ANNUAL REPORT 2023 Managing the Health, Safety and Security of People and Property. Safety Health & Safety Food Safety Legionella & Occupational Hygiene Statutory Examination (Work Equipment) Training (Accredited & Bespoke) Training & Consultancy ISO 9001 ISO 14001 ISO 27001 ISO 45001 ISO 13485 Systems CCTV Security Tagging (Systems & Consumables) Foot Fall Counting / Analysis Product Protection Security Labels Security 2024 PHSC plc 1 CONTENTS OF THE ANNUAL REPORT for the year ended 31 March 2024 Page Company Information 2 Strategic Report 3 Report of the Directors 12 Statement of Directors’ Responsibilities 16 Corporate Governance Statement 17 Independent Auditor’s Report 23 Group Statement of Financial Position 28 Group Statement of Comprehensive Income 29 Group Statement of Changes in Equity 30 Group Statement of Cash Flows 31 Accounting Policies 32 Notes to the Financial Statements 36 Company Financial Statements Company Statement of Financial Position 53 Company Statement of Changes in Equity 54 Company Statement of Cash Flows 55 Notes to the Financial Statements 56 Notice of Annual General Meeting 65 Annex 1 – Form of Directors’ Deed of Release 69 Annex 2 – Form of Shareholders’ Deed of Release 70 Form of Proxy 71 PHSC plc 2 COMPANY INFORMATION for the year ended 31 March 2024 DIRECTORS: S A King N C Coote G N Webb MBE L E Young SECRETARY: SGH Company Secretaries Limited REGISTERED OFFICE & BUSINESS ADDRESS: Te Old Church 31 Rochester Road Aylesford Kent ME20 7PR REGISTERED NUMBER: 4121793 (England and Wales) AUDITOR: Crowe U.K. LLP Chartered Accountants & Registered Auditor 40-46 High Street Maidstone Kent ME14 1JH SOLICITORS: Gullands 16 Mill Street Maidstone Kent ME15 6XT REGISTRARS: Neville Registrars Limited Neville House Steelpark Road Halesowen West Midlands B62 8HD NOMINATED ADVISER: Strand Hanson Limited 26 Mount Row London W1K 3SQ BROKER: Novum Securities Limited 7-10 Chandos Street London W1G 9DQ PHSC plc 3 STRATEGIC REPORT for the year ended 31 March 2024 FINANCIAL HIGHLIGHTS • EBITDA of £0.510m compared to £0.366m in the prior year • Statutory profit after tax of £0.249m compared to £0.243m in the prior year • Group sales revenue of £3.778m, up from £3.438m in the prior year • Group net assets of £3.275m after share buybacks, down from £3.638m • Statutory earnings per share of 2.19p compared to 2.05p in the prior year • Cash reserves of £0.488m at the year end and after share buybacks, down from £0.750m for the prior year • Final dividend of 1.25p proposed, making a total of 2.00p for the year compared with 1.5p last year 31.3.24 31.3.23 £ £ Profit before tax 332,317 304,598 Less: interest received (17,309) (1,346) Add: goodwill impairment regarding RSA Environmental Health Limited (RSA) 120,000 – Add: depreciation 74,515 63,034 EBITDA* 509,523 366,286 * EBITDA is calculated as earnings before interest, tax, depreciation and impairment charges. Tis is used by the board as a measure of underlying trading and has been provided to assist shareholders in understanding the Group’s trading activities. Te Company confirms that, subject to shareholder approval at its Annual General Meeting (AGM), a final dividend of 1.25p will be payable on 4 October 2024 to shareholders on the register on 20 September 2024. PHSC plc 4 STRATEGIC REPORT (continued) for the year ended 31 March 2024 CHIEF EXECUTIVE OFFICER’S REPORT For the first time since 2015, the Group is able to report unadjusted EBITDA in excess of £0.5m and our highest statutory profit over that nine-year period. Tis reflects a generally satisfactory performance across all subsidiaries, with some business streams naturally faring better than others in the current environment. Details about individual subsidiary performance are provided later in this report, along with general commentary surrounding the headline numbers. Every year the board assesses the value of goodwill in the Group statement of financial position and forms a view as to whether such value remains realistic and justifiable. Following extensive evaluation, discussion and technical advice, the board has determined that it should write down the goodwill in respect of RSA by £120,000 and the carrying value of QLM by £94,890. Tese adjustments principally stem from a revision in the Group’s weighted average cost of capital (WACC) utilised in the impairment assessment exercise which reflects the significant rise in interest rates and therefore the cost of debt. Accordingly, considering various factors, including a Bank of England base rate of 5.25% (at the date of assessment) there has been a consequent downgrading of valuations. Tere is no goodwill attached to B2BSG, and there is sufficient headroom in the valuations of our other trading subsidiaries to avoid a similar impairment requirement. Te board remains confident in its valuations of all subsidiary companies. As was the case in the previous year, the board embarked on a share buyback programme in accordance with the authority granted at the 2023 Annual General Meeting (AGM). In March 2024, we purchased a total of 753,384 ordinary shares into treasury for the purposes of subsequent cancellation. Since our first successful buyback programme in 2021, we have seen the Company’s issued share capital fall from 14,677,257 to 10,280,853 representing a reduction of approximately 30%. Te lower number of issued shares should, inter alia, make it more affordable to increase dividend payments going forwards. Te Group intends to seek renewed authority at the 2024 AGM for further potential share buybacks and, subject to this being granted, will consider in due course whether shareholders’ best interests would be served by acting on such authority. GENERAL BUSINESS REVIEW AND OUTLOOK Systems Division Te principal activities continued to be those of providing consultancy and training services to a wide range of clients across different sectors. Our position as a United Kingdom Responsible Person (acting on behalf of manufacturers of medical devices outside the UK) has also grown in the year, and benefits from long-term contracts and strong working relationships. During the year, management secured an extension to the lease of the division’s premises including its training facilities, from September 2024 for a further five years. Tis security of tenure enables the business to look to the future with confidence. Safety Division Te principal activities of our subsidiaries in the Safety Division were the provision of health and safety consultancy and training services to public and private sector clients. Sectors where this division is particularly strong include leisure, education, housing, transport and health care. Our primary income streams are supplemented by the preparation of expert witness reports in connection with criminal and other legal cases, and some editorial content for safety publications. We also carry out statutory examinations of plant and equipment, either directly for clients or via insurance intermediaries. Security Division Tere has been a well-publicised rise in cases of shoplifting reflecting a tougher economic climate for the average household. Tis has led some clients to upgrade their existing security hardware and to expand the number of items that are protected by electronic article surveillance devices such as tags and labels. PHSC plc 5 STRATEGIC REPORT (continued) for the year ended 31 March 2024 It is pleasing to report that for the first time in several years, the Security Division was a net contributor to Group profits. Management continued to concentrate on tight cost control and increasing margins where possible, along with generating higher sales from current and new customers. With the majority of clients in the retail sector, the focus has been to try to rely less on stores in the fashion trade where spend is discretionary, and more on supermarkets selling core and essential products. Despite much of the year’s revenue arising from one-off projects or now completed contracts, management are confident that the Security Division will make a positive contribution again in 2024-25. Cash Reserves Cash at bank reduced from £749,627 to £488,375. Te fall in cash reserves reflects the final and interim dividend distributions of circa £193,000 coupled with buyback costs totalling approximately £419,000 since March 2023. Most of the combined outlay of approximately £612,000 was financed through the Group being strongly cash generative, with the balance drawn from pre-existing cash reserves. Te Group renewed its annual facility with HSBC Bank plc in the normal course in October 2023 but has no borrowings nor any expectation that such facility will need to be called upon. Net asset value Te consolidated balance sheet net asset value (NAV) of £3.275m as at 31 March 2024 equates to approximately 29.7 pence per share which was in excess of the Company’s then prevailing market share price of 26 pence, albeit the Company’s shares were trading at a narrower discount to NAV than the prior year. Total assets at the end of the previous year were higher at £3.638m (circa 30.7 pence per share) versus a then prevailing market share price of 14.5 pence. Outlook Te board is confident that the trading subsidiaries can each contribute to Group profits in 2024-25 and that it will be possible to modestly increase fees across most of the sectors in which we operate. Economists are predicting that inflation rates have now stabilised, and our expectation is that this should lead to a general improvement in consumer confidence and potentially higher investment in the services we offer. Trading update Unaudited management accounts for the Group for Q1 of the current financial year show total revenue of approximately £0.772m and EBITDA of around £0.015m (Q1 2023-24: £0.754m and £0.049m respectively). Expenditure during Q1 was affected by five- figure employment agency fees as the Group recruited five new staff, four full-time equivalents. One is a direct replacement and the others are to improve resources across the Group in anticipation of future increases in demand. Dividends A total dividend of 1.5p per ordinary share was paid in respect of the year ended 31 March 2023; £59,190 was paid in January 2023 and the balance of £110,253 in October 2023. An interim dividend of 0.75p in respect of the year ended 31 March 2024 was paid in January 2024 (£82,757) and a final dividend of 1.25p is proposed, subject to shareholder approval, for payment in October 2024, an increase of 0.5p on last year’s total. Te cost of the 1.25p proposed final dividend is expected to be approximately £128,500. Our cash flow forecasts are predicting that this will be affordable, and dividends from our trading subsidiaries will be declared in order to cover any deficit in reserves within PHSC plc at that time. In addition to the proposed final dividend to be put to shareholders for approval at the 2024 AGM, the directors have become aware of a technical breach of the Companies Act 2006 in respect of the interim dividend of 0.75p per ordinary share paid in January 2024 due to insufficient reserves in PHSC plc at the time of payment. Accordingly, a resolution will be proposed at the 2024 AGM to ratify the interim dividend payment and thereby resolve this issue. PERFORMANCE BY TRADING SUBSIDIARY Te Group currently measures the following key performance indicators (KPIs). PHSC plc 6 STRATEGIC REPORT (continued) for the year ended 31 March 2024 Total revenues Total revenues are reviewed each month across the Group to provide the board with a ready measure of how well the Group and underlying businesses are performing relative to historical data. It enables any trend to be detected, understood and acted upon as appropriate. Consolidated Group revenues for the year increased by approximately 10%. Earnings before interest, taxation, depreciation, amortisation and non-recurring costs (underlying EBITDA) Te Group’s underlying EBITDA increased from £366,286 in 2022-23 to £509,523 in 2023-24. Staff turnover Staff turnover is monitored as the key asset of each subsidiary is its workforce. Recruiting replacement staff is an expensive task and it is not always possible to compensate for the specialised knowledge that may be lost when an employee departs. During the year, 5 people left the employment of the Group and 5 new staff were recruited, resulting in a total of 31 employees (excluding directors) at the year end. Pre-tax profit/(loss) per subsidiary before Group management charges Profit before tax and management charges is reviewed by each subsidiary and by the board every month. Each subsidiary director provides a commentary to enable the board to establish whether intervention of any kind is appropriate. A summary of the results and activities of our trading subsidiaries is set out below. Interest received is attributable to the Group rather than any individual subsidiary such that it appears only in consolidated profits. Performance is based on those factors within a subsidiary director’s control, so results are shown exclusive of management charges and taxation and any impairment judged necessary. Te parent company covers its own management costs by levying a charge on each subsidiary and derives other income through the receipt of dividends from its subsidiaries, and interest on bank deposits. B2BSG Solutions Limited (B2BSG) • 2024: revenues of £1,178,800 yielding a profit of £153,400 • 2023: revenues of £829,200 resulting in a loss of £9,100 Te company’s revenues grew from £829,200 in 2022-23 to £1,178,800 and this division saw a welcome return to profitability. Te pre-tax and management charge profit of £153,400 compares very favourably to a loss of £9,100 in the previous year. A large part of the additional circa 42% of sales revenue was attributed to hardware installed in a number of outlets for a national supermarket chain. Tis is likely to have been a one-off tranche of work. However, there was increased purchasing activity from other clients, as the retail sector demonstrated a modest recovery. Te company was also able to increase the price of some of the consumable items supplied, where almost all of the product is imported from China. General overhead costs have broadly been well managed and, with the exception of a necessary but unbudgeted spend on IT upgrades, were lower than the prior year. Tere was a one-off write-down in the value of slow-moving stock at the year end which reduced profits by around £8,000. Staffing levels remained consistent, and management are confident that the business can continue to be profitable in the current financial year. Inspection Services (UK) Limited (ISL) • 2024: revenues of £224,400 yielding a profit of £15,400 • 2023: revenues of £198,100 yielding a profit of £7,000 In January 2024 the Company was sad to learn of the death in service of engineer surveyor Andrew Gowling, who had worked at ISL since 2009. Andrew had been absent from work since May 2023. We recruited a new staff member in June 2023, who has settled in well and has been able to introduce significant additional business to the Company. PHSC plc 7 STRATEGIC REPORT (continued) for the year ended 31 March 2024 Revenues over the year rose by around 13% and was assisted by an ability to pass on some additional costs to clients and additional revenue generated from new contract wins. Costs were higher than anticipated due to the overlap of several months where the Company maintained the earnings of Mr Gowling during his illness whilst paying a full-time salary to his replacement. Te business model continues to be one of attaining most new work through introductions from insurance brokers in exchange for commission payments. Total commissions paid to brokers were very similar to those in 2022-23, demonstrating that most of the additional revenue has been secured from clients who placed their business directly with ISL. In