32816-Lucy-Group-AR-2025 web ready spreads_FINAL

Principal Accounting Policies continued

Notes to the Accounts

FINANCIAL STATEMENTS

Deferred tax The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions. Estimation uncertainty Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different. Impairment of non-financial assets and goodwill In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and equipment. Inventories Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices. determination of a suitable discount rate. Useful lives of depreciable assets

Defined benefit obligation Management’s estimate of the defined benefit obligation is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the defined benefit obligation amount and the annual defined benefit expenses. Fair value measurement Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. Management bases its assumptions on observable data as far as possible, but this is not always available. In that case management uses the best information available. Investment properties are valued using professional advice.

1. Accounting policies and presentation Basis of preparation

The Group’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the UK (adopted IFRSs) and comply with IFRSs as issued by the International Accounting Standards Board (IASB). New and amended standards that became effective during the year None of the amendments to IFRSs that were issued by the International Accounting Standards Board effective for accounting periods that begin 1 January 2025 have had an impact on the Group’s reported results. Standards and amendments issued by the International Accounting Standards Board (IASB) not effective for the current year and not early adopted by the Group The Group has not early adopted any of the new, but not yet effective, standards or amendments to existing standards as published by the International Accounting Standards Board (IASB). Such standards have not been disclosed as they are not expected to have a material impact on the Group’s consolidated financial statements. 2. Profit for the financial year The Group profit for the year after taxation includes a profit of £31.9m (2024: £45.4m) which is dealt with in the financial statements of the Company. 3. Analysis of turnover and profit between activities and markets The total turnover of the Group was £421.8m (2024: £409.3m) of which £9.4m (2024: £10.5m) related to UK exports. In the opinion of the Directors, it would be prejudicial to the interests of the Group to disclose a detailed analysis of turnover or profit.

2025 £000

2024 £000

421,799

Revenue from contracts with customers

409,331

a) Contract assets and liabilities Contract assets/liabilities relate to the Group’s rights of consideration for services provided on contracts. There were no contract assets at 31 December 2025 (2024: £nil).

2025 £000 3,145 3,631 6,776

2024 £000 4,344 2,202 6,546

Contract liabilities – customer advances Contract liabilities – deferred income

Total contract liabilities

b) Revenue recognised in relation to contract liabilities Revenue was recognised in the current reporting period relating to carried forward contract liabilities as below:

2025 £000 3,282 2,202 5,484

2024 £000 4,926 1,443 6,369

Contract liabilities – customer advances Contract liabilities – deferred income

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Lucy Group Ltd Annual Report & Accounts 2025

LUCYGROUP.COM

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