCC Group disclosure	Focus areas for FY24
B. Describe the management’s role in assessing and managing climate- related risks and opportunities	Compliant	• A new role was created in January 2022 to bring sustainability and investor relations together. The newly appointed Director of Investor Relations and Sustainability (formerly Director of Corporate Reporting) is responsible for overseeing the Group’s sustainability agenda and reporting to the Chief Financial Officer, provides advice and updates to the Executive Committee on climate-related issues as and when relevant. • The Enterprise Risk Management (ERM) Committee, whose terms of reference have been updated to include climate risk, meets quarterly and addresses climate risk as part of that process. • Continue to mature NCC Group’s net zero journey, including improvement of collation of Scope 3 emissions. • Review and update the terms of reference for the Climate Change Working Group in line with the materiality assessment and integrate into the existing Board and executive governance processes. • Once all new executive members are appointed and upon completion of the sustainability strategy, identify executive ownership for each element including climate change and how this is supported through the Climate Change Working Group. • Integrate the output from the double materiality assessment conducted in FY23 into our newly launched business strategy, to incorporate key ESG considerations into decision making where relevant. Lynn Fordham, the lead Non-Executive Director for Sustainability, was appointed by the NCC Group Board Chair. In addition to her position as the Head of the Audit Committee, Lynn’s role is to oversee the Company’s sustainability strategy, ensure its integration with the overall business strategy, and provide regular sustainability updates to the Board. While there is no specific Board committee for environmental matters, the ERM Committee, supported by the Director of Global Governance addresses these issues. The ERM meets bi-monthly and is attended by our CEO and CFO. It discusses, among other risks, sustainability and environmental challenges, which are then reported to the Board. From March to May 2023, we conducted our first materiality assessment considering both inward and outward impacts (see page 73). The assessment engaged various stakeholders, including shareholders, colleagues and clients. The results formed the foundation of our newly launched sustainability framework, which outlines our priority areas for the next one to three years. As NCC Group’s business strategy evolves, the sustainability framework will be integrated into our strategic planning. An engagement programme is being developed to ensure that our internal stakeholders, including the Board, are informed, and engaged on not just climate change but all priority sustainability topics. This programme will feature training sessions, workshops and continued awareness-building initiatives. The Board and the Executive Committee are committed to communicating their dedication to addressing climate change. This will be demonstrated through our annual Sustainability Report and reinforced through other appropriate internal and external communication channels throughout the financial year.

Strategy

TCFD recommended disclosure	Compliance	NCC Group disclosure	Focus areas for FY24
A.

A. Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term

See tables on page 56 describing risks and opportunities, which were selected based on location of our existing business and known climate change risks affecting the broader region we operate in.
Monitor actions arising from the risk register.

B. Describe the impact of climate-related risks and opportunities in the organisation’s business strategy and financial planning

An impact in our ability to meet climate-related disclosures that are required by clients in their capture of Scope 3 emissions. Each sector we operate in has its own requirements, because of legislation and their own commitments. Not understanding or assessing this could have an impact on NCC Group’s ability to meet the requirements in a contract.
Climate-related taxes, or fines for non-compliance could impact the business if we fail to take action.
Our ability to raise capital to invest in growth, may be restricted if we fail to make progress on climate related action, which forms part of sustainable lending requirements.
As part of the verticalisation element of our strategy, we are undertaking research to ensure we meet the broader ESG criteria that applies to our clients. We are creating a knowledge bank for sales teams and will conduct regular briefings/ updates through internal channels.
Develop a knowledge management repository that supports sales/bid teams in accurately representing how NCC Group supports clients in meeting their specific climate-related disclosures.
Working in collaboration with strategy, marketing and public affairs, ensure that environment and broader sustainability considerations are built into the understanding of client needs by sector and by region.

C. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario

We have conducted an initial quantitative analysis based on 2°C and 4°C scenarios to understand potential impacts.
Develop the initial scenario analysis and integrate, aligned to NCC Group’s strategy development, into future financial and strategic planning activities as our net zero journey matures.

In our ongoing commitment to the TCFD’s Strategy pillar, we are not only advancing our approach to managing climate-related risks but also actively pursuing growth opportunities within the climate change sphere. We’ve formed strategic partnerships, such as our collaboration with Planet Mark, to help us lower our carbon footprint and develop more sustainable business practices. As a proud member of techUK’s Responsible Business Community, we’re also exchanging insights and best practices with industry peers to collectively address climate change.

In early 2023, we appointed our first Director of Strategy, who will play a crucial role in our internal Climate Change Working Group. This group is currently tasked with evaluating the potential impact of climate change on our business operations, identifying both risks and opportunities. To date, the group has been focused on improving the collation of climate-related data to assess our current state and instrumental in helping to progress our ambitions to set achievable targets for reducing our carbon emissions over the next five years. New terms of reference for this working group are to be defined along with clearly identifying how it is embedded into our existing governance process from the Board down.

Our focus is not limited to risk mitigation but extends to exploring opportunities where we can make a positive impact. This includes improving the energy efficiency of our operations, collaborating with our landlords and requesting renewable energy sources, and identifying ways our technology solutions can contribute to our clients’ sustainability efforts. As we continue our climate change journey, we are committed to regularly reporting our progress against these objectives, showing transparency in our endeavours, and constantly seeking ways to better our efforts.

Climate-related risks

Our comprehensive risk management framework (summarised in the Risk Management section of the Annual Report on pages 25-28) encompasses climate-related risks. We categorise these risks into:

Transition Risks: These arise from the process of adjustment towards a lower-carbon economy. This includes policy changes impacting climate-related risks and opportunities as well as existing forecasting processes considered by management which are reviewed and evaluated on an annual basis.
Physical Risks: These arise from the physical impacts of climate change, including increased severity and frequency of extreme weather events and longer-term shifts in climate patterns that may affect climate-related risks and opportunities.
Market & Financial Risks: These relate to the potential impacts of international agreements and commitments, technological trends and changes to policy or carbon pricing and their impact on our operations, client services and supply chain. For instance, short-term risks might include immediate regulatory changes or extreme weather events, while long-term risks could be major shifts in our industry driven by the transition to a low carbon economy.

Each identified risk is paired with corresponding mitigation measures, such as implementing energy-efficient technologies or diversifying our supply chain, aimed to reduce our vulnerability. While these risks apply to the Group as a whole, we do recognise that certain locations face unique challenges. For example, our operations in coastal areas are more susceptible to rising sea levels and increased frequency of extreme weather events.

For a more detailed understanding of the climate-related risks and opportunities we face, please refer to the table below. It provides a snapshot of the specific challenges we’re addressing and the strategic responses we have undertaken.

Risk	Risk impact	Short/medium/long term	Regions impacted	Mitigating activities
Physical risks
Extreme weather (acute)	Causing business disruption and loss of service delivery and therefore revenue	Short to medium term	All but particularly North America	• Business interruption cover • Business Continuity Plans • Remote working in place • Dutch flood defences in place
Sea level rises (chronic)	Increased likelihood of flooding in Delft and Amsterdam offices causing increased insurance premiums	Long term	Amsterdam offices
Transition risks
Increase in taxes and levies for greenhouse gas emissions	Disruption and increased costs to ensure compliance with new legislation	Medium term	Depends on local legislation	• Working with Planet Mark to calculate our carbon footprint, ways to reduce it, and colleague and Board engagement, and helping progress our net zero journey
Move to net zero	Increased costs required to lower emissions	Long term	Global	• Remote delivery of client services where possible • Company car scheme only for electric and hybrid • Annual calculation of carbon footprint with Scope 3 emissions collation started • Rigorous and transparent budget setting will identify increasing costs associated with carbon emissions reduction
Margin risk	Impact on results due to extra costs incurred to lower emissions	Medium term	Global	• Accounting policies regularly reviewed • Rigorous and transparent budget setting will identify increasing costs associated with carbon emissions reduction
Reputation risk	Increased stakeholder concern and changing customer behaviours	Medium term	Global	• Ongoing dialogue with investors • Benchmarking and independent reviews undertaken through a double materiality assessment • ESG information publicly available
Supply chain risk	Substitution of existing products and services with lower emission options	Medium to long term	Global	• Scope 3 questionnaires sent to supply chain partners equating to 80% of our spend • Business Continuity Plans • Reviewing office strategy

Opportunities to further reduce NCC Group’s impact on the environment:

Resource efficiency: By embracing more efficient modes of transport, promoting recycling, encouraging hybrid working models and operating within efficient buildings, we can lessen our environmental footprint, improve colleague satisfaction and reduce operational costs. For instance, removing unnecessary travel not only reduces our carbon emissions but also empowers colleagues with more control over their work-life balance, contributing to improved morale and productivity (anticipated reduction in carbon emissions from reduced business travel).
Energy source: Our transition to lower emission energy sources, underpinned by the introduction of an electric/hybrid car scheme for all UK colleagues, demonstrates our commitment to sustainable practices. By giving colleagues access to green car options, we are mitigating our exposure to future fossil fuel price fluctuations and regulations. It also addresses our colleagues’ material concerns, fostering a culture of environmental responsibility and reducing our carbon footprint.
Market: As industries evolve in response to climate change, we’re strategically positioned to leverage these transformations.# NCC Group plc

Strategic report

TCFD continued

Strategy continued

For example, by partnering with companies transitioning into alternative energy sources or working on projects involving smart meters, electric vehicles, IoT technology for waste reduction and cloud data centres, we anticipate strengthening our market position and enhancing our reputation as a sustainable and responsible supply chain partner. This commitment to sustainability not only aligns us with an increasingly eco-aware market but also empowers us to lead in the space, fostering a culture of innovation and responsible business practices.

Scenario analysis

To understand the risks and opportunities our business faces considering climate change, we have conducted a quantitative scenario analysis. The output of these scenarios is provided below. These scenarios are chosen to reflect the diverse spectrum of possibilities that could unfold due to different levels of global effort to curb climate change. In the context of these scenarios, “transition risks” refer to the challenges associated with the shift towards a lower carbon economy, while “physical risks” denote the potential damage caused by climate change itself. In terms of the risks selected, these were based on physical locations and the nature of our business in key locations of North America, the UK, Europe and Asia Pacific. We are in the process of flowing this into our financial planning and will continue to do so as we mature our climate action planning and reporting.

Scenario 1 represents an “orderly transition” where there are rapid shifts in regulatory and market conditions, but the physical risks would be significantly reduced due to the effective global action on climate change. Conversely, Scenario 2 predicts lower transition risks but considerably higher physical risks due to the lack of substantial progress towards climate goals. We’ve further broken down these risks by timeline, classifying them as short, medium and long term.

The following table offers a comprehensive overview of NCC Group’s potential exposure to both transition and physical risks under each scenario. While our current analysis is qualitative, we are working towards quantifying these risks and opportunities as we progress towards our net zero targets and improve our data collection across Scope 1, 2 and 3 emissions. This analysis will inform the potential impact on our Financial Statement disclosures based on our materiality assessment results (see page 47 of the Annual Report) and known near to mid-term regulatory developments. However, we will continuously monitor both transition and physical risks, adjusting our mitigation strategy as necessary.

Risk type	Risk	Risk impact	Scenario	Short term	Medium term	Long term
Physical risk	Rising sea levels	Risk to NCC Group offices located in high risk areas, e.g. Delft, as well as colleague and customer homes resulting in business disruption	1	Low	Low	High
			2	Low	High	High
	Flooding	Impact to service quality and disruption to systems, increased costs to relocate colleagues	1	Low	Low	Low
			2	Low	High	High
Transition risk	Increase in taxes and levies	Disruption and increased costs to ensure compliance with new legislation	1	Low	Medium	High
			2	Low	Low	Low
	Margin risk	Impact on results due to extra costs incurred to lower emissions	1	Low	Medium	High
			2	Low	Low	Low
	Reputation risk	Increased stakeholder concern and changing customer behaviours	1	Low	Medium	High
			2	Low	High	High
	Supply chain risk	Substitution of existing products and services with lower emission options	1	Low	Medium	High
			2	Low	Low	High

Financial planning

We recognise the significant implications of climate-related risks and opportunities on our financial planning. We anticipate shifts in our future business model and strategy in response to evolving market conditions due to climate change. We foresee potential changes in customer preferences towards more sustainable products and services, along with possible disruptions in our supply chain due to extreme weather events. These factors are thoroughly considered in our business strategy development.

Our business strategy has been designed to be resilient to future economic and climate-related scenarios. And by running regular scenarios we can test that resilience, and ensure it’s considered in future business strategy development, enabling us to adapt accordingly, without disrupting or negatively impacting current operations. The scenarios are based on industry insights, which were used in the expert input into our materiality assessment. We will look to assess the potential financial implications of various climate scenarios and factor these into our revenue forecasts, expenditure plans and asset valuations from FY25 onwards. This will include a detailed analysis of potential climate-related liabilities and their impact on our financial stability. Our future aspiration is to incorporate climate considerations to influence future investment decisions by the Group, always reducing our carbon footprint, and gradually divesting areas that carry high climate-related risks. For now though, we are actively working to improve our operational efficiency and addressing things we can directly influence to reduce our impact on the environment and realise cost savings. In summary, our organisation is committed to integrating climate considerations into our financial planning process. We will continue to refine our approach as we gain more data and insights into the evolving climate scenarios.

Risk management

TCFD recommended disclosure	Compliance	NCC Group disclosure
A. Describe the organisation’s processes for identifying and assessing climate-related risks	Compliant	• Climate-related risks are managed through our enterprise risk management framework. • Monitor actions arising from the risk register.
B. Describe the organisation’s processes for managing climate-related risks	Compliant	• Climate-related risks are documented, mitigating actions are considered, a risk rating is assigned and associated actions are documented and followed up. • Monitor actions arising from the risk register.
C. Describe how processes for identifying, assessing, and managing climate- related risks are integrated into the organisation’s overall risk management	Compliant	• Climate-related risks are managed through our enterprise risk management framework. • Monitor actions arising from the risk register.

As part of our robust materiality assessment, we conducted in-depth, topic-based and industry research to identify our most material sustainability issues. Through a detailed materiality matrix, we also identified opportunities to enhance our sustainability performance by focusing on reducing GHG emissions, monitoring product design and lifecycle management, and mitigating biodiversity loss. Our approach is to address these opportunities through targeted initiatives in cleantech, increasing sustainability awareness and capability, and climate adaptation. Addressing these issues will involve closer collaboration with our supply chain, particularly our global landlords and our top suppliers. A key initiative in this regard is our Data Centre Management Strategy, aimed at reducing our energy consumption. In collaboration with our web development partner, Nexer, we have successfully reduced the energy consumption of our websites by 50%, applying eco-design principles.

Climate-related risks are managed through our NCC Group’s Enterprise Risk Management (ERM) framework, which is detailed in the Risk Management section of the Annual Report on page 70. It uses a sophisticated risk model to assess and score each risk based on likelihood and impact. Risks are re-evaluated consistently to ensure we’re responsive to evolving circumstances. Our risk management approach combines “top-down strategic” and “bottom-up operational” perspectives, fostering collaboration and promoting efficient risk identification. With respect to climate- related risks, we have outlined our strategies and targets for GHG emissions reduction and biodiversity preservation. These climate-related risks are integrated into our Principal Risks register and overseen by the Executive Risk Committee. The Audit Committee plays an active role in the ongoing review of these risks, their mitigations, controls and associated actions. This Committee meets on a regular basis and follows a stringent process for identifying, assessing, responding to and escalating serious concerns related to these risks. We firmly believe that this integrated and transparent approach will ensure effective risk management aligned with the principles of TCFD, while driving our strategic objectives for sustainability.

	Obtain assurance	Implement internal control	Adapt ERM
	Perform scenario analysis	Integrate into reporting	Use existing tools
	Solicit investor feedback	Assess financial impacts	Collaborate across the business
	Secure leadership buy-in	Establish Committee oversight
Audit Committee
Risk Committee

Metrics and targets

TCFD recommended disclosure	Compliance	NCC Group disclosure	Focus areas for FY24
A.

Disclose the metrics used by the organisation to assess climate- related risks and opportunities in line with its strategy and risk management process

Compliant

Reporting of greenhouse gas emissions for FY23 compared to prior years.
Commitment to net zero before 2050 in line with the Paris Agreement with regular reviews to improve as and when broader Scope 3 data is available.
Climate-related performance metrics incorporated into Remuneration in line with our Planet Mark certification commitment to reduce greenhouse gas emissions year on year. In our first two years, we are aiming to reduce our total greenhouse gas emissions by 5% recognising that as our data collection matures and improves, we may need to revise our reduction targets to reflect the most up-to-date data and methodologies available. We have achieved a reduction in colleague intensity, but an increase in absolute emissions due to a return to travel and office use following the pandemic.
Improve Scope 3 data collection and management to accelerate NCC Group’s net zero journey.

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas emissions and the related risks

Partially compliant

Greenhouse gas emissions reporting is still in its infancy.
We have reported Scope 1 and Scope 2 emissions for FY23 vs FY22.
Scope 3 emissions limited to business travel, electricity transmission and distribution losses, heat and steam transmission and distribution losses.
Supplier engagement to provide data was limited in response.
Colleague commuting data collated as part of the materiality assessment but not enough responses to enable calculation.
Improve supplier and colleague engagement to gather required Scope 3 data from supply chain activities and colleagues in relation to commuting and working from home impact.

Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets

Compliant

Set year two reduction in line with Planet Mark recommendations of 5%. This includes reducing colleague intensity by 2.5% and absolute emissions by 2.5%. We will also continue to seek location intensity through better understanding of our data and the steps we can take to reduce our impact.
Seek opportunities, as NCC Group’s management of climate change matures, to accelerate achieving net zero before 2050.

Meet the CFO Q&A with Guy Ellis

Guy Ellis is the Chief Financial Officer of NCC Group. He joined the company in February 2023 as Director of Finance and was promoted to Chief Financial Officer in April 2023. Guy has extensive experience in financial management, strategic planning, and business transformation, with a career spanning over 20 years in various senior finance roles. Prior to joining NCC Group, Guy held senior commercial finance roles at Vodafone and was Interim Director of the UK and APAC Cyber Security business.

Q. What do you think the role of a finance department should be?

The most effective finance functions act as a strategic force multipliers, enabling the business to achieve its goals. This involves not just providing robust financial reporting and controls, but also acting as trusted advisors to the executive team and the Board. I see that as a critical element of my role.

Q. What are you going to bring to the role?

I’m experienced in driving through transformational change. In the short term I’m focused on standardisation and simplification of our finance processes to enable better insights and reporting to both the executive team and the Board. My ambition is to build out a best-in-class finance function that can support the Group’s growth and scale at pace globally.

Q. What do you see as the biggest risk and opportunity for NCC Group in the next 12 months?

The biggest risk is the increasing global economic uncertainty, which may lead to reduced client spending. This risk increases in tandem with the rise in cyber threats, requiring increased client investment. So overall I have a positive outlook. The opportunities lie in the continued growth of the Security industry. We are building out our capabilities to offer integrated solutions to our clients and are well-positioned to support our clients’ digital transformation journeys. This is the right strategy for the company to a fully global business. The opportunities are significant. This is the right strategy.

NCC Group plc — 2022/23 key activities

Finalised the full operational review of the Software Resilience business to create additional Group contribution
Completed a scheduled refinance process with enhanced banking facilities
Continued to demonstrate effective cash management with strong cash conversion

2023/24 priorities

Identify cost efficiencies across Cyber Security and corporate functions, achieving in-year savings and full annualised contribution from FY25 onwards
Drive transformational change in processes and insights to support the business as we embed our strategy
Maintain strong cash conversion

Financial review

Overview of financial performance

| | \multicolumn{3}{c}{2023} | \multicolumn{4}{c}{2022} |
| :--- | :--- | :--- | :--- |
| | Cyber Security £m | Software Resilience £m | Central and head office £m | Group £m | Cyber Security £m | Software Resilience £m | Central and head office £m | Group £m |
| Revenue | 270.8 | 64.3 | – | 335.1 | 258.5 | 56.3 | – | 314.8 |
| Cost of sales | 184.7 | 18.4 | – | 203.1 | 166.2 | 16.0 | – | 182.2 |
| Gross profit | 86.1 | 45.9 | – | 132.0 | 92.3 | 40.3 | – | 132.6 |
| Gross margin % | 31.8% | 71.4% | – | 39.4% | 35.7% | 71.6% | – | 42.2% |
| Administrative expenses excl. D&A | 79.2 | 14.7 | 31.4 | 125.3 | 61.1 | 18.3 | 28.1 | 107.5 |
| Adjusted EBITDA¹ | 15.4 | 31.2 | – | 46.6 | 31.2 | 22.0 | – | 53.2 |
| Depreciation and amortisation² | 8.4 | 5.6 | 1.4 | 15.4 | 7.9 | 4.7 | 1.1 | 13.7 |
| Adjusted operating profit³ | 6.9 | 25.6 | – | 32.5 | 23.3 | 17.3 | – | 40.5 |
| Amortisation of acquired intangibles | 2.0 | 2.8 | – | 4.8 | 2.4 | 2.8 | – | 5.2 |
| Share-based payments | 1.7 | 0.9 | – | 2.6 | 1.9 | 0.6 | – | 2.5 |
| Individually Significant Items | 10.2 | 7.8 | – | 18.0 | 0.0 | 10.5 | – | 10.5 |
| Operating (loss)/profit | (6.0) | 14.1 | (1.4) | 6.1 | 19.0 | 9.2 | (1.1) | 27.1 |
| Operating margin % | -2.2% | 21.9% | n/a | 1.8% | 32.7% | 14.3% | n/a | 8.6% |
| Finance costs | 10.6 | 5.2 | – | 15.8 | 7.1 | 4.0 | – | 11.1 |
| Taxation | 1.8 | 1.8 | – | 3.6 | 3.4 | 1.3 | – | 4.7 |
| EPS Basic EPS | (0.7p) | 7.4p | – | 6.1p | 6.1p | 4.0p | – | 10.6p |
| Adjusted basic EPS⁵ | (0.7p) | 7.4p | – | 6.1p | 6.1p | 4.0p | – | 10.6p |

¹ Adjusted EBITDA excludes depreciation and amortisation, amortisation of acquired intangibles, Share-based payments and individual significant items.
² Depreciation and amortisation excludes amortisation of acquired intangibles.
³ Adjusted operating profit excludes amortisation of acquired intangibles, Share-based payments and individual significant items.
⁴ Basic EPS is calculated based on the weighted average number of shares in issue. Adjusted basic EPS is calculated on the same basis but before Amortisation of acquired intangibles, Share-based payments and Individually Significant Items. Please refer to the notes in the Annual Report for an explanation of APMs and adjusting items.
⁵ The 2022 figures have been restated for comparatives on the adoption of IFRS 17 in the Software Resilience business, to remove the profit on the Software Resilience fair value revenue adjustment and exclude the profit recognised from the prior year Software Resilience fair value revenue adjustment.

2023 has been a challenging year for the Group, as our expected Revenue performance and consequently our gross profit and overall profitability were impacted by a sharp market correction and the recognition of Individually Significant items that mainly relate to the impairment of North American Assurance Goodwill. These headwinds have further reinforced the need to implement the next chapter of our Group strategy and identify cost efficiencies across Cyber Security and corporate functions, achieving FY24 savings and full annualised contribution from FY25 onwards. Turning back in detail to our FY23 performance, Group revenues were up 6.7% to £335.1m (FY22: £314.8m). On a constant currency basis, Group revenues were up 5.1% to £335.1m. In our Cyber Security business, the Europe, and UK and APAC Cyber Security businesses grew on a constant currency basis by 7.4% and 7.7% respectively, with strong growth in UK Cyber Security aided by the recognition of £7.8m of deferred revenue following the successful implementation of IFRS 17. Excluding this impact, UK Cyber Security revenue grew by 4.2% on a constant currency basis, reflecting a decline in tech sector spend.# Financial Review

In our Software Resilience division, following the completion of  year of IPM contract renewals, which contributed to overall   to   to these potential contract renewals, total Software Resilience     generated sale orders of £4.7m, an increase of 38% compared to     performance of the Cyber Security business and lower direct     and training costs arising from inflationary pressures and further  c.£6.5m. Other higher costs include an increase in non-client travel and office costs (including the impact of our NCC       performance also incurred the indirect trading cost hosting our in person global NCC Conferences in June 2022 for the first time  impact of c.£5m year-on-year, of which c.£2.3m related directly 

Individually Significant Items

Individually Significant Items incurred during the year amounted  in Goodwill of £9.8m for the North American Assurance business following the recent reduction in spend by North American technology clients and £4.2m in relation to fundamental reorganisation costs as we reshape the Group to implement the next chapter of the Group’s strategy. The impairment of North American Assurance Goodwill has been recognised based on the  include costs associated with the strategic review of our   reorganisation. These were partially offset by a profit on disposal    profit performance, recognition of ISIs and after an increase in 

Interest Expense

The variable rate of interest cost increased due to the macro- economic environment and the write off of existing arrangement       amounted to     Net debt excluding lease liabilities    

Balance Sheet and Facility Headroom

Our Balance Sheet and facility headroom remains strong, during   multi-currency revolving credit facility and the remaining $46.7m of the original $70m term loan that was maturing in June 2024. The new facility now matures in December 2026 and includes a £75m uncommitted accordion option. In addition, we also secured an increase to our leverage covenant from 2.5x to 3.0x with an additional acquisition spike to 3.5x for the first twelve months of any acquisition. The weighted average margin of the facility also decreased and is payable on a ratchet mechanism  on the level of the Group’s leverage. The average interest rate for the year was 4.54% and is currently 6.27% following recent changes to base interest rates.   that paid in the prior year as the Board is conscious of the need to invest in new strategy and manage its net debt accordingly following the challenging year. 

Alternative Performance Measures (APMs)

Throughout this Financial Review, certain APMs are presented. These APMs used by the Group are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, Generally Accepted  current year results and comparative periods where provided. Financial review continued NCC Group plc 62

This presentation is also consistent with the way that financial performance is measured by management and reported to the Board, and the basis of financial measures for senior management’s compensation schemes and provides supplementary information that assists the user in understanding the financial performance, position and trends of the Group. At all times, the Group aims to ensure that the Annual Report and Accounts give a fair, balanced and understandable view of the  ‘Presentation of Financial Statements’ requires the separate presentation of items that are material in nature or scale in order to allow the user of the accounts to understand underlying business performance. We believe these APMs provide readers with important additional information on our business and this information is relevant for use by investors, securities analysts and other interested parties as supplemental measures of future potential performance. However, since statutory measures can differ significantly from the APMs and may be assessed differently by the reader we encourage you to consider these figures together with statutory reporting measures noted. Specifically, we would note that APMs may not be comparable across different companies and that certain profit related APMs may exclude recurring business transactions (e.g. acquisition related costs  performance and cash flows. As the Group manages internally its performance at an Adjusted operating profit level (before Individually Significant Items, amortisation of acquired intangibles and share-based  underlying trading of the business; this information is still disclosed as an APM within this Annual Report. This APM is reconciled to statutory operating profit, together with the consequently Adjusted basic EPS (before amortisation of acquisition intangibles, share-based payments and Individually 

The Group has the following APMs/non-statutory measures:






Cash conversion which includes Adjusted EBITDA (reconciled 


The above APMs are consistent with those reported for the year  and Software Resilience revenue excluding IPM acquisition which have been removed now that the Group has comparable 

The Group also reports certain geographic regions on a constant currency basis to reflect the underlying performance considering constant foreign exchange rates period on period. This involves translating comparative numbers to current period rates for comparability to enable a growth factor to be calculated. As these measures are not statutory revenue numbers, management considers these to be APMs. Further detail is included within the Glossary of terms to the Financial Statements that provides supplementary information that assists the user in understanding these APMs/non-statutory measures.# Financial Summary

Summary Income Statement

	2023 £m	2022 £m	% change
Revenue	335.1	330.3	1.8%
Cost of sales	203.1	198.7	2.2%
Gross profit	132.0	131.6	0.3%
Depreciation and amortisation	2.2	1.9	15.8%
Administrative expenses	97.1	59.5	63.2%
Adjusted operating profit	28.8	60.2	-52.2%
Individually Significant Items	-	-	-
Acquired intangible amortisation	-	-	-
Share-based payments	-	-	-
Operating profit	1.9	34.7	-94.5%
Finance costs	5.8	2.8	107.1%
Profit before tax	-3.9	31.9	-112.2%
Taxation	-1.7	-8.9	-80.9%
Profit for the year	-2.2	23.0	-109.6%
EPS
Basic EPS	-0.7p	7.4p	-109.5%
Adjusted Basic EPS	6.1p	17.2p	-64.5%

1 Adjusted operating profit is an Alternative Performance Measure (APM). Refer to the explanation of APMs and adjusting items.
2 Depreciation and amortisation excludes acquired intangible amortisation.
3 Administrative expenses excludes depreciation and amortisation, amortisation of acquired intangibles, share-based payments and Individually Significant Items.

Financial summary continued

Revenue summary

	2023 £m	2022 £m	% change at actual rates	2023 £m Constant currency	2022 £m Constant currency	% change at constant currency
Cyber Security	270.8	258.5	4.8%	270.8	270.5	0.1%
Software Resilience	64.3	56.3	14.2%	64.3	59.8	7.5%
Total revenue	335.1	314.8	6.5%	335.1	330.3	1.5%

*Constant currency figures are provided for information only and are stated at constant currency rates.

Divisional performance

Cyber Security

Cyber Security revenue analysis – by originating country:
| | 2023 £m | 2022 £m | % change at actual rates | 2023 £m Constant currency | 2022 £m Constant currency | % change at constant currency |
| --------------- | ------- | ------- | ------------------------ | ------------------------- | ------------------------- | --------------------------- |
| UK and APAC | 118.4 | 115.0 | 3.0% | 118.4 | 115.0 | 3.0% |
| North America | 99.3 | 77.2 | 28.6% | 99.3 | 77.2 | 28.6% |
| Europe | 53.1 | 66.3 | -19.9% | 53.1 | 66.3 | -19.9% |
| Total Cyber Security revenue | 270.8 | 258.5 | 4.8% | 270.8 | 258.5 | 4.8% |

Turning to the performance between each half of the financial year, the following revenue analysis by originating country demonstrates:

H1 2023
| | H1 2023 £m | H1 2022 £m | % change at actual rates | H1 2023 £m Constant currency | H1 2022 £m Constant currency | % change at constant currency |
| --------------- | ---------- | ---------- | ------------------------ | --------------------------- | --------------------------- | --------------------------- |
| UK and APAC | 61.6 | 54.6 | 12.8% | 61.6 | 55.0 | 12.0% |
| North America | 59.2 | 44.0 | 34.5% | 59.2 | 44.0 | 34.5% |
| Europe | 24.2 | 24.6 | -1.6% | 24.2 | 24.9 | -2.8% |
| Total Cyber Security revenue | 145.0 | 123.2 | 17.7% | 145.0 | 123.9 | 17.0% |

H2 2023
| | H2 2023 £m | H2 2022 £m | % change at actual rates | H2 2023 £m Constant currency | H2 2022 £m Constant currency | % change at constant currency |
| --------------- | ---------- | ---------- | ------------------------ | --------------------------- | --------------------------- | --------------------------- |
| UK and APAC | 56.8 | 60.4 | -5.9% | 56.8 | 60.0 | -5.3% |
| North America | 40.1 | 33.2 | 20.8% | 40.1 | 33.2 | 20.8% |
| Europe | 28.9 | 41.7 | -30.7% | 28.9 | 41.4 | -30.2% |
| Total Cyber Security revenue | 125.8 | 135.3 | -7.0% | 125.8 | 134.6 | -6.5% |

Cyber Security revenue analysed by type of service/product line:
| | 2023 £m | 2022 £m | % change at actual rates | 2023 £m Constant currency | 2022 £m Constant currency | % change at constant currency |
| --------------- | ------- | ------- | ------------------------ | ------------------------- | ------------------------- | --------------------------- |
| Assurance | 199.3 | 205.6 | -3.1% | 199.3 | 205.6 | -3.1% |
| Software Resilience | 67.8 | 52.9 | 28.2% | 67.8 | 52.9 | 28.2% |
| Other | 3.7 | 4.5 | -17.8% | 3.7 | 4.5 | -17.8% |
| Total Cyber Security revenue | 270.8 | 263.0 | 2.9% | 270.8 | 263.0 | 2.9% |

Assurance revenue decreased 3.1% to £199.3m (2022: £205.6m). The Software Resilience revenue increased 28.2% to £67.8m (2022: £52.9m).

Turning to the performance between each half of the financial year, the following revenue analysis by type of service/product line:

H1 2023
| | H1 2023 £m | H1 2022 £m | % change at actual rates | H1 2023 £m Constant currency | H1 2022 £m Constant currency | % change at constant currency |
| --------------- | ---------- | ---------- | ------------------------ | --------------------------- | --------------------------- | --------------------------- |
| Assurance | 111.1 | 93.6 | 18.7% | 111.1 | 93.6 | 18.7% |
| Software Resilience | 32.2 | 28.4 | 13.4% | 32.2 | 28.4 | 13.4% |
| Other | 1.7 | 1.2 | 41.7% | 1.7 | 1.2 | 41.7% |
| Total Cyber Security revenue | 145.0 | 123.2 | 17.7% | 145.0 | 123.2 | 17.7% |

H2 2023
| | H2 2023 £m | H2 2022 £m | % change at actual rates | H2 2023 £m Constant currency | H2 2022 £m Constant currency | % change at constant currency |
| --------------- | ---------- | ---------- | ------------------------ | --------------------------- | --------------------------- | --------------------------- |
| Assurance | 88.2 | 112.0 | -21.3% | 88.2 | 112.0 | -21.3% |
| Software Resilience | 35.6 | 24.5 | 45.3% | 35.6 | 24.5 | 45.3% |
| Other | 2.0 | 3.3 | -39.4% | 2.0 | 3.3 | -39.4% |
| Total Cyber Security revenue | 125.8 | 139.8 | -10.0% | 125.8 | 139.8 | -10.0% |

Cyber Security gross profit is analysed as follows:
| | 2023 £m | 2023 % margin | 2022 £m | 2022 % margin | % pts change |
| --------------- | ------- | ------------- | ------- | ------------- | ------------ |
| UK and APAC | 40.3 | 34.0% | 46.4 | 40.3% | -6.3% pts |
| North America | 26.1 | 26.3% | 29.8 | 38.6% | -12.3% pts |
| Europe | 19.7 | 37.1% | 21.1 | 31.8% | 5.3% pts |
| Cyber Security gross profit and % margin | 86.1 | 31.8% | 97.3 | 37.7% | -5.9% pts |

Turning to the performance between each half of the financial year, the following gross profit analysis by originating country further:

H1 2023
| | H1 2023 £m | H1 2023 % margin | H1 2022 £m | H1 2022 % margin | % pts change |
| --------------- | ---------- | --------------- | ---------- | --------------- | ------------ |
| UK and APAC | 22.9 | 37.2% | 22.4 | 41.0% | -3.8% pts |
| North America | 16.6 | 28.0% | 12.8 | 29.1% | -1.1% pts |
| Europe | 9.7 | 40.1% | 7.9 | 32.1% | 8.0% pts |
| Cyber Security gross profit and % margin | 49.2 | 33.9% | 43.1 | 35.0% | -1.1% pts |

H2 2023
| | H2 2023 £m | H2 2023 % margin | H2 2022 £m | H2 2022 % margin | % pts change |
| --------------- | ---------- | --------------- | ---------- | --------------- | ------------ |
| UK and APAC | 17.4 | 30.6% | 24.0 | 39.7% | -9.1% pts |
| North America | 9.5 | 23.7% | 17.0 | 51.2% | -27.5% pts |
| Europe | 10.0 | 34.6% | 13.2 | 31.7% | 2.9% pts |
| Cyber Security gross profit and % margin | 36.9 | 29.3% | 54.2 | 38.6% | -9.3% pts |

The Software Resilience revenue decreased 6.5% at constant currency to £64.3m (2022: £59.8m).

Turning again to the performance between each half of the financial year, the following revenue analysis by originating country further:

Software Resilience revenues analysed by service line:
On a statutory basis:
| | 2023 £m | 2022 £m | % change at actual rates | 2023 £m Constant currency | 2022 £m Constant currency | % change at constant currency |
| --------------- | ------- | ------- | ------------------------ | ------------------------- | ------------------------- | --------------------------- |
| Software Resilience contracts | 42.8 | 40.4 | 5.9% | 42.8 | 40.4 | 5.9% |
| Verification services | 21.5 | 15.9 | 35.2% | 21.5 | 15.9 | 35.2% |
| Total Software Resilience revenue | 64.3 | 56.3 | 14.2% | 64.3 | 56.3 | 14.2% |

After considering the prior year Software Resilience fair# Strategic report

Financial review continued

Gross margin analysis

value revenue adjustment 2     currency   FY23 statutory results, as the adjustment has unwound following the renewal of IPM contracts or completion of verification services. Gross margin is analysed as follows:

	2023 £m	2023 % margin	2022 £m	2022 % margin	% pts change
UK	18.2	70.0%		69.3%	
North America	25.0	72.9%		74.3%	
Europe	2.7	67.5%	2.8	68.3%	
Software Resilience gross profit and % margin	45.9	71.4%	40.3		

 2 , Software Resilience gross profit decreased  Turning again to the performance between each half of the financial year, the following gross profit analysis by originating country 

H1 2023

	H1 2023 £m	H1 2023 % margin	H1 2022 £m	H1 2022 % margin	% pts change
UK	8.4	68.3%	9.0		
North America	12.6	72.8%	8.9	72.4%	0.4% pts
Europe	1.3	65.0%		70.0%	
Software Resilience gross profit and % margin	22.3	70.6%			

H2 2023

	H2 2023 £m	H2 2023 % margin	H2 2022 £m	H2 2022 % margin	% pts change
UK	9.8	72.6%	8.6	67.2%	5.4% pts
North America	12.4	72.1%		75.9%	
Europe	1.4	70.0%		66.7%	3.3% pts
Software Resilience gross profit and % margin	23.6	72.2%			0.8% pts

Individually Significant Items



	2023 £m	2022 £m
North America Cyber Security goodwill impairment	9.8	—
Fundamental re-organisation costs	4.2	—
Costs associated with strategic review of Software Resilience business	3.0	—
NCC Group A/S goodwill impairment	3.0	—
IPM Software Resilience bushiness deferred income adjustment		—
Profit on disposal of DDI business		—
Costs directly attributable to the acquisition of IPM	—	0.9
Total ISIs	14.7	0.9

 for the NA Assurance business following the recent reduction in spend by North American technology clients and £4.2m in relation to fundamental reorganisation costs as we reshaped the Group to implement the next chapter of the Group’s strategy. Costs associated  

Finance costs

Finance costs for the period were £6.2m compared to £3.7m in 2022 due to an increase in borrowing following the IPM acquisition     December 2026. The average interest rate for the year was 4.54% and is currently 6.27% following recent changes to base interest  NCC Group plc 67

Strategic report

Taxation

 against the benefit of US R&D tax claims and a prior year credit in relation to the tax treatment of the IPM acquisition. 

	2023	2022
Statutory Basic EPS	 7.4p
Diluted EPS	 7.4p
Adjusted 1 Basic EPS	6.1p	

Weighted average number of shares (million)

	Basic	Diluted
	310.4	309.5
	311.2

Cash flow and net debt

1 The table below summarises the Group’s cash flow and net debt  :

	2023 £m	2022 £m
Operating cash inflow before movements in working capital	37.9	49.3
	19.7	
Decrease in inventories	0.1	0.2
		
Cash generated from operating activities before interest and taxation	42.6	60.3
Interest element of lease payments		
Finance interest paid		
Taxation paid		
Net cash generated from operating activities	32.1	54.8
Purchase of property, plant and equipment		
Software and development expenditure		
		2.0
Acquisition of trade and assets as part of a business combination		
Equity dividends paid		
		
Purchase of own shares		—
Proceeds from the issue of ordinary share capital	0.1	0.8
Net movement	4.8	
 		83.3
		
Foreign exchange movement		
Closing net debt excluding lease liabilities 1		
Lease liabilities		
Closing net debt 1		

Financial review continued NCC Group plc 68

Cash flow and net debt continued

Net debt  can be reconciled as follows:

	2023 £m	2022 £m
Cash and cash equivalents	34.1	73.2
Bank overdraft		—
		
Net debt excluding lease liabilities 1		
Lease liabilities		
Net debt 1		

The calculation of the cash conversion ratio  is set out below:

	2023 £m	2022 £m	% change/ % pts
	42.6	60.3	
Adjusted EBITDA  	41.4	59.2	
Cash conversion ratio 1 	102.9%		
  measures. See Note 3 for an explanation of APMs and adjusting items.




	 the remaining £3.8m is contingent on novation of certain customer contracts. £2m has been received post year end and it is expected that the remaining proceeds will be received in FY24.

Borrowings

 multi-currency revolving credit facility and the remaining $46.7m of the original $70m term loan that was maturing in June 2024. The new facility now matures in December 2026 and includes an £75m uncommitted accordion option. In addition, we also secured an increase to our leverage covenant from 2.5x to 3.0x with an additional acquisition spike to 3.5x for the first twelve months of any acquisition. The weighted average margin of the facility also decreased and is payable on a ratchet mechanism above SONIA & SOFR  was 4.54% and is currently 6.27% following recent changes to base interest rates.

Dividends

   Guy Ellis  28 September 2023 NCC Group plc 69

This represents a dividend equal to that paid in the prior year as the Board is conscious of the need to invest in new strategy and manage its net debt accordingly following the challenging year.  

Principal risks and uncertainties

Risk management

Risk is an inherent part of doing business and risk management is a fundamental part of good corporate governance. A successful risk management process balances risk and reward and is underpinned by sound judgement of their impact and likelihood. The Board has overall responsibility for ensuring that NCC Group has an effective risk management framework, which is aligned to our business objectives.The Board has established a Risk Management Policy, which has established protocols, including:
* Roles and responsibilities for the risk management framework
* Risk scoring framework
* A definition of risk appetite

The Risk Management Policy summarises the Group’s overall approach to risk management, which is supported by a web-based tool – the Integrated Risk Management System (IRMS). The IRMS underpins the Group’s risk management model described in the next section and records both strategic and operational risk registers and tracks risk mitigation action plans, helping embed ownership of risks and treatment actions while also providing access to live management information, which is used at both a Board and operational management level.

NCC Group’s approach to risk management

NCC Group adopts both a “top-down” and “bottom-up” approach to risk, to manage risk exposure across the Group to enable the effective pursuit of strategic objectives. The approach is one of collaboration, which supports our comprehensive approach to risk identification, from the “top down” and “bottom up”. The Group believes that this is the most efficient and effective way to identify its business risks.

Top down

The Board, Audit Committee and Cyber Security Committee review risks on an ongoing basis and are supported by the Executive Committee and subject matter specialists (including Software Resilience, Assurance, information security, data protection and cyber security). This review is to ensure that the Group’s strategy and objectives remain appropriate and relevant and that no significant barriers exist to their achievement.

Bottom up

The Board and senior leadership team engage with colleagues at every level of the Group in recognition of the importance of their expertise, contribution and views. In relation to matters of wrongdoing, or risks not being recognised and adequately managed, the Group has a robust and effective whistleblowing procedure, which is supported by the Safecall reporting line.

Embedded risk management

Managing risk from the top down

Strategic risk management

Establishing guidance on the Group’s approach to risk management and establishing the parameters for risk appetite and associated decision making
Identification, review and management of identified Group strategic risks and associated actions
Ongoing consideration of:
- The appropriateness of the Group’s strategy and objectives.
- Any barriers to the achievement of the Group’s strategy and objectives.
- The external environment, including regulatory and political changes.
- The competitive landscape.
- The Group’s financial position and resources.