common with similar businesses in the sector, wages rose as a consequence of general inflationary pressures and the higher expectations of employees. During the year, there was a complete revamp of ISL’s website which assisted in maintaining visibility. Personnel Health & Safety Consultants Limited (PHSCL) • 2024: revenues of £862,300 yielding a profit of £364,400 • 2023: revenues of £806,700 yielding a profit of £268,300 Revenues rose year-on year by around 7%, assisted by PHSCL being able to pass on some of its increased costs to clients. Te company continues to promote its bespoke services. It has become clear that many clients appreciate the more personalised approach to business relationships that sets PHSCL apart from its competitors. Tis helps to engender loyalty, and the company is pleased by the very high volume of repeat business from many longstanding and loyal customers as well as its ability to attract new customers who prefer the tailored approach. Recruiting and retaining the high-quality staff that are needed in the business continues to present challenges. It remains the case that attracting the right level of consultant expertise at an affordable cost is difficult. Despite this key challenge, PHSCL has shown that it is possible to grow both revenue and profit, and the outlook remains positive. QCS International Limited (QCS) • 2024: revenues of £776,900 yielding a profit of £249,700 • 2023: revenues of £834,600 yielding a profit of £272,100 Annual revenues of just under £777,000 were around £58,000 lower than last year but were broadly in line with expectations. Despite this reduced revenue and higher costs, QCS returned a profit for the year of almost £250,000. Te company continues to support customers with the implementation and maintenance of management systems across a number of international standards. With such a diverse range of clients, the company has little or no reliance on any particular contract nor on any single stream of its products and services. Repeat business remains a cornerstone of consultancy activity with clients continuing to renew agreements alongside respectable growth in new work. Te training suite posted modest growth in sales, which took time to recover from the pandemic. With its premises lease having been secured for a further five-year period, there is now the opportunity for management to take advantage of the potential upside from this facility in the year ahead. Quality Leisure Management Limited (QLM) • 2024: revenues of £391,600 yielding a profit of £112,300 • 2023: revenues of £402,400 yielding a profit of £137,500 QLM achieved annual revenues of £391,600 which is marginally lower than the prior year figure of £402,400. Tis yielded a profit of £112,300 which is lower than in 2022-23 but generally in line with expectations. PHSC plc 8 STRATEGIC REPORT (continued) for the year ended 31 March 2024 Te marketplace is highly competitive, nevertheless income from retained clients using QLM’s health and safety support service remains generally comparable with previous years. Tere are always fluctuations as leisure contracts are won and lost, and there is an increasing number of leisure trust clients being taken back under local authority management or similar. Cost of sales remains a challenge, notably in relation to travel and accommodation. Where possible such expenses are recharged to clients but are minimised as far as possible for the benefit of all stakeholders. Training is increasingly accessible to clients online. Whilst tuition income figures have remained relatively stable over the last five years, the effect of clients switching from in-person courses has seen a reduction in the expenses incurred for travel, hotels and subsistence. Tis impacts both the income and expenditure aspects of the business. Auditing remains the largest revenue stream outside of the health and safety support service. 2023-24 saw an increase in reactive work, i.e. post-accident or an incident, for new or casual clients. Tis was particularly the case in the hotel and health club sectors and supplemented QLM’s retained client proactive audit cycles. Ensuring the company remains agile enough to respond to reactive assignments will form part of QLM’s development strategy for 2024-25 onwards. Accident investigation and expert witness work is difficult to predict as an income stream as it is by nature reactive. QLM’s expertise in the leisure sector makes the company the expert of choice for several law firms who require evaluation of liability post-injury. Tis experience separates QLM from its competitors in terms of securing assignments with enforcing authorities in terms of criminal matters, and insurers’ solicitors when dealing with civil matters. QLM will be welcoming new health and safety consultancy staff during 2024 as the company gears up to seek increased income and to ensure the continued value of the company to the Group. RSA Environmental Health Limited (RSA) • 2024: revenues of £344,600 yielding a profit of £35,800 • 2023: revenues of £365,900 yielding a profit of £69,800 Annual revenue showed a 5.8% decrease compared to 2022-23. Tis was mainly due to a significant reduction in the sales of training services across the year, and a downturn in the sales of food safety consultancy. Improved sales of other services provided by the company did not make up the shortfall. Public training services, though profitable, were consistently not fully subscribed. Te lower food safety consultancy income was due to a large client deferring much of their normal requirement as they were reorganising the size of their estate. Expenditure in 2023-24 was higher than usual, with some one-off costs including exhibiting at the Independent Schools’ Bursars Association conference, increased training and development fees for the company’s own staff, and costs associated with changing a company car. SafetyMARK services saw revenues continue to improve, with demand for such services remaining strong especially within the independent schools sector. Tere is a high retention rate with schools demonstrating that they see value in the services provided by the company. Increased marketing efforts in this sector will look to ensure that this trend continues. In previous years, the company’s focus has been to diversify its service offering and strengthen its presence in the markets in which it operates. Tese efforts have continued and resulted in a more even spread of revenues across the services provided. Going forwards, the focus will be on those services which are most profitable. Te effect of lower value work will be mitigated by increasing fees wherever possible. Te company will also seek to recover some of its extra expenditure by raising its fee rates more generally. PHSC plc • 2024: net loss of £496,200 before management charges, exceptional costs, interest and dividends received • 2023: net loss of £442,300 before management charges, exceptional costs, interest and dividends received PHSC plc 9 STRATEGIC REPORT (continued) for the year ended 31 March 2024 Te Company incurs costs on behalf of the Group and does not generate any income; the costs relate to running an AIM quoted Group. PRINCIPAL RISKS AND UNCERTAINTIES Pandemic Inevitably, there are legacy impacts of the pandemic, in particular on the high street where consumers’ shopping habits have shifted towards online ordering. Tis was initially a concern for the Security Division where retail outlets form a significant part of its customer base but the subsequent rise in shoplifting cases in response to a tougher economic climate for the average household has provided a counterbalance. Te Systems and Safety Divisions initially experienced a rebound in activity as clients caught up on projects that were deferred or cancelled in the previous year but this is now slowing. Te Group’s ability to deliver services remotely as an alternative to a face-to-face offering is more appealing to some customers and this alternative continues to be offered where appropriate. Regulatory/Marketplace Approximately 50% of the Group’s work involves assisting organisations with the implementation of measures to meet regulatory requirements relating to health and safety at work. If the regulatory burden was to be substantially lightened, for example if the government embarked upon a programme of radical deregulation, there could be less demand for the Group’s services. Changes to the operation of the employer’s liability insurance system, as proposed in some quarters, could reduce the incentive for organisations to buy in claims-preventive services such as health and safety advice. In mitigation of these risks, the board has diversified the Group’s range of offerings, for example, through investing in its Systems Division and is exploring non-regulatory areas of environmental work to add to the current portfolio of services. Te Group’s Security Division works almost exclusively in the retail sector which continues to suffer from weak consumer demand on the high street and the move towards online purchasing. Any further material deterioration in the retail sector and specifically in B2BSG’s client base would have a significant negative effect on the company’s and hence the Group’s prospects. To mitigate any future negative effects, the Group wrote off the investment value of its Security Division in 2021-22 and periodically reviews the need to make financial provision against the value of stock held in its warehouse. Technological Te Group’s website is a primary source of new business. If the website became inaccessible for protracted periods, or was subject to “hacking”, this may prejudice the opportunity to obtain new business. Additionally, the increase in the use of the internet for satisfying business requirements may lead to a reduction in demand for face-to-face consultancy services and the number of training courses commissioned may be affected by moves towards screen-based interactive learning. Te subject of IT security is regularly reviewed by the board to ensure that appropriate strategies are in place. Te Aylesford based businesses (PHSC plc, PHSCL, ISL) have been re-certified to Cyber Essentials standard and all staff across the Group have participated in online training to reduce the risk of falling victim to phishing and other such scams. All head office data is backed up to the Cloud and removeable hard drives attached to the physical server are rotated on a daily basis. Personnel Generally, there is an excess of demand over supply for health and safety professionals. Tose with sufficient qualifications and experience to be suitable for consultancy roles are in the minority. Tis has the combined effect of making it difficult for the Group to source suitable personnel and having to offer higher remuneration packages to attract them. Te Group is dependent upon its current executive management team. Whilst it has entered into contractual arrangements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. Accordingly, the loss of any key member of management of the Group may have an adverse effect on the future of the Group’s business. Te Group and each subsidiary have contingency plans in place in the event of incapacity of key personnel. Geographical Te Group offers a nationwide service, but a number of organisations see benefit in using consultancies that are local to them and internet search engines favour local providers. With offices in Kent, Berkshire, Northamptonshire and Scotland, the Group has a good geographical spread. PHSC plc 10 STRATEGIC REPORT (continued) for the year ended 31 March 2024 Licences Te Group is reliant on licences and accreditations to be able to carry on its business. Te temporary loss of, or failure to maintain, any single licence or accreditation would be unlikely to be materially detrimental to the Group, as the directors believe that this could be remedied. However, if the Group fails to remedy any loss of, or does not maintain, any licence or accreditation, this will have a material adverse effect on the business of the Group. Te Group has internal processes in place to ensure that the licences and accreditations are maintained. SECTION 172 STATEMENT Te Companies (Miscellaneous Reporting) Regulations require large companies to publish a statement describing how the directors have had regard to the matters set out in section 172 (1) (a) to (f) of the Companies Act 2006. Tese sections require directors to act in a way most likely to promote the success of the Group for the benefit of its stakeholders and with regard to the following matters. The likely consequences of any decision in the long term Te board receives an annual business plan from the managing director of each subsidiary company, which forms the basis of the Group’s strategic plan. Te board requires that the plans include financial forecasts, KPIs, marketing strategy and an analysis of strengths, weaknesses, opportunities and threats. Subsidiary directors, via the Group’s operational board of which they are members, consider the implications of their own plans in the context of what others within the Group are intending to do and the opportunities for synergies are explored. Any proposed actions that may adversely affect another subsidiary are flagged at operational board level and are resolved. Subsidiary directors are challenged on the content of their plans and the assumptions they have made, to ensure that the plans are realistic and achievable. Once agreed by the board, this plan, at Group and subsidiary level, is used as the benchmark against which to assess performance. The interests of the Group’s employees As the Group is mainly involved in the supply of services, the board considers its staff to be the greatest asset and the interests of employees are taken into consideration in all decisions made. Each subsidiary company within the Group has in place the necessary structures to ensure effective communication with its employees. Te subsidiary directors meet once a quarter and relevant information is shared with employees via team meetings held at subsidiary level. Te views of employees are heard in a similar fashion, initially at team meetings, and escalated to the operational board and the main board if appropriate. Each subsidiary has its own bonus scheme, based on results for the financial year and/or tailor-made targets. Tere is an annual budget for staff training in recognition that the performance of the Group can be improved by the development of its employees. Te Group is committed to equality of employment and its policies reflect a disregard of factors such as disability in the selection and development of employees. Regular reviews are conducted to identify any gender-related pay anomalies across the Group and no such anomalies have been found. The need to foster the Group’s business relationships with suppliers, customers and others Te Group seeks to treat suppliers fairly and adhere to contractual payment terms. Te Group works with its suppliers to help drive change through innovation, promoting new ideas and ways of working. Te Group has zero-tolerance to modern slavery and is committed to acting ethically and with integrity in all business dealings and relationships. Te Group’s policy for Modern Slavery and Human Trafficking contains systems and controls to ensure that these activities are not taking place anywhere in the subsidiaries or throughout the Group’s supply chains and can be viewed on our website (www.phsc.plc.uk). Te Group also has zero-tolerance with regards to bribery, made explicit through its Anti-Bribery and Corruption Policy. Tis covers the acceptance of gifts and hospitality and any form of unethical inducement or payment including facilitation payments and “kickbacks”. Te policy sets out the responsibilities of directors, employees and contractors and details