accesso Technology Group
Annual Report 2023

Plain-text annual report

accesso Technology Group plc Annual Report & Accounts 2023 global transformation Contents Generation – Page Contents Generation – Sub Page accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements At accesso, we believe technology has the power to redefine the guest experience. We provide solutions that empower our clients to create connected guest experiences to drive their businesses forward. Read more on page 4 Our global team (average headcount during 2023) UK & EU APAC South America North America 2023 161 22 29 458 Many of our team members come from backgrounds working within the attractions and cultural industry. In this way, we are experienced operators who run a technology company serving attractions operators, versus a technology company that happens to serve the market. Our staff understand the day-to-day operations of managing complex venues and the challenges this creates, and together we strive to provide our clients and their guests with technology that empowers them to do more and enjoy more. From our agile development team to our dedicated client service specialists, every team member knows that their passion, integrity, commitment, teamwork and innovation are what drive our success. accesso is a public company, listed on AIM: a market operated by the London Stock Exchange. For more information visit www.accesso.com. Follow accesso on X, LinkedIn and Facebook. Contents Generation – PageContents Generation – Sub PageContents Generation - Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Commenting on the results: “In 2023 we exceeded our profitability target and completed three strategic acquisitions that set the stage for accelerated future growth. We won new work, innovated across our product set, and delivered new solutions for our customers. As a result, our technology now optimises revenue for more than 1,200 leisure venues across 34 countries and a wide range of verticals – from the Pyramids in Egypt to the world’s most popular theme park destination in Orlando. At the heart of our success is our ability to break new ground while continuing to increase impact in our traditional ticketing and virtual queuing categories. With accesso FreedomSM, our new Restaurant and Retail offering, we have seen encouraging early demand and a growing pipeline which will expand our reach into the hospitality market. With Qview, our machine-learning-driven queue time measurement system, we were recognised as a Best New Product by the International Association of Amusement Parks and Attractions (IAAPA). And in accesso Passport®, our market leading ticketing and eCommerce platform, we rolled out major upgrades that will enhance our core offering. Each of these efforts demonstrates our focus on organic innovation and the important role it plays in our future growth aspirations. Alongside this organic progress, our acquisitions help us boost earnings, advance our product roadmap, and accelerate our growth in new geographies. Paradocs Mountain Software, now accesso ParadoxSM, deepens our leadership in the growing ski market. With more than 150 venues as existing customers, accesso is – by far – the leading technology provider in the North America ski sector. VGS, now accesso HorizonSM, is the ticketing solution of choice for the world’s largest theme park destination. It expands our blue-chip customer base and provides a significant opportunity for accelerated growth, especially alongside our eCommerce services. DigiSoft, while smaller in scale, enhances our commitment to mobile- first solutions, including apps, which are an essential route for end users to access ticket purchases, ticket entitlements, virtual queuing and food orders all in one organised venue-centric solution. I’m confident no competitor can match the quality and diversity of our solutions while delivering revenue and profit expansion at our scale. Our dedicated teams around the world delivered a year to be proud of. I am even more excited about the work we have done to position accesso for a new phase of growth.” Steve Brown, Chief Executive Officer of accesso Read more on page 11 Contents 2023 Financial highlights At a glance Strategic report Our business model Investment case accesso’s growth strategy Our markets Navigating the future Chief Executive’s review Q&A with Chief Commercial Officer Financial review Principal risks and uncertainties Stakeholder engagement and Section 172 statement Environmental, social and governance report Governance The Board of Directors Corporate governance report Directors’ remuneration report Report of the Directors Statement of Directors’ responsibilities Independent auditor’s report to the members of accesso Technology Group plc Financial Statements Consolidated statement of comprehensive income Consolidated statement of financial position Company statement of financial position Consolidated statement of cash flow Company statement of cash flow Consolidated statement of changes in equity Company statement of changes in equity Notes to the consolidated financial statements 2 4 5 7 8 9 10 11 15 16 22 25 27 38 39 42 51 53 54 63 64 65 66 67 68 69 70 1 Company information 105 accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Contents Generation – Sub Page 2023 Financial highlights Revenue Revenue – constant currency4 $149.515m $148.523m 2023 2022 $149.515m +7.0% 2023 $148.523m +6.3% $139.730m 2022 $139.730m Cash EBITDA1 $23.626m Statutory profit before tax $8.808m 2023 2022 $23.626m (8.4)% $25.805m 2023 2022 $8.808m (29.1)% $12.417m Net cash2 Adjusted basic EPS (cents)3 Basic earnings per share (cents) $31.465m 37.48 19.19 2023 $31.465m (51.3)% 2022 $64.663m 2023 2022 37.48 +4.3% 2023 19.19 (21.4)% 35.93 2022 24.41 1 2 Cash EBITDA: operating profit before the deduction of amortisation, depreciation, acquisition and integration costs, and costs related to share-based payments less capitalised development costs (as detailed on page 20). Net cash is calculated as cash and cash equivalents less borrowings. 2 3 4 Adjusted basic earnings per share is calculated after adjusting operating profit for impairment of intangible assets, amortisation on acquired intangibles, acquisition costs and share-based payments, net of tax at the effective rate for the period on the taxable adjusted items (as detailed on page 90). Revenue metrics for the period ended 31 December 2023 have been prepared on a constant currency basis with the period ended 31 December 2022 to assist with assessing the underlying performance of the revenue streams. Average monthly rates for FY 2022 were used to translate the monthly FY 2023 results into a constant currency using the range of currencies as set out below: a. GBP sterling – $1.13 – $1.36 b. Euro – $0.98 – $1.13 c. Canadian dollars – $0.73 – $0.79 d. Australian dollars – $0.64 – $0.74 e. Mexican pesos – $0.05 – $0.05 f. Brazilian real – $0.18 – $0.21 Contents Generation – PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements • Full year expectations for 2024: With significant progress made against our strategy, the Group expects another profitable and cash-generative year in line with current expectations, with revenue of not less than $160.0m, gross margin of approximately 80% and Cash EBITDA margins of not less than 17%. 2023 Financial highlights continued Performance highlights Outlook & guidance • Exceeded expectations with strong profitability • Continued innovation to extend market • Market backdrop: leadership and enhance guest experiences accesso Freedom, our new Restaurant and Retail platform, allows venues to transform from legacy, operator-driven sales terminals to a modern solution that supports mobile food ordering, self-service ordering kiosks, and mobile point-of-sale. The solution is a ubiquitous offering across our diverse customer base that will provide significant cross-sell opportunity and the potential to expand our reach into the broader hospitality market. Qview, our machine-learning-enabled queue management technology, won a Best New Product Brass Ring award at IAAPA. Finally, we completed a significant upgrade on accesso Passport including expanded functionality for payments, new dynamic pricing capabilities and a full upgrade of the eCommerce user interface. • Operational success demonstrates strength and durability at our core Continued customer base growth in key markets with high calibre logos, and a total of 28 new venues were signed during the period across attractions, entertainment venues, ski resorts, theme parks, waterparks, zoos and aquariums in North America, EMEA and APAC (FY 2022: 24). The Group’s solutions continue to attract customers with complex needs, and a total of 10 new clients were added that are leveraging more than one accesso solution. Through our three acquisitions, we added a further 90 customers across 273 venues to our customer base. With visitor demand stabilised, attractions and venues are increasingly focused on improving the guest experience, achieving a higher percentage of returning visitors, and increasing capita per guest. Our products are perfectly positioned to help customers achieve these objectives. As customers implement technology to drive future spend, our investments made in product and scalability continue to position us at the forefront of the market. • Operational footprint and costs: After two years of double digit rises in underlying administrative expenditure, following our return to a full headcount to service additional demand and deliver on our growth objectives, we expect stability in the short term with increases in the range of 8-10%. We are continuing to be mindful of the impact of inflation and have challenged our leaders to operate efficiently with the resources available. • Focus on global growth with extended in-market presence: Following the completion of the acquisitions this year, we have now added offices in Canada, Dubai, Italy and Singapore, providing the Group with an important footprint in markets where on-the-ground presence is crucial to accessing opportunities. This is in line with our continued focus on global growth. and cash performance while investing for growth Delivered FY 2023 Cash EBITDA of $23.6m (FY 2022: $25.8m), ahead of expectations. This came alongside investment in both existing and acquired products to help drive accesso’s next phase of growth and customer success. The Group is also in a strong cash position, ending the year net cash positive despite an outflow of $50.0m related to the three acquisitions and maintaining a net cash position of $21.7m as at 31 March 2024. • Robust top line progress alongside mix-shift towards high quality repeatable revenue streams Delivered revenue growth of 7.0% to $149.5m (FY 2022: $139.7m). This was achieved while taking proactive steps to reduce lower margin or breakeven revenue streams while focusing on higher quality, more sustainable growth. Excluding the impact of our mid-year shift away from providing virtual queuing operational staff for a key customer, total Group revenue increased 9%. Transactional revenue for virtual queuing increased by 13% while our overall ticketing revenue increased by 12%. Overall Gross Margin increased from 74.4% to 76.4%. • Three strategic acquisitions enabling a new wave of geographic, technology and end- market diversification VGS, now accesso Horizon, is a leading ticketing platform with a blue-chip customer base, and has already delivered a significant Middle East win with Saudi Entertainment Ventures (SEVEN). Paradocs Mountain Software, now accesso Paradox, makes us the largest guest experience technology provider to the ski industry in North America. DigiSoft structurally transforms how we approach venue- centric mobile solutions. 3 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements At a glance Our products Ticketing & Distribution Guest Experience Payments, security, support & professional services Leading the way in technology solutions for the future of leisure, entertainment and cultural markets. Our cutting-edge solutions drive increased transaction- based revenue through ticketing, restaurant and retail commerce, virtual queuing, distribution, digital professional services, and guest experience management software. accesso is positioned for global growth, currently operating in 34 countries and continuing to expand, particularly in the Middle East and Europe. Our industry is rapidly changing and to stay ahead, we continually invest in research and development to benefit our clients while advancing the guest experience. Approximately 700 employees & contractors Proven solutions 1,200+ venues around the globe Amusements, ski, live entertainment, zoos & aquariums and cultural 4 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Our business model What we do Our technology solutions allow venues to increase the volume and range of on- and off-site spending and to drive increased transaction-based revenue through cutting-edge ticketing, unified commerce, virtual queuing, distribution, and experience management software. Providing innovative solutions that empower our clients to create connected guest experiences and drive their businesses forward. Our solutions Augmented by... Developed through... Sold to... Ticketing and distribution Queuing Visitor management Experience enhancement Restaurant/Retail commerce Visit www.accesso.com to learn more about our unique solution offerings. Digital professional services Organic growth through R&D Delivering custom digital experiences, offering venues the power to transform guest interactions through personalised UX design, mobile development, and eCommerce websites that seamlessly integrate with accesso’s suite of innovative products. 24/7 customer support teams We offer 24/7 customer support teams and guest-facing call centre staff to support our hosted and local offerings. The development of technologies tailored for deployment by entertainment operators and venues. Growing ecosystem of strategic partners & acquisitions Enabling complete solutions by augmenting offerings with managed partnerships and the acquisition of critical complementary Intellectual Property (IP). Theme parks, ski resorts, zoos and aquariums, cultural venues, live entertainment, water parks, fairs and festivals, performing arts and tours and attractions. Generating revenue through... Investment in our clients’ success. We align our revenue model so that we do well when our clients do well. Active cross- selling of synergistic solutions allows us to establish long- term client partnerships which deliver mutual value year after year, while relentless focus on technology innovation drives margin improvement. Our driving strengths Leading integrated technology Integrated technology solutions for eCommerce ticketing, restaurant and retail, virtual queuing, guest experience and ticket distribution. 5 A trusted brand We work with the largest attraction operators under long-term agreements. Globally distributed operation We support over 1,200 venues in 34 countries. Experienced leadership A clear strategy and focus on innovation and delivering best-in-class products. Strong partnerships An ongoing commitment to identifying the best complementary products to complete our solution and service offerings and the capacity to acquire market-leading IP. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Our business model continued How we generate value for stakeholders See stakeholder engagement on pages 25–26 Customers Our solutions enable customers to increase spending per capita; track, allocate and navigate capacity at large scale; deepen consumer insights; and meet a flexible range of customer requirements. Our expert 24/7 support team deliver reliability at scale. Shareholders Shareholder value and returns from profitable, cash-generative growth with a high proportion of repeatable revenue. Large enterprise customers under long-term contracts with high barriers to entry drawing on patented award-winning technology. Consumers Driving brand loyalty for clients across our global portfolio by delivering exceptional integrated digital guest experiences designed to drive visitation and brand advocacy. Employees Interesting and rewarding careers where innovation is at the forefront of our strategy, with the opportunity to work with an enviable customer base of blue chip and owner-managed venues across the globe. Alignment Our goals are aligned with customers, as we share in revenue upside; our teams’ goals are aligned with the business through incentive plans; and our customers’ goals are aligned with their consumers through personalisation at scale alongside identity services. 6 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Investment case We provide solutions that empower our clients to create connected guest experiences and drive their businesses forward. Ambitious earnings targets alongside strong cash generation Robust balance sheet with sensible and effective capital allocation Highly capable and experienced management team We have demonstrated continued profitability in recent years and sustainably growing margins is at the forefront of our ambitions. Growth to date has not come at the cost of a weak financial position. We remain in a net cash position and will continue to deploy capital in the most efficient manner to generate long-term shareholder returns. At accesso, our passion for innovation drives everything we do, and our experienced global management team exemplifies our commitment to providing premier technology to our clients worldwide. With almost 190 years of combined experience in the leisure and attractions industry, our Executive Team deeply understands our clients’ needs, ensuring we deliver the best guest experience possible. Strong client base Competitive advantage International expansion opportunities We have established relationships with some of the leading leisure and entertainment brands globally. These long-term partnerships not only provide us with steady, repeatable revenue streams but also serve as a testament to the quality and reliability of our products and services. Our highly complementary product set presents strong cross-selling opportunities across this impressive base. With a market-leading product set, the breadth and scale of our solutions are the envy of our competitors. We are unmatched in the industry and will look to capitalise on this position as we provide our customers with innovative products that drive sustainable revenue growth. The high barriers to entry and strong customer relationships further strengthen our position in the market. While we have a strong presence in key markets such as North America and Europe, there are significant opportunities for expansion into emerging markets, such as the Middle East, where the leisure and entertainment industry is growing rapidly. With its proven track record and scalable technology platform, we are well-positioned to capitalise on these opportunities. 7 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements accesso’s growth strategy Our strategy is to solidify our position as market leaders while driving sustainable growth for our stakeholders through our focus on six core growth areas. Core strategic areas: • Continue building presence in Tier 1: Leverage the strategic acquisitions made in FY 2023 to establish dominance in Tier 1 clients, ensuring market leadership and stability. • Align success models with clients: When our clients thrive, so do we. We create mutually beneficial relationships with clients by aligning success metrics. Moreover, our trusted partnership approach fosters a cycle of success where gains for our clients translate into our growth – empowering us to reinvest in continual product improvement. • Expand geographical markets: Following the recent acquisition of VGS, now accesso Horizon, accesso is strategically positioned to expand into previously untapped geographical markets such as the Middle East. The addition of the accesso Horizon ticketing & visitor management system enhances our capabilities to serve diverse venues worldwide. • Invest in modular development: By intentionally focusing on core solutions that address the complex requirements of our industry space, and developing our solutions in a modular way that allows seamless integration – we empower clients to add functionality as needed. This approach enables us to provide Tier 1 level solutions to mid- market segments while facilitating cross-selling and upselling opportunities across all segments. Our common technology investment amplifies the reach of Tier 1 innovations, fostering innovation adoption and revenue growth while ensuring accessibility and scalability across all client tiers. • Accelerate growth in ski: Leverage specialised expertise to bolster our presence in the ski industry, with targeted investments in snow school functionality and mobile capabilities to differentiate our offerings and capture market share. • Enhance managed services offering: Introduce expanded managed services, including hosting solutions, to streamline client interactions, reduce friction in purchasing, and enhance overall customer experience. eCommerce A record 106.5m A record 106.5m tickets processed, as customers embrace the power of online solutions, and we capitalise on demand. 8 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Our markets accesso operates in a dynamic market space characterised by evolving guest preferences and technological advancements. We serve a wide range of niche markets, and guests across all these markets are demanding more personalised and engaging experiences. In turn, venue operators need a more diverse set of technologies to meet guest needs. Amusements and attractions Ski industry Operating with a global reach, we prioritise best-of-breed visitor management, ticketing, and multi-channel commerce and are strategically extending our presence from Tier 1 markets into lower tiers with packaged offerings supported by professional services. Core market regions are North America, Europe, and Australia, with a strategic foothold in the rapidly growing Middle East market. From 2020-2025, the Middle East and Africa have a projected compound annual growth in attendance of 27.1%(1). Our next-generation solutions, developed in collaboration with industry insiders, are tailored for snow sports enthusiasts and position us as a dominant supplier. In the United States, there are currently 480 ski areas boasting some 65.4 million skier visits – more than any other country in the world(2). Reserved seating arenas Zoos and aquariums While this market is well-established, we are preparing for our entry into the UK market in 2024. Our decision to enter the UK market strategically positions us to seize on rising demand for innovative solutions. The UK’s cultural heritage around theatre, live music and spectator sports is underpinned by robust market dynamics and healthy projected growth. According to the World Association of Zoos and Aquariums (WAZA), zoos and aquariums worldwide welcome approximately 700 million visitors annually(3). The zoo and aquarium markets offer room for growth, as we enhance the guest experience across all tiers and make sophisticated features available to a wider audience driving client value and differentiation. IAAPA Global Theme Park and Amusements Outlook 2021-2025. Sources: 1 2 NSAA Economic Impact Infographic 2023. 3 WAZA – World Association of Zoos and Aquariums. WAZA, Accessed 18 Mar. 2024, www.waza.org. 9 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Navigating the future We monitor trends and continuously iterate our solutions to meet the evolving needs of our clients. Emerging trends & pressures How this shapes our future Efficiency Venue operators prioritise efficiency, aiming to reduce labour costs and barriers to access. Guest self-service Democratising the guest touchpoint and enabling guest self-service to allow operators to do more with less. Personalisation Guests expect a personalised and relevant journey. Service expectations Guests have more entertainment options than ever competing for their wallet share. Differentiated solutions Recognising the needs of our clients to leverage a unique market or differentiate the guest experience they provide. Promoting guest understanding Continuously investing in our guest experience platform to understand and predict individual guest behaviour to enhance the connected experience at scale. Disciplined product architecture Building segmented, componentised solutions on robust foundations for security, scalability, and modularity allows us to share the capabilities of market-leading attractions and make those capabilities available at the appropriate scale for smaller specialised operators. Extensibility and flexibility Providing APIs and Software Development Kits (SDKs) for rapid business process evolution and integration of third-party or home- grown solutions. Professional services are also offered to support smooth implementation. Confidence Delivering solutions and services that inspire trust and loyalty. Security and compliance Delivering solutions on world-leading security architectures to ensure compliance with the strictest standards. 10 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Chief Executive’s review I am excited about the work we have done to position accesso for a new phase of growth.” Steve Brown Chief Executive Officer 11 Long-term thinking underpinned by innovation and impact in the here-and-now 2023 was another strong year for accesso. We delivered innovation and impact for our customers, executed well across all our products and markets, and in bringing three outstanding acquisitions to our business, made important strides against our longer- term diversification strategy. Our confidence to pursue these plans with such vigour is a result of the quality and strength of accesso today. In 2023, we delivered top line growth, exceeded profit expectations and, once again, generated strong cash flow. We have a customer base, operational platform, product and scale unmatched in our sector. We are leveraging the strength of our foundation as we continue to extend our position in the market. On the organic front, we have continued to innovate, introducing new capability and use-case advances to enhance our platform and broaden its applicability. We are deepening our expertise in growth areas like Restaurant and Retail, and in new and exciting markets like Saudi Arabia and the UAE. As we approach these opportunities, our technology integrates, scales and adapts more seamlessly than ever – generating better guest experiences and outcomes for our customers. Coupled with the crisp execution in our organic business, our three acquisitions will help us build on our position and stand to accelerate our growth over the mid-term. They increase the internationalisation of our footprint, elevate our leadership in the important ski market, and advance the quality of the technology platform on which we will drive future innovation. Bringing VGS, Paradocs Mountain Software and DigiSoft into the accesso ecosystem also opens up material cross-selling opportunities across our product set and emphasises our commitment to globalised functionality and mobile-first solutions. Combining the strength of our existing business with the firepower of these acquisitions reinforces our unique market position. Our scale and reach means that we are able to access opportunities within multiple markets and a vast range of end sectors in a way that is unique to accesso. Significantly, we have been able to do all of this while investing in the evolution of our organic business and maintaining a level of financial performance of which I am extremely proud. Financial performance During 2023, we invested for future growth while exceeding our profitability target for the full year. Revenue improvement of 7% demonstrates solid growth against stabilised market demand and, importantly, adjusting for our planned shift away from lower margin revenue streams, we saw top line growth of 9%. This approach saw us complete the transition away from a material portion of revenue associated with our involvement in accesso LoQueue operations for a key customer during the year. This proactive step impacted revenue in 2023 and will have a further impact in 2024, but helps us accelerate towards a more focused, visible, sustainable and high quality revenue profile going forwards. Our focus on margin and cash generation forms a fundamental part of our value proposition, and our continued ability to execute within those parameters is a positive endorsement of the direction of our business and the quality of our execution. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Chief Executive’s review continued For 2023, Cash EBITDA stood at $23.6m (FY 2022: $25.8m), ahead of our expectations. This was achieved while we continued to invest in our new restaurant and retail platform, upgraded our existing core products, and began to integrate three transformative acquisitions. At the same time, we have rapidly paid down debt from the acquisitions, having already paid off $13.75m of the $35.0m drawn, and ending the period net cash positive at $31.5m. Post-period end, we have paid down a further $1.5m of our debt and repurchased a further $2.8m in shares. We ended March 2024 with a net cash position at 31 March 2024 of $21.7m, in line with our expectations, as we head toward our peak summer trading period. Organic product innovation to extend leadership position across multiple verticals During the year, we made significant updates to our product set to meet the evolving needs of our customers and improve touchpoints for our customers across the entire guest experience. Restaurant and Retail During 2023, the Group invested substantially in deepening its strategic focus on the Restaurant and Retail segment and capitalise on its 2022 acquisition of high-quality technology assets in this growing space. With the acquisition, the Group saw a significant opportunity to develop a product that would address a unique and unmet need in the sector: the demand for a solution that accounted for the contextual and specific functional requirements of restaurant and retail operations that extend well beyond the parameters of standalone outlets. In today’s market, guests expect to redeem entitlements and offers seamlessly, especially if they are packaged with admission, membership benefits and season passes. Our new proposition enables this functionality and also allows operators to deliver a mobile user experience focused on self-service at vast scale. This product came to life during the period with the launch of accesso Freedom. This all-new product’s value becomes even more meaningful when used as part of a wider solution – for example, alongside accesso Paradox, our newly acquired Ski market technology. Having launched in November 2023, we have already seen one customer go live, and delivered 5 post- period wins. eCommerce The period also saw upgrades to our leading accesso Passport product which delivered a record 106.5 million tickets in the year. As a flagship part of our business and an important tool for our customers that spans multiple areas of the guest experience – including eCommerce, PoS, guest support and payments – we are committed to modernising and innovating along with evolving consumer behaviour and customer demands. With this in mind, we are well under way with the development of a new extension to accesso Passport eCommerce which will be adaptable in phases to accesso Paradox in the near term and accesso Horizon in the mid-term. This will provide a significant upgrade to accesso Paradox eCommerce and expand the accesso Horizon business model to include eCommerce capabilities with the power of our proven, industry-leading technology. Our unmatched eCommerce capabilities paired with industry-leading platforms like accesso Paradox and accesso Horizon perfectly illustrate the complementary value propositions across our solutions and the significant transactional revenue growth opportunity made available to us through our recent acquisitions. Virtual Queuing With the majority of our virtual queuing solution now in the hands of visitors via their mobile phone, we continue to gain operational efficiency by reducing reliance on proprietary hardware and related overheads. With fewer staff needed to handle hardware provision and our key operational functions now focused on redemption of virtual queuing entitlements, mid-year we shifted away from the operational staffing for a key customer and the corresponding pass- through revenue. Net of the impact of the pass-through revenue to cover the park staffing costs, accesso LoQueue revenue increased by 13% and highlights the continued potential for growth from our innovative and proprietary virtual queuing technology. 12 During the year, we also launched Qview, an advanced, patent-pending line- counting system prepared to modernise wait time estimation for theme parks and attractions. Combining real-time images and Machine Learning, Qview provides continuous and accurate wait times. This allows customers to better manage their time within attractions, streamline operations and elevates the overall guest satisfaction. When visitors are better able to manage their time, they are more likely to spend within other areas of the attraction and have a better experience, leading to increased likelihood of a return visit. As a testament to its outstanding innovation, Qview was recognised as a “Best New Product” for the attractions industry by IAAPA – the largest international trade association for amusement facilities globally – as part of its 2023 Brass Ring Awards programme at IAAPA Expo 2023 in Orlando, Florida. This demonstrates the technological innovation that we are continuing to champion and deliver for our customers. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Chief Executive’s review continued Three strategic acquisitions already delivering results 13 The three acquisitions we made during the year all unlock key components of our strategy. We detailed the strengths of each business at the time of the interim results, and it is important to reflect on the opportunities they have already provided to our business, and how they will contribute to our proposition over the longer term. 1 Paradocs Mountain Software Strategic fit and capability Paradocs, acquired in April 2023 and now accesso Paradox, significantly improves our position within the ski market. Paradocs was a leading Canadian- based provider of cutting-edge software solutions specifically for the ski industry and was established in 2001. Our businesses shared an important ethos – that the ski industry needs a holistic and integrated approach to its operations to truly optimise operations and the guest experience. The flexible, integrated solution empowers ski resorts to take full control of their unique business needs across ticketing and passes, snow school, equipment rental, and online sales. Adding this contemporary and powerful solution to our offering supports accesso’s long-standing commitment to serving as the industry’s premier ski solutions provider. Progress to date We are already seeing the quality of accesso Paradox flow through to results – 10 new resorts will be running accesso Paradox for the 2023/24 ski season. We saw the first transition from accesso Siriusware to accesso Paradox, as our customers recognise the value of the hosted all-in-one mountain management solution. Following the acquisition, combined with the strong position we already had through products such as accesso Siriusware and accesso Passport, we have furthered our position as the largest ski software provider in North America – by far – as we now serve more than 150 venues across the region. The contracts already won, and the progress we are continuing to see post-period end, give us good momentum heading into 2024. Over the medium and long term, we are incredibly well positioned to resolve the complexity of the projects that these dynamic resorts require in a way that our competitors cannot match. 2 VGS Strategic fit and capability VGS, a leading ticketing and entitlement management platform, was acquired in June 2023 and rebranded to accesso Horizon. This acquisition significantly strengthened our global position, further extended our market leadership and provides a truly innovative platform from which we can continue to scale. The VGS technology is utilised by high profile leisure, entertainment and cultural businesses around the globe, and has supported renowned visitor attractions in all aspects of selling, distributing, and redeeming tickets since 2011. Its client roster of more than 200 venues includes the world’s largest theme park resort destination in Orlando, Florida, as well as leading theme park brands in Dubai, Singapore, Japan and China. Beyond theme parks, the ticketing and visitor management platform supports zoos, observation towers and other diverse attractions in a total of 11 countries around the globe, including one of the Seven Wonders of the Ancient World – the Pyramid of Giza in Egypt. With its top-tier client base, VGS’s expansive feature set and robust scaling capabilities provide a foundational platform for growth. With the addition of eCommerce functionality in the mid- term, accesso Horizon will continue to stand at the forefront of the market and the future of venue ticketing and entitlement management. Progress to date The breadth of VGS’s international business and its offices in Milan, Dubai and Singapore have already given us access to new markets where a physical presence is important to winning opportunities. This is particularly relevant in our efforts to expand our footprint in the Middle East and in Asia Pacific. A significant post-period win of a major Middle East customer will see accesso Horizon provisioned across 22 new venues in 14 cities for Saudi Entertainment Ventures (SEVEN). In the Asia Pacific region, our office in Singapore and expanded commercial presence is presenting a range of new to accesso opportunities. Looking ahead, in addition to the continued global growth for accesso Horizon, we are now presented with new cross-selling targets across its initial client base. Importantly, there is significant potential in the mid-term and beyond as we realise the transactional revenue opportunity provided by extending the solution to include eCommerce functionality. The VGS platform fits squarely into our technology roadmap, adds a powerful industry- leading solution to our business and unlocks a range of global opportunity. 3 DigiSoft Strategic fit and capability DigiSoft, headquartered in Cork, Ireland, was acquired in May 2023, having previously been a key partner for augmenting our mobile development initiatives. Mobile apps, although not transactional themselves, are a key delivery mechanism for a range of our transactional revenue solutions including tickets, season passes, virtual queueing and mobile food ordering. Bringing this outstanding team in-house gave us increased flexibility and efficiency, allowing us to execute at-pace on client requests and solidifies another key differentiation point for our business as we offer the full range of solutions needed by venue operators. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Chief Executive’s review continued People and culture Our team has delivered in what has been a transformative year. Their focus and dedication have been a testament to the culture that they all embody, and I have been proud of the way they have performed. We added a number of colleagues during 2023 through acquisitions, and have been impressed by the way they have immediately become part of the accesso team and culture. At the end of 2023, our employee base now stands at 672 across 12 geographies, giving our business a reach and scale that clearly differentiates us in the marketplace. In what is typically an industry of high attrition, in contrast we had 7% organic turnover (2022: 15%), which is a significant improvement on the prior year. We are proud of the investments we have made in our team and the strong culture that sets us apart as a business. Outlook We delivered robust results for 2023 with profitability that exceeded expectations. We achieved this while continuing to drive innovation across our products and integrating three strategic acquisitions. As we look forward, we will leverage this enhanced and increasingly profitable solution set to serve operators more focused than ever on leveraging technology to drive customer spend and increase revenue per visitor. No competitor can match the breadth and quality of our offering, which is uniquely placed to sit at the heart of the most complex operations for the world’s most demanding clients. As we enter our next phase of growth in 2024, we’ll continue to act with a clear-eyed focus on higher value revenue streams. Overall, the Group expects another profitable and cash-generative year in line with current expectations, with revenue of not less than $160.0m, gross margin of 80% and Cash EBITDA margins of not less than 17%. Steve Brown Chief Executive Officer 15 April 2024 14 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Q&A with Chief Commercial Officer, Andrew Jacobs Q: What have the recent acquisitions provided? A: Each acquisition has been highly targeted, delivering tailored solutions, specialised expertise, regional expansion, and robust management. For instance, the VGS acquisition, now accesso Horizon, has broadened our exposure to Tier 1 markets, serving as a bridgehead to new Middle Eastern markets. Additionally, it has bolstered our expertise in attractions commerce, further underpinning our position as technology solutions leader in the industry. Paradocs (now accesso Paradox), on the other hand, has focused on the unique requirements of snow sports, providing us with a strong customer base in Canada, thereby securing a leading market position in North America. The DigiSoft acquisition has deepened our digital expertise enhancing our mobile offerings, reducing buying friction, and enabling greater wallet- share through our digital professional managed services offering. Q: What are you missing? A: I wouldn’t say we are missing anything, but we work to stay nimble. Our culture is to move quickly and seize growth opportunities. We are always looking to maximise our potential and avoid missing out on valuable opportunities. To achieve this, we must maintain disciplined focus on our core markets and strategically allocate our resources to ensure efficient execution of our growth plans. Q: Where do you see growth and where are you focusing your efforts? A: Europe presents significant potential for us, and we’re actively organising to exploit new opportunities in this region. Additionally, the Middle East, where VGS (now accesso Horizon) enjoys strong respect, offers promising opportunities, especially with the recent post-acquisition agreement with SEVEN in Saudi Arabia. Moreover, we recognise the opportunity in the Asia-Pacific (APAC) region as we continue building partnerships to establish an even stronger presence. We’re also revamping core technologies to enable managed API access to system components, facilitating embedded integrations and headless commerce, broadening our reach to a wider range of clients in our target markets. The headless approach offers our clients greater flexibility and agility in delivering personalised guest experiences. Q: Where are the headwinds? A: Change is a constant and the pace of change in our industry is relentless. This is why our solutions must meet the challenges of today and be adaptable to changes in the near future. It’s also why our shared success models facilitate continuous investment. We must also remain open to acquisitions to fast-track solutions and market development. 