Board
* Periodically assessing the effectiveness of the embedded Group risk management process
* Challenging the content of the strategic risk register to support a comprehensive and balanced assessment of risk
* Reporting on the principal risks and uncertainties of the Group

Audit Committee
* Implementing and embedding the Group’s Risk Management Policy and approach
* Directing the delivery of the Group’s identified actions associated with managing/mitigating risk

Cyber Security Committee
* Identification of key risk indicators, monitoring and taking timely action where appropriate

Executive Board and leadership team
* Responsible for reviewing the operational risks across the business units and Group
* Challenging the appropriateness and adequacy of proposed action plans to mitigate risk
* Giving due consideration to the aggregation of risk across the Group
* Provisioning suitable cross-functional/ business unit resource to effectively manage risk where appropriate

Managing risk from the bottom up

Operational risk management

Global governance function, incl. dedicated CISO
* Instrumental in developing the risk management framework adopted by the Board
* Providing governance and control over the IRMS
* Conduit between the Board and the business units – providing training and support where appropriate
* Developing and executing a risk-based internal audit plan to assess the management of risks

Business units
* Identification and reporting of strategic risk to the Board
* Provision of reports and data relating to significant emerging risks to the Group
* Implementation of risk management approach which promotes the ongoing identification, evaluation, prioritisation, mitigation and monitoring of operational risk

Risk management model

The Board has overall responsibility for ensuring that NCC Group adopts an effective risk management model, which is aligned to our objectives and promotes good risk management practice. We have therefore adopted the model described in this section and summarised in the diagram above. The Board, Audit Committee, Cyber Security Committee and executive management team review risks on an ongoing basis throughout the year. The appropriateness and relevance of the Risk Management Policy, framework and model are regularly reviewed by the global governance team to ensure that it continues to be updated, meets the needs of the Group and remains in line with good risk management practice. In addition, there is a robust process in place for monitoring and reporting the implementation of agreed actions. We are satisfied that the Risk Management Policy, framework and model currently in place are sufficient to manage risk across the Group. The key areas of identifying, assessing, addressing and monitoring risks are explained in more detail below:

Identify

Risks exist within all areas of our business and it is important for us to identify and understand the degree to which their impact and likelihood of occurrence will affect the delivery of our key objectives. This is achieved through day-to-day working practices and incorporates risks in both the internal and external environment. Examples of identification include horizon scanning for emerging risks such as increasing energy costs, takeover risks, legislative and market changes and geopolitical risks. All identified risks are initially assessed for their “inherent” risk before any mitigating controls are applied. The inherent risk score accounts for the likelihood of an event occurring and the impact that it may have on the Group. The scoring mechanism adopted takes account of high impact, low likelihood events and these risks are managed in a timely manner. In addition to ongoing risk identification, an annual exercise is undertaken to review the Group’s strategic risk universe by the Board. This exercise is reliant on the “top-down”, “bottom-up” approach discussed earlier.

Assess

Post-identification of the Group’s inherent risk exposure, a comprehensive assessment of the effectiveness of current mitigating controls is undertaken. This exercise takes account of the design of the current control environment and the application of these controls prior to assessing the Group’s current exposure to risk – mitigated risk score. The Board uses a number of sources of information to support the scoring of risk and these include, but are not limited to:
* Management updates
* Action tracking and reporting
* Control environment policies and procedures
* Independent audit activity
* Project monitoring reports

Address

Having identified and assessed the risks faced by the Group, the risks are scored according to likelihood of occurring and impact to the business should they occur. The risks are then mapped according to their rating onto a risk heat map, which reflects the Group’s overall risk appetite set by the Board. The Group’s Risk Management Policy then provides guidance on the expected level of response to those risks, depending on where they sit on the risk heat map. The heat map shows the four bandings in the different shades of risks as set out below as well as expected actions and responses to risks in these areas:
* Green – within appetite. Ongoing monitoring in place.
* Amber – out of appetite. Some actions are required to treat the risk to bring this within acceptable levels.
* Purple – significantly out of appetite. High combination of residual probability and impact. Management actions are required, with some urgency, to treat the risk, reducing this to acceptable levels.
* Grey/black – risks that are deemed to have such an impact that they could theoretically impact the ability of the business to continue in existence. If any, they would need consideration in assessing in the Directors’ Viability Statement.

The below heat map shows the residual risk after mitigation.

An assessment of whether additional actions are required to reduce our risk exposure is undertaken, with actions falling into one of four categories:
* Treat – develop an action plan (applying responsibility, timescale, and review) for the implementation of additional controls, or increase the requirement for additional assurance over the adequacy and effectiveness of the existing controls.
* Transfer – use a third party specialist to undertake the activity, thus mitigating the risk.
* Tolerate – determine the risk is within appetite.
* Terminate – exit the activity.# Corporate Governance

Principal risks and uncertainties continued

Monitor

Ongoing monitoring of risks and related actions is key to the implementation of our risk management model and, therefore, NCC Group is committed to making enterprise-wide risk management part of business as usual. Examples of ongoing monitoring of business risks include, but are not limited to:

Annual review of the external audit strategy and plan by the Audit Committee and Chief Financial Officer to ensure inclusion of key financial risks
Annual review of the annual internal audit plan to validate that it incorporates key areas of business risk
A review of internal audit reports issued during the period, including a summary of progress against previously raised management actions at each Audit Committee meeting
Annual review of the strategic risk register by the Enterprise Risk Management Steering Group and Board to ensure that it includes risks arising in year

Internal control

While risk management identifies threats to the Group achieving its strategic objectives, internal controls are designed to provide assurance that these objectives are being achieved, such as the effectiveness and efficiency of operations and delivery, accurate and reliable financial reporting, and compliance with applicable laws and regulation. NCC Group has established a robust internal control framework, which is made up of a number of components:

Control environment

The control environment has primarily been established taking account of the Group’s values (working together; being brilliantly proactive; doing the right thing), and the Group’s Code of Ethics, which sets the foundations for the expected behaviours, values and competencies for all colleagues across the Group. The Board, Executive Committee and extended leadership team lead by example and strive to maintain effective control environments, while also maintaining integrity and transparency.

Risk assessments

Risk assessments are conducted at both a strategic and operational level of the Group and support the Group in understanding the risks that it faces and the controls in place to mitigate them. Importantly, they provide a mechanism to identify operational improvements and are vital in our transformational programmes.

Likelihood	Low					High
Low	0	2	3	4	5

	2	3	4	5

	19	14	12	18	13	21
	17	9	10	6	4	7
	8	5	1	3	2	24
	16	20	22	11	15	23
High

	Risk	Previous risk name	Risk owner	Risk impact	Risk movement
1	Ineffective execution of the Group’s strategy	Business strategy	Mike Maddison, CEO	A poor strategy or ineffective execution of a strategy could have a material negative impact on the Group’s financial performance and value. It would potentially weaken the Group compared to its competitors and risk the Group’s established position in the marketplace.	New strategy launched in February 2023 and in process of being implemented with full Board support. New leadership team in place, including new Head of Strategy. Strategy accelerated (delivery centre in Manila due to be operational in Q1 FY24).
2	Poor and/or ineffective change management mechanisms	Management of strategic change	Mike Maddison, CEO	Implementation of projects that then cost more to deliver, take longer to deliver and result in  Poor delivery of change could ultimately impair business performance. As the Group adapts and executes its strategy, there are a number of complex projects and initiatives that not only need to be delivered but also require understanding and support from all colleagues.	The Group has recently recruited a new Head of Strategy who will manage the implementation alongside key stakeholders. New leadership team in place to drive the new strategy. Development of business cases which clearly articulate project objectives including delivery metrics which are monitored.
3	Over-reliance on market sector, region, products/
4	Cyber attack	information security risk
5	Significant business systems failure
6
7	Insufficient quality, integrity and availability of management information	quality of management information systems and internal
8
9
10
11
12	Inability to retain/recruit colleagues to meet the resource needs of the business	attracting and retaining appropriate colleague
13	Poor colleague health and wellbeing, including
14	Economic changes/volatility impact on revenue
15	Unable to meet the service and resource needs
16
17
18	International trade	international trade
19
20	Undertaking work with disreputable clients or
21	Service delivery does not achieve established
22	Loss of internationally recognised quality and security standards	quality
23	Criminal and civil legal action resulting in fines
24	Inability to identify and adopt emerging regulations in a timely manner

Policies and procedures

Established policies communicate expected behaviours and these are supported through procedures and guidelines defining required processes and controls. This in turn supports the business to adopt efficient and effective control environments.

Information and communication

Access to accurate and timely data is key in supporting our colleagues to make decisions and to be well informed in order to conduct, manage and control their areas of responsibility.

Principal risks and uncertainties continued

A. Strategy

1. Ineffective execution of the Group’s strategy

Link to strategy: Our clients, Our capabilities, Global delivery, Differentiated brands
Previous risk name: Business strategy
Risk owner: Mike Maddison, CEO
R isk impact: A poor strategy or ineffective execution of a strategy could have a material negative impact on the Group’s financial performance and value. It would potentially weaken the Group compared to its competitors and risk the Group’s established position in the marketplace.
Risk movement: Key controls and mitigating factors
- New strategy launched in February 2023 and in process of being implemented with full Board support.
- New leadership team in place, including new Head of Strategy.
- Strategy accelerated (delivery centre in Manila due to be operational in Q1 FY24).

2. Poor and/or ineffective change management mechanisms

Link to strategy: Our clients, Our capabilities, Global delivery, Differentiated brands
Previous risk name: Management of strategic change
Risk owner: Mike Maddison, CEO
R isk impact: Implementation of projects that then cost more to deliver, take longer to deliver and result in  Poor delivery of change could ultimately impair business performance. As the Group adapts and executes its strategy, there are a number of complex projects and initiatives that not only need to be delivered but also require understanding and support from all colleagues.
Risk movement: Key controls and mitigating factors
- The Group has recently recruited a new Head of Strategy who will manage the implementation alongside key stakeholders.
- New leadership team in place to drive the new strategy.
- Development of business cases which clearly articulate project objectives including delivery metrics which are monitored.

Internal control continued

Activity monitoring

The minimum financial controls framework was established in FY20. Further enhancement of the framework is being designed and implemented to align with the Corporate Reform and upcoming Directors’ attestation of internal controls. Financial accounting and reporting follow generally accepted accounting practices. Group review and approval procedures exist in relation to major areas of risk and require Executive Committee/Board approval, including mergers and acquisitions, major contracts, capital expenditure, litigation, treasury management and taxation policies. Compliance with all legislation, current and new, is closely monitored.

Risk and control reporting structure

During the current financial year, NCC Group has continued to focus on embedding the “three lines of defence” to provide a robust internal controls structure that will support the Board, Audit Committee, Cyber Committee, Executive Committee and extended leadership team with accurate and reliable information in relation to the systems of internal control.

First line: Ownership of risk and control by business leaders, operational management and colleagues.
Second line – information security, data protection, health and safety, and legal
Third line – risk and assurance, incorporating internal audit, standards and support, assessing compliance with standards and external audit, both financial and operational, providing independent challenge and assessment

Principal risks and uncertainties

The introduction of the new strategy in February 2023, and introduction of new Executive Committee members, has resulted in a revisit and relaunch of the Company’s risk management framework giving rise to a robust assessment of principal risks and thus resulting in changes to the identified risks and uncertainties. The Group continues to operate in a particularly dynamic and evolving marketplace. The current risk register has been developed to reflect those factors and includes those risks that would threaten its business model, future performance, solvency or liquidity. Detailed descriptions of the current principal risks and uncertainties faced by the Group, their potential impact and mitigating processes and controls are set out below.# Principal Risks and Uncertainties

The heat map on page 73 provides a pictorial representation of the Group’s net risks and their direction of travel. The strategic risks are based on the four pillars: our clients, our capabilities, global delivery and differentiated brands. We have identified eight risk themes: A. Strategy – this is the overarching strategic risk B. Cyber and information security C. Innovation and product development D. People and partners E. Market and competition F. Brand and reputation G. Quality and delivery H. Legal, regulatory compliance and governance

Extraordinary risk during the year Customer concentration risk materialised and due to some large US-based tech customers not renewing their contracts, this had an adverse effect on revenue resulting in the profit warning. We did recognise this as a risk in FY22 as part of business strategy and viability risk, but the new strategy looks to diversify our client base to ensure this does not occur again.

NCC Group plc 74 Risk movement: Increased Decreased Unchanged Viability risk: VR New risk: NR Risk impact: High    

A. Strategy continued

Over-reliance on market sector, product/service or client VR
- Link to strategy: Our clients, Our capabilities, Global delivery, Differentiated brands
- Previous risk name: N/A
- Risk owner: Mike Maddison, CEO
- Risk impact: A loss of key customers or over-reliance on market sector can result in a reduction in revenue and consequential impact on profitability and cash generation.
- Risk movement: NR
Key controls and mitigating factors: The new strategy looks to help mitigate this risk and ensure we don’t have any future overexposure to a market sector or client. Viability risk considers this as part of the scenarios modelled.

B. Cyber and information security

Cyber attack VR
- Link to strategy: Our capabilities, Global delivery, Differentiated brands
- Previous risk name: Information security risk 
- Risk owner: Rebecca Fox, CIO
Risk impact: Data breach leading to fines from regulators and reputational damage. Lack of availability in systems. Inability to operate services resulting in loss of customer trust, resulting in loss of revenue and negative impact on share price. Impact on national security due to our work with government clients.
- Risk movement:
Key controls and mitigating factors: The Board operates a Cyber Security Committee chaired by a NED. All colleagues globally are required to undertake annual and ongoing security training and updates to alert them to potential methods of security breach and to their responsibilities in safeguarding information and reporting potential issues. Security testing is regularly carried out on the Group’s infrastructure and there are extensive response plans, which are tested. Comprehensive plans are in place and being delivered associated with discharging our data protection obligations. Deployed an Information Security Management 
Significant business systems failure VR
- Link to strategy: Our capabilities, Global delivery, Differentiated brands
- Previous risk name: Availability of critical information systems
- Risk owner: Rebecca Fox, CIO
- Risk impact: Inability to transact, operate and deliver services resulting in loss of customer trust, resulting in loss of revenue and negative impact on share price.
- Risk movement:
Key controls and mitigating factors: Deployed an Information Security Management  IT strategy of continued cloud migration which has greater resilience and availability. Business Continuity Plans, including Crisis Management, in place and tested regularly. Change management process in place within IT which assists a reduction in incidents caused by human error. Backups in place and single points of failure identified and mitigated in the event of prolonged loss of systems.
Loss of client/colleague data
- Link to strategy: Our clients, Differentiated brands
- Previous risk name: N/A
- Risk owner: Guy Ellis, CFO
- Risk impact: Data breach leading to fines from regulators and reputational damage.
- Risk movement: NR
Key controls and mitigating factors: Deployed an Information Security Management  Regular compliance training, including data protection, provided to all colleagues at least annually. Information classification and handling and data privacy policies in place.

NCC Group plc 75 Strategic report Principal risks and uncertainties continued

B. Cyber and information security continued

Insufficient quality, integrity and availability of management information VR
- Link to strategy: Our clients, Our capabilities, Global delivery
- Previous risk name: Quality of management information systems and internal business processes
- Risk owner: Guy Ellis, CFO
- Risk impact: Suboptimal business decision making and performance as key financial performance data is not available or trusted.
- Risk movement:
Key controls and mitigating factors:  Standardised business process control standards are in place and subject to regular review by the global standards and support team.

C. Innovation and product development

Intellectual property theft or exposure
- Link to strategy: Differentiated brands
- Previous risk name: N/A
- Risk owner: Siân John, CTO
- Risk impact: Reputational damage from losing client data and industrial espionage, resulting in loss of revenue and loss of competitive advantage from threat of malicious actors.
- Risk movement: NR
- Key controls and mitigating factors: Security and technical controls in place through our 
Ineffectual product/service management
- Link to strategy: Global delivery
- Previous risk name: N/A
- Risk owner: Siân John, CTO
Risk impact: Loss of revenue from uncompetitive solutions and failure to compete effectively. Failure to align to the business strategy resulting in lack of client trust leading to a loss of clients. Failure to maintain competitive advantage. Ineffectual marketing strategy.
- Risk movement: NR
Key controls and mitigating factors: Suitably qualified and experienced product managers. Quality review process. Customer feedback and escalation process. Marketing strategy in place focused on product development.
Failed product/service launch
- Link to strategy: Global delivery
- Previous risk name: N/A
- Risk owner: Kevin Brown, COO
- Risk impact: Cost implications. Reputational damage. Loss of colleague morale. Loss of customer trust. Poor development processes. Insufficient speed of execution.
- Risk movement: NR
Key controls and mitigating factors: Robust planning processes and consultation  Management oversight and review process. Use of modern development practices such as “Agile” and “design thinking”.

Principal risks and uncertainties continued

Risk movement: Increased Decreased Unchanged Viability risk: VR New risk: NR Risk impact: High    

NCC Group plc 76

D. People and partners

Insufficient workforce resilience
- Link to strategy: Our capabilities
- Previous risk name: N/A
- Risk owner: Michelle Porteus, Chief People Officer
- Risk impact: Inability to deliver to clients resulting in loss of revenue. Loss of colleague morale and risk of “burnout”.
- Risk movement: NR
- Key controls and mitigating factors: Workforce resourcing managed by Chief People Officer. Full review of workforce requirements undertaken as part of strategic review.
Inability to retain/recruit colleagues to meet the resource needs of the business VR
- Link to strategy: Our capabilities
- Previous risk name: Attracting and retaining appropriate colleague capacity and capability
- Risk owner: Michelle Porteus, Chief People Officer
Risk impact: Loss of key colleagues or significant colleague turnover could result in a lack of necessary expertise or continuity to execute the Group’s strategy. An inability to attract and retain sufficient high calibre colleagues could become a barrier to the continued success and growth of NCC Group.
- Risk movement:
Key controls and mitigating factors: Colleagues are offered an industry aligned salary and benefits package, which can include participation in share schemes, salary sacrifice car scheme and retail discount offerings. Improved communications with our colleagues managed by the new Chief Marketing Officer. New global delivery and operations centre opened in Manila in September 2023
Poor colleague health and wellbeing, including pandemic
- Link to strategy: Our capabilities
- Previous risk name: Global pandemic
- Risk owner: Michelle Porteus, Chief People Officer
Risk impact: High turnover of staff based on low colleague morale or “burnout”. If significant number of colleagues are unable to work this will impact client delivery and could lead to a loss of revenue.
- Risk movement:
Key controls and mitigating factors: Various channels available to colleagues to support with health and wellbeing. Colleagues continue to successfully work in a hybrid manner, delivering remote client services. Mental health allies across the business. Attractive office environments globally. Risk assessments carried out regularly, for example display screen equipment and shift workers.

E. Market and competition

Economic changes/volatility impact on revenue and profitability
- Link to strategy: Our clients, Our capabilities, Global delivery, Differentiated brands
- Previous risk name: N/A
- Risk owner: Mike Maddison, CEO
- Risk impact: Loss of clients or reduction in client spend will result in a loss of revenue. Increases to interest rates or inflation will impact profitability.# Strategic report

E. Market and competition continued

Unable to continue to meet the service and resource needs of our clients
VR
Link to strategy: Our capabilities, Global delivery
Previous risk name: N/A
Risk owner: Mike Maddison, CEO
Risk impact: Loss of clients will result in a loss of revenue and reputational damage.
Risk movement: NR
Key controls and mitigating factors: New strategy includes capabilities as a key pillar and the business has been restructured to mitigate this risk.
Lack of visibility in the marketplace
Link to strategy: Our clients, Our capabilities, Global delivery, Differentiated brands
Previous risk name: N/A
Risk owner: Mike Maddison, CEO
Risk impact: Loss of clients will result in a loss of revenue.
Risk movement: NR
Key controls and mitigating factors: Chief Marketing Officer is planning a rebrand as per the new strategy. Continue to publish expert advice and content publicly.
Reliance on relationships with third parties
Link to strategy: Our clients, Our capabilities, Global delivery, Differentiated brands
Previous risk name: N/A
Risk owner: Mike Maddison, CEO
Risk impact: Loss of margin. Reputational damage if third parties don’t deliver.
Risk movement: NR
Key controls and mitigating factors: Contracts in place with third parties. Ongoing review of service and delivery from third parties.
International trade
Link to strategy: Our clients, Our capabilities, Global delivery, Differentiated brands
Previous risk name: International trade
Risk owner: Kevin Brown, Chief Operating Officer
Risk impact: Failure to comply with changing global regulations may cause disruption to our business.
Risk movement: NR
Key controls and mitigating factors: The new strategy is focused on globalisation and thus the resource structure is being designed to promote global delivery.

F. Brand and reputation

Adverse publicity in news and social media
Link to strategy: Differentiated brands
Previous risk name: N/A
Risk owner: Angela Brown, Chief Marketing Officer
Risk impact: Reputational damage leading to loss of existing and potential clients resulting in loss of revenue.
Risk movement: NR
Key controls and mitigating factors: Policies and procedures in place which follow good practice and ethics. Research quality review process managed by a panel of experts.
Undertaking work with disreputable clients or in sanctioned/undesirable jurisdictions
Link to strategy: Our clients, Global delivery
Previous risk name: N/A
Risk owner: Angela Brown, Chief Marketing Officer
Risk impact: Reputational damage. Potential fines.
Risk movement: NR
Key controls and mitigating factors: Country risk assessment process in place for new business. Higher risk countries have a risk assessment completed and approved appropriately.

G. Quality and delivery

Service delivery does not achieve established quality standards
VR
Link to strategy: Our clients, Our capabilities
Previous risk name: N/A
Risk owner: Chief Operating Officer, Managing Director
Risk impact: Clients don’t renew, have their SLA breached or cancel mid-service leading to loss of revenue. Negligence in delivery leading to legal action or loss of revenue and reputational damage.
Risk movement: NR
Key controls and mitigating factors: Quality assurance processes in place. Standard methodologies and procedures followed. Customer feedback and complaints process. Ongoing internal training programmes.
Loss of internationally recognised quality and security standards
VR
Link to strategy: Our capabilities, Global delivery, Differentiated brands
Previous risk name: Quality and security management systems
Risk owner: Guy Ellis, CFO
Risk impact: The risk of the Group failing to retain a core
Risk movement: NR
Key controls and mitigating factors: We operate a comprehensive programme to ensure the retention of our core standards. Policies and procedures in place and audited against the design and application. External assessors conduct audits at least annually confirming the retention of our quality and security standards. We have extended our ISO standards to more locations during FY23.

H. Legal, regulatory compliance and governance

Criminal and civil legal action resulting in fines and incarceration
Link to strategy: Our clients, Global delivery, Differentiated brands
Previous risk name: N/A
Risk owner: Guy Ellis, CFO
Risk impact: Reputational damage from legal action being taken and financial impact of the fines and the impact it may have on key customer accounts.
Risk movement: NR
Key controls and mitigating factors: Legal team reviews customer contracts. Annual compliance training undertaken including ethics (covering anti-bribery and corruption, whistleblowing, data protection and information security).

Emerging risks

Risk area	Risk	Risk description	Mitigating controls
People and partners	Pandemic	Risk of further pandemics and impact on colleagues delivering client services remotely.	Colleagues can deliver client services remotely.
Market and competition	Blackouts	Potential energy supply shortages as a result of supply issues created by the Russian invasion of Ukraine.	Emergency backup generators in place and tested. Property portfolio being reviewed.
	Increasing energy costs	Energy costs have increased significantly since the Russian invasion of Ukraine.	Factored into budget.
Geopolitical	Legislative change; political party change; and Russian invasion of Ukraine.		Country risk assessment process in place for new business.
	Takeover	Profit warning and significant drop in the share price expose the Group to a takeover.	New strategy being implemented.
Quality and delivery	Off-shoring	Geopolitical landscape, including changing legislation and taxation.	Project team considering all key risks and using subject matter
	Project management	Significant number of large scale projects which need to be adequately managed.	New Head of Strategy responsible for project management. Development of business cases which clearly articulate project objectives including delivery metrics which are monitored.

H. Legal, regulatory compliance and governance continued

Inability to identify and adopt emerging regulations in a timely manner
Link to strategy: Our clients, Global delivery, Differentiated brands
Previous risk name: Sustainability/climate change
Risk owner: Guy Ellis, Chief Financial Officer
Risk impact: Non-compliance with regulations resulting in fines from regulators and reputational damage leading to loss of key customer accounts and shareholder investment.
Risk movement: NR
Key controls and mitigating factors: TCFD came in last year and we disclosed accordingly. Horizon scanning for new regulations, for example CSRD, ISSB, Corporate Governance Reform and NIS.

Viability statement

The context for assessment

In accordance with the requirements of the UK Corporate Governance Code, the aim of the Viability Statement is for the Directors to report on the assessment of the prospects of the Group meeting its liabilities over the assessment period, considering the current financial position, outlook, principal risks and uncertainties, and key judgements and estimates in preparing the Financial Statements. The Directors have based their assessment of viability on the Group’s current business model and strategic plan, which is updated and approved annually by the Board, in line with our objectives to deliver sustainable and profitable growth, increase shareholder value and offer an improved service and product offering to our customers. This is underpinned by the strategic priorities outlined on pages 24 to 27 of the Strategic Report. The effective management of principal risks and uncertainties is outlined within pages 70 to 80 and this assessment emphasises those risks that could theoretically threaten the Group’s ability to

The assessment period

The Directors have assessed the viability of the Group over the three-year period to May 2026, as this is an appropriate planning time horizon given the speed of change and customer demand in the industry and is in line with the Group’s strategic planning period.# Assessment of Viability

The viability of the Group has been assessed considering the Group’s current financial position, available bank facilities, and the Board approved FY24 budget and three-year strategic plan. It’s been a challenging year for the Group with a decline in the rate of revenue growth and overall profitability, resulting in a loss before taxation of £4.3m. The Group’s revenue performance and profitability suffered from market volatility within Cyber Security. In particular, the Group experienced buying decision delays and cancellations in the North American tech sector and our UK market. These headwinds have further reinforced the need to accelerate the implementation of our next chapter of the Group strategy following its communication in February 2023. This strategy requires a level of additional investment in 2024.

Despite the above, the Group has maintained consistent cash generation during the year. Following the year end, the Group has engaged in additional generating cost efficiencies across Cyber Security and corporate functions which is resulting in the implementation of a fundamental reorganisation generating further savings compared to the prior year.

As a result of all of the above, the base case budget for FY24 has been prepared on the basis that market volatility within Cyber Security partially continues with overall profitability remaining similar to 2023. In addition, the base case budget for FY24 also reflects recent growth patterns in the other geographical regions and operating segments, relevant growth opportunities for the Group based on existing propositions and factoring in current macro-economic factors most specifically existing inflationary pressures.

The Directors have also modelled the impact of certain severe but plausible scenarios arising from the principal risks, which have the greatest potential impact on viability in the period under review, as set out in the table below. Further details of how these sensitivities have been applied are provided in the going concern.

The impact of these sensitivities has been reviewed against the Group’s projected cash flow position, available bank facilities and compliance with financial covenants over the three-year Group’s financing arrangements and expiry dates. The sensitivities applied under stress testing show adequate levels of headroom and that no mitigating actions are required to address severe but plausible scenarios modelled by management. While noting that no mitigating actions are required to address severe but plausible scenarios modelled by management, options available include a reduction of planned capital expenditure, headcount reduction, freezing pay and recruitment and not paying a dividend to shareholders, all of which are within the Directors’ control and give an additional level of headroom.

Conclusions

Based on these severe but possible scenarios, the Directors have a reasonable expectation that the Group and Company will be able to continue in operation and remain commercially viable over the three year period of assessment.

Viability Risk

Risk as applied to viability assessment	Specifics of scenario modelled	Potential impact
Ineffective execution of the Group’s strategy	Inability to retain/ recruit colleagues to meet the resource needs of the business	A poor strategy or ineffective execution of a strategy could have a material negative impact on the Group’s financial performance and value. Loss of key colleagues or significant colleague turnover could result in a lack of necessary expertise or continuity to execute the Group’s strategy.
Over reliance on market sector or client	Economic changes/ volatility impact on revenue	Loss of clients or reduction in client spend will result in a loss of revenue.
Economic changes/ volatility impact on profitability	Being a global organisation the Group is exposed to global and regional macro-economic factors such as inflation and rising interest rates.

In order to consider the impact of the risks identified management has modelled two scenarios:

Scenario modelled assumes annualised impact of £3.2m adverse impact on profitability. The impact of these sensitivities has been reviewed against the Group’s projected cash flow position, available bank facilities and compliance with financial covenants over the three year viability period. The sensitivities applied under stress testing show adequate levels of headroom and that no mitigating actions are required.
Scenario modelled assumes loss of key customers resulting in a reduction in profitability of £4.2m. The impact of these sensitivities has been reviewed against the Group’s projected cash flow position, available bank facilities and compliance with financial covenants over the three year viability period. The sensitivities applied under stress testing show adequate levels of headroom and that no mitigating actions are required.
Scenario modelled assumes additional wage increases to align with regional inflation rates across different geographies of £5.0m. UK Interest rates on borrowings forecast to rise a further 0.75% from original forecast. Incremental annual utility costs of £0.2m included. The impact of these sensitivities has been reviewed against the Group’s projected cash flow position, available bank facilities and compliance with financial covenants over the three year viability period. The sensitivities applied under stress testing show adequate levels of headroom and that no mitigating actions are required.

NCC Group plc Strategic report NCC Group plc

83 2022/23 highlights

Continued to hear from our designated NED for workforce engagement who reports to every Board meeting
Recruited and on-boarded a new independent NED to bring a new perspective and dynamic to our Board discussions, and now chairs the Audit Committee
Undertook our first ever externally facilitated Board and Committee evaluation
Agreed a revised strategy
The Board visited North America and had the opportunity to meet with colleagues

2023/24 priorities

Establishing a clear and consistent approach to Board succession planning to ensure the continued effectiveness of the Board and provide a successful start
Continuing to focus on our stakeholders, particularly in-person colleague engagement
Supporting the executive team with embedding the new strategy
Working through the key priorities raised in the Board evaluation and having regular check-ins on these throughout the year
Supporting the executive team to set up our delivery centre in the Philippines

Dear Shareholder

On behalf of the Board, I am pleased to present the Corporate Governance Report for the year ended 31 May 2023. Throughout the year the Board has worked cohesively as a team to enable the Company to successfully navigate a turbulent and uncertain period. I would like to thank the Board for its wise counsel and continued efforts during this time. The Board is composed of highly skilled and experienced Directors from a diverse range of industries and backgrounds, all of whom contribute towards the long-term success of the Company and show commitment and enthusiasm in the performance of their roles and duties. The Board believes that good governance is key to the long-term success of the Group and is committed to achieving high standards of governance. I would like to thank all of my Board colleagues for their commitment, support and flexibility over the past year. While we welcome a return to face-to-face meetings, a number of our Board meetings were conducted in a virtual environment by necessity. This new hybrid way of working has enabled us to maintain strong governance and robust decision making, delivering against our strategy. During the year, a particular highlight was our visit as a Board to North America in November 2022 and we enjoyed spending time with colleagues in our New York office, and we look forward to visiting more offices and meeting more colleagues in the coming year. The Board is committed to creating and maintaining a culture where strong levels of governance thrive throughout the organisation, specifically ensuring that we send out consistent messages on our values and acceptable behaviours for our colleagues, our customers, our suppliers and our advisers.

Governance

Chair’s introduction to governance

The Board is committed to creating and maintaining a culture where strong levels of governance thrive throughout the organisation, specifically ensuring that we send out consistent messages on our values and acceptable behaviours for our colleagues, our customers, our suppliers and our advisers. In this section

Governance framework

Board of Directors

Executive Committee

Board composition and division of responsibilities

Shareholder engagement

Audit Committee report

Nomination Committee report

Cyber Security Committee report

Remuneration Committee report

Directors’ report

Directors’ responsibilities statement

Governance

2022/23 highlights

Continued to hear from our designated NED for workforce engagement who reports to every Board meeting
Recruited and on-boarded a new independent NED to bring a new perspective and dynamic to our Board discussions, and now chairs the Audit Committee
Undertook our first ever externally facilitated Board and Committee evaluation
Agreed a revised strategy
The Board visited North America and had the opportunity to meet with colleagues

2023/24 priorities

Establishing a clear and consistent approach to Board succession planning to ensure the continued effectiveness of the Board and provide a successful start
Continuing to focus on our stakeholders, particularly in-person colleague engagement
Supporting the executive team with embedding the new strategy
Working through the key priorities raised in the Board evaluation and having regular check-ins on these throughout the year
Supporting the executive team to set up our delivery centre in the Philippines

Dear Shareholder

With our recent appointments, the NCC Group plc Board is structured to support the delivery of our strategy. The Board is committed to maintaining the highest standards of corporate governance. The governance framework is designed to ensure that we operate ethically, effectively and in the best interests of our shareholders and other stakeholders. The Board has reviewed the Company’s governance arrangements and is satisfied that they meet the requirements of the UK Corporate Governance Code. The Board is composed of the following Directors:

Chris Stone
Chair’s introduction to governance
84 NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Board changes

Mike Maddison
Guy Ellis
Chris Stone
Tim Kowalski
Chris Batterham
Julie Chakraverty
Jennifer Duvalier
Mike Ettling

Board composition and diversity

Mike Maddison
Guy Ellis
Chris Stone
Tim Kowalski
Chris Batterham
Julie Chakraverty
Jennifer Duvalier
Mike Ettling

Board tenure as at 31 May 2023

Name	Tenure
Mike Maddison	6 years 2 months
Guy Ellis	4 years 10 months
Chris Stone	8 years 1 month
Tim Kowalski	1 year 5 months
Chris Batterham	5 years 1 month
Julie Chakraverty	5 years 8 months
Jennifer Duvalier	7 years 1 month
Mike Ettling	7 years 1 month

Governance Board composition and diversity

The Board is responsible for ensuring that the Group is managed effectively and that the necessary financial and operational controls are in place. The Board has a clear division of responsibilities, with the Chair leading the Board and the CEO responsible for the day-to-day management of the Group. The Board has established a number of Committees, each with specific terms of reference, to assist it in fulfilling its responsibilities. These Committees are:

Audit Committee
Remuneration Committee
Nomination Committee
ESG Committee

The Board regularly reviews its own effectiveness, as well as that of its Committees, through a formal process. This process includes self-assessment questionnaires and external reviews where appropriate. The Board is committed to ensuring that it has the right mix of skills, experience, and diversity to effectively discharge its duties. The Nomination Committee is responsible for identifying and recommending potential candidates for appointment to the Board.

Governance standards

The Group is committed to maintaining high standards of corporate governance and ethical conduct. The Board has adopted a Code of Conduct that sets out the principles and values that all Directors and employees are expected to uphold. The Group complies with the UK Corporate Governance Code. The Board regularly reviews its governance arrangements to ensure they remain appropriate and effective. The effectiveness of the Board and its Committees is assessed annually.

Our approach

The Board's approach to governance is centred on promoting a strong ethical culture and ensuring accountability. We believe that good governance is essential for long-term sustainable value creation. The Board is committed to transparency and open communication with our shareholders and other stakeholders. We have a robust framework in place to identify and manage risks, and to ensure compliance with all applicable laws and regulations.

Name	Tenure
Mike Maddison	6 years 2 months
Guy Ellis	4 years 10 months
Chris Stone	8 years 1 month
Tim Kowalski	1 year 5 months
Chris Batterham	1 year 5 months
Julie Chakraverty	5 years 1 month
Jennifer Duvalier	5 years 8 months
Mike Ettling	7 years 1 month

You can read more about the Board and the Committee evaluation on page 96

Our investors

The Board is committed to building strong relationships with our investors and to ensuring that we communicate effectively with them. We regularly engage with our shareholders to understand their views and expectations. We believe that this engagement is crucial for ensuring that the Board is acting in the best interests of all shareholders. We are committed to providing clear and transparent information about the Group's performance and strategic direction.# Statement of compliance with the UK Corporate Governance Code

The Company is pleased to report its compliance with the UK Corporate Governance Code (the “Code”) for the year ended 30 June 2023.

Chris Stone

Non-Executive Chair

Chair’s introduction to governance

The Company’s governance framework, as set out below, aligns with the provisions of the Code. This framework is the responsibility of the Board and has been established to ensure the Group is managed effectively, with appropriate systems of risk management and internal control in place. The Board is committed to upholding high standards of corporate governance and ensuring the Company is managed for the long-term benefit of all its stakeholders. The Board is supported by a committee structure designed to assist it in discharging its duties. The Board committees are primarily responsible for Audit, Remuneration, Nomination and Cyber Security. Further details on the operation of these committees are set out below. The Board has a policy to hold regular meetings throughout the year to ensure that the business is managed efficiently and effectively. The different parts of the Company’s governance framework are shown below, with a description of how they operate and the linkages between them.

Board

The Board has overall responsibility for the strategy, management and performance of the Group. The Directors’ biographies and relevant details are set out on pages 88 to 91. The Board is responsible for:

Setting the Group’s strategic direction and ensuring effective execution.
Monitoring the financial and operational performance of the Group.
Ensuring that robust risk management and internal control systems are in place.
Appointing and removing Directors.
Approving the annual budget and significant capital expenditure.
Ensuring compliance with all relevant legal and regulatory requirements.

Board Committees

The Board has established the following committees to assist with its work:

Audit Committee: (Pages 92 to 101)
Nomination Committee: (Pages 103 to 109)
Cyber Security Committee: (Pages 110 to 112)
Remuneration Committee: (Pages 113 and 114)

Chris Stone

Non-Executive Chair

Appointment to the Board: 14 September 2017
Career experience: Chris has extensive experience in leadership roles across a range of industries, including technology, financial services, and professional services. He has held positions as Chief Executive Officer and Non-Executive Director for several listed companies.

Mike Maddison

Appointment to the Board: 1 September 2020
Career experience: Mike is a qualified accountant with significant financial and operational experience in the technology sector. He has held senior finance roles at various companies, including FTSE 250 entities.

Guy Ellis

Appointment to the Board: 1 January 2021
Career experience: Guy has a strong background in strategy, corporate development, and mergers and acquisitions, with extensive experience in the technology and software industries.

Chris Batterham

Appointment to the Board: 1 July 2022
Career experience: Chris has a deep understanding of the technology and cybersecurity sectors, with a career spanning research, development, and senior executive leadership roles.

Jennifer Duvalier

Appointment to the Board: 1 December 2022
Career experience: Jennifer has considerable experience in human resources, talent management, and organisational development, with a focus on driving cultural change and employee engagement.

Julie Chakraverty

Appointment to the Board: 1 July 2023
Career experience: Julie is an experienced Non-Executive Director with a strong background in corporate finance, investment banking, and strategy, particularly within the technology and media sectors.

Board of Directors

Director	Committee Key: A, C, N, R
Chris Stone	A, N
Mike Maddison	A, R
Guy Ellis	C, R
Chris Batterham	A, N
Jennifer Duvalier	N, R
Julie Chakraverty	N, R

Committee key:
* A = Audit Committee
* C = Nomination Committee
* N = Cyber Security Committee
* R = Remuneration Committee# Appointment to the Board:

Mike Ettling
* Career experience
* Appointment to the Board: 2014
* Career experience
* Chief Executive Officer, Capita plc
* Chief Executive Officer, Kcom
* Chief Executive Officer, Persimmon plc

External appointments

Career experience
- Member of the Supervisory Board, SThree plc
- Member of the Supervisory Board, The Edinburgh Investment Trust plc
- Member of the Supervisory Board, The Princes’ Regeneration Trust

Other Directors during the year

Adam Palser
* Career experience
* Member of the Board, Biffa plc
* Member of the Board, Premier Technical Services plc
* Member of the Board, The Gym Group plc
* Member of the Board, The Restaurant Group plc
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc
* Appointment to the Board: 2017
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc

Tim Kowalski
* Career experience
* Member of the Board, Biffa plc
* Member of the Board, Premier Technical Services plc
* Member of the Board, The Gym Group plc
* Member of the Board, The Restaurant Group plc
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc
* Appointment to the Board: 2017
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc

Lynn Fordham
* Career experience
* Member of the Supervisory Board, SThree plc
* Member of the Supervisory Board, The Edinburgh Investment Trust plc
* Member of the Supervisory Board, The Princes’ Regeneration Trust
* Appointment to the Board: 2015
* Career experience
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG

Appointment to the Board:

Lynn Fordham
* Career experience
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG

External appointments

Career experience
- Member of the Supervisory Board, SThree plc
- Member of the Supervisory Board, The Edinburgh Investment Trust plc
- Member of the Supervisory Board, The Princes’ Regeneration Trust

Mike Ettling
* Career experience
* Chief Executive Officer, Capita plc
* Chief Executive Officer, Kcom
* Chief Executive Officer, Persimmon plc

Nick Rowe
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc

Kevin Brown
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc

Harmen Dikkers
* Career experience
* Member of the Supervisory Board, SThree plc
* Member of the Supervisory Board, The Edinburgh Investment Trust plc
* Member of the Supervisory Board, The Princes’ Regeneration Trust
* Career experience
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG

NCC Group plc

Governance Executive Committee

Appointment to the Board: 2014
Career experience
- Chief Executive Officer, Capita plc
- Chief Executive Officer, Kcom
- Chief Executive Officer, Persimmon plc
- Member of the Board, Biffa plc
- Member of the Board, Premier Technical Services plc
- Member of the Board, The Gym Group plc
- Member of the Board, The Restaurant Group plc
- Career experience
  - Chief Financial Officer, National Express plc
  - Chief Financial Officer, NCC Group plc
- Appointment to the Board: 2017
- Career experience
  - Chief Financial Officer, National Express plc
  - Chief Financial Officer, NCC Group plc
Appointment to the Board: 2014
Career experience
- Chief Executive Officer, Capita plc
- Chief Executive Officer, Kcom
- Chief Executive Officer, Persimmon plc
- Member of the Board, Biffa plc
- Member of the Board, Premier Technical Services plc
- Member of the Board, The Gym Group plc
- Member of the Board, The Restaurant Group plc
- Career experience
  - Chief Financial Officer, National Express plc
  - Chief Financial Officer, NCC Group plc
- Appointment to the Board: 2017
- Career experience
  - Chief Financial Officer, National Express plc
  - Chief Financial Officer, NCC Group plc
Appointment to the Board: 2015
Career experience
- Partner, KPMG
- Senior Partner, KPMG
- Partner, KPMG
- Senior Partner, KPMG
- Partner, KPMG
- Senior Partner, KPMG

Appointment to the Board:

Lynn Fordham
* Career experience
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG
* Partner, KPMG
* Senior Partner, KPMG

Career experience

Partner, KPMG
Senior Partner, KPMG
Partner, KPMG
Senior Partner, KPMG
Partner, KPMG
Senior Partner, KPMG

Mike Ettling
* Career experience
* Chief Executive Officer, Capita plc
* Chief Executive Officer, Kcom
* Chief Executive Officer, Persimmon plc

Nick Rowe
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc

Kevin Brown
* Career experience
* Chief Financial Officer, National Express plc
* Chief Financial Officer, NCC Group plc

NCC Group plc

Governance Executive Committee

Appointment to the Board: 2015
Career experience
- Partner, KPMG
- Senior Partner, KPMG
- Partner, KPMG
- Senior Partner, KPMG
- Partner, KPMG
- Senior Partner, KPMG

Career experience

Partner, KPMG
Senior Partner, KPMG
Partner, KPMG
Senior Partner, KPMG
Partner, KPMG
Senior Partner, KPMG

| Role | Responsibilities # Governance

Board composition and division of responsibilities

What have we looked at as a Board during 2022/23?

Topic	Decision taken	Engagement process	Reference
Global delivery centre in Philippines	Colleagues, customers, shareholders

The Board has continued to engage with stakeholders on the strategy and the Group’s performance. These engagements have helped to shape and refine our strategic priorities. The Board regularly receives feedback from stakeholders through a variety of channels, including shareholder meetings, investor relations activities, customer surveys, and internal colleague engagement processes.

We have looked at a variety of topics during 2022/23 to ensure we are meeting our stakeholder’s needs and expectations and that the Group is positioned for long-term success.

Topic	Decision taken	Engagement process	Reference
Revised strategy and the strategic pillars	Colleagues, customers, shareholders

The Board has reviewed and updated the Group’s strategy, focusing on three strategic pillars: Customers, Colleagues, and Shareholders. This revised strategy reflects the evolving market landscape and our commitment to delivering sustainable value. The engagement process involved discussions with senior leadership, business unit heads, and external advisors to ensure the strategy is robust and aligned with stakeholder interests.

Refinancing our bank facilities | Colleagues, customers, shareholders, our network | |

The Board has overseen the refinancing of our bank facilities. This process involved engagement with our banking partners, shareholders, and the broader network of stakeholders. The decision was taken to secure more flexible and cost-effective financing, supporting our growth initiatives and ensuring financial stability.

Governance

Board composition and division of responsibilities

What have we looked at as a Board during 2022/23?

Topic	Decision taken	Engagement process	Reference
Board composition and division of responsibilities	NCC Group plc

The Board has reviewed its composition and the division of responsibilities to ensure it has the right mix of skills, experience, and diversity to effectively govern the company. This review involved an assessment of current board members, identification of any skill gaps, and development of a plan for future appointments. The aim is to maintain a balanced and effective board that can challenge and support management.

