NCC Group plc Annual Report 2021

Normalised Group profit before tax £27.5m (2020: £16.1m)

3 Our application of materiality and an overview of the scope of our audit Materiality for the Group financial statements as a whole was set at £1.2 million (2020: £0.8 million), determined with reference to a benchmark of Group profit before tax, normalised to exclude individually significant items as disclosed in note 5 of £27.5 million (2020: profit before tax of £16.1 million, as stated in the accounts before the prior period restatement), of which it represents 4.5% (2020: 5.0%). Materiality for the Parent Company financial statements as a whole was set at £0.3 million (2020: £0.3 million), determined with reference to a benchmark of Company total assets, of which it represents 0.1% (2020: 0.1%). In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Performance materiality was set at 65% (2020: 65%) of materiality for the financial statements as a whole, which equates to £0.78 million (2020: £0.5 million) for the Group and £0.2 million (2020: £0.2 million) for the parent company. We applied this percentage in our determination of performance materiality based on the level of identified misstatements and control deficiencies during the prior period. We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £60,000 (2020: £40,000), in addition to other identified misstatements that warranted reporting on qualitative grounds. Of the Group’s 41 (2020: 23) reporting components, we subjected 8 (2020: 10) to full scope audits for Group purposes. We conducted reviews of financial information (including enquiry) at a further 4 (2020: 4) non-significant components as these components were not individually financially significant enough to require an audit for Group reporting purposes but a review was performed to provide further coverage over the Group’s results. The components within the scope of our work accounted for the percentages illustrated opposite. For the residual components, we performed analysis at an aggregated group level to re-examine our assessment that there were no significant risks of material misstatement within these. The Group team instructed component auditors as to the significant areas to be covered, including the relevant risks detailed above and the information to be reported back. The Group team approved the component materialities, which ranged from £0.22m to £0.55m (2020: £0.10m to £0.63m), having regard to the mix of size and risk profile of the Group across the components. The work on 1 of the 41 components (2020: 1 of the 23 components) was performed by component auditors and the rest, including the audit of the Parent Company, was performed by the Group team. The Group team held video and telephone conference meetings with 1 (2020: 1) component location in the Netherlands to assess the audit risk and strategy as well as updates on performance. Video and telephone conference meetings were also held with the component auditors for the Netherlands. At these meetings, the audit findings reported to the Group team were discussed in more detail, and any further work required by the Group team was then performed by the component auditor. The US components were audited remotely by the Group audit team.

Group materiality £1.2m (2020: £0.8m) £1.2m Whole financial statements materiality (2020: £0.8m) £0.78m Whole financial statements performance materiality (2020: £0.5m) £0.55m Range of materiality at 8 components (£0.22m–£0.55m) (2020: £0.10m to

Normalised PBT Group materiality

£0.63m) £0.06m

Misstatements reported to the audit committee (2020: £0.04m)

Total profits and losses that made up Group profit before tax 87++ 22++1111++II ++ 66++77++II 89% (2020: 93%) 87 87 Total profits and losses that made up Group profit before individually significant items and tax 88++ 22++1010++II 80++ 1010++1010++II 90% (2020: 93%) 80 88 10 2 6 2

Group revenue 86++ 88++66++II ++ 99++55++II 94% (2020: 95%) 86 86 Group total assets 92++ 33++55++II 96++ 22++22++II 95% (2020: 98%) 96 92 3 2 9 8

Full scope for group audit purposes 2021 Reviews of financial information (including enquiry) 2021 Full scope for group audit purposes 2020 Reviews of financial information (including enquiry) 2020 Residual components

NCC Group plc — Annual report and accounts for the year ended 31 May 2021

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