15 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Financial review We continued to go from strength to strength in 2023. Delivering record revenue and beating our profitability target in what was a pivotal year for our business. Integrating three strategically important acquisitions while delivering against our financial objectives is a testament to our strong platform, robust balance sheet and impressive market position. Our products and solutions across entertainment, attractions, venues – and new end verticals such as food & beverage – continue to advance and adapt in-step with evolving consumer expectations. Looking ahead to 2024 and beyond, we’re excited about the difference we can make for our customers, as we continue to set the standard within the industry.” Revenue 2023 Cash EBITDA1 $149.515m $23.626m Statutory profit before tax $8.808m 2023 2022 $149.515m $139.730m 2023 2022 $23.626m $25.805m 2023 2022 $8.808m $12.417m Group revenue is 7% up on 2022 with both Ticketing & Distribution and Guest Experience ahead of 2022. Ticketing benefited from the addition of accesso Horizon and accesso Paradox. In Ticketing & Distribution both accesso Passport & accesso ShoWare were up on 2022 while accesso Siriusware and Ingresso were behind. In our queuing business, the change in our labour model with a significant customer has resulted in a planned decrease in our revenue. The revenue quality table below highlights $3.3m revenue from this operation in 2023 (2022: $5.5m) with a further decrease planned in 2024. The Group delivered cash EBITDA for the period of $23.6m, including a full year of accesso Freedom development investment totalling $3.3m, 8.4% down on 2022 but ahead of our expectations for the year. Cash EBITDA, as a % of revenue, was 15.8% reflecting our first year of full headcount post pandemic. Looking ahead, as revenue grows against our full headcount, we look forward to our cash EBITDA margin % increasing. Statutory profit before tax is down $3.6m or 29.1% on 2022, however, that is after charging exceptional costs of $2.7m related to deal and integration costs on the acquisitions, as well as a $1.5m increase in our interest expense following the drawdown of our line of credit to fund the Horizon acquisition. Net cash2 Adjusted basic EPS (cents)3 Basic earnings per share (cents) $31.465m 37.48 19.19 2023 $31.465m 2022 $64.663m During 2023, the Group made three acquisitions for a net cash consideration totalling $50.0m funded through the Group’s own cash and through a $35.0m drawing on our line of credit. This drawing was reduced to $21.25m by the year end with a further $1.5m repaid post year end, taking drawings to $19.75m at 31 March 2024. The Group made $3.7m in share purchases for the Employee Benefit Trust; and $2.2m for the repurchase and cancellation of accesso’s own shares under the buyback scheme. 2023 2022 37.48 2023 19.19 35.93 2022 24.41 Adjusted basic earnings per share of 37.48 and basic earnings per share of 19.19 increased by 4.3% and reduced 21.4% respectively. Basic earnings per share includes the impact of $2.7m spend on exceptional acquisition expenditure. This impact is removed in the adjusted metric where we saw a 4.3% increase due to the revenue growth offset by returning to a full headcount and filling open positions for the first year since the pandemic. We look forward to both adjusted and basic earnings per share increasing as our operational cost base is stabilised alongside the growth in new revenue opportunities. 16 16 Fern MacDonald Chief Financial Officer 1 Cash EBITDA: operating profit before the deduction of amortisation, depreciation, acquisition and integration costs, and costs related to share-based payments less capitalised development costs. 2 Net cash is calculated as cash and cash equivalents less borrowings. 3 Adjusted basic earnings per share is calculated after adjusting operating profit for impairment of intangible assets, amortisation on acquired intangibles, acquisition and integration expenses and share-based payments, net of tax at the effective rate for the period on the taxable adjusted items (as detailed on page 90). Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Financial review continued Financial overview During 2023, the Group delivered record financial performance in revenue and a Cash EBITDA number that exceeded our expectations. We successfully completed three acquisitions in the period and all have contributed to our 2023 results. Key performance indicators and alternative performance measures The Board continues to utilise consistent alternative performance measures (APMs) internally and in evaluating and presenting the results of the business. The Board views these APMs as representative of the Group’s underlying performance. The historic strategy of enhancing accesso’s technology offerings via acquisitions, as well as an all-employee share option arrangement, necessitate adjustments to statutory metrics to remove certain items which the Board does not believe are reflective of the underlying business. By consistently making these adjustments, the Group provides a better period-to-period comparison and is more readily comparable against businesses that do not have the same acquisition history and equity award policy. APMs include Cash EBITDA, Adjusted basic EPS, net cash, underlying administrative expenditure and repeatable and non-repeatable revenue analysis and are defined as follows: • Cash EBITDA is defined as operating profit before the deduction of amortisation, impairment of intangible assets, depreciation, acquisition and integration costs, and costs related to share-based payments less capitalised internal development costs; • Adjusted basic earnings per share is calculated after adjusting operating profit for impairment of intangible assets, amortisation on acquired intangibles, acquisition costs and share-based payments, net of tax at the effective rate for the period on the taxable adjusted items (see page 90); • Net cash is defined as available cash less borrowings (see page 101). Lease liabilities are excluded from borrowings on the basis they do not represent a cash drawing; • Underlying administrative expenses are administrative expenses adjusted to add back the cost of capitalised development expenditure and property lease payments and remove amortisation, impairment of intangible assets, depreciation, acquisition costs, and costs related to share-based payments (see page 20). This measure is to identify and trend the underlying administrative cost before these items; • Repeatable revenue consists of transactional revenue from Virtual Queuing, Ticketing and eCommerce and is defined as revenue earned as either a fixed amount per sale of an item, such as a ticket sold by a customer or as a percentage of revenue generated by a venue operator. Normally, this revenue is repeatable where a multi-year agreement exists and purchasing patterns by venue guests do not significantly change. Other repeatable revenue is defined as revenue, excluding transactional revenue, that is expected to be earned through a customer’s agreement, without the need for additional sales activity, such as maintenance and support revenue. Non-repeatable revenue is revenue that occurs one-time (e.g. up-front licence fees) or is not repeatable based upon the current agreement (e.g. billable professional services hours) and is unlikely to be repeatable without additional successful sales execution by accesso. Other revenue consists of hardware sales and other revenue that may or may not be repeatable with limited sales activity if customer behaviour remains consistent; and • The revenue streams for year ended 31 December 2023 have been prepared on a pro forma basis using consistent currency rates with the year ended 31 December 2022 to assist with assessing the underlying performance. Average monthly rates from 2022 were used to translate the monthly 2023 results into a constant currency using the range of currencies as set out below: – GBP sterling – $1.13-$1.36 – Euro – $0.98-$1.13 – Canadian dollars – $0.73-$0.79 – Australian dollars – $0.64-$0.74 – Mexican pesos – $0.05-$0.05 – Brazilian real – $0.18-$0.21 The Group considers Cash EBITDA, which disregards any benefit to the income statement of capitalised development expenditure, as its principal operating metric. These APMs should not be viewed in isolation but as supplementary information. As adjusted results include the benefits of the Group’s acquisition history but exclude significant costs (such as significant legal or amortisation expenditure), they should not be regarded as a complete picture of the Group’s financial performance, which is presented in its total results. 17 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Financial review continued Key financial metrics Revenue Group revenue of $149.5m (2022: $139.7m) represents a record for the Group and built on the excellent performance in 2022. Through 2023, customers continued to use our technology to tackle more conventional problems, such as physical queues, and also newer use-cases, with technology driving efficiency and compensating for staffing difficulties, including wage inflation and recruitment challenges. Our touchless technologies and ability to drive eCommerce ahead of visitation reduces labour-intensive point-of-sale models and delivers an enhanced guest experience. These technology-based solutions are now the base- level consumer expectation across our key markets and will increasingly become the industry standard over time. We set out details of our revenue by segment, geography and repeatable to non-repeatable analysis below. Revenue on a segmental basis was as follows: Ticketing Distribution Ticketing and distribution Virtual queuing – transactional revenue Virtual queuing – staffing cost reimbursement Other guest experience Guest experience 2023 $000 86,455 17,569 104,024 25,754 3,344 16,393 45,491 2022 $000 77,175 18,081 95,256 22,727 5,452 16,295 44,474 Vs 2022 % 12.0% (2.8%) 9.2% 13.3% (38.7%) (0.6%) 2.3% Total revenue 149,515 139,730 7.0% Ticketing and Distribution revenue was 9.2% up on 2022, this includes the benefit of a partial year of accesso Horizon and accesso Paradox revenue, which together contributed $6.4m of the $8.8m increase. The distribution business was significantly impacted by the UK theatre sector where third-party sellers had a difficult year due to more limited inventory than normal as theatres opted to sell more direct and restrict distribution deals. The distribution business continues to diversify beyond the UK theatre market and is benefiting from wider integration into the Group’s customer base, allowing existing customers to distribute their ticket supply to wider markets. In the first quarter of 2024, a decision was made to exit the B2C division of our distribution business which has operated with minimal profit contribution. This will result in a reduction in revenue on a full year basis of approximately $2.5m but, due to low margin and the potential for savings in overhead, there will be minimal impact on our bottom line. This move is another step in our focus on profitable, quality revenue as we work to improve our margins. 18 Our distribution business, focused on B2B, will continue to be a key part of our service offering however, due to the accounting standards covering revenue recognition, our margins in this business will always be significantly lower than the rest of our revenue streams. These revenue recognition standards require us to recognise the full amount of commission included within the gross value of a ticket sold as our revenue, with the larger portion of this commission paid to the distributor as our cost of goods sold. To illustrate the impact this has on our results, the table below presents what our revenue and gross profit and cash EBITDA margins would be if we were permitted to recognise net commission as our revenue. Proforma income statement with distribution revenue recognised net: Revenue Cost of goods sold Gross Profit Gross Profit margin Expenses (as reported) Cash EBITDA Cash EBITDA margin 2023 $000 136,917 (22,670) 114,247 83.4% (90,621) 23,626 2022 $000 128,533 (24,573) 103,960 80.9% (78,155) 25,805 17.3% 20.1% During 2023, the Group went live with 33 new eCommerce ticketing clients, down slightly on 40 during 2022. This demonstrates a continued shift in consumer behaviour and attraction preference towards sales online, significantly benefiting both accesso and its customers as spend per guest increases, operational costs are reduced, and we gain additional insight into consumer behaviour through data. Within the Guest Experience segment, accesso LoQueue’s transactional-based queuing products grew despite a change in strategy which resulted in the management and provision of seasonal labour being returned to a major customer from July 2023 onward. Whilst this causes a reduction in revenue, it is an important step in accesso’s focus on high quality revenue and focus on EBITDA margin. The numbers below show queuing revenue with seasonal labour reimbursement removed, which shows underlying growth in transactional revenue of 13.3% over 2022. Virtual queuing revenue: Virtual queuing – transactional revenue Virtual queuing – staffing cost reimbursement Queuing 2023 $000 25,754 3,344 29,098 2022 $000 22,727 5,452 28,179 Vs 2022 % 13.3% (38.7%) 3.3% The remaining revenue within the Guest Experience segment comes primarily from professional services which was down 2.8% on 2022. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Financial review continued Revenue on a geographic and segmental basis was as follows: Primary geographic markets UK Other Europe Australia/South Pacific/Asia/Africa USA Canada Mexico Other Central and South America 2023 Ticketing and Distribution $000 Guest Experience $000 Group $000 Ticketing and Distribution $000 22,358 2,673 8,644 61,626 4,270 3,550 903 104,024 3,286 5,776 1,854 34,098 266 211 – 45,491 25,644 8,449 10,498 95,724 4,536 3,761 903 149,515 24,636 3,085 4,797 56,285 3,216 2,618 619 95,256 2022 Guest Experience $000 2,441 3,233 1,975 36,276 302 247 – 44,474 Group $000 27,077 6,318 6,772 92,561 3,518 2,865 619 139,730 Outside of the UK, we experienced growth in all of our geographies in 2023. As discussed above, the UK was impacted by a number of UK theatre distribution partners opting to restrict sales through third-party channels. The acquisition of accesso Paradox increased our footprint in Canada, while the acquisition of accesso Horizon increased our footprint outside our core regions of UK and USA. In the USA, the reduction in the USA Guest Experience revenue reflects our move away from the provision of labour for our largest queuing customer. Revenue quality Virtual queuing – transactional revenue Virtual queuing – staffing cost reimbursement Ticketing and eCommerce Reservation revenue Transactional revenue Maintenance and support Platform fees Recurring licence revenue Total repeatable One-time licence revenue Professional services Non-repeatable revenue Hardware Other Other revenue Total revenue Total repeatable as % of total 19 2023 $000 25,754 3,344 82,776 – 111,874 9,338 3,352 1,505 126,069 2,881 15,536 18,417 1,533 3,496 5,029 149,515 84.3% 2022 $000 22,727 5,452 77,788 18 105,985 7,122 3,007 604 116,718 2,145 15,988 18,133 1,434 3,445 4,879 139,730 83.5% % 13.3% (38.7%) 6.4% (100.0%) 5.6% 31.1% 11.5% 149.2% 8.0% 34.3% (2.8%) 1.6% 6.9% 1.5% 3.1% 7.0% – The above is an analysis of the Group’s revenue by type. Transactional revenue consisting of Virtual Queuing, Ticketing and eCommerce is defined as revenue earned as either a fixed amount per sale of an item, such as a ticket sold by a customer, or as a percentage of revenue generated by a venue operator. Normally, this revenue is repeatable where a multi-year agreement exists and purchasing patterns by venue guests do not significantly change, as they did in 2020 as a result of the pandemic. Other repeatable revenue is defined as revenue, excluding transactional revenue, that is expected to be earned through each year of a customer’s agreement, without the need for additional sales activity, such as maintenance and support revenue. Repeatable revenue of 84.3% is consistent with the 83.5% achieved in 2022 and 84.4% in 2021. Non-repeatable revenue is revenue that occurs one-time (e.g. up-front licence fees) or is not repeatable based upon the current agreement (e.g. billable professional services hours) and is unlikely to be repeatable without additional successful sales execution by accesso. Other revenue consists of hardware sales and other revenue that may or may not be repeatable with limited sales activity if customer behaviour remains consistent. The Group’s transactional revenue streams have continued to grow, up 5.6% on 2022. As detailed above, underlying virtual queuing growth was 13.3% with the impact of the elimination of labour recharge removed. Professional services revenue fell 2.8% against the prior year but continues to drive our platform revenues which grew to $3.4m, an increase of 11.5%. Other revenues were broadly comparable with 2022, being 3.1% higher. This is commissions received from the Group’s guest ticket insurance partners as well as third-party hardware partners. Other revenue also includes referral commissions received from the Group’s guest payment gateway partners. Gross margin The Group’s reported gross profit margin increased again to 76.4% (2022: 74.4%) as the Group continues to focus on the quality of revenue and the improvement of our gross profit and Cash EBITDA margins in the medium to long term. Administrative expenses Reported administrative expenses increased 14.4% to $104.3m in the year, while underlying administrative expenditure increased by 14.7% to $91.3m. This increase includes the impact of 82 new headcount joining the business from the three acquisitions completed in 2023 from both a staff cost perspective as well as other expenses such as rent and travel. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Financial review continued Administrative expenses continued Share-based payment costs increased by 21.2% to $3.2m, reflective of key management incentive arrangements being granted in 2023, which included the CEO, and an all-other staff share-based payment award granted in summer 2023. Administrative expenses as reported Capitalised development expenditure1 Amortisation related to acquired intangibles Share-based payments Amortisation and depreciation2 Property lease payments not in administrative expense1 Impairment of intangible assets Acquisition expenses 2023 $000 104,308 2,839 (2,811) (3,187) (7,832) 668 (6) (2,690) 2022 $000 91,209 2,155 (1,667) (2,629) (10,744) 1,430 (32) (137) Underlying administrative expenditure 91,289 79,585 1 See consolidated cash flow statement. 2 This excludes acquired intangibles but includes depreciation on right of use assets. Cash EBITDA The Group delivered Cash EBITDA for the year of $23.6m, an 8.4% reduction on 2022 but ahead of our expectations for the year. Cash EBITDA margin was 16% in 2023 as this was our first year of full headcount post pandemic. Looking forward, as revenue grows, we see our Cash EBITDA margin increasing. The table below sets out a reconciliation between statutory operating profit and Cash EBITDA: Operating profit Add: acquisition expenses Add: Amortisation related to acquired intangibles Add: Share-based payments Add: Impairment of intangibles Add: Amortisation and depreciation (excluding acquired intangibles) Deduct: Capitalised internal development costs 2023 $000 9,939 2,690 2,811 3,187 6 7,832 (2,839) 2022 $000 12,751 137 1,667 2,629 32 10,744 (2,155) Cash EBITDA 23,626 25,805 The Group recorded an operating profit of $9.9m in 2023 (2022: $12.8m); and Adjusted basic earnings per share increased to 37.48 cents (2022: 35.93 cents). 20 Development expenditure Total development expenditure % of total revenue 2023 $000 48,518 32.5% 2022 $000 43,174 30.9% Our total development expenditure for 2023 increased to $48.5m, 12.4% higher than 2022. The spend includes the additional headcount from the Horizon and Paradox acquisitions as well as $3.3m of cost incurred in relation to the development of the accesso Freedom product launched in November 2023. Development expenditure represents all expenses incurred by the Group’s Engineering and Product Management functions, predominantly comprising payroll and software related costs. These functions maintain our existing solutions and work with our customers to ensure the Group’s products are well positioned to meet customer needs. In addition, these functions also perform research and development activities based on the product roadmaps which set out the planned features and releases over time. The Group capitalises elements of development expenditure where it is appropriate and in accordance with IAS 38 Intangible Assets. Capitalised development expenditure of $2.8m (2022: $2.2m) represents 5.9% (2022: 5.2%) of total development expenditure. The Group’s research and development is primarily focused on improving existing customer products, which in turn leads to increased customer satisfaction and retention, rather than a focus on creating new revenue streams. It continues to be critical in order to continue to meet and exceed the expectations of our existing customers’ requirements and the current solutions they utilise. Development continues to expand the product set and add features that will be important for our customers’ operations in the future. Cash and net cash Net cash at the end of the year has decreased to $31.5m from $64.7m at 31 December 2022. Cash in hand & at bank Less: Borrowings (including capitalised finance costs) Net cash 2023 $000 51,814 (20,349) 31,465 2022 $000 64,663 – 64,663 The Group has maintained a strong net cash position with net cash inflow from operating activities of $25.7m. (2022 Net inflow of $14.5m) offset by $52.6m used in investing activities. This included $50.0m spent on the three acquisitions net of cash acquired. The Group generated $12.5m from financing activities. This included outflows of $3.7m of shares purchased by the Group’s Employee Benefit Trust and $2.2m on the purchase and cancellation of accesso’s own shares through the buyback programme. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Financial review continued Cash and net cash continued On 26 May 2023, the Group secured a $40.0m revolving credit facility with a four-year term, to May 2027, accompanied by a $20.0m accordion option. As at 31 December 2023, the Group had drawn $21.2m ($20.4m net of finance costs) which was used to partially fund the three acquisitions made by the Group. This facility replaces the Group’s undrawn £18.0m arrangement with Investec from 19 March 2021, which was due to expire in March 2024. The Investec facility has been cancelled. Dividend and share repurchases The Board maintains its consistent view that the payment of a dividend is unlikely in the short to medium term with surplus cash more efficiently invested in share repurchases, strategic product development or, where the opportunities arise, value accretive acquisitions. During the year, the Board approved a share repurchase programme of up to £4.0m. As at the year end, the Company had repurchased and cancelled a total of 299,272 shares for a total of $2.2m (GBP £1.8m). The programme was concluded on February 29, 2024 with a total repurchase and cancellation of 706,984 shares for a total consideration of $5.0m (GBP £4.0m). Employee Benefit Trust The Group funded the trustees of the Employee Benefit Trust in January 2023 to enable the trustees to purchase 374,971 shares at a total cost of $3.7m. The shares are held by the trustees and will be used to satisfy awards granted under the Company’s employee share plans that are expected to vest in future years. Impairment In line with relevant accounting standards, the Group reviews the carrying value of all intangible assets on an annual basis or at the interim where indicators of impairment exist. As a result, the Group recognised a $0.01m impairment charge in the year over previously capitalised research and development projects where they were no longer expected to generate economic benefit. Taxation The tax charge of $1.1m represents an effective tax rate on the $8.8m of statutory profit before tax of 12.7% (2022:19.0%). The key reconciling items to actual tax rates are: $1.0m in relation to additional deferred tax assets recognised for losses at a US State level and US state level current tax adjustments; a combined $1.0m relating to the adjustment of R&D estimates from the prior period and the utilisation of R&D credits during the year; offset by subsidiary profits generated in non-US territories being charged at lower taxable rate when compared to our blended US tax rate of 27.67%. The Strategic Report on pages 5 to 36 has been approved by the Board and signed on its behalf by: Fern MacDonald Chief Financial Officer 15 April 2024 21 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Principal risks and uncertainties The Board has identified the following principal risks and uncertainties which it believes may impact the Group and its operations. The Board is satisfied that the Group’s risk management and internal control systems are adequate. At this stage, the Board does not consider it to be appropriate to establish an internal audit function. 22 Principal risks and uncertainties Staff retention risk Description of risk and uncertainty Mitigation In line with groups of a similar size, the Group is managed by a limited number of key personnel, including Executive Directors and senior management, who have significant experience within the Group and the sectors it operates within, and who could be difficult to replace. Executive Directors and senior management have remuneration plans, incorporating long-term incentives to mitigate this risk combined with an appropriate level of succession planning. Customer concentration risk A key risk relates to the high concentration of revenue derived from particular customers or guests of particular theme parks groups. The Group continues to increase its customer base, extending its geographical presence and broadening its technologies to a wider range of venues. Business disruption risk Currency risk Intellectual property infringement The Group has a significant seasonal business with revenue and cash flows predominantly linked to leisure venue attendance which, with the current profile of business, peak in the summer months of the Northern Hemisphere. As demonstrated in 2020, attendance at leisure venues can be impacted by circumstances outside the control of the Group including, but not limited to, pandemics, inclement weather, consumer spending capability within the regions we operate together with operator venue pricing, discount policies, investment capability, safety record and marketing. A significant proportion of revenues of the business are denominated in US dollars. Although the majority of expenditure is also denominated in this currency, there remains an exposure to movements between the US dollar and other world currencies. It is of fundamental importance in maintaining a sustainable long-term business that the Group is aware and takes action to mitigate competitive threats, whether from technological change, or from competition. The Group demonstrated great resilience to the pandemic, rebounding quickly to take advantage of changing market demands. The Group’s global footprint and diverse range of markets that it serves has enabled it to prosper even when certain markets, such as live entertainment, took longer to recover. The Group has continued to diversify with acquisitions during 2023 through access to new geographic markets and customers. Should 2024 mirror the pandemic year of 2020 as a severe worst case scenario, the Group has sufficient available liquidity to continue as a going concern. The Group’s treasury policy is to minimise holding currency (where practical) in an entity with a different functional currency to minimise the impact on Group profit before tax. Effort is directed to ensure that the Group invests in appropriate and focused research and development activity and monitors technological advances and competitor activity. Linked to this, the Group is committed to protecting its technology by the development and/or purchase of patents and will take appropriate action to defend its Intellectual Property rights or ensure infringers enter into licensing arrangements. The Group capitalises appropriate levels of development expenditure but is exposed to the risk that development of a specific technology could suffer impairment. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Principal risks and uncertainties continued Principal risks and uncertainties Cybersecurity Description of risk and uncertainty Mitigation Cybersecurity is a primary concern at accesso and an ever- increasing threat on businesses. We take a multi-layer approach to security, employing many solutions to protect our systems at every level including vulnerability management, intrusion detection and endpoint protection. We conduct aggressive penetration testing throughout the year and against all of our platforms. All of the above is built upon an ever-expanding set of policies that govern our approach to engagement, security and response. We also recognise that the first, and most likely, point of attack is against our people and go to great lengths to provide training on the types of attacks they may encounter and vulnerabilities to which they are subject. This includes, but is not limited to, regular phishing simulations at varying degrees of sophistication followed up by additional training and clarification. As attacks become more sophisticated and customised, our staff need to understand how to recognise and respond, as they are the last line of defence when something slips through our various protections. The Group has clear product roadmaps and has significant resources focused on the continuous development and maintenance of all software solutions and operational systems. The Group benefits from well-established operating processes and procedures including systems and data security and disaster recovery. Further information on our response and strategy to mitigate environmental risks are set out in our Taskforce on Climate- Related Financial Disclosures (TCFD) on pages 27 to 36. Software systems and digital technology Environmental risks Software and digital technology are key differentiators and are central to our product offering, customer interaction, service planning and delivery. Failure to invest or maintain software and systems, the loss of systems and/or data or poor system performance could cause a disruption to service delivery, impacting on performance with a potential financial impact. The physical climate impact on our client’s ability to deliver reliable services to end customers remains a key concern. This risk is broad and covers the impact of changing customer and supplier behaviour, as well as the transition risk arising from changing regulation. 23 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Principal risks and uncertainties continued Principal risks and uncertainties Business growth and related acquisition risk Description of risk and uncertainty Mitigation Acquiring differing businesses with differing technologies, people, competencies and processes creates risk to both the customers and services being acquired, and the Group’s existing operating model. Given the Group’s significant surplus cash balance and acquisition appetite, this is considered an increasing risk. The Group considers this risk split into three main areas. Acquisition target risk – the risk that the Group is unable to identify suitable acquisition targets. Acquisition integration risk – the risk that completed acquisitions are not integrated into the underlying business in an efficient or effective way leading to potential loss of customers and employees from the acquired business. Post-acquisition performance risk – the risk that the acquired business may not perform as well as expected or synergies may not be delivered as planned. This has the potential to adversely impact both cash flow and profits post-acquisition. Acquisition target risk is managed by a combination of internal resource dedicated to identifying targets complemented by strong relationships with external advisors. Acquisition integration risk is managed by detailed planning, including active participation from the vendors to ensure acquisitions are integrated effectively. Post-acquisition performance risk is mitigated through due diligence and integration planning including the use of experts throughout the acquisition process. 24 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Stakeholder engagement and section 172 statement Compliance with Section 172 of the Companies Act A Director of the Company must act in accordance with a set of general duties. These duties are detailed in Section 172 of the Companies Act 2006, summarised as follows: • Consider the likely consequences of any decisions in the long term • Consider the interests of the Company’s employees • Need to foster the Company’s business relationships with suppliers, customers and other key stakeholders • Review and assess the impact of the Company’s operations on the community and the environment • Maintain a reputation for high standards of business conduct, and • Act fairly between members of the Company In discharging its Section 172 duties, the Board has considered the factors set out above and the views of key stakeholders. Engaging, consulting and acting on the needs of different stakeholders is critical for the development and delivery of a culture and strategy that achieves long-term success. accesso undertakes meaningful engagement with its stakeholder groups to build trust and supports the ethos of Section 172. These priorities reflect the need to consider the interests of our staff and the need to keep pace with market initiatives and technological changes so the business is appropriately positioned to take best advantage of market conditions. The strategic priorities are cascaded down to individuals within the business through the Performance and Development Review process. The Board confirms that, during the year, the Board and its individual members have acted in a way that would be most likely to promote the success of the Company, for the benefit of its members as a whole, in the decisions made by the Board during the year. The Directors confirm that the deliberations of the Board, which underpin its decisions, incorporate appropriate regard to the matters detailed in section 172(1) of the Companies Act 2006. During the year, the Board considered information from across the Group’s businesses and received presentations from management, reviewed papers and reports and took part in discussions which considered, where relevant, the impact of the Company’s activities on its key stakeholders. These activities, together with direct engagement by the Board and individual Directors with the Company’s stakeholders, helped to inform the Board in its decision-making processes. 25 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Stakeholder engagement and section 172 statement continued Compliance with Section 172 of the Companies Act Stakeholder group Why they are important How we engage Employees Engaged, enabled, empowered employees who contribute to the best of their ability are fundamental to the long-term success of the business. We seek to attract, develop and retain high-calibre staff, and as a consequence, our customers can be assured that the service they receive is among the best available. Customers and suppliers accesso’s customers and suppliers are key to the long-term success of our business. We seek to grow and maintain our customer base and select suppliers to ensure our reputation is preserved, protecting our position as the leading technology provider of choice for tomorrow’s attractions, venues and institutions to help us achieve our growth ambitions. Shareholders Shareholders play an important role in the success and growth of the Group and, as proved during the pandemic year, were able to provide a source of equity to insulate the business. In addition, shareholders provide important feedback to the Executive Directors on market conditions, expectations, and economic performance. 26 The Group’s policy is to consult and engage with employees, by way of meetings, surveys and through personal contact by Directors and other senior executives, on matters likely to affect employees’ interests. Information on matters of concern to employees is given in meetings, emails, letters and reports, which seek to achieve a common awareness on the part of all employees on the financial and economic factors affecting the Group’s performance. We maintain oversight of their performance through an annual performance and development review process. We seek to offer appropriate levels of remuneration which we benchmark using market surveys. We value our employees’ thoughts and ideas and two-way communication is actively sought and encouraged. An anonymous Staff Engagement Survey was conducted during the year, the results of which were considered in detail by management and helped to inform and guide subsequent strategic decisions that were made. Our expected standards of behaviour are set out in our Code of Business, which all staff are expected to adhere to. They are key business partners and we set out our relationship in terms of business or service level agreements. We maintain oversight of these arrangements, as well as making sure our customers receive an appropriate level of disclosure. We listen to our customers and invest in research and development because our industries demand it, our clients benefit from it and it makes a positive impact on the guest experience. Our innovative technology solutions allow venues to increase the volume and range of on-site spending and to drive increased transaction-based revenue through cutting-edge ticketing, point- of-sale, virtual queuing, distribution and experience management software. Many of our team members have direct, hands-on experience working in the venues we serve. In this way, we are experienced operators who run a technology company serving attraction operators, versus a technology company that happens to serve the market. Our staff understand the day-to-day operations of managing complex venues and the challenges this creates, and together we strive to provide our clients and their guests with technology that empowers them to do more and enjoy more. From our agile development team to our dedicated client service specialists, every team member knows that their passion, integrity, commitment, teamwork and innovation are what drive our success. We have an ongoing dialogue with shareholders through formal communication of financial results on a yearly and half yearly basis; we also provide periodic market updates and the required press releases to ensure compliance with the AIM rules. We engage with substantial shareholders to ensure that the strategic direction of the business is aligned with their expectations. Further details on how shareholder engagement is maintained is outlined in the Corporate Governance Report on page 39. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) We understand the increasing importance of aligning to global Environmental, Social and Governance (ESG) corporate responsibility standards. With continuous developments in important areas such as climate change, globalisation, digitalisation, equality and diversity; accesso recognises the need to develop, monitor and improve its policies and practice to drive forward change. Environmentally, we are committed to and actively striving for a sustainable future by engaging in decarbonisation. Building upon the launch of our Climate Policy in 2022, we established an ESG Committee in 2023 with responsibility for the policy’s continued implementation. Socially, we endeavour to be a strong advocate of equal opportunity, diversity and ethical business. In governance, we work hard to ensure our procedures and management are conducive to managing the risks and opportunities posed by environmental and social issues, as well as achieving our own performance targets, with the Board constantly reviewing appropriate governance structures. Below we outline our performance in ESG during 2023 and what we are aiming to accomplish in 2024 and beyond. 27 Environment accesso recognises the importance of climate change and is committed to minimising any negative impact on the environment by transitioning to a Net Zero business by 2050. We have continued to invest in our environment strategy this year, building on the foundations we established in 2022. The Group’s focus in 2023 has been on integrating the acquired businesses into our carbon footprint calculations and continuing to take steps to reduce our emissions. We have also expanded our Scope 3 value chain carbon footprint calculations to include our key suppliers, homeworking, and hotel stays, in addition to business travel (excluding hotel stays), which we disclosed last year. We have conducted the Group’s first climate-related assessment in line with the Taskforce for Climate-Related Disclosures (TCFD) recommendations, which has highlighted the resilience of our business and deepened our understanding of the risk climate change may present, allowing us to prepare for and minimise its impact. We look forward to progressing the Group’s climate strategy further in 2024, concentrating on changes that will maximise footprint reduction. Climate policy We developed the Group’s Climate Policy in 2022 in recognition of the increasing urgency of climate action and the role accesso plays in reaching global climate targets, including limiting global warming to 1.5°C as outlined in the Paris Agreement. We remain committed to achieving Net Zero in Scope 1 (fuel in operations) and Scope 2 (purchased electricity in operations) emissions by 2035, and being Net Zero across the Group’s value chain, i.e. Scope 1, 2, and 3 (value chain), by 2050. The Group’s Climate Policy applies to all current and future operations and subsidiaries. Due to the level of acquisitive activity during 2023, we have focused our efforts on standardising and aligning the acquired business areas into the Group’s operating model. This includes the aspects that underpin our Climate Policy objectives, from transitioning the acquired businesses to cloud infrastructure, to aligning the Group’s Business Travel Policy. In a year of high activity for accesso, with the acquisition of three new businesses located across five regions, the Group’s emissions have increased. This has largely been driven by the travel activity required to execute the Group’s acquisitions. However, we are pleased to see that our Scope 1 (fuel in operations) and Scope 2 (purchased electricity) emissions for a like-for-like basis has decreased by 15 tCO2e compared to 2022. The like-for-like basis refers to a direct comparison of emissions when comparing the same operational footprint in 2023 as 2022, i.e. without the acquisitions, and without new scope of emissions, e.g. homeworking. The expansion of our Scope 3 footprint calculation, to include emissions from the Group’s key suppliers, remote working and hotel stays, has inevitably increased the Group’s total emissions, but provides us with an opportunity to identify the areas of strategic reduction that will have the most impact. We have made demonstrable progress on several intentions set out in 2022, including expanding the scope of our footprint calculations and carbon reduction activities. However, we have not yet established a detailed decarbonisation roadmap with intermediate targets, which will enable us to track and demonstrate our progress against the Group’s Net Zero commitments. The Board is pleased with the progress made during what has been a very busy year for the business, aligning the acquired businesses to the Group’s policies, expanding the understanding of our interaction with climate change and a Net Zero transitioning world through the TCFD analysis, and continuing to invest in initiatives to reduce the Group’s carbon footprint. The Board remains committed to continuing our Net Zero journey in 2024. