LucyGroup-ARA2024_spreads web ready_FINAL

NOTES TO THE COMPANY ACCOUNTS

BUSINESS OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

1. Accounting policies Statement of compliance These financial statements have been prepared in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (FRS 101). The Company has taken the exemption allowed under Section 408 of the Companies Act 2006 from the requirement to present its own income statement. The profit for the year was £45.4m (2023: £38.0m). These financial statements present information about the Company as an Lucy Group Ltd is a private company limited by shares incorporated in England, United Kingdom. The address of the registered office is given in the Company information on page 132 of this report. The financial statements have been prepared in accordance with the Companies Act 2006 and the principal accounting policies as summarised below. They have all been applied consistently throughout the year. Disclosure exemptions adopted The Company has taken advantage of the following disclosure exemptions under FRS 101: • IAS 1: Presentation of comparative reconciliations for property, plant and equipment and intangible assets • IAS 1: Capital management disclosures • IAS 7: Exemption from preparing a cash flow statement • IAS 8: Disclosures in respect of standards in issue not yet effective • IFRS 15: Various disclosures in respect of revenue recognition including disaggregation of revenue and details of performance obligations • IAS 24: Related party disclosures to disclose related party transactions entered into • IAS 24: Disclosure of key management personnel compensation Functional and presentation currency The financial statements are presented in UK pound sterling, which is also the functional currency of the Company. Foreign currency transactions and balances Foreign exchange gains and losses resulting from the remeasurement of monetary items denominated in foreign currency at year-end exchange rates are recognised in the income statement. Non-monetary items are translated at the date of the transaction. individual undertaking and not about its Group. General information and basis of preparation

1. Accounting policies continued Investment properties Investment properties are valued annually and are included in the financial statements at fair value after taking appropriate professional advice. Changes in fair value are recognised in the income statement. No depreciation is provided in respect of investment properties. Investments Investments in subsidiaries, including long-term loans, are held at cost less any provision for impairment. Impairment provisions are based upon an assessment of the net recoverable amount of each investment. Other investments are measured at cost and are subject to impairment. Investments in equity securities are classified as available for-sale financial assets and are initially measured at cost, which is considered to equal fair value. Subsequently, such investments are measured at fair value and changes therein are recognised in Other Comprehensive Income. Leases The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The asset is initially measured at cost and subsequently depreciated using the straight-line method from the commencement date to the end of the useful life of the asset or the end of the lease term, whichever is earlier. 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 this is not available, the Company’s incremental borrowing rate. Generally, the incremental borrowing rate is used. The lease liability is subsequently measured at amortised cost using the effective interest method. The Company has elected not to recognise right-of-use assets and liabilities for short-term leases of assets that have a lease term of less than 12 months and leases where the underlying asset is of low value. Such leases are recognised as an expense on a straight-line basis over the term of the lease. Current and deferred tax The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income (OCI) or to an item recognised directly in equity is also recognised in OCI or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.

Revenue Revenue is measured at the fair value of consideration received or receivable, excluding sales taxes and net of returns, trade discounts and volume rebates. Revenue is recognised when control of the products or services has

Deferred balances are recognised on temporary differences where the carrying amount of an asset or liability differs from its tax base, except: • The recognition of deferred assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; • Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and that are subject to an insignificant risk of changes in value. Financial instruments Financial assets and liabilities are recognised in the balance sheet when the Company becomes party to the contractual provisions of the instrument. The Company classifies financial assets into one of three categories: i) amortised cost; ii) fair value through Other Comprehensive Income (FVOCI); and iii) fair value through profit or loss (FVTPL). The Group’s business model for managing the assets and their cash flows determines which classification is applied to each financial asset. Assets held under the ‘held to collect’ business model are classified at amortised cost; those ‘held to collect and for sale’ at FVOCI, and assets held under any other business model to the above, are classified at FVTPL. Derivative financial instruments The Group operates a centralised treasury function, which is responsible for managing liquidity, interest, commodity and foreign currency risks for the Group. As part of its strategy for the management of these risks at a Group level, the Company uses financial derivatives in accordance with the Group Treasury Policy. The Company uses derivative financial instruments, currency and commodity (copper) swaps to manage currency and commodity risks associated with the Group’s underlying business activities and the financing of these activities. The Company does not undertake any speculative activity, in accordance with the Group Treasury Policy.

transferred to the customer. Operating expenses

Operating expenses are recognised in the income statement upon utilisation of the service or at the date of their origin. Fixed assets Freehold buildings, fixtures and machinery are initially recognised at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the company’s management. Buildings, fixtures and other equipment are subsequently measured using the cost model, cost less accumulated depreciation and impairment losses. Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the straight-line method, on the following bases: • Freehold buildings Straight line over expected useful life • Leasehold premises Term of the lease, not exceeding 50 years • Leasehold improvements Not exceeding the term of the lease • Plant and equipment 4–15 years • Fixtures and fittings 3–10 years • Computer equipment 4–5 years • Computer software 3 years • Motor vehicles 4 years Material residual value estimates and estimates of useful life are updated as required, but at least annually. Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in the income statement within other income or other expenses. Intangible fixed assets Intangible assets, other than goodwill, are stated at cost less accumulated amortisation. Amortisation is calculated to write off the cost of the licences on a straight-line basis over the life of the licence. The residual value, if significant, is reassessed annually.

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Lucy Group Ltd Annual Report & Accounts 2024

LUCYGROUP.COM

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