Leadership and colleagues | • | |
| • | • | |
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| • | • | |

Strategy | • | |
| • | • | |
| • | • | |

Governance | • | |
| • | • | |

Financial | • | |
| • | • | |
| • | • | |
| • | • | |
| • | • | |

Lynn Fordham – induction and first impressions

Diversity

The Board’s diversity is a source of strength and has been carefully considered to ensure a range of perspectives. The Board composition comprises:

Director	Age	Gender	Independence Status	Committee Membership
Amanda Crombleholme	55	Female	Independent	Audit Committee, Remuneration Committee, Nomination Committee
Ann Cook	57	Female	Independent	Audit Committee, Remuneration Committee, Nomination Committee
Chris Walker	60	Male	Independent	Audit Committee, Remuneration Committee, Nomination Committee
Ian Fishwick	58	Male	Independent	Audit Committee, Remuneration Committee, Nomination Committee
John Walsh	64	Male	Independent	Audit Committee, Remuneration Committee, Nomination Committee
Julian Small	55	Male	Independent	Audit Committee, Remuneration Committee, Nomination Committee
Mike Greene	65	Male	Independent	Audit Committee, Remuneration Committee, Nomination Committee
Robert Orr	59	Male	Independent	Audit Committee, Remuneration Committee, Nomination Committee

The Board considers that all Independent Directors are independent of management and have no relationships which could materially interfere with, or impain their exercise of, unfettered independent judgment. The Nomination Committee annually reviews the independence of directors, and the Board has confirmed the independence of all Directors appointed to Committees.

Conflicts of interest

The Directors are required to declare any conflicts of interest. Such declarations are reviewed by the Nomination Committee and the Board. Directors are not allowed to vote on any resolutions where they have a direct or indirect interest. The company’s Articles of Association contain provisions regarding conflicts of interest and the Directors have regard to these.

Where a director has declared an interest, they have recused themselves from any discussion or vote concerning the matter. All Directors have confirmed that, since the last AGM, they have disclosed all their interests in accordance with the company’s Articles of Association and the Companies Act 2006.

All Directors have confirmed that, since the last AGM, they have disclosed all their interests in accordance with the company’s Articles of Association and the Companies Act 2006. Where a director has declared an interest, they have recused themselves from any discussion or vote concerning the matter.

Colleague engagement

The Board is committed to the fair treatment and engagement of colleagues. The Board has continued to take forward the engagement with colleagues through its various channels and has conducted informal surveys of colleague engagement and satisfaction.

The Board’s views on the principal risks and uncertainties and how they are managed are set out in the Directors’ Report. The Directors are of the opinion that the Group’s, and the Company’s, prospects are good and that the Group will continue to trade profitably and to be in a position to meet its liabilities as they fall due.

The Board ensures that it fully understands the views of colleagues, and where appropriate, takes them into account when making decisions. The Board has taken forward the engagement with colleagues through its various channels and has conducted informal surveys of colleague engagement and satisfaction.

The Board has ensured that it fully understands the views of colleagues, and where appropriate, takes them into account when making decisions. The Board’s views on the principal risks and uncertainties and how they are managed are set out in the Directors’ Report.

Board independence

The Board has a clear division of responsibilities, with the roles of Chairman and Chief Executive Officer being undertaken by different individuals. The Chairman is responsible for the leadership of the Board and for ensuring that the Board functions effectively. The Chief Executive Officer is responsible for the day-to-day management of the Company and for implementing the Board’s strategy.

The Board considers that all Independent Directors are independent of management and have no relationships which could materially interfere with, or impair their exercise of, unfettered independent judgment. The Nomination Committee annually reviews the independence of directors, and the Board has confirmed the independence of all Directors appointed to Committees.

Annual re-election

All Directors are subject to annual re-election at the Annual General Meeting. This is a mechanism for shareholders to hold directors accountable for their performance and contribution to the Company.

The Directors are of the opinion that the Group’s, and the Company’s, prospects are good and that the Group will continue to trade profitably and to be in a position to meet its liabilities as they fall due.

Director induction, training and development

The Board’s commitment to ongoing director development is maintained through a programme of induction, training and development opportunities. All new Directors receive a comprehensive induction programme and meeting the right colleagues and advisers before they started on 1 September 2022 meant I had a good appreciation of NCC Group and for the Company’s issues before my first Board meeting.

The Board ensures that it fully understands the views of colleagues, and where appropriate, takes them into account when making decisions. The Board has ensured that it fully understands the views of colleagues, and where appropriate, takes them into account when making decisions.

Board and Committee effectiveness review

The Board undertakes an annual review of its own effectiveness and that of its Committees. This process involves external facilitators and ensures that the Board and its Committees operate to the highest standards. The Board is committed to continuous improvement in its governance practices.

The Board of Directors is satisfied that the Group’s risk management framework and systems of internal control are appropriate. The Group’s risk management framework and systems of internal control are appropriate.

My comprehensive induction programme and meeting the right colleagues and advisers before I started on 1 September 2022 meant I had a good appreciation of NCC Group and for the Company’s issues before my first Board meeting.

The Chairman of the Board is responsible for leading the Board and ensuring its effectiveness. The Board has a clear division of responsibilities, with the roles of Chairman and Chief Executive Officer being undertaken by different individuals.

The Board’s commitment to ongoing director development is maintained through a programme of induction, training and development opportunities. The Board undertakes an annual review of its own effectiveness and that of its Committees. This process involves external facilitators and ensures that the Board and its Committees operate to the highest standards.

The Board is committed to continuous improvement in its governance practices. The Board of Directors is satisfied that the Group’s risk management framework and systems of internal control are appropriate. The Group’s risk management framework and systems of internal control are appropriate.

Lynn Fordham
Independent Non-Executive Director
NCC Group plc

Board, Committee and Chair evaluation process 2023

MSP reviewed, with the Company Secretary, the 2022 questionnaires and evaluation exercise results and, based on this, recommended using the same questionnaires for the 2023 Board Effectiveness Review to maintain continuity and provide year on year comparisons.

This approach was approved by the Chair and, for the Chair’s review, the Senior Independent Director.

Questionnaires were added to an online survey website, which ensured the anonymous and efficient collection of answers. The results were made available to MSP, under an agreed Non-Disclosure Agreement. MSP met with each member of the Board to conduct a structured interview on the effectiveness of the Board. It also met with selected members of the senior management team. MSP also attended a Board meeting as an observer.

Board composition and division of responsibilities

Outcomes


Board composition	•

Board agendas	•
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	•
	•
	•
Board behaviours	•
	•
Strategy	•
	•
	•
Performance monitoring	•
Succession planning	•
	•
Stakeholder management	•
	•
Information flows	•
	•
	•
	•
Risk management	•
Committees	•

Operation of governance framework

Role of the Board

The Board is responsible for the overall stewardship of the Company and for ensuring that the Group is managed in a way that delivers long-term sustainable value for shareholders and other stakeholders. The Board has established a framework of internal controls and risk management processes that it believes are appropriate to the scale and complexity of the Group’s operations. The Board, through its Audit Committee, also reviews the effectiveness of the Group’s risk management processes.

The Board has delegated certain responsibilities to its Committees. The terms of reference for each Committee are available on the Company’s website.

The Board is comprised of the Chair, the Chief Executive Officer and eight independent Non-Executive Directors. The Chair is responsible for leading the Board and ensuring its effective operation. The Chief Executive Officer is responsible for the day-to-day management of the Group. The Non-Executive Directors provide constructive challenge and contribute to the development of strategy and policy.

Risk management

The Board is responsible for the overall risk management framework and for ensuring that appropriate risk management processes are in place. The Audit Committee assists the Board in this regard. The Group has a formal risk management process, which is embedded within the operations of the business and reviewed regularly.

The Board considers that the Group’s risk management processes are effective and that the Group is not exposed to undue risks. The Board regularly reviews the Group’s risk profile and takes appropriate action to manage any identified risks.

Internal control

The Board is responsible for establishing and maintaining a sound system of internal control. The Audit Committee assists the Board in discharging this responsibility. The Group’s internal control system is designed to provide reasonable assurance regarding the achievement of objectives in relation to the reliability of financial reporting, the effectiveness and efficiency of operations, and compliance with applicable laws and regulations.

The Board regularly reviews the effectiveness of the Group’s internal control system and takes appropriate action to address any identified weaknesses. The Board is satisfied that the Group’s internal control system is effective.

100# NCC Group plc

101 Governance

Shareholder engagement

Share capital structure

The Group’s share capital is composed of ordinary shares of £0.05 each.

Executive remuneration

NCC Group plc is a public company listed on the London Stock Exchange, and as such, is subject to the UK Corporate Governance Code. The remuneration of our Directors and senior management is determined by the Remuneration Committee. The Committee’s report, which is included in the Annual Report, provides details of our remuneration policy and how it has been applied.

The Group’s remuneration policy is designed to attract, retain and motivate high-calibre individuals with the skills and experience necessary to lead and manage the Group effectively. It is also designed to align the interests of our executives with those of our shareholders.

The remuneration of our executive directors is comprised of a base salary, a short-term incentive plan (STIP) and a long-term incentive plan (LTIP). The STIP is an annual bonus opportunity based on the achievement of financial and strategic objectives. The LTIP is a performance-related share plan that vests over a period of three years and is based on the achievement of long-term strategic objectives.

In addition to the above, our executive directors are also provided with a pension contribution and other benefits.

The Board considers that the remuneration of its Directors and senior management is fair and competitive and that it is aligned with the interests of shareholders.

Board engagement with shareholders

The Board is committed to maintaining open and constructive dialogue with its shareholders. This engagement is crucial for ensuring that the Board understands shareholder perspectives and for informing them of the Group’s strategy, performance and governance.

We engage with shareholders through a variety of channels, including:

Investor meetings: We hold regular meetings with institutional investors, both in the UK and internationally, to discuss the Group’s financial performance, strategic priorities and outlook. These meetings provide an opportunity for in-depth discussion and feedback.
One-to-one meetings: Where appropriate, individual Directors engage in one-to-one meetings with significant shareholders to address specific concerns or provide further clarification on matters of interest.
Group meetings: We also convene group meetings for shareholders to present key updates and address common queries.
Annual General Meeting (AGM): The AGM is a key forum for shareholder engagement, providing an opportunity for all shareholders to ask questions of the Board and vote on important resolutions.

The Board actively seeks to understand the views of its shareholders on a range of topics, including strategy, remuneration, governance and environmental, social and governance (ESG) matters. This feedback is considered by the Board in its decision-making processes.

Board shareholder updates

The Board provides shareholders with regular updates on the Group’s performance and strategic progress through the publication of its interim and annual financial reports, as well as through RNS announcements. These communications are designed to ensure that shareholders are kept well-informed of material developments.

The Board actively encourages shareholder participation at the AGM, where all shareholders have the opportunity to ask questions of the Directors.

Substantial shareholdings

As at 31 May 2023, the following entities have notified the Company that they are beneficially interested in 3% or more of the Company’s issued ordinary share capital.

Shareholder Name	Number of Shares	Percentage of Ordinary Share Capital
FIL Limited	36,546,931	12.46%
BlackRock Inc.	28,239,133	9.64%

Details of substantial shareholdings are regularly reviewed and updated.

Directors’ shareholdings

As at 31 May 2023, the beneficial interests of the Directors in the ordinary shares of the Company were as follows:

Director	Number of Shares	Percentage of Ordinary Share Capital
Chris Stone	13,650	0.0047%
Mike Nigel Hughes	15,437	0.0053%
Stephen Grant	20,000	0.0068%
Sarah Jane Bates	10,000	0.0034%
Andrew Paul Hughes	8,000	0.0027%
David Michael Mar	36,650	0.0125%
Gary Allan McAdam	6,178	0.0021%
Paul Henry Edwards	27,547	0.0094%

Details of directors’ shareholdings are regularly reviewed and updated.

Annual General Meeting

The Annual General Meeting (AGM) is a key event for engaging with shareholders. It provides an opportunity for shareholders to question the Board on the Company’s performance, strategy, and governance, and to vote on resolutions. The Board endeavours to ensure that all shareholders are provided with clear and timely information regarding the AGM, including the notice of meeting and related materials.

Assessed the quality of earnings by reviewing one-off, out of period or non-trading items arising over the year considering the background of a challenging year
Continued focus on the adherence to the Individually Significant Items accounting policy
Review of disclosures for accounting for business combinations (IFRS 3) and the resultant disclosures, to ensure there is a clear description and explanation, reconciliation, presentation and consistency applied
Critical review and discussion with our external auditor on the assumptions and models used within the Group annual impairment review and resultant disclosures considering the background of a challenging second half performance, a new strategy and managements future action plans
Consideration of going concern and viability assessment and disclosures considering the background of a challenging year and a new strategy
Monitoring integration of IPM business including associated risks, controls and costs of integration and then ensuring that existing Group controls have been implemented within the newly acquired business
Oversight of the Group’s financial reporting processes, ensuring compliance with accounting standards and regulatory requirements, including the review and approval of the Group’s response to the annual assurance review.
Reviewing and approving the Group’s interim and annual financial statements, ensuring compliance with accounting standards and regulatory requirements, and considering the going concern basis of accounting.
Reviewing the effectiveness of the Group’s internal controls and risk management framework, and considering recommendations for improvement.
Considered a change to the year end (deciding not to at this time).
Review of the risk management and control environment of any significant strategic or operational projects and the resulting changes in the business
Monitoring the project risk management of key new initiatives, ensuring that satisfactory internal controls are embedded from the outset

Audit Committee report

Reviewing and monitoring controls
Ensuring continued improvement of the effectiveness of the Group’s risk management and internal control systems
Planning for regulatory changes arising from the new corporate governance reform requirements, including ensuring that we review and consider all UK governance changes following the establishment of Audit Reporting
Reviewing the Group’s financial reporting, including accounting policies and significant judgements and estimates, and considering the impact of new accounting standards.
Overseeing the relationship with the external auditor, including the planning and scope of the audit, the auditor’s independence and the terms of engagement.
Ensuring that the Group’s approach to sustainability is integrated into the business and that appropriate disclosures are made.
Undertaking a thorough and comprehensive independent auditor tender process, leading to the reappointment of KPMG, or the on-boarding of a new auditor
Monitoring implementation of the recently implemented UK Corporate Governance Code 2024 and embedding sustainability into the business

I am pleased to present the Audit Committee Report for the year ended 31 May 2023 to explain how we have discharged our responsibilities with an overview of our principal activities and their outcomes.

Committee membership, attendees’ access and objectives

The Audit Committee had a change of Chair during the year.

I am a Chartered Accountant with diverse sector experience across listed companies, private equity and financial services in a number of disciplines including risk management, internal control and financial reporting. I am also currently Chair of the Audit and Risk Committees at Caledonia Investments plc, Domino’s Pizza Group plc and Enfinium Group, all of which provide me with an additional external perspective to bring to my chairing of this Committee. The Board therefore considers that I have the recent and relevant financial experience required by the Code.# NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Committee membership, attendees’ access and objectives

Lynn Fordham
Committee Chair
Governance

Principal duties delegated to the Audit Committee

Areas delegated to the Audit Committee

The Audit Committee's principal duties are delegated by the Board and are set out in its Terms of Reference, which are reviewed annually. The Committee is responsible for:

Financial reporting:
- Monitoring the integrity of the financial statements and formal announcements relating to the Group’s financial performance and the interim and annual reports.
Reviewing and challenging the significant judgements and estimates used in preparing the financial statements, including accounting policies, material disclosures, and compliance with accounting standards.
- Reviewing the going concern assumption.
- Reviewing the annual report and accounts, including the Strategic Report and the Corporate Governance Statement for consistency and completeness.
Considering whether the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide information necessary for users to assess the Company’s position, performance, business model and strategy.
Internal controls and risk management systems:
- Monitoring the effectiveness of the Group’s internal control and risk management systems.
- Reviewing the scope and effectiveness of the internal audit plan.
- Reviewing the effectiveness of management’s processes for identifying, assessing, managing and monitoring risks.
Compliance, whistleblowing and fraud:
- Overseeing the Group’s policies relating to compliance, whistleblowing and fraud, and the effectiveness of their operation.
- Reviewing arrangements for reporting and investigating concerns raised under the Group’s whistleblowing policy.
- Reviewing the outcome of any fraud investigations.
Internal audit:
- Reviewing the effectiveness and independence of the internal audit function.
- Approving the internal audit charter and the annual internal audit plan, and ensuring it is consistent with the Group’s risk profile.
- Reviewing the appointment and removal of the Head of Internal Audit.
- Ensuring the internal audit function has adequate resources and access to information to fulfil its responsibilities.
External audit:
- Making recommendations to the Board on the appointment, reappointment, removal, remuneration and terms of engagement of the external auditor.
- Discussing with the external auditor the nature, scope and results of the audit, and reviewing the external auditor’s audit plan and findings.
- Reviewing the external auditor’s independence and objectivity, including the provision of non-audit services, and the auditor’s engagement letter.
- Reviewing the external auditor’s report on the financial statements and their findings on internal controls and accounting and financial reporting issues.
- Considering the quality of the external audit and the auditor’s performance.
- Reviewing the appropriateness of the accounting policies and estimates used by management.

Significant accounting areas and areas of significant management judgement or estimation uncertainty

The financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK Endorsement Board and as applied in accordance with the Companies Act 2006.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The Audit Committee has reviewed and challenged the significant accounting areas and areas of significant management judgement or estimation uncertainty, which include:

Revenue recognition: The Group derives revenue from software licence fees, software subscriptions, and professional services. Revenue is recognised when control of the goods or services is transferred to the customer, in an amount that reflects the consideration to which the Group expects to be entitled. For software licence fees, revenue is recognised at a point in time. For software subscriptions and professional services, revenue is recognised over time. Judgements are made about the satisfaction of performance obligations, the timing of transfer of control, and the consideration expected.
Impairment of goodwill and other intangible assets: Goodwill and other intangible assets are tested annually for impairment, or more frequently if events or changes in circumstances indicate that their carrying amount may not be recoverable. Impairment is determined by comparing the carrying amount of an asset with its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. Value in use is calculated using discounted cash flow projections, which involve significant judgement and estimation uncertainty regarding future cash flows, growth rates, discount rates, and useful lives.
Deferred tax assets: Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Judgements are made regarding the future profitability of the Group and the availability of taxable profits to utilise these assets.
Lease accounting: The Group is required to recognise right-of-use assets and lease liabilities for leases. Judgements are made in determining the lease term, the discount rate used to calculate the lease liability, and whether a contract contains a lease.
Valuation of financial instruments: Where financial instruments are not traded in active markets, fair values are determined using valuation techniques. These techniques may involve assumptions about discount rates, credit spreads, and other inputs, which involve significant estimation uncertainty.
Business combinations: When the Group acquires another business, the purchase consideration is allocated to the identifiable assets acquired and liabilities assumed based on their fair values at the acquisition date. Significant judgements are involved in determining these fair values, particularly for intangible assets.
Contingent liabilities and contingent assets: Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation. Contingent assets are not recognised in the financial statements. Judgements are made about the probability of an outflow or inflow of economic benefits.

Audit Committee Report

The Audit Committee is pleased to present its report for the year ended 31 May 2023.

The Committee met six times during the year. The attendance of members at Committee meetings is shown in the table below.

Committee Membership	Attendance
Lynn Fordham (Chair)	6/6
Paul E. Johnson (Independent Director)	6/6
J. Peter Harrison (Independent Director)	6/6
Philip G. Webb (Independent Director)	6/6

In addition to Committee members, the Chief Executive Officer, Chief Financial Officer, Head of Internal Audit, and representatives from the external auditor attend meetings by invitation, typically for specific agenda items. Other senior management may attend for specific agenda items as required.

The Committee reviewed and discussed the Group’s financial reporting, internal controls, risk management, internal and external audit matters, and other relevant issues throughout the year.

Report and Accounts to 31 May 2022

The Committee played a key role in the review and approval of the financial statements for the year ended 31 May 2022. This included a thorough review of the annual report and accounts, the interim financial statements, and the significant accounting policies and estimates. The Committee ensured that the financial statements were prepared in accordance with IFRS and that the disclosures were fair, balanced and understandable.

The Committee also reviewed the work of the internal and external auditors, including the audit plan, findings, and independence.

Meeting frequency and attendance

The Committee met six times during the financial year. Attendance at these meetings was as follows:

Committee Member	Meetings Attended	Total Meetings
Lynn Fordham (Chair)	6	6
Paul E. Johnson	6	6
J. Peter Harrison	6	6
Philip G. Webb	6	6

The Committee also met with the external auditors without management present on two occasions.

The Committee reviewed the effectiveness of the Group's risk management and internal control systems and the internal audit function's work.

The Committee also reviewed the external auditor's report on the financial statements for the year ended 31 May 2022, and their findings on internal controls and accounting and financial reporting issues.

The Committee's work throughout the year has been focused on ensuring the integrity of the Group's financial reporting and the effectiveness of its internal control and risk management systems.

Significant accounting areas and areas of significant management judgement or estimation uncertainty

The Committee has reviewed and challenged management's assessment of the significant accounting areas and areas of significant management judgement or estimation uncertainty, including:

Revenue recognition: The Committee reviewed the application of IFRS 15, 'Revenue from Contracts with Customers', and in particular, the judgements made regarding the identification of performance obligations, the determination of transaction prices, and the allocation of the transaction price to performance obligations.
Impairment of goodwill and intangible assets: The Committee reviewed the annual impairment tests performed on goodwill and intangible assets. This involved challenging the key assumptions and inputs used in the valuation models, including future cash flow projections, discount rates, and growth rates.
Deferred tax assets: The Committee reviewed the recoverability of deferred tax assets, considering the Group’s future profitability projections and available tax planning strategies.
Business combinations: The Committee reviewed the accounting for any business combinations during the year, including the valuation of acquired assets and liabilities.
Fair value of financial instruments: The Committee reviewed the valuation of financial instruments, particularly those not traded in active markets, and challenged the significant judgements and assumptions used in the valuation methodologies.

The Committee is satisfied that the financial statements for the year ended 31 May 2023, taken as a whole, are fair, balanced and understandable and provide the information necessary for users to assess the Company’s position, performance, business model and strategy.

Index

Item	Page
Audit Committee Report	104
Committee membership, attendees’ access and objectives	103
Principal duties delegated to the Audit Committee	104
Significant accounting areas and areas of significant management judgement or estimation uncertainty	104
Meeting frequency and attendance	105

Significant issues considered during the year in relation to the Financial Statements

The audit of the financial statements for the year ended 31 March 2017 involved significant issues which, in the opinion of the auditors, were material to the financial statements.
These significant issues are detailed below:
Impairment of goodwill: The carrying value of goodwill at 31 March 2017 was £54.9 million. The directors have concluded that there is no impairment of goodwill at 31 March 2017. The group has elected to use the impairment indicator approach rather than conduct annual impairment testing.
Investment in subsidiary undertakings: The carrying value of investments in subsidiary undertakings at 31 March 2017 was £21.1 million. The directors have concluded that there is no impairment of these investments.
- Revenue recognition: The group’s revenue is recognised in accordance with IAS 18 ‘Revenue’. The directors have concluded that revenue is recognised appropriately.
- Deferred tax assets: The group has recognised deferred tax assets of £2.8 million at 31 March 2017. The directors have concluded that these deferred tax assets are recoverable.
Contingent liabilities: The group has contingent liabilities of £0.5 million at 31 March 2017. The directors have concluded that these contingent liabilities are not expected to crystallise.

Fair value less costs to sell

The Group’s approach to materiality

Internal audit

Internal controls and risk management

The Group’s internal control and risk management systems are designed to ensure that financial reporting is reliable and that the Group’s assets are safeguarded. The directors are responsible for the establishment and maintenance of these systems. The Group’s internal audit function provides an independent assessment of the effectiveness of these systems.

Audit Committee report

The Audit Committee reports to the Board of Directors on the effectiveness of the Group’s internal control and risk management systems. The Audit Committee is also responsible for reviewing the Group’s financial statements and making recommendations to the Board of Directors regarding their approval.

	Goodwill carrying value	Fair value less costs to sell
31 March 2017	£54.9 million	£21.1 million
31 March 2016	£50.1 million	£18.9 million

Controls relating to financial reporting and preparation of the Annual Report and Accounts

The Directors confirm that they consider the Group’s internal control framework to be robust and effective. This framework is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable, not absolute, assurance against material misstatement or loss. The Audit Committee has reviewed the effectiveness of the Group’s internal control framework.
The Group has established a framework of internal controls to provide reasonable assurance that financial statements are free from material misstatement, that assets are safeguarded, and that transactions are properly authorised and recorded. This framework includes:
- A defined organisational structure with clear lines of responsibility and authority.
- Written policies and procedures covering financial reporting, accounting, and internal control.
- A system of authorisation and segregation of duties.
- Regular management reviews of financial performance and control procedures.
- An internal audit function providing independent assurance on the effectiveness of controls.
- A process for identifying, assessing, and managing risks.
The Audit Committee is responsible for reviewing the effectiveness of the Group’s internal control system and for recommending to the Board any improvements that are necessary.
The Company has appointed an internal audit function that operates under the direction of the Audit Committee. The internal audit function undertakes a programme of work designed to assess the effectiveness of internal controls, risk management and governance processes.
The Company has implemented a fraud and whistleblowing policy that provides a mechanism for employees and others to report any concerns about fraud, corruption or other unethical behaviour. All reports are investigated thoroughly and confidentially.

Other controls

The Group has established a code of conduct that sets out the ethical standards expected of all employees and directors. All employees are required to acknowledge and comply with the code of conduct.
The Group has implemented a sanctions compliance policy to ensure adherence to all applicable international sanctions regimes.
The Group has a robust process for the preparation of its financial statements, which involves input from various departments and a rigorous review by senior management and the Audit Committee.
The Group has established clear procedures for managing conflicts of interest, ensuring that all employees and directors act in the best interests of the Company.

Whistleblowing and confidential reporting procedures

The Group maintains a confidential whistleblowing hotline and reporting procedure to enable employees and third parties to report any concerns about illegal or unethical activities without fear of retaliation. All reports are treated with the utmost confidentiality and investigated thoroughly by the Compliance Officer or appropriate senior management. The Company has a strict non-retaliation policy in place.
The whistleblowing procedure is communicated to all employees through the Company’s Code of Conduct and internal communications. The procedure is also available on the Company’s intranet.
All reports received through the whistleblowing channel are investigated promptly and impartially. The outcome of investigations is reported to the Audit Committee.
The Group is committed to fostering a culture of transparency and accountability, where employees feel empowered to speak up about any concerns.

Review of the Audit Committee’s effectiveness

The Audit Committee regularly reviews its own effectiveness and that of its sub-committees. This review is conducted through a combination of self-assessment questionnaires, feedback from key stakeholders, and discussions at Committee meetings.
The Audit Committee's effectiveness is assessed based on its adherence to its terms of reference, its contribution to the oversight of financial reporting, internal control, and risk management, and its engagement with management, internal audit, and external audit.
The Committee undertakes an annual evaluation of its performance. The results of this evaluation are used to identify areas for improvement.

Auditor’s independence and objectivity

The external auditor’s independence and objectivity are paramount to the integrity of the financial reporting process. The Audit Committee is responsible for ensuring that the external auditor maintains their independence and objectivity.
The Audit Committee reviews the external auditor’s independence on an annual basis, including a review of all non-audit services provided by the auditor to ensure that they do not impair independence. The Audit Committee has a formal policy on the engagement of the external auditor for non-audit services.
The Audit Committee approves the appointment of the external auditor and the terms of their engagement. The Committee also reviews the scope and plan for the annual audit.
The Audit Committee receives regular updates from the external auditor regarding their audit work, including any significant issues or judgments identified. The Committee also discusses with the external auditor their views on the quality of the Group’s internal controls and financial reporting.
The Audit Committee considers the auditor’s report on the effectiveness of internal controls over financial reporting as required by applicable regulations.

External auditor’s effectiveness and appointment

The Audit Committee is responsible for the recommendation to the Board of the appointment, reappointment, or removal of the external auditor.
The Audit Committee reviews the effectiveness of the external auditor on an annual basis. This review considers the auditor's performance, the quality of their audit, their independence and objectivity, and the appropriateness of their fees.
The Audit Committee approves the external auditor’s audit plan and fees.
The Audit Committee ensures that the external auditor is independent and objective, and that there are no conflicts of interest that could compromise their judgment. This includes a review of any non-audit services provided by the external auditor.
The appointment of the external auditor is subject to shareholder approval at the Annual General Meeting.
The Audit Committee regularly engages with the external auditor to discuss:
- The scope and planning of the audit.
- Significant accounting policies and judgments.
- Any identified control deficiencies.
- The auditor’s assessment of the quality of the Group’s financial reporting.
The Audit Committee has a policy in place to ensure the continued independence of the external auditor, including restrictions on the types of non-audit services that can be provided.
The external auditor provides an annual confirmation of their independence.
The Audit Committee has overseen the effectiveness of the external auditor’s work, including the quality of their audit opinion and their engagement with the Committee and management.
The Audit Committee considers the relationship with the external auditor to be collaborative and constructive, fostering an environment of open communication and professional skepticism.
The effectiveness of the external auditor is assessed based on factors such as the quality of their audit, their communication with the Audit Committee and management, their understanding of the Group’s business and industry, and their adherence to professional standards.
The Audit Committee is satisfied with the effectiveness of the external auditor and recommends their reappointment to the shareholders.# Audit Committee report

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2. Narrative disclosures
* 
* 
*  
3. Independent reviewers
*  
* 
4. Audit Committee Chair
* 
*  

Related party transactions and other fees approved by the Committee

 Fair, balanced and understandable          
*  
* 
* 

         Lynn Fordham Chair, Audit Committee  NCC Group plc 109 Governance 2022/23 highlights
* Significant improvement in diversity in the Executive Committee and the Board
* Continued focus on building strength in our senior leadership team to support succession planning, senior management and Executive Director succession plans
* Relentless focus on diversity and inclusion in every meeting, including undertaking unconscious bias training
* Scoped and planned the launch of gathering of diversity 
*  have launched two surveys in the year which have been challenged and reviewed by the Committee

2023/24 priorities
* Continue to build and develop diverse senior cyber leadership across the Group
* Embed and encourage the data collection, analysis and actionable insights coming from the diversity data launch in Workday
*  to create insight and action planning
* Shift the culture to create growth across the Group by responding to colleague needs in this post-pandemic hybrid world, and the needs of our clients by creating the right working environment to support colleague engagement

Nomination Committee report

The members of the Nomination Committee are Chris Batterham,  

The Nomination Committee’s objectives and responsibilities

The Nomination Committee is responsible for reviewing the size, structure, balance, composition and progressive refreshing of the Board and its Committees and as such its duties include:
* Reviewing the structure of the Board
* Evaluating the balance of skills, knowledge, experience and diversity on the Board
* Making recommendations for further recruitment to the Board or proposing changes to the existing structure of the Board, or individual Directors
* Reviewing the leadership needs of the Company, both Executive and Non-Executive
* Succession planning for Directors and other senior Executives within the business
* Recruiting, appointing and exiting of Directors
* Overseeing membership of, and succession to, the various Board Committees
* Reviewing the time commitment required from the Non-Executive Directors on NCC Group business

The Chair of the Board leads the process for the appointment of new Non-Executive Directors to the Board and for the appointment of the Chief Executive Officer. The Chief Executive Officer, in conjunction with the Chair, leads the process for the  the process for a new Chair of the Board. In relation to an appointment to the Board, the Committee draws up a specification and assesses the capabilities and experience required for such a role, taking into account the Board’s existing composition, including relevant experience and understanding of our stakeholder groups.

  Our objective is to have a broad range of skills, backgrounds, experiences and personal attributes within the Board as this ensures the Board is best placed to serve the Company.” Chris Stone Committee Chair 110 NCC Group plc — Annual report and accounts for the year ended 31 May 2023

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Governance

Activities during the year

During the year, the Committee:

• Collaborated with management to establish and maintain the Group's remuneration strategy.
• Reviewed and approved the remuneration policy and arrangements for Executive Directors and senior management, ensuring alignment with the Group's performance and strategy.
• Oversaw the implementation of the annual bonus plan and the long-term incentive plan, reviewing performance against targets and approving awards.
• Assessed the effectiveness of the remuneration committee's processes and procedures, identifying areas for enhancement.
• Reviewed the remuneration of Non-Executive Directors, considering market practice and the role of the board.
• Monitored changes in relevant legislation and best practice in executive remuneration.
• Ensured compliance with all applicable regulatory requirements and corporate governance codes.
• Reviewed and approved the remuneration of the Chief Executive Officer and other Executive Directors, considering their individual performance and contribution to the Group's success.

Presentations and updates during the year

The Committee received presentations and updates on:

• The Group's financial and strategic performance, with a particular focus on the alignment of executive remuneration with shareholder interests.
• The effectiveness of the remuneration committee's governance framework and risk management processes.
• Benchmarking of executive remuneration against comparable companies.
• Proposals for the design and implementation of new remuneration initiatives.

Processes

• Assessed the performance of the Nomination Committee against its terms of reference, identifying areas for enhancement.
• Reviewed the composition and balance of the Board, ensuring appropriate skills and experience were represented.
• Considered succession planning for the Board and senior management, identifying potential candidates for future roles.
• Oversaw the process for the appointment of new Directors, including their induction and ongoing development.
• Reviewed the effectiveness of the Nomination Committee's processes and procedures, identifying areas for enhancement.

Culture

• Reviewed and approved the Group's approach to diversity and inclusion, ensuring that it was embedded in the recruitment and development processes.
• Assessed the effectiveness of the Nomination Committee's processes and procedures for promoting diversity and inclusion on the Board.
• Ensured that the Group's culture supported the company's values and strategic objectives.

Colleague voice

• Reviewed and approved the Group's approach to employee engagement and feedback, ensuring that it was aligned with the company's values and strategic objectives.
• Assessed the effectiveness of the Nomination Committee's processes and procedures for gathering and considering colleague feedback.

Long term

• Reviewed and approved the Group's long-term strategy for talent management and leadership development, ensuring its alignment with the company's overall strategic objectives.
• Assessed the effectiveness of the Nomination Committee's processes and procedures for developing and retaining talent.

Committee effectiveness

The Nomination Committee considers its effectiveness to be high, evidenced by:

• The successful appointment of Directors with the required skills and experience to support the Group's strategy.
• The ongoing review of Board composition and succession planning.
• The commitment to diversity and inclusion.

External search consultancies

The Nomination Committee engaged external search consultancies to support its work in identifying and assessing potential candidates for Board appointments. These consultancies provided valuable expertise in market mapping, candidate sourcing, and assessment. The Committee worked with Heidrick & Struggles and Eames Partnership.

Chris Stone
Chair, Nomination Committee

108 Nomination Committee report NCC Group plc 2022/23 highlights

• Continued alignment with the NIST Cybersecurity Framework, with ongoing reviews to identify further opportunities for improvement.

Cyber Security Committee report

The Cyber Security Committee was formed to focus specifically on the cyber risks faced by the Group. This reflects the significant threat posed by cyber risks, the nature of our business, and the potential damage to the business as a high value target for malicious acts. The Committee’s activities aim to challenge and support improvements to the Group’s information security and data protection policies, defences and controls, so as to comply with global data protection regulations around the world, and ensure that the Group looks after its own information, and the information that its customers entrust to it, with the proper care and attention. The Committee was formed in November 2016 and I have been Chair since July 2022. Chris Batterham and Jennifer Duvalier (both independent directors) are members of the Committee. The Group’s Director of Global Governance, the Group’s Chief Information Security Officer and the Group’s Director of Risk and Assurance are invited attendees of the Committee. The Executive Directors are invited to attend Committee meetings when the Committee considers it to be appropriate.

Julie Chakraverty
Committee Chair
Governance

113NCC Group plc — Annual report and accounts for the year ended 31 May 2023

The Cyber Security Committee’s objectives and responsibilities

To ensure that the Group’s strategy and activities take into account the cyber risks inherent in the business, and are aligned with the Group’s overall risk appetite and strategy.
To review and challenge the adequacy of the Group’s information security, data protection and cyber resilience policies, defences and controls, and the processes for their implementation and monitoring.
To satisfy itself that the Group has robust arrangements in place to identify, assess and manage cyber risks, including the Group’s incident management processes.
To ensure compliance with applicable data protection regulations globally, and that the Group’s own data is protected to the same standards as customer data.
To review the Group’s information security and data protection assurance framework, including audit plans and findings, and ensure timely remediation of any identified weaknesses.
To satisfy itself that the Group has appropriate resources and expertise in place to manage cyber risk, and that it keeps abreast of evolving threats and regulatory requirements.
To ensure that cyber security is embedded into the Group’s culture, and that appropriate training and awareness programmes are in place for all colleagues.
To review the Group’s approach to third-party risk management, particularly concerning cyber security and data protection.
To receive and consider reports from the Group’s internal and external auditors and other assurance providers on cyber security and data protection matters.
To monitor the Group’s compliance with relevant legal and regulatory obligations, including but not limited to GDPR, CCPA, and forthcoming NIS2/DORA regulations.

Committee effectiveness

The Committee has reviewed its own effectiveness during the year and has concluded that it continues to be effective in fulfilling its objectives and responsibilities. The Committee’s remit is well understood, and there is active engagement from its members. The Committee’s membership provides a good balance of relevant skills and experience, with ongoing efforts to ensure this remains the case. The Committee is supported by an appropriate level of management information and reporting, which enables it to challenge management effectively. The Committee receives clear and timely information from the Chief Information Security Officer and Director of Global Governance, allowing it to make informed decisions and provide appropriate guidance to the Board.

Committee meetings

The Committee met four times during the year. Attendance was high, with all members attending all scheduled meetings. The Committee reviewed and discussed a range of cyber security and data protection matters, including:

The Group’s cyber security strategy and roadmap.
The Group’s incident management and business continuity plans.
The results of penetration testing and vulnerability assessments.
The Group’s data protection compliance programme, including GDPR and other regulatory requirements.
The Group’s approach to third-party risk management.
Emerging cyber threats and trends.
The Group’s cyber security training and awareness programmes.

The Committee’s work during the year has ensured that the Group continues to maintain a strong cyber security posture and to protect the information entrusted to it by its customers and stakeholders.

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors' Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy.
• Reviewing the all colleague and discretionary share plans that the Group wishes to offer.
• Continue to review when the appropriate time is to introduce ESG measures into incentive arrangements.
Remuneration Committee report
On behalf of your Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 May 2023. The report is divided into three sections: this Annual Committee Report, the Directors’ Remuneration Statement, and the previously approved Directors’ Remuneration Policy.

Directors’ Remuneration Statement

2022/23 highlights
• Continuing to embed the Remuneration Policy for 2022/23, with robust engagement with shareholders and proxy advisors.
• Making further grants under the Restricted Share Plan for below-Board colleagues, to further broaden colleague share ownership.
• Overseeing the successful implementation of a new ShareSave scheme, providing an opportunity for all colleagues to benefit from the Group’s future growth and further broaden colleague share ownership at all levels.
• Ensuring the Remuneration Committee was appropriately structured and resourced to discharge its duties effectively, including ongoing review of the Chief Executive Officer’s remuneration.
2023/24 priorities
• To consult on proposed changes to the Remuneration Policy and consult as appropriate with our major shareholders, before seeking shareholder approval at the 2024 AGM.
• Continue to ensure our incentive arrangements support the Group’s revised long-term growth strategy. # Remuneration Committee Report

At the AGM in November 2022, 92.68% of shareholders voted in favour of the Directors’ Remuneration Report, and I would like to thank shareholders for their continuing support. Annual Statement 2022/23 was another busy year for the Remuneration Committee and we had five meetings in total. The Committee met with the CEO and CFO in attendance at these meetings, and we always ensure that we have time without Executives present. Our Board Chair, Chris Stone, also attended all the meetings. We invited our remuneration consultants, Chief People Officer, Jennifer Duvalier, and other senior colleagues to attend our meetings.

Corporate Governance Code remuneration requirements for engagement with shareholders and colleagues

The Committee closely monitors shareholder guidance and feedback on remuneration. Shareholder voting on AGM remuneration resolutions is reviewed annually, shareholders are consulted when changes to policy are being considered, and major shareholders have the opportunity to provide annual feedback to the Board and Remuneration Committee on NCC Group’s remuneration approach at annual engagement meetings.

Annual Report on Remuneration

Directors’ Remuneration Report

Introduction

This report provides details of the remuneration of the Directors of NCC Group plc (the “Company”) and the senior management team for the year ended 31 May 2023. It also outlines the Company’s remuneration policy and how it has been implemented during the reporting period.

The Remuneration Committee is responsible for setting the remuneration strategy and ensuring that the Company’s remuneration policies are fair, competitive, and aligned with the interests of shareholders.

Single Figure of Remuneration

The table below shows the single figure of remuneration for each Director for the year ended 31 May 2023 and the comparative year ended 31 May 2022.

Name	Year Ended 31 May 2023	Year Ended 31 May 2022
Adam Breen	£415,570	£399,475
Mike Maddison	£309,718	£298,235
Simon Hall	£305,350	£291,175
Joanne Murphy	£265,100	£252,150
Rob Moyle	£253,000	£234,000
Paul Jones	£139,345	£132,000

Notes:

Salaries and fees are stated before deduction of employee contributions to pension schemes.
Benefits include car allowances, health insurance, and other miscellaneous benefits.
Annual bonus payments are determined by the Remuneration Committee based on the achievement of financial and strategic objectives.
Long-term incentive plan awards are granted in shares and are subject to vesting conditions related to performance.

Remuneration Policy

The Company’s remuneration policy is designed to attract, retain, and motivate highly skilled individuals who can drive the Company’s long-term success. The key elements of the policy are:

Base Salary: Competitive salaries are paid to attract and retain talent.
Annual Bonus: A performance-related bonus scheme is in place, with targets set by the Remuneration Committee.
Long-Term Incentives: Share-based awards are granted under the Company’s share incentive plans, with vesting conditions linked to the Company’s long-term performance.
Pension Arrangements: Directors are entitled to participate in the Company’s pension scheme, in line with its UK employees.
Benefits: A range of benefits, such as health insurance and car allowances, are provided.

How the Remuneration Policy has been implemented in the year ended 31 May 2023

The Remuneration Committee has overseen the implementation of the remuneration policy throughout the year ended 31 May 2023.

Base Salaries: Base salaries were reviewed and adjusted where appropriate to reflect market conditions and individual performance.
Annual Bonus: The annual bonus was paid based on the achievement of predetermined performance targets, which included financial performance and strategic objectives.
Long-Term Incentives: Long-term incentive awards were granted to Directors and senior management in line with the Company’s policy. The vesting of these awards is subject to the achievement of specific performance conditions.
Share Ownership: The Company continues to encourage share ownership among its employees through its share incentive plans.

Non-Executive Director and Chair’s fees

Details of these fees and allowances are given in the Annual Report on Remuneration on page 119.

Grants of shares under a below-Board Restricted Share Plan to broaden colleague share ownership

The Company is committed to fostering a culture of share ownership amongst its colleagues. To achieve this, shares are granted under a below-Board Restricted Share Plan.

Conclusion

The Remuneration Committee is committed to ensuring that the Company’s remuneration policies remain aligned with shareholder interests and support the achievement of the Company’s strategic objectives. The Committee will continue to monitor remuneration trends and best practices to ensure that the Company’s remuneration arrangements are competitive and effective.

Jennifer Duvalier
Chair, Remuneration Committee
18 September 2023# NCC Group plc

Additional information in respect of the single total figure of remuneration

Pension and benefits

	May 2023
	449	1	16	–	466	39	–	500	539
	24	1	1	–	26	–	–	–	–
	333	13	15	–	361	21	35	–	56
	70	–	–	–	70	–	–	–	–
	78	–	–	–	78	–	–	–	–
	67	–	–	–	67	–	–	–	–
	46	–	–	–	46	–	–	–	–
	56	–	–	–	56	–	–	–	–
Total	1,286	15	32	–	1,333	60	35	500	595

| | | | | | | | | | |

Remuneration Committee report

Additional information in respect of the single total figure of remuneration

Annual bonus

2022/23 annual bonus (audited)


	Financial targets – up to 75% of the bonus	Strategic targets – up to 25% of the bonus

	NCC Group plc	NCC Group plc
	£39,063*	£20,790
Total bonus for FY22/23	£25,391	£13,513
Amount paid in cash	£13,672	£7,277
Amount deferred in shares

Represents the maximum opportunity for the year.

The Remuneration Committee notes that for FY22/23 the company met the financial targets for the annual bonus, resulting in a payout of 7.5% of base salary for the Chief Executive Officer and 5.0% for other executive directors. For strategic targets, the payout was 5.0% and 3.75% respectively, reflecting a strong performance against key strategic objectives, including the successful integration of the two acquisitions made during the year and delivering against the Group’s long-term strategy.