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Climate policy Following its creation in 2023, the ESG Committee has assumed responsibility for our Climate Policy implementation and oversight. The Group’s Climate Policy is reviewed annually by the Board, who remain accountable for its adherence. An updated version, in line with our progress, is available on The Group’s website https://www.accesso.com/about/environmental-social-and-governance. Climate-related financial disclosures As an AIM-quoted company in the UK with almost 700 employees globally, accesso is required to report in line with climate-related regulation, which are based on the Taskforce on Climate-Related Financial Disclosures (TCFD) recommendations. This is accesso’s first report aligned with the principles of TCFD and we engaged an ESG consultancy to support us with this disclosure. The regulation has two main objectives. The first is to support accesso’s identification and management of any climate-related risks and opportunities that present a material risk to the long-term success of the business; and secondly, to appropriately disclose the key findings to interested stakeholders. The regulation requires an assessment of both the risks and opportunities that result from physical climate change, e.g. increases in the frequency of extreme weather events as a result of global temperature rises, and those that result from the transition to a Net Zero world, where greenhouse gas emissions are largely eliminated. Assessing and documenting the Group’s climate-related risks and opportunities has been a natural extension of our climate strategy and we are pleased with the outcomes. As we have been tracking in the Group’s principal risks and uncertainties, we do have climate-related risks within the business and the mapping of these risks to a more granular level has highlighted the resilience of the Group’s business through the mitigation plans under way. It has also identified some areas for further analysis and focus, although there were no new risks flagged that are of concern to the Board at this stage. The physical climate impact on our client’s ability to deliver reliable services to end customers remains our key concern. This risk is broad and covers the impact on follow on impact of changing customer and supplier behaviour as well as the transition risk arising from changing regulation. We are excited about the role we can play in our industry and across the communities we impact, to transition to a Net Zero future. Governance Significant climate-related risks and opportunities are ultimately the responsibility of the Board, who remain committed to ensuring the risk management framework and internal controls are appropriate for the Group, and oversee the Group risk register. In 2023, we established an ESG Committee, with senior representation from across the organisation. The ESG Committee has responsibility for identifying and managing all ESG-related risks and opportunities, including climate- related items. If the Committee identify any risks or opportunities that require executive level input, decisions, or awareness, this will be escalated to Fern MacDonald, as CFO, and then up to the Board as required. Any decisions or guidance from the Board will be passed back to the ESG Committee to execute. The most appropriate Committee member will be assigned as the action owner, and they will be responsible for overseeing the execution and reporting progress back to the Committee. Jody Madden, Non-Executive Director, in her capacity to drive forward ESG initiatives and facilitate ESG-related risk assessment, would flag any concerns with the Group’s climate-related risk management to the Board and independently, if required, to the Audit Committee, on which she also sits. Strategy accesso’s strategy, to partner with and provide technology solutions which improve the guest experiences of leisure attraction operators globally, is impacted by climate change, given that many of the Group’s products and services are used for outdoor activities. As part of the Group’s climate-related reporting, the ESG Committee were responsible for testing the resilience of our business model and strategy against two climate-related scenarios. These scenarios stress test the two extremes of likely future states – extreme physical climate change in the “Climate Chaos” scenario, and an extreme transition to Net Zero in the “Proactive Transition” scenario: 28 Contents Generation – PageContents Generation – Sub PageContents Generation – SectionContents Generation – Section Contents Generation – Page Contents Generation – Sub Page accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Strategy continued Scenario Summary of assumptions within the assessed timeframe, to 2050 “Climate Chaos”, business- as-usual scenario, aligned to Representative Concentration Pathway (RCP) 8.5, which will see a temperature rise of 4°C by 2100. • Significant rise in global temperatures and sea level, resulting in a significant increase in acute weather events. • Continued use of coal, oil, and gas. • No regulatory burden to decarbonise. “Proactive Transition”, achieving Net Zero in 2050 with a 1.5°C warming in 2100, following the Representative Concentration Pathway (RCP) 2.6. Increases in policy and regulation globally to mandate decarbonisation. • • Transition to renewable energy. • Rise in global temperatures and sea levels with resulting increase in acute weather events, at a lesser extent. As this is accesso’s first climate-related scenario analysis, and in line with the regulation, we conducted the analysis in a qualitative manner. We focused the analysis on the Group’s core product and revenue lines, and our core operational footprint. We identified six risks and two opportunities which are set out in the below table, detailing the possible impact and our initial response. The impacts of the risks and opportunities were assessed and mapped against three time horizons aligned to the Group’s Net Zero strategy. • Short term: 2023 – 2025 • Medium term: 2025 – 2035: in line with the Group’s interim Net Zero target • Long term: 2035 – 2050: in line with the Group’s Net Zero 2050 target The analysis highlighted the climate resilience of our business and potential opportunities that both a Net Zero transition and physical climate changes may bring. We believe the mitigation and realisation plans we have in place today, described below, are currently sufficient to manage the risks. We will continue to regularly monitor the risks and opportunities and repeat the scenario analysis within three years, or sooner if there is a significant change in the Group’s business model. Some additional risks and opportunities were identified that were not deemed material to report. The ESG Committee will assess these at least annually to monitor any change. 29 29 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Physical climate risks Theme Description & impact Response & strategy Chronic (longer term shifts in weather patterns) & Acute (increased frequency and severity of extreme weather events) Rising temperatures and an increase in extreme weather events may reduce customers’ service availability and reliability to consumers. We are focused on growing an increasingly diverse customer base, including new global locations, indoor venues, and higher altitude ski resorts. Any impact to our customers’ ability to provide their services will directly impact our transactional revenue. We are committed to work with our customers to support the adaptation of their businesses in response to the impact of climate change, including sharing lessons learned across the industry and insights from our data. Time horizon Medium term, Long term Chronic Significant examples identified: a) extreme weather events for outdoor venues (notably temperature rises and rainfall) b) low-altitude ski resort reduced seasons as a result of reduced snow-assuredness Supplier’s response to climate change, including implementation of adaptation strategies and building resilience into their business, may result in increased costs to their customers, including accesso, notably from third-party data centres. We are also committed to supporting the industries and communities in which we work and will identify opportunities to engage in initiatives that support climate adaptation and resilience innovation, for example the external Protect Our Winters initiative in North America, which includes diversifying the use of ski infrastructure. accesso works with enterprise grade cloud-based data centre providers based in global locations. Our main suppliers have robust Net Zero strategies which will reduce the likelihood of rapid and unplanned adaptation which would result in higher costs to be passed on. We will continue to work with our data centre suppliers and monitor climate change mitigation and adaptation strategies, for example improvements in energy efficiency and server cooling efficiency, to better understand and mitigate this risk and account for any significant cost increases in our future cash flow accounting. Medium term Chronic & Acute Physical climate events may result in disruption to accesso’s operational efficiency as a result of communication infrastructure down-time for our predominantly remote-based team, impacting employee efficiency. We have a robust Disaster Recovery plan in place across accesso’s operations and we consider Disaster Recovery in our procurement process to mitigate disruptions as a result of acute climate impacts. Long term We will continue to monitor this risk and identify opportunities to build additional resilience within the organisation, including leveraging the global nature of our team. Chronic Rising temperatures may increase inflation globally, which may reduce consumer discretionary spend, especially within the leisure and tourism industry, impacting accesso’s revenue. We monitor inflation risk across our business, and if required in the future, we will build in provisions into our accounting methodology. We do not believe it is currently required. Medium term, Long term There may also be a likely smaller impact, due to increases accesso’s cost base – considering both staff and suppliers. Where possible, our contracts for long-term agreements include a clause to increase our fees in line with inflation. 30 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Transition risks Theme Policy & Legal, Market Description & impact Response & strategy Time horizon Transition to Net Zero may result in travel restrictions and increased costs of travel. This may impact accesso’s sales and marketing strategy (e.g. attendance at tradeshows and customer sites), as well as limiting in-person team events. We measure the Group’s business travel and resulting emissions in our carbon footprint reporting annually. Medium term, Long term We are updating the Group’s Business Travel Policy and engaging our staff in an awareness campaign to help reduce our business travel. We will continue to identify and implement business travel decarbonisation initiatives, including consideration to the Group’s Sales and Marketing strategy. Policy & Legal Transition to Net Zero will highly likely result in increased regulation and carbon taxation, both of which will introduce costs to accesso, as well as a risk of fines and reputational damage as a result of not responding adequately. We will continue to monitor for new climate-related regulations to enable a response in a timely manner to help mitigate risk of fines and engage external support if required. Short term, Medium term, Long term As levels of carbon taxation are better understood, we can consider accounting for these in our future cost models. We have established a Net Zero strategy and committed to be Net Zero by 2050 with a significant reduction by 2035, which will help minimise the impact of this risk. Climate-related opportunities Theme Markets Description & impact Response & strategy Rising temperatures may increase customers’ service availability and reliability to consumers, resulting in increased revenue for accesso. We will consider physical climate changes within the Group’s sales and marketing strategy to help realise these opportunities, targeting customers who will be most greatly impacted by climate change. Time horizon Medium term, Long term Significant examples identified: a) Seasonal theme park and other warm weather customers will be able to open for longer periods in the year. b) Increased demand for virtual queuing use at outside venues to avoid queuing in the potentially dangerous heat. A transition to Net Zero will result in an increased demand for greener products and service providers, increasing customer’s demand for accesso’s low-carbon solutions as they seek to meet their own Net Zero targets. accesso’s solutions allow clients to reduce resource use (paper and energy) and operate within the cloud. Resilience 31 We continue to invest in our Net Zero strategy and to achieve Net Zero by 2050 and make significant reductions by 2035. Medium term, Long term We are working on establishing our detailed roadmap to achieve our 2035 target and we will continue to report publicly on this to all stakeholders including customers. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Risk Management In 2022, we engaged a consultancy to support the Group’s Environment and Climate strategy, which included setting our approach for the scenario analysis. In 2023, we engaged an ESG consultancy specialising its services for AIM-quoted companies, to support the scenario analysis, identification of, and plan for, the ongoing management of climate-related risks and opportunities and to support our disclosures. The approach taken to identify, assess and manage the risks is outlined below: Identify: A workshop was held with senior representative from across the business including board representation by Fern MacDonald, CFO. The workshop attendees were given a thorough briefing to facilitate in-depth preparation ahead of the workshop. Attendees were asked to consider the potential impact of the two climate scenarios outlined above, with respect to identifying and assessing potential risks and opportunities. Ten risks and five opportunities were identified in total. Assess: The likelihood and potential impact of identified risks and opportunities was discussed in depth. This included the impact to the Group’s own business and our value chain operations, as well as the potential impacts to revenue and reputation. Six risks and two opportunities were considered as having a material impact to the Group strategy and business model if left unmanaged. The reported risks and opportunities were mapped to time-horizons in-line with the scenario assumptions. Manage: For all risks and opportunities identified, management plans were established. Plans include actions already underway, and the additional activities which could and should be done to build out accesso’s response. Required monitoring was identified and where available, metrics were identified to facilitate ongoing management. The principal risks and opportunities and resulting mitigation and realisation plans were presented to Fern MacDonald and Jody Madden for awareness and to establish any that required the Board’s attention and ultimately consolidation into the Group level risk register. No new risks were identified as significant for the Board’s attention and the identified risks were used to refine the existing Environmental risk on the risk register. Following the initial scenario analysis and risk and opportunity identification process, the ESG Committee will assume responsibility for identifying, assessing, and managing climate-related risks and opportunities and for escalating any material risks and opportunities to the CFO and then ultimately the Board. The ESG Committee meets twice annually and reviews all ESG related risks and opportunities, including climate- related risks on at least an annual basis. The climate-related risk and opportunity register will also be reviewed at least annually at the Board level. 32 Metrics & targets In 2022, we committed to be Net Zero across the business and the Group’s value chain by 2050. We also committed to achieving Net Zero in Scope 1 (fuel in offices) and Scope 2 (purchased electricity) emissions, whilst making significant reductions in our Scope 3 (value chain emissions) by 2035. We will use our greenhouse gas (GHG) emissions to monitor the Group’s identified Net Zero transition risks and opportunities. This year, our emission calculations include our global Scope 1 (fuel) and Scope 2 (electricity), as well as our most material Scope 3 (value chain) emissions: key suppliers (Category 1), employee business travel (air, train, car, taxi and hotel stays – Category 6), and employee remote working emissions (Category 7). We have focused the expansion of the Group’s carbon footprint calculation on those areas we believe are most material to our business. Key next steps are (i), develop a baseline carbon footprint of all our material emission categories, and (ii), establish a detailed decarbonisation plan with interim targets, so we can track our progress towards the Group’s Net Zero targets. We are committed to continue to invest in our climate strategy to achieve these objectives. We have mapped specific GHG emission targets to each Net Zero transition risk and opportunity for ongoing monitoring. We recognise that for the physical climate risks and opportunities, the Group’s GHG emissions and transition to Net Zero targets and progress will not be suitable for monitoring purposes. As a company at the start of its climate-related risk and opportunity management journey, we will continue to evolve our assessment, integration, and monitoring processes, which will include building out metrics and targets for the Group’s physical climate-related risks and opportunities. Understanding our footprint This is the third year calculating the Group’s carbon footprint, and this year we have made steps to extend our understanding of our global footprint and scope of reporting: • We engaged the Group’s cloud service providers (AWS, Rackspace, Microsoft, and Google, covering 90% of our server expenses) as the suppliers creating the most material emissions to report on our upstream footprint for the first time (Scope 3: Category 1, purchased goods & services). • We extended the Group’s business travel calculation to include hotel stays in addition to our air, train, and car travel disclosed in previous years (Scope 3: Category 6, business travel). • We have included an estimate for remote working emissions, to more closely reflect on the Group’s true impact that may be lost in Scope 1 (fuel in operations) & Scope 2 (purchased electricity) emissions due to our predominant remote working operating model. This sits within Scope 3: Category 7, employee commuting. We have not included any further employee commuting calculations. • We extended our calculations to include our acquired businesses, extending the Group’s footprint to employees in five new locations (all reported Scopes). • We also conducted a detailed analysis into the Group’s waste and water in our operations and determined our usage is currently immaterial, due to our relatively small office footprint globally. We will continue to monitor this on an annual basis. The Group’s environmental metrics have been produced in line with the Streamlined Energy & Carbon Reporting (SECR) framework. Our methodology is in alignment with the GHG-Protocol Corporate Accounting Standard and supplemented by guidance from the Eco Act for remote working emissions. We engaged a third- party consultant to support us with our calculations and have aligned methodology to previous years, using up to date Emissions Factors globally where available. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Understanding our footprint continued As might be expected with a growing business, in 2023 the Group’s total carbon footprint has increased significantly. This is largely attributed to the acquisition of three businesses with staff located across five new regions, and the surrounding travel activity related to the execution of these acquisitions. However, when directly comparing emissions of FY 2023 Scope 1 (fuel) and Scope 2 (electricity) with FY 2022, on a like-for-like basis, emissions have reduced by 15 tCO2e. This is largely due to carbon reduction measures taken by accesso and the closure of one of the US offices in Lake Mary. The Group’s business travel emissions have increased by 303 tCO2e. This is primarily due to the activity related to the acquisition of the new businesses, that required a greater level of international travel to facilitate, and the inclusion of hotel stays in 2023. Our emissions impact here was kept low as is feasible by the Group’s Business Travel Policy, designed to limit use of high emitting air travel classes. The additional inclusion this year of the Group’s key suppliers (Scope 3: Category 1, purchased goods & services) and employee homeworking (Scope 3: Category 7, employee commuting) has also, as anticipated, been a driver in raising the Group’s total emissions, with homeworking making up 43% of the Group’s total FY 2023 emissions. The Group’s Category 1 emissions are 49 tCO2e this year and we expect this to fall over time due to our key suppliers such as Amazon Web Services and Microsoft committing to Net Zero targets. Including the homeworking emissions in our carbon footprint calculation was important to accesso due to the predominant nature of the Group’s remote working operating model. The emission calculation includes office hardware energy usage, which has been calculated based on our specific office setup and is estimated to be 133 tCO2e, and home office energy heating and cooling, which has been estimated to be 399 tCO2e and accounts for 75% of the Group’s remote working emissions. It should be noted that homeworking calculations are reliant on numerous assumptions that can be more or less conservative. We have opted to take a less conservative approach, reflecting a higher potential impact. If more accurate methods of calculating homeworking emissions become available in the future, this may improve the accuracy of these results. Due to most of the calculation being estimated, and until a time there is further guidance produced by the GHG protocol, we will not be able to reflect any significant progress we are taking to reduce the Group’s office setup energy usage and encourage our employees to reduce their home emissions. We will continue to monitor these emissions but note that significant reductions will depend on government intervention and regulation to increase renewable energy supply and reduce country-by-country emission factors. Decarbonisation We have taken several steps to reduce the Group’s carbon footprint during 2023, including engaging our suppliers and employees as key stakeholders that will enable our successful transition to Net Zero by 2050. The below summarises the Group’s key initiatives we adopt to reduce emissions. Our product and technology We support our customers in reducing paper consumption through using our digital ticket platforms, and venue applications such as digital maps and activity guides. However, we recognise that while reducing paper usage, this simultaneously increases mobile phone usage, requiring capacity and run-time on the Group’s third- party data centre servers, which results in increased electricity use. We employ global leading cloud service providers, Amazon Web Services, Rackspace, and Google, who all have robust Net Zero policies and customer emission reporting tools. A key activity in 2023 has been to transition the acquired businesses onto our cloud infrastructure, which both reduces the Group’s carbon footprint in the immediate term, as well as supports our commitment to transition to Net Zero as we progress on the Group’s Net Zero journey alongside our technology providers. In house, the Group’s engineering team is always looking to increase efficiency across our technology stack, delivering benefits to our clients and customers, reducing the Group’s emissions, as well as increasing the scalability and long-term sustainability of our products. Many of these initiatives are being embedded into the Group’s standard ways of working and will persist into 2024 and beyond. Initiatives undertaken in 2023 include: • We completed a cloud efficiency assessment, utilising native cloud-specific tools like AWS CloudWatch and Google Operations Suite, to gain visibility into resource usage and emissions. • We continually identify and implement resource optimisation initiatives, for example, minimising idle computing resources, and are in the process of transitioning to serverless architecture. • We transition non-critical workloads to run during lower-carbon intensity periods. • The Group’s regional data centre location strategy helps to reduce our cloud energy consumption. • We identify opportunities to reduce the computational resources required to run our software and invest in our code to reduce technical debt and write out inefficiencies. • We continually evolve our technology to employ the latest in innovative solutions that help reduce energy usage. 33 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Our offices Being a software company and with the transition to a remote working model for a significant proportion of our staff, the Group’s Scope 1 (fuel) and 2 (electricity) emissions remain comparatively light. Following the acquisitions during 2023, we currently have an increased number of people working in offices, with approximately 10% of FTE working from offices on a regular basis. We also closed one of our US offices based in Lake Mary, which reduced the Group’s Scope 1 (fuel) and 2 (electricity) emissions compared to 2022. Inside our offices, we try to keep our energy usage and waste production to a minimum. We do this by considerate use of space, where our LED lighting and heating or air-conditioning turn off automatically in spaces we do not use at that time. This year, we conducted a detailed assessment of the Group’s waste and water usage across all our office space which is largely limited to office-based consumption from bathroom and kitchen facilities. Whilst the quality of data was low for certain locations, even taking a worst-case scenario resulted in very minimal emissions. We employ recycling schemes in each of our offices where available and reuse material where possible. IT equipment waste comprises of outdated end-user hardware (for example laptops, mobile devices, peripherals) which is only replaced as needed, and we minimise e-waste where possible by recycling all hardware at the end-of-life, for example using the Dell Recycle Programme. In addition, the use of third-party cloud data centres eliminates waste related to servers, network equipment, and other physical infrastructure within the Group’s own operations. For our Prism product, we reuse the straps and any reusable components. The remaining parts are recycled by an accredited recycling company in the UK and Europe, following the Regulations: restriction of hazardous substances (RoHS) and the Waste Electrical and Electronic Equipment Directive (WEEE). In the US, these non-reusable parts are disposed of by our partner that recycles components wherever possible. Our staff Our employees are critical stakeholders in the Group’s decarbonisation journey. We require them to think about and take steps to reduce their carbon emissions as they pertain to their work, from taking decisions to reduce business travel where possible, to reducing their energy usage when working in an office or at home. To reflect the Group’s dependency on our employees, in 2023 we mobilised our employee Sustainable Awareness Programme, educating our staff on accesso’s climate strategy and their role in delivering on our Net Zero ambition. We created a Climate Channel, as a safe space for employees to share green initiatives and provided educational resources, identifying steps that can be taken by individuals to reduce their impact on the environment. We have aligned the acquired businesses to the Group’s Business Travel Policy and reduced our Travel Expense Budgets for 2024 on reflection of our ongoing commitment to reduce business travel where possible. 34 Whilst we understand that most homeworking emissions are created by home office heating and cooling, we have taken several steps this year to help reduce the emissions of homeworking setup and equipment, where accesso has greater control. We regularly monitor energy consumption and carbon emissions of remote work setups and established and implemented a new policy to improve power saving on company laptops. We also updated the Group’s standard home office hardware with lower energy consumption models for all new and replacement requirements. We ensure the delivery of office equipment is direct from producer to employee, minimising the transmission and distribution emissions of new equipment. We have had great engagement from our staff during 2023 and looking ahead, we will continue to invest in the Group’s Sustainable Awareness Programme, adding in new resources to build understanding of our staff’s role and building a feeling of accountability in achieving accesso’s 2050 Net Zero ambition. Our environmental metrics Scope definitions Scope 1: Direct emissions from owned or controlled sources. Scope 2: Indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by accesso. Scope 3: All other indirect emissions that occur in a company’s value chain. accesso has chosen to report on Category 1, 6 and 7 emissions. For category 7, we have included the Group’s homeworking emissions for home office equipment, heating, and cooling. We have not included any further elements of category 7. Energy use (MWh) Non-renewable fuel consumed: Natural Gas Electricity consumption Total energy consumption GHG emissions by scope (tCO2e) Scope 1: Natural Gas Scope 2: Electricity (location-based) Subtotal (Scope 1 + 2) Scope 3 Total emissions (Scope 1 + 2 + 3) 2023 41 170 211 2023 8 33 41 1,194 1,235 2022 22 148 170 2022 4 37 41 323 364 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Scope 3 emissions by category (tCO2e) GHG emission intensity (tCO2e /operating profit M$) Category 1: Purchased goods & services Category 6: Business travel (hotel travel only) Category 6: Business travel (excl. hotel travel) Category 7: Employee commuting (homeworking only) Total GHG emissions by region (tCO2e) Scope 1: Natural Gas Scope 2: Electricity: (location-based) Intensity metrics GHG emission intensity (tCO2e /revenue M$) Revenue (M$) Scope 1 Scope 2 (location-based) Subtotal (Scope 1 + 2) (location-based) Scope 3: Category 6 Total emissions per revenue (M$) 35 2023 35 37 589 533 1,194 2022 n/a n/a 323 n/a 323 Operating profit All scope operating profit intensity GHG emission intensity (tCO2e/FTE) Full time employees (year average) * Scope 1 & 2 employee intensity Location 2023 2022 All scope employee intensity 2023 9.9 124.7 2023 670 0.06 1.84 2022 12.7 29 2022 584 0.07 0.62 * FTE only are included in this calculation. Seasonal workers have been excluded. We have recalculated the Group’s 2022 intensity metrics to align with this methodology. SECR metrics UK emissions & energy usage Scope 1: Natural Gas Scope 2 Electricity (location-based) Subtotal (Scope 1 + 2) Scope 3: Car mileage Total 2023 2022 kWh 0 70,351 70,351 n/a 70,351 tCO2 0 15 15 5 20 kWh 0 83,699 83,699 n/a 83,699 tCO2 0 16 16 3 19 Italy US Subtotal Singapore Canada Italy Mexico UAE UK US 5 2 7 2 0.1 6.2 2.3 1 15 7 Subtotal 33.6 2023 149.5 0.05 0.22 0.27 7.99 8.26 – 4 4 – – – 2 – 16 19 37 2022 139.7 0.03 0.26 0.29 2.31 2.60 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Environmental, social and governance report (ESG report) continued Social At accesso, we recognise our employees are paramount to the success of our business. We continually seek opportunities to engage with our employees throughout the year. Our initiatives enhance employee wellbeing and support, which in turn, contribute to lower turnover and promote employee retention. We administered the eighth annual Employee Engagement Survey with 92% participation and a 4.2 overall average score (out of 5.0), consistent with the results in 2022, which represented the highest average score in the history of the survey. This is above the 75th percentile for similarly sized organisations in our industry. We implemented a subscription for all employees to the Calm app, which focuses on mental health and wellbeing. Through the subscription, employees have unlimited access to the content which includes mindfulness, improved sleep and meditation to name a few. Each employee also has the ability to invite up to five of their dependents to use the app as part of their subscription. We launched accesso’s inaugural Leadership Development programme, called GOLD (Global Organisational Leadership Development) through a partnership with Udemy. The programme is virtual but allows leaders in each cohort to collaborate with each other and with the instructors, as well as attend a live session at the end of each unit to discuss what was learned. In 2023, we onboarded 92 new hires and a further 82 employees from acquired companies. We ended 2023 with 7.0% voluntary turnover (2022: 15.4%), a notable drop on the prior year. Diversity Diversity, Equity & Inclusion (DEI) remains a key focus area as we work to implement a more formalised strategy including updated metrics and targets. We have expanded our DEI metrics to include wider gender and racial/ ethnic group representation metrics across the business. On 31 December 2023, our minority headcount was 29% and female headcount was 35%. We have continued to partner with the National Diversity Council to assess our current diversity landscape and assist with the building of our future efforts. Following the successful launch of our DEI Strategic Council in 2022, a further nine new members were welcomed during 2023. Notable Council achievements during 2023 include: • Supporting the implementation of Inclusively, which is a recruiting platform that provides employers with a suite of resources to help us to better hire, support and provide accommodations for individuals with disabilities. Inclusivity training was also provided to managers, as well as all employees before the launch of the platform. • Assisting with the transition to Greenhouse Applicant Tracking System which has more DEI focused features as well as updating all job descriptions to include more inclusive language. As well as the above, accesso sponsored 13 female accesso employees to attend the Grace Hopper Celebration, which is the largest tech conference in the world for women. accesso’s diversity and inclusion policy, which encompasses the Board, is based on a commitment to creating an environment where diversity is valued and respected. We believe that business success is a direct result of the experience and quality of its people. Inherent within this approach is an acceptance and embracing of diversity in all its forms and an endorsement that the entire workforce, including the Board, be representative of the communities in which the Group operates. Key aims of the policy are to ensure equality, diversity and inclusion in the workplace and to promote a culture where everyone is treated with respect and dignity. Community accesso is a responsible member of its community; this reflects our culture and matters to our staff and local community. accesso has a strong culture of supporting staff in both individual and Group volunteering and fundraising initiatives. This includes encouraging staff to volunteer at local community projects and participate in local events; and providing corporate sponsorship of charitable activities. Volunteer time off We utilise a Volunteer Time Off (VTO) Programme for all employees to volunteer a paid day off at a charity of their choosing. In 2023, our employees volunteered at Habitat for Humanity, the Second Harvest Food Bank, the Ronald McDonald House and Give Kids the World to name a few. Charitable giving Both directly and in partnership with our clients, we contribute to various causes including domestic violence prevention, childhood hunger, cancer research, and natural disasters. One example from 2023 is the donation of office, cleaning and kitchen supplies from the closure of our Lake Mary office to a local charity that benefits victims of domestic violence. ESG governance The governance of ESG currently falls under the responsibility of the whole Board and is a recurring Board agenda point. This governance structure and approach is constantly under review. accesso recognises the importance of meeting globally recognised corporate responsibility standards and has given Jody Madden, Non-Executive Director, responsibility to drive forward ESG initiatives and facilitate ESG-related risk assessment. Looking ahead to 2024, the ESG Committee will develop, guide, monitor and revise the plans, policies and structures wherever and whenever deemed necessary. We employ an experienced Board made up of a diverse group of Executive and Non-Executive Directors with significant experience in the industry and as directors of other public companies to help us develop and adhere to best practice on governance matters. The three Non-Executive Directors are independent. 36 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Governance contents Governance The Board of Directors Corporate governance report Directors’ remuneration report Report of the Directors Statement of Directors’ responsibilities Independent auditor’s report to the members of accesso Technology Group plc 38 39 42 51 53 54 37 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Board of Directors Bill Russell Non-Executive Chairman Andy Malpass Non-Executive Director Jody Madden Non-Executive Director Steve Brown Chief Executive Officer Fern MacDonald Chief Financial Officer Date appointed to the Board: 1 March 2019 Date appointed to the Board: 26 June 2018 Date appointed to the Board: 1 January 2021 Date appointed to the Board: 27 January 2020 Date appointed to the Board: 27 April 2020 Experience Bill Russell has served in a variety of roles in both public and private technology company boards, in a career spanning several decades, with 23 years across a number of senior management roles at Hewlett Packard, including Vice President and General Manager of Hewlett Packard’s multi-billion- dollar Enterprise Systems Group and its Software Solutions Group. Bill is currently Non-Executive Chairman at PROS Holdings, a provider of AI-powered solutions that optimise selling in the digital economy, and previously served on the boards at SABA Software, Inc., webMethods and Cognos. Bill has a BSc (Hons) in Computer Science from Edinburgh University and is based in the United States. Bill Russell joined as the Group’s Non- Executive Chairman on 1 March 2019. Experience Andy Malpass has over almost 40 years experience in the software industry covering both private and public companies, including approximately 20 years as Group Finance Director of Fidessa Group plc. Andy also served as Company Secretary of Fidessa Group plc for many years. He is currently an Independent Non-Executive Director and Chair of the Audit Committee at Kainos Group plc. Andy graduated with a BA (Hons) in Accounting and Finance from Lancaster University and is a Fellow of the Chartered Institute of Management Accountants. Andy joined accesso on 26 June 2018 as Independent Non-Executive Director. Andy is the Chair of the Audit Committee and became a member of the Remuneration Committee in March 2019. Experience Jody is an experienced technology leader, and is currently Chief Executive Officer of Foundry, a London-based software developer for the Media and Entertainment industry. She has 20 years of experience in Media and Entertainment and held a range of senior roles at Digital Domain, Lucasfilm and Industrial Light & Magic prior to joining Foundry. Jody is also on the Board of Directors of the Sustainable Food Center, a Central Texas non-profit group. Jody has a Bachelor of Arts degree from Stanford University. Jody was appointed as a Non-Executive Director of the Group on 1 January 2021 and is a member of accesso’s Audit Committee and Chair of the Remuneration Committee. Experience Fern is an experienced international accounting and finance professional who served as Senior Vice President of Finance at accesso from May 2018 prior to her appointment as Chief Financial Officer on 27 April 2020. Fern has more than 20 years of experience and a deep understanding of the accesso business. Prior to joining accesso, she spent eight years in various financial leadership roles at ZeroChaos (now Workforce Logiq), a global provider of workforce management solutions, culminating as Executive Vice President, Finance. Previously, Fern was a senior manager with Ernst & Young, serving a series of public and private clients from both the Dublin, Ireland and Moscow, Russia offices. Fern graduated with a BA (Hons) in Accounting and Finance from Dublin City University. Experience Steve led the Company’s namesake accesso business from 2008, which became part of what is now accesso Technology Group plc when it was acquired from Steve in 2012. During a period of rapid expansion between 2013 and 2017, the Company acquired Siriusware, ShoWare, Ingresso and TE2. Steve served as President and CEO from 2016 until 2018 when he departed the Company. He stepped back into the CEO role in January 2020 to reinvigorate the Company’s strategic plan to fully leverage the range of assets within its portfolio and deliver value- enhancing solutions to the marketplace. Steve brings a strong operations and finance background to accesso with extensive experience in ticketing, pricing strategy, eCommerce and revenue management. His theme park career began during college at Walt Disney World Resort. Over the course of sixteen years, he held a variety of roles with increasing responsibility in financial planning and pricing strategy including Director, Walt Disney World Ticketing and Vice President, Revenue Management for Disneyland Resort, where he drove dramatic growth in park admissions and hotel revenues utilising strategic and promotional pricing. Prior to joining accesso, Steve served as the corporate Vice President of Ticket Strategy and Sales for Six Flags. Steve received his MBA from the Goizueta Business School at Emory University in Atlanta and graduated with a BSc in Marketing from the University of South Florida in Tampa. 