LucyGroup-ARA2024_spreads web ready_FINAL

NOTES TO THE COMPANY ACCOUNTS CONTINUED

BUSINESS OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

1. Accounting policies continued Recognition and measurement

3. Intangible assets

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Provisions are discounted to their present values, where the time value of money is material. In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognised. Significant management judgement in applying accounting policies and estimation uncertainty When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses. The following judgements and estimates have had the most significant effect on amounts recognised in the financial statements: Recognition of deferred tax assets The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Company’s future taxable income against which the deferred tax assets 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. 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 appropriate professional advice. 2. Profit for the financial year The Company profit for the year after taxation is £45.4m (2023: £38.0m).

Licences and software £000

All derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Derivative financial instruments are formally documented at the initial designation of the hedge, the documentation describes the relationship between the hedged item and hedging instrument, risk management strategy and the method for assessing hedge effectiveness. Cash flow hedging Derivative financial instruments classified as cash flow hedges are those that hedge the Group’s net variability in cash flows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction. These include commodity (copper) swaps and foreign currency exchange forwards and swaps. Equity, reserves and dividend payments Share capital represents the nominal value of shares that have been issued. Share premium includes any premiums received on issue of share capital. Incremental transaction costs that are directly attributable to the issuing of shares are deducted from share The Company contributes to a pension scheme operated by the Group providing benefits based on final pensionable pay for eligible employees who joined on, or before, 10 April 2002. The scheme is administered by trustees and the funds are independent of the Company’s finances. The pension cost of the defined benefit scheme is charged to the income statement so as to spread the cost of pensions over employees’ working lives with the Company. The Group provides the Lucy Group Personal Pension Plan for UK employees who are not in this scheme. Eligible employees in the UK, who are not covered by these schemes, were enrolled into a scheme established under Part 1 of the Pensions Act 2008. The pension costs of these schemes are charged as incurred. Provisions A provision is recognised when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required from the Company and amounts can be estimated reliably. premium, net of any related income tax benefits. Post-employment benefits plans

Gross carrying amount

At 1 January 2024

1,550 1,550

At 31 December 2024

Amortisation At 1 January 2024 Charge for year

1,471

48

At 31 December 2024

1,519

Net book value At 31 December 2024 At 31 December 2023

31 79

4. Property, plant and equipment

Freehold land and buildings £000

Fixtures and fittings £000

Motor vehicles £000

Total £000

Cost or valuation

At 1 January 2024

2,264

5,554

493

8,311

Additions Disposals

530

340

23

893

–

(331)

(26)

(357)

At 31 December 2024

2,794

5,563

490

8,847

Depreciation At 1 January 2024 Charge for year

503

4,521

339

5,363

44

314

73

431

Disposals

–

(331)

(26)

(357)

At 31 December 2024

547

4,504

386

5,437

Net book value At 31 December 2024 At 31 December 2023

2,247 1,761

1,059 1,033

104 154

3,410 2,948

5. Investment property Investment property represents real estate properties in the UK, which are owned to earn rentals and for capital appreciation. Note 26 of the Group accounts (Financial Instruments) sets out how the fair value of the investment properties has been determined. Changes to the carrying amounts are as follows:

2024 £000

2023 £000

165,939

Carrying amount 1 January

166,408

616

Additions Disposals

2,302

(60)

(83)

2,401

Revaluation

(2,688)

168,896

Carrying amount 31 December

165,939

Freehold land and buildings, which had a value of £53.5m in 2020, have been pledged to secure borrowings of the Company (see Note 11).

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Lucy Group Ltd Annual Report & Accounts 2024

LUCYGROUP.COM

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