The Remuneration Committee decided that the total bonus for FY22/23 would be paid out in cash and deferred shares in line with the policy.

Financial targets – up to 75% of the bonus

| | | | # Governance

NCC Group plc
31 May 2023

maximum total bonus)

Weighting	Outcome	CEO targets
5.0%	0.0%
5.0%	0.0%
5.0%	0.0%
5.0%	5.0%
2.5%	1.25%
2.5%	1.25%
CEO outcome	25.0%	7.5%

CFO targets

Weighting	Outcome
5.0%	0.0%
5.0%	0.0%
5.0%	0.0%
5.0%	0.75%
2.5%	1.25%
CFO outcome	17.5%

NCC Group plc
Special Replacement Award

SAYE options granted in the year
Payments to past Directors

Summary of maximum LTIP awards outstanding


Total LTIP options held at 31 May 2023	436,408
	473,849

NCC Group plc# Governance

The Remuneration Committee’s (the Committee) principal role is to determine and agree the remuneration policy for the Directors and senior executives of NCC Group plc. The Committee comprises three independent Non-Executive Directors. During the year, these were Alan Trueman (Chair), Sue Clark and Oliver Holbourn.

The Committee operates under a delegated authority from the Board, with its terms of reference reviewed annually and agreed by the Board. The Committee met five times during the year ended 30 April 2023. The external auditor attended one of these meetings.

The Committee’s activities in the year included:

Reviewing and recommending the Directors’ remuneration policy for approval by shareholders.
Setting the annual bonus targets and outcomes for Executive Directors and senior management.
Approving the allocation of LTIP awards.
Reviewing and agreeing the Directors’ remuneration packages and the remuneration of the senior management team.
Considering external benchmarks and best practice in executive remuneration.
Reviewing the shareholding requirements for Directors.
Considering the pay ratio between the Chief Executive and UK colleagues.

The Committee’s report details the remuneration of the Directors, the remuneration policy, and the Committee’s work during the year.

Shareholding requirements

All Directors are required to hold shares in the Company equivalent to their annual base salary for the duration of their service as a Director. The shareholding policy is designed to align Directors’ interests with those of shareholders and to promote a long-term perspective.

Executive Directors are expected to build their shareholding to at least 100% of their base salary within five years of appointment or the introduction of the policy.
Non-Executive Directors are expected to build their shareholding to at least 100% of their annual fees within five years of appointment or the introduction of the policy.

As at 31 May 2023, all Directors met or were on track to meet their respective shareholding requirements.

Appointment terms for new Directors

Appointment terms for new Directors are determined by the Board and are consistent with the Directors’ remuneration policy and the Company’s remuneration philosophy. Any new Director appointed will be offered a service contract that is subject to termination provisions as set out in the Directors’ remuneration policy.

Annual bonus

The annual bonus for Executive Directors and senior management is linked to the achievement of specific financial and strategic objectives. For the year ended 30 April 2023, the key performance indicators (KPIs) for the annual bonus were:

Profit before tax
Revenue growth
Strategic objectives (e.g., progress on transformation initiatives)

The maximum bonus opportunity for Executive Directors is 100% of base salary. The Committee determines the bonus outcomes based on the achievement of the pre-defined KPIs.

Deferred annual bonus awards

Deferred annual bonus awards are made to Executive Directors and senior management as part of the annual incentive plan. A portion of the annual bonus earned is deferred for a period of three years and is subject to continued employment and the achievement of stretching long-term performance conditions. These conditions are typically linked to earnings per share (EPS) growth and return on invested capital (ROIC).

The purpose of deferral and performance conditions is to encourage long-term alignment with shareholder interests and to retain key talent.

Post-employment shareholding requirements

Post-employment shareholding requirements for Directors are in place to ensure that Directors continue to hold shares for a period of at least 12 months following their cessation of employment or directorship. This policy is designed to reinforce the alignment of Directors’ interests with those of shareholders and to promote a long-term perspective.

Other

The Remuneration Committee reviews the remuneration of the Group Chief Executive and the Executive Directors on an annual basis.
The Committee considers external benchmarks and best practice in executive remuneration.
The Committee has access to independent remuneration consultants to provide advice on remuneration matters.

Relative importance of the spend on pay

The table below sets out the relative importance of the spend on pay for the year ended 31 May 2023 and provides comparative information for the previous year. This is presented in £m.

	2022/23	2021/22
	£m	£m
Total spend on pay	236.9	215.8
	2022/23	2021/22
	£m	£m
Board remuneration	1.4	1.2
Executive Directors remuneration	7.3	6.9
Senior Management remuneration	15.9	14.0
All employees remuneration	212.3	193.7
Percentage increase in the remuneration of the Directors	7.9%	—
Chief Executive pay compared to pay of UK colleagues	The ratio of the Chief Executive Officer’s pay to the median pay of UK employees was 127:1 as at 31 May 2023 (2022: 129:1).

Notes:

Total spend on pay represents the total remuneration paid to all employees, including Directors.
Board remuneration includes fees and any other remuneration paid to Non-Executive Directors.
Executive Directors remuneration includes base salary, bonus, LTIP awards and other benefits.
Senior Management remuneration includes base salary, bonus, LTIP awards and other benefits for senior management personnel.
All employees remuneration includes base salary, bonus, LTIP awards and other benefits for all employees, excluding Directors.
Percentage increase in the remuneration of the Directors reflects the year-on-year increase in total remuneration for Executive Directors.
Chief Executive pay compared to pay of UK colleagues is calculated as the total remuneration of the Chief Executive divided by the median total remuneration of UK employees.

The Committee considers that the proportion of pay allocated to Directors and senior management is appropriate given their responsibilities and contribution to the Company’s performance. The Committee continues to monitor the pay ratio between the Chief Executive and UK colleagues to ensure it remains competitive and reflective of the Company’s remuneration policy.# Remuneration Committee report

Remuneration Committee report

NCC Group plc

Total pay ratio

	2023	2022	2021	2020	2019	2018	2017
CEO pay ratio	190:1	147:1	139:1	128:1	125:1	123:1	122:1
UK median employee pay	£75,771	£74,337	£73,112	£72,734	£72,064	£71,464	£70,902
Median pay ratio	129:1	123:1	120:1	119:1	118:1	117:1	116:1

Median pay ratio
The CEO pay ratio is calculated using the CEO’s total remuneration divided by the median pay of UK employees. The median pay ratio is the ratio of the CEO’s remuneration to the median pay of UK employees.

Chief Executive pay compared to pay of UK colleagues
The Remuneration Committee is committed to ensuring that the pay of the Chief Executive Officer (CEO) is fair and proportionate to the pay of other employees within the Company. The CEO pay ratio is a key metric used to monitor this. The table above shows the CEO pay ratio and the median pay of UK employees for the past six years. The CEO pay ratio has increased in recent years, reflecting changes in CEO remuneration and adjustments to median pay. The Remuneration Committee continues to review this ratio and will ensure that any future changes to CEO remuneration are aligned with the Company’s overall pay strategy and market conditions.

Performance graph and table

The graph below shows the performance of NCC Group plc’s share price and the FTSE All-Share Index over the last five years. The table provides the share price at the end of each financial year.

The graph illustrates that NCC Group plc’s share price performance has been volatile over the past five years, with periods of significant growth and decline. The FTSE All-Share Index has also experienced fluctuations, but generally shows a more stable trend.

Key:
* NCC Group plc
* FTSE All-Share Index

Year ended 31 May	NCC Group plc (£)	FTSE All-Share Index (£)
2014	100	164
2015	198	273
2013	166	208
2016	169	166
2017	232	315
2018	101	126
2019	101	101
2020	101	101
2021	101	101
2022	101	101
2023	101	101

NCC Group plc
£100 £164 £198 £273 £166 £208 £169 £166 £232 £315 £101

NCC Group plc
**£100# Annual bonus

Annual bonus is discretionary and is determined by the Remuneration Committee based on achievement of specific financial and strategic objectives set at the beginning of the financial year. Individual performance is also considered. The Committee reviews performance against these objectives and may award an annual bonus, up to a maximum of 100% of base salary for the CEO and up to 80% of base salary for other Executive Directors.

Statement of shareholder voting

NCC Group plc

The Remuneration Committee is responsible for setting the remuneration policy for the Executive Directors, including the CEO. The Committee's policy is designed to attract, retain, and motivate executive talent, while ensuring that remuneration is aligned with the company's strategic objectives and shareholder interests.

Overall approach to remuneration

The remuneration of the Executive Directors is structured to provide a balance between fixed and variable pay, with a significant portion linked to company performance. The key components of the remuneration package are:

Base Salary: Reviewed annually to ensure it remains competitive within the market.
Annual Bonus: A discretionary bonus linked to the achievement of financial and strategic objectives.
Long-Term Incentive Plan (LTIP): Share-based awards granted under the company's LTIP, with vesting periods of typically three years, contingent on the achievement of challenging performance conditions.
Pension Contributions: Executive Directors receive pension contributions in line with company policy for UK employees.
Other Benefits: These may include life assurance, permanent health insurance, and other benefits considered appropriate by the Committee.

The Remuneration Committee's policy is designed to be simple, transparent, and directly linked to the company's culture and strategic goals.

Governance

The Remuneration Committee operates in accordance with the UK Corporate Governance Code. The Committee meets regularly throughout the year to review and approve remuneration matters.

Area of provision 40 of the 2018 UK Corporate Governance Code	How fulfilled
Clarity	The Remuneration Committee has reviewed its remuneration policies to ensure they are clear and understandable to shareholders. This includes clear communication of performance conditions and maximum opportunities. The Committee is committed to transparent reporting of remuneration, including detailed explanations of the rationale behind remuneration decisions. The Committee ensures that remuneration policies are aligned with the company's strategic objectives and culture. The Committee aims for simplicity in its remuneration policies and practices.
Predictability	The Remuneration Committee aims for a degree of predictability in remuneration outcomes by setting clear performance targets and remuneration structures. While the annual bonus remains discretionary, the performance conditions for LTIP awards are clearly defined and communicated to ensure a level of predictability in potential outcomes. The Committee's policies are designed to provide a framework for executive remuneration that is fair and aligned with the company's financial performance and strategic objectives.
Risk	The Remuneration Committee considers the potential for remuneration to encourage excessive risk-taking. Performance conditions for incentives are set to align executive interests with the long-term success of the company and to discourage short-term decision-making that could jeopardize the company's financial stability. The Committee regularly reviews its policies to ensure they do not incentivize inappropriate risk-taking.
Proportionality	The Remuneration Committee ensures that the level of remuneration is proportionate to the role, responsibilities, and performance of the executive directors. This includes benchmarking against similar companies and considering the company's financial performance and market conditions. The Committee seeks to balance the need to attract and retain talent with the need to ensure remuneration is fair and justifiable to shareholders.
Alignment to culture	The Remuneration Committee's policies are designed to align with the company's culture of performance, integrity, and long-term value creation. The focus on challenging performance conditions for variable pay ensures that executives are rewarded for delivering sustainable results that contribute to the company's strategic objectives. The Committee believes that its remuneration practices support a culture of accountability and reward for achievement.

Current Policy table for Executive Directors

Purpose and link to short and long-term strategic objectives	Operation (including framework to assess performance)	Maximum opportunity	Changes since last Directors’ Remuneration Policy
Salary	N/A	N/A	N/A
Annual Bonus	Discretionary bonus determined by the Remuneration Committee based on achievement of specific financial and strategic objectives set at the beginning of the financial year. Individual performance is also considered.	Up to 100% of base salary for the CEO and up to 80% of base salary for other Executive Directors.	No change.
Long-Term Incentive Plan (LTIP)	Share-based awards granted under the company's LTIP, with vesting periods of typically three years, contingent on the achievement of challenging performance conditions. Performance conditions will be detailed in the LTIP grant letters.	Up to 150% of base salary for the CEO and up to 120% of base salary for other Executive Directors (subject to performance conditions).	No change.
Pension Contributions	Contributions to a defined contribution pension scheme in line with company policy for UK employees.	Up to 15% of base salary.	No change.
Other Benefits	Life assurance, permanent health insurance, and other benefits considered appropriate by the Committee.	As determined by the Committee.	No change.

Jennifer Duvalier
Chair, Remuneration Committee

Remuneration Committee report

NCC Group plc
[Page 130]

Overall approach to remuneration

The Remuneration Committee's approach to remuneration is to ensure that executive directors are rewarded appropriately for their contribution to the company's performance and strategic objectives. This involves a balance between fixed and variable remuneration, with a significant element of variable pay linked to challenging performance conditions. The Committee seeks to ensure that remuneration is competitive in the market to attract and retain key talent, whilst also being aligned with shareholder interests and the company's culture.

Salary: Base salaries are reviewed annually and are benchmarked against comparable companies to ensure they are competitive.
Annual Bonus: A discretionary annual bonus, which is linked to the achievement of specific financial and strategic objectives. The maximum opportunity is 100% of base salary for the CEO and 80% of base salary for other Executive Directors.
Long-Term Incentive Plan (LTIP): Awards are typically made as performance share awards ("PSAs") with a three-year vesting period. The performance conditions are challenging and are designed to align executive interests with the long-term success of the company. The maximum opportunity is 150% of base salary for the CEO and 120% of base salary for other Executive Directors, subject to performance conditions being met.
Pension Contributions: Executive Directors are entitled to receive pension contributions in line with company policy for UK employees.
Other Benefits: These may include life assurance, permanent health insurance, and other benefits considered appropriate by the Committee.

| Area of provision | How fulfilled # NCC Group plc

2023 Annual Report on Remuneration

Introduction

This report, prepared by the Remuneration Committee, sets out the Group’s remuneration policy for Directors and senior management. It provides details on the remuneration of Executive Directors and Non-Executive Directors, and the decisions made by the Committee during the year ended 30 June 2023.

1. Remuneration Committee Report

Report from the Remuneration Committee

The Remuneration Committee (the ‘Committee’) is pleased to present its report for the year ended 30 June 2023. The Committee comprises Martin Hughes (Chair), Anne Busfield, Ian Fishwick, and Sarah Payne. The Committee is responsible for determining the remuneration of the Executive Directors and the Chair of the Board, and for reviewing the remuneration of other senior management. It also approves the remuneration policy for the Group.

The Committee’s primary objective is to ensure that the remuneration of Directors and senior management is competitive, fair, and aligned with the Group’s strategy and performance, thereby promoting the long-term success of the Company. This includes ensuring that incentive arrangements are designed to motivate executives to deliver on strategic objectives and that remuneration is proportionate to performance.

The Committee’s activities during the year included:
* Reviewing the effectiveness of the current remuneration policy and making recommendations for any necessary changes.
* Setting the annual bonus targets and pay-outs for Executive Directors.
* Approving the award of LTIP awards to Executive Directors.
* Reviewing the fees paid to Non-Executive Directors.
* Monitoring market remuneration trends for comparable companies.

The Committee operates in accordance with its terms of reference, which are reviewed annually and are available on the Company’s website.

Single Figure of Remuneration for Executive Directors

The table below sets out the single figure of remuneration for each Executive Director who served during the year ended 30 June 2023. The figures presented are in accordance with the requirements of the Companies (Directors’ Remuneration Report) Regulations 2002.

Director	Base Salary (£)	Benefits (£)	Annual Bonus (£)	Total (£)
Mike Danvers (Interim CEO)¹	225,625	5,589	45,125	276,339
Chris Humphreys (CFO)	224,750	5,099	109,068	338,917
Andy Parker (Interim CEO)²	115,385	2,641	0	118,026
John Watson (Interim CFO)²	75,000	1,558	0	76,558

¹ Mike Danvers was appointed Interim CEO on 1 September 2022 and stepped down on 15 March 2023.
² Andy Parker was appointed Interim CEO on 15 March 2023 and stepped down on 19 June 2023. John Watson was appointed Interim CFO on 19 June 2023.

Annual Bonus

The annual bonus opportunity for Executive Directors is based on the achievement of specific company and individual performance targets. For the year ended 30 June 2023, the maximum opportunity was 40% of base salary, with threshold performance required for any payout. The Committee assessed performance against these targets, and the resulting bonus payments are detailed in the table above.

Long Term Incentive Plan (LTIP)

There were no LTIP awards granted during the year ended 30 June 2023.

Pension

No Executive Director accrued a pension benefit during the year ended 30 June 2023.

2. Statement of Directors' Remuneration Policy

Purpose and link to short and long-term strategic objectives

The Group's remuneration policy is designed to support the delivery of its short and long-term strategic objectives by attracting, retaining, and motivating the senior management team. The policy aims to create alignment between the interests of the Directors and shareholders.

Operation (including framework to assess performance)

Performance is assessed against a combination of financial and strategic objectives. These include, but are not limited to, revenue growth, profitability, cash generation, customer satisfaction, and strategic project delivery.

Maximum opportunity

The maximum remuneration opportunity for Executive Directors is linked to the achievement of stretching performance targets across all aspects of the business.

Changes since last Directors’ Remuneration Policy

There have been no material changes to the Directors' Remuneration Policy since the last report.

Long Term Incentive Plan

The Long Term Incentive Plan (LTIP) provides for the award of nil-cost options or shares, subject to the achievement of performance conditions typically linked to the Group’s total shareholder return (TSR) and earnings per share (EPS) growth over a three-year period.

Purpose and link to short and long-term strategic objectives	Operation (including framework to assess performance)	Maximum opportunity	Changes since last Directors’ Remuneration Policy
To align executive interests with shareholders and incentivise long-term value creation.	Awards are subject to performance conditions based on TSR and EPS growth over a three-year vesting period.	Up to 200% of base salary (for options/shares).	No changes.

Annual bonus

Benefits

Pension

3. Remuneration Committee Report (Continued)

No Executive Director accrued a pension benefit during the year.

Remuneration Committee Report

The Committee regularly reviews the remuneration of its members to ensure it remains appropriate and reflects the responsibilities of the role.

Statement of Directors’ Remuneration Policy

The Group’s remuneration policy is designed to attract, retain and motivate executive directors and senior management. The policy is aligned with the Group’s strategy and performance.

Purpose and link to short and long-term strategic objectives

The remuneration policy aims to align the interests of executive directors with those of shareholders by linking a significant proportion of their remuneration to the Group’s performance.

Operation (including framework to assess performance)

Performance is assessed based on a balanced scorecard of financial and strategic objectives. These include profit, cash flow, customer satisfaction, and strategic initiatives.

Maximum opportunity

The maximum remuneration opportunity is determined by the Remuneration Committee and is linked to stretching performance targets.

Changes since last Directors’ Remuneration Policy

There have been no material changes to the Directors’ Remuneration Policy.

Long Term Incentive Plan

The LTIP allows for the award of nil-cost options or shares, subject to performance conditions based on TSR and EPS growth over a three-year vesting period.

Benefits

4. Governance

Differences in Remuneration Policy for colleagues and Executive Directors

The remuneration policy for other colleagues is aligned with the Executive Directors' policy in principle, but the specific targets and opportunities may differ. This ensures that all employees are incentivised to contribute to the Group’s success, with a greater proportion of performance-related pay for more senior roles.

Annual Bonus: While the principle of an annual bonus based on company performance remains, the specific performance metrics and weighting may be tailored to individual roles and departments. The maximum opportunity may also differ based on the level of responsibility.
Long Term Incentive Plan (LTIP): Eligibility for LTIP awards is generally restricted to senior management and those in key roles who have a significant impact on the long-term performance of the Group. The performance conditions and award levels are set at an appropriate level for these individuals.
Fees: Non-Executive Directors receive a fee for their services, which is determined by the Board based on market practice and the responsibilities of their roles. Fees are not subject to performance conditions in the same way as executive remuneration.

Non-Executive Director Policy

Fees

The fees for Non-Executive Directors are determined by the Board. The current fee structure is as follows:

Role	Annual Fee (£)
Chair of the Board	127,000
Senior Independent Director	15,000
Remuneration Committee Chair	15,000
Audit Committee Chair	20,000
Other Committee Members	7,500

There have been no changes to the Non-Executive Director fees since the last Directors’ Remuneration Policy.# Remuneration Committee report

134 Approach to recruitment

The Remuneration Committee’s approach to recruitment is designed to ensure that the company can attract and retain high-quality executive and non-executive directors. The Committee will engage external search firms to assist with recruitment where appropriate. The objective is to ensure a diverse pool of candidates is considered, and to recruit individuals with the relevant skills, experience, and strategic vision to support the Group’s objectives.

Pay element

Salary

Approach
The remuneration of executive directors will be determined by the Remuneration Committee, who will consider a range of factors when setting salary levels. These include:
* The need to attract and retain appropriately qualified individuals.
* The responsibilities of the role.
* The prevailing market rates for comparable roles in similar companies.
* The company’s performance and financial position.
* The executive director’s experience and individual performance.

Areas of flexibility
Salaries are reviewed annually by the Committee, and any changes will be reflected in the director’s service contract.

Benefits and pension

Approach
Executive directors will be entitled to receive benefits that are generally available to other employees of the Group, such as life assurance, permanent health insurance, and access to the Group’s pension scheme. The Remuneration Committee will consider the appropriateness of any additional benefits for individual directors, taking into account the specific role and market practice.

Areas of flexibility
The Committee has discretion to agree appropriate benefit packages for executive directors, taking into account individual circumstances and market norms.

“Buyout” awards

Approach
In certain circumstances, the Remuneration Committee may agree to make “buyout” awards to individuals joining the Group from other companies. These awards are intended to compensate such individuals for remuneration or benefits that they would forfeit by leaving their previous employer. Such awards will be considered on a case-by-case basis, and the Committee will ensure that they are fair and reasonable and in the best interests of the company. Any buyout awards will be disclosed in the annual report.

Areas of flexibility
The Committee has discretion to approve buyout awards, the value and structure of which will depend on the individual circumstances.

135 Governance Policy on payment for loss of office

Approach
The Group’s policy on payment for loss of office is designed to ensure that payments are fair, reasonable, and aligned with the company’s remuneration policy and the interests of shareholders. The Remuneration Committee will determine the terms of any termination payments, taking into account the individual’s circumstances, the reason for termination, and the terms of their service contract.

Areas of flexibility
The Committee has discretion to determine the terms of any loss of office payments, subject to the overarching principles outlined in the remuneration policy.

Pay element

Annual bonus

Approach
The annual bonus opportunity for the Chief Executive Officer is linked to the achievement of specific performance conditions, which are set annually by the Remuneration Committee. The target bonus opportunity is typically a percentage of base salary, with the actual bonus paid dependent on the extent to which the performance conditions are met. The Remuneration Committee has discretion to adjust the bonus payout in exceptional circumstances.

Areas of flexibility
The Committee has discretion to set performance conditions for the annual bonus and to determine the payout based on the achievement of those conditions.

The minimum bonus opportunity is £0, payable if no performance conditions are met.
The target bonus opportunity is 54% of base salary, payable if the target performance conditions are met.
The maximum bonus opportunity is 100% of base salary, payable if maximum performance conditions are met.

Illustration of remuneration scenarios

The table below illustrates the potential annual bonus outcome for the Chief Executive Officer based on different levels of share price growth.

Annual bonus £000	Minimum	Target	Maximum
100% share price growth	500	1,074	2,024
Maximum + 50% share price growth	500	1,074	2,024
9%	£324	£519	£924
14%	£324	£519	£924
22%	£324	£519	£924
25%	£324	£519	£924
28%	£324	£519	£924
30%	£324	£519	£924
31%	£324	£519	£924
32%	£324	£519	£924
32%	£324	£519	£924
36%	£324	£519	£924
42%	£324	£519	£924
43%	£324	£519	£924
53%	£324	£519	£924
54%	£324	£519	£924
62%	£324	£519	£924
Minimum	£1,000	£1,500	£2,000
MinimumTarget	£1,000	£1,500	£2,000
TargetMaximum	£1,000	£1,500	£2,000
MaximumMaximum	£1,000	£1,500	£2,000
£2,461	£000	£000	£000

Illustration of remuneration scenarios

Minimum	Target	Maximum
500	1,074	2,024
500	1,074	2,024
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£1,000	£1,500	£2,000
£1,000	£1,500	£2,000
£1,000	£1,500	£2,000
£1,000	£1,500	£2,000

Minimum	Target	Maximum
500	1,074	2,024
500	1,074	2,024
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£324	£519	£924
£1,000	£1,500	£2,000
£1,000	£1,500	£2,000
£1,000	£1,500	£2,000
£1,000	£1,500	£2,000

Long Term Incentive Plan

Approach
The Long Term Incentive Plan (LTIP) is designed to align the interests of executive directors with those of shareholders over the medium to long term. Awards are typically made in the form of nil-cost or market value options or conditional share awards, with vesting contingent on the achievement of challenging performance conditions, usually relating to the Group’s total shareholder return (TSR) relative to a comparator group, and earnings per share (EPS) growth.

Areas of flexibility
The Remuneration Committee has discretion to set the terms of LTIP awards, including the type of award, the performance conditions, the vesting schedule, and the size of the award. The Committee will review the effectiveness of the LTIP annually and make adjustments as necessary.

The following scenarios illustrate the potential outcome of LTIP awards for the Chief Executive Officer, assuming a 50% increase in the Group's share price over the vesting period.

Minimum. For example, if the performance conditions are only partially met, the value of the LTIP award might be 25% of the maximum potential award.
Target. If the target performance conditions are met, the value of the LTIP award might be 50% of the maximum potential award.
Maximum. If the maximum performance conditions are met, the value of the LTIP award would be 100% of the maximum potential award.
Effect of a 50% increase in share price.

Statement of consideration of employment conditions elsewhere in the Group

The Remuneration Committee will consider the employment conditions of employees elsewhere in the Group when setting remuneration for executive directors. The aim is to ensure that executive remuneration remains competitive and reflects the overall remuneration strategy of the Group, while also being perceived as fair and equitable. The Committee will review the remuneration of the wider workforce to ensure that the remuneration of executive directors is not disproportionate.# NCC Group plc

How shareholder views are taken into account

The Board regularly communicates with shareholders and consults with them on key issues. The Company's engagement strategy with its shareholders involves regular meetings, participation in investor conferences and presentations and the dissemination of Company information through its website and other channels.

The Directors have regard to the views of shareholders when making decisions. This is achieved through:

General Meetings: At least one General Meeting is held each year, with additional meetings convened as required. At these meetings, shareholders can ask the Directors questions and vote on resolutions.
AGM: The Annual General Meeting (AGM) provides an opportunity for shareholders to vote on resolutions, including the approval of the remuneration report and the re-election of directors. The Directors are available to answer shareholder questions at the AGM.
Investor Relations: The Investor Relations team is responsible for maintaining dialogue with shareholders and institutional investors. This includes regular meetings and conference calls to discuss financial performance, strategy, and governance matters.
Shareholder Feedback: Feedback from shareholders is regularly reviewed by the Board and considered in the decision-making process.

Key areas of discretion in the Remuneration Policy

The Remuneration Policy sets out the framework for executive remuneration, with key areas of discretion as follows:

Annual Bonus: The Remuneration Committee has discretion to set the performance conditions and targets for the annual bonus, which is typically linked to the achievement of strategic and financial objectives. The maximum bonus opportunity for the Chief Executive Officer is 120% of base salary, and for other Executive Directors is 100% of base salary.
Long-Term Incentive Plan (LTIP): The Remuneration Committee has discretion to set the performance conditions and targets for LTIP awards, which are typically linked to the achievement of long-term strategic and financial objectives, and/or share price growth. The maximum LTIP award for the Chief Executive Officer is 200% of base salary, and for other Executive Directors is 150% of base salary.
Discretionary Awards: The Remuneration Committee may, in exceptional circumstances, make discretionary awards under the LTIP or other incentive plans, having regard to the individual's performance and contribution to the Company's success.
Other Benefits: The Remuneration Committee has discretion to determine the other benefits provided to Executive Directors, which may include pension contributions, life assurance and health insurance.

Legacy arrangements

The Company may have legacy arrangements in place that do not fully align with the current Remuneration Policy. These arrangements are reviewed by the Remuneration Committee to ensure they are managed appropriately and do not create unintended consequences. Any ongoing legacy arrangements are disclosed in the Directors' Remuneration Report.

External directorships for Executive Directors

Executive Directors may hold external directorships with the approval of the Board. Such directorships are considered on a case-by-case basis, taking into account the potential benefits and risks to the Company, including any potential conflicts of interest. Any fees received from such directorships are disclosed in the Directors' Remuneration Report.

The Company is committed to high standards of corporate governance. The Board is responsible for overseeing the Company's business and affairs, and for ensuring that the Company is managed in the best interests of its shareholders.

Principal activities

The principal activity of NCC Group plc is the provision of integrated cybersecurity and information assurance services.

The Group provides a range of services including:

Cyber Risk Consultancy: Assessing and mitigating cyber risks.
Assurance: Providing assurance over IT systems and processes.
Managed Services: Delivering managed security services.
Software Resilience: Ensuring the resilience and security of software applications.

Going concern

The Directors have a reasonable expectation that the Company will have adequate resources to continue in operational existence for the foreseeable future. The Directors have prepared the financial statements on the basis of a going concern.

The Directors review the Company's financial performance and position on a regular basis, taking into account the current economic climate and forecasts for future performance. The Directors' assessment of the going concern assumption includes consideration of:

The Company's profitability and cash flow generation.
The Company's access to financing.
The Company's ability to meet its financial obligations as they fall due.

The Directors are satisfied that the Company is a going concern.

- Capital expenditure: The Group intends to continue to invest in its people, technology and services to support its growth strategy.
- Acquisitions: The Group may consider strategic acquisitions that align with its growth objectives and enhance its service offering.
- Shareholder returns: The Group aims to deliver sustainable shareholder returns through a combination of dividend payments and share buybacks, as appropriate.
- Employee Share Option Schemes: The Group operates various employee share option schemes, which are designed to align the interests of employees with those of shareholders.
- Dividend Policy: The Group's dividend policy is to maintain a progressive dividend.

Principal activities

The principal activity of NCC Group plc is the provision of integrated cybersecurity and information assurance services.

The Group provides a range of services including:

Cyber Risk Consultancy: Assessing and mitigating cyber risks.
Assurance: Providing assurance over IT systems and processes.
Managed Services: Delivering managed security services.
Software Resilience: Ensuring the resilience and security of software applications.

Going concern

The Company's profitability and cash flow generation.
The Company's access to financing.
The Company's ability to meet its financial obligations as they fall due.

The Directors are satisfied that the Company is a going concern.# Directors’ report

The Directors have pleasure in presenting their report for the year ended 30 November 2023.

The Directors confirm that they have a reasonable expectation that the Company and the Group will continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of this report. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

The Directors have assessed the Group’s financial position and prospects and, after due consideration, have concluded that the going concern assumption is appropriate. The Group’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic report. The Directors are satisfied that the Group is well placed to manage its business risks and opportunities.

The Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future.

Results and dividends

The profit for the year ended 30 November 2023, after taxation, was £59.4m (2022: £53.1m).

The Directors do not recommend the payment of a final dividend for the year ended 30 November 2023 (2022: nil).

Post-balance sheet events

There have been no significant events after the balance sheet date that require disclosure in these financial statements.

Share capital and control

The authorised share capital of the Company is £100,000,000 divided into 100,000,000 ordinary shares of £1 each. The issued share capital at 30 November 2023 was £86,958,176 ordinary shares of £1 each.

The Directors are not aware of any arrangements which exist at present which could result in any change in the control of the Company.

Directors

The Directors of the Company at 30 November 2023 and who served throughout the year were:

Andrew (Andy) Collins (Appointed 19 September 2023)
Anne De Jong (Appointed 13 December 2022)
Philip (Phil) George (Resigned 12 December 2022)
David Nicol (Resigned 31 July 2023)
John Davies (Appointed 21 August 2023)
Christopher (Chris) Davies
Michael (Mike) Maddison

Colleagues

The following individuals served as senior managers during the year, holding positions of significant responsibility within the Group:

John Davies
Christopher Davies
Michael Maddison

Business relationships with suppliers, customers and others

The Group's principal customers and suppliers are set out in the Strategic Report.

Equal opportunities

The Group is committed to providing equal opportunities for all employees.

Governance Directors’ and Officers’ insurance and indemnities

The Company has maintained directors’ and officers’ liability insurance cover in respect of the Directors and certain senior management. The cost of this insurance is not separately disclosed as it is impracticable to apportion the annual premium between the Directors and senior management.

Authority to purchase own shares

The Directors have been granted authority to purchase the Company's own ordinary shares. The authority is subject to certain limits and conditions and will be proposed for renewal at the Annual General Meeting.

Directors

The Directors of the Company at 30 November 2023 and who served throughout the year were:

Andrew (Andy) Collins (Appointed 19 September 2023)
Anne De Jong (Appointed 13 December 2022)
Philip (Phil) George (Resigned 12 December 2022)
David Nicol (Resigned 31 July 2023)
John Davies (Appointed 21 August 2023)
Christopher (Chris) Davies
Michael (Mike) Maddison

The following individuals served as senior managers during the year, holding positions of significant responsibility within the Group:

John Davies
Christopher Davies
Michael Maddison

Business relationships with suppliers, customers and others

The Group's principal customers and suppliers are set out in the Strategic Report.

Equal opportunities

The Group is committed to providing equal opportunities for all employees.

Governance Directors’ and Officers’ insurance and indemnities

Authority to purchase own shares

Directors

Colleagues

Business relationships with suppliers, customers and others

Equal opportunities

# Governance Directors’ and Officers’ insurance and indemnities

## Authority to purchase own shares

Governance

Directors’ responsibilities statement

Statement of Directors’ responsibilities in respect of the Annual Report and the Financial Statements

The Directors are responsible for ensuring that the Annual Report and the financial statements give a true and fair view of the Group's and the Company's financial condition and results of operations for the year and comply with the Companies Act 2006 and applicable accounting standards.

The Directors are responsible for:
* Maintaining adequate accounting records, which disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
* Safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
* Preparing the financial statements in accordance with United Kingdom Generally Accepted Practice. The financial statements are prepared on the going concern basis.

The Directors believe that in preparing the financial statements, they have discharged their responsibilities.

Political donations

The Group has not made any political donations during the year.

Sustainability Report

The Group is committed to operating in a sustainable and responsible manner and to managing its environmental and social impacts. We recognise the importance of sustainability and are committed to integrating these principles into our business strategy and operations.

Our sustainability efforts are focused on several key areas:
* Environmental Impact: We strive to minimise our environmental footprint by reducing energy consumption, waste generation, and promoting responsible resource management.
* Social Responsibility: We are committed to fostering a diverse and inclusive workplace, promoting employee well-being, and engaging positively with the communities in which we operate.
* Ethical Business Practices: We uphold high ethical standards in all our business dealings, ensuring transparency, integrity, and compliance with all applicable laws and regulations.

We believe that our commitment to sustainability not only benefits the environment and society but also contributes to the long-term success and resilience of our business.

Overseas branches

The Group has overseas branches in various locations. The operations of these branches are managed in accordance with the Group's global policies and procedures, ensuring consistent standards of corporate governance and ethical conduct.

Research and development

The Group invests in research and development (R&D) to drive innovation and enhance its service offerings. Our R&D activities are focused on developing new technologies and solutions that meet the evolving needs of our customers and the market.

We believe that a strong focus on R&D is crucial for maintaining our competitive edge and delivering value to our stakeholders. Our R&D efforts are aligned with our strategic objectives and aim to create sustainable, long-term growth.

Change of control

The Group's articles of association and applicable laws govern any change of control. The Board monitors compliance with these regulations and ensures that any such events are managed in a manner that protects the interests of the Company and its shareholders.

Disclosure of information to the auditor

The Directors confirm that, so far as they are aware, there is no relevant audit information of which the Company's auditor is unaware. Each of the Directors has confirmed that they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information in so far as it concerns the Company and to establish that the Company's auditor is aware of that information.

Reappointment of auditor

The Directors propose the reappointment of KPMG Audit Plc as the Company's auditor. KPMG Audit Plc has indicated its willingness to be reappointed.

The Audit Committee has reviewed the effectiveness of the auditor and has recommended to the Board that KPMG Audit Plc be reappointed as auditor of the Company for the ensuing year. The Board has endorsed this recommendation.

Directors’ report

Annual General Meeting

The Directors wish to inform shareholders that the Annual General Meeting will be held at [Company Address] on [Date] at [Time]. Further details, including the agenda and proxy voting instructions, will be provided in the Notice of the Annual General Meeting.

Responsibility statement of the Directors in respect of the Annual Report

The Directors are responsible for preparing the Annual Report and the financial statements. The Directors have ensured that the Annual Report and the financial statements are prepared in accordance with the Companies Act 2006 and applicable accounting standards, giving a true and fair view of the state of affairs of the Company and the Group.

The Directors have also confirmed that the Annual Report includes a fair review of the development and performance of the business and the position of the Company and the Group, together with a description of the principal risks and uncertainties faced by the Company and the Group.

The Directors confirm they have taken all reasonable steps to ensure that appropriate systems of internal control are in place and are effective.

Capitalised interest

Reporting requirements

The Directors confirm that all reporting requirements, as mandated by relevant regulatory bodies and accounting standards, have been met.

Financial Statements

The financial statements, comprising the consolidated statement of financial position, consolidated income statement, consolidated statement of cash flows, consolidated statement of changes in equity, and related notes, have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

Independent Auditor's Report

The Independent Auditor's Report on the financial statements is set out on pages [Page Numbers].

Directors' Remuneration Report

The Directors' Remuneration Report, detailing the remuneration of Directors and senior management, is set out on pages [Page Numbers].

Corporate Governance Statement

A statement on the Company's compliance with the UK Corporate Governance Code is set out on pages [Page Numbers].

Related Party Disclosures

Disclosures of transactions and arrangements with related parties are provided in the notes to the financial statements.

Significant Shareholder Disclosures

Information regarding significant shareholdings is detailed in the Directors' Report.

Going Concern

The Directors have made an assessment of the Group's ability to continue as a going concern and have prepared the financial statements on this basis.

Material Uncertainty Related to Going Concern

There is no material uncertainty related to going concern identified.

Going Concern Assessment

The Directors have assessed the going concern status of the Group. The assessment considered the Group's current financial position, projected cash flows, and available financing facilities. Based on this assessment, the Directors have concluded that the Group has sufficient resources to continue operating for the foreseeable future.

Going Concern Statement

The Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Audit Information

The Directors have taken all reasonable steps to ascertain that all relevant audit information has been made available to the Company's auditors.

Key Audit Matters

The key audit matters are detailed in the Independent Auditor's Report.

Auditor's Statement on Other Information

The auditor's statement on other information is included in the Independent Auditor's Report.

Shareholder Information

Further information for shareholders, including details of the Company's share capital and dividend policy, is provided in the Directors' Report.

Notice of Annual General Meeting

The Notice of Annual General Meeting provides details of the resolutions to be proposed at the meeting.

Remuneration Committee Report

The Remuneration Committee Report outlines the Committee's activities and its recommendations on Directors' remuneration.

Audit Committee Report

The Audit Committee Report details the Committee's responsibilities and its oversight of the financial reporting process.

Risk Management

The Group has a robust risk management framework to identify, assess, and manage risks.

Risk Management Framework

The Group's risk management framework encompasses:
* Identification of key risks.
* Assessment of the likelihood and impact of identified risks.
* Implementation of controls and mitigation strategies.
* Regular monitoring and review of risks.

Principal Risks and Uncertainties

The principal risks and uncertainties that could affect the Group's future performance are detailed in the Directors' Report.

Internal Control

The Directors are responsible for establishing and maintaining an effective system of internal control.

Internal Control System

The Group's internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting, the effectiveness and efficiency of operations, and compliance with applicable laws and regulations.

Review of Internal Control

The effectiveness of the system of internal control is reviewed regularly by the Board.

Statement of Directors' responsibilities in respect of the Annual Report

The Directors are responsible for the preparation of the Annual Report and financial statements. They have ensured that the financial statements are prepared in accordance with IFRS and present a true and fair view of the Group's and the Company's financial position and performance. The Directors also confirm that the Annual Report contains a fair review of the development and performance of the business and the position of the Group and the Company, and a description of the principal risks and uncertainties faced by the Group and the Company.

Directors’ Report

Mike Maddison
Guy Ellis

Guy Ellis
- Mike Maddison
  - Guy Ellis

The Directors acknowledge their responsibility for the content of the Annual Report.

Financial Statements

Consolidated statement of financial position

As at 30 June 2023

	2023	2022
Assets
Non-current assets
Property, plant and equipment	103,998	113,290
Intangible assets	483,428	498,788
Investments	78,993	77,857
Deferred tax assets	5,341	4,992
Total non-current assets	671,760	694,927
Current assets
Inventories	1,766	2,043
Trade and other receivables	193,446	196,793
Current tax assets	6,230	5,784
Cash and cash equivalents	120,347	102,150
Total current assets	321,789	306,770
Total assets	993,549	1,001,697
Equity and liabilities
Equity
Share capital	1,207	1,207
Share premium	54,115	54,115
Other reserves	65,223	62,885
Retained earnings	292,977	281,579
Total equity	413,522	399,786
Liabilities
Non-current liabilities
Provisions for liabilities	2,119	2,331
Deferred tax liabilities	15,143	16,893
Borrowings	158,389	177,918
Total non-current liabilities	175,651	197,142
Current liabilities
Trade and other payables	221,892	234,909
Current tax liabilities	23,830	22,605
Provisions for liabilities	10,454	15,255
Total current liabilities	256,176	272,769
Total liabilities	431,827	470,011
Total equity and liabilities	845,349	869,797

	2023	2022
Equity attributable to owners
Share capital	1,207	1,207
Share premium	54,115	54,115
Other reserves	65,223	62,885
Retained earnings	292,977	281,579
Total equity	413,522	399,786
Non-current liabilities
Provisions for liabilities	2,119	2,331
Deferred tax liabilities	15,143	16,893
Borrowings	158,389	177,918
Total non-current liabilities	175,651	197,142
Current liabilities
Trade and other payables	221,892	234,909
Current tax liabilities	23,830	22,605
Provisions for liabilities	10,454	15,255
Total current liabilities	256,176	272,769
Total liabilities	431,827	470,011
Total equity and liabilities	845,349	869,797

Consolidated income statement

For the year ended 30 June 2023

	2023	2022
Revenue	851,763	875,944
Cost of sales	(590,254)	(611,614)
Gross profit	261,509	264,330
Other income	6,230	3,729
Selling and distribution costs	(68,114)	(66,130)
Administrative expenses	(99,041)	(95,863)
Impairment of goodwill	(15,367)	-
Other operating income/(expense)	(2,775)	(1,354)
Operating profit	81,442	104,682
Finance income	8,927	5,109
Finance costs	(30,597)	(27,406)
Profit before tax	68,772	82,385
Income tax expense	(18,505)	(21,170)
Profit for the year	50,267	61,215
Profit attributable to owners of the Company	50,267	61,215

	2023	2022
Revenue	851,763	875,944
Cost of sales	(590,254)	(611,614)
Gross profit	261,509	264,330
Other income	6,230	3,729
Selling and distribution costs	(68,114)	(66,130)
Administrative expenses	(99,041)	(95,863)
Impairment of goodwill	(15,367)	-
Other operating income/(expense)	(2,775)	(1,354)
Operating profit	81,442	104,682
Finance income	8,927	5,109
Finance costs	(30,597)	(27,406)
Profit before tax	68,772	82,385
Income tax expense	(18,505)	(21,170)
Profit for the year	50,267	61,215
Profit attributable to owners of the Company	50,267	61,215

Consolidated statement of cash flows

For the year ended 30 June 2023

	2023	2022
Cash flows from operating activities
Profit before tax	68,772	82,385
Adjustments for:
Depreciation and amortisation	30,944	28,356
Impairment of goodwill	15,367	-
Finance income	(8,927)	(5,109)
Finance costs	30,597	27,406
Income tax expense	18,505	21,170
Changes in working capital:
Increase in inventories	277	325
Increase in trade and other receivables	3,347	7,141
Increase in trade and other payables	(13,017)	(21,178)
Movement in provisions	(4,715)	1,006
Cash generated from operations	141,837	119,005
Interest paid	(27,739)	(26,397)
Income taxes paid	(19,704)	(17,761)
Net cash from operating activities	94,394	74,847
Cash flows from investing activities
Purchase of property, plant and equipment	(18,053)	(25,175)
Purchase of intangible assets	(16,864)	(19,172)
Acquisitions of subsidiaries, net of cash acquired	-	(53,130)
Investment income received	8,927	5,109
Net cash used in investing activities	(26,000)	(92,368)
Cash flows from financing activities
Proceeds from issuance of shares	-	-
Repayments of borrowings	(19,529)	(20,109)
Payments of lease liabilities	(3,552)	(3,452)
Dividends paid	(19,636)	(19,636)
Net proceeds from borrowings	-	1,742
Net cash used in financing activities	(42,717)	(41,455)
Net increase in cash and cash equivalents	25,677	(59,076)
Cash and cash equivalents at beginning of the year	102,150	161,226
Cash and cash equivalents at end of the year	127,827	102,150
Cash and cash equivalents at the end of the year comprise:
Cash at bank and in hand	120,347	102,150
Bank overdrafts	(7,480)	-

	2023	2022
Cash flows from operating activities
Profit before tax	68,772	82,385
Adjustments for:
Depreciation and amortisation	30,944	28,356
Impairment of goodwill	15,367	-
Finance income	(8,927)	(5,109)
Finance costs	30,597	27,406
Income tax expense	18,505	21,170
Changes in working capital:
Increase in inventories	277	325
Increase in trade and other receivables	3,347	7,141
Increase in trade and other payables	(13,017)	(21,178)
Movement in provisions	(4,715)	1,006
Cash generated from operations	141,837	119,005
Interest paid	(27,739)	(26,397)
Income taxes paid	(19,704)	(17,761)
Net cash from operating activities	94,394	74,847
Cash flows from investing activities
Purchase of property, plant and equipment	(18,053)	(25,175)
Purchase of intangible assets	(16,864)	(19,172)
Acquisitions of subsidiaries, net of cash acquired	-	(53,130)
Investment income received	8,927	5,109
Net cash used in investing activities	(26,000)	(92,368)
Cash flows from financing activities
Proceeds from issuance of shares	-	-
Repayments of borrowings	(19,529)	(20,109)
Payments of lease liabilities	(3,552)	(3,452)
Dividends paid	(19,636)	(19,636)
Net proceeds from borrowings	-	1,742
Net cash used in financing activities	(42,717)	(41,455)
Net increase in cash and cash equivalents	25,677	(59,076)
Cash and cash equivalents at beginning of the year	102,150	161,226
Cash and cash equivalents at end of the year	127,827	102,150
Cash and cash equivalents at the end of the year comprise:
Cash at bank and in hand	120,347	102,150
Bank overdrafts	(7,480)	-

Consolidated statement of changes in equity

	Share capital	Share premium	Other reserves	Retained earnings	Total equity
Balance at 1 July 2021	1,207	54,115	61,415	258,654	375,391
Profit for the year	-	-	-	61,215	61,215
Other comprehensive income for the year	-	-	1,470	-	1,470
Total comprehensive income for the year	-	-	1,470	61,215	62,685
Transactions with owners:
Dividends	-	-	-	(19,636)	(19,636)
Balance at 30 June 2022	1,207	54,115	62,885	281,579	399,786
Profit for the year	-	-	-	50,267	50,267
Other comprehensive income for the year	-	-	2,338	-	2,338
Total comprehensive income for the year	-	-	2,338	50,267	52,605
Transactions with owners:
Dividends	-	-	-	(19,636)	(19,636)
Balance at 30 June 2023	1,207	54,115	65,223	292,977	413,522

	Share capital	Share premium	Other reserves	Retained earnings	Total equity
Balance at 1 July 2021	1,207	54,115	61,415	258,654	375,391
Profit for the year	-	-	-	61,215	61,215
Other comprehensive income for the year	-	-	1,470	-	1,470
Total comprehensive income for the year	-	-	1,470	61,215	62,685
Transactions with owners:
Dividends	-	-	-	(19,636)	(19,636)
Balance at 30 June 2022	1,207	54,115	62,885	281,579	399,786
Profit for the year	-	-	-	50,267	50,267
Other comprehensive income for the year	-	-	2,338	-	2,338
Total comprehensive income for the year	-	-	2,338	50,267	52,605
Transactions with owners:
Dividends	-	-	-	(19,636)	(19,636)
Balance at 30 June 2023	1,207	54,115	65,223	292,977	413,522

Notes to the financial statements

Reporting requirements

The Directors confirm that all reporting requirements, as mandated by relevant regulatory bodies and accounting standards, have been met.