38 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements The role of the Board The Board is responsible for the overall leadership of the Company and setting the Company’s vision, purpose, values and standards. It approves the Group’s strategic aims and objectives and the annual operating and capital expenditure budgets and ensures maintenance of a sound system of internal control and risk management. There is a formal schedule of matters reserved for the Board, which is reviewed on an annual basis. The Executive Directors have day-to-day responsibility for the operational management of the Group’s activities. The Non-Executive Directors are responsible for bringing independent and objective judgement to Board decisions and they also hold meetings on a regular basis to discuss matters without Executive Directors present to provide a forum for independent discussion. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision-making and ensuring the Non-Executive Directors are properly briefed on matters. The Chief Executive Officer has responsibility for implementing the strategy of the Board, alongside the Chairman, and managing the day-to-day activity of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed, and applicable rules and regulations are complied with. All Directors have access to the Company Secretary and are permitted to obtain independent professional advice at the Company’s expense where they consider it necessary for them to effectively discharge their duties. The Board has established an Audit Committee and Remuneration Committee to assist the Board in fulfilling its responsibilities. Both Board Committees have separate terms of reference, which along with the Board’s schedule of matters reserved are reviewed on a regular basis. It is considered that the composition and size of the Board does not warrant the appointment of a Nominations Committee and appointments are dealt with by the Board as a whole. The need to appoint such a committee is subject to review by the Board. Corporate governance report for the financial year ended 31 December 2023 Introduction The Board of Directors’ (the ‘Board’) continues to support achieving high standards of corporate governance and we remain fully compliant with the principles of the Quoted Company Alliance’s Corporate Governance Code (the ‘‘QCA Code’’). accesso’s adherence to high standards of ethics, values and corporate social responsibility are principles which underpin our governance procedures and the strategic and management decisions that we make. Our governance model evolves to support the business and the QCA Code continues to provide a flexible, yet rigorous approach to support this. The Board has continued and has engaged with professional advisors to assist with the formalisation of ESG matters and actions. Following on from the launch of the Climate Change policy in 2022, this led to the establishment of an ESG Committee during 2023. We also recognise that we have an impact on the world in which we live, our employees, and the people we interact with. We strive to deliver strong results to our investors through sustainable business practices across environmental, social and governance pillars. Details of how we comply with the QCA Code are set out in our Statement of Compliance, a copy of which can be found on our website www.accesso.com. Details of our approach to ESG can also be found under the ESG section of the Strategic Report on page 27 and on our website. Board composition The Board of Directors comprised two Executive Directors, the Non-Executive Chairman and two independent Non-Executive Directors for the financial year 2023 following the resignation of Karen Slatford on 17 January 2023. Full details of the Directors are on page 38. All Directors are subject to election by shareholders at their first annual general meeting following their appointment to the Board and seek re-election at each annual general meeting thereafter. Each of the Directors brings a mix of skills, experience and knowledge, the balance of which enables the Board to discharge its duties effectively. Upon joining the Board, Directors receive an induction on various aspects of the Group. The Directors receive updates from the Company Secretary and other various external advisers on legal requirements and regulations, remuneration matters and corporate governance best practice. The Board will continue to look to build further diversity into leadership and across the business, recognising the value of building and developing a diverse workforce at all levels. We have partnered with the National Diversity Council to assess our current diversity landscape and assist with the building of our future efforts. Succession planning is a continuous strategic process and the Board has continued over the past year to focus on both long- term and short-term succession both for Board and senior management. Currently the Board is over one-third female, more than half are Non-Executive Directors, and the average Non-Executive tenure is under 5 years. 39 Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Corporate governance report continued for the financial year ended 31 December 2023 Board and Committee meetings 2023 The Company holds Board meetings regularly throughout the year. Due to the acquisition activity during the year, four short meetings were held by just the Executive Directors the purpose of which was to execute previously Board-approved transactions. The Audit Committee held two meetings and the Remuneration Committee held four meetings. Attendance by Board members is shown below. Number of meetings held Executive Board members Steve Brown Fern MacDonald Non-Executive Board members Bill Russell Andy Malpass Jody Madden Board 14 14 14 10 10 9 Audit Committee Remuneration Committee 2 – – – 2 2 4 – – – 4 4 In the event that Board approval is required between Board meetings, Board members are provided with supporting information to assist in making a decision. The decision of each Board member is communicated and recorded at the following Board meeting. Board members are aware of the time commitment required when joining the Board. The Board agenda for each meeting is collated by the Chairman in conjunction with the Company Secretary. The agenda ensures that adequate time is spent on operational and financial issues, as well as strategic matters. During the course of the year, the topics subject to Board discussion at Board meetings included: • Protection and support of staff • Key management and Company-wide share-based arrangements • Strategic plan and annual forecast and budget • Financial performance • Capital management and utilisation • Succession planning • Market and competitor reports • Risk and internal controls • Approval of annual and half year reports • Stakeholder engagement • Governance matters • Reports from the Audit and Remuneration Committees 40 Detailed proposal papers, management reports, progress on key initiatives and routine matters such as financial reports and a statement on current trading are produced in advance of meetings to enable proper consideration and debate of matters by the Board in its meetings. Major strategic initiatives involving significant cost or perceived risk are only undertaken following their full evaluation by the Board. Matters of an operational nature are delegated to Executive management. The Board also receives management information on a regular basis between formal meetings. The Chairman, the CEO and CFO are invited to attend the Audit and Remuneration Committee meetings if appropriate. Minutes of all Board and Committee meetings are recorded by the Company Secretary. Audit Committee The Audit Committee is chaired by Andy Malpass and completed by Jody Madden. Karen Slatford was a member until her resignation effective 17 January 2023. The Committee met twice during the year to fulfil its duties. The Chairman, Chief Executive Officer, Chief Financial Officer and external auditor attended meetings by invitation. The Committee is responsible for monitoring and reviewing the financial reporting of the Group from information provided by management and the auditor. As part of this, it reviews both the financial information and the narrative reporting within the externally published announcements and Company reports. It also considers the objectivity, independence and cost effectiveness of the external auditor, taking into account the views of management. The Committee keeps under review the effectiveness of the Group’s system of internal control on behalf of the Board. As part of this role, it reviews the Group’s controls and procedures for the evaluation, monitoring and management of risks and advises the Board on the Group’s risk strategy. The Executive Directors are closely involved with the management and review of business operations. The Audit Committee’s recommendation is that Grant Thornton UK LLP be reappointed as the Company’s auditor and an appropriate resolution be put to the shareholders at this year’s annual general meeting. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Corporate governance report continued for the financial year ended 31 December 2023 Remuneration Committee The full Remuneration Committee report is on pages 42 to 50 which includes full details of the composition and terms of reference of the Committee. Relations with shareholders The Company and Board recognise the importance of developing and maintaining good relationships with all the various categories of shareholders and devotes significant effort and resource in this respect. There have been regular dialogues with shareholders during the year including such as holding briefings with analysts and other investors, including staff shareholders. The Company also uses the annual general meeting as an opportunity to engage with its shareholders, where both private and institutional investors are given the opportunity to question the Board. The Company’s annual general meeting was held in May 2023. Notice of the date of the 2024 annual general meeting is included with this report. Separate resolutions on each substantially separate issue, in particular any proposal relating to the Annual Report and Accounts, will be made at the annual general meeting. Board performance evaluation In the last quarter of 2021, the Board undertook a formal review which was conducted internally by the Company Secretary and consisted of written responses to a questionnaire. Recommendations and issues raised by the evaluation exercise were used to improve the effectiveness of the Board and introduce improvements to Board processes during 2023. A targeted evaluation of the specific issues raised in the previous review took place in early 2024 to assess progress made in these areas and to determine whether any further action is required. Bill Russell Non-Executive Chairman 15 April 2024 41 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report for the financial year ended 31 December 2023 Introduction As the Chair of the Remuneration Committee, I am pleased to present our report setting out accesso’s Remuneration Policy, practice and activities during the financial year. Although a full remuneration report is not a requirement of an AIM listed company, the Committee has decided that, as was the case last year, a comprehensive report is good practice and provides shareholders with more clarity around how we set and manage remuneration for our Executive Directors. This report gives an overview of the year, the Remuneration Policy of the Company and provides detail of the amounts paid in 2023, as well as how the Remuneration Policy will be implemented in the 2024 financial year. As in prior years, salary increases for our Executive Directors were in line with the rest of the organisation and benefits such as retirement contributions are on the same basis as the rest of the employees. The Company continued to comply with the Quoted Companies Alliance’s Corporate Governance Code (the ‘QCA Code’), and the report has been prepared in accordance with the principles of the QCA Code. The content of this report is unaudited unless otherwise stated. Role of the Committee The Committee’s primary role is to determine, and agree with the Board, the Remuneration Policy for the Executive Directors and senior management as well as to oversee the remuneration of the Group, ensuring alignment of objectives and rewards. Within the terms of the policy, the Committee also approves performance- related and discretionary awards to Executive Directors. The Committee’s full Terms of Reference may be viewed on accesso’s website. Senior members of accesso’s management team may attend meetings by invitation but will not be present when their own remuneration is discussed. Appointment of external advisors The Committee continued to use external independent remuneration consultants, Mercer Limited, to assist the Company with setting fair and balanced remuneration policies for its key management. Mercer is a signatory to, and adheres to, the Code of Conduct for Remuneration Consultants (which can be found at www.remunerationconsultantsgroup.com). Principal activities in 2023 We hope you find the information in this report helpful to you as a shareholder. The principal activities undertaken by the Committee during 2023 were as follows: Committee membership Chair Jody Madden2 Karen Slatford1 1 Resigned 17 January 2023; served as Chair until that date. 2 Appointed as Chair 24 January 2023; served as member until that date. Members Andy Malpass Committee membership is limited to independent Non-Executive Directors of the Company unless there is an insufficient number of appointed Non-Executive Directors at any point, in which case an Executive Director will be appointed. The Company Secretary acts as secretary to the Committee. • Reviewed and approved Company-wide salary increases with effect from January 2024; • Reviewed and approved the Long-Term Incentive Plan (LTIP) and Company-wide share award plan grants for 2023; • Reviewed and approved the Company-wide bonus pool; • Reviewed and approved the terms of reference of the Committee; • Reviewed and approved Directors’ expenses for 2022 and the policy for authorisation. Activities undertaken between the end of the financial year and the date of this report: • Reviewed and approved the bonus awards in respect of the 2023 performance year; • Reviewed the annual bonus targets for the Executive Directors for the financial year 2023 and measured performance against them; • Reviewed and approved Directors’ expenses for 2023 and the policy for authorisation. 42 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report continued for the financial year ended 31 December 2023 Remuneration Policy overview The principal objectives of the Company’s Remuneration Policy are to attract, retain and motivate the Company’s Executive Directors and senior management and provide incentives that align with, and support, the Company’s business strategy. This objective is critical as the Company operates in a market where wage pressure and competition for talent continues to have a significant impact on all businesses in the sector. Directors’ Remuneration Policy This section sets out accesso’s Remuneration Policy for Executive and Non-Executive Directors. The Policy explains the purpose and principles underlying the structure of remuneration packages and how the Policy links remuneration to the achievement of sustained high performance and long-term value creation. The Remuneration Committee oversees the implementation of this policy and seeks to ensure that the Executive Directors are fairly rewarded for the Company’s performance over the short, medium and long term. Taking typical practice within the sector into account, the Committee has decided that a significant proportion of potential total remuneration should be performance related. Shareholders should note that approximately 64% of the Group’s workforce, including both Executive Directors, are based in the US and their remuneration reflects that market, whilst recognising that the Company is UK- listed. Overall remuneration is structured and set at levels to enable accesso to recruit and retain high-calibre executives necessary for business success whilst ensuring that: The Committee will continue to monitor the salary and total remuneration for Executive Directors closely and reserves the right to make an increase in excess of typical UK market practice if it considers it necessary and appropriate, especially given the Company’s predominant presence in the US. • our reward structure, performance measures and mix between fixed and variable elements are comparable with similar organisations; • our remuneration supports the implementation of strategy and aims of the business, and effective risk management for the medium to long term; • the right behaviours, values and culture are encouraged and rewarded; and • the approach is simple to communicate to participants and shareholders. Focus for 2024 In the coming year, the Remuneration Committee will consider a number of matters including: • approval of bonus performance measures and targets for 2024; • approval of performance conditions and awards under the Company’s LTIP for 2024; • approval of any awards under the Company-wide share award plan; and • assessment of the ongoing appropriateness of the remuneration arrangements in light of remuneration trends and market practice. Resolutions at the AGM A full remuneration report is not a requirement for AIM-listed companies and similarly votes on remuneration policy and reports are not required for such companies. Therefore, shareholders will not be invited to vote on our Remuneration Policy or the Remuneration Report. The policy has been presented only for information and to give shareholders full background on the Company’s approach to remuneration. 43 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report continued for the financial year ended 31 December 2023 Fixed elements of remuneration for Executive Directors Element of remuneration Link to Company strategy Operation Maximum opportunity Salary Provides a set level of remuneration sufficient to attract and retain Executives with the appropriate experience and expertise. The Committee takes into account a number of factors when setting and reviewing salaries, including: • Scope and responsibility of the role; • Any changes to the scope or size of the role; • The skills and experience of the individual; • Salary levels for similar roles within appropriate comparators; and • Value of the remuneration package as a whole. Benefits Provides benefits sufficient to attract and retain Executives with the appropriate experience and expertise. Executive Directors are eligible for the following benefits: • Healthcare • Life Insurance • Short and long-term disability insurance Retirement schemes Provides retirement scheme contributions sufficient to attract and retain Executives with the appropriate experience and expertise. Executive Directors are eligible to receive employer contributions to the Company’s pension plan(s) (which are defined contribution plans). There is no set maximum to salary levels or salary increases. Account will be taken of increases applied to colleagues as a whole when determining salary increases for the Executive Directors, however the Committee retains the discretion to award higher increases where it considers it appropriate. The Committee recognises the need to maintain suitable flexibility in the benefits provided to ensure it is able to support the objective of attracting and retaining personnel in order to deliver the Company strategy. The maximum will be set at the cost of providing the benefits described. One-off payments such as legal fees or outplacement costs may also be paid if it is considered appropriate. 4% of salary per annum for the CEO and CFO, subject to an annual maximum for the type of scheme per local tax and/or retirement regulations. To the extent that Executive Directors participate in the Company’s pension arrangements, they do so on the same terms as the workforce. 44 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report continued for the financial year ended 31 December 2023 Variable elements of remuneration for Executive Directors Element of remuneration Link to Company strategy Operation Target opportunity Performance metrics Annual bonus Variable remuneration that rewards the achievement of annual financial, operational and individual objectives integral to Company strategy. Objectives are set annually based on the achievement of strategic goals. At the end of the year, the Committee meets to review performance against the agreed objectives and determines payout levels. Awards are made in cash. 200% salary for the CEO and 150% salary for the CFO. Long-Term Incentive Plan (LTIPs) Variable remuneration designed to incentivise and reward the achievement of long-term targets aligned with shareholder interests. The LTIP also provide flexibility in the retention and recruitment of Executive Directors. Awards granted under the LTIP vest subject to achievement of performance conditions measured over a three-year period. LTIPs may be made as conditional share awards or in other forms (e.g. nil cost options) if it is considered appropriate. Accrued dividends may be paid in cash or shares, to the extent that awards vest. The plan also allows for share options to be granted, subject to a six-month exercise period. The Committee may adjust and amend awards in accordance with the LTIP rules. Overall maximum of up to 300% salary in any one year, including any share option plan awards. The CEO received an award in the 2023 performance year of 469,424 performance shares. No awards will be made to the CEO in fiscal years 2024 or 2025. Awards are based on financial, operational and individual goals set at the start of the year. Up to 50% of the award will be assessed against the Company’s financial performance in that year. The remainder of the award will be based on achievement against specific personal and strategic objectives. The Committee reserves the right to make an award of a different amount produced by achievement against the measures if it believes the outcome is not a fair reflection of Company or personal performance. The split between these performance measures will be determined annually by the Committee, and exceptionally during the year if there is a compelling reason to do so. Performance measures are currently related equally to Total Shareholder Return (TSR) and Cash EBITDA. The Committee reserves the right to adjust the measures before awards are granted to reflect relevant strategic targets. The Committee reserves the right to exercise discretion to adjust the outcome produced by achievement against the measures if it believes the outcome is not a fair reflection of Company performance. 45 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report continued for the financial year ended 31 December 2023 Notes to the policy table All LTIP and bonus awards made to Executive Directors are subject to malus and clawback provisions. The Committee may, in its absolute discretion, determine to reduce the number of shares to which an award or option relates or cancel it altogether. Alternatively, the Committee could impose further conditions on the vesting or exercise of an award or option. At any time within two years of an award vesting, the Committee may require the Executive Director to transfer to the Company a number of shares or a cash amount in: • any circumstances justifying summary dismissal of a participant from their office or employment with any Group Company including, but not limited to, dishonesty, fraud, misrepresentation or breach of trust; • any material breach of a participant's terms and conditions of employment; • any material violation of Company policy, rules or regulations; • any material failure of risk management; and/or • any inaccurate reporting of any accounts, financial data or such other similar information resulting in such accounts, financial data or other information or any future accounts, financial data or other information having to include material write-downs, adjustments or other corrective items. Remuneration policy for other employees As with the Executive Directors, salary for other employees is set at a level sufficient to attract and retain them, taking into account their experience and expertise. Annual bonus for other employees is normally payable as a percentage of salary and is set annually, based on the achievement of strategic and personal goals. Selected employees may be invited to participate in accesso’s LTIP, share award plan, CSOP, EMI or unapproved option schemes to aid retention and motivation. Pension arrangements are consistent across the UK and US workforce including Executive Directors. Executive Directors’ service contracts Each of the Executive Directors has a rolling service contract terminable by the Company on six months’ notice, or by the Executive Director on 90 days’ notice. Each Executive Director receives life insurance, the benefit of which amounts to a maximum of $600,000. Each Executive Director is entitled to reimbursement of reasonable expenses incurred by them in the performance of their duties. The service contracts for Executive Directors make no provision for termination payments, other than for payment in lieu of salary. Recruitment policy The Committee will seek to align a new Executive Director’s remuneration package to the Company’s Remuneration Policy as set out above. In determining remuneration for a new Executive Director, the Committee will consider all relevant factors, including the requirements of the role, the external market and internal relativities, while ensuring it does not pay more than is necessary to appoint the preferred candidate. Benefits will be limited to those outlined in the Remuneration Policy, with relocation assistance provided where appropriate. Awards under the LTIP rules and/or CSOP rules that may be awarded to a new Executive Director will be limited to 300% of salary and bonus limited to 200% of salary. The Committee may buy out remuneration a new hire has had to forfeit on joining the Group, if it considers the cost can be justified and is in the best interests of the Company. Any such buyout would be in addition to the limits set out above. Any such buyout awards will be of comparable commercial value and reflect as closely as practicable the form and structure of the forfeited awards, including timing of vesting, performance conditions and the probability of those conditions being met. The fair value of any bought-out awards will be no higher than that of those forfeited. Where appropriate, the Committee retains the discretion to use the provisions provided in the Listing Rules for the purpose of making such an award, or to utilise any other incentive plan operated by the Group. Where an Executive Director is appointed from within the Group, any legacy arrangements would be honoured in line with the original terms and conditions as long as these do not cause a material conflict with the Remuneration Policy. If an Executive Director is appointed following an acquisition of, or merger with, another Company, legacy terms and conditions that are of higher value than provided in the policy would normally be honoured. Termination of office policy If the employment of an Executive Director is terminated, any compensation payable will be determined by reference to the terms of the service contract in force at the time. As variable pay awards are not contractual, treatment of these awards is determined by the relevant rules. The Committee may structure any compensation payments beyond the contractual notice provisions in the contract in such a way as it deems appropriate. The Company may at its discretion make termination payments in lieu of notice calculated only on base salary. Service agreements may allow for garden leave during any notice period. There is no entitlement to a bonus in any year. The Committee retains discretion to award bonuses for leavers taking into account the circumstances of departure. Any bonus would normally be subject to performance, deferral and time pro-rating as appropriate. 46 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report continued for the financial year ended 31 December 2023 Termination of office policy continued Treatment of share awards is governed by the plan rules. If an Executive Director ceases to be a Director or employee of a Group Company before (i) the release date of an award granted as a conditional share award or (ii) the date on which an award granted as an option becomes capable of exercise by reason of death or any other reason other than for cause, the award shall be released or become exercisable to the participant. The release or exercise will be subject to the extent that any relevant performance condition has been satisfied over the relevant period, which may be determined by the Board. Any part of the award which remains unvested as at the date of cessation, office or employment shall lapse immediately. If a participant ceases to be a Director or employee of a Group Company for cause, all awards shall lapse immediately. The Committee has discretion regarding whether to pro-rate the bonus based on the proportion of the year worked. The Committee’s intention is that it will pro-rate the bonus for time, taking performance measures up to that time into account. The Committee anticipates it would only use its discretion to not pro-rate only where there is an exceptional business case, which would be explained in full to shareholders. Change of control policies LTIP awards issued in 2020, 2021, 2022 and 2023 vest in full on a change of control where the sale price exceeds a threshold price per share. Awards issued under the Company-wide share plan from 2021 entitles an award holder to a pro-rated time- based vesting of their award on a change of control, with a 50% minimum if the award has not reached a 50% point in the vesting period. Stakeholder engagement In making remuneration decisions, the Committee considers the pay and employment conditions elsewhere in the Group although employees were not formally consulted prior to setting the Remuneration Policy for Executive Directors. Employees within the Group receive base salary, benefits, pension and an annual bonus subject to appropriate eligibility conditions. The terms and value of these elements vary based on seniority. The Committee appreciates the importance of understanding the views of the Company’s shareholders. The Committee is open to listening to the views of our shareholders and engaging in ongoing dialogue with them on Executive remuneration matters. The Committee also takes full account of the guidelines of investor bodies and shareholder views in determining the remuneration arrangements in operation within the Group. Shareholders should also note that a significant proportion of the Company’s workforce are based in the US and their remuneration reflects that market. 47 External appointments Executive Directors may hold external directorships if the Board determines that such appointments do not cause any conflict of interest. Where such appointments are approved and held, it is a matter for the Board to agree whether fees paid in respect of the appointment are retained by the individual or paid to the Company. Non-Executive Director remuneration Element of remuneration Link to Company strategy Operation Maximum opportunity Non-Executive Director fees The fees paid to the Non- Executive Directors are determined by the Board as a whole. Fee levels are set by reference to Non- Executive Director fees at companies of similar size and complexity and general increases for salaried employees within the Company. Fees are set at a level to reflect the amount of time and level of involvement required in order to carry out their duties as members of the Board and its Committees and to attract and retain Non-Executive Directors of the highest calibre with relevant commercial and other experience. Appointment of Non-Executive Directors All the Non-Executive Directors have letters of appointment with the Company. Appointment is terminable on written notice. The appointment letters for the Non-Executive Directors provide that no compensation is payable upon termination of employment. Letters of appointment are available for inspection at the Company’s registered offices. Each of the Non-Executive Directors are subject to annual re-election. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements 2023 annual bonus The 2023 annual bonus performance measures were selected to reflect accesso’s annual and long-term objectives and reflect financial and strategic priorities, as appropriate. Performance targets are set to be stretching but achievable, considering a range of reference points including financial performance versus budget and achievement of certain strategic milestones. In respect of the year ended 31 December 2023, the Remuneration Committee reviewed the corporate performance of the Group and decided that the Executive Directors should receive 75% of their bonus. Statement of Directors’ shareholding and scheme interests The share option and LTIP awards of the Directors are set out below: 31 December 2022 582,567 – 154,422 44,432 45,237 – Steve Brown 27 January 2020 20 June 2023 Fern MacDonald 16 September 2020 25 March 2021 25 April 2022 20 June 2023 Exercised in the period Lapsed in the period Granted in the period 31 December 2023 Exercise price Date from which exercisable (582,567) – – – – – – – – – 469,424 – – 469,424 £0.01 £0.00 25 April 2023 19 June 2026 – – – 69,544 154,422 44,432 45,237 69,544 £0.01 16 September 2023 30 April 2024 £0.00 24 April 2025 £0.00 19 June 2026 £0.00 Directors’ remuneration report continued for the financial year ended 31 December 2023 Single total figure of remuneration The following tables set out the aggregate emoluments earned by the Directors in respect of the years ended 31 December 2023 and 2022, respectively. 2023 2022 2023 2022 Salary $000 Fees $000 Bonus $000 Share- based payments $000 Other benefits $000 Total $000 Total $000 Retirement contributions $000 Non-Executive Directors Bill Russell Karen Slatford 1 Andy Malpass 1 Jody Madden Executive Directors Steve Brown Fern MacDonald Total – – – – 460 325 785 190 4 65 78 – – 337 – – – – – – – – – – – – 190 4 65 78 190 65 58 61 675 450 1,125 513 355 868 16 15 31 1,664 1,145 3,146 2,106 1,268 3,748 – – – – – 13 13 – – – – – 12 12 1 Salary or fees payable in GBP and converted at the applicable monthly exchange rate. (i) Annual salary and fees – correspond to the amount earned during the relevant financial year, either as base salary for Executives or fees for Non-Executives. (ii) Annual bonus – corresponds to the amount earned in respect of the relevant financial year. Details of how this was calculated are set out below. (iii) Benefits – corresponds to the taxable value of benefits received during the relevant financial year and principally includes life assurance and permanent health insurance. (iv) Share-based payment – corresponds to the amount charged against current financial year earnings for equity awards to the Executive Directors in the current or previous financial year. (v) Retirement contributions – corresponds to the amount contributed to a defined contribution retirement plan. The Executive Directors received a retirement plan contribution of up to 4% of salary as detailed earlier in this report. 48 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report continued for the financial year ended 31 December 2023 LTIP awards There are three unvested LTIP awards currently in issue to the Executive Directors. The performance conditions are set out below. More detailed information on the specifics of the TSR, EPS and Cash EBITDA targets will be disclosed when the awards vest but are not published at this stage as they are considered commercially sensitive. Date of award 25 March 2021 (Fern MacDonald only) Vesting period (months) 36 Period stock to be held following exercise (months) 6 25 April 2022 (Fern MacDonald only) 36 20 June 2023 36 6 6 Performance conditions 50% of the performance condition for the 2021 award is related to Total Shareholder Return (TSR) over the period to 30 April 2024. Performance in line with the threshold and stretch targets will result in 25% and 100% vesting of the TSR element, respectively, with straight-line interpolation between these two points. 50% of the performance condition for the 2021 award is related to Cash EBITDA for the fiscal year 31 December 2023. Performance in line with the threshold and stretch targets will result in 25% and 100% vesting of the EBITDA element, respectively, with straight-line interpolation between these two points. 50% of the performance condition for the 2022 award is related to Total Shareholder Return (TSR) over the period to 24 April 2025. Performance in line with the threshold and stretch targets will result in 25% and 100% vesting of the TSR element, respectively, with straight-line interpolation between these two points. 50% of the performance condition for the 2022 award is related to Cash EBITDA for the fiscal year 31 December 2024. Performance in line with the threshold and stretch targets will result in 25% and 100% vesting of the EBITDA element, respectively, with straight-line interpolation between these two points. 50% of the performance condition for the 2023 award is related to Total Shareholder Return (TSR) over the period to 19 June 2026. Performance in line with the threshold and stretch targets will result in 25% and 100% vesting of the TSR element, respectively, with straight-line interpolation between these two points. 50% of the performance condition for the 2023 award is related to Cash EBITDA for the fiscal year 31 December 2025. Performance in line with the threshold and stretch targets will result in 25% and 100% vesting of the EBITDA element, respectively, with straight-line interpolation between these two points. 49 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Directors’ remuneration report continued for the financial year ended 31 December 2023 Fees for the Non-Executive Directors A summary of current fees for the year ended 31 December 2024 is shown below. A review of Non-Executive fees took place in 2023. No increase was made to the Non-Executive Chairman fees, but market increases were awarded to the remaining Non-Executive Director fees and are reflected in the numbers below. Annual bonus and LTIP performance measures are selected annually to reflect accesso’s annual and long- term objectives and reflect financial and strategic priorities, as appropriate. Performance targets are set to be stretching and achievable, taking into account a range of reference points including the strategic plan and broker forecasts, as well as the Group’s strategic priorities and the external context. Bill Russell Andy Malpass 1 Jody Madden 2 Basic fee $ 190,000 64,975 78,000 Role Non-Executive Chairman Chair of the Audit Committee Chair of the Remuneration Committee 1 Payable in GBP and converted on 1 January 2024 rate of 1.273. 2 Appointed as Chair of the Remuneration Committee on 24 January 2023. External appointments No Executive Director held an external appointment as at 31 December 2023. Implementation of policy for 2024 Salaries for Executive Directors are reviewed each year taking into account the Remuneration Policy set out in this report. The table below shows the salaries for the Executive Directors as at 1 January 2024 in comparison to base salary at 1 January 2023; Steve Brown Fern MacDonald 1 January 2023 $ 450,000 400,000 1 January 2024 $ 468,000 416,000 % change 4.0% 4.0% The increases awarded to the Executive Directors are in line with the average awarded to the wider workforce. In respect of the annual bonus, as part of the implementation of the strategic plan the following measures have been agreed: • Revenue, profitability and cash flow management. • Meeting the relevant 2024 targets in the Company’s long-term plan. • Retention of key staff. The achievement of stretch targets will usually result in the maximum bonus being awarded under the formula. Falling below the pre-determined threshold targets will ordinarily result in no award being made in respect of that measure. The final determination on bonus awards is however made by the Committee taking all available factors into account. The Committee will set appropriate performance conditions for any LTIP awards made to Executive Directors in 2024. Jody Madden Chair of the Remuneration Committee 15 April 2024 50 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Report of the Directors for the financial year ended 31 December 2023 The Directors present their report with the financial statements of the Company and the Group for the financial year ended 31 December 2023. Dividends No dividends will be proposed for the financial year ended 31 December 2023 (31 December 2022: none). Share repurchases During the year, the Board approved a share repurchase programme of up to £4.0m. As at the year end, the Company had repurchased and cancelled a total of 299,272 shares for a total of $2.2m (GBP £1.8m). The programme was concluded on 29 February 2024 with a total repurchase and cancellation of 706,984 shares for a total consideration of $5.0m (GBP £4.0m). Research and development The Group’s research and development activities relate to the development of technologies that can be deployed by entertainment operators and venue owners within leisure, entertainment and cultural markets. During the financial year ended 31 December 2023, the Group capitalised $2.8m of research and development spend (year ended 31 December 2022: $2.2m) and impaired $6k of development costs within the guest experience segment (2022: $32k). Directors The Directors during the period under review and to the date of approval of the financial statements were: Bill Russell, Non-Executive Chairman Steve Brown, Executive Director Fern MacDonald, Executive Director Andy Malpass, Non-Executive Director Karen Slatford, Senior Independent Director (Resigned 17 January 2023) Jody Madden, Non-Executive Director The Company paid for sufficient directors and officer’s indemnity insurance during the period, and to the date of approval of these financial statements, to enable the Directors to carry out their duties. The beneficial interests of the Directors holding office on 31 December 2023 in the issued share capital of the Company were as follows: Ordinary share capital £0.01 shares Bill Russell, Non-Executive Steve Brown, Executive Fern MacDonald, Executive Andy Malpass, Non-Executive As at 31 December 2023 60,007 1,296,341 22,570 23,424 As at 1 January 2023 53,507 700,774 22,570 23,424 Details of the Directors’ share options are disclosed within the Directors’ remuneration report. 