the procedures in place to prevent bribery and corruption. Tis policy is also available on our website. PHSC plc 11 STRATEGIC REPORT (continued) for the year ended 31 March 2024 Each subsidiary is focussed on its customers. Communication takes many forms and is structured according to how each subsidiary interacts with its client base. Channels of communication include quarterly newsletters in hard copy and/or sent electronically, customer roadshows, interaction via various social media platforms (X (formerly Twitter), LinkedIn and Facebook) and regular client meetings. An ongoing dialogue is held electronically, with most clients subscribing to email updates that are sent out periodically. Stephen King is the principal contact between the Company and its investors, with whom he maintains a regular dialogue. Te Company is committed to listening to and communicating openly with its shareholders to ensure that its business model and performance are understood. Regular announcements are made to the market and the AGM provides a forum for information dissemination, discussion, and feedback. The impact of the Group’s operations on the community and the environment Te board’s intention is to behave responsibly and ensure that management operates the business in a responsible manner, complying with high standards of business conduct and good governance. Te Group has a long tradition of supporting local causes through sponsorship and community involvement, details of which can be found on our website. Te directors are aware of the impact of the Group’s business on the environment but believe this to be minimal due to the nature of its operations. GOING CONCERN Company law requires the directors to consider the appropriateness of the going concern basis when preparing the financial statements. Te board is satisfied that the Group’s cash reserves, along with the Group’s cash-generative trading position and (unused) credit facility will ensure that there are sufficient resources to continue in operational existence for the foreseeable future. Te cost of the proposed enhanced final dividend is factored into the board’s calculations in this respect. Te directors therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements. On behalf of the board, I must once again thank all our shareholders, employees and other stakeholders for continuing to place their trust in us and for enabling 2023-24 to be another successful year. On behalf of the board Stephen King Group Chief Executive 1 August 2024 PHSC plc 12 REPORT OF THE DIRECTORS for the year ended 31 March 2024 Te directors present their report with the audited financial statements of PHSC plc (Company and Group) for the year ended 31 March 2024. DIRECTORS Te directors who held office during the year under review and up to the date of approval of the financial statements were: S A King N C Coote G N Webb MBE L E Young DIVIDENDS A total dividend of 1.5p per ordinary share was paid in respect of the year ended 31 March 2023; £59,190 was paid in January 2023 and the balance of £110,253 in October 2023. An interim dividend of 0.75p in respect of the year ended 31 March 2024 was paid in January 2024 (£82,757) and a final dividend of 1.25p is proposed, subject to shareholder approval, for payment in October 2024, an increase of 0.5p on last year’s total. FINANCIAL RISK MANAGEMENT Te Group’s operations expose it to a variety of financial risks which are outlined in note 1 to the financial statements on page 36. SHARE CAPITAL Te issued share capital of the Company as at the date of this report is 10,280,853 ordinary shares of 10p each. In August 2023, 812,782 shares were repurchased and subsequently cancelled, resulting in 11,034,237 shares being in issue at the year end. A further 753,384 were repurchased in March 2024 but were not cancelled until 11 June 2024. Tese changes to share capital are detailed in note 10 to the accounts. DATA PROTECTION Te Company has a policy to meet the requirements of the General Data Protection Regulations (GDPR) and this has been issued across the Group. SUBSTANTIAL SHAREHOLDINGS As at 1 August 2024, the following persons had notified the Company of an interest of 3% or more in its issued share capital. Name No. of ordinary shares % of issued share capital N C Coote 2,196,419 21.36 S A King 2,018,253 19.63 Unicorn Asset Management Limited and Unicorn AIM VCT II plc 1,249,057 12.15 James Faulkner 455,000 4.43 PROVISION OF INFORMATION TO AUDITOR So far as each of the directors is aware at the time this report is approved: • there is no relevant audit information of which the Group’s auditor is unaware; and • the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. PHSC plc REPORT OF THE DIRECTORS (continued) for the year ended 31 March 2024 13 ANNUAL GENERAL MEETING (AGM) Tis year’s AGM will be held at 10.00 a.m. on Tursday 19 September 2024 at Te Old Church, 31 Rochester Road, Aylesford, Kent ME20 7PR. Te notice of meeting is set out on pages 65 to 67 of this document and a form of proxy is included on page 71. Details of the business to be considered at the meeting are given below. Report and accounts (Resolution 1) It is a requirement of company law that the annual report and accounts are laid before shareholders in a general meeting. Declaration of final dividend (Resolution 2) As noted above, the directors recommend a final dividend of 1.25p per share. If approved, the final dividend will be paid on 4 October 2024 to shareholders on the register of members at the close of business on 20 September 2024. Re-election of director (Resolution 3) Under the Company’s articles of association, Stephen King will retire by rotation and offers himself for re-election. Reappointment of auditor (Resolution 4) A resolution for the reappointment of Crowe U.K. LLP as the Company’s auditor will be put to the AGM together with the usual practice of authorising the directors to determine the auditor’s fees. Authority of directors to allot shares (Resolutions 5 and 6) By law, directors are not permitted to allot new shares (or to grant rights over shares) unless they are authorised to do so by shareholders. In addition, directors require specific authority from shareholders before allotting new shares (or granting rights over shares) for cash without first offering them to existing shareholders in proportion to their holdings. Resolution 5 gives the directors the necessary authority until the earlier of next year’s AGM or 19 December 2025, to allot securities up to an aggregate nominal amount of £342,695.10 being equivalent to approximately one third of the Company’s issued share capital as at the date of the notice of meeting. Resolution 6 empowers the directors, until the earlier of next year’s AGM or 19 December 2025, to allot such securities for cash otherwise than on a pro-rata basis to existing shareholders, up to an aggregate nominal amount of £205,617.06 being equivalent to approximately 20 per cent. of the Company’s issued share capital as at the date of the notice of meeting. It is intended to renew this authority and power at each AGM. Authority for the Company to purchase its own shares (Resolution 7) Resolution 7 authorises the Company, until the earlier of next year’s AGM or 19 December 2025 to purchase in the market up to a maximum of 1,542,128 ordinary shares (equivalent to approximately 15 per cent. of the issued share capital of the Company as at the date of the notice of meeting) for cancellation at a minimum price of 10 pence per share and a maximum price per share of an amount equal to 105 per cent. of the average of the middle market quotations for an ordinary share (as derived from the London Stock Exchange) for the five business days immediately before the date of purchase. Te Company may hold any repurchased shares in treasury, instead of cancelling them immediately. If the Company buys back its own shares and holds them in treasury it may then deal with some or all of them in several ways. It may sell them for cash; transfer them under the provisions of an employee share scheme; cancel them; or continue to hold them in treasury. Holding shares in treasury in this way will allow the Company to reissue them quickly and cost effectively, giving increased flexibility to the management of its capital base. Dividends are not paid on shares held in treasury, nor do they carry voting rights while they remain there. Te directors intend to decide at the time of any further share buybacks, whether to cancel the shares immediately or to hold them in treasury, depending on what would best promote the success of the Company at the time. Te Company currently holds no ordinary shares in treasury. PHSC plc REPORT OF THE DIRECTORS (continued) for the year ended 31 March 2024 14 Te proposal should not be taken as an indication that the Company will purchase shares at any particular price or indeed at all, and the directors will only consider making further purchases if they believe that such purchases would result in an increase in earnings per share and are in the best interests of shareholders. Interim Dividend Ratification and Release (Resolution 8, 9 and 10) Te board has become aware of two technical breaches of the Companies Act (the Act) in respect of the interim dividend of 0.75 pence per ordinary share paid by the Company on 12 January 2024 (the distribution). By way of background, the Act provides that a public company may pay a dividend out of its distributable profits as shown in its last annual accounts circulated to members or, if interim accounts are used, those that have been filed at Companies House. Te requirement for the relevant accounts to have been filed applies even if the company in question has sufficient distributable profits at the relevant time. In addition to having sufficient distributable profits, the Act provides that a public limited company may only pay a dividend: (i) if at the time the dividend is paid the amount of its net assets is not less than the aggregate of its called-up share capital and undistributable reserves; and (ii) if, and to the extent that, the dividend does not reduce the amount of those net assets to less than the aggregate amount of its called up share capital and undistributable reserves. Prior to paying any dividend the Company should therefore always ensure that it had the requisite level of distributable profits and the requisite level of net assets, by reference in each case to relevant accounts (as defined in the Act). Where relevant, the Company should prepare interim accounts showing the requisite level of distributable profits and, if appropriate, net assets and should file such interim accounts at Companies House prior to making the relevant dividend payments to satisfy the requirements of the Act. Te Company did not satisfy the procedural requirements of the Act before making the distribution. At the time the Company made the distribution, the Company did not have adequate distributable reserves or the requisite level of net assets. However, there were sufficient reserves and cash held in the Company’s wholly-owned subsidiaries, which were capable of being distributed to the Company prior to the payment of such dividends in order to provide the Company with adequate reserves and net assets. Te Company had also not prepared and filed with Companies House the relevant interim accounts showing this. Consequently, the distribution was made otherwise than in accordance with the Act. Te Company has been advised that, as a consequence of the distribution having been made otherwise than in accordance with the Act, it may have claims against past and present shareholders who were recipients of the distribution and against persons who were directors of the Company at the time of payment of the distribution. To resolve this matter and to release all shareholders who have received the distribution from potential claims, it is proposed that the Company enter into a Shareholders’ Deed of Release and a Directors’ Deed of Release and put all potentially affected parties so far as possible in the position in which they were always intended to be had the distribution been made in accordance with the procedural requirements of the Act. Te consequence of the entry into these deeds by the Company is that the Company will be unable to make any claims against: (a) past and present shareholders of the Company who were recipients of the distribution; and (b) the directors (the relevant directors), in each case in respect of the payment of the distribution otherwise than in accordance with the Act. Te ratification resolution will also seek the specific approval of the shareholders of the entry into the Directors’ Deed of Release and the Shareholders’ Deed of Release. Te entry by the Company into the Directors’ Deed of Release and the Shareholders’ Deed of Release in connection will constitute related party transactions (as defined in the AIM Rules). Tis is because the relevant directors are considered related parties for the purposes of the AIM Rules in relation to the Directors’ Deed of Release and each of the substantial shareholders (who are also each recipient shareholders) are considered related parties of the Company for the purposes of the AIM Rules in relation to the Shareholders’ Deed of Release. PHSC plc REPORT OF THE DIRECTORS (continued) for the year ended 31 March 2024 15 Accordingly, and as all the Company’s directors are beneficiaries of the Directors’ Deed of Release and/or the Shareholders’ Deed of Release, Strand Hanson Limited, acting in its capacity as nominated adviser to the Company, has confirmed that it considers the terms of such related party transactions are fair and reasonable insofar as the shareholders are concerned. It was further noted that as all the Company’s directors are interested in the matters relating to the distribution the Company’s Articles of Association do not allow such directors to vote or count in the quorum. It is therefore proposed to make a change to the Articles of Association to allow shareholders to approve such conflict and allow them to vote and count in the quorum by way of ordinary resolution. Voting A form of proxy is included at the end of this document for use at the AGM. Please complete, sign and return it as soon as possible in accordance with the instructions on it, whether or not you intend to attend the AGM. Returning a form of proxy will not prevent you from attending the meeting and voting in person if you so wish. A form of proxy should be returned so that it is received not less than 48 hours (excluding non-working days) before the time of the AGM. Te directors consider that all the resolutions to be put to the meeting are in the best interests of the Company and its shareholders as a whole. Te directors will be voting in favour of them and unanimously recommend that you do so as well. SUBSEQUENT EVENTS AND FUTURE DEVELOPMENTS Based on the results for 2023-24, the board is confident that the Group can remain profitable and cash-generative throughout the current financial year. On behalf of the board SGH Company Secretaries Limited Secretary 1 August 2024 PHSC plc 16 Te directors are responsible for preparing the strategic report, the directors’ report and the Group and parent Company financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law the directors have elected to prepare the consolidated financial statements and Company accounts 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 of the Group and parent Company and of the profit or loss of the 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; • state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. Te directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company and Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and Group and enable them to ensure that the financial statements comply with the Companies Act 