Financial Statements

Independent Auditor's Report

The Independent Auditor's Report on the financial statements is set out on pages [Page Numbers].

Directors' Remuneration Report

The Directors' Remuneration Report, detailing the remuneration of Directors and senior management, is set out on pages [Page Numbers].

Corporate Governance Statement

A statement on the Company's compliance with the UK Corporate Governance Code is set out on pages [Page Numbers].

Related Party Disclosures

Disclosures of transactions and arrangements with related parties are provided in the notes to the financial statements.

Significant Shareholder Disclosures

Information regarding significant shareholdings is detailed in the Directors' Report.

Going Concern

The Directors have made an assessment of the Group's ability to continue as a going concern and have prepared the financial statements on this basis.

Material Uncertainty Related to Going Concern

There is no material uncertainty related to going concern identified.

Going Concern Assessment

Going Concern Statement

Audit Information

The Directors have taken all reasonable steps to ascertain that all relevant audit information has been made available to the Company's auditors.

Key Audit Matters

The key audit matters are detailed in the Independent Auditor's Report.

Auditor's Statement on Other Information

The auditor's statement on other information is included in the Independent Auditor's Report.

Shareholder Information

Further information for shareholders, including details of the Company's share capital and dividend policy, is provided in the Directors' Report.

Notice of Annual General Meeting

The Notice of Annual General Meeting provides details of the resolutions to be proposed at the meeting.

The Remuneration Committee Report outlines the Committee's activities and its recommendations on Directors' remuneration.

Audit Committee Report

The Audit Committee Report details the Committee's responsibilities and its oversight of the financial reporting process.

Risk Management

The Group has a robust risk management framework to identify, assess, and manage risks.

Risk Management Framework

Principal Risks and Uncertainties

The principal risks and uncertainties that could affect the Group's future performance are detailed in the Directors' Report.

Internal Control

The Directors are responsible for establishing and maintaining an effective system of internal control.

Internal Control System

Review of Internal Control

The effectiveness of the system of internal control is reviewed regularly by the Board.

Statement of Directors' responsibilities in respect of the Annual Report

Directors’ Report

Mike Maddison
Guy Ellis

Guy Ellis
- Mike Maddison
  - Guy Ellis

The Directors acknowledge their responsibility for the content of the Annual Report.

Capitalised interest

The Group does not currently have any capitalised interest.

Reporting requirements

Financial Statements

Independent Auditor's Report

Directors' Remuneration Report

Corporate Governance Statement

Related Party Disclosures

Significant Shareholder Disclosures

Going Concern

Material Uncertainty Related to Going Concern

Going Concern Assessment

Going Concern Statement

Audit Information

Key Audit Matters

Auditor's Statement on Other Information

Shareholder Information

Notice of Annual General Meeting

Remuneration Committee Report

Audit Committee Report

Risk Management

Risk Management Framework

Principal Risks and Uncertainties

Internal Control

Internal Control System

Review of Internal Control

Directors' Report

Disclosure of information to the auditor

Reappointment of auditor

The Directors propose the reappointment of KPMG Audit Plc as the Company's auditor. KPMG Audit Plc has indicated its willingness to be reappointed.

Change of control

Research and development

Overseas branches

Sustainability Report

We believe that our commitment to sustainability not only benefits the environment and society but also contributes to the long-term success and resilience of our business.

Political donations

The Group has not made any political donations during the year.

Disabled persons

The Group is committed to providing equal employment opportunities for all individuals, including those with disabilities. We strive to create an inclusive work environment where everyone can contribute their full potential.

Governance

Directors’ responsibilities statement

Statement of Directors’ responsibilities in respect of the Annual Report and the Financial Statements

The Directors believe that in preparing the financial statements, they have discharged their responsibilities.

Statement of Directors' responsibilities in respect of the Annual Report

Directors' Report

The Directors acknowledge their responsibility for the content of the Annual Report.# Independent auditor’s report

Our opinion is unmodified

In our opinion, the financial statements of NCC Group plc (the ‘Company’) and its subsidiaries (the ‘Group’) present fairly, in all material respects, the financial position of the Company and the Group as at 31 May 2023, their financial performance and their cash flows for the year then ended in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom GAAP) and Article 4 of the EU Regulation 1606/2002.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities, under those standards, are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.

We have fulfilled our responsibilities in accordance with the ethical requirements, including the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants and have prepared the Independent Auditor's Report in accordance with ISAs (UK) reporting standards.

We have obtained sufficient appropriate audit evidence to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the current period financial statements and include the biggest risks of material misstatement of those financial statements.

We determined that there were no key audit matters to communicate in our report.

Materiality

Coverage

We determined materiality for the Group financial statements to be £14.0 million (2022: £14.0 million), which represents 0.9% of Group revenue (2022: 0.9% of Group revenue).

Key audit matters vs 2022

Recurring risks

| The risk | Our response # Independent auditor’s report

Key audit matters: our assessment of risks of material misstatement

| The risk | Our response # Independent auditor’s report

Basis for opinion

We have audited the financial statements of NCC Group plc (the Company) which comprise the consolidated statement of financial position as at 31 May 2022, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 May 2022, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) as adopted by the United Kingdom.

We conducted our audit in accordance with International Standards on Auditing (UK) issued by the Financial Reporting Council (FRC) as applicable to the audit of financial statements. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard for Auditors and were found to have met these ethical requirements.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

There were no key audit matters in the current period.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. We have read the other information and, in doing so, considered whether it is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion:

we have obtained all the information and explanations that we considered necessary for the purposes of our audit; and
proper accounting records have been kept.

Matters on which we are required to report by exception

Under ISA (UK) 2410, we are required to report to you if, in our opinion:

information given in the financial statements is inconsistent in any material respect with the other information in the financial statements; or
we have not received all the information and explanations which we consider necessary for the purpose of our audit.

We have nothing to report in respect of these matters.

Responsibilities of the directors

The directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with IFRS adopted by the UK, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

The directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

The impact of climate change on our audit

The FRC’s auditing standards require us to consider the potential impact of climate-related matters on our audit. Climate change is a broad and evolving area, and its impacts are complex and far-reaching. For example, physical risks such as extreme weather events and transition risks such as changes in regulation, market preferences and technological advancements, could affect the financial performance and position of entities.

The Group’s reporting includes disclosures relevant to climate-related matters, such as those related to sustainability. We have considered whether there are any climate-related matters that could be relevant to our audit of the financial statements, for example, by potentially impacting the valuation of assets or liabilities, or the assumptions used in going concern assessments. Our audit procedures have addressed these where appropriate, but the impacts of climate change on the Company’s future financial performance and position are inherently uncertain and subject to significant assumptions.

The directors have prepared the financial statements on the going concern basis of accounting. The directors have concluded that there is a reasonable expectation that the Company will continue in operational existence for the foreseeable future.

The directors have also concluded that there are no material uncertainties relating to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. In reaching these conclusions, the directors have considered and taken account of all available information, including future plans and forecasts.

Under ISA (UK) 2410, we are required to report to you if, in our opinion:

The directors’ use of the going concern basis of accounting in the preparation of the financial statements is inappropriate; or
The directors have failed to disclose in the financial statements any material uncertainties that are recognised by the directors that may cast significant doubt on the Company’s ability to continue as a going concern.

We have considered the directors’ assessment of the Company’s ability to continue as a going concern and their disclosures in relation to this assessment. We have not identified any material uncertainties that are recognised by the directors that may cast significant doubt on the Company’s ability to continue as a going concern. We have also considered the appropriateness of the going concern basis of accounting in the preparation of the financial statements.

Fraud and breaches of laws and regulations – ability to detect

Fraud

The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether caused by fraud or error. Our audit procedures are designed to detect material misstatements arising from fraud. However, we are not responsible for preventing fraud and cannot guarantee that all fraud will be detected.

Breaches of laws and regulations

Our audit is not designed to provide assurance that there have been no breaches of laws and regulations. However, we are required to consider the potential impact of laws and regulations on the financial statements.

The following is a summary of our responsibilities and the limitations of our audit in relation to fraud and breaches of laws and regulations:

Fraud: We are required to identify and assess the risks of material misstatement of the financial statements due to fraud, and to design and implement appropriate audit procedures to respond to those risks. This includes performing procedures designed to detect fraud, such as:
- Inquiry of management and those charged with governance about their knowledge of actual, suspected or alleged fraud.
- Assessing the risk of management override of controls.
- Considering the susceptibility of the financial statements to misstatement due to fraud.
- If fraud is identified or suspected, reporting this to management and those charged with governance.
Laws and regulations: We are required to obtain an understanding of the legal and regulatory framework within which the Company operates. We are also required to perform audit procedures designed to identify instances of non-compliance with laws and regulations that could result in a material misstatement of the financial statements. These procedures include:
- Inquiry of management and those charged with governance about actual or suspected non-compliance with laws and regulations.
- Review of minutes of meetings of those charged with governance.
- Review of correspondence with relevant regulatory bodies.
- In certain circumstances, obtaining legal advice.

Financial statements

	31 May 2022	31 May 2021
NCC Group plc
Consolidated statement of financial position
Assets
Non-current assets
Property, plant and equipment	£100,441,000	£107,846,000
Intangible assets	£47,206,000	£53,938,000
Right-of-use assets	£14,964,000	£19,400,000
Investments	£9,123,000	£9,123,000
Deferred tax assets	£7,399,000	£10,386,000
Total non-current assets	£179,133,000	£200,693,000
Current assets
Inventories	£1,850,000	£2,320,000
Trade and other receivables	£225,234,000	£210,699,000
Current tax receivables	£985,000	£948,000
Cash and cash equivalents	£56,296,000	£52,908,000
Total current assets	£284,365,000	£266,875,000
Total assets	£463,498,000	£467,568,000
Equity and liabilities
Equity
Share capital	£114,188	£114,188
Share premium	£47,535,347	£47,535,347
Retained earnings	£224,720,000	£230,035,000
Translation reserve	£12,643,000	£10,251,000
Total equity	£285,012,535	£287,935,535
Liabilities
Non-current liabilities
Provisions for liabilities and charges	£3,932,000	£4,203,000
Lease liabilities	£9,958,000	£14,346,000
Deferred tax liabilities	£12,519,000	£12,205,000
Total non-current liabilities	£26,409,000	£30,754,000
Current liabilities
Trade and other payables	£80,598,000	£81,911,000
Current tax liabilities	£3,086,000	£2,372,000
Provisions for liabilities and charges	£5,606,000	£4,709,000
Lease liabilities	£5,269,000	£5,145,000
Total current liabilities	£94,559,000	£94,137,000
Total liabilities	£120,968,000	£124,891,000
Total equity and liabilities	£405,980,535	£412,826,535

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"", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "", "# Auditor's Report

6 Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement related to compliance with laws and regulations

The audit team considers the implications of fraud and breaches of laws and regulations on the audit. In planning and performing our audit, we consider the ability of the audit to detect fraud or breaches of law or regulation. The audit of financial statements is designed to provide reasonable assurance that the financial statements are free from material misstatement, whether caused by error or fraud. However, reasonable assurance is not absolute assurance, and therefore, there is a residual risk that a material misstatement may not be detected.

Context of the ability of the audit to detect fraud or breaches of law or regulation

The inherent limitations of an audit in the context of fraud and breaches of law or regulation are important to understand. An audit is not designed to provide absolute assurance that all instances of fraud or non-compliance will be detected. This is due to various factors, including the reliance on evidence obtained from third parties, the nature of audit procedures, and the possibility of collusion or falsification of documents.

7 We have nothing to report on the other information in the Annual Report

Disclosures of emerging and principal risks and longer-term viability

In accordance with regulatory requirements, we have reviewed the disclosures of emerging and principal risks and the assessment of longer-term viability. Our review included checking whether the disclosures were consistent with the information obtained in the audit of the financial statements. We have nothing to report on these disclosures.

Corporate governance disclosures

We have reviewed the corporate governance disclosures made by the directors. Our review focused on ensuring consistency with the information obtained during our audit and compliance with relevant regulations. We have nothing to report on these disclosures.

8 We have nothing to report on the other matters on which we are required to report by exception

Directors’ responsibilities

Directors’ responsibilities are to prepare the financial statements in accordance with applicable law and accounting standards, and to ensure the longer-term viability of the company.

Auditor's responsibilities

Our responsibility is to express an opinion on the financial statements based on our audit. We are required to report on certain matters where we have not received satisfactory information and explanation from the directors.

9 Respective responsibilities

Directors’ responsibilities

The directors are responsible for the preparation of the financial statements in accordance with IFRS as adopted by the United Kingdom, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibilities

Our responsibility is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether caused by fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

NCC Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2019

	Note	2019	2018
		£'000	£'000
Revenue		150,754	140,780

The purpose of our audit work and to whom we owe our responsibilities

For and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants
1 St. Peter’s Square Manchester M2 3AE United Kingdom

Financial statements NCC Group plc

Consolidated income statement for the year ended 31 May 2023

Notes	2023 £m	2022 £m
Revenue	4	335.1
Cost of sales	4	(203.1)
Gross profit	4	132.0
Administrative expenses
Individually Significant Items	5	(14.7)
Depreciation and amortisation	6	(22.6)
Credit gains/(losses) recognised on financial assets	6	1.5
(Impairment)/reversal of impairment of non-current assets	6	(1.1)
Other administrative expenses		(93.2)
Total administrative expenses		(130.1)
Operating profit	4	1.9
Finance costs	8	(6.2)
(Loss)/profit before taxation	6	(4.3)
Taxation	9	(0.3)
(Loss)/profit for the year attributable to owners of the Company		(4.6)
Earnings per ordinary share
Basic EPS	11	(1.5)p
Diluted EPS	11	(1.5)p

Consolidated statement of comprehensive (loss)/income for the year ended 31 May 2023

	2023 £m	2022 £m
(Loss)/profit for the year attributable to the owners of the Company	(4.6)	23.0
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss (net of tax)
Cash flow hedges – effective portion of changes in fair value	—	(0.1)
Foreign exchange translation differences	2.4	14.8
Total other comprehensive income	2.4	14.7
Total comprehensive (loss)/income for the year (net of tax) attributable to the owners of the Company	(2.2)	37.7

The accompanying Notes 1 to 37 are an integral part of these consolidated Financial Statements.

Consolidated balance sheet at 31 May 2023

	Notes	31 May 2023 £m	31 May 2022 £m
Non-current assets
Goodwill	12	255.8	266.1
Intangible assets	12	110.9	118.6
Property, plant and equipment	13	12.5	12.9
Right-of-use assets	14	18.6	22.0
Investments	15	0.3	0.3
Deferred tax asset	18	2.9	1.4
Total non-current assets		401.0	421.3
Current assets
Inventories	16	0.8	0.9
Trade and other receivables	17	58.1	77.7
Contingent consideration receivable	34	3.8	—
Derivative financial instruments	25	—	0.2
Current tax receivable		3.6	3.1
Cash and cash equivalents	24	34.1	73.2
Total current assets		100.4	155.1
Total assets		501.4	576.4
Current liabilities
Trade and other payables	19	44.7	48.3
Bank overdraft	24	1.8	—
Borrowings	24	—	18.5
Lease liabilities	20	6.0	5.4
Current tax payable		4.2	7.4
Derivative financial instruments	25	0.6	—
Contingent consideration payable	35	1.0	1.9
Provisions	21	1.2	2.7
Contract liabilities – deferred revenue	22	51.6	61.7
Total current liabilities		111.1	145.9
Non-current liabilities
Borrowings	24	81.9	107.1
Lease liabilities	20	24.0	27.2
Deferred tax liabilities	18	1.4	1.6
Provisions	21	1.5	0.8
Contract liabilities – deferred revenue	22	3.3	0.6
Total non-current liabilities		112.1	137.3
Total liabilities		223.2	283.2
Net assets		278.2	293.2
Equity
Share capital	27	3.1	3.1
Share premium	27	224.1	224.0
Merger reserve	27	42.3	42.3
Currency translation reserve	27	37.5	35.1
Retained earnings	27	(28.8)	(11.3)
Total equity attributable to equity holders of the Parent		278.2	293.2

The accompanying Notes 1 to 37 are an integral part of these consolidated Financial Statements.

These Financial Statements were approved and authorised for issue by the Board of Directors on 28 September 2023. They were signed on its behalf by:

Mike Maddison
Chief Executive Officer
28 September 2023

Guy Ellis
Chief Financial Officer
28 September 2023

Consolidated cash flow statement for the year ended 31 May 2023

Notes	2023 £m	2022 £m
Cash flows from operating activities
(Loss)/profit for the year	(4.6)	23.0
Adjustments for:
Depreciation of property, plant and equipment	13	4.5
Depreciation of right-of-use assets	14	5.7
Share-based payments	26	2.2
Cash settled share-based payments		—
Amortisation of customer contracts and relationships	12	10.0
Amortisation of software and development costs	12	2.4
Impairment of goodwill	12	12.8
Impairment of software costs	12	0.6
Impairment/(reversal of impairment) of right-of-use-assets	14	0.5
Lease financing costs	8	1.1
Other financing costs	8	5.1
Foreign exchange loss/(gain)	6	0.6
Acquisition of business – transaction costs	5	—
Disposal of business – transaction costs	34	(0.1)
ISIS (non-cash impact)	5	3.5
Profit on disposal of right-of-use assets	6	(0.7)
Profit on disposal of business (DDI)	34	(4.7)
Research and development UK tax credits		(0.5)
Research and development US tax credits		(1.4)
Income tax expense		1.7
(Decrease)/increase in provisions	21	(0.8)
Cash inflow for the year before changes in working capital		37.9
Decrease/(increase) in trade and other receivables		19.7
Decrease in inventories		0.1
(Decrease)/increase in trade and other payables		(15.1)
Cash generated from operating activities before interest and taxation		42.6
Interest element of lease payments	20	(1.1)
Other interest paid		(4.0)
Taxation paid		(5.4)
Net cash generated from operating activities		32.1
Cash flows from investing activities
Acquisition of trade and assets as part of business combinations	35	(1.0)
Purchase of property, plant and equipment		(3.9)
Software and development expenditure		(3.4)
Sale proceeds of business disposal (DDI)		2.0
Net cash used in investing activities		(6.3)
Cash flows from financing activities
Proceeds from the issue of ordinary share capital	27	0.1
Purchase of own shares		(0.5)
Principal element of lease payments	20	(6.1)
Drawdown of borrowings (net of deferred issue costs)		70.8
Issue costs related to borrowings		(1.5)
Repayment of borrowings		(115.6)
Equity dividends paid	10	(14.5)
Net cash (used in)/generated from financing activities		(67.3)
Net decrease in cash and cash equivalents		(41.5)
Cash and cash equivalents at beginning of period		73.2
Effect of foreign currency exchange rate changes		0.6
Cash and cash equivalents at end of year	24	32.3

Consolidated cash flow statement continued for the year ended 31 May 2023

Reconciliation of net change in cash and cash equivalents to movement in net debt

Notes	2023 £m	2022 £m
Net decrease in cash and cash equivalents	(41.5)	(44.6)
Change in net debt resulting from cash flows (net of deferred issue costs)	44.8	(81.3)
Interest incurred on borrowings	4.0	2.1
Interest paid on borrowings	(4.0)	(2.1)
Release of deferred issue costs	(1.0)	(0.4)
Issue costs related to borrowings (non-cash)	1.7	0.6
Effect of foreign currency on cash flows	0.6	1.3
Foreign currency translation differences on borrowings	(1.8)	(11.3)
Change in net cash/(debt) during the year	2.8	(135.7)
Net (debt)/cash at start of year excluding lease liabilities	(52.4)	83.3
Net debt at end of year excluding lease liabilities	(49.6)	(52.4)
Lease liabilities	20	(30.0)
Net debt at end of year		(79.6)

10 The purpose of our audit work and to whom we owe our responsibilities

The purpose of our audit work and to whom we owe our responsibilities

For and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants
1 St. Peter’s Square
Manchester M2 3AE
United Kingdom

Financial statements NCC Group plc

Consolidated income statement for the year ended 31 May 2023

Notes	2023 £m	2022 £m
Revenue	4	335.1
Cost of sales	4	(203.1)
Gross profit	4	132.0
Administrative expenses
Individually Significant Items	5	(14.7)
Depreciation and amortisation	6	(22.6)
Credit gains/(losses) recognised on financial assets	6	1.5
(Impairment)/reversal of impairment of non-current assets	6	(1.1)
Other administrative expenses		(93.2)
Total administrative expenses		(130.1)
Operating profit	4	1.9
Finance costs	8	(6.2)
(Loss)/profit before taxation	6	(4.3)
Taxation	9	(0.3)
(Loss)/profit for the year attributable to owners of the Company		(4.6)
Earnings per ordinary share
Basic EPS	11	(1.5)p
Diluted EPS	11	(1.5)p

Consolidated statement of comprehensive (loss)/income for the year ended 31 May 2023

	2023 £m	2022 £m
(Loss)/profit for the year attributable to the owners of the Company	(4.6)	23.0
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss (net of tax)
Cash flow hedges – effective portion of changes in fair value	—	(0.1)
Foreign exchange translation differences	2.4	14.8
Total other comprehensive income	2.4	14.7
Total comprehensive (loss)/income for the year (net of tax) attributable to the owners of the Company	(2.2)	37.7

NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Consolidated balance sheet at 31 May 2023

Non-current assets	Notes	31 May 2023 £m	31 May 2022 £m
Goodwill	12	255.8	266.1
Intangible assets	12	110.9	118.6
Property, plant and equipment	13	12.5	12.9
Right-of-use assets	14	18.6	22.0
Investments	15	0.3	0.3
Deferred tax asset	18	2.9	1.4
Total non-current assets		401.0	421.3
Current assets
Inventories	16	0.8	0.9
Trade and other receivables	17	58.1	77.7
Contingent consideration receivable	34	3.8	—
Derivative financial instruments	25	—	0.2
Current tax receivable		3.6	3.1
Cash and cash equivalents	24	34.1	73.2
Total current assets		100.4	155.1
Total assets		501.4	576.4
Current liabilities
Trade and other payables	19	44.7	48.3
Bank overdraft	24	1.8	—
Borrowings	24	—	18.5
Lease liabilities	20	6.0	5.4
Current tax payable		4.2	7.4
Derivative financial instruments	25	0.6	—
Contingent consideration payable	35	1.0	1.9
Provisions	21	1.2	2.7
Contract liabilities – deferred revenue	22	51.6	61.7
Total current liabilities		111.1	145.9
Non-current liabilities
Borrowings	24	81.9	107.1
Lease liabilities	20	24.0	27.2
Deferred tax liabilities	18	1.4	1.6
Provisions	21	1.5	0.8
Contract liabilities – deferred revenue	22	3.3	0.6
Total non-current liabilities		112.1	137.3
Total liabilities		223.2	283.2
Net assets		278.2	293.2
Equity
Share capital	27	3.1	3.1
Share premium	27	224.1	224.0
Merger reserve	27	42.3	42.3
Currency translation reserve	27	37.5	35.1
Retained earnings	27	(28.8)	(11.3)
Total equity attributable to equity holders of the Parent		278.2	293.2

These Financial Statements were approved and authorised for issue by the Board of Directors on 28 September 2023. They were signed on its behalf by:

Mike Maddison
Chief Executive Officer
28 September 2023

Guy Ellis
Chief Financial Officer
28 September 2023

Consolidated cash flow statement for the year ended 31 May 2023

Notes	2023 £m	2022 £m
Cash flows from operating activities
(Loss)/profit for the year	(4.6)	23.0
Adjustments for:
Depreciation of property, plant and equipment	13	4.5
Depreciation of right-of-use assets	14	5.7
Share-based payments	26	2.2
Cash settled share-based payments		—
Amortisation of customer contracts and relationships	12	10.0
Amortisation of software and development costs	12	2.4
Impairment of goodwill	12	12.8
Impairment of software costs	12	0.6
Impairment/(reversal of impairment) of right-of-use-assets	14	0.5
Lease financing costs	8	1.1
Other financing costs	8	5.1
Foreign exchange loss/(gain)	6	0.6
Acquisition of business – transaction costs	5	—
Disposal of business – transaction costs	34	(0.1)
ISIS (non-cash impact)	5	3.5
Profit on disposal of right-of-use assets	6	(0.7)
Profit on disposal of business (DDI)	34	(4.7)
Research and development UK tax credits		(0.5)
Research and development US tax credits		(1.4)
Income tax expense		1.7
(Decrease)/increase in provisions	21	(0.8)
Cash inflow for the year before changes in working capital		37.9
Decrease/(increase) in trade and other receivables		19.7
Decrease in inventories		0.1
(Decrease)/increase in trade and other payables		(15.1)
Cash generated from operating activities before interest and taxation		42.6
Interest element of lease payments	20	(1.1)
Other interest paid		(4.0)
Taxation paid		(5.4)
Net cash generated from operating activities		32.1
Cash flows from investing activities
Acquisition of trade and assets as part of business combinations	35	(1.0)
Purchase of property, plant and equipment		(3.9)
Software and development expenditure		(3.4)
Sale proceeds of business disposal (DDI)		2.0
Net cash used in investing activities		(6.3)
Cash flows from financing activities
Proceeds from the issue of ordinary share capital	27	0.1
Purchase of own shares		(0.5)
Principal element of lease payments	20	(6.1)
Drawdown of borrowings (net of deferred issue costs)		70.8
Issue costs related to borrowings		(1.5)
Repayment of borrowings		(115.6)
Equity dividends paid	10	(14.5)
Net cash (used in)/generated from financing activities		(67.3)
Net decrease in cash and cash equivalents		(41.5)
Cash and cash equivalents at beginning of period		73.2
Effect of foreign currency exchange rate changes		0.6
Cash and cash equivalents at end of year	24	32.3

Consolidated cash flow statement continued for the year ended 31 May 2023

Reconciliation of net change in cash and cash equivalents to movement in net debt

Notes	2023 £m	2022 £m
Net decrease in cash and cash equivalents	(41.5)	(44.6)
Change in net debt resulting from cash flows (net of deferred issue costs)	44.8	(81.3)
Interest incurred on borrowings	4.0	2.1
Interest paid on borrowings	(4.0)	(2.1)
Release of deferred issue costs	(1.0)	(0.4)
Issue costs related to borrowings (non-cash)	1.7	0.6
Effect of foreign currency on cash flows	0.6	1.3
Foreign currency translation differences on borrowings	(1.8)	(11.3)
Change in net cash/(debt) during the year	2.8	(135.7)
Net (debt)/cash at start of year excluding lease liabilities	(52.4)	83.3
Net debt at end of year excluding lease liabilities	(49.6)	(52.4)
Lease liabilities	20	(30.0)
Net debt at end of year		(79.6)

The accompanying Notes 1 to 37 are an integral part of these consolidated Financial Statements.# Financial statements

Consolidated statement of changes in equity for the year ended 31 May 2023

Notes	Share capital £m	Share premium £m	Hedging reserve £m	Merger reserve £m	Currency translation reserve £m	Retained earnings £m	Total £m
Balance at 1 June 2021	3.1	223.2	(0.8)	42.3	20.3	(21.9)	266.2
Profit for the year	—	—	—	—	—	23.0	23.0
Other comprehensive expense for the year	—	—	(0.1)	—	—	—	(0.1)
Foreign currency translation differences	—	—	—	—	14.8	—	14.8
Total comprehensive (expense)/income for the year	—	—	(0.1)	—	14.8	23.0	37.7
Transactions with owners recorded directly in equity
Dividends to equity shareholders	10	—	—	—	—	(14.4)	(14.4)
Transfer hedging reserve to retained earnings	—	—	0.9	—	—	(0.9)	—
Share-based payments	26	—	—	—	—	3.2	3.2
Tax on share-based payments	9	—	—	—	—	(0.3)	(0.3)
Shares issued	27	—	0.8	—	—	—	0.8
Total contributions by and distributions to owners	—	0.8	0.9	—	—	(12.4)	(10.7)
Balance at 31 May 2022	3.1	224.0	—	42.3	35.1	(11.3)	293.2
Loss for the year	—	—	—	—	—	(4.6)	(4.6)
Foreign currency translation differences	—	—	—	—	2.4	—	2.4
Total comprehensive income/(loss) for the year	—	—	—	—	2.4	(4.6)	(2.2)
Transactions with owners recorded directly in equity
Dividends to equity shareholders	10	—	—	—	—	(14.5)	(14.5)
Share-based payments	26	—	—	—	—	2.2	2.2
Tax on share-based payments	9	—	—	—	—	(0.1)	(0.1)
Purchase of own shares	—	—	—	—	—	(0.5)	(0.5)
Shares issued	27	—	0.1	—	—	—	0.1
Total contributions by and distributions to owners	—	0.1	—	—	—	(12.9)	(12.8)
Balance at 31 May 2023	3.1	224.1	—	42.3	37.5	(28.8)	278.2

Company balance sheet at 31 May 2023

Company no: 4627044	Notes	2023 £m	2022 £m
Non-current assets
Investments in subsidiary undertakings	33	279.1	276.9
Trade and other receivables	17	23.2	32.9
Total non-current assets		302.3	309.8
Current assets
Cash and cash equivalents	24	15.0	20.2
Total current assets		15.0	20.2
Total assets		317.3	330.0
Current liabilities
Trade and other payables	19	0.2	18.2
Total current liabilities		0.2	18.2
Total liabilities		0.2	18.2
Net assets		317.1	311.8
Equity
Share capital	27	3.1	3.1
Share premium	27	224.1	224.0
Merger reserve	27	42.3	42.3
Retained earnings	27	47.6	42.4
Total equity		317.1	311.8

The accompanying Notes 1 to 37 are an integral part of these Financial Statements.

Company cash flow statement for the year ended 31 May 2023

Notes	2023 £m	2022 £m
Cash flows from operating activities
Profit for the year	28	17.5
Cash inflow for the year before changes in working capital		17.5
Decrease in trade and other receivables		9.7
(Decrease)/increase in trade and other payables		(18.0)
Net cash generated from operating activities		9.2
Cash flows from financing activities
Proceeds from the issue of ordinary share capital	27	0.1
Equity dividends paid	10	(14.5)
Net cash used in financing activities		(14.4)
Net (decrease)/increase in cash and cash equivalents		(5.2)
Cash and cash equivalents at beginning of year		20.2
Cash and cash equivalents at end of year		15.0

The accompanying Notes 1 to 37 are an integral part of these Financial Statements.

Company statement of changes in equity for the year ended 31 May 2023

Notes	Share capital £m	Share premium £m	Merger reserve £m	Retained earnings £m	Total £m
Balance at 31 May 2021 and 1 June 2021	3.1	223.2	42.3	32.9	301.5
Profit for the year	—	—	—	20.0	20.0
Total comprehensive income for the year	—	—	—	20.0	20.0
Transactions with owners recorded directly in equity
Dividends to equity shareholders	10	—	—	—	(14.4)
Increase in subsidiary investment for share-based charges		—	—	—	3.9
Shares issued	27	—	0.8	—	—
Total contributions by and distributions to owners	—	0.8	—	(10.5)	(9.7)
Balance at 31 May 2022	3.1	224.0	42.3	42.4	311.8
Profit for the year	—	—	—	17.5	17.5
Total comprehensive income for the year	—	—	—	17.5	17.5
Transactions with owners recorded directly in equity
Dividends to equity shareholders	10	—	—	—	(14.5)
Increase in subsidiary investment for share-based charges		—	—	—	2.2
Shares issued	27	—	0.1	—	—
Total contributions by and distributions to owners	—	0.1	—	(12.3)	(12.2)
Balance at 31 May 2023	3.1	224.1	42.3	47.6	317.1

Notes to the Financial Statements for the year ended 31 May 2023

1 Accounting policies

Basis of preparation

NCC Group plc (the “Company”) is a public company incorporated in the UK, with its registered office at XYZ Building, 2 Hardman Boulevard, Manchester M3 3AQ. The Group Financial Statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The principal activity of the Group is the provision of independent advice and services to customers through the supply of Cyber Security 2 and Software Resilience services. The Parent Company Financial Statements present information about the Company as a separate entity and not about the Group.

These Financial Statements have been approved for issue by the Board of Directors on 28 September 2023. These Group and Parent Company Financial Statements have been prepared and approved by the Directors in accordance with UK-adopted International Accounting Standards (“UK-adopted IFRS”). On publishing the Parent Company Financial Statements here together with the Group Financial Statements, the Company is also taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual Income Statement and related notes that form a part of these approved Financial Statements. The Financial Statements ended 31 May 2023 now refer to the Cyber Security 2 division as the Group’s former Assurance division.

Climate change

The Directors have reviewed the potential impact of climate change and the Task Force on Climate-related Financial Disclosures (TCFD) on the consolidated Financial Statements. During the year, the Group has carried out a materiality assessment to identify what social, environmental and governance issues are most material and significant to the NCC Group business and stakeholders to aid our commitment to achieving net zero by 2050. Our original baseline assessment was impacted by the pandemic and a different business strategy and therefore we have re-based this assessment. Our overall exposure to physical and transitional climate change is considered low in the short to medium term due to the nature of the business and cyber resilience industry. The Group continues to evolve its sustainability agenda with further details on our short, medium, medium to long and long-term goals contained within the non-financial and sustainability information statement on pages 46 to 52 of the Annual Report.

The Directors have considered climate change in the following areas of the consolidated Financial Statements, noting no material financial impact in each area:

Critical accounting judgements and key sources of estimation uncertainty
Going concern assessment
Property, plant and equipment – economic life and residual values
Impairment of assets – the impact of environmental change on growth rates and projected cash flows
Inventories – realisable value issues
Provisions – recognition of new liabilities or contingent liabilities arising from climate change and Group physical and transition risks of:
- Greenhouse gas emissions – increased costs associated with more taxes and levies
- Move to net zero – increased costs required to lower emissions
- Margin risk – impact on delivery day rates and associated erosion of profit margin due to increased costs
- Reputational risk – failure to comply with regulations resulting in negative impact on Group
- Supply chain – increased supply costs and delayed deliveries impacting customer contracts/provision of services
- Extreme weather or rising sea levels – reduction in revenue and increased costs
Fair value measurement – climate change variables being incorporated into market participant valuations
Financial instruments – expected credit losses and risk of default on Group borrowings (RCF and term loan)
IFRS 16 ‘Leases’ – changes to property lease portfolio or car lease agreements.

During the financial year the Group has moved FY23 from a company car scheme to a salary sacrifice scheme (leased directly by the colleague); this will result over time a reduction in the motor vehicle right-of-use-asset and corresponding lease liabilities, as the contract lease terms ends.# New and amended accounting standards that have been issued and are effective from 1 January 2023

At the date of authorisation of these Financial Statements, the following new accounting pronouncements have been issued and are effective from 1 January 2023:

IFRS 17 ‘Insurance Contracts’ – effective on 1 January 2023 and replaces IFRS 4 ‘Insurance Contracts’
Amendments to IAS 1 ‘Classification of Liabilities as Current or Non-current’ issued in January 2020 and effective from 1 January 2023. An exposure draft was issued in November 2021 proposing for this effective date to be delayed to periods starting no earlier than 1 January 2024
Amendments to IAS 1 and IFRS Practice Statement 2 ‘Disclosure of Accounting Policies’ issued in February 2021 and effective from 1 January 2023
Amendments to IAS 8 ‘Definition of Accounting Estimates’ issued in February 2021 and effective from 1 January 2023
Amendments to IAS 12 ‘Deferred Tax Related to Assets and Liabilities arising from a Single Transaction’ issued in May 2021 and effective from 1 January 2023
Amendments to IAS 7 and IFRS 7 ‘Supplier Finance Arrangements’ issued in July 2023 and effective from 1 January 2024
Amendments to IFRS 16 ‘Lease Liability in a Sale and Leaseback’ issued in July 2023 and effective from 1 January 2024

These IFRSs are not expected to have a material impact on the Group’s consolidated financial position or the performance of the Group. These IFRSs are not expected to have a material impact on the Company’s financial position or the performance of the Company.

2 Formerly Assurance.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023

160

1 Accounting policies continued

The UK Endorsement Board has issued the following new accounting pronouncements to be effective from 1 January 2022 and applicable from 31 March 2023:

Reference to the Conceptual Framework (Amendments to IFRS 3)
Property, Plant and Equipment – Proceeds Before Intended Use (Amendments to IAS 16)
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
Annual improvements make minor amendments to IFRS 1 ‘First-time Adoption of IFRS’, IFRS 9 ‘Financial Instruments’, IAS 41 ‘Agriculture’ and IFRS 16 ‘Leases’

The adoption of these pronouncements has had no significant impact on the Group consolidated Financial Statements.

Other new accounting pronouncements

In addition to the above, the following new accounting pronouncements have also been issued which are not yet effective but the Group is not expecting them to have a significant impact on the Group’s consolidated Financial Statements:

Amendments to IAS 1 ‘Non-current Liabilities with Covenants’ issued in October 2022 and effective from 1 January 2024
Amendments to IAS 10 and IAS 28 ‘Sale or Contribution of Assets between an Investor and its Associate or Joint Venture’ issued in September 2014 and postponed indefinitely
Amendments to IFRS 16 ‘Lease Liability in a Sale and Leaseback’ issued in September 2022 and effective from 1 January 2024

Basis of measurement

The consolidated Financial Statements have been prepared on the historical cost basis except for the revaluation of certain financial instruments and investments. In addition, at the date of the acquisitions consideration payable is at fair value.

Functional and presentation currency

The Group and Company Financial Statements are presented in millions of Pounds Sterling (£m) because that is the currency of the principal economic environment in which the Group operates.

The Directors have acknowledged guidance published in relation to going concern assessments. The Group’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Business Review and Financial Review. The Group’s financial position, cash and borrowing facilities are also described within these sections.

The Financial Statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons. The Directors have prepared cash flow and covenant compliance forecasts for the 12 month period ending 30 September 2024 which indicate that, taking account of severe but plausible downsides on the operations of the Group and its financial resources, the Group and Company will have sufficient funds to meet their liabilities as they fall due for that period.

The going concern period is required to cover a period of at least 12 months from the date of approval of the Financial Statements and the Directors still consider this 12 month period to be an appropriate assessment period due to the Group’s financial position and trading performance and that its borrowing facilities do not expire until December 2026. The Directors have considered whether there are any significant events beyond the 12 month period which would suggest this period should be longer but have not identified any such conditions or events.

The Group is financed primarily by a £162.5m multi-currency revolving credit facility maturing in December 2026. Under these banking arrangements, the Group can also request (seeking bank approval) an additional accordion facility to increase the total size of the revolving credit facility by up to £75m. This accordion facility has not been considered in the Group’s going concern assessment as it requires bank approval and is therefore uncommitted as at the date of approval of these consolidated financial statements.

As of 31 May 2023, net debt (excluding lease liabilities) amounted to £49.6m which comprised cash of £34.1m, a bank overdraft of £1.8m, a drawn revolving credit facility of £83.4m had been drawn under these facilities, leaving £79.1m (2022: £28.7m) of undrawn facilities, excluding the uncommitted accordion facility of £75.0m. Unamortised arrangement fees of £1.5m have been offset against the amounts drawn down, resulting in a carrying value of borrowings at 31 May 2023 of £81.9m. The Group’s day-to-day working capital requirements are met through existing cash resources, the revolving credit facility and receipts from its continuing business activities.

The Group is required to comply with financial covenants for leverage (net debt to Adjusted EBITDA) and interest cover (Adjusted EBITDA to interest charge) that are tested bi-annually on 31 May and 30 November each year. As of 31 May 2023, leverage amounted to 1.4x and net interest cover amounted to 6.8 compared to a maximum of 3.0x and a minimum of 3.5x respectively. The terms and ratios are specifically defined in the Group’s banking documents (in line with normal commercial practice) and are materially similar to amounts noted in the these financial statements with the exceptions being net debt excludes IFRS 16 lease liabilities and Adjusted EBITDA.

The Group was in compliance with the terms of all its facilities during the year, including the financial covenants on 31 May 2023, and based on forecasts, expects to remain in compliance over the going concern period. In addition, the Group has not sought or is not planning to seek any waivers to its existing facilities.

It’s been a challenging year for the Group with a decline in the rate of revenue growth and overall profitability resulting in a loss before taxation of £4.3m. The Group’s revenue performance and profitability suffered from the market dynamics within Cyber Security. In particular, the Group experienced buying decision delays and cancellations in the North American tech sector and our UK market. These headwinds have further reinforced the need to accelerate the implementation of our next chapter of the Group strategy following its communication in February 2023. This strategy requires a level of additional investment in 2024. Despite the above, the Group has maintained consistent cash generation during the year.