51 Financial instruments Details of the Group’s financial risk management objectives and policies, including the use of financial instruments, are included within the accounting policies in note 7 to the financial statements. As at 12 April 2024, the Company had been notified that the following were interested in 3% or more of the ordinary share capital of the Company: Shareholder Long Path Partners LP Canaccord Genuity Group Inc. BlackRock, Inc. Amati AIM VCP plc and T B Amati Investment Funds Limited Chelverton Asset Management Limited Pershing Securities Limited (via Pershing Nominees Limited) Number of ordinary shares 6,298,320 4,587,702 2,770,338 2,035,191 2,000,000 1,428,430 % of issued ordinary share capital 15.12% 11.01% 6.65% 4.88% 4.80% 3.43% There were no further updates to the date of this report. Changes in major interests in the Company are updated on the Company’s website as and when these occur. Annual general meeting The annual general meeting of the Company will be held on Tuesday, 21 May 2024. The notice convening the meeting is enclosed with these financial statements. Branch registration The Company operates branches in Germany and Italy. Employees The Directors believe that the Group’s people are its most important asset. Our policy is to employ the best people irrespective of race, gender, nationality, disability or sexual orientation. Consultation with employees or their representatives occurs at all levels, with the aim of ensuring their views are taken into account when decisions are made that are likely to affect their interests. Further information on how Directors have engaged with employees is given in our environmental, social and governance strategy on page 34 and Directors’ duties on pages 25 to 26. Business relationships Information on how the Company has engaged with suppliers, customers and business relationships is detailed in the Directors’ duties on page 26. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Report of the Directors continued for the financial year ended 31 December 2023 Community, environment, emissions and energy use The Company’s Streamlined Energy and Carbon Report for the financial year is included in our environmental, social and governance strategy on pages 27 to 36. All necessary assistance with initial training courses will be given. Once employed, a career plan will be developed so as to ensure suitable opportunities for each disabled person. Arrangements will be made, wherever possible, for re-training employees who become disabled to enable them to perform work identified as appropriate to their aptitudes and abilities. Political donations The Group did not make any political donations or incur any political expenditure during the year (2022: nil). Going concern The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons. For the purposes of the going concern assessment, the Directors have prepared monthly cash flow projections for a period of 12 months post the date of approval of the financial statements (base scenario). The cash flow projections show that the Group has significant headroom against its committed facilities and can meet its financial covenant obligations. The Directors have reviewed sensitised net cash flow forecasts for the same going concern period, which indicate that, taking account of severe but plausible downsides, the Group will have sufficient funds to meet the liabilities of the Group as they fall due for that period. The Group’s severe but plausible downside scenario models revenue over the next 12 months reflecting the full financial impact of a sustained material event, which reduces forecast revenues by 10% in comparison to the base scenario referenced above, and results in revenue of $144.7m for 2024 and marginally decreases thereafter. Under this same scenario, underlying administrative spend increases to $99.9m in 2024, from $91.5m in 2023, with marginal decreases thereafter for the same corresponding periods to reflect cost cutting measures that would be implemented. The severe but plausible downside scenario indicates that the Group’s net cash balance reaches a low point of $17.1m. At 31 December 2023, the Group has cash of $51.8m and drawings on the loan facility of $21.3m with a further $18.7m of the total $40.0m remaining available. Financial covenants on the facility were passed during 2023 and are forecast to be passed through the going concern assessment period both under a base case and a severe but plausible scenario. The Group is in the process of acceding two additional entities to act as guarantors to continue to meet the general undertakings of the facility, refer to note 23 for further details. Consequently, the Directors are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for the assessment period being 12 months from the date of signing and therefore have prepared the financial statements on a going concern basis. Disabled employees The Group’s policy is one of equal opportunity in the selection, training, career development and promotion of staff. The Group has a policy not to discriminate against disabled employees for those vacancies that they are able to fill and will provide facilities, equipment and training to assist any disabled persons employed. 52 Website publication The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein. Statement as to disclosure of information to auditor So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Group’s auditor is unaware, and each Director has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group’s auditor is aware of that information. Auditor A resolution approving the reappointment of Grant Thornton UK LLP will be proposed at the forthcoming annual general meeting. Other information An indication of likely future developments in the business have been included in the Strategic Report on pages 10 to 12. Post balance sheet events No further significant events have occurred since the end of the financial year which would require disclosure in this report. On behalf of the Board Fern MacDonald Chief Financial Officer 15 April 2024 Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements To the best of our knowledge: • the Group and Company financial statements, prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation taken as a whole; and • the Strategic Report and the Report of the Directors include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. On behalf of the Board Fern MacDonald Chief Financial Officer 15 April 2024 Statement of Directors’ responsibilities in respect of the Annual Report and the financial statements The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with UK-adopted international accounting standards. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit of the Company and Group for that period. In preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently • make judgements and accounting estimates that are reasonable and prudent; and • state whether applicable UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors confirm that: • so far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and • the Directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 53 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Independent auditor’s report to the members of accesso Technology Group plc Opinion Our opinion on the financial statements is unmodified We have audited the financial statements of accesso Technology Group plc (the ‘parent Company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2023, which comprise the Consolidated statement of comprehensive income, Consolidated statement of financial position, Company statement of financial position, Consolidated statement of cash flow, Company statement of cash flow, Consolidated statement of changes in equity, Company statement of changes in equity and Notes to the consolidated financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and, as regards the parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. In our opinion: • the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2023 and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; • the parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance with the provisions of the Companies Act 2006, and; • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. 54 Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report. We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Group or the parent Company to cease to continue as a going concern. Our evaluation of the directors’ assessment of the Group’s and the parent Company’s ability to continue to adopt the going concern basis of accounting included, but was not restricted to: • obtaining and understanding management’s assessment of going concern based on what they have prepared and challenging the assumptions used in the cash flow forecasts, which have been approved by the Board; • obtaining management’s base case scenario, together with supporting evidence for all key trading, working capital and cash flow assumptions; • challenging the key assumptions in the forecasts and the scope of scenario planning undertaken. Assumptions challenged include growth rates in the underlying forecasts, working capital changes, and capital expenditure; • obtaining an understanding of the financing arrangements in place and management’s assessment of their adequacy and plans to manage these arrangements; • obtaining management’s reverse stress test and downside scenarios, which reflect management’s assessment of uncertainties. The assumptions regarding the forecast period and reduced trading levels were evaluated for plausibility; and • evaluating the policies and disclosures in respect of going concern given in the financial statements for appropriateness. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements The key audit matter relating to the Accuracy of calculation of tax losses to be utilised in the US s382 was a KAM in the prior year but is no longer reported as it is not a calculation with significant level of judgement or estimation uncertainty. The prior year key audit matter relating to ‘Valuation of Goodwill’ has been pinpointed specifically to the goodwill associated with the Ticketing and Distribution segment in the current year We performed full scope audits on two components. We performed specific audit procedures relating to three further components. We performed analytical procedures at Group level for the remaining 16 components in the Group during the year. In total, our procedures covered 87% of the Group’s revenue and 94% of the Group’s total assets. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those that had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Description Audit response KAM Disclosures Our results Independent auditor’s report continued to the members of accesso Technology Group plc In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the Group’s and the parent Company’s business model including effects arising from macro-economic uncertainties such as inflationary pressures, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the group’s and the parent company’s financial resources or ability to continue operations over the going concern period. In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s and the parent Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Our approach to the audit Overview of our audit approach Overall materiality: Group: $1,050,000, which represents 0.7% of the Group’s revenue. Parent Company: $580,000 which represents 0.24% of the parent Company’s total assets, capped at an amount less than group materiality for group audit purposes ($419,200). Materiality Key audit matters Key audit matters were identified as: • Valuation of goodwill (ticketing and distribution segment) (Valuation of Goodwill in the prior year); • Acquisition accounting and valuation of intangible assets acquired in relation to the VGS acquisition (new in the current year) Scoping Our auditor’s report for the year ended 31 December 2022 included two key audit matters that have not been reported as key audit matters in our current year’s report with a further one being refined. These are ‘Risk of fraud in revenue recognition’, and Accuracy of calculation of tax losses to be utilised in the US under s382’. The key audit matter relating to risk of fraud in revenue recognition was due to a change in accounting policy in the prior year which is not relevant for the current year. 55 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Independent auditor’s report continued to the members of accesso Technology Group plc In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit. This is not a complete list of all risks identified by our audit. Going concern Management Override of Controls Risk of fraud in revenue recognition Acquisition accounting and valuation of acquired intangibles relating to the acquisition of VGS. Uncertain tax position (Transfer Pricing) Valuation of goodwill (ticketing and distribution segment) Low Extent of management judgement High Key audit matter Significant risk High t c a p m i t n e m e t a t s l a i c n a n fi l a i t n e t o P Low 56 Key Audit Matter – Group How our scope addressed the matter – Group Valuation of goodwill (ticketing and distribution segment) We identified the valuation of goodwill for the ticketing and distribution segment as one of the most significant assessed risks of material misstatement due to error. The two largest acquisitions in the year being allocated to the ticketing and distribution operating segment. This created a risk that the performance of the reporting segment could mask any potential impairment for the newly acquired entities and therefore was deemed to be a key audit matter. The segment has goodwill, with a carrying value of $109.1m (2022: $69.2), with the movement in the year being driven by two acquisitions being Paradox and Horizon. Under IAS 36 ‘Impairment of Assets’, management is required to test the goodwill annually for impairment. Management prepare impairment models to assess the value in use of each cash generating unit (“CGU”) and then assess goodwill for impairment at the operating segment level. In responding to the key audit matter, we performed the following audit procedures: • Obtained a paper from the management and, based on our knowledge of their business, challenged their identification of CGUs with the requirements of IAS 36; • Obtained a paper from the management and, based on our knowledge of their business, challenged their assessment that Paradox and Horizon, which are the new acquisitions in the year, should be included within ticketing and distribution segment for the assessment of impairment of goodwill; • Obtained an understanding of the related business processes and assessed the design and implementation of the associated controls; • Tested the arithmetical accuracy of the models and underlying data used by management in their impairment assessment and agreed the underlying forecasts to the board approved budgets; • Considered the historical forecasting ability of management by comparing historical budgets to actual performance; • Used an auditor’s internal valuation expert to calculate estimated range of discount rates (in respect of value-in-use assessments) which we applied to the cash flows and ran sensitivities on; • Challenged management’s model in respect of allocated costs and allocated capital expenditure; Their assessment of potential impairment incorporates significant judgements in assumptions, such as the determination of CGUs, the judgement in combining the CGUs along with the appropriate allocation of goodwill to them, and significant estimates, such as the timing and extent of future cash flows related to those CGUs. There is also a risk of management bias in the discount rate applied. The selection of certain inputs within the cash flow forecasts can also significantly impact the results of the impairment assessment. • Performed our own sensitivity analysis by reducing growth rates, based on industry information, and discount rates, using an auditor’s range. Evaluated the headroom under each of these scenarios and assessed whether goodwill was impaired; • Challenged management’s assumptions concerning forecasted cash flows, based on historical trends and market expectations. This also involved considering any contradictory evidence noted in other areas of the audit; and • Evaluated the disclosures made in the financial statements to ensure requirements of IFRS have been complied with. Relevant disclosures in the Annual Report and Accounts 2023 • Financial statements: Note 4 for the accounting Our results Our audit testing did not identify any material misstatements in relation to the valuation of goodwill. policy; Note 17 for Impairment (excluding deferred tax assets) and Intangibles; Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Independent auditor’s report continued to the members of accesso Technology Group plc Key Audit Matter – Group How our scope addressed the matter – Group Key Audit Matter – Group How our scope addressed the matter – Group Relevant disclosures in the Annual Report and Accounts 2023 • Financial statements: Note 4 for the accounting policy; note 6 for critical judgements and key sources of estimation uncertainty; Note 16 for business combinations; Our results Our audit testing did not identify any material misstatements in relation to the valuation of the acquired intangibles. We did not identify any key audit matters relating to the audit of the financial statements of the parent Company only. Acquisition accounting and valuation of acquired Intangibles relating to the acquisition of VGS The Group completed the acquisition of VGS and its subsidiaries in June 2023. We identified the accounting associated with these acquisitions, including the valuation of the intangible assets acquired, as one of the most significant assessed risks of material misstatements due to error. Under IFRS 3 ‘Business Combinations’, management is required to recognise, separately from goodwill, the assets acquired and liabilities assumed, and then recognise goodwill on purchase. Assets, liabilities and intangible assets should be recognised at fair value. Management make judgments to identify specific intangible assets that are acquired and make estimates to value these assets. The process for assessing the valuation of intangible assets is complex and therefore this has been included as a key audit matter. In responding to the key audit matter, we performed the following audit procedures: • Assessed the share purchase agreement, and understood the key details around the acquisition including details of consideration paid; • Assessed whether the requirements of control as defined by IFRS 10 ‘Consolidated Financial Statements’ had been achieved; • Assessed whether the Group’s accounting policy for the valuation of intangible assets acquired is in accordance with IFRS 3 ‘Business Combinations’ and checking that the fair value measurements are accounted for in accordance with the stated accounting policy; • Obtained the acquisition balance sheet for each acquired subsidiary and performed procedures to test the recognition of the material assets and liabilities acquired; • Obtained management’s purchase price allocation calculation used to value specific acquired intangibles and assessed the appropriateness and reasonableness of key assumptions made in the calculations, such as growth rates, customer attrition rates and discount rates, considering whether assets and liabilities transferred were recognised at fair value, per the requirements of IFRS 3 ‘Business Combinations’; • Assessed and challenged managements expert report for the valuation of the identified intangible assets • Engaged our internal valuations experts to inform our challenge of management, that the methodology used in the valuation calculations and assumptions used were reasonable; and • Assessed whether the Group’s disclosures with respect to the intangible asset recognised and fair value of assets and liabilities acquired are adequate. 57 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Independent auditor’s report continued to the members of accesso Technology Group plc Our application of materiality We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report. Materiality was determined as follows: Materiality measure Group Parent company Materiality for financial statements as a whole We define materiality as the magnitude of misstatement in the financial statements that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of these financial statements. We use materiality in determining the nature, timing and extent of our audit work. Materiality threshold $1.05m, which is 0.7% of the Group’s revenues. Significant judgements made by auditor in determining materiality In determining materiality, we made the following significant judgements: • Revenue was determined to be the most appropriate benchmark for the Group because in our view, it is most reflective of the performance of the business given the size and the nature of its operations. • The measurement of 0.7% is, in our view, appropriate to result in a materiality which is sufficient to identify any material misstatements. Materiality for the current year is higher than the level that we determined for the year ended 31 December 2022 to reflect a growth in the business. $580,000 which is 0.24% of total assets, it has been capped at an amount less than group materiality for group audit purposes $419,200. In determining materiality, we made the following significant judgements: • Total assets was determined to be the most appropriate benchmark for the Parent Company because in our view, it is most reflective of the financial position of the parent and it’s nature of operations • The measurement of 0.24% is, in our view, appropriate to result in a materiality which is sufficient to identify any material misstatements Materiality for the current year is higher than the level that we determined for the year ended 31 December 2022 to reflect a growth in the business. Materiality measure Group Parent company Performance materiality used to drive the extent of our testing We set performance materiality at an amount less than materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. Performance materiality threshold $682,500, which is 65% of financial statement materiality $377,000, which is 65% of financial statement materiality however it has been capped at an amount less than group performance materiality for group audit purposes $272,400. Significant judgements made by auditor in determining performance materiality In determining performance materiality, we made the following significant judgements: • The number and magnitude of adjusted and unadjusted misstatements to the Group’s financial statements in prior years; and In determining performance materiality, we made the following significant judgements: • The number and magnitude of adjusted and unadjusted misstatements to the Group’s financial statements in prior years; and • The nature and impact of significant • The nature and impact of significant control deficiencies identified in prior years. control deficiencies identified in prior years. Specific materiality We determine specific materiality for one or more particular classes of transactions, account balances or disclosures for which misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. Specific materiality Communication of misstatements to the audit committee Threshold for communication We determined a lower level of specific materiality for the following areas: • directors’ remuneration; and • related party transactions We determined a lower level of specific materiality for the following areas: • directors’ remuneration; and • related party transactions We determine a threshold for reporting unadjusted differences to the audit committee. $52,500 and misstatements below that threshold that, in our view, warrant reporting on qualitative grounds. $20,960 and misstatements below that threshold that, in our view, warrant reporting on qualitative grounds. 58 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Independent auditor’s report continued to the members of accesso Technology Group plc The graph below illustrates how performance materiality interacts with our overall materiality and the threshold for communication to the Audit Committee. An overview of the scope of our audit We performed a risk-based audit that requires an understanding of the Group’s and the parent Company’s business and in particular matters related to: Overall materiality – Group Overall materiality – Parent Revenue $149.5m FSM [$1,050,000] Total assets $245.7m FSM [$419,200] FSM [$1,050,000] PM [$682,500] RoM [$1,050,000 to [$419,200] TfC [$52,500] FSM [$419,200] PM [$272,400] TfC [$20,960] FSM: Financial statement materiality, PM: Performance materiality, RoM: Range of materiality at 2 components, TfC: Threshold for communication to the Audit Committee. 59 Understanding the Group, its components, and their environments, including Group-wide controls • The Group engagement team obtained an understanding of the Group and its environment, • • including Group-wide controls, and assessed the risks of material misstatement at the Group level; In addition, we evaluated the design and implementation of controls over the financial reporting systems identified as part of our risk assessment. With respect to the risk of fraud in revenue recognition we evaluated the design and implementation of controls in addition to performing substantive procedures. Inspecting the processes management follow to prepare and report results Management review the results on a revenue product basis and as an overall Group rather than on an individual company basis. The subsidiaries in the Group are all controlled by the parent Company. Identifying significant components • Evaluation by the Group engagement team of identified components to assess the significance of that component and to determine the planned audit response based on a measure of materiality, considering the relative size of each component as a percentage of total revenues and total assets. Accordingly for any component that was classified as ‘individually financially significant to the Group’ we performed an audit of the financial information using component materiality (full-scope audit); With regard to the US entities, there were 5 entities each having a varying share of the Group’s revenues. We have aggregated these entities into a single larger component given that the processes, controls and procedures across these entities are consistent. • The Group engagement team performed full-scope audit procedures to component materiality on the financial information of the parent Company and aggregated US entities; • Additional three components were selected based on an assessment of the risk of material misstatement to the Group. Type of work to be performed on financial information of parent and other components (including how it addressed the key audit matters) • Of the Group’s 21 components, we identified 2 which, in our view, required an audit of their financial information using component materiality (full scope audit), either due to their size or their risk characteristics. As a result of this, we performed an audit of the financial statements of the parent Company and of the financial information of the aggregated US component. • We performed specific audit procedures in respect of three components, Ingresso Group Limited, accesso Technology Group Employee Benefit Trust and VGS. • We performed analytical procedures at Group level over the remaining sixteen components. These procedures, together with the additional procedures outlined above, were designed to give us the audit evidence needed for our opinion on the Group financial statements as a whole. Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Independent auditor’s report continued to the members of accesso Technology Group plc Performance of our audit • The engagement team visited the Group’s head office frequently during the course of the audit. • The work performed was supported through the use of software collaboration platforms for the secure and timely delivery of requested audit evidence. The engagement team held weekly pre-scheduled meetings at the Group’s head office throughout the course of the audit fieldwork. Audit approach Full-scope audit Specified audit procedures Analytical procedures Total No. of components 2 3 16 21 % coverage Total assets 84% 3% 13% 100% % coverage Revenue 76% 0% 24% 100% % coverage PBT 82% 0% 18% 100% Communications with component auditors • We did not engage any component auditors as the Group engagement team performed all of the required procedures. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on other matters prescribed by the Companies Act 2006 is unmodified • • the information given in the strategic report and the directors’ report for the financial year for which the In our opinion, based on the work undertaken in the course of the audit: financial statements are prepared is consistent with the financial statements; and the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. 60 Matter on which we are required to report under the Companies Act 2006 In the light of the knowledge and understanding of the Group and the parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent Company financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Responsibilities of directors As explained more fully in the directors’ responsibilities statement on page 53 of the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s and the parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Independent auditor’s report continued to the members of accesso Technology Group plc • Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. • Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below: • We enquired of management, the finance team and the Board of Directors about the Group’s and the parent Company’s policies and procedures relating to the identification, evaluation and compliance with laws and regulations and the detection and response to the risks of fraud and the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations; • We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and the parent Company. We determined that the most significant laws and regulations are those related to financial reporting and taxation in the UK and the US, being UK-adopted international accounting standards (for the Group and parent Company), the Companies Act 2006, the AIM Listing Rules, and the application of tax rules in the UK and the US; • We enquired of management and the Board of Directors whether they were aware of any instances of non-compliance with laws and regulations and whether they had any knowledge of actual, suspected or alleged fraud and corroborated this with our review of the board minutes; • In assessing the potential risks of material misstatement, we obtained an understanding of the Group’s and the parent Company’s operations, including the nature of income sources and of their objectives and strategies in order to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement; • We assessed the susceptibility of the Group’s and the parent Company’s financial statements to material misstatement, including how fraud might occur and the risk of management override of controls. Audit procedures performed by the engagement team included: – Enquiring of management, the finance team and the Board of Directors about the risks of fraud at the Group and the parent Company and the controls implemented to address those risks. – Assessing the design and implementation of controls relevant to the audit that management has in place to prevent and detect fraud, including updating our understanding of the internal controls over journal entries, including those related to the posting of entries used to record non-recurring, unusual transactions or other non-routine adjustments; – Making specific inquiries of each member of the finance team that posted journals in the year to ascertain whether they had been subject to undue pressure or had been asked to make any unusual postings or modifications to reports used in financial reporting; – Identifying and testing journal entries, with selection based on risk profiling; – Running specific keyword searches (including to related parties and of those previously connected to related entities) over the journal entry population to identify descriptions that could indicate fraudulent activity or management override of controls. Unusual entries noted from these searches were agreed to supporting documentation to assess the validity of the posting; – Assessing the disclosures within the annual report, including principal and emerging risks; and – Challenging assumptions and judgements made by management in its significant accounting estimates. 61 • These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it; • The engagement partner’s assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s understanding of, and practical experience with, audit engagements of a similar nature and complexity, through appropriate training and participation; and • We communicated relevant laws and regulations and potential fraud risks with all the engagement team, including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it; A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Wendy Russell Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants Milton Keynes 15 April 2024 Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Financial Statements Financial Statements Consolidated statement of comprehensive income Consolidated statement of financial position Company statement of financial position Consolidated statement of cash flow Company statement of cash flow Consolidated statement of changes in equity Company statement of changes in equity Notes to the consolidated financial statements Company information 63 64 65 66 67 68 69 70 105 62 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Consolidated statement of comprehensive income for the financial year ended 31 December 2023 Revenue Cost of sales Gross profit Administrative expenses Operating profit before exceptional items Acquisition and integration related expenditure Impairment of intangible assets Operating profit Finance expense Finance income Profit before tax Income tax expense Profit for the period Other comprehensive income/(loss) Items that will be reclassified to income statement Exchange differences on translating foreign operations Total comprehensive income All profit and comprehensive income is attributable to the owners of the parent Earnings per share expressed in cents per share: Basic Diluted All activities of the Company are classified as continuing. Notes 9 11 17 12 12 13 2023 $000 149,515 (35,268) 114,247 2022 $000 139,730 (35,770) 103,960 (104,308) (91,209) 12,635 (2,690) (6) 12,920 (137) (32) 9,939 12,751 (2,084) 953 (566) 232 8,808 12,417 (1,116) 7,692 (2,361) 10,056 3,138 3,138 10,830 (5,283) (5,283) 4,773 15 15 19.19 18.67 24.41 23.45 The accompanying notes on pages 70 to 104 form part of these consolidated financial statements. 63 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Consolidated statement of financial position as at 31 December 2023 Registered Number: 03959429 Assets Non-current assets Intangible assets Property, plant and equipment Right of use assets Contract assets Deferred tax assets Current assets Inventories Finance lease receivables Contract assets Trade and other receivables Income tax receivable Cash and cash equivalents Liabilities Current liabilities Trade and other payables Lease liabilities Contract liabilities Income tax payable Net current assets Non-current liabilities Deferred tax liabilities Contract liabilities Lease liabilities Borrowings Total liabilities Net assets 64 Shareholders’ equity Called up share capital Share premium Retained earnings Merger relief reserve Translation reserve Own shares held in trust Capital Redemption Reserve Total shareholders’ equity 31 December 2023 $000 31 December 2022 $000 Notes 24 25 25 25 25 25 25 603 153,948 31,196 19,641 (2,446) (9,451) 4 193,495 597 153,621 22,887 19,641 (5,584) (5,775) – 185,387 The financial statements were approved by the Board of Directors on 15 April 2024 and were signed on its behalf by: Fern MacDonald Chief Financial Officer The accompanying notes on pages 70 to 104 form part of these consolidated financial statements. 31 December 2023 $000 31 December 2022 $000 Notes 17 18 30 9 13 20 30 9 21 29 22 30 9 13 9 30 23 165,188 1,346 1,609 784 16,703 185,630 1,115 165 3,345 29,700 2,199 51,814 88,338 34,939 792 7,353 6,115 49,199 39,139 8,821 927 1,177 20,349 31,274 80,473 193,495 110,420 1,603 980 314 15,279 128,596 499 – 3,694 28,785 1,864 64,663 99,505 32,090 451 4,920 574 38,035 61,470 3,294 616 769 – 4,679 42,714 185,387 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Company statement of financial position as at 31 December 2023 Registered Number: 03959429 Assets Non-current assets Intangible assets Investments in subsidiaries Property, plant and equipment Right of use assets Contract assets Current assets Inventories Contract assets Trade and other receivables Income tax receivable Cash and cash equivalents Liabilities Current liabilities Trade and other payables Lease liabilities Contract liabilities Income tax payable Net current (liabilities)/assets Non-current liabilities Deferred tax Contract liabilities Lease liabilities Borrowings Total liabilities Net assets 65 Shareholders’ equity Called up share capital Share premium Own shares held in trust Retained earnings Merger relief reserve Translation reserve Capital Redemption Reserve Total shareholders’ equity 31 December 2023 $000 31 December 2022 $000 Notes 24 25 25 25 25 25 25 603 153,948 (9,451) 43,623 19,641 (11,995) 4 196,373 597 153,621 (5,775) 36,128 19,641 (22,328) – 181,884 Under section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own income statement. The profit for the financial year for the Company was $6.52m (2022: $1.01m). The financial statements were approved by the Board of Directors on 15 April 2024 and were signed on its behalf by: Fern MacDonald Chief Financial Officer The accompanying notes on pages 70 to 104 form part of these consolidated financial statements. 31 December 2023 $000 31 December 2022 $000 Notes 17 19 18 30 9 20 9 21 29 22 30 9 13 9 30 23 3,823 221,746 233 219 28 226,049 44 524 9,300 73 9,678 19,619 28,310 156 171 9 28,646 (9,027) 200 2 98 20,349 20,649 49,295 196,373 2,428 167,652 269 315 57 170,721 15 617 8,665 397 15,612 25,306 13,386 140 203 6 13,735 11,571 163 5 240 – 408 14,143 181,884 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Cash flows from financing activities Share issue Purchase of shares held in trust Purchase of own shares for cancellation Interest paid Payments on property lease liabilities Proceeds from property lease receivables Cash paid to refinance Proceeds from borrowings Repayments of borrowings Payment made to cancel equity settled option awards Net cash generated from/(utilised in) financing activities (Decrease)/ increase in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange gain/(loss) on cash and cash equivalents Cash and cash equivalents at end of year Notes 2023 $000 30 29 23 23 129 (3,676) (2,186) (1,387) (668) 33 (1,040) 35,000 (13,750) – 12,455 (14,490) 64,663 1,641 51,814 2022 $000 118 (5,775) – (330) (1,430) – – – – (129) (7,546) 3,136 64,050 (2,523) 64,663 The accompanying notes on pages 70 to 104 form part of these consolidated financial statements. Consolidated statement of cash flow for the financial year ended 31 December 2023 Cash flows from operations Profit for the period Adjustments for: Depreciation (excluding leased assets) Depreciation on leased assets Amortisation on acquired intangibles Amortisation on development costs and other intangibles Impairment of intangibles Loss on disposal of property, plant and equipment Share-based payment Movement on bad debt provision Finance expense Finance income Foreign exchange gain Income tax expense RDEC tax credits Increase in inventories Decrease/(increase) in trade and other receivables Increase in contract assets/contract liabilities Increase/(decrease) in trade and other payables Cash generated from operations Tax paid Net cash inflow from operating activities Cash flows from investing activities Acquisition of VGS Companies (net of cash acquired) Acquisition of Paradocs Solutions, Inc. (net of cash acquired) Acquisition of Boxer Consulting Limited (net of cash acquired) Capitalised internal development costs Purchase of intangible assets Proceeds from sale of intangible assets Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Interest received Net cash (used in) investing activities 66 Notes 2023 $000 2022 $000 7,692 10,056 18 30 17 17 17 10 12 12 13 16 16 16 17 17 975 467 2,811 6,390 6 207 3,187 41 2,084 (953) (187) 1,116 – 23,836 (614) 2,082 1,960 432 27,696 (2,003) 25,693 (39,323) (8,845) (1,792) (2,839) (14) – (638) 8 805 (52,638) 1,227 773 1,667 8,744 32 135 2,629 15 566 (232) (31) 2,361 (141) 27,801 (231) (10,482) 435 (797) 16,726 (2,259) 14,467 – – – (2,155) (1,140) 25 (725) – 210 (3,785) Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Company statement of cash flow for the financial year ended 31 December 2023 Cash flows from financing activities Share issue Purchase of own shares held in trust Purchase of own shares for cancellation Interest paid Payments on property lease liabilities Cash paid to refinance Proceeds from borrowings Repayments of borrowings Net cash generated from/(utilised in) financing activities Decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange gain/(loss) on cash and cash equivalents Cash and cash equivalents at end of year Notes 2023 $000 30 23 23 23 129 (3,676) (2,188) (1,377) (162) (1,040) 35,000 (13,750) 12,936 (6,748) 15,612 814 9,678 2022 $000 118 (5,775) – (330) (159) – – – (6,146) (654) 18,198 (1,932) 15,612 The accompanying notes on pages 70 to 104 form part of these consolidated financial statements. Notes 18 30 17 17 17 16 16 2023 $000 6,515 147 111 917 6 285 20 145 117 1,938 (7,790) (198) 230 2,443 (27) 10,398 110 2,689 15,613 130 15,743 (2,151) (102) (43,265) (1,792) 145 11,738 (35,427) 2022 $000 1,010 200 111 1,161 32 257 17 86 (117) 612 (180) 60 300 3,549 35 3,504 178 (84) 7,182 (792) 6,390 (1,006) (50) – – 158 – (898) Cash flows from operations (Loss)/Profit for the period Adjustments for: Depreciation excluding leased assets Depreciation on leased assets Amortisation Impairment of intangibles Movement on intercompany bad debt provision Loss on disposal of property, plant and equipment Share-based payment Movement on bad debt provision Finance expense Finance income Foreign exchange (gain)/loss Income tax expense (Increase)/Decrease in inventories Decrease in trade and other receivables Decrease in contract assets/contract liabilities Increase in trade and other payables Cash generated from operations Tax received/(paid) Net cash inflow from operating activities Cash flows from investing activities Capitalised internal development costs Purchase of property, plant and equipment Acquisition of VGS Companies Acquisition of Boxer Consulting Limited Interest received Dividends received from subsidiaries Net cash (used in) investing activities 67 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Consolidated statement of changes in equity for the financial year ended 31 December 2023 Balance at 1 January 2023 Comprehensive income for the year Profit for period Other comprehensive income Exchange differences on translating foreign operations Total comprehensive income for the year Issue of share capital Share-based payments Share option tax charge – current Share option tax charge – deferred Re-purchase of shares to be held in trust Re-purchase of shares for cancellation Contingent consideration settled in shares Total contributions by and distributions by owners Balance at 31 December 2023 Balance at 1 January 2022 Comprehensive income for the year Profit for period Other comprehensive income Exchange differences on translating foreign operations Total comprehensive income for the year Contributions by and distributions to owners Issue of share capital Share-based payments Share option tax charge – current Share option tax charge – deferred Cancellation of share options Re-purchase of shares to be held in trust Total contributions by and distributions by owners Balance at 31 December 2022 Share capital $000 Share premium $000 597 153,621 Retained earnings $000 22,887 7,692 – 7,692 – 3,187 894 (1,274) – (2,190) – 617 31,196 Merger relief reserve $000 19,641 – – – – – – – – – – – 19,641 – – – 120 – – – – – 207 327 153,948 153,504 9,753 19,641 – – – 117 – – – – – 117 153,621 10,056 – 10,056 – 2,576 143 448 (89) – 3,078 22,887 – – – – – – – – – – 19,641 Own shares held in trust $000 Capital Redemption reserve $000 (5,775) – – – – – – – (3,676) – – (3,676) (9,451) – – – – – – – – – (5,775) (5,775) (5,775) – – – – – – – – – 4 – 4 4 – – – – – – – – – – – – Translation reserve $000 (5,584) – 3,138 3,138 – – – – – – – – (2,446) Total $000 185,387 7,692 3,138 10,830 129 3,187 894 (1,274) (3,676) (2,190) 208 (2,722) 193,495 (301) 183,193 – (5,283) (5,283) – – – – – – – (5,584) 10,056 (5,283) 4,773 118 2,576 143 448 (89) (5,775) (2,579) 185,387 – – – 9 – – – – (4) 1 6 603 596 – – – 1 – – – – – 1 597 The accompanying notes on pages 70 to 104 form part of these consolidated financial statements. 