Notes to the Financial Statements for the year ended 31 May 2022
1 Accounting policies Basis of preparation
NCC Group plc (the “Company”) is a public 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 6 September 2022. These Group and Parent Company Financial Statements have been prepared and approved by the Directors in accordance with international accounting standards in accordance with UK-adopted international accounting standards (“UK-adopted IFRS”). 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. Ukraine conflict Management has reviewed the potential impact of the Ukraine conflict on the consolidated Financial Statements. The conflict is not considered to have a direct material impact due to the Group having limited direct exposure in the affected region. The conflict has an indirect impact due to the increased risks arising from the global economic impact on inflation and interest rates. Additionally, the Group will seek to deliver any additional revenue opportunities to provide additional cyber security services as a result of the conflict. Climate change The Directors have reviewed the potential impact of climate change and the Task Force on Climate-Related Financial Disclosures (TCFD) on the consolidated Financial Statements. Our overall exposure to physical and transitional climate change is considered low due to the nature of the business and cyber resilience industry. Further details are contained within pages 39 to 46 of the Annual Report. The Directors have considered climate change in the following areas of the consolidated Financial Statements, noting no material financial impact in each area: • Critical accounting judgements and key sources of estimation uncertainty • Going concern assessment • Property, plant and equipment – economic life and residual values • Impairment of assets – the impact of environmental change on growth rates and projected cash flows • Inventories – realisable value issues • Provisions – recognition of new liabilities or contingent liabilities arising from climate change and Group physical and transition risks of: • Greenhouse gas emissions – increased costs associated with more taxes and levies • Move to net zero – increased costs required to lower emissions • Margin risk – impact on delivery day rates and associated erosion of profit margin due to increased costs • Reputational risk – failure to comply with regulations resulting in negative impact on Group • Supply chain – increased supply costs and delayed deliveries impacting customer contracts/provision of services • Extreme weather or rising sea levels – reduction in revenue and increased costs
• Fair value measurement – climate change variables being incorporated into market participant valuations • Financial instruments – expected credit losses and risk of default on Group borrowings (RCF and term loan)
• IFRS 16 ‘Leases’ – changes to property lease portfolio or car lease agreements. The Group is moving in FY23 from a company car scheme to a salary sacrifice scheme (leased directly by the colleague); this will result over time to a reduction in the motor vehicle right-of-use-asset and corresponding lease liabilities, as the contract lease terms ends
NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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