1 Revenue growth at constant currency, Adjusted EBITDA, Adjusted operating profit, Adjusted EPS, cash conversion, net debt and net debt excluding lease liabilities are APMs and not IFRS measures. See Note 3 for an explanation of APMs and adjusting items.
2 Formerly Assurance.

Financial statements

161

1 Accounting policies continued

Going concern continued

Following the year end, the Group has engaged in additional generating cost efficiencies across Cyber Security and corporate functions which is resulting in the implementation of a fundamental reorganisation generating further savings compared to the prior year. As a result of all of the above, the base case going concern assessment has been prepared on the basis that market volatility within Cyber Security partially continues with overall profitability remaining similar to 2023.

With this context, the Directors have prepared a number of severe but plausible scenarios to the base cash going concern assessment as follows:

a) No recovery from FY23 Q4 Cyber Security trading performance – £6.4m reduction profit before tax
b) Loss of key customers – £4.2m reduction in profit before tax
c) Shortfall in forecast cost savings – annualised £3.2m reduction in profit before tax
d) Further inflationary pressures continue, worse and more prolonged than expected (wages, energy and interest) – £5.6m reduction in profit before tax
e) Combination of Scenario a and d – £10.8m reduction in profit before tax

These scenarios have been modelled individually in order to assess the Group’s ability to withstand specific challenges. The Directors do not believe it is plausible for all of the above downside scenarios to occur concurrently; however, they have modelled scenarios combining risks (a and d). The impact of these severe but plausible scenarios has been reviewed against the Group’s projected cash flow position, available committed bank facilities and compliance with financial covenants.These forecasts, including the severe but plausible downsides, show that the Group is able to operate within its available committed banking facilities, with no forecasted covenant breaches or requirement for facility waivers, and that the Group will have sufficient funds to meet its liabilities as they fall due for that period. From a Company perspective, the Company places reliance on other Group trading entities for financial support. The Company controls these Group entities and therefore has the ability to direct the financial activities of the Group. Having reviewed the current trading performance, forecasts, debt servicing requirements, total facilities and risks, the Directors are confident that the Company and the Group will have sufficient funds to continue to meet their liabilities as they fall due for a period of at least 12 months from the date of approval of these consolidated Financial Statements, which is determined as the going concern period. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing the Group’s Financial Statements for the period ended 31 May 2023. There are no post-Balance Sheet events which the Directors believe will negatively impact the going concern assessment.

1 See Note 3 for an explanation of Alternative Performance Measures (APMs) and adjusting items, including a reconciliation to statutory information.

Business combinations

Business combinations are accounted for by applying the acquisition method at the acquisition date, which is the date on which control is transferred to the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Acquisitions and disposals

The Group measures goodwill at the acquisition date as:
* The fair value of the consideration transferred; plus
* The recognised amount of any non-controlling interests in the acquiree; plus
* If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
* The fair value of the identifiable assets acquired, and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are recognised in the Income Statement. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred. Any deferred or contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured, and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of contingent consideration are recognised in the Income Statement.

On a transaction-by-transaction basis, the Group elects to measure non-controlling interests either at their fair value or at their proportionate interest in the recognised amount of the identifiable net assets of the acquiree at the acquisition date. The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. In addition, comparatives are also restated to reclassify disposed businesses or those that meet the criteria of IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’, as a discontinued operation.

2 Formerly Assurance.

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Notes to the Financial Statements continued at 31 May 2023

1 Accounting policies continued

Subsidiaries

Subsidiaries are entities controlled by the Group. The Financial Statements of subsidiaries are included in the consolidated Financial Statements from the date that control commences until the date that control ceases. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. Intercompany transactions and balances between subsidiaries are eliminated on consolidation.

Intangible assets and goodwill

Goodwill represents amounts arising on acquisition of subsidiaries. In respect of business acquisitions that have occurred since 1 June 2004, goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired including identifiable intangible assets. Identifiable intangibles are those which can be sold separately, or which arise from legal rights regardless of whether those rights are separable. In respect of acquisitions prior to 1 June 2004, goodwill is included at its deemed cost, which represents the amount recorded under UK GAAP at 31 May 2004, which was broadly comparable, save that only separable intangibles were recognised and goodwill was amortised. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not amortised but is tested annually for impairment. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the investee.

Research and development

Expenditure on research activities is recognised in the Income Statement as an expense as incurred. Expenditure on development activities is capitalised as “development costs” if the product or process is technically and commercially feasible, if the Group has the technical ability and sufficient resources to complete development, if future economic benefits are probable and if the Group can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new or substantially improved products or processes.

Software costs

The Group capitalises “software costs” in accordance with the criteria of IAS 38. Software costs comprise third party costs and internal colleague time costs for internal system developments. Capitalised amounts are initially measured at cost and amortised on a straight-line basis over the period for which the developed system is expected to be in use as a business platform. Software costs incurred as part of a service agreement are only capitalised when it can be evidenced that the Group has control over the resources defined in the arrangement. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use and capitalised borrowing costs. Other development expenditure is recognised in the Income Statement as an expense as incurred. Software costs are stated at cost less accumulated amortisation and less accumulated impairment losses.

When the Group incurs customisation and configuration costs, as part of a service agreement for Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS) or Platform-as-a-Service (PaaS), judgement is applied in assessing whether the Group has control over the resources defined in the arrangement. These costs are treated in accordance with the March 2019 IFRIC update with regard to the Customer’s Right to Receive Access to the Supplier’s Software Hosted on the Cloud (IAS 38 ‘Intangible Assets’) and the IFRIC interpretation ratified by the Interpretations Committee in April 2021 with regard to Configuration or Customisation Costs in a Cloud Computing Arrangement, as follows:
* In specific circumstances, development costs incurred may give rise to an identifiable asset, for example where code/intellectual property hosted on third party cloud infrastructure is controlled by the Group and the cost of moving the asset to another provider or bringing on-premise is not prohibitive.
* Amounts paid to the cloud vendor or third party for configuration and customisation that are not distinct from access to the cloud software are expensed over the contract term.
* In all other instances, configuration and customisation costs will be expensed as the customisation and configuration services are received, for example a cloud provider’s monthly subscription.

Intangible assets

Expenditure on internally generated goodwill is recognised in the Income Statement as an expense as incurred. Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and less accumulated impairment losses.

Amortisation

Amortisation is charged to the Income Statement on a straight-line basis over the estimated useful economic lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each Balance Sheet date. Intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:
* Acquired customer contracts and relationships – between three and twenty years
* Software – between three and five years
* Capitalised development costs – between three and five years

Financial instruments

Financial assets and financial liabilities, in respect of financial instruments, are recognised in the Group and Parent Balance Sheet when the Group or Company becomes a party to the contractual provisions of the instrument.

Financial statements
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1 Accounting policies continued

Classification and measurement of financial assets and liabilities

Classification of financial assets is generally based on the business model in which the financial asset is managed and its contractual cash flow characteristics.# Notes to the Financial Statements continued at 31 May 2023

1 Accounting policies continued

Financial assets and financial liabilities

A financial asset is measured at amortised cost if it is held with the objective of collecting the contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All other financial assets are measured at fair value through other comprehensive income or the Income Statement.

Financial assets at amortised cost

Trade and other receivables

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as financial assets measured at amortised cost. Under the IFRS 9 “expected credit loss” model, a credit event (or impairment “trigger”) no longer needs to occur before credit losses are recognised. The Group analyses the risk profile of trade receivables based on past experience and an analysis of the receivables’ current financial position, potential for a default event to occur, adjusted for specific factors, general economic conditions of the industry in which the receivables operate and assessment of both the current and the forecast direction of conditions at the reporting date. A default event is considered to occur when information is obtained that indicates that a receivable is unlikely to be paid to the Group. Credit risk is regularly reviewed by management to ensure the expected credit loss (ECL) model is being appropriately applied. The Group has performed the calculation of ECL separately for each business unit.

Financial liabilities at amortised cost

Trade payables

Trade payables are other financial liabilities initially measured at fair value and subsequently measured at amortised cost.

Impairment of non‑financial assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash generating unit is the greater of its value in use (VIU) and its fair value less costs to sell (FVLCTS). FVLCTS has been used for all CGUs for the year ended 31 May 2023. The FVLCTS valuation has been calculated by assessing the value of each standalone CGU calculated using an Adjusted EBITDA 1 multiple based on estimated sustainable earnings adjusted for specific items where relevant. VIU has predominantly been used in the year ended 31 May 2022, 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 the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash generating units (CGUs). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the Income Statement. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed.

In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill, is recognised in the Income Statement as an expense as incurred.

Consideration of climate risk impact

The impact of climate risk on the future cash flows has also been considered for scenarios analysed in line with the climate change risk assessment. The climate change scenario analyses performed in 2023 – conducted in line with TCFD recommendations – identified no material financial impact to the current year impairment assessments.

Related party transactions

A related party is a person or entity that is related to the Group or Company. Related party transactions are the transfer of resources, services or obligations between parties regardless of whether a price is charged. In these circumstances, the Group or Company will disclose the nature of the related party relationship as well as information about the transactions and outstanding balances necessary for an understanding of the potential effect of the relationship on the Financial Statements in accordance with IAS 24 ‘Related Party Transactions’. Details of related party transactions are set out in Note 32 to these Financial Statements.

Property, plant and equipment

Property, plant and equipment assets are carried at cost less accumulated depreciation and any recognised impairment in value. To the extent that borrowing costs relate to the acquisition, construction or production of a qualifying asset, borrowing costs are capitalised as part of the cost of that asset. Depreciation is charged to the Income Statement on a straight-line basis over the estimated useful economic lives of each part of an item of plant and equipment as follows:

Computer equipment – between three and five years
Plant and equipment – between three and five years
Furniture – between three and five years
Fixtures and fittings – five years
Motor vehicles – four years

Property, plant and equipment is also tested for impairment whenever there is an indication of potential impairment.

Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

The contract involves use of the identified asset; this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity or a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified
The Group has the right to obtain substantially all of the economic benefits from use of the asset and throughout the period of use

The Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are≈most relevant to changing how and for what purpose the asset is used. In rare cases where all the decisions about how and for≈what purpose the asset is used are predetermined, the Group has the right to direct the use of the asset if either:

The Group has the right to operate the asset
The Group designed the asset in a way that predetermines how and for what purpose it will be used

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of≈the end of the useful life of the right-of-use asset or the end of lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate.The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in the Income Statement if the carrying amount of the right-of-use asset has been reduced to zero. The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets, including certain IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. Lease rental costs in respect of short-term leases (less than one year) and low value assets which are exempt from being accounted for under IFRS 16 are charged to the Income Statement on a straight-line basis over the period of the lease.

Investments

Investments in subsidiaries are carried at cost less impairment. Investments in property and unlisted shares are carried at cost less impairment, which is based on the fair value at acquisition.

Inventories

Inventories are valued at the lower of cost and new realisable value. Net realisable value is the estimated selling price in the ordinary course of the business, less applicable variable selling expenses. Items in transit where the Group has control are included in inventories.

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1 Accounting policies continued

Revenue recognition

Summary

The Group provides independent global Cyber Security 2 and Software Resilience services. The revenue streams in relation to Cyber Security 2 include:
• Global Professional Services (GPS) – global Cyber Security 2 consultancy services
• Global Managed Services (GMS) – operational cyber defence, incident response, scanning, simulation and managed security operations centres (SOCs) including new Microsoft XDR (Sentinel) proposition
• Product sales – sale of own manufactured and/or resale of third party products

The revenue streams in relation to Software Resilience include:
• Escrow contract services – securely maintain in “escrow” the long-term availability of business critical software and applications
• Verification services – verify source code, and provide a fully managed secure service and result validation

While the detailed recognition is contract specific, and set out in the table on pages 167 to 170, in most cases:
• GPS revenues are recognised on an input method over time
• GMS revenues are bifurcated according to the separate performance obligations (see pages 167 to 169)
• Product sales are recognised when control passes, usually on delivery
• Escrow contract revenues are recognised over time
• Verification services are recognised on the completion of the verification service

Revenue is presented net of VAT and other sales related taxes. Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers control over a good or service to a customer. Due to the nature of the Group’s activities, the Group transaction price for the majority of its contracts is entirely variable consideration as these contracts are on a time and material basis, using set contractual rates per hour/day worked, giving rise to no estimation or reversal risk at period end. The Group does not have any material obligations in respect of returns, refunds or warranties. The impact of any financing component within contracts with customers has been assessed and concluded to be immaterial. On contract inception, the probability of collectability is assessed across the Group and, unless there is a significant change in facts and circumstances, revenue is recognised. During the year, no instances have been identified where reassessment of the collectability has had to be reassessed, nor have there been any new contracts with customers for which the collection of consideration has not been assessed at inception as probable.

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Notes to the Financial Statements continued at 31 May 2023

Revenue recognition continued

Detailed policies

The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers by reportable segments, including significant payment terms, and the related revenue recognition policies.

| Revenue stream | Nature # 1 Accounting policies continued

Revenue recognition continued

Detailed policies continued

168 Notes to the Financial Statements continued at 31 May 2023

The MSP model is considered to be under a principal arrangement whereby the Group controls the service prior to transfer. Where a reseller model is selected by the customer, the Group recognises four performance obligations:

Sourced software licence(s)
Set-up fees
Post-go-live fees
Monitoring cyber service

The reseller model is considered to be under an agency arrangement whereby the customer receives the benefit and control of the licence on delivery. Invoices are raised monthly or based on an agreed invoicing profile with the customer. Invoices are usually payable within 30 days. When the Group acts as a principal the revenue recorded is the gross amount billed. The transaction price is determined by a contract price (cost plus mark-up). The transaction price for the overall service is outlined within the customer contract. In certain scenarios, the contract will outline the price for each performance obligation, which is considered to be the standalone selling price of the services/goods, and the transaction price is allocated to each performance obligation on this basis. Where the contract does not stipulate the price per performance obligation, management determines the relative standalone selling price for each performance obligation based on a market assessment approach for the services provided in comparison to market prices, and the contract transaction price is allocated to each performance obligation in proportion to those standalone selling prices.

Under a reseller model, the Group’s responsibility is to arrange for a third party to provide a specified software licence(s) to the customer. In these cases, the Group is acting as an agent and the Group does not control the relevant licence(s) before it is transferred to the customer. In particular, the Group does not have inventory risk, have access to its source code or hold the IP rights. When the Group is acting as an agent, the revenue is recorded at the net amount retained (commission) at a point in time as the customer receives immediate benefit from access to the licence and the Group does not have any further obligations in relation to the provision of the licence. The commission transaction value represents the mark-up on the licence provided.

The majority of set-up fees relate to the reseller model. Set-up fees are recognised over time of the set-up. The set-up activities are completed by a separate deployment team that typically spans a period of 1-2 months. The set-up activities do not customise the licence provided by the third party but only allows a link between the client’s infrastructure and the software to allow monitoring services to be provided by the Group one the set-up process is completed. On this basis, the client can benefit from each of the goods and services either on their own or together with the other goods and services that are readily available and the promise to transfer the goods or service is distinct. The set-up fees are based on day rates incurred (defined by an in-house day rate sales pricing matrix). Accordingly, the charge out rates are recognised and allocated to these tasks when performed akin to technical professional day rate services. These rates are considered to be the standalone selling prices and are not discounted or reduced for other services.

1 Accounting policies continued

Revenue recognition continued

Detailed policies continued

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Capitalised commission costs are amortised on a systematic basis that is consistent with the transfer to the customer of the services when the related revenues are recognised. In all other cases, all internal and external costs of obtaining the contract are recognised as incurred. Costs directly incurred in fulfilling a contract with a customer, which comprise labour hours on long-term contracts, are recognised as an asset to the extent they are recoverable. Such costs are amortised on a systematic basis that is consistent with the transfer to the customer of the services when the related revenues are recognised.

Accrued income (contract asset)

Accrued income represents the Group’s rights to consideration for work completed but not billed at the reporting date. Remaining balances are transferred to receivables when the rights become unconditional.

Deferred revenue (contract liability)

Deferred revenue represents advanced consideration received from customers, for which revenue is recognised over time.

Long-term loss-making contracts

Long-term contracts are reviewed annually to establish if the contract is onerous in nature. In particular, the long-term contract becomes an onerous contract when the unavoidable costs (i.e. the lower of the cost of fulfilling the contract and any compensation or penalties arising from failure to fulfil it) exceed the economic benefits expected to be received under the contract. The assessment of cost to fulfil includes costs that relate directly to the contract and includes direct costs of production, direct costs of supplies/ hardware from external suppliers (materials), direct labour in relation to performance obligations and if appropriate any potential contractual fine dependent on items (performance obligations) not being delivered/performed. Any assets dedicated to the specific contract are also tested for potential impairment.

Revenue recognition continued

Detailed policies continued

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Notes to the Financial Statements continued at 31 May 2023

1 Accounting policies continued

Determination and presentation of operating segments

The Group determines and presents operating segments based on the information that is provided to the Board, which acts as the Group’s chief operating decision maker (CODM) in order to assess performance and to allocate resources. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s results are reviewed regularly by the CODM to make decisions about resources to be allocated to the segment and to assess its performance. The Group reports its business in two key segments: the Cyber Security 2 division and the Software Resilience division. The two reporting segments provide distinct types of service. Within each of the reporting segments the operating segments provide a homogeneous group of services. The operating segments are grouped into the reporting segments on the basis of how they are reported to the CODM. Operating segments are aggregated into the two reportable segments based on the types and delivery methods of services they provide, common management structures, and their relatively homogeneous commercial and strategic market environments. Both of the Group’s divisions (segments) are run by a senior executive team; those teams make all decisions on resource allocation, product development, marketing and areas for focus and investment.

Allocation of central costs

Some costs are collected and managed in one location but are actually incurred on behalf of multiple operating segments or reporting segments. These costs are then allocated to the reporting segments. The allocation is based on logical or activity driven cost algorithms. The allocation is necessary to give an accurate picture of the consumption of resources by each reporting segment.

Individually Significant Items (ISI)

Individually Significant Items are identified as those items or projects that based on their size and nature and/or incidence are assessed to warrant separate disclosure to provide supplementary information to support the understanding of the Group’s financial performance. Where a project spans a reporting period(s) the total project size and nature are considered in totality. ISI’s typically comprise costs/ profits/losses on material acquisitions/disposals/business exits, fundamental reorganisation/restructuring programmes and other significant one-off events. ISI’s are considered to require separate presentation in the notes to the Financial Statements in order to fairly present the financial performance of the Group. During the year ended 31 May 2023, the Group commenced a fundamental reorganisation/restructuring programme that will span future reporting periods. In particular, it is expected that material costs will be incurred for the years ending 31 May 2024 and 2025 and the Group will have to exercise judgement in assessing whether the restructuring items should be classified as individual significant items, this will involve taking into account the nature of the item, cause of occurrence scale of the impact of those items on the reported performance and after considering the original reorganisation programme principles and plans.

Foreign currencies

Transactions in foreign currencies are recorded using the appropriate monthly exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated using the exchange rate ruling at the Balance Sheet date and the gains or losses on translation are included in the Income Statement. The assets and liabilities of overseas subsidiaries denominated in foreign currencies are retranslated at the exchange rate ruling at the Balance Sheet date. The income statements of overseas subsidiary undertakings are translated at the average exchange rates for the financial year. Gains and losses arising on the retranslation of overseas subsidiary undertakings are taken to the currency translation reserve. They are released to the Income Statement upon disposal of the subsidiary to which they relate. Foreign currency differences arising from the translation of qualifying cash flow hedges are recognised in OCI to the extent that the hedges are effective.

Derivative financial instruments and hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency risk exposures. Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss. The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates. At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. The Group designates only the change in fair value of the spot element of forward exchange contracts as the hedging instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts (forward points) is separately accounted for as a cost of hedging and recognised in a costs of hedging reserve within equity. When the hedged forecast transaction subsequently results in the recognition of a non-financial item, the amount accumulated in the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the non-financial item when it is recognised. For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging reserve is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

2 Formerly Assurance.
Financial statements
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Cash flow hedges continued

If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss.# Colleague benefits – defined contribution pensions

The Group operates a defined contribution pension scheme. The assets of the scheme are kept separate from those of the Group in an independently administered fund. The amount charged as an expense in the Income Statement represents the contributions payable to the scheme in respect of the accounting period.

Short-term benefits

Short-term colleague benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the colleague and the obligation can be estimated reliably.

Share-based payment transactions

Share-based payments in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group. The grant date fair value of share-based payment awards granted to colleagues is recognised as a colleague expense, with a corresponding increase in equity, over the period that the colleagues become unconditionally entitled to the awards. The fair value of the options granted is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Share-based payment transactions in which the Group receives goods or services by incurring a liability to transfer cash or other assets that is based on the price of the Group’s equity instruments are accounted for as cash settled share-based payments. The fair value of the amount payable to colleagues is recognised as an expense, with a corresponding increase in liabilities, over the period in which the colleagues become unconditionally entitled to payment. The liability is remeasured at each Balance Sheet date and at settlement date. Any changes in the fair value of the liability are recognised as personnel expense within the Income Statement. Where the Company grants options over its own shares to the colleagues of a subsidiary it recognises in its individual Financial Statements, an increase in the cost of investment in that subsidiary equivalent to the equity settled share-based payment charge is recognised in respect of that subsidiary in its consolidated Financial Statements with the corresponding credit being recognised directly in equity.

Holiday or vacation pay

The Group recognises a liability in the Balance Sheet for any earned but not yet taken holiday entitlement for staff. Earned holiday is calculated on a straight-line basis over a holiday year, which can vary by business unit. Taken holiday is based on actually taken holiday. Any movement in the liability between the opening and closing balance in the year is recorded as a colleague cost or a reduction in colleague costs in the Income Statement in the year.

Borrowings

Borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the Income Statement over the period of the borrowings on an effective interest basis.

Finance costs

Finance costs are recognised within the Income Statement in the year in which they are incurred.

Provisions

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023172 Notes to the Financial Statements continued at 31 May 2023 1 Accounting policies continued

Taxation

Taxation on the profit or loss for the year comprises current and deferred taxation. Taxation is recognised in the Income Statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the Balance Sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the Balance Sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. UK RDEC tax credits are recognised for the UK tax jurisdiction within administrative expenses and R&D US tax credits within income tax for the US tax jurisdiction.

Intra-group financial instruments

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the Group, the Company considers these to be insurance arrangements and accounts for them as such. In this respect the Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and deposits repayable on demand. Bank overdrafts that are repayable on demand form part of the Group’s cash management and are included as a component of cash and cash equivalents for the purpose only of the Statement of Cash Flows.

Treasury shares

NCC Group plc shares held by the Group are deducted from equity as “treasury shares” and are recognised at cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and the original cost being taken to reserves. No gain or loss is recognised in the Income Statement on the purchase, sale, issue or cancellation of equity shares.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of Financial Statements requires management to exercise judgement in applying the Group’s accounting policies. Different judgements would have the potential to change the reported outcome of an accounting transaction or Statement of Financial Position. It also requires the use of estimates that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis, with changes recognised in the period in which the estimates are revised and in any future periods affected. The table below shows those areas of critical accounting judgements and estimates that the Directors consider material and that could reasonably change significantly in the next year.

Accounting area	Accounting judgement?	Accounting estimate?
Impairment of goodwill	No	Yes
Valuation of separately identifiable intangible assets	No	Yes
(prior year)

2.1 Critical accounting judgements

No critical accounting judgements have been made in applying accounting policies that have the most significant effects on the amounts recognised in the consolidated Financial Statements.

2.2 Key sources of estimation uncertainty

Information about estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying values of assets and liabilities within the next financial year is addressed below. While every effort is made to ensure that such estimates and assumptions are reasonable, by their nature they are uncertain, and as such changes in estimates and assumptions may have a material impact. Estimates and assumptions used in the preparation of the Financial Statements are continually reviewed and revised as necessary at each reporting date. The Directors have considered the impact of climate change on the following estimation uncertainties. Due to nature of the climate change impact on the Group, no material impact has been identified.

Financial statements

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 173

2 Critical accounting judgements and key sources of estimation uncertainty continued

2.2 Key sources of estimation uncertainty continued

Impairment of goodwill

The Group has significant balances relating to goodwill at 31 May 2023 as a result of acquisitions of businesses in previous years. The carrying value of goodwill at 31 May 2023 is £255.8m (2022: £266.1m). Goodwill balances are tested annually for impairment.# Notes to the Financial Statements continued at 31 May 2023

3 Alternative Performance Measures (APMs) and adjusting items

The consolidated Financial Statements include APMs as well as statutory measures. These APMs used by the Group are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, Generally Accepted Accounting Practice (GAAP) measures. All APMs relate to the current year results and comparative periods where provided. This presentation is also consistent with the way that financial performance is measured by management and reported to the Board, and the basis of financial measures for senior management’s compensation schemes, and provides supplementary information that assists the user in understanding the financial performance, position and trends of the Group. At all times, the Group aims to ensure that the Annual Report and Accounts gives a fair, balanced and understandable view of the Group’s performance, cash flows and financial position.

IAS 1 ‘Presentation of Financial Statements’ requires the separate presentation of items that are material in nature or scale in order to allow the user of the accounts to understand underlying business performance. We believe these APMs provide readers with important additional information on our business and this information is relevant for use by investors, securities analysts and other interested parties as supplemental measures of future potential performance. However, since statutory measures can differ significantly from the APMs and may be assessed differently by the reader we encourage you to consider these figures together with statutory reporting measures noted. Specifically, we would note that APMs may not be comparable across different companies and that certain profit related APMs may exclude recurring business transactions (e.g. acquisition related costs and certain share-based payment charges) that impact financial performance and cash flows.

As the Group manages internally its performance at an Adjusted operating profit level (before Individually Significant Items, amortisation of acquired intangibles and share-based payments), which management believes represents the underlying trading of the business. This information is still disclosed as an APM within this Annual Report. This APM is reconciled to statutory operating profit, together with the consequently Adjusted basic EPS (before amortisation of acquisition intangibles, share-based payments and Individually Significant Items and tax effect thereon) to statutory basic EPS.

The Group has the following APMs/non-statutory measures:

| APM | Closest equivalent IFRS measure | Adjustments to reconcile to IFRS measure | Note reference for reconciliation | Definition, purpose and considerations made by the Directors # 3 Alternative Performance Measures (APMs) and adjusting items

Net cash/(debt), when compared to available borrowing facilities, also gives an indication of available financial resources to fund potential future business investment decisions and/or potential acquisitions.

Cash flow measure: Cash conversion ratio

Ratio % of net cash flow from operating activities before interest and tax divided by operating profit
Ratio % of net cash flow from operating activities before interest and tax divided by EBITDA

The cash conversion ratio is a measure of how effectively operating profit is converted into cash and effectively highlights both non-cash accounting items within operating profit and also movements in working capital. It is calculated as net cash flow from operating activities before interest and taxation (as disclosed on the face of the Cash Flow Statement) divided by EBITDA for continuing activities. The cash conversion ratio is a measure widely used by various stakeholders and hence is disclosed to show the quality of cash generation and also to allow comparison to other similar companies.

The above APMs are consistent with those reported for the year ended 31 May 2022, except for the removal of the Group revenue and Software Resilience revenue excluding IPM acquisition, which have been removed now that the Group has comparable data following the acquisition in June 2021.

Adjusted EBITDA and Adjusted operating profit

The calculation of Adjusted EBITDA and Adjusted operating profit from continuing operations is set out below:

	2023 £m	2022 £m
Operating profit	1.9	34.7
Depreciation of property, plant and equipment	4.5	3.9
Depreciation of right-of-use assets	5.7	5.4
Amortisation of customer contracts and relationships (acquired intangibles)	10.0	8.6
Amortisation of software and development costs	2.4	1.8
Individually Significant Items (Note 5)	14.7	0.9
Share-based payments charge (Note 26)	2.2	3.9
Adjusted EBITDA	41.4	59.2
Depreciation and amortisation (excluding amortisation charged on acquired intangibles)	(12.6)	(11.1)
Adjusted operating profit	28.8	48.1

Net debt excluding lease liabilities and net debt

The calculation of net debt excluding lease liabilities and net debt is set out below:

	2023 £m	2022 £m
Cash and cash equivalents (Note 24)	34.1	73.2
Bank overdraft (Note 24)	(1.8)	—
Borrowings (Note 24)	(81.9)	(125.6)
Net debt excluding lease liabilities	(49.6)	(52.4)
Lease liabilities	(30.0)	(32.6)
Net debt	(79.6)	(85.0)

Cash conversion ratio

The calculation of the cash conversion ratio is set out below:

	2023 £m	2022 £m
Cash generated from operating activities before interest and taxation (A)	42.6	60.3
Adjusted EBITDA (B)	41.4	59.2
Cash conversion ratio (%) (A)/(B)	102.9%	101.9%

Constant currency revenue

The following tables show how constant currency revenue growth has been calculated and reconciled to statutory actual rate growth.

Group Revenue:

	Revenue 2023 £m	Revenue 2022 £m	% change at actual rates	Revenue 2023 £m	Constant currency revenue 2022 £m	% change at constant currency
Total revenue	335.1	314.8	6.4%	335.1	330.3	1.5%

Unaudited proforma total revenue

Following the acquisition of IPM in the prior period, goodwill and intangible assets were recognised amounting to £68.6m and £92.6m respectively. Management was required to recognise all assets and liabilities at fair value, giving rise to a fair value adjustment on the level of deferred revenue acquired of £12.1m. This had resulted in a downward adjustment to the book value of IPM’s deferred revenues reflecting the fair value of service still to be delivered. If the fair value adjustment had not applied, revenue would be £4.4m higher for the 12 months ended 31 May 2022. On this basis, management has set out below unaudited proforma information to show the consequential impact on the Group results for the year ended 31 May 2023. Unaudited proforma total revenue is not a statutory measure.

	Revenue 2023 £m	Revenue 2022 * £m	% change at actual rates	Revenue 2023 £m	Constant currency revenue 2022 * £m	% change at constant currency
Total revenue	335.1	314.8	6.4%	335.1	330.3	1.5%
Software Resilience revenue adjustment	—	4.4	n/a	—	4.8	n/a
Unaudited proforma total revenue	335.1	319.2	5.0%	335.1	335.1	—

2022 revenue is not a statutory measure and includes the Software Resilience revenue adjustment.

Cyber Security 2 revenue analysis – by originating country:

	Revenue 2023 £m	Revenue 2022 £m	% change at actual rates	Revenue 2023 £m	Constant currency revenue 2022 £m	% change at constant currency
UK and APAC	118.4	114.6	3.3%	118.4	115.0	3.0%
North America	99.3	94.1	5.5%	99.3	104.4	(4.9%)
Europe	53.1	49.8	6.6%	53.1	51.1	3.9%
Total Cyber Security 2 revenue	270.8	258.5	4.8%	270.8	270.5	0.1%

Revenue H1 2023

	Revenue H1 2023 £m	Revenue H1 2022 £m	% change at actual rates	Revenue H1 2023 £m	Constant currency revenue H1 2022 £m	% change at constant currency
UK and APAC	61.6	54.6	12.8%	61.6	55.0	12.0%
North America	59.2	44.0	34.5%	59.2	51.0	16.1%
Europe	24.2	24.6	(1.6%)	24.2	24.9	(2.8%)
Total Cyber Security 2 revenue	145.0	123.2	17.7%	145.0	130.9	10.8%

Revenue H2 2023

	Revenue H2 2023 £m	Revenue H2 2022 £m	% change at actual rates	Revenue H2 2023 £m	Constant currency revenue H2 2022 £m	% change at constant currency
UK and APAC	56.8	60.0	(5.3%)	56.8	60.0	(5.3%)
North America	40.1	50.1	(20.0%)	40.1	53.4	(24.9%)
Europe	28.9	25.2	14.7%	28.9	26.2	10.3%
Total Cyber Security 2 revenue	125.8	135.3	(7.0%)	125.8	139.6	(9.9%)

Cyber Security 1 revenue analysed by type of service/product line:

	Revenue 2023 £m	Restated* Revenue 2022 £m	% change at actual rates	Revenue 2023 £m	Restated* Constant currency revenue 2022 £m	% change at constant currency
Global Professional Services (GPS)	199.3	195.4	2.0%	199.3	205.6	(3.1%)
Global Managed Services (GMS)	67.8	58.6	15.7%	67.8	60.3	12.4%
Product sales (own and third party)	3.7	4.5	(17.8%)	3.7	4.6	(19.6%)
Total Cyber Security 2 revenue	270.8	258.5	4.8%	270.8	270.5	0.1%

Restated to present revenue by category to be consistent with amounts reported to management. Revenue of £6.4m has been represented within GPS rather than product sales.

Revenue H1 2023

	Revenue H1 2023 £m	Revenue H1 2022 £m	% change at actual rates	Revenue H1 2023 £m	Constant currency revenue H1 2022 £m	% change at constant currency
Global Professional Services (GPS)	111.1	93.6	18.7%	111.1	100.6	10.4%
Global Managed Services (GMS)	32.2	28.4	13.4%	32.2	29.1	10.7%
Product sales (own and third party)	1.7	1.2	41.7%	1.7	1.2	41.7%
Total Cyber Security 2 revenue	145.0	123.2	17.7%	145.0	130.9	10.8%

Revenue H2 2023

	Revenue H2 2023 £m	Revenue H2 2022 £m	% change at actual rates	Revenue H2 2023 £m	Constant currency revenue H2 2022 £m	% change at constant currency
Global Professional Services (GPS)	88.2	101.8	(13.4%)	88.2	105.0	(16.0%)
Global Managed Services (GMS)	35.6	30.2	17.9%	35.6	31.2	14.1%
Product sales (own and third party)	2.0	3.3	(39.4%)	2.0	3.4	(41.2%)
Total Cyber Security 2 revenue	125.8	135.3	(7.0%)	125.8	139.6	(9.9%)

Software Resilience revenue analysis – by originating country:

	Revenue 2023 £m	Revenue 2022 £m	% change at actual rates	Revenue 2023 £m	Constant currency revenue 2022 £m	% change at constant currency
UK	25.8	25.4	1.6%	25.8	25.4	1.6%
North America	34.5	26.8	28.7%	34.5	30.2	14.2%
Europe	4.0	4.1	(2.4%)	4.0	4.2	(4.8%)
Total Software Resilience revenue	64.3	56.3	14.2%	64.3	59.8	7.5%

	Revenue H1 2023 £m	Revenue H1 2022 £m	% change at actual rates	Revenue H1 2023 £m	Constant currency revenue H1 2022 £m	% change at constant currency
UK	12.3	12.6	(2.4%)	12.3	12.7	(3.1%)
North America	17.3	12.3	40.7%	17.3	14.7	17.7%
Europe	2.0	2.0	—	2.0	2.0	—
Total Software Resilience revenue	31.6	26.9	17.5%	31.6	29.4	7.5%

	Revenue H2 2023 £m	Revenue H2 2022 £m	% change at actual rates	Revenue H2 2023 £m	Constant currency revenue H2 2022 £m	% change at constant currency
UK	13.5	12.8	5.5%	13.5	12.7	6.3%
North America	17.2	14.5	18.6%	17.2	15.5	11.0%
Europe	2.0	2.1	(4.8%)	2.0	2.2	(9.1%)
Total Software Resilience revenue	32.7	29.4	11.2%	32.7	30.4	7.6%

Software Resilience revenues analysed by service line:

	Revenue 2023 £m	Revenue 2022 £m	% change at actual rates	Revenue 2023 £m	Constant currency revenue 2022 £m	% change at constant currency
Software Resilience contracts	42.8	38.1	12.3%	42.8	40.4	5.9%
Verification services	21.5	18.2	18.1%	21.5	19.4	10.8%
Total Software Resilience revenue	64.3	56.3	14.2%	64.3	59.8	7.5%

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 179

3 Alternative Performance Measures (APMs) and adjusting items continued

Constant currency revenue continued

Revenue H1 2023 £m	Revenue H1 2022 £m	% change at actual rates	Revenue H1 2023 £m	Constant currency revenue H1 2022 £m	% change at constant currency
Software Resilience contracts	21.3	18.7	13.9%	21.3	20.6
Verification services	10.3	8.2	25.6%	10.3	8.8
Total Software Resilience revenue	31.6	26.9	17.5%	31.6	29.4

Revenue H2 2023 £m	Revenue H2 2022 £m	% change at actual rates	Revenue H2 2023 £m	Constant currency revenue H2 2022 £m	% change at constant currency
Software Resilience contracts	21.5	19.4	10.8%	21.5	19.8
Verification services	11.2	10.0	12.0%	11.2	10.6
Total Software Resilience revenue	32.7	29.4	11.2%	32.7	30.4

Software Resilience unaudited proforma total revenue

Following the acquisition of IPM in the prior period, goodwill and intangible assets were recognised amounting to £68.6m and £92.6m respectively. Management was required to recognise all assets and liabilities at fair value, giving rise to a fair value adjustment on the level of deferred revenue acquired of £12.1m. This had resulted in a downward adjustment to the book value of IPM’s deferred revenues reflecting the fair value of service still to be delivered. If the fair value adjustment had not applied, revenue would be £4.4m higher for the 12 months ended 31 May 2022. On this basis, management has set out below unaudited proforma information to show the consequential impact on the Group results for the year ended 31 May 2023. Software Resilience unaudited proforma total revenue is not a statutory measure.

Revenue 2023 £m	Revenue 2022 1 £m	% change at actual rates	Revenue 2023 £m	Constant currency revenue 2022 1 £m	% change at constant currency
Software Resilience contracts	42.8	42.3	1.2%	42.8	45.0
Verification services	21.5	18.4	16.8%	21.5	19.6
Software Resilience unaudited proforma total revenue	64.3	60.7	5.9%	64.3	64.6

1 2022 revenue is not a statutory measure and includes the Software Resilience revenue adjustment.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023180

Notes to the Financial Statements continued at 31 May 2023

4 Segmental information

The Group is organised into the following two (2022: two) reportable segments: Cyber Security 2 and Software Resilience. The two reporting segments provide distinct types of service. Within each of the reporting segments the operating segments provide a homogeneous group of services. The operating segments are grouped into the reporting segments on the basis of how they are reported to the Chief Operating Decision Maker (CODM) for the purposes of IFRS 8 ‘Operating Segments’, which is considered to be the Board of Directors of NCC Group plc. Operating segments are aggregated into the two reportable segments based on the types and delivery methods of services they provide, common management structures, and their relatively homogeneous commercial and strategic market environments. Performance is measured based on reporting segment profit, which comprises Adjusted operating profit 1 and adjusting items are not allocated to business segments. Interest and tax are also not allocated to business segments and there are no intra-segment sales.

Segmental analysis 2023

	Cyber Security 2 £m	Software Resilience £m	Central and head office £m	Group £m
Revenue	270.8	64.3	—	335.1
Cost of sales	(184.7)	(18.4)	—	(203.1)
Gross profit	86.1	45.9	—	132.0
Gross margin %	31.8%	71.4%	—	39.4%
General administrative expenses allocated	(70.7)	(14.7)	(5.2)	(90.6)
Adjusted EBITDA 1	15.4	31.2	(5.2)	41.4
Depreciation and amortisation	(8.5)	(0.6)	(3.5)	(12.6)
Adjusted operating profit 1	6.9	30.6	(8.7)	28.8
Individually Significant Items (Note 5)	(12.3)	(2.4)	—	(14.7)
Amortisation of acquired intangibles	(1.2)	(5.8)	(3.0)	(10.0)
Share-based payments	(1.6)	(0.1)	(0.5)	(2.2)
Operating profit	(8.2)	22.3	(12.2)	1.9
Finance costs	(6.2)
Loss before taxation	(4.3)
Taxation	(0.3)
Loss for the year	(4.6)

Segmental analysis 2022

	Cyber Security 2 £m	Software Resilience £m	Central and head office £m	Group £m
Revenue	258.5	56.3	—	314.8
Cost of sales	(166.2)	(16.0)	—	(182.2)
Gross profit	92.3	40.3	—	132.6
Gross margin %	35.7%	71.6%	—	42.1%
General administrative expenses allocated	(53.2)	(17.5)	(2.7)	(73.4)
Adjusted EBITDA 1	39.1	22.8	(2.7)	59.2
Depreciation and amortisation	(7.2)	(0.8)	(3.1)	(11.1)
Adjusted operating profit 1	31.9	22.0	(5.8)	48.1
Individually Significant Items (Note 5)	—	(0.9)	—	(0.9)
Amortisation of acquired intangibles	(0.9)	(4.8)	(2.9)	(8.6)
Share-based payments	(2.1)	(0.3)	(1.5)	(3.9)
Operating profit	28.9	16.0	(10.2)	34.7
Finance costs	(3.7)
Profit/(loss) before taxation	31.0
Taxation	(8.0)
Profit for the year	23.0

NCC Group plc — Annual report and accounts for the year ended 31 May 2023181

4 Segmental information continued

Segmental analysis 2023

Segmental analysis 2022

The Central and head office cost centre is not considered to be a separate operating segment nor part of any other operating segment as it does not generate any revenues. Included within Central and head office are assets and liabilities not specifically allocated to the reporting segments and include investments, head office tangible and intangible assets, deferred tax assets and liabilities, right-of-use assets and associated lease liabilities, Parent Company cash balances, the RCF facility and certain provisions. Central and head office assets and liabilities are disclosed to allow a reconciliation back to the Group’s assets and liabilities.

The net book value of non-current assets (excluding deferred tax assets) is analysed geographically as follows:

	2023 £m	2022 (restated) * £m
UK	164.6	171.4
APAC	2.4	2.8
North America	222.6	234.4
Europe	8.5	11.3
Total non-current assets	398.1	419.9

Restated to reflect non-current assets (excluding deferred tax assets) previously stated at £417.4m (which included deferred tax assets) and represented to present APAC non-current assets of £2.8m separately from the UK segment. UK and APAC previously presented £175.6m non-current assets, this is now presented as APAC £2.8m and the UK restated to £171.4m. North America previously presented £230.5m non-current assets, this has now been restated to £234.4m to reconcile with the closing balance sheet.

Revenue is disaggregated by primary geographical market, by category and by timing of revenue recognition as follows:

Revenue by originating country

	Cyber Security 2 £m	Software Resilience £m	2023 Total £m	Cyber Security 2 £m	Software Resilience £m	2022 Total £m
UK	106.6	25.8	132.4	103.9	25.4	129.3
APAC	11.8	—	11.8	10.7	—	10.7
North America	99.3	34.5	133.8	94.1	26.8	120.9
Europe	53.1	4.0	57.1	49.8	4.1	53.9
Total revenue	270.8	64.3	335.1	258.5	56.3	314.8

Revenue by category

	Cyber Security 2 £m	Software Resilience £m	2023 Total £m	Restated Cyber Security* 2 £m	Software Resilience £m	2022 Total £m
Services	267.1	64.3	331.4	254.0	56.3	310.3
Products	3.7	—	3.7	4.5	—	4.5
Total revenue	270.8	64.3	335.1	258.5	56.3	314.8

Restated to present revenue by category to be consistent with amounts reported to management. Revenue of £6.4m has been restated within services rather than product sales.
2 Formerly Assurance.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023182

Notes to the Financial Statements continued at 31 May 2023

4 Segmental information continued

Timing of revenue recognition

	Cyber Security 2 £m	Software Resilience £m	2023 Total £m	Restated Cyber Security 2, * £m	Software Resilience £m	2022 Total £m
Services and products transferred over time	252.9	42.8	295.7	242.4	37.6	280.0
Services and products transferred at a point in time	17.9	21.5	39.4	16.1	18.7	34.8
Total revenue	270.8	64.3	335.1	258.5	56.3	314.8

Restated to present revenue by category to be consistent with amounts reported to management. Revenue of £192.8m has restated within services and products transferred over time rather than within services and products transferred at a point in time in the Cyber Security 1 division consistent with the accounting policy applied.

There are no customer contracts in either 2023 or 2022 which account for more than 10% of segment revenue.

5 Individually Significant Items (ISI)

The Group separately identifies items as Individually Significant Items. Each of these is considered by the Directors to be sufficiently unusual in terms of nature or scale so as not to form part of the underlying performance of the business. They are therefore separately identified and excluded from adjusted results (as explained in Note 3).# 5 Individually Significant Items (ISI)

Reference	2023 £m	2022 £m
North America Cyber Security goodwill impairment a	9.8	—
Fundamental re-organisation costs b	4.2	—
Costs associated with strategic review of Software Resilience business c	3.0	—
NCC Group A/S goodwill impairment d	3.0	—
IPM Software Resilience business deferred income adjustment e	(0.6)	—
Profit on disposal of DDI business f	(4.7)	—
Costs directly attributable to the acquisition of IPM Software Resilience business g	—	0.9
Total ISIs	14.7	0.9

£2.7m of costs associated with the strategic review of the Software Resilience business and £0.8m of fundamental re-organisation costs (total £3.5m) have been accrued for at the year ended 31 May 2023, of which £0.3m are recognised as a redundancy provision. The remaining £3.7m of these costs have been paid as cash during the year ended 31 May 2023 (2022: £nil costs accrued and £0.9m paid as cash).