68 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Company statement of changes in equity for the financial year ended 31 December 2023 Balance at 1 January 2023 Comprehensive income for the year Profit for period Other comprehensive income Exchange differences Total comprehensive income for the year Issue of share capital Share-based payments Share option tax credit – deferred Re-purchase of shares to be held in trust Re-purchase of shares for cancellation Contingent consideration settled in shares Total contributions by and distributions by owners Balance at 31 December 2023 Balance at 1 January 2022 Comprehensive income for the year Profit for period Other comprehensive income Exchange differences Total comprehensive income for the year Issue of share capital Share-based payments Share option tax charge – deferred Repurchase of shares Total contributions by and distributions by owners Balance at 31 December 2022 Share capital $000 Share premium $000 597 153,621 Own shares held in trust $000 (5,775) – – – 9 – – – (4) 1 6 603 596 – – – 1 – – – 1 597 – – – 120 – – – – 207 327 153,948 153,504 – – – 117 – – – 117 153,621 – – – – – – (3,676) – – (3,676) (9,451) – – – – – – – (5,775) (5,775) (5,775) The accompanying notes on pages 70 to 104 form part of these consolidated financial statements. 69 Merger relief reserve $000 Capital Redemption reserve $000 Retained earnings $000 36,128 6,515 – 6,515 – 3,187 (17) – (2,190) – 980 43,623 19,641 – – – – – – – – – – 19,641 32,560 19,641 1,010 – 1,010 – 2,576 (18) – 2,558 36,128 – – – – – – – – 19,641 Translation reserve $000 (22,328) – 10,333 10,333 – – – – – – – (11,995) Total $000 181,884 6,515 10,333 16,848 129 3,187 (17) (3,676) (2,190) 208 (2,359) 196,373 (314) 205,987 – 1,010 (22,014) (22,014) – – – – – (22,328) (22,014) (21,004) 118 2,576 (18) (5,775) (3,099) 181,884 – – – – – – – – 4 – 4 4 – – – – – – – – – – Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Notes to the consolidated financial statements for the financial year ended 31 December 2023 1. Reporting entity accesso Technology Group plc is a public limited company incorporated in the United Kingdom, whose shares are publicly traded on the AIM market. The Company is domiciled in the United Kingdom and its registered address is Unit 5, The Pavilions, Ruscombe Park, Twyford, Berkshire RG10 9NN. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the “Group”). New standards and interpretations not yet adopted A number of new standards, amendments to standards, and interpretations are either not effective for 2023 or not relevant to the Group, and therefore have not been applied in preparing these accounts. These standards, amendments or interpretations are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. The Group’s principal activities are the development and application of ticketing, mobile and eCommerce technologies, licensing and operation of virtual queuing solutions and providing a personalised experience to customers within the attractions and leisure industry. The eCommerce technologies are generally licenced to operators of venues, enabling the online sale of tickets, guest management, and point-of-sale (“POS”) transactions. The virtual queuing solutions and personalised experience platforms are installed by the Group at a venue, and managed and operated by the Group directly or licenced to the operator for their operation. Exemption from audit For the year ended 31 December 2023 accesso Technology Group plc has provided a guarantee in respect of all liabilities due by its subsidiaries Ingresso Group Limited (company number 07477714) and Lo-Q Limited (company number 08760856). This entitles them to exemption from audit under 479A of the Companies Act 2006 relating to subsidiary companies. 2. Basis of accounting The consolidated Group and parent Company financial statements have been prepared in accordance with UK- adopted international accounting standards (“UK-adopted IFRS”) and the applicable legal requirements of the Companies Act 2006. They were authorised for issue by the Company’s Board of Directors on 15 April 2024. The consolidated financial statements have been prepared on the historical cost basis except for contingent consideration and acquired intangible assets arising on business combinations, which are measured at fair value. Details of the Group’s accounting policies are included in notes 3 and 4. 3. Changes to significant accounting policies Other new standards and improvements Other than as described below, the accounting policies, presentation and methods of calculation adopted are consistent with those of the Annual Report and Accounts for the year ended 31 December 2022, apart from standards, amendments to or interpretations of published standards adopted during the period. • Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) • Lease Liabilities in a Sale and Leaseback (Amendments to IFRS 16) • Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) • Non-current Liabilities with Covenants (Amendments to IAS 1) • Lack of Exchangeability (Amendments to IAS 21) 4. Significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the periods presented. Basis of consolidation The consolidated financial statements incorporate the results of accesso Technology Group plc and all of its subsidiary undertakings and the Employee Benefit Trust as at 31 December 2023 using the acquisition method. Subsidiaries are all entities over which the Group has the ability to affect the returns of the entity and has the rights to variable returns from its involvement with the entity. The results of subsidiary undertakings are included from the date of acquisition. The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Any costs directly attributable to the business combination are written off to the Group income statement in the period incurred. The acquiree’s identifiable assets, liabilities, and contingent liabilities that meet the conditions under IFRS 3 are recognised at their fair value at the acquisition date. Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities, and contingent liabilities recognised. Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances existing at the acquisition date. The following standards, interpretations and amendments to existing standards are now effective and have been adopted by the Group. The impacts of applying these policies are not considered material: Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. • Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) • Definition of Accounting Estimates (Amendments to IAS 8) Disclosure and details of the subsidiaries are provided in note 19. 70 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 4. Significant accounting policies continued Basis of consolidation continued Investments, including the shares in subsidiary companies held as non-current assets, are stated at cost less any provision for impairment in value. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group. At 31 December 2023, the Group has cash of $51.8m and drawings on the loan facility of $21.3m with a further $18.7m of the total $40.0m remaining available. Financial covenants on the facility were passed during 2023 and are forecast to be passed through the going concern assessment period both under a base case and a severe but plausible scenario. The Group is in the process of acceding two additional entities to act as guarantors to continue to meet the general undertakings of the facility, refer to note 23 for further details. Lo-Q (Trustees) Limited, a subsidiary company that holds an employee benefit trust on behalf of accesso Technology Group plc, is under control of the Board of Directors and hence has been consolidated into the Group results. accesso Technology Group Employee Benefit Trust is considered to be a special purpose entity in which the substance of the relationship is that of control by the Group in order that the Group may benefit from its control. The assets held by the trust are consolidated into the Group financial statements. All intra-Group transactions, balances, income and expenses are eliminated on consolidation. Contingent consideration Contingent consideration is recognised at fair value at the acquisition date and is based on the actual and/or expected performance of the entity in which the contingent consideration relates. Contingent consideration is subject to the sellers fulfilling their performance obligations over the contingent period. Subsequent changes to the fair value of contingent consideration are based on the movement of the Group’s share price at the reporting date. These changes which are deemed to be a liability are recognised in accordance with IFRS 9 in the statement of comprehensive income. Going concern The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons. For the purposes of the going concern assessment, the Directors have prepared monthly cash flow projections for a period of 12 months post the date of approval of the financial statements (base scenario). The cash flow projections show that the Group has significant headroom against its committed facilities and can meet its financial covenant obligations. The Directors have reviewed sensitised cash flow forecasts for the same going concern period, which indicate that, taking account of severe but plausible downsides, the Group will have sufficient funds to meet the liabilities of the Group as they fall due for that period. The Group’s severe but plausible downside scenario models revenue over the next 12 months reflecting the full financial impact of a sustained material event, which reduces forecast revenues by 10% in comparison to the base scenario referenced above, and results in revenue of $144.7m for 2024 and marginally decreases thereafter. Under this same scenario, underlying administrative spend increases to $99.9m in 2024, from $91.5m in 2023, with marginal decreases thereafter for the same corresponding periods to reflect cost cutting measures that would be implemented. The severe but plausible downside scenario indicates that the Group’s net cash balance reaches a low point of $17.1m. Consequently, the Directors are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for the assessment period being at least 12 months from the date of signing and therefore have prepared the financial statements on a going concern basis. Foreign currency Foreign currency transactions Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the rates ruling when the transactions occur. Monetary assets and liabilities denominated in foreign currency are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign operations The assets and liabilities of foreign operations, including goodwill, are translated into USD at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into USD at the rates ruling when the transactions occur, or appropriate averages. Foreign currency differences on translating the opening net assets at an opening rate and the results of operations at actual rates are recognised in other comprehensive income and accumulated in the translation reserve. Retranslation differences recognised in other comprehensive income will be reclassified to profit or loss in the event of a disposal of the business, or the Group no longer has control or significant influence. Revenue from contracts with customers IFRS 15 provides a single, principles-based five step model to be applied to all sales contracts as outlined below. It is based on the transfer of control of goods and services to customers and replaces the separate models for goods and services. 1. Identify the contract(s) with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognise revenue when or as the entity satisfies its performance obligations. 71 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 4. Significant accounting policies continued Revenue from contracts with customers continued The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies. Type of product/ service/segment a. Point-of-sale (POS) licences and support revenue – Ticketing and Distribution Nature of the performance obligations and significant payment terms Accounting policy Each contract provides the customer with the right to use the POS licence (installed on premise) for terms between one and three years. The customer also receives support for typically a period of one year. This support is not necessary for the functionality of the licence and is therefore a distinct performance obligation from the right to use the POS licence. With agreements longer than one year, invoices are generated either quarterly or annually; usually payable within thirty days. Although payments are made over the term of the agreement, the agreement is binding for the negotiated term. The total transaction price is payable over the term of the agreement via the annual or quarterly instalments. The transaction price is allocated in accordance with management’s estimate of the standalone selling price for each performance obligation, which is based on observable input costs and a target margin. Revenue from sale of POS licences is recognised at a point in time when the customer has been provided with the software. Point in time recognition is appropriate because the licence provides the customer with the right of use of the POS software as it exists and is fully functional from the date it is provided to the customer. Support revenue is recognised on a straight-line basis over the term of the contract, which in most cases is one year and is renewable at the option of the customer thereafter. This option to renew is not considered a material right. The revenue recognition of POS licences at a point in time gives rise to a contract asset at inception. The balance reduces as the consideration is billed annually/quarterly in accordance with the agreement. Type of product/ service/segment Nature of the performance obligations and significant payment terms Accounting policy b. Software licences and the related maintenance and support revenue – Ticketing and Distribution and Guest Experience Each contract provides the customer with the right to use the software licence (installed on premise) with annual support and maintenance. The support and maintenance is not required to operate the software and is considered a distinct performance obligation from the right to use the software licence. The customer has an option to renew the licence at no additional cost by annually renewing support and maintenance at each anniversary. This is considered a material right under IFRS 15 and represents a separate performance obligation. Where the contract contains a substantial termination penalty, it is considered that there is no option to renew and as such these contracts do not include a separate performance obligation for a material right of renewal. Invoices are raised at the beginning of each contract for the software licence and annual support and maintenance. Subsequently, invoices are raised at each anniversary of the contract for annual support and maintenance (as software licence is renewed at no additional cost). The transaction price is allocated using observable market inputs, where the annual support and maintenance revenue is carved out of the total consideration using an estimate that best reflects its stand-alone selling price. Annual support and maintenance revenue is recognised on a straight-line basis over the term of the contract, which in most cases is one year and is renewable at the option of the customer thereafter. Revenue from sale of annual software licences is recognised at a point in time when the customer has been provided with the software. The revenue is recognised at a point in time because the licence provides the customer with the right of use of the software as it exists and is fully functional from the date it is provided to the customer. Revenue from sale of multi-year software licence contracts is spread as the customer has the option to renew each year’s licence at no additional cost by paying the annual support and maintenance fee. A proportion of the licence payment is deferred and recognised at a future point in time when the customer renews. The amount that is deferred is dependent on the term of the contract. For example: on the inception of a three-year contract, two thirds of the licence fee consideration would be deferred and released equally on the first and second anniversary when the customer renews their maintenance and support. Perpetual licences are recognised in the same manner, with the exception being that the contract term is estimated to be five years. If the customer chooses not to exercise the above option, any residual deferred revenue would be recognised as income in that period. Revenue from the sale of multi-year software licences containing a substantial termination penalty is not deferred and instead recognised at a point in time. It is considered that these contracts do not contain an option to renew. The deferred revenue gives rise to a contract liability at the inception of the contract. The balance reduces as revenue is recognised at each contract anniversary. 72 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 4. Significant accounting policies continued Revenue from contracts with customers continued Type of product/ service/segment Nature of the performance obligations and significant payment terms Accounting policy c. Software licences and bundled implementation services – Ticketing and Distribution Each contract provides the customer with the right to use a customised software licence (installed on premise). The software license is sold alongside interdependent implementation services that are not considered to be a separate obligation from the license. Invoices are raised at predetermined milestones set out within the contract. The milestones correspond with the value being received by the customer and reflect the value of progress toward completion of the obligation. Virtual queuing systems are installed at a client’s location, and revenue is recognised when a park guest uses the service as a sales or usage-based royalty. The Group’s performance obligation is to provide a right to access, and the necessary technical support to, its virtual queuing platform, with which the park provides virtual queueing services to the park guest. The Group’s contracts are with the attraction owner, not park guest. The Group’s performance obligation is the provision of a right to access, and necessary specified technical support to, its ticketing and eCommerce platform, over a distinct series of service periods. Invoices are issued monthly and are generally payable within thirty days. Professional services revenue is typically providing customised software development and in general is agreed with the customer and billed at each month end. Certain contracts span longer time periods whereby the Group carries out customisation and delivers software releases to customers at predetermined milestones. d. Virtual queuing system – Guest Experience e. Ticketing and eCommerce revenue – Ticketing and Distribution f. Professional services – Ticketing and Distribution and Guest Experience Revenue from the sale of customised licenses is recognised over time as the asset is created and control passes to the customer. The output method is adopted where the Group’s right to consideration corresponds directly with the completed milestones performance obligations. Revenue for these customers is recognised in line with the amount of revenue the Group is entitled to invoice. Revenues are recognised when the park guest purchases virtual queuing services from the attraction owner, being the later of sale or usage, and the satisfaction of the performance obligation to which that sale or usage-based royalty has been allocated. Ticketing and eCommerce revenue is recognised at the time the ticket is sold through our platform, or the transaction takes place, within that distinct series of service periods. accesso recognises the fee it receives for processing the transaction as revenue. The output method is adopted where the Group’s right to consideration corresponds directly with the completed monthly performance obligation. Revenue for these customers is recognised in line with the amount of revenue the Group is entitled to invoice. Bespoke professional services work is recognised over time where the Group has enforceable rights to revenue in the event of cancellation. The Group is entitled to compensation for performance completed to date in the event that the customer terminates the contract. This compensation would be sufficient to cover costs and a reasonable proportion of the expected margin. The Group recognises revenue over time using the input method (hours/total budgeted hours) when this method best depicts the Group’s performance of transferring control. 73 Type of product/ service/segment Nature of the performance obligations and significant payment terms Accounting policy g. Hardware sales – Ticketing and Distribution and Guest Experience On certain contracts, customers request that the Group procures hardware on their behalf which the Group has determined to be a distinct performance obligation. h. Platform fees – Guest Experience Cloud-based experience management platform systems are used by certain venues to provide customer relationship management, guest personalisation, payment and ordering services, push notifications, scheduling, offers, location-based services, consumer-facing screens and many other services to end users at attractions. These secure platforms are provided to venues together with support under annual contracts. This revenue is recognised at the point the customer obtains control of the hardware which is considered to be the point of delivery when legal title passes. accesso takes control and risk of ownership on hardware procurement and recognises sales and costs on a gross basis as principal. Revenue is billed monthly and recognised over time as the performance obligations of hosting and supporting the secure platforms are provided to the venues. Contract assets and contract liabilities Contract assets represent licence fees which have been recognised at a point in time but where the consideration is contractually payable over time; professional service revenue whereby control has been passed to the customer; and deferred contract commissions incurred in obtaining a contract, which are recognised in line with the recognition of the revenue. Contract assets for point in time licence fees and unbilled professional service revenue are considered for impairment on an expected credit loss model. These assets have historically had immaterial levels of bad debt and are with creditworthy customers, and consequently the Group has not recognised any impairment provision against them. Contract liabilities represent discounted renewal options on licence arrangements whereby a customer has the right to renew their licence at a full discount subject to the payment of annual support and maintenance fees on each anniversary of the contract. Contract liabilities are recognised as income when a customer exercises their renewal right on each anniversary of the contract and pays their annual maintenance and support. In the situation of a customer terminating their contract, all unexercised deferred renewal rights would be recognised as income, representing a lapse of the renewal right options. The licence fees related to these contract liabilities are non-refundable. Where these assets or liabilities mature in periods beyond 12 months of the balance sheet date, they are recognised within non-current assets or non-current liabilities as appropriate. Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 4. Significant accounting policies continued Interest expense recognition Expense is recognised as interest accrues, using the effective interest method, to the net carrying amount of the financial liability. Employee benefits Share-based payment arrangements The Group issues equity-settled share-based payments to full-time employees. Equity-settled share-based payments are measured at the fair value at the date of grant, with the expense recognised over the vesting period, with a corresponding increase in equity. The amount recognised as an expense is adjusted to reflect the Group’s estimate of shares that will eventually vest, such that the amount recognised is based on the number of awards that meet the service and non-market performance conditions at the vesting date. The fair value of our share awards with time-based and employment conditions are measured by use of a Black-Scholes model, and share options issued under the Long-Term Incentive Plan (LTIP) are measured using the Monte Carlo method, due to the market-based conditions upon which vesting is dependent. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non- transferability, exercise restrictions, and behavioural considerations. The LTIP awards contain market-based vesting conditions where they have been set. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied. LTIP awards granted in 2020 included continued employment conditions only due to the unprecedented market instability, before being modified on 12 February 2022 by the Remuneration Committee to include a market- based total shareholder return condition and Cash EBITDA non-market-based conditions. The fair value of these LTIP share awards were initially valued by use of a Black-Scholes model due to them including only continued employment conditions. On their modification they were reassessed using a Monte Carlo method, due to the market-based conditions upon which vesting is dependent. This resulted in a fair value below that on which the awards were initially granted, as such the fair value was not reduced in line with IFRS 2 Share-based payments and they continue to be recognised at their original grant date fair value. Pension costs Contributions to the Group’s defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the period in which they become due. Property, plant and equipment Items of property, plant and equipment are stated at cost of acquisition or production cost less accumulated depreciation and impairment losses. Depreciation is charged to write off the cost of assets, less residual value, over their estimated useful lives, using the straight-line method, on the following bases: Plant, machinery, and office equipment Installed systems Furniture and fixtures Leasehold Improvements 20 – 33.3% 25 – 33.3%, or life of contract 20% Shorter of useful life of the asset or time remaining within the lease contract Inventories The Group’s inventories consist of parts used in the manufacture and maintenance of its virtual queuing product, along with peripheral items that enable the product to function within a park. Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving items. Inventories are calculated on a first-in, first-out basis. Park installations are valued on the basis of the cost of inventory items and labour plus attributable overheads. Net realisable value is based on estimated selling price less additional costs to completion and disposal. Deferred tax Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the Consolidated and Company statements of financial position differs from its tax base, except for differences arising on: • the initial recognition of goodwill; • the initial recognition of an asset or liability in a transaction which is not a business combination and at the • time of the transaction affects neither accounting or taxable profit; and investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future. Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised. The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered). 74 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 4. Significant accounting policies continued Deferred tax continued Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either: • the same taxable Group company; or • different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered. Current income tax The tax expense or benefit for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. See note 13 for further discussion on provisions related to tax positions. Goodwill and impairment of non-financial assets Any excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised in the consolidated statement of financial position as goodwill and is not amortised. After initial recognition, goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed for impairment at an operating segment level before aggregation, at least annually and whenever events or changes in circumstances indicate that the carrying value may be impaired. Where the recoverable amount of the cash-generating unit is less than its carrying amount including goodwill, an impairment loss is recognised in the consolidated income statement. Any non-financial assets other than goodwill which have suffered impairment are reviewed for possible reversal of the impairment at each reporting date. Assets that are subject to amortisation and depreciation are also reviewed for any possible impairment at each reporting date. Externally acquired intangible assets Intangible assets are capitalised at cost and amortised to nil by equal instalments over their estimated useful economic life. Intangible assets are recognised on business combinations if they are separable from the acquired entity. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques. The significant intangibles recognised by the Group and their useful economic lives are as follows: • Trademarks over 10 years. • Patents over 20 years. • Customer relationships and supplier contracts over 1 to 15 years. • Acquired internally developed technology over 3 to 7 years. Internally generated intangible assets and research and development Expenditure on internally developed products is capitalised if it can be demonstrated that it is substantially enhancing an asset and: • it is technically feasible to develop the product for it to be sold; • adequate resources are available to complete the development; • there is an intention to complete and sell the product; • the Group is able to sell the product; • sale of the product will generate future economic benefits; and • expenditure on the project can be measured reliably. In accordance with IAS 38 Intangible Assets, expenditure incurred on research and development is distinguished as either related to a research phase or to a development phase. Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects is recognised in the consolidated income statement as incurred. Development expenditure is capitalised and amortised within administrative expenses on a straight-line basis over its useful economic life between 3 to 5 years from the date the intangible asset goes into use. The amortisation expense is included within administrative expenses in the consolidated income statement. All advanced research phase expenditure is charged to the income statement. For development expenditure, this is capitalised as an internally generated intangible asset, only if it meets the criteria noted above. The Group has contractual commitments for development costs of $nil (2022: $nil). Acquired intellectual property rights and patents Intellectual property rights comprise assets acquired, being external costs, relating to know-how, patents, and licences. These assets have been capitalised at the fair value of the assets acquired and are amortised within administrative expenses on a straight-line basis over their estimated useful economic life of 5 to 7 years. 75 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 4. Significant accounting policies continued Financial assets The Group classifies all its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Group’s accounting policy for each category is as follows: • Trade and loan receivables: Trade receivables are initially recognised by the Group and carried at original invoice amount less an allowance for any uncollectible or impaired amounts. Under IFRS 9, the Group applies the simplified approach to measure the loss allowance at an amount equal to the lifetime expected credit losses for trade receivables. Trade receivables are also specifically impaired where there are indicators of significant financial difficulties for the counterparty or there is a default or delinquency in payments. Loan receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade receivables), but also incorporate other types of contractual monetary asset. • Cash and cash equivalents in the statement of financial position comprise cash at bank, cash in hand and short- term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purposes of the consolidated statement of cash flow. Financial liabilities The Group treats its financial liabilities in accordance with the following accounting policies: • Trade payables, accruals and other short-term monetary liabilities are recognised at fair value and subsequently at amortised cost. • Bank borrowings and leases are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statement of financial position. ‘Interest expense’ in this context includes initial transaction costs and premiums payable on redemption, as well as any interest payable while the liability is outstanding. Where bank borrowings are denominated in foreign currency, they are translated into the functional currency at the exchange rate at the reporting date. with the corresponding net gain or loss recorded within interest expense. For loan modifications, the Group assesses if the loan can be prepaid without significant penalty and if so, no gain or loss is recognised in the income statement at the date of the modification. Employee Benefit Trust (EBT) As the Company is deemed to have control of its EBT, it is treated as an extension of the parent Company and is included in the consolidated financial statements. It is also included in the Company balance sheet as it is treated as an extension of the Company. The EBT’s assets (other than investments in the Company’s shares), liabilities, income, and expenses are included on a line-by-line basis in the consolidated financial statements. The EBT’s investment in the Company’s shares is deducted from equity in the consolidated and Company statements of financial position as if they were treasury shares. IFRS 16 leases The Group assesses whether a contract is or contains a lease. Under IFRS 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. As a lessee The Group leases commercial office space. The Group has elected not to recognise right of use assets and lease liabilities for some leases of low value and those being short-term, below 12 months in duration. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Group recognises a right of use asset and lease liability at the lease commencement date. The right of use asset and lease liability are initially measured at the present value of the lease payments that are not paid at the commencement date, discounting using the Group’s incremental borrowing rate. Subsequently, the right of use asset is adjusted for impairment losses and adjusted for certain remeasurements of the lease liability. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Group has applied judgement to determine the lease term for some lease contracts that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right of use assets recognised. As a lessor As a lessor, the Group classifies its leases as either operating or finance leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of the underlying asset, and classified as an operating lease if it does not. The Group has not currently entered into any lease that is classified as an operating lease. At the commencement of the finance lease, the Group recognises a lease receivable that equates to the net investment in the lease, which comprises the lease payments receivable discounted using the Group’s incremental borrowing rate. For further details on the Group’s leases see note 30. Exceptional items Items that are non-operating or non-recurring in nature are presented as exceptional items in the consolidated income statement, within the relevant account heading. The Directors are of the opinion that the separate recording of exceptional items provides helpful information about the Group’s underlying business performance. Events which may give rise to the classification of items as exceptional include but are not restricted to impairment charges over the Group’s internally developed and acquired intangibles and costs relating to business acquisitions along with any subsequent integration & reorganisation cost. 76 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 5. Functional and presentation currency The presentation currency of the Group is US dollars (USD) in round thousands. Items included in the financial statements of each of the Group’s entities are measured in the functional currency of each entity. The Group used the local currency as the functional currency, including the parent Company, where the functional currency is sterling. The Group’s choice of presentation currency reflects its significant dealings in that currency. 6. Critical judgments and key sources of estimation uncertainty In preparing these consolidated financial statements, the Group makes judgements, estimates and assumptions concerning the future that impact the application of policies and reported amounts of assets, liabilities, income and expenses. The resulting accounting estimates calculated using these judgements and assumptions are based on historical experience and expectations of future events and may not equal the actual results. Estimates and underlying assumptions are reviewed on an ongoing basis, and revisions to estimates are recognised prospectively. The judgements and key sources of assumptions and estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are discussed below. Judgements Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in these consolidated financial statements are below: Capitalised development costs The Group capitalises development costs in line with IAS 38 Intangible Assets. Management applies judgement in determining if the costs meet the criteria and are therefore eligible for capitalisation at the outset of a project; $2.84m has been capitalised on new projects during 2023 (2022: $2.16m). Significant judgements include the determination that assets have been substantially enhanced, the technical feasibility of the development, recoverability of the costs incurred, and economic viability of the product and potential market available considering its current and future customers. Within Intangible Assets at the year end is $2.8m capitalised in relation to a new product that launched to the market in November 2023. A key assumption in the future economic viability of this product is the successful signing of contracts with customers in the period subsequent to the year end. Given the early stage of the product in its life cycle, there is uncertainty in the number of contracts that will be obtained and a significant variation from expectations could result in a value in use below the carrying value. See internally generated intangible assets and research and development within note 4 for details on the Group’s capitalisation and amortisation policies, and Intangible Assets, note 17, for the carrying value of capitalised development costs. Deferred tax asset on US losses and tax credits The Group has recognised a deferred tax asset of $3.8m derived from US tax credits (with 20-year expiry dates ranging from 2037 to 2042). The recognition of this asset is based on the expected profitability of the US entities using the Group’s 5-year Board-approved forecasts, which indicates that such credits would be utilised by the fiscal year ending 31 December 2024. According to the enacted legislation, these tax credits can be used to offset a current income tax liability greater than $25K, for up to 75% of the said liability. The key inputs are not sensitive to plausible changes in the assumptions. In addition, to the expected profitability of the US entities, the said credits were assessed under guidelines established under section 382 of the current US tax legislation, which sets out that these would be restricted if there is deemed to have been an ownership change of greater than 50% over the assessment period. This assessment concluded any ownership change was below 50% resulting in no restriction on the credits available for use. The need for an assessment under the above- mentioned section of the US legislation will be monitored closely for its future applicability. Identification of separable intangibles on acquisition Identification of separable intangibles on acquisition are recognised when they are controlled through contractual or other legal rights, or are separable from the rest of the business, and their fair value can be reliably measured. Customer relationships and acquired technology have been identified by management as separate intangible assets and can be reliably measured by valuation of future cash flows. Uncertain tax positions The Group has undertaken a review of potential tax risks and current tax assessments, refer to note 13 (pages 86 to 89) for further details of the liabilities recognised and the assumptions and judgements taken. These liabilities recognised cover the Group’s position taken on Research & Development credits available within the US as well as liabilities in relation to the application of the Group’s transfer pricing policies. Assumptions and estimation uncertainties Information about assumptions and estimation uncertainties that have a significant risk of resulting in material adjustments in the following year are: Valuation of separable intangibles on acquisition (not subject to annual update) When valuing the customer relationships and technology acquired in a business combination, management estimate the expected future cash flows from the asset and select a suitable discount rate in order to calculate the present value of those cash flows. Separable intangibles valued on acquisitions made in the year were $8.9m (2022: nil) in respect of customer relationships, $11.4m (2022: nil) in respect of technology as defined further in note 17. Impairment of non-financial assets (subject to annual update) The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details are given in note 17. 