2006. Tey are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Tey are further responsible for ensuring that the strategic report, the report of the directors and other information included in the annual report and financial statements is prepared in accordance with applicable law and regulations in the UK. Te maintenance and integrity of the PHSC plc website is the responsibility of the directors; the work carried out by the auditor does not involve the consideration of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website. Legislation in the UK governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions. On behalf of the board Stephen King Group Chief Executive 1 August 2024 STATEMENT OF DIRECTORS’ RESPONSIBILITIES for the year ended 31 March 2024 PHSC plc 17 CORPORATE GOVERNANCE STATEMENT for the year ended 31 March 2024 Dear Shareholder, Te board has an obligation to ensure that good standards of corporate governance are embraced throughout the Company and its subsidiaries (together, the Group). As a board, we set clear expectations concerning the Group’s culture, values and behaviours. Our values are to ensure our customers receive a quality service and support, our customers, staff and other stakeholders are treated fairly and that we develop our staff so that they can provide the most innovative and effective solutions. We firmly believe that by encouraging the right way of thinking and behaving across all our people, our corporate governance culture is reinforced, enabling us to drive our premium, customer-focussed, people-led strategy and deliver value for our stakeholders. It is the board’s job to ensure that the Group is managed for the long-term benefit of all shareholders, with effective and efficient decision-making. Corporate governance is an important part of that job, reducing risk and adding value to our business. Te below statement sets out how the Group complies with the 10 principles of the 2018 Quoted Companies Alliance Corporate Governance Code (the QCA Code). Te board is currently reviewing the updated 2023 QCA Code and expects to adopt that version and make the appropriate disclosures in next year’s annual report. Stephen King Chair ESTABLISHING STRATEGY AND BUSINESS MODEL Te Group is dedicated to being a leading provider of health, safety, hygiene and environmental consultancy services and security solutions to the public and private sectors. Te board sets the Group’s strategy and monitors its implementation through management and financial performance reviews. It also seeks to ensure that adequate resources are available to implement the Group’s strategy in a timely manner. Te Group has set out a strategic plan to promote long-term value creation for shareholders and will update all shareholders on this in the annual report each year. Te board meets on a regular basis to discuss the strategic direction of the Group and any significant change will be highlighted promptly. Further information on the Group’s strategy, performance and outlook can be found within the strategic report on pages 3 to 11. UNDERSTANDING AND MEETING SHAREHOLDER NEEDS AND EXPECTATIONS Te Group remains committed to listening to, and communicating openly with, its shareholders to ensure that its strategy, business model and performance are clearly understood. Te AGM is a forum for shareholders to engage in dialogue with the board. Te results of voting at the AGM will be published via a regulatory information service and on the Group’s website. Stephen King is the principal contact between PHSC plc and its shareholders, with whom he maintains a regular dialogue. Te views of shareholders are communicated to the whole board. Te Group’s progress on achieving its key targets is regularly communicated to investors through its announcements to the market. Te Group also uses other professional advisers such as its nomad, broker, auditor and company secretary who provide advice and recommendations on shareholder communication as appropriate. PHSC plc 18 CORPORATE GOVERNANCE STATEMENT (continued) for the year ended 31 March 2024 CONSIDERING STAKEHOLDER AND SOCIAL RESPONSIBILITIES Te board recognises its responsibilities to stakeholders including staff, suppliers, customers and the communities within which it operates. Te heads of each of its operating subsidiaries provide regular feedback to the executive directors, who then ensure that the board as a whole is informed of any major developments. Te Group’s initiatives in relation to its employees are detailed in the section 172 statement on page 10. EMBEDDING EFFECTIVE RISK MANAGEMENT Te board and the audit committee regularly review the risks facing the business as outlined on pages 9 to 10 and the internal controls in place to address these risks. Each operating subsidiary has reviewed its business and identified the key risks which it faces. As a result, plans have been put in place to deal with various contingencies which might arise. Accepting that no systems of control can provide absolute assurance against material misstatement or loss, the directors believe that the established systems for internal control within the Group are appropriate for the business. Te Group’s operations expose it to a variety of financial risks which are outlined in note 1 to the financial statements on page 36. MAINTAINING A BALANCED AND WELL-FUNCTIONING BOARD, WITH APPROPRIATE SKILLS AND CAPABILITIES It is the role of the board to ensure that the Group is managed for the long-term benefit of all shareholders and other stakeholders with effective and efficient decision-making. Good corporate governance is an important contributor, reducing risk and adding value to PHSC plc. Te board will continue to monitor the governance framework of the Group. Te board comprises four directors, of which two are executive and two are non-executive, reflecting a blend of different experience and backgrounds. Te chair of the board is Stephen King, who is also the group chief executive. He oversees the financial position of the Group on a day-to-day basis with assistance from the group accountant. Nicola Coote is the deputy group chief executive, and she leads on the Group’s marketing initiatives and oversees PHSCL. Graham Webb and Lorraine Young are the non-executive directors, whom the board considers to be independent based on their arms-length oversight of the Group’s governance. Both have extensive external experience and are able to use this together with their personal qualities to ensure objectivity. PHSC plc is a small company and the value from an intimate knowledge and understanding of the Group’s history is fundamental to the ability to give best advice and to best protect stakeholders’ interests. Te board sets direction for the Group and has a formal schedule of matters reserved for its decision, including Group strategy, approval of major capital expenditure, approval of the annual and interim results, annual budgets, dividend policy and board structure. Te board monitors the exposure to key business risks and reviews the strategic direction of all trading subsidiaries, their annual budgets, their performance in relation to those budgets and their capital expenditure. Te board delegates day-to-day responsibility for managing the business to the executive directors and the operational board. Te QCA Code recommends that the chair and chief executive should not be the same person. Currently Stephen King, the group chief executive, is also the Group’s chair. As the board is comprised of only four members, two of whom are independent non- executive directors, the directors are of the view that there is no need to split these roles. For the same reason the board has not appointed a senior independent director. Graham Webb has served on the board for 21 years. Te board is of the view that he retains his independent judgement and continues to make a valuable contribution to the board. Regular board meetings are held (a minimum of four per year) and other meetings are scheduled as required. Brief biographical details of the directors are set out on the next page. PHSC plc 19 CORPORATE GOVERNANCE STATEMENT (continued) for the year ended 31 March 2024 Stephen King Group Chief Executive and Chair Stephen King co-founded PHSCL in 1990 with Nicola Coote. He has over 36 years’ experience in health and safety management, having qualified in 1985. He left a role as personnel manager at Delta Enfield Cables Ltd in 1986, moving to the News International printing facility at Wapping, London. At News International, he was occupational health and safety manager, in charge of a team of practitioners responsible for the well-being of over 4,000 staff. In 1990, he joined Reuters plc as UK health and safety manager. He left employment with Reuters plc in 1992 and continued to service their health and safety requirements through PHSCL. He has acted as secretary of the southeast branch of the Institution of Occupational Safety and Health (IOSH) and served a two-year term as chair of the London Occupational Health and Safety Group by whom he was granted honorary life membership. He chaired the annual Tolley Health and Safety Conference for three successive years and has presented papers at several conferences. He chaired the Kent Health and Safety Consultants Forum, a group set up by the Health and Safety Executive with a remit of improving the standard of advice given by all independent safety consultants in the county, for the whole of its six-year existence. He is immediate past chair of Kent Executive Club, a long-established group that promotes links between business people across the county. His other activities include serving as a trustee for a charity operating a group of care homes and, until recently, acting as chair of trustees for a local animal sanctuary, where he stepped down in February 2024 following 12 years’ service. Nicola Coote Deputy Group Chief Executive and Deputy Chair Nicola Coote co-founded PHSCL in 1990 with Stephen King, after working with him in occupational safety and health at both News International and Reuters plc. Nicola is Deputy CEO which includes heading the marketing function of PHSC plc. Nicola has served as secretary of the southeast branch of IOSH and has chaired the annual Tolley Health and Safety Conference. She continues to write and update editorial material for their publication Tolley’s Health & Safety at Work Handbook and has acted as author, consultant editor or contributor to more than 30 titles produced by publishers such as Croner. She was the first female Fellow of IOSH in the south of England and continues to support the institution by, inter alia, sitting on the panel for applicants applying for Chartered Membership and Chartered Fellowship status. She is also a Registered Expert Witness and works on both criminal and civil cases. In June 2022, Nicola was appointed a non-executive director of Tera Trust, a charity supporting adults with learning difficulties. Graham Webb MBE Non-Executive Director Graham Webb was appointed a non-executive director of PHSC plc in June 2003. He served as a Kent Ambassador for 12 years, appointed by Kent County Council. Prior to its sale, Graham was chair in the UK for many years of the international hair and beauty group that bears his name. Te US company was sold to Wella and subsequently acquired by Procter & Gamble for whom Graham served in North America as their goodwill ambassador for 6 years. He was chair of the Institute of Directors, Kent branch, from 1996 to 1999 and was appointed as a member of the Confederation of British Industry South Eastern Regional Council (1994 to 2000). Graham was chair of the Kent Business Awards for 9 years and chair of the Kent Excellence in Business Awards for 3 years. His charitable activities included being an ambassador for the Kent Association for Spina Bifida and Hydrocephalus. As chair of the Kent and Medway NSPCC Full Stop Appeal, Graham helped raise over £460,000. In the 2005 New Year Honours list, Graham was awarded an MBE for his services to business and charity in Kent. Graham is chair of the remuneration committee and is a member of the audit committee. Lorraine Young Non-Executive Director Lorraine Young was appointed a non-executive director of PHSC plc in April 2016. She runs a board review, advisory and consultancy practice, as well as being an accredited mediator, and serves on the advisory board of Indigo Independent Governance. She is a former non-executive director of City of London Group plc, an AIM quoted company in the financial services sector where she chaired the remuneration committee. Lorraine has held senior governance roles at several blue-chip companies, including Standard Chartered plc and Brambles Industries plc. She ran her own company secretarial and corporate governance advisory practice for 13 years, which in 2016 she merged with the company secretarial team at a UK top 50 law firm, where she was a partner. Lorraine is on the Court of the Worshipful Company of Chartered Secretaries and Administrators being one of the modern livery companies, PHSC plc 20 CORPORATE GOVERNANCE STATEMENT (continued) for the year ended 31 March 2024 where she chairs the Finance & General Purposes Committee. She is also a past president and fellow of the Chartered Governance Institute. Lorraine is chair of the audit committee and is a member of the remuneration committee. MAINTAINING GOVERNANCE STRUCTURES AND PROCESSES Te board In addition to the information given under the previous principle, the chair is responsible for the leadership of the board and is pivotal to fostering a culture that adopts good corporate governance. Te chair, together with the rest of the board sets direction for the Group through a formal schedule of matters reserved for its decision as set out on page 18. Independence of directors At present, the Group has two independent non-executive directors, Graham Webb MBE and Lorraine Young. Time commitments All directors are expected to commit sufficient time to fulfil their duties in that role. Attendance at meetings Board Audit Remuneration Stephen King* 5/5 2/2 0/1 Nicola Coote* 5/5 2/2 0/1 Graham Webb 5/5 2/2 1/1 Lorraine Young 5/5 2/2 1/1 * Stephen King and Nicola Coote are not members of the audit and remuneration committee, though they are both invited to attend committee meetings as and when required. Tey do not participate in discussions concerning their own remuneration. Committees Te board has delegated certain matters to committees. Tere is an audit committee and a remuneration committee. Te terms of reference of these committees were reviewed during the year and are available on request. Tere is no separate nominations committee and the board as a whole deals with any matters that would normally be within the remit of such a committee. For example, the board reviews succession planning at senior levels within the Group at least annually. Audit committee Te audit committee comprises Lorraine Young (chair) and Graham Webb. Tere is an annual audit planning meeting between the external auditor and the committee chair as well as a formal meeting with the auditor and the committee at the time of the final results. Te key risk areas identified by the auditors and considered by the audit committee as part of the year-end process, were the impairment of goodwill and investments, stock valuation, revenue recognition and the override of controls by management. Tere were no changes in accounting standards or disclosure requirements this year which the committee needed to consider. Te committee also discussed the technical breach of the Companies Act in relation to the interim dividend payment and has received assurances from management that the internal processes and procedures will be adjusted to ensure there is no recurrence of such a breach. Te committee also regularly reviews internal controls