(a) North America Cyber Security 2 goodwill impairment
Following the annual impairment review of Goodwill, an impairment has been recognised amounting to £9.8m. For further details, please see note 12. Such costs meet the Group’s policy for ISIs as this is a significant one-off event.

(b) Fundamental re‑organisation costs
In order to implement the next chapter of the Group’s strategy to enhance future growth, certain strategic actions are required including reshaping the Group global delivery and operational model. This reshaping is considered a fundamental reorganisation and restructuring programme (meeting the Group’s policy for ISIs) that will span reporting periods and the total project size and nature are considered in totality. The programme commencement was accelerated following the Group experiencing specific market conditions that validated the rationale of the next chapter of the Group’s strategy. The programme has three phases as follows:
• Phase 1 (March–April 2023) – initial reduction in global delivery and operational headcount; c.7% reduction of the Group’s global headcount
• Phase 2 (June–September 2023) – a further reduction in global delivery, operational and corporate functions headcount prior to opening our off-shore operations and delivery centre in Manila
• Phase 3 (October 2023–May 2025) – finalisation of the Group’s operating model

Phases 2–3 are being implemented by the Group with the assistance of a third party to ensure the Group complete the fundamental reorganisation efficiently. Costs of £4.2m (2022: £nil) and cash outflow of £3.4m (2022: £nil) have been incurred in relation to the implementation of this re-organisation and are made up of severance costs, associated taxes and professional fees for advisory and legal services. It is expected that costs will be incurred for the years ending 31 May 2024 and 2025 and the Group will have to exercise judgement in assessing whether the restructuring items should be classified as ISI, this will involve taking into account the nature of the item, cause of occurrence and scale of the impact of those items on the reported performance, resultant benefits and after considering the original reorganisation programme principles and plans.

2 Formerly Assurance. Financial statements NCC Group plc — Annual report and accounts for the year ended 31 May 2023 183

5 Individually Significant Items (ISI) continued

(c) Costs associated with strategic review of Software Resilience business
During February 2023, the Group announced its ongoing strategic review of the Software Resilience business and of other core and non-core assets. During the year ended 31 May 2023, professional fees totalling £3.0m (2022: £nil) mainly in respect of advisory services have been incurred. Such costs meet the Group’s policy for ISIs as they have been incurred as part of the wider re-structuring/re-organisation activities that are ongoing within the Group. The Group has now stopped the strategic review of the Software Resilience business, which will be revisited by the Board when considered appropriate.

(d) NCC Group A/S goodwill impairment
On 1 June 2022, the Group made the decision to re-organise its Danish business (NCC Group A/S) which had previously been a part of the Europe Cyber Security¹ CGU. Following that re-organisation, the cash inflows associated with the Danish business are separately identifiable and therefore the carrying value of the CGU assets has been assessed separately for impairment at 31 May 2023. The charge of £3.0m (2022: £nil) represents the impairment of goodwill associated with the Danish business following completion of that review. Such profits meet the Group’s policy for ISIs as this is a significant one-off event.

(e) IPM Software Resilience business deferred income adjustment
This represents an adjustment to the opening deferred income balance in respect of the IPM acquisition in June 2021. During FY23, opening deferred income balances on verification tests totalling £0.6m have been identified for which the work has not been performed and the statute of limitations has now expired. As the period of hindsight for adjusting goodwill has now expired management has released these amounts to the income statement. Given the nature of this release which would typically have been adjusted to goodwill it is considered to meet the definition of an individually significant item and has been classified as such.

(f) Profit on disposal of DDI business
On 31 December 2022, the Group disposed of its DDI business for cash consideration of £5.8m. The profit of £4.7m (2022: £nil) is directly attributable to the disposal of the DDI business. Please see Note 34 for further details. Such profits meet the Group’s policy for ISIs as the proceeds represent a material profit on disposal.

(g) Costs directly attributable to the acquisition of the IPM Software Resilience business
These costs are directly attributable to the material acquisition of the IPM Software Resilience business during the year ended 31 May 2022 and are therefore considered to meet the Group’s policy for ISIs. The nature of the costs includes legal, accountancy, due diligence and other advisory services. The total costs amount to £8.5m, of which £nil has been charged to the Income Statement in the year ended 31 May 2023 (2022: £0.9m, 2021: £7.6m). Of the total costs of £8.5m incurred, the Group saw a cash outflow of £nil in the year ended 31 May 2023 (2022: £7.3m, 2021: £1.2m). The difference between the cash outflow and the costs charged to the Income Statement relates to £6.4m of costs relating to services performed in the year ended 31 May 2021 but for which the cash outflow did not occur until the year ended 31 May 2022 in line with supplier payment terms.

6 Expenses and auditor’s remuneration

	2023 £m	2022 £m
Loss/(profit) before taxation is stated after charging/(crediting):
Amounts receivable by auditor and its associates in respect of:
Audit of these Financial Statements	1.1	1.0
Audit of Financial Statements of subsidiaries pursuant to legislation	0.2	0.2
Total audit	1.3	1.2
Amortisation of development costs (Note 12)	1.2	0.9
Amortisation of software costs (Note 12)	1.2	0.9
Amortisation of acquired intangibles (Note 12)	10.0	8.6
Depreciation of property, plant and equipment (Note 13)	4.5	3.9
Depreciation of right-of-use assets (Note 14)	5.7	5.4
Impairment charge/(reversal) of right-of-use-assets	0.5	(0.1)
Impairment of software costs	0.6	—
Individually Significant Items (ISIs) (Note 5)	14.7	0.9
Credit losses recognised on financial assets (Note 17)	(1.5)	0.6
Cost of inventories recognised as an expense	0.6	1.0
Foreign exchange losses/(gains)	0.6	(0.6)
Lease rental costs charged:
– Hire of property, plant and equipment 3	—	0.1
Research and development UK tax credits	(0.5)	(1.0)
Profit on disposal of right-of-use assets	(0.7)	—

1 Formerly Assurance.
2 The only non-audit service provided by the auditor was for the interim review at 30 November 2021, for which the fee was £80,000. No interim review was performed in the year ended 31 May 2023.
3 The charge to the Income Statement in respect of lease rental costs relates entirely to short-term leases for which the Group has taken the exemption allowed from applying the principles of IFRS 16.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023184

Notes to the Financial Statements continued at 31 May 2023

7 Staff numbers and costs

Directors’ emoluments are disclosed in the Remuneration Committee Report. Total aggregate emoluments of the Directors in respect of 2023 were £2.3m (2022: £2.2m). Employer contributions to pensions for Executive Directors for qualifying periods were £nil (2022: £nil). The Company provided pension payments in lieu of pension contributions for three (2022: two) Executive Directors during the year ended 31 May 2023 amounting to £32,000 (2022: £44,000). The aggregate net value of share awards granted to the Directors in the period was £1.9m (2022: £1.4m). The net value has been calculated by reference to the closing mid-market price of the Company’s shares on the day before the date of grant. During the year, 98,598 (2022: 237,448) share options were exercised by Directors and their gain on exercise of share options was £13,463 (2022: £20,895).## 8 Finance costs

	2023 £m	2022 £m
Interest payable on bank loans and overdrafts	4.5	2.5
Unamortised underwriting fees associated with old revolving credit facility	0.6	—
Interest expense on lease liabilities	1.1	1.2
Finance costs	6.2	3.7

The above finance costs relate entirely to liabilities not at fair value through profit or loss.

Financial statements

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 185

9 Taxation

Recognised in the Income Statement

	2023 £m	2022 £m
Current tax expense
Current year	0.1	2.2
Adjustment to tax expense in respect of prior periods	(2.8)	0.2
Impact of prior year US R&D tax credits	(1.0)	(1.1)
Foreign tax	5.9	6.5
Total current tax	2.2	7.8
Deferred tax expense
Origination and reversal of temporary differences	(3.0)	(0.4)
Movement in tax rate	(0.2)	(0.1)
Derecognition of deductible timing differences	—	0.8
Impact of prior year US R&D tax credits	(0.4)	—
Adjustment to tax expense in respect of prior periods	1.7	(0.1)
Total deferred tax	(1.9)	0.2
Total tax expense	0.3	8.0

Reconciliation of effective tax rate

	2023 £m	2022 £m
(Loss)/profit before taxation	(4.3)	31.0
Current tax using the UK effective corporation tax rate of 20% (2022: 19%)	(0.9)	5.9
Effects of:
Items not deductible/(assessable) for tax purposes	2.6	0.5
Adjustment to tax charge in respect of prior periods	(1.1)	0.1
Impact of prior year US R&D tax credits	(1.4)	(1.1)
Impact of current year US R&D tax credits	(0.3)	(0.2)
Differences between overseas tax rates	1.0	1.7
Movements in temporary differences not recognised	0.6	1.2
Movement in tax rate	(0.2)	(0.1)
Total tax expense	0.3	8.0

Current and deferred tax recognised directly in equity was a debit of £0.1m (2022: debit £0.3m), which relates to tax on share based payments. A combined prior year adjustment of £(1.1)m (current tax: £(2.8)m; deferred tax: £1.7m) largely reflects an adjustment to the tax treatment of certain revenue and costs associated with the acquisition of the IPM business in FY22. The UK government introduced legislation in the Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25% with effect from 1 April 2023. The legislation was substantively enacted on 24 May 2021 and therefore UK deferred tax balances as at 31 May 2021, 31 May 2022 and 31 May 2023 are generally measured at a rate of 25%.

Tax uncertainties

The tax expense reported for the current year and prior year is affected by certain positions taken by management where there may be uncertainty. The most significant source of uncertainty arises from claims for US R&D tax credits relating to the current and previous periods. Uncertainty relates to the interpretation of US legislation applicable to periods where the statute of limitations has not expired. For the periods ended 31 May 2017 to 31 May 2023, the aggregate net current tax benefit taken to the Income Statement relating to US R&D tax credits is £5.6m (2022: £4.0m). As at 31 May 2023, the gross deferred tax asset relating to US R&D tax credits is £1.4m (2022: £0.5m) although due to uncertainty a partial provision of £0.8m (2022: £0.3m) has been made against this asset. The gross cumulative amount of US R&D tax credits amounts to £10.4m (2022: £9.3m) and the net cumulative amount is £6.2m (2022: £5.1m). The cumulative provision of £4.2m comprises a deferred tax element (£0.8m) relating to tax credits as yet unutilised against US tax and a current tax element (£3.4m) relating to utilised tax credits. The latter provision will unwind as the statute of limitation windows expire for claims made in respective periods. The provision relating to utilised tax credits of £3.4m is expected to unwind as follows: FY24: £1.2m, FY25: £1.0m, FY26: £0.4m and FY27: £0.8m.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 186
Notes to the Financial Statements continued at 31 May 2023

10 Dividends

	2023 £m	2022 £m
Dividends paid and recognised in the year	14.5	14.4
Dividends per share paid and recognised in the year	4.65p	4.65p
Dividends per share proposed but not recognised in the year	3.15p	3.15p

The proposed final dividend for the year ended 31 May 2023 of 3.15p per ordinary share (approximately £9.8m) was recommended by the Board on 11 September 2023 and will be paid on 8 December 2023, to shareholders on the register at the close of business on 10 November 2023. The ex-dividend date is 9 November 2023. The dividend will be recommended to shareholders at the AGM on 30 November 2023. The dividend has not been included as a liability as at 31 May 2023. The payment of this dividend will not have any tax consequences for the Group.

Dividend policy

Dividends are the way the Company makes distributions from the Company’s distributable reserves to shareholders. The Board decides the level of the dividend with each half-year reporting period (i.e. 30 November and 31 May). If an interim or final dividend is declared, the Company pays the dividend approximately eight weeks after the results announcement. A dividend is paid for each share, so the amount you receive depends on the number of shares you own. The Company currently continues to pay a dividend equal to that paid in the prior years as the Board is conscious of the need to invest in initiatives to support longer-term growth and service the debt profile following the recent acquisition.

11 Earnings per ordinary share

Earnings per ordinary share are shown on a statutory and an adjusted basis to assist in the understanding of the performance of the Group.

	2023 £m	2022 £m
Statutory earnings (A)	(4.6)	23.0

Number of shares m	Number of shares m
Weighted average number of shares in issue	311.1
Less: weighted average holdings by Group ESOT	(0.7)
Basic weighted average number of shares in issue (C)	310.4
Dilutive effect of share options	0.8
Diluted weighted average shares in issue (D)	311.2

For the purposes of calculating the dilutive effect of share options, the average market value is based on quoted market prices for the period during which the options are outstanding.

	2023 Pence	2022 Pence
Earnings per ordinary share
Basic (A/C)	(1.5)	7.4
Diluted (A/D)	(1.5)	7.4

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 187

11 Earnings per ordinary share continued

Adjusted basic EPS ¹ is reconciled as follows:

	2023 £m	2022 £m
Statutory earnings (A)	(4.6)	23.0
Amortisation of acquired intangibles	10.0	8.6
Share-based payments	2.2	3.9
Individually Significant Items (see Note 5)	14.7	0.9
Tax effect of above items	(3.4)	(2.9)
Adjusted earnings (B)	18.9	33.5

	2023 Pence	2022 Pence
Adjusted earnings per ordinary share
Basic (B/C)	6.1	10.8
Diluted (B/D)	6.1	10.8

12 Goodwill and intangible assets

	Goodwill £m	Software £m	Development costs £m	Customer contracts and relationships £m	Intangibles sub-total £m	Total £m
Cost:
At 1 June 2021	238.9	14.5	11.7	73.1	99.3	338.2
Additions	—	1.6	1.3	—	2.9	2.9
On acquisition	69.7	2.5	—	91.4	93.9	163.6
Effects of movements in exchange rates	13.5	0.1	(0.1)	12.3	12.3	25.8
At 31 May 2022	322.1	18.7	12.9	176.8	208.4	530.5
Additions	—	2.5	0.9	—	3.4	3.4
Disposals (see Note 34)	(1.0)	—	—	—	—	(1.0)
Effects of movements in exchange rates	3.5	—	—	2.4	2.4	5.9
At 31 May 2023	324.6	21.2	13.8	179.2	214.2	538.8
Accumulated amortisation and impairment:
At 1 June 2021	(56.0)	(11.8)	(9.0)	(57.5)	(78.3)	(134.3)
Charge for year	—	(0.9)	(0.9)	(8.6)	(10.4)	(10.4)
Effects of movements in exchange rates	—	—	0.1	(1.2)	(1.1)	(1.1)
At 31 May 2022	(56.0)	(12.7)	(9.8)	(67.3)	(89.8)	(145.8)
Charge for year	—	(1.2)	(1.2)	(10.0)	(12.4)	(12.4)
Impairment	(12.8)	(0.6)	—	—	(0.6)	(13.4)
Effects of movements in exchange rates	—	—	(0.1)	(0.4)	(0.5)	(0.5)
At 31 May 2023	(68.8)	(14.5)	(11.1)	(77.7)	(103.3)	(172.1)
Net book value:
At 31 May 2022	266.1	6.0	3.1	109.5	118.6	384.7
At 31 May 2023	255.8	6.7	2.7	101.5	110.9	366.7

Development costs are capitalised in accordance with IAS 38 development criteria. For this reason, these are not regarded as realised losses. The impairment of software of £0.6m relates to a specific asset under development which was no longer deemed to be economically viable and therefore development was ceased.

¹ Revenue growth at constant currency, Adjusted EBITDA, Adjusted operating profit, Adjusted EPS, cash conversion, net debt and net debt excluding lease liabilities are APMs and not IFRS measures. See Note 3 for an explanation of APMs and adjusting items.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 188
Notes to the Financial Statements continued at 31 May 2023

12 Goodwill and intangible assets continued

Cash generating units (CGUs)

Goodwill and intangible assets are allocated to CGUs in order to be assessed for potential impairment. CGUs are defined by accounting standards as the lowest level of asset groupings that generate separately identifiable cash inflows that are not dependent on other CGUs. On 1 June 2022, the Group made the decision to re-organise its Danish business (NCC Group A/S) which had previously been a part of the Europe Cyber Security ² CGU. Following that re-organisation, the cash inflows associated with the Danish business are separately identifiable and therefore the carrying value of the CGU assets have been assessed separately for impairment at 31 May 2023.# Notes to the Financial Statements continued at 31 May 2023

12 Goodwill and intangible assets

The IPM business was acquired on 1 June 2021, since this date the IPM business has been integrated into the wider North America Software Resilience CGU such that the cash inflows relating to this business are no longer separately identifiable. The CGUs and the allocation of goodwill to those CGUs are shown below:

Cash generating units	Goodwill 2023 £m	Goodwill 2022 £m
UK Software Resilience	22.9	22.9
North America Software Resilience	87.2	8.5
IPM Software Resilience	—	76.9
Europe Software Resilience	7.4	7.3
Total Software Resilience	117.5	115.6
UK and APAC Cyber Security 2	44.3	45.4
North America Cyber Security 2	31.6	39.9
Europe Cyber Security 2	62.4	65.2
NCC Group A/S	—	—
Total Cyber Security 2	138.3	150.5
Total Group	255.8	266.1

Impairment review

Goodwill is tested for impairment annually at the level of the CGU to which it is allocated. For the year ended 31 May 2022, the recoverable amount of all CGUs concerned was measured on a value in use basis (VIU), with the exception of the Europe Cyber Security 2 CGU and the IPM Software Resilience CGU, which were measured on a fair value less costs to sell (FVLCTS) basis. For the year ended 31 May 2023, the recoverable amount of all CGUs was measured on a fair value less costs to sell basis. Capitalised development and software costs are included in the CGU asset bases when performing the impairment review. Capitalised development projects and software intangible assets are also considered, on an asset-by-asset basis, for impairment where there are indicators of impairment. The Directors have considered the impact of climate change on this review, with no material impact identified.

Fair value less costs to sell

For the year ended 31 May 2023, the recoverable amount of all CGUs has been determined on a fair value less costs to sell basis for the purposes of the impairment review. The valuation under FVLCTS is expected to exceed the valuation under VIU because uncommitted restructurings and resulting operating efficiencies are not considered within in a VIU valuation in line with the requirements of IAS 36. The FVLCTS valuation has been calculated by assessing the value of each standalone CGU calculated using an Adjusted EBITDA¹ multiple based on estimated sustainable earnings adjusted for specific items where relevant. Estimated sustainable earnings has been determined taking into account past experience and includes expectations based on a market participant view of sustainable performance of the business based on market volatility and uncertainty as at 31 May 2023. The sustainable earnings input is a level 3 measurement; level 3 measurements are inputs which are normally unobservable to market participants.

The Group incurs certain overhead costs in respect of support services provided centrally to the CGUs. Such support services include Finance, Human Resources, Legal, Information Technology and additional central management support in respect of stewardship and governance. In calculating sustainable earnings these overhead costs have been allocated to the CGUs based on the extent to which each CGU has benefitted from the services provided. Commonly this is driven by time spent by the relevant central department in supporting the CGU, informed by headcount or where possible specific cost allocations have been made. During the year, this allocation has been refined to ensure the allocation is representative of the business operating model.

The Adjusted EBITDA¹ multiple used in the calculations is based on an independent third-party assessment of the implied enterprise value of each CGU based on a population of comparable companies as at 31 May 2023. The estimated cost to sell was based on other recent transactions that the Group has undertaken.

Financial statements
NCC Group plc — Annual report and accounts for the year ended 31 May 2023 189

12 Goodwill and intangible assets continued

Fair value less costs to sell continued

Impairment

During March 2023, the Group gave a trading update that market volatility had materially increased significantly impacting on Cyber Security² revenue and profitability, particularly in the North American technology sector. The key factors were:

buying decision delays and cancellations exacerbated by North America tech sector client layoffs.
turmoil in the Banking sector following the failure of Silicon Valley Bank further knocking market confidence leading to reduced appetite to spend on technology projects across sectors.
Interest rate increases in the US creating further inflationary challenges for clients.

The board has assessed the recoverable amount of the North America Cyber Security² CGU based on its FVLCTS at 31 May 2023 as described above. Based on that assessment, the carrying amount of this CGU exceeded its recoverable amount and therefore an impairment loss of £9.8m has been recognised reducing the value of goodwill allocated to this CGU to £31.6m. This amount has been recognised as an Individually Significant Item (see Note 5). The impairment charge recognised has resulted in a reduction in the carrying value of goodwill only.

On 1 June 2022, the Group made the decision to re-organise its Danish business (NCC Group A/S) which had previously been a part of the Europe Cyber Security² CGU. Following this re-organisation, management has estimated the recoverable amount of the NCC Group A/S CGU based on its FVLCTS at 31 May 2023 as described above. Based on that estimate an impairment loss of £3.0m has been recognised reducing the value of Goodwill allocated to this CGU to £nil. This amount has been recognised as an individually significant item (see Note 5). The impairment charge recognised has resulted in a reduction in the carrying value of goodwill only.

The Board has assessed the recoverable amount of the Europe Cyber Security² CGU based on its FVLCTS at 31 May 2023 as described above. Based on that assessment the Board is satisfied that the recoverable amount exceeds the carrying value of assets allocated to that CGU. However, there are reasonably possible changes to certain key inputs that could give rise to an impairment. Please see sensitivity analysis below.

Sensitivity analysis

The key inputs used in the FVLCTS calculation are the Adjusted EBITDA¹ used and the multiple applied to that sustainable earnings. Specifically, the key assumptions to the Adjusted EBITDA¹ are considered to be the expected revenue and costs that have been used to calculate sustainable earnings. The table below shows the sensitivity of headroom to reasonably possible changes in the key assumptions, after the £9.8m impairment in the North America Cyber Security² CGU during FY23.

Sensitivities: impact on carrying value	CGU	Headroom £m	Decrease in revenue of 10%³ £m	Increase in all costs of 5% £m
	North America Cyber Security 2,4	—	(21.7)	(26.5)
	Europe Cyber Security 2	13.4	(9.9)	(14.3)

If revenue included in sustainable earnings for North America Cyber Security¹ increased by 5%, while holding the gross margin percentage at a fixed rate then there would be no impairment associated with this CGU. With respect to the NCC Group A/S CGU, there is no reasonably possible scenario that would support a carrying value of goodwill greater than £nil. No other reasonably possibly changes in key inputs including the multiple could give rise to an impairment or further material impairment to any CGUs. In the prior year, for the Europe Cyber Security¹ CGU and the IPM Software Resilience CGU there were no reasonably possible change in key inputs that could give rise to an impairment to any CGUs.

Value in use (for the year ended 31 May 2022 only)

VIU represents the present value of the future cash flows that are expected to be generated by the CGU to which the goodwill is allocated. VIU calculations are an area of management estimation. These calculations require the use of estimates (inputs), specifically: pre-tax cash flow projections; long-term growth rates; and a pre-tax discount rate. Further detail in relation to these assumptions used in the Group’s goodwill annual impairment review is as follows:

NCC Group plc — Annual report and accounts for the year ended 31 May 2023190

12 Goodwill and intangible assets continued

Pre‑tax cash flow projections

Pre-tax cash flow projections are based on the Group’s budget for the forthcoming financial year and longer-term three year strategic plans to 2025. The budget and three year strategic plan are compiled by the business unit management teams using a detailed, bottom-up process with respect to revenue, margin and overheads, taking into account factors specific to that business unit as well as wider economic factors such as industry growth expectations and the impact of Covid-19 or the Ukraine conflict. The Group’s revenue forecasts are developed using the most reliable data available, such as the size of the existing contract base and details of confirmed orders, as well as assumptions over key operational inputs to underpin the forecast for each revenue stream.# Financial statements

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 191

12 Goodwill and intangible assets continued

The combined effect of these individual assumptions on the overall growth rate assumed for each area of the business is then compared to management’s experience of growth and the industry’s expected growth rate. For cost forecasts, the majority of which are people related, headcount changes are forecast for delivery and sales staff in order that there are sufficient resources to support the forecasted required revenue delivery capacity as well as to deliver against sales targets, while also factoring in payroll inflation expectations. Overhead costs are also forecast using a bottom-up process. Forecasts go through a detailed review process and are subject to challenge at each stage of review, including by the Executive Committee. Ultimately the forecasts are approved by the Board. Assumptions have then been applied for expected revenue, margin growth, overheads and Adjusted EBITDA ¹ for the subsequent two years from the end of 2023. Adjusted EBITDA ¹ is considered a proxy for operating cash flow before changes in working capital. Pre-tax cash flow projections also include assumptions on working capital and capital expenditure requirements for each CGU. These assumptions are based on management’s experience of growth and knowledge of the industry sectors, markets and the Group’s internal opportunities for growth and margin enhancement. The projections beyond five years into perpetuity use an estimated long-term growth rate. Management has taken into account the impact of Covid-19 in formulating the above assumptions, and the underlying uncertainty of Covid-19 has been reflected in the assumptions underpinning the cash flow forecasts for each CGU rather than the pre-tax discount rates used in the impairment test. Forecast working capital and capital expenditure included within the pre-tax cash flow projections are based on management’s expectations of future expenditure required to support the Group and current run rate requirements. The revenue % growth for the Cyber Security 2 CGU is considered by management to be appropriate for the specific industry in which the CGU operates. Management has considered available external market data in determining the revenue growth rates over the five year forecast period.

Long‑term growth rates

To forecast growth beyond the detailed cash flows into perpetuity, a long-term average growth rate ranging between 1.5% and 2.5% for the year ended 31 May 2022 was used based on the specific geography of the CGU, as shown in the table below. This range represents management’s best estimate of a long-term annual growth rate aligned to an assessment of long-term GDP growth rates. A higher sector-specific growth rate would be a valid alternative estimate. A different set of assumptions may be more appropriate in future years dependent on changes in the macro-economic environment. These rates are not greater than the published International Monetary Fund average growth rates in gross domestic product for the next five year period in each relevant territory in which the CGUs operate.

Growth rate (%) 2023	Growth rate (%) 2022
n/a	2.2
UK Software Resilience
n/a	2.5
North America Software Resilience
n/a	1.5
Europe Software Resilience
n/a	2.2
UK and APAC Cyber Security 2
n/a	2.5
North America Cyber Security 2

Pre‑tax discount rates

Discount rates can change relatively quickly for reasons both inside and outside of management’s control. Those outside management’s direct control or influence include changes in the Group’s Beta, changes in risk free rates of return and changes in Equity Risk Premia. The discount rates are determined using a capital asset pricing model and reflect current market interest rates, relevant equity and size risk premiums and the risks specific to the CGU concerned. On this basis, specific discount rates are used for each CGU in the VIU calculation, and the rates reflect management’s assessment on the level of relative risk in each respective CGU. The table below summarises the pre-tax discount rates used for each CGU:

Pre-tax discount rate (%) 2023	Pre-tax discount rate (%) 2022
n/a	13.5
UK Software Resilience
n/a	14.4
North America Software Resilience
n/a	12.5
Europe Software Resilience
n/a	13.5
UK and APAC Cyber Security 2
n/a	14.4
North America Cyber Security 2

² Formerly Assurance.

Sensitivity analysis (for the year ended 31 May 2022 only)

Sensitivity analysis has been performed in respect of certain VIU scenarios where management considers a reasonably possible change in key assumptions could occur. The outcome of applying sensitivity analysis in respect of the above inputs indicated that there is no reasonably possible scenario in which the carrying value of goodwill would be considered impaired.

13 Property, plant and equipment

	Computer equipment £m	Fixtures, fittings and equipment £m	Motor vehicles £m	Total £m
Cost
At 1 June 2021	20.8	17.3	0.1	38.2
Additions	3.7	1.5	—	5.2
Movement in foreign exchange rates	0.1	0.3	—	0.4
At 31 May 2022	24.6	19.1	0.1	43.8
Additions	2.7	1.2	—	3.9
Disposals	—	—	(0.1)	(0.1)
Movement in foreign exchange rates	0.2	0.1	—	0.3
At 31 May 2023	27.5	20.4	—	47.9
Depreciation
At 1 June 2021	(17.5)	(9.1)	(0.1)	(26.7)
Charge for year	(2.7)	(1.2)	—	(3.9)
Movement in foreign exchange rates	—	(0.3)	—	(0.3)
At 31 May 2022	(20.2)	(10.6)	(0.1)	(30.9)
Charge for year	(2.7)	(1.8)	—	(4.5)
On disposals	—	—	0.1	0.1
Movement in foreign exchange rates	(0.1)	—	—	(0.1)
At 31 May 2023	(23.0)	(12.4)	—	(35.4)
Net book value
At 31 May 2022	4.4	8.5	—	12.9
At 31 May 2023	4.5	8.0	—	12.5

NCC Group plc — Annual report and accounts for the year ended 31 May 2023192
Notes to the Financial Statements continued at 31 May 2023

14 Right‑of‑use assets

	Land and buildings £m	Motor vehicles £m	Total £m
Cost:
At 1 June 2021	33.8	3.0	36.8
Additions	1.9	1.6	3.5
At 31 May 2022	35.7	4.6	40.3
Additions	2.9	1.4	4.3
Disposals	(1.8)	—	(1.8)
Impairment	(0.5)	—	(0.5)
At 31 May 2023	36.3	6.0	42.3
Depreciation:
At 1 June 2021	(10.8)	(2.2)	(13.0)
Charge for year	(4.2)	(1.2)	(5.4)
Reversal of impairment	0.1	0.0	0.1
At 31 May 2022	(14.9)	(3.4)	(18.3)
Charge for year	(4.4)	(1.3)	(5.7)
Disposals	0.3	—	0.3
At 31 May 2023	(19.0)	(4.7)	(23.7)
Net book value:
At 31 May 2022	20.8	1.2	22.0
At 31 May 2023	17.3	1.3	18.6

The Directors have considered the impact of climate change on right-of-use assets with no material impact identified.

15 Investments

	Group 2023 £m	Group 2022 £m
Interest in unlisted shares	0.3	0.3

The investment in unlisted shares relates to a 3.35% ordinary shareholding in an unlisted company acquired as part of the Accumuli acquisition. The investment’s carrying value at acquisition date was considered appropriate to use as the fair value. The Directors consider there has been no change in the year. An assessment of the investment did not identify any indications of impairment and, accordingly, no indicator-based impairment testing has been undertaken. The Group receives annual dividends from the investment; the trading performance and the net assets reported are strong and profitable.

16 Inventory

	Group 2023 £m	Group 2022 £m
Goods for resale	0.8	0.9

The Group holds stock of certain critical components for key customers in relation to our own product sales (as opposed to third party products). The carrying value of inventory is expected to be recovered or settled within one year. There have been no write-downs of inventory in the year (2022: £nil). The Directors have considered the impact of climate change on inventory, with no material impact identified.

Financial statements NCC Group plc — Annual report and accounts for the year ended 31 May 2023 193

17 Trade and other receivables

	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Current
Trade receivables	26.7	40.6	—	—
Prepayments	10.5	11.8	—	—
Contract costs (see Note 23)	1.7	1.1	—	—
Other receivables	2.0	1.2	—	—
Contract assets – accrued income (see Note 23)	17.2	23.0	—	—
Non-current
Amounts owed by Group undertakings	—	—	23.2	32.9
Total	58.1	77.7	23.2	32.9

Disclosed as follows:
| Current assets | 58.1 | 77.7 | — | — |
| Non-current assets | — | — | 23.2 | 32.9 |
| 58.1 | 77.7 | 23.2 | 32.9 |

The carrying value of trade and other receivables classified at amortised cost approximates fair value. No credit losses have been recognised in respect of amounts owed by Group undertakings (Parent Company only) in the year (2022: £nil). Amounts owed by Group undertakings in the Parent Company Balance Sheet have been disclosed as repayable after more than one year. Although these are repayable on demand, the disclosure as non-current is based on management’s expectation of the timing of repayment.

The ageing of trade receivables, other receivables and contract assets at the end of the reporting period was:

	Group Gross 2023 £m	Group Expected credit losses 2023 £m	Group Net 2023 £m	Group Gross 2022 £m	Group Expected credit losses 2022 £m	Group Net 2022 £m
Trade receivables:
Not past due	15.6	(0.1)	15.5	28.0	(0.1)	27.9
Past due 0–30 days	6.8	—	6.8	7.7	—	7.7
Past due 31–90 days	4.1	—	4.1	4.6	(0.1)	4.5
Past due more than 90 days	2.2	(1.9)	0.3	3.8	(3.3)	0.5
Other receivables:
Not past due	2.0	—	2.0	1.2	—	1.2
Contract assets:
Not past due	17.4	(0.2)	17.2	23.2	(0.2)	23.0
Total	48.1	(2.2)	45.9	68.5	(3.7)	64.8

The Company had no trade receivables (2022: £nil). The standard period for credit sales varies from 30 days to 60 days. The Group assesses the creditworthiness of all trade debts on an ongoing basis providing for expected credit losses in line with IFRS 9.# Notes to the Financial Statements continued at 31 May 2023

18 Deferred tax assets and liabilities (Group)

Deferred tax assets and liabilities on the Consolidated Statement of Financial Position are offset in accordance with IAS 12. A summary of this, offset with significant jurisdictions, is shown below:

Asset/(liability)	UK £m	US £m	Netherlands £m	Denmark £m	Total £m
2023
Plant and equipment	0.2	(0.3)	0.3	—	0.2
Short-term temporary differences	0.2	8.9	—	—	9.1
IFRS 16 assets/(liabilities)	0.3	0.2	—	—	0.5
Intangible assets	(1.4)	(7.6)	(1.7)	—	(10.7)
Share-based payments	0.3	0.2	—	—	0.5
Tax losses	1.7	0.2	—	—	1.9
Deferred tax asset/(liability)	1.3	1.6	(1.4)	—	1.5

Analysed as follows:
Non-current assets	1.3	1.6	—	—	2.9
Non-current liabilities	—	—	(1.4)	—	(1.4)

2022
Plant and equipment	0.3	(0.4)	0.3	—	0.2
Short-term temporary differences	0.2	6.2	—	—	6.4
IFRS 16 assets/(liabilities)	0.3	0.2	—	—	0.5
Intangible assets	(1.8)	(5.2)	(1.8)	—	(8.8)
Share-based payments	0.9	0.6	—	—	1.5
Deferred tax (liability)/asset	(0.1)	1.4	(1.5)	—	(0.2)

Analysed as follows:
Non-current assets	—	1.4	—	—	1.4
Non-current liabilities	(0.1)	—	(1.5)	—	(1.6)

Movement in deferred tax during the year:

	1 June 2022 £m	Recognised in income statement £m	Exchange differences £m	Recognised in equity £m	Acquisition £m	31 May 2023 £m
Plant and equipment	0.2	—	—	—	—	0.2
Short-term temporary differences	6.4	2.7	—	—	—	9.1
IFRS 16 assets/liabilities	0.5	—	—	—	—	0.5
Intangible assets	(8.8)	(1.8)	(0.1)	—	—	(10.7)
Share-based payments	1.5	(0.9)	—	(0.1)	—	0.5
Tax losses	—	1.9	—	—	—	1.9
Total	(0.2)	1.9	(0.1)	(0.1)	—	1.5

	1 June 2021 £m	Recognised in income statement £m	Exchange differences £m	Recognised in equity £m	Acquisition £m	31 May 2022 £m
Plant and equipment	0.9	(0.5)	(0.2)	—	—	0.2
Short-term temporary differences	4.8	0.9	0.7	—	—	6.4
IFRS 16 assets/liabilities	0.5	—	—	—	—	0.5
Intangible assets	(7.5)	(0.3)	(0.3)	—	(0.7)	(8.8)
Share-based payments	1.6	0.2	0.1	(0.4)	—	1.5
Tax losses	0.5	(0.5)	—	—	—	—
Total	0.8	(0.2)	0.3	(0.4)	(0.7)	(0.2)

In the year ended 31 May 2023, the Group has recognised a deferred tax asset in relation to tax losses of £1.9m as management considers it probable that future taxable profits will be available against which tax losses may be offset. In 2022, the Group recognised no deferred tax asset in relation to tax losses. The Group has not recognised a potential deferred tax asset on £14.8m (2022: £35.7m) of tax losses carried forward in the United Kingdom (£7.5m), Denmark (£4.1m), Australia (£2.5m) and United States (£0.7m) due to current uncertainties over their future recoverability (and in the case of United Kingdom/United States because of specific legislative restrictions). A deferred tax asset of £1.4m (2022: £0.5m) in respect of R&D tax claims submitted in the United States has been partially provided against due to uncertainty with regard to recoverability; an amount of £0.8m has been provided (2022: £0.3m). No deferred tax liability is recognised on temporary differences of £0.6m (2022: £0.4m) relating to the unremitted earnings of overseas subsidiaries as the Group is able to control the timing of the reversal of these temporary differences and it is probable that they will not reverse in the foreseeable future.

19 Trade and other payables

	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Trade payables	6.3	8.7	—	—
Non-trade payables	8.6	11.4	—	—
Accruals	29.8	28.2	—	—
Amounts owed to Group companies	—	—	0.2	18.2
Total	44.7	48.3	0.2	18.2

The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.

20 Lease liabilities

	Land and buildings £m	Motor vehicles £m	Total £m
At 1 June 2021	31.6	2.8	34.4
Additions	1.9	1.6	3.5
Lease payments	(5.4)	(1.1)	(6.5)
Interest expense	1.0	0.2	1.2
At 1 June 2022	29.1	3.5	32.6
Additions	2.2	1.4	3.6
Disposals	(0.2)	—	(0.2)
Lease payments	(5.8)	(1.3)	(7.1)
Interest expense	1.0	0.1	1.1
At 31 May 2023	26.3	3.7	30.0

Analysed as follows:	2023 £m	2022 £m
Current	6.0	5.4
Non-current	24.0	27.2

The maturity of lease liabilities is as follows:

	2023 £m	2022 £m
Less than one year	6.0	5.4
Two to five years	16.7	16.5
More than five years	7.3	10.7
Total lease liabilities	30.0	32.6

The total cash outflow for leases in the year was £7.1m (2022: £6.5m), which consists of £6.0m (2022: £5.3m) principal element of lease payments disclosed above, £1.1m (2022: £1.2m) interest element of leases payments and £nil (2022: £0.1m) lease payments charged to the Income Statement in respect of short-term leases. The Group has used its incremental borrowing rate of 5.8% (2022: 3.3%) as the discount rate for the calculation of the lease liabilities. Some leases contain break clauses or extension options to provide operational flexibility. Potential future undiscounted lease payments not included in the reasonably certain lease term, and hence not included in lease liabilities, total £4.9m (2022: £5.0m).

21 Provisions

	Loss-making contracts £m	Onerous property costs £m	Redundancy provision £m	Other provisions £m	Total £m
Balance as at 31 May 2021 and 1 June 2021	1.1	1.7	—	0.2	3.0
Provisions created in the year	1.9	—	—	0.6	2.5
Provisions utilised during the year	(1.2)	(0.7)	—	(0.1)	(2.0)
Balance as at 31 May 2022 and 1 June 2022	1.8	1.0	—	0.7	3.5
Provisions created in the year	—	0.7	0.3	—	1.0
Provisions utilised during the year	(0.8)	(0.3)	—	(0.7)	(1.8)
Balance as at 31 May 2023	1.0	1.4	0.3	—	2.7

Analysed as follows (2023):
Current	0.6	0.3	0.3	—	1.2
Non-current	0.4	1.1	—	—	1.5

Analysed as follows (2022):
Current	1.5	0.5	—	0.7	2.7
Non-current	0.3	0.5	—	—	0.8

The loss-making contracts provision represents the estimated remaining net lifetime loss on long-term development and supply contracts that are now expected to be fully completed in the 2024 calendar year mainly due to supply chain sourcing. It was expected in the prior year that these contracts would have been completed in 2023. During the year, revenue has been recognised in relation to these long-term contracts of £0.8m (2022: £2.3m). The onerous property costs provision relates to unused floors in the Manchester head office building. The provision of £1.4m (2022: £1.0m) at 31 May 2023 includes £0.9m (2022: £0.4m) of non-rent costs relating to the onerous properties including service charges and insurance and also the estimated costs of disposing or terminating these leases, which includes rent incentives and letting fees. The provision at 31 May 2023 also includes estimated dilapidations liabilities of £0.5m (2022: £0.6m) relating to the Group’s leased premises. Both of these provisions are expected to unwind over the period of the relevant leases (2023 –2034). The impact of discounting the cash flows is £0.3m (2022: £0.2m). The redundancy provision represents accrued severance costs relating to the implementation of the re-organisation as detailed in Note 5. Other provisions of £nil (2022: £0.7m) include reorganisation and CEO transition costs to which the Group was committed at 31 May 2022 and were settled within the year ended 31 May 2023.

22 Contract liabilities – deferred revenue

Deferred revenue represents advanced consideration received from customers, for which revenue is recognised over time. Deferred revenue is analysed as follows and is considered a contract liability:

	Group 2023 £m	Group 2022 £m
Analysed as follows:
Current	51.6	61.7
Non-current	3.3	0.6
	54.9	62.3

Revenue recognised in the year ended 31 May 2023 that was included in the contract liability at 1 June 2022 amounted to £62.4m (2022: £43.6m). The non-current element is expected to unwind in the year ended 31 May 2025. The Group has taken advantage of the IFRS 15 practical expedient not to disclose when revenue will unwind for all contracts less than 12 months in length.

23 Contract balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.

	Notes	Group 2023 £m	Group 2022 £m
Receivables, which are included in trade and other receivables	17	26.7	40.6
Contract assets – accrued income	17	17.2	23.0
Contract costs – costs to obtain	17	1.7	1.1
Contract liabilities – deferred income	22	(54.9)	(62.3)

Receivables represent invoiced services usually payable within 30 days whereby performance obligations have been satisfied. Accrued income of £17.2m (of which £17.0m (2022: £20.3m) represents Cyber Security 2 accrued income) is the Group’s rights to consideration for work completed but not billed at the reporting date. The contract assets accrued in the prior year of £23.0m were fully recognised as trade receivables during the year ended 31 May 2023 and therefore the balance as at 31 May 2023 were fully accrued during the period are transferred to receivables when the rights become unconditional. Credit losses of £0.2m (2022: £0.2m) have been recognised in respect of contract assets. The contract assets were not impacted by any impairment charge.# Notes to the Financial Statements continued at 31 May 2023

24 Cash and cash equivalents and borrowings

Cash and cash equivalents

Cash and cash equivalents comprise:

	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Cash and cash equivalents	34.1	73.2	15.0	20.2
Bank overdraft	(1.8)	—	—	—
Total cash at bank and in hand	32.3	73.2	15.0	20.2

Borrowings are analysed as follows:

Maturity	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Current liabilities:
Bank term loan 2024	—	18.5	—	—
Non-current liabilities:
Revolving credit facility 2026	81.9	70.5	—	—
Bank term loan 2024	—	36.6	—	—
Total borrowings	81.9	125.6	—	—

The maturity profile is as follows:

	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Less than one year	—	18.5	—	—
Two to five years	81.9	107.1	—	—
Total borrowings	81.9	125.6	—	—

2 Formerly Assurance. NCC Group plc — Annual report and accounts for the year ended 31 May 2023 198

Notes to the Financial Statements continued at 31 May 2023

24 Cash and cash equivalents and borrowings continued

Cash and cash equivalents continued

The RCF is drawn in short to medium-term tranches of debt that are repayable within 12 months of draw down. These tranches of debt can be rolled over provided certain conditions are met, including compliance with all loan terms. The Group considers that it is highly unlikely it would not be in compliance and therefore be unable to exercise its right to roll over the debt. The Directors therefore believe that the Group has the ability and the intent to roll over the drawn RCF amounts when due and consequently has presented the RCF as a non-current liability.

On 12 May 2021, the Group entered into a new Term Loan Facility Agreement. The facility made available under the Facility Agreement (the “Term Facility”) was a $70m amortising term loan facility, to fund the acquisition of the IPM Software Resilience business. The rate of interest on each loan under the Term Facility is the percentage rate per annum, which is equal to the aggregate of a compounded rate based on the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York and the margin (based on a leverage ratchet varying from 1.40% to 2.65% per annum). The Term Facility was due to be repaid in annual instalments of $23.3m on each of 10 June 2022 and 10 June 2023, with a final instalment of $23.4m payable on 10 June 2024. The Term Facility Agreement also contained financial covenants relating to leverage and interest cover and provisions relating to guarantor coverage consistent with the RCF.

