LucyGroup-ARA2024_spreads web ready_FINAL

CORPORATE GOVERNANCE REPORT CONTINUED

BUSINESS OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

Wates Principle 5 – Remuneration We aim to have remuneration polices which are fair, appropriate and affordable. The structure and level of remuneration is set to enable us to attract and retain a high-quality workforce and motivate high performance at all levels in the organisation. Remuneration decisions for the Executive Directors are handled by the Remuneration Committee, which reviews and sets competitive levels of remuneration for the Executive Directors aligned to the Group’s performance, both in terms of its annual results and long-term sustainable success. The Executive Directors set fees for the Non-Executive Directors by considering their roles and responsibilities, including where a Non-Executive Director chairs a Committee, and their time commitment.

Wates Principle 6 – Stakeholder Relationships and Engagement

External Auditors Wenn Townsend has reported to the Audit Committee that, in their professional judgement, they are independent within the meaning of regulatory and professional requirements, and the objectivity of the audit engagement partner and audit staff is not impaired. The Audit Committee has reviewed this statement and agrees with its conclusion. In accordance with Group policy, the lead audit partner was rotated six years ago to maintain an appropriate degree of rigour and independence and, after a Board review which is next scheduled for 2025, this rotation will continue to occur periodically. Going concern The Directors report that, having reviewed current performance and forecasts, the Group has adequate resources to continue in operational existence for the foreseeable future. They have, therefore, continued to adopt the going concern basis in preparing the accounts.

The Head of Internal Audit undertakes a programme of internal audits and reports their findings and recommendations to the Audit Committee, which raises any concerns to the Board for discussion and action. The Directors have reviewed the effectiveness of internal control and considered the key risks and exposures within the Group. The Group’s principal risks and uncertainties are described on pages 52 to 55, together with mitigating actions designed to control and minimise their impact. The system of internal control is designed to manage, rather than eliminate, risk of failure to achieve business objectives, and can only provide reasonable, not absolute, assurance against material misstatement or loss. These systems and controls are periodically assessed against market best practice, and internal processes are monitored to ensure adherence to these controls. The Board holds regular meetings where it approves major decisions, including significant items of capital expenditure, investments, funding and dividend policy. The Board is responsible for approving annual Group budgets and medium term plans. Performance against budgets is reported to the Board and substantial variances are explained. Forecasts are prepared each quarter and reviewed by the Board. In addition, there is open and frequent discussion, and detailed information is provided to Non-Executive Directors for their review and challenge. The Company has a formal Whistleblowing Policy through which employees can raise genuine concerns of possible wrongdoing, in confidence, through an independent helpline. If possible wrongdoing is raised by an employee, or is discovered by any other means, a full investigation is carried out and appropriate remedial steps are taken to address any findings.

CASE STUDY

Leading Responsibly

The Group engages regularly with each of its key stakeholder groups to ensure their needs are appropriately reflected in our purpose and priorities. Key stakeholder groups include employees, customers, suppliers, shareholders and the communities within which we operate. Details of engagement with key stakeholders are found in the sections on Relations with Stakeholders on pages 78 to 79, ESG on pages 56 to 65, and in the Report of the Directors on pages 76 to 77. The Board aims to promote the success of the Company for the benefits of our shareholders as a whole, considering the long-term consequences of its decisions and looking at those decisions from several perspectives. This involves the Board maintaining a dialogue with, and promoting the interests of, shareholders as a key priority throughout the year, not only ahead of the Annual General Meeting (AGM). The Board is accountable to shareholders for the performance and activities of the Group. The Board communicates the Group’s business activities to shareholders through the Annual Report and Accounts, the half-yearly announcement, and at other times as appropriate. The Company makes constructive use of its AGM, and shareholders attending the meeting have an opportunity to ask questions or represent their views there. By order of the Board.

In July 2023, we launched a new governance framework known as ‘Leading Responsibly’. The intention is for the Group’s businesses to operate independently, with more delegated authorities, yet always within a broader Group governance framework. This is being achieved through a review and update of the Group’s core policies, promoting training and understanding among all employees. Over the past 18 months, we have succeeded in launching a number of new policies and updating existing ones. New policies delivered in 2024 include Trade Compliance, Sustainable Development, Tax, and Crisis Communications. We have also established a dedicated, ISO 27001-compliant Data Management System (DMS) for all policies, built in SharePoint and accessible via the intranet. In 2025, with the vast majority of Group policies launched and associated training up to date, Group resources will support the businesses with local adaptation of policies (where required) and regular ongoing audits to support compliance requirements.

Board of Directors and Committees

Legal and Regulatory Framework

Policies and Procedures

Vision

Mission

Corporate Governance

Smart Goals

Strategy

Transparency and Accountability

Organisational Hierarchy

Madeline Laxton Company Secretary

Objectives

20 March 2025

Monitoring and Internal Control

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Lucy Group Ltd Annual Report & Accounts 2024

LUCYGROUP.COM

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