and risk management, including the risk register. Accepting that no systems of control can provide absolute assurance against material misstatement or loss, the directors believe that the established systems for internal control within the Group are appropriate to the business. Te audit committee reviews annually whether the Group needs to have an internal audit function and does not consider this to be necessary at present. Te committee does consider the continuing independence of the external auditor and notes the level of non-audit fees to ensure they remain at an acceptable level. A new audit partner was appointed this year to replace the previous partner who had been in the role for five years and hence was required to rotate off the audit engagement after the 2023 AGM. PHSC plc 21 CORPORATE GOVERNANCE STATEMENT (continued) for the year ended 31 March 2024 Remuneration committee Te remuneration committee comprises Graham Webb (chair) and Lorraine Young. Te committee has written terms of reference and considers all aspects of the remuneration of the executive directors and other senior executives. Te members of the committee maintain knowledge and awareness of the latest regulatory requirements and current market practice. As in prior years, any payments to senior executives under the Group bonus plan are approved by the committee. It also receives representations on any proposed general pay increases across Group subsidiaries and is responsible for approving those. Directors’ remuneration Te remuneration of the executive directors of PHSC plc, from all Group companies, was as follows: Year ended 31.3.24 Short-term employee benefits Post Year Waiver/ Pension employment ended voluntary salary benefits 31.3.23 Salary Bonus reduction sacrifice Benefits Pension Total Total £ £ £ £ £ £ £ £ S A King 101,783 5,000 (48,500) (3,600) 2,966 6,192 63,841 69,225 N C Coote 84,100 5,000 – (10,000) 2,614 13,705 95,419 89,482 Te benefits relate to health insurance. Stephen King’s bonus was added to salary whereas Nicola Coote opted to take her bonus as a pension contribution. Te fees of the non-executive directors were as follows: Year ended Year ended 31.3.24 31.3.23 £ £ G N Webb 16,981 16,095 L E Young 16,981 16,095 Total 33,962 32,190 Nominations committee Te board has not set up a separate nominations committee. Any matters which would normally be dealt with by such a committee will be considered by the whole board. EVALUATING BOARD PERFORMANCE Te board has a mix of experience, skills and personal qualities that help deliver the strategy of the Group. Te board will ensure that between them, the directors have the necessary up-to-date experience, skills and capabilities to deliver the Group’s strategy. PROMOTING ETHICAL VALUES AND BEHAVIOURS Te Group has a corporate culture that is based on ethical values and behaviours. It will maintain a quality system appropriate to the standards required for a company of its size. Te board communicates regularly with staff through meetings and other forms of internal communication. Information is cascaded to staff at subsidiaries via operational board meetings (which are held at least quarterly). Te head of each subsidiary attends these meetings with the executive directors. Te non-executive directors attend these meetings from time to time to keep up to date with performance and developments throughout the business. PHSC plc 22 CORPORATE GOVERNANCE STATEMENT (continued) for the year ended 31 March 2024 COMMUNICATING WITH SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS Te Group makes available on its website historical annual reports, notices of meetings and other publications over the last five years. On behalf of the board SGH Company Secretaries Limited Secretary 1 August 2024 PHSC plc 23 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF PHSC PLC for the year ended 31 March 2024 OPINION We have audited the financial statements of PHSC plc (the Parent Company) and its subsidiaries (the Group) for the year ended 31 March 2024, which comprise: • the Group statement of financial position as at 31 March 2024; • the Group statement of comprehensive income for the year ended 31 March 2024; • the Group statement of changes in equity for the year then ended; • the Group statement of cash flows for the year then ended; • the Parent Company statement of financial position as at 31 March 2024; • the Parent Company statement of changes in equity for the year then ended; • the Parent Company statement of cash flows for the year then ended; and • the notes to the financial statements, including significant accounting policies. Te financial reporting framework that has been applied in the preparation of the financial statements of both the Group and the Parent Company is applicable law and UK-adopted international accounting standards. In our opinion the financial statements of the Group and Parent Company: • give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2024 and of the Group’s profit for the year then ended; • have been properly prepared in accordance with UK-adopted international accounting standards; • have been prepared in accordance with the requirements of the Companies Act 2006. 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 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. Our evaluation of the directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern basis of accounting included the following: • We obtained and reviewed management’s trading budgets and cash flow forecasts. In addition to the review of arithmetical accuracy, we also discussed the key assumptions with management and ensured they are in line with expectations based on industry averages and analysis of prior year trends and performance. Te trading budget and cash flow forecast show the Group as being profitable and cash generative throughout the forecast period. Our assessment included undertaking sensitivity analysis on these forecasts and considered the feasibility of results in light of past results and recent economic conditions. • We reviewed the board minutes and discussed with management any matters not documented in the minutes. • We enquired with management whether there are any significant subsequent events that may impact on the Group’s going concern status. PHSC plc 24 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF PHSC PLC (continued) for the year ended 31 March 2024 In addition to the above we noted that the Group has significant cash reserves at 31 March 2024 and a long standing agreed additional bank facility available which has never been used. 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 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. OVERVIEW OF OUR AUDIT APPROACH Materiality In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified. Based on our professional judgement, we determined overall materiality for the Group financial statements as a whole to be £35,000 (2023 £21,000), based on 1% percent of the Group’s draft turnover. Materiality for the Parent Company financial statements as a whole was set at £30,000 (2023: £8,000) based on 6% of loss before tax, excluding intercompany charges and dividends. We use a different level of materiality (performance materiality) to determine the extent of our testing for the audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment. Tis is set at £24,500 (PY £14,700) for the group and £21,000 (PY £5,600) for the parent. Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors’ remuneration. We agreed with the audit committee to report to it all identified errors in excess of £3,500 (2023: £2,100). Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds. Audit Scope Te audit scope was established during the planning stage and was based around the key matters set out below. We performed an audit of the complete financial information of the consolidated and Parent Company financial information. Te financial information of PHSCL, B2BSG, QLM and QCS were audited using a component materiality for the purposes of consolidation only. RSA, ISL and all dormant subsidiaries were not considered to be significant components and as such we only performed specific procedures on those parts of the financial information which was considered to be material to the consolidated financial statements. Te audit approach for each component was consistent with the overall scope of the audit. Te parent and subsidiaries were all audited by the Group engagement team and no component auditors were used. 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. Tese matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. Tese 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. Tis is not a complete list of all risks identified by our audit. PHSC plc 25 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF PHSC PLC (continued) for the year ended 31 March 2024 Key audit matter How the scope of our audit addressed the key audit matter As at 31 March 2024, the Group has goodwill balances totalling £2,115,000 allocated between the Group’s Cash Generating Units (CGUs). As explained in note 6 to the financial statements, the directors are required to annually test goodwill for impairment, a process that is complex and highly judgemental. We therefore identified the impairment of goodwill as a significant risk. Our audit work included, but was not restricted to: – considering management’s assessment of the existence of any impairment indicators. – obtaining an understanding of the key controls over the impairment review process and generation of cash flow forecasts. – obtaining and checking the arithmetical accuracy of management’s impairment model. – considering management’s assessment of CGUs, the net assets of each CGU and whether impairment testing is being conducted for all relevant CGUs. – challenging and testing the assumptions underlying the impairment models for value in use calculations, in particular maintainable trading levels, growth rates and discount rates (utilising a valuation specialist), – testing the accuracy of management’s forecasting through a comparison of budget to actual data and historical variance trends. – considering the accounting policy for compliance with IAS 36 and the application by the Group in accordance with the stated policy. – reviewing the disclosures in the financial statements to ensure they are both accurate and complete. Te parent company holds investments in its subsidiaries totalling £2,217,388. As this amount is higher than the year- end market capitalisation for the Group, this was considered to be an indication of impairment and so management performed a review to identify if any impairment was required. Tis involved preparation of value in use forecasts, which require management to make a number of estimates and judgements and we therefore consider this to be a key audit matter. Our audit work included, but was not restricted to: – considering management’s assessment of the existence of any impairment indicators. – obtaining an understanding of the key controls over the impairment review process and generation of cash flow forecasts. – obtaining and checking the mechanical accuracy of management’s impairment model. – considering management’s assessment of CGUs, the net assets of each CGU and whether impairment testing is being conducted for all relevant CGUs. – challenging and testing the assumptions underlying the impairment models for value in use calculations, in particular maintainable trading levels, growth rates and discount rates (utilising a valuation specialist), – testing the accuracy of management’s forecasting through a comparison of budget to actual data and historical variance trends. – considering the accounting policy for compliance with IAS 36 and the application by the Group in accordance with the stated policy. – reviewing the disclosures in the financial statements to ensure they are both accurate and complete. Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. Tey were not designed to enable us to express an opinion on these matters individually and we express no such opinion. OTHER INFORMATION Te directors are responsible for the other information contained within the annual report. Te other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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. PHSC plc 26 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF PHSC PLC (continued) for the year ended 31 March 2024 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 this gives rise to 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. OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion based on the work undertaken in the course of our audit: • the information given in the strategic report and the report of the directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the report of the directors and strategic report have been prepared in accordance with applicable legal requirements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION In 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 report of the directors. We have nothing to report in respect of the following matters where 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 THE DIRECTORS FOR THE FINANCIAL STATEMENTS As explained more fully in the directors’ responsibilities statement set out on page 16 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 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. 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. EXTENT TO WHICH THE AUDIT IS CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD Irregularities, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion. PHSC plc 27 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF PHSC PLC (continued) for the year ended 31 March 2024 We obtained an understanding of the legal and regulatory frameworks within which the Group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Te laws and regulations we considered in this context were the Companies Act 2006 and Taxation legislation. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management and the recognition of revenue. Our audit procedures to respond to these risks included: • enquiry of management about the Group’s policies, procedures and related controls regarding compliance with laws and regulations and if there are any known instances of non-compliance; • examining supporting documents for all material balances, transactions and disclosures; • review of the board meeting minutes; • evaluation of the selection and application of accounting policies related to subjective measurements and complex transactions; • detailed testing of a sample of sales made during the year and around the year end and agreeing these through to invoices and receipts; • testing the appropriateness of a sample of significant journal entries recorded in the general ledger and other adjustments made in the preparation of the financial statements; and • review of accounting estimates for biases. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. Tis description forms part of our auditor’s report. USE OF OUR REPORT Tis 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. Darren Rigden (Senior Statutory Auditor) for and on behalf of Crowe U.K. LLP Statutory Auditor Maidstone 1 August 2024 PHSC plc 28 GROUP STATEMENT OF FINANCIAL POSITION as at 31 March 2024 31.3.24 31.3.23 Note £ £ Non-Current Assets Property, plant and equipment 5 501,775 468,490 Goodwill 6 2,115,045 2,235,045 Deferred tax asset 14 12,370 11,554 2,629,190 2,715,089 Current Assets Stock 8 245,663 200,169 Trade and other receivables 7 768,844 674,372 Cash and cash equivalents 9 488,375 749,627 1,502,882 1,624,168 Total Assets 4,132,072 4,339,257 Current Liabilities Trade and other payables 11 630,818 531,422 Right of use lease liabilities 13 38,464 25,137 Current corporation tax payable 79,270 56,919 748,552 613,478 Non-Current Liabilities Right of use lease liabilities 13 40,865 25,414 Deferred tax liabilities 14 67,290 62,223 108,155 87,637 Total Liabilities 856,707 701,115 Net Assets 3,275,365 3,638,142 Capital and reserves attributable to equity holders of the Group Called up share capital 10 1,103,426 1,184,704 Share premium account 10 1,916,017 1,916,017 Capital redemption reserve 507,928 426,650 Merger relief reserve 133,836 133,836 Treasury shares (209,977) – Retained earnings (175,865) (23,065) 3,275,365 3,638,142 Te financial statements were approved and authorised for issue by the board of directors on 1 August 2024, and were signed on its behalf by: S A King Director Registered number: 4121793 Te accounting policies and notes on pages 32 to 51 form part of these financial statements. 