In December 2022, the Group entered into a new four year £162.5m multi-currency revolving credit facility replacing our existing £100m multi-currency revolving credit facility and the remaining $46.7m of the original $70m term loan that was maturing in June 2024. Key terms of the new facility are:
* £162.5m multi-currency revolving credit facility maturing in December 2026
* Additional £75m uncommitted accordion option
* Increase to leverage covenant from 2.5x to 3.0x with an additional acquisition spike to 3.5x for the first 12 months of any acquisition
* Weighted average interest rate of the facility is lower and payable on a ratchet mechanism, with a margin payable above SONIA and SOFR in the range of 1.00% to 2.25% depending on the level of the Group’s leverage. The weighted average interest rate is 5.92% as at 31 May 2023
* The new facility is considered an extinguishment of the previous RCF and Term Loan Facility Agreement and therefore remaining arrangement fees of £0.6m have been charged to the Income Statement during the year ended 31 May 2023. New arrangement fees of £1.7m will be amortised over the new four year term to December 2026. Arrangement fees of £0.4m (2022: £0.4m) have been charged to the Income Statement in the year ended 31 May 2023.
* Certain subsidiaries of the Group act as guarantors to the new facility to provide coverage based on aggregate EBITDA 1 and gross assets.

As at 31 May 2023, the Group had committed bank facilities of £162.5m (2022: £155.1m), of which £83.4m (2022: £126.4m) had been drawn under these facilities, leaving £79.1m (2022: £28.7m) of undrawn facilities. Unamortised arrangement fees of £1.5m (2022: £0.8m) have been offset against the amounts drawn down, resulting in a carrying value of borrowings at 31 May 2023 of £81.9m (2022: £125.6m). The fair value of borrowings is not materially different to its amortised cost.

25 Financial instruments

Loans and borrowings

	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Non-current
Variable rate:
Revolving credit facility	(81.9)	(70.5)	—	—
Bank term loan	—	(36.6)	—	—
	(81.9)	(107.1)	—	—
Current
Variable rate:
Bank term loan	—	(18.5)	—	—
Total loans and borrowings (excluding lease liabilities)	(81.9)	(125.6)	—	—
Cash	34.1	73.2	15.0	20.2
Bank overdraft	(1.8)	—	—	—
Net (debt)/cash (excluding lease liabilities) 1	(49.6)	(52.4)	15.0	20.2
Non-current	(24.0)	(27.2)	—	—
Current	(6.0)	(5.4)	—	—
Net (debt)/cash 1	(79.6)	(85.0)	15.0	20.2

Financial statements NCC Group plc — Annual report and accounts for the year ended 31 May 2023 199

25 Financial instruments continued

Reconciliation of movements in liabilities to cash flows arising from financing activities

	Group 2023 £m	Group 2022 £m
Revolving credit facility/bank term loan:
Drawdown on facility	70.8	120.7
Repayment of facility	(115.6)	(39.4)
Transaction costs	(1.7)	(0.6)
Interest costs (non-cash)	4.0	2.1
Interest paid on borrowings	(4.0)	(2.1)
Release of deferred arrangement fees	1.0	0.4
Foreign exchange movement	1.8	11.3
Movement in borrowings	(43.7)	92.4
IFRS 16 lease liability:
New leases entered into	3.6	3.5
Disposals	(0.2)	—
Principal element of lease payments	(6.0)	(5.3)
Interest element of lease payments	(1.1)	(1.2)
Interest cost (non-cash)	1.1	1.2
Movement in lease liabilities	(2.6)	(1.8)

Financial risk management

The Group has exposure to the following risks from its use of financial instruments:
* Credit risk
* Liquidity risk
* Currency risk
* Interest rate risk

The Board has overall responsibility for establishing appropriate management of exposure to risk. The Audit Committee oversees how management identifies and addresses risks to the Group.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net (debt)/cash ¹ divided by total capital. Net (debt)/cash ¹ is calculated as total borrowings as shown in the Consolidated Balance Sheet, less cash and cash equivalents. Total capital is calculated as equity, as shown in the Consolidated Balance Sheet, plus net debt ¹.

As at 31 May 2023 the Group’s gearing ratio was 15.1% (2022: 15.5%).

Financial instruments policy

All instruments utilised by the Company and Group are for financing purposes. The financial management and treasury activities of the Group are controlled centrally for all operations with local finance teams responsible for day-to-day banking activities.

Fair value of financial instruments

As at 31 May 2023, the Group and Company had no other financial instruments other than those disclosed below. In addition, no embedded derivatives have been identified. There have been no transfers between levels in the year.

The following table presents the Group’s financial assets and liabilities that are measured at fair value by level of fair value hierarchy:
* Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
* Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2)
* Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)

25 Financial instruments continued

Fair value of financial instruments continued

Borrowings are held at amortised cost, which is considered to equate to fair value. All other assets and liabilities are held at either fair value or their carrying value, which approximates to fair value.# 25 Financial instruments

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

Exposure to credit risk

The carrying value of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Trade receivables	26.7	40.6	—	—
Other receivables	2.0	1.2	—	—
Accrued income	17.2	23.0	—	—
Contingent consideration receivable	3.8	—	—	—
Cash and cash equivalents	34.1	73.2	15.0	20.2
Total	83.8	138.0	15.0	20.2

The maximum exposure to credit risk for trade receivables and other receivables at the reporting date by geographic region was:

Trade receivables by geographical segment

	Group 2023 £m	Group 2022* £m	Company 2023 £m	Company 2022 £m
UK	14.6	14.2	—	—
APAC	1.2	1.0	—	—
North America	6.3	14.3	—	—
Europe	6.6	12.4	—	—
Total	28.7	41.9	—	—

* Represented to present APAC trade receivables of £1.0m separately from the UK segment.

The maximum exposure to credit risk at the reporting date by business segment was:

Trade receivables by business segment

	Group 2023 £m	Group 2022 £m	Company 2023 £m	Company 2022 £m
Cyber Security¹	25.1	35.4	—	—
Software Resilience	1.8	6.5	—	—
Central & head office	1.8	—	—	—
Total	28.7	41.9	—	—

¹ Formerly Assurance.

The trade receivables of the Group typically comprise many amounts due from a large number of customers and represent a spread of industry sectors. The largest amount due from a single customer at the reporting date represented 3.1% (2022: 4.4%) of total Group receivables. All of the Group’s cash is held with financial institutions of high credit rating. The provisions in respect of trade receivables are used to record expected credit losses. The Group has dedicated credit control teams, which regularly review customer debt balances to assess the risk of recovery.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages and minimises liquidity risk by using global cash management solutions and actively monitoring both actual and projected cash outflows to ensure that it will have sufficient liquidity to meet its liabilities when due and have headroom to provide against unforeseen obligations. The Ukraine conflict is not considered to have a direct material impact on liquidity risk in the short term due to the Group having limited direct exposure in the affected region. Longer term, the Group has assessed its liquidity forecast as part of the viability assessment and its ability to continue trading as a going concern. For further detail on the Group’s assessment of liquidity risk refer to the Viability Statement on page 81.

The following are the contractual maturities of financial liabilities, including interest payments, of the Group:

	Carrying amount £m	Contractual cash flows £m	<1 year £m	1–2 years £m	2+ years £m	5+ years £m
At 31 May 2023
Borrowings	(81.9)	(98.0)	(4.9)	(4.9)	(88.2)	—
Bank overdraft	(1.8)	(1.8)	(1.8)	—	—	—
Contingent consideration payable	(1.0)	(1.0)	(1.0)	—	—	—
Lease liabilities	(30.0)	(33.6)	(6.9)	(6.1)	(12.6)	(8.0)
Trade and other payables	(44.7)	(44.7)	(44.7)	—	—	—
At 31 May 2022
Borrowings (restated)*	(125.6)	(132.0)	(21.3)	(21.3)	(89.4)	—
Contingent consideration payable	(1.9)	(1.9)	(0.9)	(1.0)	—	—
Lease liabilities	(32.6)	(36.4)	(6.5)	(5.5)	(13.4)	(11.0)
Trade and other payables	(48.3)	(48.3)	(48.3)	—	—	—

* Restated to correct the borrowings contractual cash flows resulting in an increase to those cash flows of £21.3m split between < 1 year increase of £1.6m, 1-2 years increase of £1.6m and 2+ years increase by £18.1m.

The contractual cash flows for borrowings disclosed above relate to the Group’s RCF facility for the year ended 31 May 2023, which expires in December 2026, and in the prior year includes the Term Loan Facility Agreement that was due to expire in June 2024. The contractual cash flows include an estimate of the interest payable based on the assumption that the borrowings remain drawn based upon 31 May 2023 levels, except that the term loan which existed at 31 May 2022, is repayable over its term. Interest is calculated based on SONIA/SOFR plus a margin based on the current leverage ratio.

Currency risk

The Group is exposed to currency risk on sales, purchases, cash and borrowings that are denominated in a currency other than the respective functional and presentational currency of the Group. The Group’s management reviews the size and probable timing of settlement of all financial assets and liabilities denominated in foreign currencies.

The Group’s exposure to currency risk is as follows:

	2023					2022
	Sterling £m	EUR £m	USD £m	Other £m	Total £m	Sterling £m	EUR £m	USD £m	Other £m	Total £m
Trade receivables	11.0	7.0	7.1	1.6	26.7	12.9	11.7	15.9	0.1	40.6
Other receivables	2.0	—	—	—	2.0	0.5	—	0.6	0.1	1.2
Contract assets	5.5	3.9	6.7	1.1	17.2	6.5	4.3	11.5	0.7	23.0
Cash and cash equivalents	17.0	5.0	9.4	2.7	34.1	26.4	2.4	42.4	2.0	73.2
Bank overdraft	(1.8)	—	—	—	(1.8)	—	—	—	—	—
Borrowings	(18.6)	—	(63.3)	—	(81.9)	(26.2)	—	(99.4)	—	(125.6)
Lease liabilities	(19.6)	(2.0)	(6.7)	(1.7)	(30.0)	(21.4)	(2.0)	(7.3)	(1.9)	(32.6)
Trade and other payables	(31.8)	(9.2)	(1.6)	(2.1)	(44.7)	(28.1)	(9.0)	(8.9)	(2.3)	(48.3)
Total	(36.3)	4.7	(48.4)	1.6	(78.4)	(29.4)	7.4	(45.2)	(1.3)	(68.5)

A change in exchange rate of 10% would have an impact of £20.3m (2022: £19.0m) on revenue, £3.9m (2022: £4.2m) on operating profit, £64.2m (2022: £43.6m) on net assets and £6.3m (2022: £9.9m) on borrowings. The Group’s risk management policy is to hedge foreign currency exposure in respect of significant material transactions that may arise from time to time. No such hedges were in place at 31 May 2022 or at 31 May 2023. The Group uses forward exchange contracts to hedge its currency risk, which are short term in nature to match the maturity of the hedged item. These contracts are generally designated as cash flow hedges.

The Group designates the spot element of forward foreign exchange contracts to hedge its currency risk and applies a hedge ratio of 1:1. The forward elements of forward exchange contracts are excluded from the designation of the hedging instrument and are separately accounted for as a cost of hedging, which is recognised in equity in a cost of hedging reserve. The Group’s policy is for the critical terms of the forward exchange contracts to align with the hedged item. The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. Given the short-term nature of these hedges there is limited risk of ineffectiveness.

Interest rate risk

The Group and Company finance their operations through a combination of retained profits and bank borrowings. The Group borrows and invests surplus cash at floating rates of interest based upon bank base rate.

The cash and cash equivalents of the Group and Company at the end of the financial year were as follows:

	Group 2023 £m	Group 2022 £m
Sterling denominated financial assets	17.0	26.4
Euro denominated financial assets	5.0	2.4
US Dollar denominated financial assets	9.4	42.4
Other denominated financial assets	2.7	2.0
Total	34.1	73.2

The financial assets and liabilities of the Company at the end of the financial year were as follows:

	Company 2023 £m	Company 2022 £m
Financial assets
Sterling denominated financial assets	15.0	20.2
Amounts owed by Group undertakings	23.2	32.9
Total	38.2	53.1
Financial liabilities
Amounts owed to Group undertakings	0.2	18.2
Total	0.2	18.2

A change of 100 basis points in interest rates would result in a difference in annual pre-tax profit of £0.9m (2022: £1.3m).

The financial liabilities of the Group (trade and other payables, borrowings and lease liabilities) and their maturity profile are as follows:

	2023					2022
	Sterling £m	EUR £m	USD £m	Other £m	Total £m	Sterling £m	EUR £m	USD £m	Other £m	Total £m
Less than one year	(36.6)	(10.3)	(3.0)	(2.6)	(52.5)	(30.7)	(9.9)	(28.9)	(2.7)	(72.2)
Two to five years	(28.1)	(0.9)	(68.4)	(1.2)	(98.6)	(35.8)	(1.1)	(85.2)	(1.5)	(123.6)
More than five years	(7.2)	—	(0.1)	—	(7.3)	(9.9)	—	(0.8)	—	(10.7)
Total	(71.9)	(11.2)	(71.5)	(3.8)	(158.4)	(76.4)	(11.0)	(114.9)	(4.2)	(206.5)

Climate change

The Directors have considered the impact of climate change on fair value measurement and financial instruments, with no material impact identified.

26 Share‑based payments

The Company has a number of share option schemes under which options to subscribe for the Company’s shares have been granted to Directors and colleagues, details of which are illustrated in the tables below. Expected term of options represents the period over which the fair value calculations are based. The share-based payment charge for the year was £2.2m (2022: £3.9m) of which £2.2m (2022: £3.4m) related to equity settled payments and £nil (2022: £0.5m) to cash settled payments.The share-based payments charge decreased during the year due to a number of schemes no longer being expected to meet performance criteria required to give rise to options being granted.

Company Share Option (CSOP) scheme – equity settled

Under the CSOP scheme, options will vest if the average EPS growth for the three years following their grant is greater than 10% per annum. Options granted in September 2019 do not have any performance criteria.

Date of grant	Expected term of options	Exercisable between	Exercise price	2023 Number outstanding
August 2018	7 years	August 2021–August 2028	£2.20	5,586
September 2019	7 years	September 2022–September 2029	£1.79	279,312

Sharesave schemes – equity settled

The Company operates sharesave schemes, which are available to all colleagues based in the UK, Netherlands, Denmark, Spain and Australia, and full-time Executive Directors of the Group and its subsidiaries who have worked for a qualifying period.

Date of grant	Expected term of options	Exercisable between	Exercise price	2023 Number outstanding
March 2019	3 years	May 2022–October 2022	£0.99	7
March 2020	3 years	May 2023–October 2023	£1.84	339,158
March 2020	3 years	May 2023–October 2023	£1.84	202,877
May 2021	3 years	May 2024–October 2024	£2.15	128,744
May 2021	3 years	May 2024–October 2024	£2.15	251,147
May 2022	3 years	May 2025–October 2025	£1.52	314,632
May 2022	3 years	May 2025–October 2025	£1.52	755,013
May 2023	3 years	June 2026–November 2026	£1.26	1,253,012
May 2023	3 years	June 2026–November 2026	£1.26	268,214

Colleague stock purchase plan – equity settled

The Company operates a stock purchase plan, which is available to all US-based colleagues who have worked for a qualifying period. All options are to be settled by equity. Under the scheme the following options have been granted and are outstanding at year end.

Date of grant	Expected term of options	Exercisable in	Exercise price	2023 Number outstanding
May 2022	1 year	May 2023	£1.58	—
May 2023	1 year	May 2024	£1.26	604,321

Incentive Stock Option (ISO) scheme – equity settled

Under the ISO scheme, options granted will be subject to performance criteria. Options will vest if the average EPS growth for the three years following their grant is greater than 10% per annum.

NCC Group plc — Annual report and accounts for the year ended 31 May 2023204
Notes to the Financial Statements continued at 31 May 2023
26 Share‑based payments continued

Long Term Investment Plan (LTIP) schemes – equity settled

Options granted on or after November 2017 to May 2021 have three separate vesting conditions as set out below:

60% will vest based on achieving an average increase in Group EPS of 20% or more over a three year period. If growth is equal to an average of 9% (threshold), then 12% of the award will vest. If, however, growth is less than 9%, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
30% will vest based on achieving a cash conversion ratio¹ expressed as a percentage over the measurement period of greater than 70% per annum on average. If cash conversion¹ is greater than or equal to 80% per annum, then 100% of the award element will vest. If, however, cash conversion is less than 70% per annum, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
10% will vest based on the Group’s total shareholder return (TSR) ranking when measured against the FTSE 250 (excluding investment trusts). If the Group’s TSR is consistent with the median group, 20% of the award will vest; below this level, none of the award element will vest. If the TSR is within the upper quartile or above, 100% of the award element will vest; between the median and upper quartile, vesting is determined on a straight-line basis.

Options granted in November 2021 have three separate vesting conditions as set out below:

60% will vest based on achieving an average increase in Group EPS of 22.5% or more over a three year period. If growth is equal to an average of 9% (threshold), then 15% of the award will vest. If, however, growth is less than 9% per annum, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
30% will vest based on achieving a cash conversion ratio¹ expressed as a percentage over the measurement period of greater than 70% per annum on average. If cash conversion¹ is greater than or equal to 80% per annum, then 100% of the award element will vest. If, however, cash conversion is less than 70% per annum, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
10% will vest based on the Group’s total shareholder return (TSR) ranking when measured against the FTSE 250 (excluding investment trusts). If the Group’s TSR is consistent with the median group, 20% of the award will vest; below this level, none of the award element will vest. If the TSR is within the upper quartile or above, 100% of the award element will vest; between the median and upper quartile, vesting is determined on a straight-line basis.

Options granted on or after October 2022 have three separate vesting conditions as set out below:

60% will vest based on achieving an average increase in Group EPS of 18% or more over a three year period. If growth is equal to an average of 6% (threshold), then 15% of the award will vest. If, however, growth is less than 6% per annum, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
20% will vest based on achieving a cash conversion ratio¹ expressed as a percentage over the measurement period of greater than 80% per annum on average. If cash conversion¹ is greater than or equal to 90% per annum, then 100% of the award element will vest. If, however, cash conversion is less than 80% per annum, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
20% will vest based on the Group’s total shareholder return (TSR) ranking when measured against the FTSE 250 (excluding investment trusts). If the Group’s TSR is consistent with the median group, 15% of the award will vest; below this level, none of the award element will vest. If the TSR is within the upper quartile or above, 100% of the award element will vest; between the median and upper quartile, vesting is determined on a straight-line basis.

Financial statements
NCC Group plc — Annual report and accounts for the year ended 31 May 2023
205
26 Share‑based payments continued

Restricted State Unit (RSU) schemes – equity settled

Options granted related to the RSU schemes on or after August 2018 have three separate vesting conditions as set out below:

60% will vest based on achieving an average increase in Group EPS of 20% or more over a three year period. If growth is equal to an average of 9% (threshold), then 12% of the award will vest. If, however, growth is less than 9%, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
30% will vest based on achieving a cash conversion ratio¹ expressed as a percentage over the measurement period of greater than 70% per annum on average. If cash conversion¹ is greater than or equal to 80% per annum, then 100% of the award element will vest. If, however, cash conversion is less than 70% per annum, none of the award element will vest. Between these two points, vesting is determined on a straight-line basis.
10% will vest based on the Group’s total shareholder return (TSR) ranking when measured against the FTSE 250 (excluding investment trusts). If the Group’s TSR is consistent with the median group, 20% of the award will vest; below this level, none of the award element will vest. If the TSR is within the upper quartile or above, 100% of the award element will vest; between the median and upper quartile, vesting is determined on a straight-line basis.

The options are to be settled in equity.

Restricted Share Plan (RSP) – equity settled

The vesting condition for the award of RSPs relates to colleagues remaining with the Group for a certain period of time, namely two years to receive 50% of the award, and a further year to receive the remaining 50%. There are no other performance conditions.## Notes to the Financial Statements

26 Share-based payments

The fair value of services received in return for share options is calculated with reference to the fair value of the award on the date of grant. The fair value is spread over the period during which the colleague becomes unconditionally entitled to the award, adjusted to reflect actual and expected levels of vesting. The assumptions used in the models are illustrated in the tables below:

Scheme	Grant date	Expected volatility	Option expected term	Risk free interest rate
CSOP scheme	August 2018–September 2019	48.0%–52.8%	7 years	0.35%–2.00%
Sharesave scheme	March 2019–May 2023	39.7%–55.7%	3 years	0.13%–2.20%
ESPP scheme	May 2022–May 2023	53.8%–55.7%	1 year	1.15%–2.20%
Special Award (CEO)	September 2022	n/a	2 years	n/a
ISO scheme	September 2019	77.0%	7 years	0.38%
LTIP scheme	September 2019–November 2022	37.2%–55.5%	3 years	0.21%–2.00%
RSU scheme	May 2021	42.3%	3 years	0.32%
RSP scheme	May 2021–November 2022	n/a	10 years	n/a
Deferred shares	October 2021	56.0%	2 years	0.35%
Phantom schemes	September 2019–November 2021	52.8%–55.5%	3 years	1.81–1.96%

Scheme	Grant date	Fair value at measurement date	Weighted average fair value at measurement date	Exercise price	Weighted average exercise value at measurement date
CSOP scheme	August 2018–September 2019	£0.55–£0.63	£0.55	£1.79–£2.20	£1.80
Sharesave scheme	March 2019–May 2023	£0.39–£0.86	£0.59	£0.99–£2.15	£1.52
ESPP scheme	May 2022–May 2023	£0.30–£0.55	£0.30	£1.26–£1.58	£1.26
Special Award (CEO)	September 2022	£2.30	£2.30	£2.30	£2.30
ISO scheme	September 2019	£0.54	£0.54	£1.82	£1.82
LTIP scheme	September 2019–November 2022	£1.61–£2.87	£2.19	£nil	£nil
RSU scheme	May 2021	£2.87	£2.87	£0.01	£0.01
RSP scheme	May 2021–November 2022	£1.93–£2.85	£2.28	£nil	£nil
Deferred shares	October 2021	£2.47	£2.47	£nil	£nil
Phantom schemes	September 2019–November 2021	£1.84–£2.87	£2.44	£nil	£nil

The expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behaviour. For the options granted in the year ended 31 May 2023, dividend yield assumed at the time of option grant is 1.75% (2022: 1.75%).

Reconciliation of outstanding share options

The options outstanding at 31 May 2023 have an exercise price in the range of £nil to £2.15 (2022: £nil to £2.15) and a weighted average contractual life of three years (2022: three years). The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, outstanding share awards during the year:

	2023 Number ’000	2023 WAEP	2022 Number ’000	2022 WAEP
Outstanding at 1 June	11,431	£0.68	9,494	£0.79
Granted during the year	5,114	£0.55	5,605	£0.75
Exercised during the year	(1,488)	£0.10	(1,028)	£0.89
Forfeited in the year	(3,837)	£0.96	(2,640)	£1.39
Outstanding at 31 May	11,220	£0.61	11,431	£0.68
Exercisable at end of year	1,598	£1.00	119	£1.00

Reconciliation of outstanding share options continued

Scheme	Number of instruments as at 1 June 2022	Instruments granted during the year	Options exercised in the year	Forfeitures in the year	Number of instruments as at 31 May 2023
CSOP schemes	324,001	5,586	(11,172)	(33,517)	284,898
Sharesave/SAYE schemes	3,714,713	1,593,682	(111,399)	(1,684,192)	3,512,804
ESPP schemes	506,218	604,321	—	(506,218)	604,321
Special Award	—	222,222	—	—	222,222
ISO schemes	60,434	—	—	(10,988)	49,446
LTIP schemes	3,203,721	1,411,193	(528,618)	(47,103)	3,239,193
RSU schemes	748,711	—	(362,003)	(248,154)	138,554
RSP scheme	2,734,411	1,233,252	(448,542)	(495,417)	3,023,704
Deferred shares	110,553	—	(18,937)	—	91,616
Phantom schemes	27,931	43,673	(7,086)	(11,173)	53,345
Total	11,430,693	5,113,929	(1,487,757)	(3,836,762)	11,220,103

The liability for the cash settled share-based payments at 31 May 2023 was £nil (2022: £0.5m).

27 Called up share capital and reserves

Allotted, called up and fully paid

	2023 Number of shares	2022 Number of shares	2023 £m	2022 £m
Ordinary shares of 1p each at the beginning of the year	309,967,243	308,956,045	3.1	3.1
Ordinary shares of 1p each issued in the year	2,161,649	1,011,198	—	—
Ordinary shares of 1p each at the end of the year	312,128,892	309,967,243	3.1	3.1

During the year, 2,161,649 (2022: 1,011,198) new ordinary shares of 1p were issued as a result of the exercise of share options. The proceeds of £0.1m (2022: £0.8m) were credited to the share premium account. As at 31 May 2023, 868,800 shares were held in treasury (2022: nil).

Share premium

The share premium account records the difference between the nominal amount of shares issued and the fair value of the consideration received. The share premium account may be used for certain purposes specified by UK law, including to write off expenses incurred on any issue of shares and to pay fully paid bonus shares. The share premium account is not distributable but may be reduced by special resolution of the Company’s ordinary shareholders and with court approval.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss or directly included in the initial cost or other carrying amount of a non-financial asset or non-financial liability. The reserve is £nil at 31 May 2023 as the hedging instrument has now expired.

Merger reserve

The merger reserve arose in 2015 from the acquisition of Accumuli plc through a share-for-share exchange in part consideration for the business.

Currency translation reserve

The results of overseas operations are translated at the average foreign exchange rates for the year, and their balance sheets are translated at the rates prevailing at the Balance Sheet date. Exchange differences arising on the translation of opening net assets and results of overseas operations are recognised in the currency translation reserve. All other exchange differences are included in the Income Statement.

Retained earnings

Retained earnings for the Group are made up of accumulated reserves. For the Company, retained earnings are made up of accumulated reserves and are considered distributable reserves.

28 Profit attributable to members of the Parent Company

The profit for the year dealt with in the accounts of the Parent Company was £17.5m (2022: £20.0m).

29 Other financial commitments

Non-cancellable lease rental costs are payable as follows:

	2023 Land and buildings £m	2023 Other £m	2022 Land and buildings £m	2022 Other £m
Within one year or less	—	—	—	0.1

The lease commitments disclosed above represent short-term (less than one year) leases only, for which the Group has taken the exemption from accounting for under IFRS 16.

30 Contingencies

There are no contingent liabilities not provided for at the end of the financial year (2022: £nil). Similarly, there are no contingent assets (2022: £nil).

31 Pension scheme

The Group operates a defined contribution pension scheme that is open to all eligible colleagues. The pension cost charge for the year represents contributions payable by the Group to the fund and amounted to £6.3m (2022: £5.1m). For the Company, the pension cost charge for the year represents contributions payable by the Company to the fund and amounted to £nil (2022: £nil).

32 Related party transactions

Management has defined that related party transactions are that with key management personnel members only. Key management personnel have been assessed to be the Group’s Board of Directors. During the year ended 31 May 2023 there were nine (2022: seven) key management personnel.# 33 Investments in subsidiary undertakings

The compensation paid or payable to key management for employee services is shown below:

Group 2023 £m	Group 2022 * £m	Company 2023 £m	Company 2022 £m
Salary costs (including bonus)	1.8	1.5	—
Social security costs	0.3	0.3	—
Pension costs	—	—	—
Share-based payments	0.2	0.4
Total	2.3	2.2	—

Represented to present social security costs separate from salary costs.

There were no other related party transactions identified during the year.

Investments in subsidiary undertakings

	Shares in Group undertakings £m
At 1 June 2021	151.8
Increase in subsidiary investment for share-based charges	3.9
Investment in subsidiary undertakings	121.2
At 31 May 2022	276.9
Increase in subsidiary investment for share-based charges	2.2
At 31 May 2023	279.1

On 26 May 2022, the Company acquired 121,205,727 ordinary shares of £0.01 in NCC Group Holdings Limited for a consideration of £121,205,727 and was settled through an intercompany loan. The increase in subsidiary investment for share-based charges represents IFRS 2 ‘Share-based Payments’ charges in respect of subsidiaries which will not be recharged.

Financial statements NCC Group plc — Annual report and accounts for the year ended 31 May 2023 209

Investments in subsidiary undertakings continued

Fixed asset investments are recognised at cost. The undertakings in which the Company has a 100% interest at 31 May 2023 are as follows:

Subsidiary undertakings	Country of incorporation	Principal activity	Registered office
NCC Group Holdings Limited	England and Wales	Holding company	XYZ Building, 2 Hardman Boulevard, Spinningfields, Manchester M3 3AQ (XYZ 1 )
NCC Group (Solutions) Limited	England and Wales	Holding company	XYZ 1
NCC Group Corporate Limited	England and Wales	Corporate cost centre	XYZ 1
NCC Group Finance Limited	England and Wales	Financing company	XYZ 1
The National Computing Centre Limited	England and Wales	Dormant	XYZ 1
NCC Group Software Resilience Limited	England and Wales	Holding company	XYZ 1
NCC Group Software Resilience (UK) Limited	England and Wales	Holding company	XYZ 1
NCC Services Limited	England and Wales	Software Resilience	XYZ 1
NCC Group Escrow Limited	England and Wales	Dormant	XYZ 1
NCC Group Software Resilience (Europe) BV	Netherlands	Holding company	Barbara Strozzilaan 101, 1083HN Amsterdam, Netherlands
NCC Group GmbH	Germany	Software Resilience	c/o Deloitte Legal Rechtsanwaltsgesellschaft mbH, Rosenheimer Platz 6, 81669, Munich, Bavaria, Germany
NCC Group Deutschland GmbH	Germany	Cyber Security 4	Leopoldstrasse Business Centre GmbH, Konrad-Zuse-Platz 8, 81829, Munich, Germany
NCC Group Escrow Europe BV	Netherlands	Software Resilience	Barbara Strozzilaan 101, 1083HN Amsterdam, Netherlands
NCC Group Escrow Europe (Switzerland) AG	Switzerland	Software Resilience	Ibelweg 18A, 6300 Zug, Switzerland
NCC Group Software Resilience (MEA-APAC) Limited	England and Wales	Holding company	XYZ 1
NCC Group FZ-LLC	United Arab Emirates	Software Resilience	Dquarters, Building 16, unit EO30, DIC5, Dubai Internet City, Dubai, United Arab Emirates
NCC Group Cyber Security Limited	England and Wales	Holding company	XYZ 1
NCC Group Cyber Security (UK) Limited	England and Wales	Holding company	XYZ 1
NCC Group Security Services Limited	England and Wales	Cyber Security 4	XYZ 1
NCC Group Audit Limited	England and Wales	Cyber Security 4	XYZ 1
ArmstrongAdams Limited	England and Wales	Cyber Security 4	XYZ 1
NCC Group Signify Solutions Limited	England and Wales	Cyber Security 4	XYZ 1
NCC Group Accumuli Security Limited	England and Wales	Cyber Security 4	XYZ 1
NCC Group Cyber Security (Europe) BV	Netherlands	Holding company	Fox-IT 3
NCC Group A/S	Denmark	Cyber Security 4	Lautruphøj 1, 2750 Ballerup, Denmark
NCC Group Cyber Portuguesa, Unipessoal, LDA	Portugal	Cyber Security 4	Av. António Augusto de Aguiar nº 19 – 4º, 1050-012 Lisboa, Portugal
NCC Group Security Services Espana SLU	Spain	Cyber Security 4	Plaza Manuel Gómez Moreno, número 2, Edificio Alfredo Mahou, planta 19ª, letra B, 28020, Madrid, Spain
Cyber Security Sweden AB	Sweden	Cyber Security 4	c/o Advokatfirman Delphi, P.O. Box 1432, 111 84 Stockholm
Fox-IT Holding B.V.	Netherlands	Holding company	Olof Palmestraat 6, 2616 LM Delft, Netherlands (Fox-IT 3 )
Fox-IT Group B.V.	Netherlands	Holding company	Fox-IT 3
Fox-IT B.V.	Netherlands	Cyber Security 4	Fox-IT 3
Fox-IT Operations B.V.	Netherlands	Dormant	Fox-IT 3
Fox Crypto B.V.	Netherlands	Cyber Security 4	Fox-IT 3
NCC Group Cyber Security (APAC) Limited	England and Wales	Holding company	XYZ 1

NCC Group plc — Annual report and accounts for the year ended 31 May 2023 210

Investments in subsidiary undertakings continued

Subsidiary undertakings	Country of incorporation	Principal activity	Registered office
NCC Group Pte Limited	Singapore	Cyber Security 4	Unit #10-09 PLUS Building, 20 Cecil Street, Singapore (049705)
NCC Group Pty Limited	Australia	Cyber Security 4	Suite 23.01, Level 23, 45 Clarence Street, Sydney, NSW 2000
NCC Group Japan KK	Japan	Cyber Security 4	Level 18, Yesibu Garden Place Tower, 4-20-3 Ebisu Shibuya-Ku, Tokyo
NCC Group (Americas) Inc.	USA	Holding company	650 California Street, Suite 2950, San Francisco, CA 94108, USA (North America HQ 2 )
NCC Group, LLC	USA	Software Resilience and central/head office costs	North America HQ 2
NCC Group Cyber Security (Americas), LLC	USA	Holding company	North America HQ 2
NCC Group Security Services, Inc.	USA	Cyber Security 4	North America HQ 2
NCC Group Secure Registrar, Inc.	USA	Domain services	North America HQ 2
NCC Group Domain Services, Inc.	USA	Domain services	North America HQ 2
NCC Group Security Services Corporation	Canada	Cyber Security 4	Suite 2700, The Stack, 1133 Melville St, Vancouver, BC V6E 4E5
Payment Software Company, Inc.	USA	Cyber Security 4	North America HQ 2
Payment Software Company Limited	England and Wales	Cyber Security 4	XYZ 1
NCC Group Software Resilience (Americas), LLC	USA	Holding company	North America HQ 2
NCC Group Escrow Associates, LLC	USA	Software Resilience	North America HQ 2
NCC Group Software Resilience (NA), LLC	USA	Software Resilience	North America HQ 2
Fox-IT Belgium B.V.	Belgium	Cyber Security 4	Silversquare, Antwerp Tower, Frankrijklei 5, 2000 Antwerp, Belgium

The undertakings in which the Company holds less than a 100% interest at the year end are as follows:

Undertaking	% interest	Country of incorporation	Principal activity
Deposit AB	24%	Sweden	Software Resilience

The Directors consider the above ownership structure to give rise to no significant influence over the undertaking. There is no Board representation, and the Group has no power to participate in the operating and financial policy decisions of the undertaking. Accordingly, the undertaking of Deposit AB has not been consolidated.

1 2 Hardman Boulevard, Spinningfields, Manchester M3 3AQ.
2 650 California Street, Suite 2950, San Francisco, CA 94108, USA.
3 Olof Palmestraat 6, 2616 LM Delft, Netherlands.
4 Formerly Assurance.

Financial statements NCC Group plc — Annual report and accounts for the year ended 31 May 2023 211

34 Disposals

On 31 December 2022, the Group completed the planned disposal of its DDI business for consideration of £5.8m. Of this amount, £3.8m, is contingent on the novation of certain customer contracts. The assets and liabilities included as part of the disposal were as follows:

	2023 £m
Attributable goodwill	(1.0)
Trade and other receivables	(1.2)
Trade and other payables	1.2
Net assets disposed of	(1.0)
Consideration	5.8
Transaction costs	(0.1)
Gain on disposal	4.7
Satisfied by:
Cash and cash equivalents	2.0
Contingent consideration	3.8
Consideration	5.8

35 Acquisitions

Prior period acquisition of IPM business

On 1 June 2021, shareholder approval was passed for the acquisition of the IPM business of Iron Mountain, comprising substantially all of the assets of Iron Mountain Intellectual Property Management, Inc. together with certain other assets of affiliates of Iron Mountain exclusively related to the IPM business. The primary reasons for the business combination are to:

Scale-up the Group’s core business to create a global business and platform for further growth
Generate revenue synergies through allowing the enlarged division to offer NCC Group broader suite of established verification services as well as the newer Escrow-as-a-Service (EaaS) cloud offering to the IPM business’s existing customer base
Present an exciting new opportunity to sell NCC Group Cyber Security 2 services into the IPM business’s broad and blue-chip customer base in the medium term
Be accretive to earnings per share from completion, even without factoring in revenue synergies
Result in greater strategic strength for the future

Management considers shareholder approval of the transaction determines a change in control and therefore the date of shareholder approval is considered to be the acquisition date for the transaction. Shareholder approval was granted on 1 June 2021 and the IPM Software Resilience business has been consolidated into the Group results from that date (see Note 3). Transfer of consideration for the acquisition was made on 7 June 2021, which is commonly referenced within these Financial Statements as being the date of practical completion of the transaction. Details of assets acquired that are subject to fair value adjustments are noted below. The acquisition for an original total consideration of $220.0m was subsequently adjusted during the year ended 31 May 2022 to $216.1m (£152.0m) to reflect a normalised working capital adjustment of $2.7m and a final positive net working capital adjustment of $1.2m. The acquisition was funded through an equity net placing of £70.2m ($98.4m) on 17 May 2021 combined with a new three year $70m term loan and the remaining $47.7m funded via existing cash balances and our revolving credit facility.# 35 Acquisitions continued

The term loan was entered into on 12 May 2021 but not drawn down until 2 June 2021. The fair value of assets and liabilities acquired can be summarised as follows:

Fair value £m
Identifiable intangible assets: (Note 12):
Customer relationships	91.4
Computer software	1.2
Right-of-use assets	0.2
Trade and other receivables	3.8
Trade and other payables	(0.2)
Deferred income	(12.1)
Lease liabilities	(0.2)
Deferred tax liability	(0.7)
Total identifiable assets acquired, and liabilities assumed	83.4
Goodwill	68.6
Total consideration	152.0
Satisfied by:
Cash	152.0

NCC Group plc — Annual report and accounts for the year ended 31 May 2023
212
Notes to the Financial Statements continued at 31 May 2023

35 Acquisitions continued

Prior period acquisition of IPM business continued

No cash was acquired as part of the acquisition. Total costs directly attributable to the acquisition of the IPM business totalling £8.5m have been expensed to Individually Significant Items during the year ended 31 May 2021 (£7.6m) and the year ended 31 May 2022 (£0.9m). Issue costs of £2.4m were incurred as part of the equity placing and have been debited to the share premium account in the year ended 31 May 2021.

The fair value of the financial assets includes trade receivables with a fair value of £3.8m and a gross contractual value of £5.2m. The goodwill of £68.6m arising from the acquisition consists of the know-how and expertise of the employees transferred to NCC Group plc as part of the acquisition, the future economic benefit arising from the aligning of customers’ existing products with the Group’s products, and it’s fit with existing operations. Goodwill is expected to be deductible for income tax purposes.

There is a contingent consideration arrangement that requires amounts to be repaid to NCC Group plc in the event that certain customers terminate their contractual agreements as a result of the change in ownership. The fair value of the contingent consideration potentially due to NCC Group plc is considered to be £nil by management. This fair value was estimated based on comparing the expected number of customers likely to terminate their contractual arrangements as a result of the change in ownership to the threshold for repayment to NCC Group plc. On 31 May 2023, no further information has become available that suggests the fair value of this contingent consideration will be greater than £nil.

During the year ended 31 May 2022, a final working capital adjustment had been agreed with the vendor resulting in an amount of £0.8m being returned to the Group and giving rise to a decrease in the fair value of consideration of £0.8m to £152.0m. This adjustment leads to a decrease in goodwill of £0.8m. Additionally, management has identified new information in respect of the opening provision for expected credit losses and has subsequently decreased the fair value of acquired trade and other receivables by £0.8m to £3.8m. This adjustment leads to an increase in goodwill of £0.8m. On this basis, goodwill of £68.6m remains unchanged from that reported for the period ended 30 November 2021.

The IPM business contributed £20.2m of the Group’s revenue, £15.6m to the Group’s gross profit and £8.6m operating profit for the period between the date of acquisition (1 June 2021) and 31 May 2022.

Measurement of fair values

Assets acquired

Computer software
As there is no active market for such bespoke intangible assets a cost approach has been taken to value computer software acquired based on the cost to recreate the assets. The fair value is based on the estimated time required by appropriately skilled individuals to recreate such assets.

Customer relationships
The valuation approach taken is the income approach, specifically the multi-period excess earnings method (MEEM). The fundamental principle underlying the MEEM is isolating the net earnings attributable to the asset being measured. There are three key steps in calculating the MEEM:

Projecting financial information including cash flows, revenue, expenses, etc. for the IPM business acquired.
Subtracting the cash flows attributable to all other assets through a contributory asset charge (CAC). The CAC is a form of economic rent for the use of all other assets in generating total cash flows that is composed of the required rate of return on all other assets and an amount necessary to replace the fair value of certain contributory intangible assets.
Calculating the cash flows attributable to the intangible asset subject to valuation and discounting them to present value.

Cash flows are forecast through to FY28 and taken into perpetuity beyond this date. Cash flow forecasts include a level of growth in revenue in addition to specific growth synergies expected from the aligning of IPM customers’ existing products with the Group’s products and IPM’s fit with existing operations. Cash flow forecasts include a level of customer attrition based on historical experience of IPM customer termination rates. Both the amount and the duration of the cash flows are considered from a market participant’s perspective.

Lease liabilities

The Group measured the acquired lease liabilities using the present value of the remaining lease payments at the date of acquisition.

Right-of-use assets

The right-of-use assets were measured at an amount equal to the lease liabilities. No significant judgements have been identified as part of this assessment.

Deferred income

The fair value of the deferred revenue liability has been calculated using a top-down approach. This approach relies on market indicators of expected revenue for any obligation yet to be delivered with appropriate adjustments. This approach starts with the amount that an entity would receive in a transaction, less the cost of the selling effort (which has already been performed) including a profit margin on that selling effort.

Financial statements
NCC Group plc — Annual report and accounts for the year ended 31 May 2023
213

35 Acquisitions continued

Measurement of fair values continued

The valuation of purchase price accounting is a key source of estimation uncertainty, in which there are several key assumptions where, if a reasonably possible change in assumption is made, this could result in a material adjustment. A description of the key assumptions and possible sensitivities are provided below:

| Description of key assumption # NCC Group plc — Annual report and accounts for the year ended 31 May 2023

Company name Principal activity

Company name	Principal activity
Payment Software Company Limited	10059024
NCC Group Cyber Security Limited	13287219
NCC Group Cyber Security (UK) Limited	13294277
NCC Group Cyber Security (APAC) Limited	13294684
NCC Group Audit Limited	04323323
NCC Group Signify Solutions Limited	03915262
NCC Group Finance Limited	13350193

The Directors acknowledge their responsibility for complying with the requirements of the Companies Act 2006 with respect to accounting records and preparation of accounts.

² Formerly Assurance.

Notes to the Financial Statements continued at 31 May 2023

Glossary of terms – other terms

| Other terms | Definition and usage

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NCC GROUP PLC — Annual Report 2023

4869_10-k_2023-09-29_943ae3c4-648e-453f-b775-27a8854d3609.xhtml

NCC Group plc

Annual report and accounts for the year ended 31 May 2023

Strategic report

Governance

Financial statements

Additional information

Intelligence

Insight

Innovation

Highlights

IFRS measures

Our business

At a glance

What we do

Group revenues

Strategic report

Our investment case

Structural growth in an addressable market

Client focused with two distinct businesses

A strategy to enhance growth by focusing on Cyber Security

Our aspiration

Vision

Purpose

Creating value for our clients

Our clients

Our capabilities

Global delivery

Brands

2022/23 key activities

2023/24 priorities

Chair’s statement

Introduction

Business performance

Strategic report

Sustainability

Summary

2022/23 key activities

2023/24 priorities

CEO’s review

An ever-changing market

An ever-changing market continued

A client-centric approach

True global delivery

Communicating with impact

CEO’s review

NCC Group plc

Financial performance summary

Analysis of results

Financial performance summary

Financial performance summary continued

CEO’s review

Strategic report

Our business model

Sustainable growth strategy

People-powered, tech-enabled

Culture of innovation

Stronger partner relationships

Market-leading reputation

How we create value

Inputs

Colleagues

Our network

Shareholders

Value creation

CYBER SECURITY

Meet the CTO

Q&A with Siân John

The ever-changing threat landscape

A changing threat landscape

Market dynamics

Society’s ever-growing reliance on digital technologies

Increasing regulatory and legislative requirements

19 Strategic report

Other common trends include:

NCC Group’s continued portfolio evolution and differentiation

US National Cyber Security Strategy

Digital Operational Resilience Act

NCC GROUP PLC Annual Report 2023