77 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 6. Critical judgments and key sources of estimation uncertainty continued Useful economic lives of capitalised development costs (subject to annual update) The Group amortises its capitalised development costs over 3 to 5 years as this has been deemed by management to be the best reflection of the lifecycle of their technology. If this useful economic life estimate were to be 4 or 6 years, the impact on the current year amortisation would be $1,795k higher and $789k lower respectively. Management review this estimate each year to ensure it is reflective of the technologies being developed. 7. Financial risk management Overview: The Group’s use of financial instruments exposes it to a number of risks, including: • Liquidity risk; • Interest rate risk; • Credit risk; and, • Market risk. This note presents information about the Group’s exposure to each of the above risks and the Group’s policies and processes for measuring and managing these risks. The risks, for both the Group and the parent Company, are managed centrally following Board-approved policies, and by regularly monitoring the business and providing ongoing forecasts of the impact on the business. The Group operates a centralised treasury function in accordance with Board-approved policies and guidelines covering funding and management of foreign exchange exposure and interest rate risk. Transactions entered into by the treasury function are required to be in support of, or as a consequence of, underlying commercial transactions. Other than short-term trade receivables and trade payables that arise directly from operations, as detailed in notes 21 and 22, the Group’s financial instruments comprise cash, borrowings, and leases. The fair values of these instruments are not materially different to their book values. The objective of holding financial instruments is to finance the Group’s operations and manage related risks. Liquidity risk The Group closely monitors its access to bank and other credit facilities in comparison to its outstanding commitments to ensure it has sufficient funds to meet its obligations as they fall due. The Group finance function produces regular forecasts that estimate the cash inflows and outflows for the next 12 months, so that management can ensure that sufficient financing is in place as it is required. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of banking arrangements in place. Maturity analysis The following table analyses the Group’s liabilities on a contractual gross basis based on amount outstanding at the balance sheet date up to date of maturity: 31 December 2023 Group Financial liabilities Leases Bank Loan Interest on bank loan Total Company Financial liabilities Leases Bank Loan Interest on bank loan Total 31 December 2022 Group Financial liabilities Leases Total Company Financial liabilities Leases Total Less than 6 months $000 25,727 390 – 843 26,960 27,218 77 – 843 28,138 Less than 6 months $000 21,693 258 21,951 12,529 78 12,607 Between 6 months and 1 year $000 Between 1 and 5 years $000 Over 5 years $000 – 403 – 1,687 2,090 – 79 – 1,687 1,766 Between 6 months and 1 year $000 – 259 259 – 78 78 – 920 21,250 3,205 25,375 – 97 21,250 3,205 24,552 – 258 – – 258 – – – – – Between 1 and 5 years $000 Over 5 years $000 – 821 821 – 253 253 – – – – – – Total $000 25,727 1,971 21,250 5,735 54,683 27,218 253 21,250 5,735 54,456 Total $000 21,693 1,338 23,031 12,529 409 12,938 Note 22 30 23 22 30 23 Note 22 30 22 30 The Group would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows as disclosed above through effective cash management. 78 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 7. Financial risk management continued Interest rate risk The Group’s interest rate risk arises mainly from interest on its bank loan facility, which is currently undrawn, which is subject to a floating interest rate. The Group regularly reviews its funding arrangements to ensure they are competitive with the marketplace. The table below shows the Group’s and Company’s financial assets and liabilities that could be affected by the fluctuation in interest rates split by those bearing fixed and floating rates and those that are non-interest bearing: 31 December 2023 Group Financial assets – trade and other receivables Cash Bank Loan Total Company Financial assets – trade and other receivables Cash Bank Loan Total 31 December 2022 Group Financial assets – trade and other receivables Cash Total Company Financial assets – trade and other receivables Cash Total 79 Note 21 21 Note 21 21 Fixed rate $000 Floating rate $000 Non-interest bearing $000 Total assets $000 Total liabilities $000 – 15,030 – 15,030 – – (21,250) (21,250) 25,471 36,784 – 62,255 25,471 51,814 – 77,285 – – (21,250) (21,250) – 212 – 212 Fixed rate $000 – 56 56 – 56 56 – – (21,250) (21,250) 8,114 9,466 – 17,580 8,114 9,678 – 17,792 – – (21,250) (21,250) Floating rate $000 Non-interest bearing $000 Total assets $000 Total liabilities $000 – – – – – – 24,711 64,607 89,318 24,711 64,663 89,374 7,268 15,556 22,824 7,268 15,612 22,880 – – – – – – Credit risk exposure Credit risk predominantly arises from trade receivables, contract assets, cash and cash equivalents, and deposits with banks. Credit risk is managed on a Group basis. External credit checks are obtained for larger customers. In addition, the credit quality of each customer is assessed internally before accepting any terms of trade. Internal procedures take into account a customer’s financial position, their reputation in the industry, and past trading experience. As a result, the Group’s exposure to bad debts is generally not significant due to the nature of its trade and relationships with customers. Indeed, the Group, having considered the potential impact of its exposure to credit risk, and having due regard to both the nature of its business and customers, do not consider this to have a materially significant impact to the results. Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions that have acceptable credit ratings. Financial assets – trade and other receivables Contract assets Cash Estimated irrecoverable amounts Note 21 9 29 21 Group Company 2023 $000 25,814 4,129 51,814 (343) 81,414 2022 $000 25,289 4,008 64,663 (578) 93,382 2023 $000 9,017 552 9,678 (903) 18,344 2022 $000 7,868 674 15,612 (600) 23,554 The maximum exposure is the carrying amount as disclosed in trade and other receivables. The average credit period taken by customers is 49 days (2022: 53 days). The allowance for estimated irrecoverable amounts has been measured according to the lifetime expected credit losses for trade receivables and with knowledge of the financial circumstances of individual trade receivables at the balance sheet date. The Group holds no collateral against these receivables at the balance sheet date. No expected credit losses have been recognised on contract assets as these are not considered material. The following table provides an analysis of trade and other receivables that were past due at 31 December 2023 and 31 December 2022, but against which no provision has been made. The Group believes that the balances are ultimately recoverable based on a review of past payment history and the current financial status of the customers. Up to 3 months 3 to 6 months Note Group Company 2023 $000 4,707 1,208 5,915 2022 $000 6,032 773 6,805 2023 $000 856 15 871 2022 $000 2,749 429 3,178 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 7. Financial risk management continued Capital risk management The Group and Company considers their capital to comprise its ordinary share capital, share premium, own shares held in trust, accumulated retained earnings and borrowings as disclosed in the Consolidated and Company statement of financial position. Further details of the Group’s and Company’s borrowing facilities are included in note 23 and further details of the ordinary share capital, share premium and own shares held in trust are included in note 24. The Group and Company manage their capital structure in the light of changes in economic conditions and financial markets generally and regularly evaluates its compliance with covenants applicable to their borrowing facilities. The Group’s and Company’s objectives when managing capital are to safeguard the ability to continue as a going concern in order to provide returns for current and future shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to minimise the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or increase or reduce debt. The Group and Company do not seek to maintain any specific debt to capital ratio but considers investment opportunities on their merits and funds them in what it considers to be the most effective manner. Foreign currency exposure The Group is an international technology business and has transfer pricing arrangements in place to cover funding arrangements, management costs and the exploitation of IP between Group companies. This results in intercompany balances within the Group not denominated in the operating or ‘functional’ currency of the Group companies. If the currency markets were 5% stronger, this would result in settlement of these balances at a loss of $1,360k for Group and loss of $822k for Company. If the currency markets were 5% weaker, this would result in settlement of these balances at a gain of $1,295k for Group and gain of $783k for Company. The Group manages risk by its subsidiaries matching revenue and expenditure in their local currency wherever possible. The Group tries to keep foreign intercompany balances as low as possible to avoid translation adjustments. Given the nature of the Group’s operations and their management of foreign currency exposure, they limit the potential downside risk as far as practicably possible. Fair value measurement The Group or Company do not have any level 2 or 3 financial assets or liabilities that have unobservable inputs that require disclosure. 8. Business and geographical segments Segmental analysis The Group’s operating segments under IFRS have been determined with reference to the financial information presented to the Board of Directors. The Board of the Group is considered the Chief Operating Decision Maker (“CODM”) as defined within IFRS 8, as it sets the strategic goals for the Group and monitors its operational performance against this strategy. The Group’s Ticketing and Distribution operating segment comprises the following products: • accesso Passport ticketing suite using our hosted proprietary technology offering to maximise up-selling, cross-selling and selling greater volumes. • accesso Siriusware software solutions providing modules in ticketing & admissions, memberships, reservations, resource scheduling, retail, food service, gift cards, kiosks and eCommerce. • accesso ShoWare ticketing solution for box office, online, kiosk, mobile, call centre and social media sales. • Ingresso operate a consolidated distribution platform which connects venues and distributors, opening up a larger global channel for clients to sell their event, theatre and attraction tickets. • accesso Paradox cutting-edge software solution specifically tailored to the unique needs of the industry. The flexible, hosted solution empowers ski areas to take full control of their operations across ticketing and passes, snow school, retail, equipment rental, food & beverage, administration, and online sales in one, unified platform. • accesso Horizon highly functional and best-in-class ticketing and visitor management solution leveraging an innovative portfolio model approach to guest management. The Group’s Guest Experience reportable segment comprises the following aggregated segments: • accesso LoQueue providing leading edge virtual queuing solutions to take customers out of line, improve guest experience and increase revenue for theme parks. • Mobile Applications experience management platforms which delivers personalised real-time immersive customer experiences at the right time, elevating the guest’s experience and loyalty to the brand. • accesso Freedom: recently launched point of sale system enabling modules in food and beverage, retail, eCommerce via kiosk or mobile through a multi-tenanted hosted solution. The Group’s virtual queuing solution (accesso LoQueue), experience management platforms (Mobile Platforms), and food and beverage retail system (accesso Freedom) are headed by segment managers who discuss the operating activities, financial results, forecasts and plans of their respective segments with the CODM. These three distinct operating segments share similar economic characteristics, expected long term financial performance, customers and markets; the products are heavily bespoke, technology and software intensive in their delivery and are directly targeted at improving a guest’s experience of an attraction or entertainment venue, whilst providing cross-selling opportunities and increased revenues to the venues. Management therefore conclude that they meet the aggregation criteria. 80 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements Year ended 31 December 2022 Revenue Cost of sales Central unallocated administrative expenses Cash EBITDA1 Capitalised development spend Depreciation and amortisation (excluding acquired intangibles) Amortisation related to acquired intangibles Impairment of intangible assets Share-based payments Exceptional costs relating to IP acquisition Finance income Finance expense Profit before tax Ticketing and Distribution $000 95,256 (19,437) – 75,819 Guest Experience $000 44,474 (15,947) – 28,527 Central unallocated costs $000 – (386) (78,155) (78,541) Group $000 139,730 (35,770) (78,155) 25,805 2,155 (10,744) (1,667) (32) (2,629) (137) 232 (566) 12,417 1 Cash EBITDA is calculated as operating profit before the deduction of amortisation, impairment of intangible assets, depreciation, acquisition costs, deferred and contingent payments, and costs related to share-based payments but after capitalised development costs. The segments will be assessed as the Group develops and continues to make acquisitions. 8. Business and geographical segments continued Segmental analysis continued The Group’s assets and liabilities are reviewed on a Group basis and therefore segmental information is not provided for the statements of financial position of the segments. The CODM monitors the results of the reportable segments prior to charges for interest, depreciation, tax, amortisation and non-recurring items but after the deduction of capitalised development costs. The Group has a significant amount of central unallocated costs which are not segment specific. These costs have therefore been excluded from segment profitability and presented as a separate line below segment profit. The following is an analysis of the Group’s revenue and results from the continuing operations by reportable segment, which represents revenue generated from external customers. Ticketing and Distribution $000 104,024 (20,768) – 83,256 Guest Experience $000 45,491 (14,324) – 31,167 2023 $000 104,024 45,491 149,515 Central unallocated costs $000 – (176) (90,621) (90,797) 2022 $000 95,256 44,474 139,730 Group $000 149,515 (35,268) (90,621) 23,626 2,839 (7,832) (2,816) (6) (3,187) (2,690) 953 (2,084) 8,808 Ticketing and Distribution Guest Experience Total revenue Year ended 31 December 2023 Revenue Cost of sales Central unallocated administrative expenses Cash EBITDA1 Capitalised development spend Depreciation and amortisation (excluding acquired intangibles) Amortisation related to acquired intangibles Impairment of intangible assets Share-based payments Exceptional costs relating to acquisitions Finance income Finance expense Profit before tax 81 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 8. Business and geographical segments continued Segmental analysis continued An analysis of the Group’s external revenues and non-current assets (excluding deferred tax) by geographical location are detailed below: Revenue Non-current assets UK Italy* Germany* France* Spain* Netherlands* Ireland* Other Europe* Australia* Japan* Singapore* Other Asia/South Pacific* USA Canada Mexico Other Central and South America United Arab Emirates* Africa 2023 $000 25,644 713 2,848 1,359 1,386 1,012 382 749 5,788 1,754 402 1,252 95,724 4,536 3,761 903 1,109 193 149,515 2022 $000 27,077 500 2,327 755 279 1,406 251 796 5,705 277 23 771 92,561 3,518 2,865 619 – – 139,730 2023 $000 24,830 39,675 7 – – – 2,131 – 9 – 2,545 8 86,063 10,863 47 12 1,953 – 168,143 2022 $000 22,833 – 7 – – – – – – – – 44 90,050 – 30 39 – – 113,003 * This disclosure has been enhanced to present disaggregated revenue and non-current assets for Italy, Germany, France, Spain, the Netherlands, Ireland, Australia, United Arab Emirates, Japan and Singapore in 2022. Italy, Germany, France, Spain, the Netherlands and Ireland were previously disclosed aggregated with Other Europe. Australia, Japan, and Singapore were previously disclosed aggregated with Australia/South Pacific/Asia. Revenue generated in each of the geographical locations is generally in the local currency of the venue or operator based in that location. 82 Major customers The Group has entered into agreements with theme parks, theme park groups, and attractions to operate its technology in single or multiple theme parks or attractions within the theme park group. There are two park and attraction operators with which the Group has contractual relationships with combined segmental revenues in excess of 10% of the total Group revenue. The first park operator accounted for $8.5m (2022: $7.0m) of Ticketing and Distribution revenue and for $14.3m (2022: $17.1m) of Guest Experience revenue. The second park and attractions operator accounted for $15.2m (2022: $13.9m) of Ticketing and Distribution revenue and for $7.4m (2022: $5.5m) of Guest Experience revenue. 9. Revenue Revenue primarily arises from the operation and licensing of virtual queuing solutions, the development and application of eCommerce ticketing, professional services, and licence sales in relation to point-of-sale and guest management software and related hardware. All revenue of the Group is from contracts with customers. Disaggregated revenue The Group has disaggregated revenue into various categories in the following table which is intended to depict the nature, amount, timing and uncertainty of revenue recognition and to enable users to understand the relationship with revenue segment information provided in note 8. Year ended 31 December 2023 Year ended 31 December 2022 Ticketing and Distribution $000 Guest Experience $000 22,358 713 1,006 26 80 154 314 380 4,174 1,754 402 1,012 61,626 4,270 3,550 903 1,109 193 3,286 – 1,842 1,333 1,306 858 68 369 1,614 – – 240 34,098 266 211 – – – Ticketing and Distribution $000 Guest Experience $000 24,636 500 1,113 20 96 676 251 425 3,788 277 23 713 56,285 3,216 2,618 619 – – 2,441 – 1,214 735 183 730 – 371 1,917 – – 58 36,276 302 247 – – – Group $000 25,644 713 2,848 1,359 1,386 1,012 382 749 5,788 1,754 402 1,252 95,724 4,536 3,761 903 1,109 193 Group $000 27,077 500 2,327 755 279 1,406 251 796 5,705 277 23 771 92,561 3,518 2,865 619 – – Primary geographic markets UK Italy* Germany* France* Spain* Netherlands* Ireland* Other Europe Australia* Japan* Singapore* Other Asia/South Pacific* USA Canada Mexico Other Central and South America United Arab Emirates Africa Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 9. Revenue continued Disaggregated revenue continued Contract balances The following tables provide information about contract assets arising from contracts with customers. Year ended 31 December 2023 Year ended 31 December 2022 Ticketing and Distribution $000 Guest Experience $000 Ticketing and Distribution $000 Guest Experience $000 Group $000 Group $000 104,024 45,491 149,515 95,256 44,474 139,730 4,386 8,809 – – 82,753 4,006 769 3,301 104,024 – 529 3,352 29,098 23 11,530 764 195 45,491 4,386 9,338 3,352 29,098 82,776 15,536 1,533 3,496 149,515 2,749 7,122 – – 77,795 3,070 1,384 3,136 95,256 – – 3,007 28,179 12 12,918 50 308 44,474 2,749 7,122 3,007 28,179 77,807 15,988 1,434 3,444 139,730 3,834 552 – – 3,834 552 2,749 – – – 2,749 – 86,823 33,409 120,232 82,315 28,549 110,864 12,815 104,024 12,082 45,491 24,897 149,515 10,192 95,256 15,925 44,474 26,117 139,730 1,811 – 1,811 2,144 – 2,144 Product type Licence fees Support and maintenance Platform fees Virtual queuing Ticketing and eCommerce Professional services Hardware Other Timing of transfer of goods and services Point in time licence fees Over time licence fees Point in time virtual queuing/ ticketing/hardware/other Over time licence fees, maintenance, support, platform fees and professional services Revenue included within point in time licence fees above related to the exercise or lapse of renewal rights * This disclosure has been enhanced to present disaggregated revenue and non-current assets for Italy, Germany, France, Spain, the Netherlands, Ireland, Australia, United Arab Emirates, Japan and Singapore in 2022. Italy, Germany, France, Spain, the Netherlands and Ireland were previously disclosed aggregated with Other Europe. Australia, Japan, and Singapore were previously disclosed aggregated with Australia/South Pacific/Asia. At 31 December 2022 At 31 December 2023 Non current $000 314 784 Group Current $000 3,694 3,345 Total $000 Non current $000 4,008 4,129 57 28 Breakdown of contract assets at 31 December 2023 Accrued income Contract commissions Breakdown of contract assets at 31 December 2022 Accrued income Contract commissions Company Current $000 617 524 Group $000 3,675 454 4,129 Group $000 3,463 545 4,008 Total $000 674 552 Company $000 484 68 552 Company $000 594 80 674 The contract assets primarily relate to the Group’s rights to consideration for licence fees or professional services recognised but not billed. The contract assets are transferred to receivables when the rights become unconditional. This occurs when the Group issues an invoice to the customer in line with the contractually agreed terms and does not relate purely to the passage of time. The Group also capitalises commissions paid in connection with obtaining a contract and recognises the expense over the term of the agreement, testing for impairment annually. The following tables provide information about contract liabilities arising from contracts with customers. At 31 December 2022 At 31 December 2023 Non current $000 616 927 Group Current $000 4,920 7,353 Total $000 Non current $000 5,536 8,280 5 2 Company Current $000 203 171 Total $000 208 173 83 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 9. Revenue continued Contract balances continued Transfers of contract liabilities to revenue during the period were equal to the prior year current liabilities. 10. Employees and Directors The contract liabilities primarily relate to support and maintenance services to be provided for ticketing software licences and guest management software, where the revenue is recognised over the terms of the agreements. A portion of contract liabilities relates to upfront milestone billings where the performance obligation has not yet been satisfied. The remaining balance of contract liabilities consists of material rights customers of the Group’s ticketing software receives at the time the contract is signed for right to use software licences, which allows them to renew at a discount in subsequent years. Refer to item (b) the Group’s revenue recognition policy table in note 4 covering software licences and the related maintenance and support revenue. The revenue is recognised when the customer renews over the term of the contract or 5 years for contracts that do not have a term. No revenue was recognised in the period ended 31 December 2023 or 2022 from performance obligations satisfied (or partially satisfied) in previous periods. Remaining performance obligations No information is provided about remaining performance obligations at 31 December 2023 or 2022 that have an original expected duration of one year or less, as allowed by IFRS 15. The amount of revenue that will be recognised in future periods on contracts with material rights over future discounted licence fees is analysed as follows: Material rights over discounted licence fee renewal 31 December 2023 31 December 2022 Less than 1 year $000 Between 1 and 5 years $000 Less than 1 year $000 Between 1 and 5 years $000 652 895 482 591 Group Wages and salaries Professional services wages and salaries included with cost of goods sold Capitalised development costs Wages and salaries included within administrative expenses Social security costs Defined contribution pension costs Share-based payment transactions Company Wages and salaries Capitalised development costs Wages and salaries included within administrative expenses Social security costs Defined contribution pension costs Share-based payment transactions Headcount The average monthly number of employees during the year was made up as follows: Group Operations Research & development Sales & marketing Finance & administration Seasonal staff Company Operations Research & development Sales & marketing Finance & administration 2023 $000 67,926 (5,450) (2,839) 59,637 4,947 2,052 3,187 69,823 9,522 (2,151) 7,371 913 443 145 8,872 2023 212 343 68 47 252 922 24 54 6 8 92 2022 $000 58,952 (5,594) (2,155) 51,203 4,102 1,662 2,629 59,596 6,392 (1,006) 5,386 728 317 86 6,517 2022 185 297 41 45 397 965 21 40 4 9 74 84 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 10. Employees and Directors continued 11. Expenses by nature Key management compensation The key management of the Company in 2023 and 2022 are considered to be the Executive Directors, Non- Executive Directors and the Chief Executive’s direct reports, being the Senior Vice Presidents of Engineering, Strategy and HR, the Vice President of POS Solutions, the President of Operations and the Chief Commercial Officer. During 2023, three additional staff were considered to be key management following acquisition activity and role changes being; President accesso Horizon and the Senior Vice Presidents of Delivery and Product. The key management remuneration is as follows: Salary Fees Bonus Short term non-monetary benefits Contribution to retirement scheme Employer’s social security costs Share-based payments 2023 $000 3,008 337 1,417 133 80 107 1,849 6,931 Directors’ remuneration In respect of Directors’ remuneration, the disclosures required by Schedule 5 to Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 are as follows: Salary Fees Bonus Other benefits Total remuneration within the statement of comprehensive income* Retirement contributions Gains on exercise of share awards 2023 $000 785 337 1,125 31 2,278 13 5,473 2022 $000 2,206 374 1,944 115 69 74 1,855 6,637 2022 $000 803 374 1,419 31 2,627 12 41 * This figure excludes IFRS 2 share-based payment charge also recorded in the statement of comprehensive income during the year in respect of the Directors’ share awards of $0.87m (2022: $1.12m). Park operating costs Server costs (cost of goods sold) Server costs (admin expenses) Hardware equipment (cost of goods sold) Commissions costs paid to distributors Direct to consumer marketing spend (costs of goods sold) Contract labour Other employee related costs Acquisition and integration related costs Depreciation – owned assets Depreciation – right of use assets Amortisation of intangible assets Impairment of intangible assets Foreign exchange (gain)/loss 2023 $000 7,048 2,511 1,304 751 12,620 1,095 1,947 6,892 2,690 975 467 9,201 6 205 2022 $000 9,341 1,933 961 1,718 11,109 1,700 3,556 4,463 137 1,227 773 10,411 32 (272) Park operating costs are incurred to deliver the Group’s virtual queuing system where there is a requirement for the Group to provide onsite labour, as well as other assistance in ensuring the software licence operates as intended. Server costs are split between cost of goods sold and administrative expenses. They represent the hosting costs incurred that are either directly attributable to revenue generating activities or a Group overhead. Acquisition and integration related costs includes all external costs relating to the acquisitions that would not have otherwise been incurred; these are largely advisory & diligence fees as well as staff travel. This also includes any professional service related integration costs arising for a period of six months post-acquisition date, again relating to costs that would not otherwise have been incurred. Other employee related costs include health insurance costs, professional development and recruitment. Research and development gross spend* Research and development capitalised to balance sheet (note 16) Research and development recognised in operating profit 2023 $000 48,518 (2,839) 45,679 2022 $000 43,174 (2,155) 41,019 The total emoluments received by the highest paid Director was $6.63m (2022: $1.30m), which includes $5.47m in relation to the gain following the exercise of share awards (2022: nil). * Research and development expenditure represents all costs incurred by the Group’s Engineering and Product functions. These costs include staff labour as well as software related expenditure. Retirement contributions were received by 1 director (2022: 1). 85 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 11. Expenses by nature continued Auditor’s remuneration During the period the following services were obtained from the Group’s auditor at a cost detailed below: 13. Tax The table below provides an analysis of the tax charge for the periods ended 31 December 2023 and 31 December 2022: Fees payable to the Company’s auditors of the parent Company and consolidated accounts Fees payable to the Company’s auditors for the audit of subsidiaries Audit services 2023 $000 993 – 993 2022 $000 699 38 737 UK corporation tax Current tax on income for the period Adjustment in respect of prior periods For the year ended 31 December 2023, accesso Technology Group plc has provided a guarantee in respect of all liabilities due by its subsidiaries Ingresso Group Limited and Lo-Q Limited. As a result, these entities are exempt from audit. Overseas tax Current tax on income for the period Adjustment in respect of prior periods 12. Finance income and expense The table below details the finance income and expense for the current and prior periods: Total current taxation Deferred taxation Original and reversal of temporary difference – for the current period Impact on deferred tax rate changes Original and reversal of temporary difference – for the prior period Total taxation charge/(benefit) 2023 $000 934 15 4 953 (1,467) (464) (101) (52) (2,084) (1,131) 2022 $000 232 – – 232 (308) (253) (190) 185 (566) (334) Finance income: Bank interest received Interest on tax receivable Finance lease receivables Total finance income Finance costs: Bank interest Amortisation of capitalised refinance costs Lease (note 30) Interest on sales tax accrual Total finance costs Net finance expense 86 2023 $000 946 (364) 582 2,115 933 3,048 3,630 (1,094) 170 (1,590) (2,514) 1,116 2022 $000 750 (40) 710 690 453 1,143 1,853 1,641 (967) (166) 508 2,361 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 13. Tax continued The differences between the actual tax charge for the period and the theoretical amount that would arise using the applicable weighted average tax rate are as follows: Profit/(loss) on ordinary activities before tax Tax at United States tax rate of 27.67% (2022: 26.87%) Effects of: Expenses not deductible for tax purposes Profit subject to foreign taxes at a lower marginal rate Adjustment in respect of prior period – income statement Research and Development credit estimation adjustment Research and Development credits utilised Share options Impact of rate changes Other Total taxation charge 2023 $000 8,808 2,437 (61) 714 (1,021) (697) (351) (177) 170 102 1,116 2022 $000 12,417 3,336 30 (195) 247 – (141) 195 (967) (144) 2,361 Deferred taxation Group At 31 December 2021 (Charged)/credited to income Credited directly to equity Foreign currency translation At 31 December 2022 Credited to income Credited directly to equity Foreign currency translation Acquired through business combination At 31 December 2023 Company At 31 December 2021 Charged to income Credited directly to equity Foreign currency translation Netted against the asset At 31 December 2022 Charged to income Credited directly to equity Foreign currency translation Netted against the asset At 31 December 2023 Asset $000 16,260 (1,404) 448 (25) 15,279 2,573 (1,274) 40 85 16,703 – 22 (18) (9) 5 – 19 (17) 5 (7) – Liability $000 (4,236) 896 – 46 (3,294) (59) – (22) (5,446) (8,821) (336) 134 – 44 5 (163) (31) – (13) 7 (200) 87 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 13. Tax continued Deferred taxation continued The following table summarises the recognised deferred tax asset and liability: Group Recognised asset Tax relief on unexercised employee share options Short-term timing differences Net operating losses & tax credits Capitalised R&D Expenditure Deferred tax asset Recognised liability Capital allowances in excess of depreciation Short-term timing differences Business combinations Deferred tax liability Company Recognised asset Tax relief on unexercised employee share options Short-term timing differences Offset against Company deferred tax asset Deferred tax asset Recognised liability Capital allowances in excess of depreciation Offset against Company deferred tax asset Deferred tax liability * Restatement of prior year deferred tax asset. 88 2023 $000 2022 Restated* $000 1,930 2,829 4,552 7,392 16,703 (703) (745) (7,373) (8,821) 60 32 (92) – (292) 92 (200) 3,034 6,903* 5,342* – 15,279 (204) (1,025) (2,065) (3,294) 57 28 (85) – (248) 85 (163) The deferred tax asset balances recognised in respect of the US, for the year ended 31 December 2022, were calculated considering that the revised version of Section 174 of the US Internal Revenue Code, would be repealed. This legislation was not repealed as expected and remained in force, resulting in a restatement of the 31 December 2022 deferred tax asset balances, to reflect the reclassification of some of the amounts recognised. The total deferred tax asset of $15.3m remains the same, however short-term timing differences have been restated to $6.9m, previously $2.7m, and net operating losses & tax credits have been restated to $5.3m, previously $9.6m. The tax rate in the US rate remained at 21%, before state taxes. Deferred tax assets and liabilities were measured at a rate 21% (2022: 21%) plus state taxes in the US. An increase in the UK corporation rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2022. This will increase the Company’s future current tax charge accordingly. The deferred tax assets and liabilities at 31 December 2023 have been calculated based on these rates, reflecting the expected timing of reversal of the related temporary and timing differences (2022: 25%). There are no material unrecognised deferred tax assets. The critical assumptions used in the assessment for the recognition of the deferred tax asset on US losses and available tax credits are discussed in note 6. Taxation and transfer pricing The Group is an international technology business and, as such, transfer pricing policies are in place to cover funding arrangements, management costs and the exploitation of IP between Group companies. Transfer prices and the policies applied directly affect the allocation of Group-wide taxable income across a number of tax jurisdictions. While transfer pricing entries between legal entities are on an arm’s length basis, there is increasing scrutiny from tax authorities on transfer pricing arrangements. This could result in the creation of uncertain tax positions. The Group provides for anticipated risks, based on reasonable estimates, for tax risks in the respective countries in which it operates. The amount of such provisions can be based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible authority. Uncertainties exist with respect to the evolution of the Group following international acquisitions holding significant IP assets, interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 13. Tax continued Taxation and transfer pricing continued Uncertainties in relation to tax liabilities are provided for within income tax payable to the extent that it is considered probable that the Group may be required to settle a tax liability in the future. Settlement of tax provisions could potentially result in future cash tax payments; however, these are not expected to result in an increased tax charge as they have been fully provided for in accordance with management’s best estimates of the most likely outcomes. Ongoing tax assessments and related tax risks The Group has undertaken a review of potential tax risks and current tax assessments, and whilst it is not possible to predict the outcome of any current or future tax enquiries, adequate provisions are considered to have been included in the Group accounts to cover any expected estimated future settlements. In common with many international groups operating across multiple jurisdictions, certain tax positions taken by the Group are based on industry practice and external tax advice or are based on assumptions and involve a degree of judgement. It is considered possible that tax enquiries on such tax positions could give rise to material changes in the Group’s tax provisions. 15. Earnings per share Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Own shares held by the Employee Benefit Trust are eliminated from the weighted average number of shares. Diluted earnings per share is calculated by dividing the net profit attributable to ordinary shareholders, after adjustments for instruments that dilute basic earnings per share, by the weighted average of ordinary shares outstanding during the period (adjusted for the effects of dilutive instruments). Earnings for adjusted earnings per share, a non-GAAP measure, are defined as profit before tax before the deduction of amortisation related to acquisitions, impairment of intangible assets, acquisition costs, deferred and contingent consideration linked to continued employment, and costs related to share-based payments, less tax at the effective rate on tax impacted items. The table below reflects the income and share data used in the total basic, diluted, and adjusted earnings per share computations. The Group is consequently, from time to time, subject to tax enquiries by local tax authorities and certain tax positions related to intercompany transactions may be subject to challenge by the relevant tax authority. Profit attributable to ordinary shareholders ($000) The Group has recognised provisions where it is not probable that tax positions taken will be accepted, totalling $1.3m (2022: $0.9m) in relation to availability of international R&D claims. A further provision of $5.1m (2022: $0.0m) has been recognised, in connection with tax liabilities inherited in the entities acquired during the year ended 31 December 2023. This provision has been calculated in accordance with the Group’s transfer pricing policies. The US losses recognised in the year were assessed under the section 382 US tax legislation to validate they can be utilised. This assessment will need to continue to be performed on an annual basis to determine if any restriction is required. 