29 PHSC plc GROUP STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2024 31.3.24 31.3.23 Note £ £ Continuing operations: Revenue 26 3,778,750 3,437,624 Cost of sales 15 (1,763,210) (1,612,543) Gross profit 2,015,540 1,825,081 Administrative expenses 15 (1,580,532) (1,524,829) Goodwill impairment 6 (120,000) _ Other income 16 – 3,000 Profit from operations 315,008 303,252 Finance income 19 17,309 1,346 Profit before taxation 332,317 304,598 Corporation tax expense 20 (83,552) (61,339) Profit for the year after tax attributable to owners of the parent 248,765 243,259 Other comprehensive income – – Total comprehensive income attributable to owners of the parent 248,765 243,259 Basic earnings per share from continuing operations (p) 21 2.19p 2.05p Te accounting policies and notes on pages 32 to 51 form part of these financial statements. PHSC plc 30 PHSC plc GROUP STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2024 Merger Capital Share Share Relief Redemption Treasury Retained Capital Premium Reserve Reserve Shares Earnings Total £ £ £ £ £ £ £ Balance at 1 April 2023 1,184,704 1,916,017 133,836 426,650 – (23,065) 3,638,142 Profit for year attributable to equity holders – – – – – 248,765 248,765 Dividends – – – – – (193,010) (193,010) Cancellation of own shares (81,278) – – 81,278 (209,977) (208,555) (418,532) Balance at 31 March 2024 1,103,426 1,916,017 133,836 507,928 (209,977) (175,865) 3,275,365 Balance at 1 April 2022 1,467,726 1,916,017 133,836 143,628 (644,738) 496,884 3,513,353 Profit for year attributable to equity holders – – – – – 243,259 243,259 Dividends – – – – – (118,470) (118,470) Cancellation of own shares (283,022) – – 283,022 644,738 (644,738) – Balance at 31 March 2023 1,184,704 1,916,017 133,836 426,650 – (23,065) 3,638,142 Te accounting policies and notes on pages 32 to 51 form part of these financial statements. PHSC plc 31 PHSC plc GROUP STATEMENT OF CASH FLOWS for the year ended 31 March 2024 31.3.24 31.3.23 Note £ £ Cash flows from operating activities: Cash generated from operations I 471,807 318,153 Tax paid (56,951) (55,114) Net cash generated from operating activities 414,856 263,039 Cash flows used in investing activities Purchase of property, plant and equipment (39,611) (41,386) Interest received 17,309 1,346 Net cash used in investing activities (22,302) (40,040) Cash flows used in financing activities Payment of lease liabilities (42,264) (4,265) Purchase of own shares (418,532) _ Dividends paid to shareholders (193,010) (118,470) Net cash used in financing activities (653,806) (122,735) Net (decrease)/increase in cash and cash equivalents (261,252) 100,264 Cash and cash equivalents at beginning of year 749,627 649,363 Cash and cash equivalents at end of year 488,375 749,627 All changes in liabilities arising from financing relate entirely to cash movements. NOTE TO THE GROUP STATEMENT OF CASH FLOWS for the year ended 31 March 2024 31.3.24 31.3.23 £ £ I. CASH GENERATED FROM OPERATIONS Profit from operations 315,008 303,252 Depreciation charge 74,515 63,034 Goodwill impairment 120,000 _ Loss on sale of fixed assets 2,854 _ (Increase) in stock (45,494) (14,484) (Increase)/decrease in trade and other receivables (94,472) 52,006 Increase/(decrease) in trade and other payables 99,396 (85,655) Cash generated from operations 471,807 318,153 PHSC plc 32 ACCOUNTING POLICIES for the year ended 31 March 2024 General information PHSC plc is quoted on the AIM market operated by London Stock Exchange plc and is incorporated in England and Wales under the Companies Act 2006. Te address of its registered office is set out in the Company information schedule at the front of this annual report. Te Group’s head office is based in Aylesford, Kent, with additional premises in Scotland, Berkshire and Northants. Te nature of the Group’s operations and its principal activities are set out in the strategic report on pages 3 to 11. Te financial statements are presented in pounds sterling which is the Group’s functional and presentation currency. Te figures shown in the financial statements are rounded to the nearest pound. Basis of preparation of financial statements Te Group’s financial statements have been prepared in accordance with UK adopted international accounting standards and under the historical cost convention except as noted below. Te preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. Te areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2. Company Law requires the directors to consider the appropriateness of the going concern basis when preparing the financial statements. Te directors confirm that they have considered a period up to 12 months from the date of signing and any severe but plausible downside factors and that the going concern basis remains appropriate. In accordance with Financial Reporting Council guidance the directors have provided reasons for this opinion in the going concern section of the strategic report on page 11. Tere are no standards that are issued but not yet effective that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. Basis of consolidation Te Group financial statements consolidate the financial statements of PHSC plc and all of its subsidiary undertakings made up to 31 March 2024. Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Te Group obtains and exercises control through voting rights. Te acquisition of subsidiaries has been accounted for using the acquisition method of accounting. Te cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed are measured initially at their fair values at the acquisition date. Te excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. Inter-company transactions (including unrealised gains/losses) and balances are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. Property, plant and equipment Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment. Cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit and loss in the period in which they are incurred. PHSC plc 33 ACCOUNTING POLICIES (continued) for the year ended 31 March 2024 Depreciation is provided on all property, plant and equipment, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset over the shorter of the expected useful life or lease term, as follows: Property: Freehold buildings – 2% on a straight line basis Improvements to property – on a straight line basis (10% of cost if expected useful life is shorter than the lease term) Plant and equipment: Fixtures and equipment – 25% on reducing balance basis Right of use assets – 25% on reducing balance basis Motor vehicles – 25% on reducing balance basis Material residual value estimates are updated as required. An asset is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised in profit and loss. Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: • Te contract involves the use of identified assets; this may be specified explicitly or implicitly and should be physically distinct or represent substantially all the capacity of a physically distinct asset. • Te Group has the right to obtain substantially all the economic benefits from use of the assets throughout the period of use; and • Te Group has the right to direct the use of the asset. Te Group has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of the asset if the Group has the right to operate the asset. All leases are accounted for by recognising a right-of-use asset and a lease liability except for: • Leases of low value assets; and • Leases with a duration of twelve months or less. Lease liabilities are measured at the present value of contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the entity’s incremental borrowing rate on commencement of the lease is used. Te effect of discounting is considered immaterial to the financial statements, so the values recorded represent the gross undiscounted amounts. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. Intangible assets Goodwill arises on the acquisition of subsidiary undertakings and interests and represents the excess of the cost of acquisition over the net asset values of the subsidiaries or interests acquired. Such goodwill is capitalised as an intangible asset and is stated at cost less impairment losses. Impairment of intangible assets and property, plant and equipment For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Goodwill is allocated to those cash-generating units that are expected to benefit from the business combination on which the goodwill arose and represent the lowest level within the Group at which management monitors the related cash flows. PHSC plc 34 ACCOUNTING POLICIES (continued) for the year ended 31 March 2024 Goodwill, other individual assets, or cash-generating units that include goodwill are reviewed for impairment at least annually. All property, plant and equipment with a finite life are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets or cash-generating unit’s carrying amount exceeds its recoverable amount. Te recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use, based on an internal discounted cash flow evaluation. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. Impairment losses are charged to administrative expenses. Stock Stock is stated at the lower of cost and net realisable value after making allowance for obsolete and slow-moving stock. Te value of stock is calculated on purchase cost on a first-in, first-out basis. Cash and cash equivalents Cash and cash equivalents comprise cash in hand, demand deposits, bank overdrafts, and short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value. Financial instruments Trade receivables and contract assets are initially stated at the transaction price and subsequently measured at amortised cost using the effective interest method. Te carrying amounts for accounts receivable are net of allowances for expected credit losses. Te Group evaluated the expected credit losses on trade receivables by reviewing historical data, adjusted for forward-looking factors to the debtors and the economic environment. Individual receivables are only written off when management deems them not collectible. Taxation Current tax is the tax currently payable based on the taxable profit for the year. Deferred tax is provided in full on temporary differences between the carrying amounts of assets and liabilities and their tax bases, except when, at the initial recognition of the asset or liability, there is no effect on accounting or taxable profit or loss under a business combination or does not give rise to equal taxable and deductible temporary differences. Deferred tax is determined using tax rates and laws that have been substantially enacted by the statement of financial position date, and that are expected to apply when the temporary difference reverses. Tax losses available to be carried forward, and other tax credits to the Group, are recognised as deferred tax assets, to the extent that it is probable that there will be future taxable profits against which the temporary differences can be utilised. Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the statement of comprehensive income, except where they relate to items that are charged or credited directly to equity, in which case the related deferred tax is also charged or credited directly to equity. Provisions Tese are recognised when the Group has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Te increase in the provision due to the passage of time is recognised as a finance cost. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Te proceeds of share issues, received net of any directly attributable transactions costs, are credited to share capital at nominal value and the excess credited to the share premium account. PHSC plc 35 ACCOUNTING POLICIES (continued) for the year ended 31 March 2024 Te capital redemption reserve arose when the Company repurchased some of its own shares. At that point the nominal value of those shares was transferred to the capital redemption reserve. Te merger relief reserve represents the premium of any shares issued in part consideration on acquisitions in accordance with section 612 of Te Companies Act 2006. Retained earnings represent the accumulated profits and losses, less dividends since the Group was formed. Employee benefits Te Group supports various personal pension arrangements and is auto-enrolment compliant. Payments are made to individual defined contribution pension schemes. Agreed contributions are charged to the statement of comprehensive income as they become payable. Revenue recognition Revenue consists of the consideration to which the Group expects to be entitled for services provided in the ordinary course of the Group’s activities, excluding VAT and trade discounts. Revenue stream Nature, timing of satisfaction of performance obligations and significant payment terms Services: one-off consultancy, training, health & safety audits, editorials and safety inspections Revenue from services is recognised as the services are provided as this is the point at which the performance obligations are fulfilled. In respect of services invoiced in advance, amounts are deferred until provision of the service. Customer payment terms are generally 30 days from the date of invoice. Services: health and safety support, annual consultancy services, appointed safety adviser services and certification services Revenue is recognised evenly across the length of the contract as this is considered the best estimate of the fulfilment of the performance obligations. Customer payment terms are generally 30 days from the date of invoice. Services: UK Responsible Person Service Revenue is apportioned across the year using pre-set percentages reflecting the associated workload each month. Supply and installation of security equipment and maintenance of equipment Revenue from installation and maintenance visits is recognised as these services are provided as this is the point at which the performance obligations are fulfilled. Customer payment terms are between 30 and 60 days from the date of invoice. Foreign currencies Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the Group statement of financial position are reported at the rates of exchange prevailing at that date. All foreign exchange gains and losses are presented in the statement of comprehensive income within the administrative expense heading. Government grants Such grants are accounted for on an accruals basis and are recognised in the statement of comprehensive income as other income. PHSC plc 36 1. FINANCIAL RISK MANAGEMENT Financial risk Te Group’s activities expose it to a variety of financial risks. Te Group’s overall risk management programme seeks to minimise potential adverse effects on the Group’s financial performance. Risk management is carried out by the board which evaluates and manages financial risks in close co-operation with the managing directors of the subsidiary companies. Te Group: • regularly reviews credit extended to customers with appropriate action being taken to minimise the cost of bad debts; • balances risk and return when assessing where to place cash surplus