NCC Group plc Annual Report 2021

Notes to the Financial Statements for the year ended 31 May 2021

1 Accounting policies Basis of preparation

NCC Group plc (the ‘Company’) is a company incorporated in the UK, with its registered office at XYZ Building, 2 Hardman Boulevard, Manchester M3 3AQ. The Group Financial Statements consolidate those of the Company and its subsidiaries (together referred to as the ‘Group’). The principal activity of the Group is the provision of independent advice and services to customers through the supply of cyber assurance and Software Resilience services. The Parent Company Financial Statements present information about the Company as a separate entity and not about the Group. These Financial Statements have been approved for issue by the Board of Directors on 14 September 2021. These Group and Parent Company Financial Statements were prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 and these Group Financial Statements were also in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (‘IFRSs as adopted by the EU’). On publishing the Parent Company Financial Statements here together with the Group Financial Statements, the Company is also taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual Income Statement and related notes that form a part of these approved Financial Statements. Brexit Management has reviewed the impact of Brexit on the Financial Statements. The Group has so far proven structurally resilient to any significant disruption caused by Brexit. The main risks to the Group from Brexit continue to be any reduction in demand from an economic slowdown as well as real or perceived differences in data protection standards which impact our global ways of working. On this basis, management has concluded that the impact should be limited; this includes any impact on the IFRS 9 expected credit loss model. Management also notes no changes to this assessment from a post-Balance Sheet event perspective. Covid-19 Management has reviewed the potential impact of Covid-19 on the Financial Statements. Accordingly, consideration has been given to the impact on the IFRS 9 expected credit loss model, IFRS 15 collectability assessments, IFRS 16 lease term assessments (no material impact on lease term assessment), the annual impairment review and the going concern and viability assessments. New and amended accounting standards that have been issued but are not yet effective At the date of authorisation of these Financial Statements, the following standards and interpretations were in issue but have not been applied in these Financial Statements as they were not yet mandatory: • IFRS 17 ‘Insurance Contracts’ • ‘Classification of Liabilities as Current or Non-Current’ (Amendments to IAS 1) • Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) • Amendments to IAS 37 ‘Onerous Contracts – Cost of Fulfilling a Contract’ • Conceptual Framework – ‘Amendments to References to the Conceptual Framework in IFRS Standards’ • Amendments to IAS 16 ‘Property, Plant and Equipment – Proceeds Before Intended Use’ • Annual Improvements to IFRS Standards 2018–2020 Cycle – Amendments to IFRS 1 ‘First-time Adoption of International Financial Reporting Standards’, IFRS 9 ‘Financial Instruments’, IFRS 16 ‘Leases’, and IAS 41 ‘Agriculture’ These IFRSs are not expected to have a material impact on the Group’s consolidated financial position or performance of the Group. Application of significant new or amended EU-endorsed accounting standards The following amended standards and interpretations were also effective during the year; however, they have not had a material impact on our consolidated Financial Statements. • Amendments to IFRS 3 ‘Definition of a Business’ • Amendments to IAS 1 and IAS 8 ‘Definition of Material’ • Covid-19 Related Rent Concessions – Amendment to IFRS 16 Application of IFRIC agenda decisions In April 2021, the IFRS Interpretations Committee (IFRIC) published an agenda decision on the clarification of accounting in relation to the configuration and customisation costs incurred in implementing Software-as-a-Service (SaaS) as follows: • Amounts paid to the cloud vendor for configuration and customisation that are not distinct from access to the cloud software are expensed over the SaaS contract term • In limited circumstances, other configuration and customisation costs incurred in implementing SaaS arrangements may give rise to an identifiable intangible asset, for example, where code is created that is controlled by the entity • In all other instances, configuration and customisation costs will be expensed as the customisation and configuration services are received See Notes 12 and 34 for further details. Basis of measurement The consolidated Financial Statements have been prepared on the historical cost basis except for consideration payable on acquisitions, the revaluation of certain financial instruments and investments. Functional and presentation currency The Group and Company Financial Statements are presented in millions of Pounds Sterling (£m) because that is the currency of the principal economic environment in which the Group operates.

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

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