14. Result of parent Company As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is not presented as part of these financial statements. The parent Company’s profit for the financial year ended 31 December 2023 was $6.52m (2022: $1.01m). Basic EPS Denominator Weighted average number of shares used in basic EPS (000s) Basic earnings per share (cents) Diluted EPS Denominator Weighted average number of shares used in basic EPS (000s) Effect of dilutive securities Options (000s) Contingent share consideration on business combinations (000s) Weighted average number of shares used in diluted EPS (000s) Diluted earnings per share (cents) 89 2023 $000 7,692 2022 $000 10,056 40,075 19.19 41,196 24.41 40,075 41,196 1,034 88 41,197 18.67 1,692 – 42,888 23.45 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Section accesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 15. Earnings per share continued Adjusted EPS Profit attributable to ordinary shareholders ($000) Adjustments for the period related to: Amortisation relating to acquired intangibles from acquisitions Impairment of intangible assets Acquisition expenses Share-based compensation and social security costs on unapproved options Net tax related to the above adjustments (2023: 16.7%, 2022: 9.7%): Adjusted profit attributable to ordinary shareholders ($000) Adjusted basic EPS Denominator Weighted average number of shares used in basic EPS (000s) Adjusted basic earnings per share (cents) Adjusted diluted EPS Denominator Weighted average number of shares used in diluted EPS (000s) Adjusted diluted earnings per share (cents) 2023 $000 2022 $000 7,692 10,056 2,811 6 2,690 3,187 16,386 (1,365) 15,021 1,667 32 – 2,629 14,384 418 14,802 40,075 37.48 41,196 35.93 41,197 36.46 42,888 34.51 1,040,511 LTIP awards were excluded in the calculation of diluted EPS as at 31 December 2023 (2022: nil) as a result of exercise conditions contingent of the satisfaction of certain criteria that had not been met. Acquisition of VGS companies (now accesso Horizon) On 20 June 2023, the Group entered into a share purchase agreement to acquire 100% of the share capital of four VGS entities (VGS S.r.l., VGS ME DMCC, VGS Asia PTE Ltd. and VGS Holding, Inc.), and an underlying subsidiary, for a total consideration of $53.6m, paid in cash. The principal reason for this acquisition was to expand the Group’s product proposition, significantly increase international presence, enhance revenue diversity, and provide extensive new opportunities for global growth. It also provides a fundamental building block for the Group’s mid-to-long-term product roadmap. Acquisition and integration-related costs of $1.77m were incurred in relation to this acquisition and are included within administrative expenses. Deferred tax has been provided on the value of the intangible assets at the tax rate applicable at the time the asset is expected to be realised. Included in the consolidated statement of income is $4.9m of revenue generated by VGS and $2.5m profit before tax. If the acquisition had been completed on the first day of the financial year, VGS would have generated $7.6m revenue and $3.7m profit before tax. Identifiable intangible assets – acquired technology Identifiable intangible assets – customer relationships Property, plant and equipment Cash Receivables and other debtors Payables and other liabilities Deferred tax liabilities Total net assets acquired 16. Business combinations During the year, the Group completed 3 acquisitions to create shareholder value by adding depth and breadth to the Group’s software solutions and available resources. Goodwill acquired in the business combinations represent a payment made by the acquirer in anticipation of future economic benefits from assets that are not capable of being individually identified and separately recognised. Goodwill is not deductible for tax purposes. Acquisition balance sheets are deemed provisional when the post-acquisition integration period, typically up to 12 months post-acquisition, has yet to complete. Goodwill on acquisition Consideration Satisfied by: Cash to vendors During the year, the Group made the following acquisitions which individually represent 5% or more of the total Enterprise Value of all acquisitions made during the year. 90 Fair value $000 5,111 8,353 1,272 14,275 4,243 (8,615) (3,618) 21,021 32,577 53,598 53,598 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 16. Business combinations continued Acquisition of Paradocs Solutions, Inc. (now accesso Paradox) On 21 April 2023, the Group acquired 100% of the share capital of Paradocs Solutions, Inc (“Paradocs”) for a total consideration of $10.01m, of which $9.0m was paid in cash with a further $1.01m in contingently issuable shares. Acquisition of Boxer Consulting Limited On 4 May 2023, the Group acquired 100% of the share capital of Boxer Consulting Limited (“DigiSoft”) for a total consideration of €1.82m ($2.0m). A total of €1.62m ($1.79m) was paid in cash with a further €0.2m held as deferred consideration to be paid two years post-completion. The principal reason for this acquisition was to deepen the Group’s presence in the important ski market by acquiring a cutting-edge software solution specifically tailored to the unique needs of the industry. The flexible, hosted solution empowers ski areas to take full control of their operations across ticketing and passes, snow school, retail, equipment rental, food & beverage, administration, and online sales in one, unified platform. The principal reason for this acquisition was to enable the Group to gain efficiency, flexibility, and reduce costs by bringing an existing supplier of mobile development services in-house. Acquisition and integration related costs of $0.33m were incurred in relation to this acquisition and are included within administrative expenses. Acquisition and integration related costs of $0.5m were incurred in relation to this acquisition and are included within administrative expenses. Deferred tax has been provided on the value of the intangible assets at the tax rate applicable at the time the asset is expected to be realised. Deferred tax has been provided on the value of the intangible assets at the tax rate applicable at the time the asset is expected to be realised. Included in the consolidated statement of income is $1.5m of revenue generated by Paradocs and $1.0m loss before tax. If the acquisition had been completed on the first day of the financial year, Paradocs would have generated $1.9m revenue and $1.1m loss before tax. No disclosure has been made of the revenue and profit before tax as if the acquisition has been completed on the first day of the financial year or for the amounts generated by the acquiree following the acquisition. This is due to the information being impracticable because the acquired entity, DigiSoft, held no profit or loss activity prior to the acquisition. Digisoft, formerly a supplier to the Group, incurred costs of $1.3m with external revenues of $0.3m in the post-acquisition period. Identifiable intangible assets – customer relationships Identifiable intangible assets – acquired technology Property, plant and equipment Cash Receivables and other debtors Payables and other liabilities Deferred tax liabilities Total net assets acquired Goodwill on acquisition Consideration Satisfied by: Cash to vendors Contingent share consideration to vendors Fair value $000 550 5,790 156 155 848 (918) (1,704) 4,877 5,130 10,007 9,000 1,007 Identifiable intangible assets – acquired technology Property, plant and equipment Receivables and other debtors Payables and other liabilities Deferred tax liabilities Total net assets acquired Goodwill on acquisition Consideration Satisfied by: Cash to vendors Deferred cash consideration to vendors Fair value $000 462 4 25 (85) (124) 282 1,731 2,013 1,792 221 * Contingent share consideration is payable in instalments over a two year period subject to the sellers fulfilling their performance obligations over the contingent period. The initial fair value of $1.01m reflects the share price at the time of the acquisition. Subsequent changes to fair value of contingent consideration are based on the movement of the Group’s share price at the reporting date. At the year end, the fair value of the contingent consideration was $0.65m following the first instalment settlement for $0.2m and subsequent remeasurement of the remaining liability at the reporting date. 91 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 16. Business combinations continued The net cash outflow in the current year in respect of acquisitions comprised: 17. Intangible assets The cost and amortisation of the Group’s intangible fixed assets are detailed in the following table: VGS Cash paid Net cash acquired Paradocs Cash paid Net cash acquired DigiSoft Cash paid Net cash acquired Total net cash outflow in respect of acquisitions in the current period $000 53,598 (14,275) 39,323 9,000 (155) 8,845 1,792 – 1,792 49,960 The cash outflow for the Company comprised VGS and DigiSoft but excluded the purchase of VGS Holding, Inc which was purchased by a subsidiary within the Group. The gross cash outflow for the Company, excluding acquired cash, was $43.3m for VGS companies and $1.8m for DigiSoft. Customer relationships & supplier contracts $000 Goodwill $000 Trademarks $000 Acquired internally developed intellectual property $000 Patent & IPR costs $000 Develop- ment costs $000 Totals $000 117,376 13,577 (2,236) – – 115,140 – – – 13,577 1,123 – 8 – 39,438 – 155,701 8,903 – 22,488 469 – – – 469 – 14 – – 483 24,426 779 57,298 213,925 – – – 24,426 86 – 11,363 – 35,875 (96) 1,140 (717) 1,106 (1,065) 2,155 (71) (3,397) 3,295 (788) 58,317 213,035 67 – 627 2,839 1,911 2,853 1 – 1,174 – (497) 59,705 (497) 61,286 277,007 17,403 10,002 466 23,942 695 41,329 93,837 Cost At 31 December 2021 Foreign currency translation Additions Disposals At 31 December 2022 Foreign currency translation Additions Acquisition through business combination Disposals At 31 December 2023 Amortisation/Impairment At 31 December 2021 Foreign currency translation Charged Reversal of impairment Disposal At 31 December 2022 Foreign currency translation Charged Impairment Disposal At 31 December 2023 – – – – 17,403 – – – – 17,403 – 1,183 – – 11,185 1 1,369 – – 12,555 – 1 – – 467 – 2 – – 469 – 484 – – 24,426 13 1,442 – – 25,881 (74) 198 – (683) 136 23 399 – – 558 (850) 8,545 32 (58) (924) 10,411 32 (741) 48,998 102,615 457 5,989 6 (497) 494 9,201 6 (497) 54,953 111,819 Net book value At 31 December 2023 At 31 December 2022 138,298 97,737 9,933 2,392 14 2 9,994 – 616 970 6,333 165,188 110,420 9,319 92 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 17. Intangible assets continued The cost and amortisation of the Company’s intangible fixed assets are detailed in the following table: Patent costs $000 Development costs $000 Totals $000 Impairment testing of goodwill The Group is required to test, on an annual basis, whether goodwill has suffered any impairment or where indicators of impairment exist. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows. The goodwill balances of the Group are monitored and tested at an operating segment level, further details on their composition are set out below. 10,207 10,800 The carrying amount of goodwill is allocated as follows: Cost At 31 December 2021 Foreign currency translation Additions Disposals At 31 December 2022 Foreign currency translation Additions Disposals At 31 December 2023 Amortisation At 31 December 2021 Foreign currency translation Charged Impairment Disposals At 31 December 2022 Foreign currency translation Charged Impairment Disposals At 31 December 2023 Net book value At 31 December 2023 At 31 December 2022 593 (88) – (415) 90 5 – – 95 531 (80) 14 – (403) 62 4 10 – – 76 19 28 (1,070) 1,006 (59) 10,084 606 2,151 (384) 12,457 7,407 (843) 1,147 32 (59) 7,684 440 907 6 (384) 8,653 (1,158) 1,006 (474) 10,174 611 2,151 (384) 12,552 7,938 (923) 1,161 32 (462) 7,746 444 917 6 (384) 8,729 3,804 2,400 3,823 2,428 Ticketing and Distribution (CGU 1, 2, 3, 7 and 8) * accesso LoQueue (CGU 5) ** Professional services (CGU 9) *** The key assumptions used in the value in use calculations are as follows: Pre-tax discount rate (%) Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* accesso LoQueue** (CGU 5) Professional services*** (CGU 9) Average annual EBITDA growth rate during forecast period (average %) Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* accesso LoQueue** (CGU 5) Professional services*** (CGU 9) Terminal growth rate (%) Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* accesso LoQueue** (CGU 5) Professional services*** (CGU 9) Period on which detailed forecasts based (years) Ticketing and Distribution (CGU 1, 2, 3, 7 & 8)* accesso LoQueue** (CGU 5) Professional services*** (CGU 9) 2023 $000 108,067 28,500 1,731 138,298 2022 $000 69,235 28,500 – 97,735 2023 2022 17.0% 17.3% 17.2% 27.8% 3.5% 1.0% 2.0% 2.0% 2.0% 5 5 5 16.6% 16.8% – 19.7% 15.1% – 2.0% 2.0% – 5 5 – Capitalised development costs are not treated as a realised loss for the purpose of determining the Company’s distributable profits as the costs meet the conditions requiring them to be treated as an asset in accordance with IAS 38. 93 * Comprises the products accesso Passport & Siriusware (CGU1); accesso ShoWare (CGU2); Ingresso (CGU3); accesso Paradox (CGU7) and accesso Horizon (CGU8) within all trading entities as disclosed in note 19. ** Comprises accesso LoQueue trading within accesso Technology Group plc; Lo-Q, Inc.; Lo-Q Service Canada Inc. and accesso Australia PTY Limited. *** Comprises professional services trading within accesso Ireland Limited and Blazer and Flip Flops Inc. The assets consisting of Professional services are comprised of the assets derived from the acquisition of accesso Ireland Limited (formally Boxer Consulting Limited) and certain assets previously disclosed within The Experience Engine. The Experience Engine CGU was revised during the year ended 31 December 2023 to reflect the structural changes within the Group. There was no goodwill or indefinite intangible assets within the CGU formally known as The Experience Engine in either the current or prior year. Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 17. Intangible assets continued Impairment testing of goodwill continued Operating margins have been based on experience, where possible, and future expectations in the light of anticipated economic and market conditions. Growth rates beyond the formally budgeted period are based on economic data pertaining to the industry and region concerned. The discount rates applied to all CGUs was a pre-tax measure estimated based on comparable listed company gearing and capital structures, an equity risk premium and risk-free rate applicable to the country, small stock premium relative to the market and size of business and an appropriate cost of debt relative to market conditions. Sensitivity analysis A considerable amount of judgement is applied in setting discount rates, forecasts and terminal values. If any of the following changes were made to the following key assumptions, the carrying value and recoverable amount would be equal as at 31 December 2023. Pre-tax discount rate EBITDA growth rate during detailed forecast period (average) Terminal growth rate Excess over carrying value ($000) Ticketing and Distribution* accesso LoQueue** 2023 2022 2023 2022 Increase by 10.8% Reduce by 39.2% Reduce by 28.3% to a terminal rate of -26.3% $92,259 Increase by 11.7% Reduce by 45.0% Reduce by 27.6% to a terminal rate of -25.6% $79,790 Increase by 13.2% Reduce by 40.1% Reduce by 19.9% to terminal rate of -17.9% $27,684 Increase by 14.7% Reduce by 48.4% Reduce by 52.0% to terminal rate of -50.0% $44,791 * Comprises the products accesso Passport & Siriusware (CGU1); accesso ShoWare (CGU2); Ingresso (CGU3); accesso Paradox (CGU7) and accesso Horizon (CGU8) within all trading entities as disclosed in note 19. ** Comprises accesso LoQueue trading within accesso Technology Group plc; Lo-Q, Inc.; Lo-Q Service Canada Inc. and accesso Australia PTY Limited. We do not consider there are any plausible changes in assumptions that would give rise to an impairment in Ticketing and Distribution or accesso LoQueue over the next financial year. There is no reasonably possible change in the key assumptions that would reduce the recoverable amount of professional services (CGU 9) to equal the carrying value as the recoverable amount is achieved within the forecast 5-year period. 94 Environmental risk in cash flows It is expected that air travel will be reduced in the longer term in response to climate change agendas and we have considered this risk in our cash flow forecasting for impairment testing. The majority of the venues we serve have typically localised customer bases rather than being reliant on destination travel; consequently we consider the risk as minimal on our forecasts. The below table sets out the intangible asset impairments recorded within accesso LoQueue, The Experience Engine and the Ticketing and Distribution segment: 2023 2022 accesso LoQueue $000 Professional services $000 Ticketing and Distribution $000 Total $000 accesso LoQueue $000 Professional services $000 Ticketing and Distribution $000 Intangible assets Impairment of specific development projects* Impairment charge recorded within administrative expense – 6 6 – – – – – – – 6 6 – 32 32 – – – – – – Total $000 – 32 32 A review of all project development costs capitalised was performed at year end with $0.06m impairment charges recorded. No intangible asset impairment reversals were recorded within the Group during the current or prior year. Development costs not yet available for use Development cost assets not yet available for use reside in the CGUs as follows and are considered annually for impairment in line with the goodwill attached to those CGUs. These capitalised costs relate to development projects which have not been put into use as at the year end: Entity name (and CGU) accesso, LLC & Siriusware, Inc. (CGU 1 and 6) ShoWare (CGU 2) accesso Technology Group plc (CGUs 5 and 6) 2023 $000 464 – 974 2022 $000 518 70 1,289 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 18. Property, plant and equipment The cost and depreciation of the Group’s tangible fixed assets are detailed in the following table: Furniture & fixtures $000 Leasehold improvements $000 Totals $000 Cost At 31 December 2021 Cost At 31 December 2021 Foreign currency translation Additions Disposals At 31 December 2022 Foreign currency translation Additions Acquisition through business combination Disposals At 31 December 2023 Depreciation At 31 December 2021 Foreign currency translation Charged Disposals At 31 December 2022 Foreign currency translation Charged Disposals At 31 December 2023 Net book value At 31 December 2023 At 31 December 2022 Installed systems $000 Plant, machinery and office equipment $000 1,635 3,686 (19) 197 (10) 1,803 10 22 – (97) 1,738 (106) 516 (1,088) 3,008 40 411 113 (672) 2,900 2,023 (71) 20 (836) 1,136 33 205 83 (418) 1,039 1,078 2,595 1,565 (12) 414 (7) 1,473 9 180 (87) 1,575 163 330 (81) 572 (1,043) 2,043 73 620 (648) 2,088 812 965 (60) 189 (757) 937 29 122 (383) 705 334 199 Foreign currency translation Additions Disposals At 31 December 2022 Foreign currency translation Additions Disposals At 31 December 2023 Depreciation At 31 December 2021 Foreign currency translation Charged Disposals At 31 December 2022 Foreign currency translation Charged Disposals At 31 December 2023 Net book value At 31 December 2023 At 31 December 2022 487 – 34 (244) 277 – – 41 (247) 71 357 – 52 (241) 168 – 53 (187) 34 37 109 7,831 (196) 767 (2,178) 6,224 83 638 237 (1,434) 5,748 5,595 (153) 1,227 (2,048) 4,621 111 975 (1,305) 4,402 1,346 1,603 Refer to note 23 for details of security over the Group’s property, plant and equipment by banking providers. The cost and depreciation of the Company’s tangible fixed assets are detailed in the following table: 95 Installed systems $000 Plant, machinery and office equipment $000 Furniture & fixtures $000 158 (16) 27 – 169 9 – – 178 93 (10) 53 – 136 7 19 – 162 16 33 1,006 (107) 50 (27) 922 53 102 (27) 1,050 772 (83) 111 (19) 781 46 93 (23) 897 153 141 690 (71) – – 619 34 – (1) 652 545 (57) 36 – 524 30 35 (1) 588 64 95 Totals $000 1,854 (194) 77 (27) 1,710 96 102 (28) 1,880 1,410 (150) 200 (19) 1,441 83 147 (24) 1,647 233 269 Refer to note 23 for details of security over the Group’s property, plant and equipment by banking providers. Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 19. Investments Investment in subsidiaries The investment balance on the Company’s books at 31 December 2023 is as detailed below: Cost At 31 December 2022 Capital contribution to subsidiaries1 Purchase of subsidiaries Return of capital from subsidiaries2 Foreign currency translation At 31 December 2023 Cost At 31 December 2021 Capital contribution to subsidiaries1 Foreign currency translation At 31 December 2022 $000 Net book value 167,652 3,042 55,277 (13,397) 9,172 221,746 184,768 2,490 (19,606) 167,652 1 Capital contribution to subsidiaries represents share-based payment charges for awards made to employees of the subsidiary companies. 2 Dividends are recognised in the profit or loss of the Company, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investments carrying amount as a return of capital. Name Lo-Q, Inc1 Lo-Q Service Canada Inc.1 Lo-Q (Trustees) Limited2 accesso, LLC.1 Siriusware, Inc.1 Lo-Q Limited2 VisionOne Worldwide Ltd.3 VisionOne, Inc.1 VisionOne S.A. de C.V.4 ShoWare Brasil Ltda5 accesso Australia PTY Limited6 Blazer and Flip Flops Inc.1 Ingresso Group Limited2 accesso Netherlands BV7 96 Country of incorporation Principal activity 15 United States of America 15 Canada 15 United Kingdom 16 United States of America 16 United States of America 15 United Kingdom 15 British Virgin Islands 15 United States of America 16 Mexico 17 Brazil 15 Australia 16 United States of America 15 United Kingdom 16 Netherlands Software services Software services Dormant company Software services Software services IP holder Holding company Software services Software services Software services Software services Software services Software services Software services Name accesso (Shanghai) Co., Ltd.8 Ingresso US, Inc.9 Ingresso USA, Inc.1 accesso Solutions, LLC1 accesso Paradox, Inc. (formerly Paradocs Solutions, Inc.)10 accesso Ireland Holdings Limited11 accesso Ireland Limited11 VGS USA Holding, Inc.1 accesso Inc.1 (formerly Vanguard Generation Solutions Inc.) accesso Singapore Ltd.12 (formerly VGS Asia PTE Ltd) accesso Italy s.r.l (formerly VGS s.r.l)13 VGS ME DMCC14 All shares owned are ordinary shares. Country of incorporation Principal activity 15 China 16 United States of America 16 United States of America 16 United States of America Dormant company Dormant company Dormant company Dormant company 16 Canada Ireland 15 Ireland 16 16 United States of America Software services Holding company Software services Holding company 16 United States of America Software services 15 Singapore 15 15 United Arab Emirates Italy Software services Software services Software services As required by the Companies Act, the registered addresses of each business are: 1. Registered address of 100 Technology Park, Suite 165, Lake Mary, FL USA. 2. Registered address of Unit 5, The Pavilions, Ruscombe Park, Twyford, Berkshire RG10 9NN, UK. 3. Registered address of Wickhams Cay II Road Town Tortola, British Virgin Islands, Zip Code VG1110. 4. Registered address of Montecito #38, Piso 42 Oficinas 12 Colonia Napoles, 03810, Mexico City, Mexico, D.F. 5. Registered address of Rua Realengo, 140 – Vila Madalena, Sao Paulo, Sao Paulo, Brazil, Zip Code 05451-030. 6. Registered address of PO Box 432, Chatswood, NSW 2057, Australia. 7. Registered address of Butterwick 1, London, W6 8DL, UK. 8. Registered address of No.778, Chuangxin West Road, FTA, Shanghai, China. 9. Registered address of 19C Trolley Square, Wilmington, Delaware, DE 19806, USA. 10. Registered address of 660 Avenue Royale, Quebec, QC, Canada, G1E 1Y7. 11. Registered address of 1st Floor, The Liffey Trust Centre, 117-126 Sheriff Street Upper, Dublin. 12. Registered address of 7500A Beach Rd, #13-301 VGS Asia Pte Ltd, Singapore 199591. 13. Registered address if Via Tonale, 26 Milano Lombardia, 20125. 14. Registered address of Unit 1203, SABA 1 – Cluster E – Jumeirah Lake Towers – Dubai – United Arab Emirates. 15. 100% wholly owned subsidiary directly by accesso Technology Group plc. 16. 100% owned through wholly owned subsidiary of accesso Technology Group plc. 17. 99.99% owned through a wholly owned subsidiary of accesso Technology Group plc. Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 20. Inventories Stock Group Company 2023 $000 1,115 1,115 2022 $000 499 499 2023 $000 44 44 2022 $000 15 15 The amount of inventories recognised as an expense and charged to cost of sales for the year ended 31 December 2023 was $1.0m (2022: $0.5m). 22. Trade and other payables Current Trade creditors Current other creditors Amounts owed to Group undertakings Accruals Social security and other taxes Group 2023 $000 20,188 2,461 – 10,913 1,377 34,939 2022 $000 17,624 1,347 – 11,654 1,465 32,090 Company 2023 $000 1,498 961 23,370 2,119 362 28,310 2022 $000 360 70 11,313 1,372 271 13,386 21. Trade and other receivables Trade debtors Other debtors Amounts owed by Group undertakings Financial assets Prepayments Group Company 2023 $000 24,948 523 – 25,471 4,229 29,700 2022 $000 23,462 1,249 – 24,711 4,074 28,785 2023 $000 3,549 30 4,535 8,114 1,186 9,300 2022 $000 4,421 359 2,488 7,268 1,397 8,665 Included within trade and other payables are financial instruments of $25.7m and $27.2m for Group and Company respectively. Financial instruments comprise of trade creditors, current other creditors, amounts owed to Group undertakings and a portion of accruals where there is an obligation for them to be cash settled. Of the $10.9m of accruals for Group, $3.1m (2022: $2.7m) constitute financial liabilities and of the $2.1m for Company, $1.4m (2022: $0.8m) are financial liabilities. The Group’s financial liabilities are generally short term in nature. In the opinion of the Directors, the book values approximate to their fair value. Included within trade creditors are amounts payable to ticket suppliers. In certain agreements, the Group receives the total cash from the sale of the ticket. The Group’s financial assets are short term in nature. In the opinion of the Directors, the book values approximate to their fair value. No expected credit losses have been recognised on accrued income, contract assets or other debtors as these are not considered material. An expected credit loss provision has been recognised in respect of trade debtors in the Group and Company financial statements of $0.3m and $nil respectively. An expected credit loss provision has also been recognised in the Company financial statements of $0.9m (2022: $0.6m) in respect of intercompany receivables due from subsidiary undertakings. Included within trade debtors are amounts owed to the Group from ticket sales, equating to the total value of the ticket and the commission earned by the Group. The value of the ticket, less the commission, is payable to the supplier of the ticket, and is not revenue to the Group. 97 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 23. Borrowings 24. Called up share capital Group Company 2023 2022 Bank loans Arrangement fees, less amortised cost 2023 $000 21,250 (901) 20,349 2022* $000 – (356) (356) 2023 $000 21,250 (910) 20,349 2022* $000 – (356) (356) * In 2022, while the Group was undrawn on the loan facility with Investec Bank PLC, capitalised arrangement fees were included within Other Debtors. In 2023, the capitalised arrangement fees on the loan facility with HSBC UK Bank PLC are presented net of the bank loan. On 26 May 2023, the Group secured a $40.0m revolving credit facility with a four-year term, to May 2027, accompanied by a $20.0m accordion option HSBC UK Bank PLC. The facility is secured through fixed and floating charges over assets belonging to material Group entities: accesso Technology Group plc, Lo-Q Inc, accesso, LLC, Siriusware, Inc, VisionOne, Inc, Blazer and Flip-flips, Inc and Ingresso Group Limited. The Group also has a general undertaking to ensure that entities acting as guarantors to the HSBC facility aggregate to at least 85% of the Group’s Cash EBITDA. Post year end the Group obtained a waiver from this requirement as a result of the existing guarantors falling below the 85% threshold, due to greater than anticipated growth in an acquired entity, accesso Italy s.r.l, and the accession of additional entities not taking place within the required timeframe. This waiver is conditional on the accession of two additional entities, Lo-Q Service Canada Limited and Lo-Q Limited, by 30 April 2024 to ensure the general undertaking continues to be met. The Group does not foresee any issues with this accession and this does not impact the Directors’ going concern assessment. As at 31 December 2023, the Group had drawn $21.3m ($20.4m net of finance costs) which was used to partially fund the three acquisitions made by the Group. Ordinary shares of 1p each Opening balance Issued in relation to exercised share options Re-purchase of shares for cancellation Contingent consideration settled in shares Closing balance Number 41,394,647 718,976 (299,272) 29,409 41,843,760 $000 597 9 (4) 1 603 Number 41,267,376 127,271 – – 41,394,647 $000 596 1 – – 597 During 2023, 718,976 shares (2022: 121,271 shares), with a nominal value $9,145 (2022: $1,549), were allotted following the exercise of share options. The number of shares held by the accesso Technology Group plc Employee Benefit Trust as at 31 December 2023 was 1,136,942 shares (2022: 761,971). 374,971 shares (2022: 761,971) were purchased by the Employee Benefit Trust during the year. During the year, the Board approved a share repurchase programme of up to £4.0m. As at the year end, the Company had repurchased and cancelled a total of 299,272 shares for a total of $2.2m (GBP £1.8m). The programme was concluded on 29 February 2024 with a total repurchase and cancellation of 706,984 shares for a total consideration of $5.0m (GBP £4.0m). In 2023, 29,409 shares (2022: nil) were issued in relation to the settlement of contingent consideration. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. This HSBC facility replaces the Group’s undrawn £18.0m arrangement with Investec from 19 March 2021, which was due to expire in March 2024. The £18.0m Investec facility has been cancelled and associated security held has been released. Following the adoption of new Articles of Association on 12 April 2011, the Company no longer has an authorised share capital limit. All issued share capital is fully paid as at 31 December 2023. 98 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 25. Reserves The following describes the nature and purpose of each reserve within equity: 28. Share-based payment schemes and transactions Share option schemes At 31 December 2023 the following share-based incentives were outstanding in respect of the ordinary shares: Reserve Description and purpose Share premium: Own shares held in trust: Weighted average cost of own shares held by the accesso Technology Amount subscribed for share capital in excess of nominal value Merger relief reserve: Retained earnings: Translation reserve: Capital redemption reserve: Employee Benefit Trust The merger relief reserve represents the difference between the fair value and nominal value of shares issued on the acquisition of subsidiary companies, where the Company has taken advantage of merger relief All other net gains and losses and transactions not recognised elsewhere Gains/losses arising on retranslating the net assets of overseas operations into US dollars Nominal value of shares repurchased by the company and subsequently cancelled. Scheme EMI Scheme UK CSOP Scheme UK unapproved Scheme US Scheme 26. Pension commitments The Group operates defined contribution pension schemes in North America and Europe. The assets of each scheme are held separately from those of the Group in independently administered funds. The pension charge represents contributions payable by the Group to the funds. The amounts related to the charge in the period and payable at period end are: Pension charge in the period Payable to the funds (included within other creditors) 27. Related party disclosures Ultimate controlling party There is no ultimate controlling party. 2023 $000 2,053 318 2022 $000 1,662 102 Other schemes Long-Term Incentive Plan Share plan 2021 Subsidiaries All intercompany revenues, expenses, and balances between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and have not been included in this note. These transactions are carried out on an arms-length basis which comprise recharging of costs incurred, or reallocation of revenue received as well as annual adjustments recorded in accordance with the Group’s transfer pricing policies. Canada Share Plan 2023 Number of shares Period of option Price per share 2,500 19,405 29,640 6,600 9,050 1,895 20,000 22,450 42,950 97,150 7,500 88,000 87,420 1,650 7,000 8,840 196,422 74,600 296,041 248,315 6,148 769,810 121,250 8,670 2,195 196,110 83,800 3,000 58,208 185 2,516,804 23 January 2017 to 22 January 2024 22 March 2021 to 21 March 2028 13 May 2023 to 13 May 2029 15 April 2018 to 15 April 2025 29 April 2019 to 28 April 2026 22 March 2021 to 21 March 2028 30 March 2022 to 21 March 2028 23 January 2018 to 22 January 2024 15 April 2018 to 15 April 2025 29 April 2019 to 28 April 2026 12 July 2021 to 21 March 2028 21 March 2022 to 21 March 2028 13 May 2023 to 13 May 2029 29 April 2019 to 28 April 2026 22 March 2022 to 22 March 2028 13 May 2023 to 13 May 2029 16 September 2021 to 16 September 2024 17 March 2022 to 30 October 2024 25 March 2022 to 30 October 2024 25 April 2023 to 25 October 2025 11 July 2023 to 10 July 2025 20 June 2023 to 19 June 2026 31 July 2022 to 31 July 2031 27 May 2023 to 26 May 2032 15 May 2023 to 26 May 2032 20 June 2023 to 19 June 2033 4 August 2023 to 3 August 2027 1 November 2023 – 19 June 2033 20 June 2023 to 19 June 2033 4 August 2023 to 19 June 2033 697.5 p 775 p 775 p 557.5 p 1105 p 775 p 775 p 679.5 p 557.5 p 1105 p 775 p 775 p 775 p 1105 p 775 p 775 p 1 p1 –1 –1 –1 –1 –1 – – – – – – 1p 1p 99 1 Vesting is conditional on achievement of certain market-based conditions. Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 28. Share-based payment schemes and transactions continued Equity-settled share option schemes Details of the number of share-based incentives and the weighted average exercise price (WAEP) outstanding during the period are as follows: Long-Term Incentive Plan During the current and prior period, the Group granted conditional share awards (“awards”) over ordinary shares of 1 penny under the Long-Term Incentive Plan with their vesting periods set out in the table above. Awards are required to be held for a further six months after the vest date, as well as being subject to certain performance conditions. Outstanding at beginning of year Granted during the year Exercised during the year Leavers, lapsed & other 2023 2022 Number WAEP (pence) Number WAEP (pence) 2,212,754 1,141,010 (718,976) (117,984) 202.45 0.05 14.45 448.22 2,184,659 299,434 (127,271) (144,068) 227.76 0.93 76.80 354.10 Outstanding at end of the year 2,516,804 153.42 2,212,754 202.45 Exercisable at the end of the year 648,472 594.96 529,720 842.06 The exercise price of options outstanding at 31 December 2023 range between 0p and 1105p (2022: 0p and 1105p) and their weighted average contractual life was 2.48 years (2022: 2.95 years). The weighted average share price at the date of exercise for share options exercised during the period was 710.18p (2022: 684.05p). Share awards were granted in the period and the inputs to the model for options issued in the current period were as follows: Weighted average exercise price of options issued during the period (pence) Expected volatility (%) Expected life beyond vesting date (years) Risk free rate (%) Dividend yield (%) 2023 710.18 45.5% 2.83 4.3% – Both share awards and long-term incentives were issued in the current year. The Group did not enter into any share-based payment transactions with parties other than employees during the current or previous period. Expected volatility was determined by calculating the historic volatility of the Group’s share price over the previous 12-month period. Expected life is based on the Group’s assessment of the average life of the option following the vesting period. 100 The fair values of the awards at the dates of grant were calculated using the Monte Carlo statistical modelling approach to reflect the market conditions within the award conditions. The award dates, number of awards granted assuming the performance conditions are fully met, and inputs to the valuation model were as follows: Long-term incentive awards issued 2023 Awards issued Expected volatility (%) Expected life years Risk-free rate (%) Dividend yield (%) 20 June 2023 790,842 45.5% 3 4.3% – Long-term incentive awards issued 2022 11 July 2022 25 April 2022 Awards issued Expected volatility (%) Expected life years Risk-free rate (%) Dividend yield (%) 6,148 67.7% 3 2.8% – 279,111 67.7% 3 2.8% – Refer to the remuneration report on page 49 for a breakdown of the vesting conditions related to each award. Change of control provisions The change of control provisions explained on page 47 of the remuneration report have not impacted the current period share-based payment charges as no change of control is considered probable as at 31 December 2023. Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 29. Reconciliation of net cash flow to movements in net funds and analysis of net funds The amounts disclosed on the cash flow statement in respect of cash and cash equivalents are in respect of these balance sheet amounts. Reconciliation of liabilities arising from financing activities The changes in the Group’s liabilities from financing activities can be classified as follows: Group Cash in hand & at bank Company Cash in hand & at bank Group Cash in hand & at bank Company Cash in hand & at bank 2022 $000 Cash flow $000 Exchange movement $000 2023 $000 At 1 January 2022 Cash flows 64,663 (14,490) 1,641 51,814 15,612 (6,748) 814 9,678 2021 $000 Cash flow* $000 Exchange movement $000 2022 $000 64,050 3,136 (2,523) 64,663 Drawings on loan Repayments Payment of arrangement fee and other transaction costs Non-cash movements Effects of foreign exchange Lease liabilities additions/modifications in the year Interest expense At 31 December 2022 Cash flows Drawings on loan Repayments Payment of arrangement fee and other transaction costs 18,198 (654) (1,932) 15,612 Non-cash movements * This number was previously disclosed net of payments from lease liabilities. The disclosure has been amended in the current year for clarity to present the gross cash flows. The cash in hand & at bank includes the following amounts held on short-term deposit: Effects of foreign exchange Lease liabilities additions Lease liabilities acquired through business combination Release of capitalised finance costs Interest expense 65 day notice sterling account denominated in sterling: $0.07m (2022: $0.06m). At 31 December 2023 Group net cash reconciliation The Group did not draw on its facility during the year ended 31 December 2022. Borrowings (including capitalised finance costs) Less: Cash in hand & at bank Net cash Note 23 2023 $000 (20,349) 51,814 31,465 2022 $000 – 64,663 64,663 Borrowings $000 Lease liabilities $000 – – – – – – – – 35,000 (13,750) (1,040) (17) – – 156 – 20,349 3,736 – (1,430) – (59) (1,217) 190 1,220 – (668) – 13 125 1,178 – 101 1,969 101 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements 30. Leases The Group leases commercial office space and a single warehouse. The leases typically run for periods of 10 years, with a 5-year break clause. Lease liabilities are assumed to extend to the full term of the lease where there is a reasonable assumption that the break period will not be utilised. Lease payments are renegotiated every 5 years to reflect market rentals. Some leases provide for additional rent payments that are based on changes in local price indices. No restrictive covenants exist preventing the Group from subletting properties. The Group leases office equipment with contract terms of 1 to 3 years. These leases are short term and/or leases of low-value items. The Group has elected not to recognise right of use assets and lease liabilities for these leases. During 2023, the Group sublet the remainder of its leased property in Lake Mary, Florida. As a result, a net investment in the sublease has been recognised for the year ended 31 December 2023. During 2022, the Group exited a large proportion of its leased property in Lake Mary, Florida. A termination penalty of $0.4m, was incurred and considered to be a payment against the remaining obligation of the lease. The right of use asset and corresponding lease obligation for the remaining space held in Lake Mary were adjusted to reflect the reduced scope of the lease. Information about leases for which the Group is a lessee is presented below. Right of use assets Cost At 1 January 2022 Additions Disposals Foreign currency translation At 31 December 2022 Additions Acquired through business combination Disposals Foreign currency translation At 31 December 2023 Depreciation At 1 January 2022 Charged Disposals Foreign currency translation At 31 December 2022 Charged Disposals Foreign currency translation At 31 December 2023 Net book value At 31 December 2022 At 31 December 2023 Land and buildings Group $000 Company $000 6,042 94 (3,307) (90) 2,739 131 1,192 (1,416) 64 2,710 (2,989) (773) 1,960 43 (1,759) (467) 1,159 (34) (1,101) 957 – – (103) 854 – – – 47 901 (483) (111) – 55 (539) (111) – (32) (682) 980 1,609 315 219 102 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements Group $000 Company $000 (3,736) (66) (190) 1,430 1,283 59 (1,220) (125) (1,178) (101) 668 (13) (1,969) Contractual minimum lease payments The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be paid after the reporting date for the Group and Company: Lease liability maturity Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years Short-term and low-value leases Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years Group 2023 $000 193 600 416 504 258 Group 2023 $000 21 11 – – – Company 2023 $000 38 117 98 – – Company 2023 $000 – – – – – When measuring lease liabilities for leases that were classified as operating leases, the Group discounted lease payments using its incremental borrowing rate at 1 January 2023. The weighted average rate applied is 5.94% (2022: 6.38%). (575) – (24) 159 – 60 (380) – – (17) 162 (19) (254) Total $000 (380) (254) 30. Leases continued Lease liabilities Cost At 1 January 2022 Additions Interest expense Lease payments cash flow Impact of lease modification Foreign currency translation At 31 December 2022 Additions Acquired through business combination Interest expense Lease payments cash flow Foreign currency translation At 31 December 2023 Maturity At 31 December 2022 At 31 December 2023 Group Company Current $000 Non current $000 Total $000 Current $000 Non current $000 (451) (792) (769) (1,177) (1,220) (1,969) (140) (156) (240) (98) Extension options Some property leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options and builds this into the right of use asset and liability calculation. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control. 103 Notes to the consolidated financial statements continuedfor the financial year ended 31 December 2023Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Governance Financial Statements Financial Statements Notes to the consolidated financial statements continued for the financial year ended 31 December 2023 30. Leases continued Lease receivables Information about leases for which the Group is a lessor is presented below. Maturity At 31 December 2022 At 31 December 2023 Group Company Current $000 Non current $000 – 165 – – Total $000 – 165 Current $000 Non current $000 – – – – Total $000 – – The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the reporting date for the Group and Company: Lease receivables maturity Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years Total undiscounted lease payments receivable Unearned finance income Other direct costs Net investment in lease Group 2023 $000 40 121 – – – 161 (6) 10 165 Company 2023 $000 – – – – – – – – – 104 Contents Generation – PageContents Generation – Sub PageContents Generation – Sectionaccesso Technology Group plc | Annual Report & Accounts 2023 Strategic Report Governance Financial Statements Company information for the financial year ended 31 December 2023 Directors: Secretary: Registered office: Bill Russell, Non-Executive Chairman Steve Brown, Chief Executive Officer Fern MacDonald, Chief Financial Officer Andy Malpass, Non-Executive Director Jody Madden, Non-Executive Director Anne-Marie Palmer Unit 5, The Pavilions Ruscombe Park Twyford Berkshire RG10 9NN Unit 5, The Pavilions Ruscombe Park Twyford Berkshire RG10 9NN Registered number: 03959429 (England and Wales) Grant Thornton UK LLP 30 Finsbury Square London EC2A 1AG Lloyds Bank PLC The Atrium Davidson House Forbury Square Reading Berkshire RG1 3EU HSBC UK Bank PLC Level 7, Thames Tower Station Road Reading RG1 1LX Auditor: Bankers: 105 Contents Generation – PageContents Generation – Sub PageContents Generation – SectionCBP018218 Printed by a Carbon Neutral Operation (certified: CarbonQuota) under the PAS2060 standard. Printed on material from well-managed, FSC™ certified forests and other controlled sources. This publication was printed by an FSC™ certified printer that holds an ISO 14001 certification. 100% of the inks used are HP Indigo ElectroInk which complies with RoHS legislation and meets the chemical requirements of the Nordic Ecolabel (Nordic Swan) for printing companies, 95% of press chemicals are recycled for further use and, on average 99% of any waste associated with this production will be recycled and the remaining 1% used to generate energy. The paper is Carbon Balanced with World Land Trust, an international conservation charity, who offset carbon emissions through the purchase and preservation of high conservation value land. Through protecting standing forests, under threat of clearance, carbon is locked-in, that would otherwise be released. accesso Technology Group plc Unit 5, The Pavilions Ruscombe Park Twyford Berkshire RG10 9NN www.accesso.com 

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