to the Group’s immediate requirements; and • keeps open options to employ debt finance to ensure that the Group has enough funds for continuing operations and planned growth. Market risk Te Group has interest-bearing assets which are subject to a variable rate of interest. Accordingly, the Group is only exposed to interest rate risk, which is not expected to have a significant impact on profit or loss or equity. Cash is deposited with a blue chip institution with regular monitoring of exposure and risk. Credit risk Te Group has implemented policies that require appropriate credit checks on potential customers before sales are made. No credit limits were exceeded during the year, and management does not expect any losses from non-performance by such counterparties. Liquidity risk Te Group keeps open avenues for securing debt finance to ensure that funds may be called upon if and when needed for operations. Te board monitors the Group’s liquidity position on the basis of expected cash flow on a regular basis. Te following table analyses the Group’s financial liabilities, placed into relevant maturity groupings based on the remaining period to maturity at 31 March. Te amounts disclosed are the contractual undiscounted cash flows: Less than Between Between Over 1 year 1 & 2 yrs 2 & 5 yrs 5 yrs £ £ £ £ At 31 March 2024 Trade and other payables 630,818 – – – Lease liabilities 38,464 40,865 – – At 31 March 2023 Trade and other payables 531,422 – – – Lease liabilities 25,137 25,414 – – Capital risk Te Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns to shareholders. Te Group defines capital as share capital plus reserves. Te Group is not subject to any externally imposed capital requirements. Te board monitors levels of cash and any excess levels have historically been used for acquisitions, but more recently for share buy-backs and special dividends. NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2024 PHSC plc 37 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated. Tey are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Critical accounting estimates and assumptions Te directors are required to make estimates and judgements concerning the future. Te resulting accounting estimates will, by definition, seldom equal the related actual results. Te areas involving a higher degree of judgement or complexity and areas where assumptions are significant to the production of these financial statements are disclosed below. Impairment of goodwill An impairment of goodwill has the potential to significantly impact upon the Group’s statement of comprehensive income for the year. To determine whether impairments are required the directors estimate the recoverable amount of the goodwill. Tis calculation is based on the directors’ expectations of future revenues and margins based on the results forecast for a three-year period ending 31 March 2027. Full details are disclosed in note 6. Provision for obsolete and slow-moving stock Stock of £38,611 (2023: £38,076) has been identified as slow moving within B2BSG and a provision has been made against this stock to cover potential obsolescence. Te stock provision will be monitored and updated regularly. Te risks of material adjustment to the provision in the next financial year are as follows: i) Changes in technology rendering current stock technologically obsolete; and ii) Customers changing their existing systems which would mean elements of current maintenance stock are unable to be utilised. PHSC plc 38 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 3. SEGMENTAL REPORTING IFRS 8 requires that operating segments be identified based on internal reporting and decision-making. PHSC plc’s operating segments are by subsidiary company as the directors and management team receive and make decisions based on monthly management accounts by subsidiary. A description of each subsidiary’s activities is included in the strategic report on pages 6 to 9. Te following table shows the Group’s revenue and results for the year under review analysed by operating segment. Segment operating profit represents the trading profit after depreciation, but before tax and management charges. Te management charges represent Group overheads and are reflected in the operating loss of the parent company. All revenue arose in the UK and all assets are located in the UK. Tere is an element of liabilities that derive from foreign currency due to one subsidiary sourcing goods overseas. Operating Profit/ Other profit/ Net (loss) Current Deferred Goodwill Profit Revenue income Depreciation (loss) interest before tax taxation taxation impairment after tax £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Year ended 31 March 2024 Security division – B2BSG 1,179 – 1 154 – 154 – 1 – Health and safety division ISL 224 – 12 15 – 15 (1) – – PHSCL 862 – 7 364 – 364 (76) – – QLM 392 – 11 112 – 112 (16) (6) – RSA 345 – 13 36 – 36 (3) – (120) 1,823 – 43 527 – 527 (96) (6) (120) Quality systems division – QCS 777 – 18 250 – 250 (55) – – Holding company – PHSC plc – – 13 (496) 17 (479) 72 1 – Total 3,779 – 75 435 17 452 (79) (4) (120) 249 Operating Profit/ Other profit/ Net (loss) Current Deferred Goodwill Profit Revenue income Depreciation (loss) interest before tax taxation taxation impairment after tax £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Year ended 31 March 2023 Security division – B2BSG 830 3 1 (9) – (9) 10 (4) – Health and safety division ISL 198 – 11 7 – 7 1 – – PHSCL 807 – 4 268 – 268 (38) (1) – QLM 402 – 6 137 – 137 (21) – – RSA 366 – 9 70 – 70 (9) – – 1,773 – 30 482 – 482 (67) (1) – Quality systems division – QCS 835 – 18 272 – 272 (47) – – Holding company – PHSC plc – – 14 (442) 1 (441) 47 1 – Total 3,438 3 63 303 1 304 (57) (4) – 243 PHSC plc 39 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 3. SEGMENTAL REPORTING – continued Te table below shows assets and liabilities by subsidiary, exclusive of inter-company balances. Non-current Net asset Non-current Current Total Current Non-current Total operating additions assets assets assets liabilities liabilities liabilities assets £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 As at 31 March 2024 Security division – B2BSG – 11 575 586 (77) – (77) 509 Health and safety division ISL 18 20 57 77 (76) (9) (85) (8) PHSCL 4 16 243 259 (100) (6) (106) 153 QLM 51 42 106 148 (126) (17) (143) 5 RSA 34 491 88 579 (70) (18) (88) 491 107 569 494 1,063 (372) (50) (422) 641 Quality systems division – QCS 3 30 170 200 (218) (3) (221) (21) Holding company – PHSC plc 1 2,673 264 2,937 (82) (48) (130) 2,807 Sub–total 111 3,283 1,503 4,786 (749) (101) (850) 3,936 Consolidation adjustments To goodwill – (656) – (656) – – – (656) To deferred tax – 2 – 2 – (7) (7) (5) Total 111 2,629 1,503 4,132 (749) (108) (857) 3,275 Non–current Net asset Non-current Current Total Current Non–current Total operating additions assets assets assets liabilities liabilities liabilities assets £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 As at 31 March 2023 Security division – B2BSG – 13 453 466 (28) – (28) 438 Health and safety division ISL 16 14 54 68 (64) (8) (72) (4) PHSCL 20 20 201 221 (78) (10) (88) 133 QLM – 2 93 95 (122) (1) (123) (28) RSA 4 470 95 565 (58) (5) (63) 502 40 506 443 949 (322) (24) (346) 603 Quality systems division – QCS 1 45 197 242 (204) (9) (213) 29 Holding company – PHSC plc – 2,685 531 3,216 (59) (48) (107) 3,109 Sub–total 41 3,249 1,624 4,873 (613) (81) (694) 4,179 Consolidation adjustments To goodwill – (536) – (536) – – – (536) To deferred tax – 2 – 2 – (7) (7) (5) Total 41 2,715 1,624 4,339 (613) (88) (701) 3,638 Tere were three B2BSG customers where invoices raised during the year exceeded 10% of turnover. Te revenue earned from these customers together with the percentage of total turnover was as follows: £0.268m (23%), £0.221m (19%) and £0.2m (17%). PHSC plc 40 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 4. AUDITOR’S REMUNERATION 31.3.24 31.3.23 £ £ Audit Fees payable to the Company’s auditor for the audit of the annual parent Company and consolidated accounts 55,000 34,000 Total audit 55,000 34,000 Tax Tax compliance services 6,500 8,625 Tax advisory services – present year 2,500 2,500 Tax advisory services – previous year – 4,000 Total tax 9,000 15,125 Total 64,000 49,125 5. PROPERTY, PLANT AND EQUIPMENT Freehold Improvements Fixtures and Motor Right of use property to property equipment vehicles assets Totals £ £ £ £ £ £ COST At 1 April 2022 571,270 100,132 123,445 – 133,750 928,597 Additions – – 7,864 – 33,522 41,386 Disposals – – – – – – At 31 March 2023 571,270 100,132 131,309 – 167,272 969,983 Additions – – 10,112 29,499 71,043 110,654 Disposals – – (25,840) – (17,645) (43,485) At 31 March 2024 571,270 100,132 115,581 29,499 220,670 1,037,152 DEPRECIATION At 1 April 2022 205,580 57,696 96,249 – 78,934 438,459 Charge for year 8,838 7,641 8,768 – 37,787 63,034 Disposals – – – – – – At 31 March 2023 214,418 65,337 105,017 – 116,721 501,493 Charge for year 8,838 7,642 8,396 7,375 42,264 74,515 Disposals – – (22,986) – (17,645) (40,631) At 31 March 2024 223,256 72,979 90,427 7,375 141,340 535,377 NET BOOK VALUE At 31 March 2024 348,014 27,153 25,154 22,124 79,330 501,775 At 31 March 2023 356,852 34,795 26,292 – 50,551 468,490 At 31 March 2022 365,690 42,436 27,196 – 54,816 490,138 Depreciation expenses of £74,515 (2023: £63,034) are included in administrative expenses in the statement of comprehensive income. Te net book value of right of use assets includes £4,698 (2023: £15,973) in relation to short-term lease hold property and £74,631 (2023: 34,578) in relation to motor vehicles. PHSC plc 41 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 6. GOODWILL Goodwill £ COST At 1 April 2022 and 2023 5,514,547 Additions – At 31 March 2024 5,514,547 IMPAIRMENT At 1 April 2022 and 2023 3,279,502 Impairment 120,000 At 31 March 2024 3,399,502 NET BOOK VALUE At 31 March 2024 2,115,045 At 31 March 2023 2,235,045 At 31 March 2022 2,235,045 Impairment Tests for Goodwill Goodwill is allocated to the Group’s cash-generating units, identified according to subsidiary. Te following table shows a summary of the goodwill allocation by subsidiary: 31.3.24 31.3.23 £ £ B2BSG Solutions Limited – – Inspection Services (UK) Limited 87,967 87,967 Personnel Health & Safety Consultants Limited 594,952 594,952 QCS International Limited 417,638 417,638 Quality Leisure Management Limited 582,844 582,844 RSA Environmental Health Limited 431,644 551,644 Total goodwill for Group 2,115,045 2,235,045 Te directors have estimated the value-in-use of goodwill by discounting estimated future cash flows in accordance with IFRS. Management have prepared forecasts for 2024-25 and have then assessed whether it is appropriate to assume that this level of performance will be maintained or improved over the following two years. A growth factor of 2% has been applied and the forecast performance for the third year, 2026-27, is assumed to continue into perpetuity. Te impairment review calculations use estimated future cash flows based on these forecasts with a terminal value being calculated using the year three expected cash flows. Te cash flow projections are based on profits before inter group management charges but after tax and have been discounted using a discount rate of 15% (2023: 13%). Tis takes into consideration the weighted average cost of capital (WACC) and factors in an increased risk connected with being a company quoted on AIM. PHSC plc 42 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 6. GOODWILL – continued Every year the board assesses the value of goodwill in the Group statement of financial position and forms a view as to whether this value is realistic and justifiable. Following extensive discussion, the board determined that it should write down the goodwill value of RSA by £120,000 in the consolidated financial statements and the investment value of QLM by £94,890 in PHSC Plc’s company financial statements. Tese changes arise primarily from an increase in the discount rate used. Tere is no goodwill attached to B2BSG, and there is sufficient headroom in other trading subsidiaries to avoid a similar impairment requirement. Te board remains confident in its valuations of all subsidiary companies. Sensitivity analysis Te calculations are sensitive to movements in the discount rate and cash flows and may therefore result in an impairment charge to the income statement. An increase of 1% to the discount rate and 3% reduction in revenue would result in additional impairment charges as follows: Reduction in Increase in cash flows discount rate of 3% of 1% £ £ RSA Environmental Health Limited 12,991 29,213 Quality Leisure Management Limited 26,923 48,769 Additional work undertaken found actual results for RSA to regularly exceed those forecast year on year. Building in the same uplift to forecasts as prior actuals management are confident that goodwill is not impaired. PHSC plc 43 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 7. TRADE AND OTHER RECEIVABLES 31.3.24 31.3.23 £ £ Trade receivables 659,487 580,845 Less provision for impairment of trade receivables – – Trade receivables (net) 659,487 580,845 Other debtors and prepayments 109,357 80,117 Contract assets – 13,410 Total 768,844 674,372 At 31 March 2024 there were no impaired trade receivables (2023: nil). Te ageing of receivables is as follows: 31.3.24 31.3.23 £ £ Up to 3 months 574,159 541,159 3 to 6 months 69,343 10,197 Over 6 months 15,985 29,489 659,487 580,845 Movements on the Group provision for impairment of trade receivables are as follows: 31.3.24 31.3.23 £ £ At 1 April – 2,485 Release of provision – (2,485) At 31 March – – Te creation and release of the provision for impaired receivables is included in administrative expenses in the statement of comprehensive income. Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash. Debts older than 90 days have either been provided for or are considered fully recoverable based on the customer’s payment history and current trading situation. Te other classes within trade and other receivables do not contain impaired assets. Te maximum exposure to credit risk at the year end is the value of each class of receivable mentioned above. Te Group does not hold any collateral as security. Trade receivables and contract assets are the only types of financial asset within the Group that are subject to IFRS 9’s expected credit loss model. Te Group has taken into consideration the requirements of IFRS 9 for these classes of asset; using the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance, did not lead to a material change in the impairment of trade receivables or contract assets, so no adjustment was made. PHSC plc 44 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 8. STOCK 31.3.24 31.3.23 £ £ Stock of finished goods 245,663 200,169 £38,611 of stock was provided for in the current year (2023: £38,076). Te value of stock consumed and recognised as an expense was £630,940 (2023: £452,819). 9. CASH AND CASH EQUIVALENTS Te cash balances for the purposes of the cash flow statement were as follows: 31.3.24 31.3.23 £ £ Cash at bank and in hand 488,375 749,627 On 1 October 2008, PHSC plc entered into an unlimited multilateral guarantee with HSBC Bank plc (see note 12). 10. CALLED UP SHARE CAPITAL Number of Ordinary Share shares (Nominal shares premium Total value of 10p) £ £ £ Called up, allotted and fully paid At 1 April 2022 14,677,257 1,467,726 1,916,017 3,383,743 Cancellation of shares held in Treasury (2,830,238) (283,022) _ (283,022) At 31 March 2023 11,847,019 1,184,704 1,916,017 3,100,721 Purchase of own shares (812,782) (81,278) _ (81,278) At 31 March 2024 11,034,237 1,103,426 1,916,017 3,019,443 Te authorities granted by shareholders at the 2022 AGM and 2023 AGM were utilised to implement two share buyback programmes during the year ended 31 March 2024. Te first was announced on 15 August 2023 and completed on 23 August 2023. Over that period, the Company’s broker was able to repurchase a total of 812,782 ordinary shares on the Company’s behalf for a total consideration (including costs) of £208,555. Te repurchased shares were initially held in treasury but were subsequently cancelled on 29 September 2023. Te second was announced on 19 March 2024 and completed on 28 March 2024. Over that period, the Company’s broker was able to repurchase a total of 753,384 ordinary shares on the Company’s behalf for a total consideration (including costs) of £209,977. Te repurchased shares were held in treasury at the year end and were cancelled on 11 June 2024. Accordingly, the number of ordinary shares in issue as at 31 March 2024 was 11,034,237 but subsequently reduced to 10,280,853 on cancellation of the shares. Te buyback programmes were funded from the surplus cash held on account. PHSC plc 45 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 11. TRADE AND OTHER PAYABLES 31.3.24 31.3.23 £ £ Trade payables 121,855 48,267 Social security and other taxes 168,307 162,451 Other payables 8,984 25,392 Accruals 102,330 60,258 Contract liabilities 229,342 235,054 Total 630,818 531,422 12. FINANCIAL LIABILITIES On 1 October 2008, PHSC plc entered into an unlimited multilateral guarantee with HSBC Bank plc. Until the middle of March 2023 each company within the Group operated its own current account, the balance on which was allowed to fluctuate according to trading conditions. Interest was only charged on a net overdrawn balance as the Group had the right to offset overdrawn accounts with accounts in credit across the Group. It is now the case that interest is charged on each account on a standalone basis necessitating funds to be moved between Group companies to avoid any interest charges. Tese movements are reflected through inter-company accounts which accounts for some relatively large inter-company balances at the year end. Te Group has an overdraft facility of £50,000 which is secured by a debenture including a fixed charge over certain freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and a first floating charge over all assets and undertakings both present and future. Te overdraft is next scheduled for review in October 2024. 13. LEASES Land & Motor Buildings Vehicles Total Year ended 31 March 2024 £ £ £ Amounts due within 1 year – right of use lease liabilities 4,698 33,766 38,464 Amounts due within 1-2 years - right of use lease liabilities _ 26,758 26,758 Amounts due within 2-5 years - right of use lease liabilities _ 14,107 14,107 Total 4,698 74,631 79,329 Land & Motor Buildings Vehicles Total Year ended 31 March 2023 £ £ £ Amounts due within 1 year – right of use lease liabilities 11,275 13,862 25,137 Amounts due within 1-2 years - right of use lease liabilities 4,698 13,861 18,559 Amounts due within 2-5 years – right of use lease liabilities _ 6,855 6,855 Total 15,973 34,578 50,551 Te finance leases are secured against the underlying assets. PHSC plc 46 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 14. DEFERRED TAX Other Tax losses Accelerated short-term carried capital temporary forward allowances differences Total Deferred tax asset £ £ £ £ At 1 April 2022 2,017 – 13,574 15,591 Debited to income statement – – (4,037) (4,037) At 31 March 2023 2,017 – 9,537 11,554 Credited to income statement – – 816 816 At 31 March 2024 2,017 – 10,353 12,370 Provision Accelerated revalued capital Intangible properties allowances assets Total Deferred tax liabilities £ £ £ £ At 1 April 2022 34,948 3,342 23,552 61,842 Debited income statement – 381 – 381 At 31 March 2023 34,948 3,723 23,552 62,223 Debited to income statement – 5,067 – 5,067 At 31 March 2024 34,948 8,790 23,552 67,290 Deferred tax has been provided at 25% (2023: 25%). Te Group has unrecognised deferred tax assets of £5,938 (2023: £23,750). 15. EXPENSES BY NATURE 31.3.24 31.3.23 £ £ Cost of sales 1,007,532 830,486 Staff related costs 1,575,440 1,596,056 Premises costs 64,947 56,097 Professional fees 240,179 211,041 Other expenses 381,129 380,658 Depreciation 74,515 63,034 Impairment 120,000 _ Total 3,463,742 3,137,372 Cost of sales 1,763,210 1,612,543 Administrative expenses (including goodwill impairment) 1,700,532 1,524,829 Total 3,463,742 3,137,372 PHSC plc 47 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 16. OTHER INCOME 31.3.23 31.3.22 £ £ Apprenticeship grant _ 3,000 _ 3,000 17. EMPLOYEES Staff costs (including executive directors) 31.3.24 31.3.23 £ £ Wages and salaries 1,338,092 1,353,353 Social security costs 136,446 148,999 Other pension costs 74,694 72,182 1,549,232 1,574,534 Te average monthly number of employees during the year was as follows: 31.3.24 31.3.23 Directors of PHSC plc and subsidiary companies 7 7 Consultants 17 17 Administrative 14 14 Total 38 38 Te aggregate compensation for key management, being the members of the board of PHSC plc and the directors of the subsidiary companies (including de facto directors), was as follows: 31.3.24 31.3.23 £ £ Short-term employee benefits 400,875 394,876 Post-employment benefits 39,758 42,111 Total 440,633 436,987 PHSC plc 48 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 18. DIRECTORS’ REMUNERATION Directors of PHSC plc only 31.3.24 31.3.23 £ £ Emoluments 168,325 167,336 Pension contributions to money purchase schemes 24,897 23,561 Total 193,222 190,897 Te remuneration of the executive directors of PHSC plc, from all Group companies, was as follows: Year ended 31.3.24 Short-term employee benefits Post Year Waiver/ Pension employment ended voluntary salary benefits 31.3.23 Salary Bonus reduction sacrifice Benefits Pension Total Total £ £ £ £ £ £ £ £ S A King 101,783 5,000 (48,500) (3,600) 2,966 6,192 63,841 69,225 N C Coote 84,100 5,000 – (10,000) 2,614 13,705 95,419 89,482 Te benefits relate to health insurance. Stephen King’s bonus was added to salary whereas Nicola Coote opted to take her bonus as a pension contribution. Te fees of the non-executive directors were as follows: 31.3.24 31.3.23 £ £ G N Webb 16,981 16,095 L E Young 16,981 16,095 Total 33,962 32,190 19. FINANCE INCOME 31.3.24 31.3.23 £ £ Finance income Bank interest received 17,309 1,346 PHSC plc 49 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 20. TAXATION Analysis of tax charge in year 31.3.24 31.3.23 £ £ Current tax: UK corporation tax on profits in the year 79,271 56,921 Adjustments in respect of previous year 30 _ Total current tax charge 79,301 56,921 Deferred tax: Origination and reversal of temporary differences 4,251 4,418 Total deferred tax charge 4,251 4,418 Tax on profit on ordinary activities 83,552 61,339 Reconciliation of tax on ordinary activities Te relationship between expected tax expense based on the effective tax rate of PHSC plc at 25% (2023: 19%) and the tax expense recognised in the income statement can be reconciled as follows: 31.3.24 31.3.23 £ £ Profit on ordinary activities before tax 332,317 304,598 Tax on profit on ordinary activities at standard rate of corporation tax of 25% (2023: 19%) 83,079 57,874 Effects of: Depreciation on non-qualifying assets 2,306 _ Expenses not deductible for tax purposes 30,222 3,465 Adjustment to tax in respect of previous periods 30 _ Fixed asset differences 237 _ Marginal relief (643) _ Losses brought forward utilised (31,679) _ Total tax charge 83,552 61,339 21. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the year. 31.3.24 31.3.23 Profit attributable to equity holders of the Group (£) 248,765 243,259 Weighted average number of ordinary shares in issue 11,357,413 11,847,019 Basic earnings per share (pence per share) 2.19p 2.05p Tere are no dilutive shares, options or warrants in issue. 22. DIVIDENDS A total dividend of 1.5p per ordinary share was paid in respect of the year ended 31 March 2023; £59,190 was paid in January 2023 and the balance of £110,253 in October 2023. An interim dividend of 0.75p in respect of the year ended 31 March 2024 was paid in January 2024 (£82,757) and a final dividend of 1.25p is proposed, subject to shareholder approval, for payment in October 2024. PHSC plc 50 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 23. RELATED PARTY DISCLOSURES 31.3.24 31.3.23 £ £ PHSC plc dividends paid to directors S A King 37,534 25,618 N C Coote 41,160 25,303 G N Webb MBE 341 195 79,035 51,116 24. ULTIMATE CONTROLLING PARTY Tere is no ultimate controlling party, but the largest shareholder, Ms N Coote, currently holds 21.36% (2023: 21.36%) of the issued share capital of PHSC plc. 25. FINANCIAL INSTRUMENTS Set out below are the Group’s financial instruments: 31.3.24 31.3.23 £ £ Financial assets at amortised cost Trade and other receivables 768,844 674,372 Cash and cash equivalents 488,375 749,627 1,257,219 1,423,999 Financial liabilities at amortised cost Trade and other payables 630,818 531,422 630,818 531,422 Due within 1 year 630,818 531,422 Due in over 1 year – – 630,818 531,422 PHSC plc 51 26. REVENUE Set out below is a breakdown of revenue: 31.3.24 31.3.23 £ £ Health and safety services 1,823,027 1,773,111 Quality systems services 776,942 834,636 Security related products 1,178,781 829,877 3,778,750 3,437,624 Te split of revenue is in line with the segmental analysis in note 3. Te following table provides information about receivables, contract assets and contract liabilities with customers: 31.3.24 31.3.23 £ £ Receivables which are included in ‘trade and other receivables’ 659,487 580,845 Contract assets _ 13,410 Contract liabilities 229,342 235,054 Contract assets relate to uninvoiced work carried out at the reporting date where performance obligations had been met. Contract liabilities relate to deferred revenue in respect of ongoing services where the revenue is being recognised across the term of the customer contract. Significant changes in the contract assets and contract liabilities balances during the period are as follows: 31.3.24 31.3.23 £ £ Revenue deferred into future periods (229,342) (235,054) Revenue accrued in current period _ 13,410 Deferred revenue recognised in the period 235,054 246,945 Te performance obligations for all revenues that have been deferred into future periods have been satisfied by the following year end as the performance obligations on the contracts are no longer than one year in length. Tere are no impairment losses in relation to the contract assets recognised under IFRS 15. NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 52 PHSC plc COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 Company number: 4121793 PHSC plc 53 31.3.24 31.3.23 Note £ £ Non-Current Assets Property, plant and equipment 9 360,601 372,926 Investments 10 2,217,388 2,312,278 2,577,989 2,685,204 Current Assets Trade and other receivables 11 865,418 987,951 Cash and cash equivalents 12 230,352 506,560 1,095,770 1,494,511 Total Assets 3,673,759 4,179,715 Current Liabilities Trade and other payables 13 200,232 107,791 Corporation tax – – 200,232 107,791 Non-Current Liabilities Deferred taxation 14 47,714 48,274 47,714 48,274 Total Liabilities 247,946 156,065 Net Assets 3,425,813 4,023,650 Capital and reserves attributable to equity holders of the Group Called up share capital 15 1,103,426 1,184,704 Share premium account 15 1,916,017 1,916,017 Capital redemption reserve 507,928 426,650 Merger relief reserve 133,836 133,836 Treasury shares (209,977) _ Retained earnings (25,417) 362,443 3,425,813 4,023,650 Te Company has elected to take the exemption under section 408 of the Companies Act 2006 to not present the parent Company Statement of Comprehensive Income. Te profit for the year was £13,705 (2023: loss of £48,189). Approved and authorised for issue by the board on 1 August 2024 and signed on its behalf by: S A King Director COMPANY STATEMENT OF FINANCIAL POSITION as at 31 March 2024 Registered number: 4121793 PHSC plc 54 COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2024 Merger Capital Share Share Relief Redemption Treasury Retained Capital Premium Reserve Reserve Shares Earnings Total £ £ £ £ £ £ £ Balance at 1 April 2023 1,184,704 1,916,017 133,836 426,650 – 362,443 4,023,650 Profit for year attributable to equity holders – – – – – 13,705 13,705 Cancellation of own shares – August 23 (81,278) – – 81,278 – – – Cancellation of treasury shares – August 23 – – – – – (208,555) (208,555) Cancellation of own shares – March 24 – – – – (209,977) – (209,977) Dividends paid – – – – – (193,010) (193,010) Balance at 31 March 2024 1,103,426 1,916,017 133,836 507,928 (209,977) (25,417) 3,425,813 Balance at 1 April 2022 1,467,726 1,916,017 133,836 143,628 – 529,102 4,190,309 Loss for year attributable to equity holders – – – – – (48,189) (48,189) Cancellation of own shares (283,022) – – 283,022 – – – Dividends paid – – – – – (118,470) (118,470) Balance at 31 March 2023 1,184,704 1,916,017 133,836 426,650 – 362,443 4,023,650 PHSC plc 55 COMPANY STATEMENT OF CASH FLOWS for the year ended 31 March 2024 31.3.24 31.3.23 Note £ £ Cash flows (used by)/generated from operating activities: Cash (used by)/generated from operations I (87,985) 319,903 Group tax relief receipt 71,894 47,226 Net cash (used by)/generated from operating activities (16,091) 367,129 Cash flows from investing activities Purchase of property, plant and equipment (874) – Dividends from subsidiary companies 335,000 165,000 Interest received 17,299 1,346 Net cash from investing activities 351,425 166,346 Cash flows used by financing activities Dividends paid to Group shareholders (193,010) (118,470) Purchase of own shares (418,532) – Net cash used by financing activities (611,542) (118,470) Net (decrease)/increase in cash and cash equivalents (276,208) 415,005 Cash and cash equivalents at beginning of year 506,560 91,555 Cash and cash equivalents at year end 230,352 506,560 All changes in liabilities arising from financing relate entirely to cash movements. NOTE TO THE COMPANY STATEMENT OF CASH FLOWS for the year ended 31 March 2024 31.3.24 31.3.23 £ £ I. CASH (USED BY)/GENERATED FROM OPERATIONS Loss before taxation and interest (411,048) (262,310) Depreciation charge 13,199 13,446 Impairment of investment 94,890 – Decrease in trade and other receivables 122,533 490,314 Increase in trade and other payables 92,441 78,453 Cash (used by)/generated from operations (87,985) 319,903 PHSC plc 56 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2024 1. BASIS OF PREPARATION Te Company’s financial statements have been prepared in accordance with UK adopted international accounting standards and under the historical cost convention except as noted below. Te preparation of financial statements in conformity with UK adopted international accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. Te areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 18. Te Company has elected to apply the exemption under section 408 of the Companies Act 2006 to not present the Parent Company Statement of Comprehensive Income. Te loss for the year before dividends received from subsidiaries (2024: £335,000; 2023: £165,000) was £321,295 (2023: loss of £213,189). Tere were no items of other comprehensive income in either period. Company law requires the directors to consider the appropriateness of the going concern basis when preparing the financial statements. Te directors confirm that they have considered a period up to 12 months from the date of signing and any severe but plausible downside factors and that the going concern basis remains appropriate. In accordance with Financial Reporting Council guidance the directors have provided reasons for this opinion in the going concern section of the strategic report on page 11. Tere are no standards that are issued but not yet effective that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. 2. ACCOUNTING POLICIES Revenue Management charge income is recognised when the service the Company has provided is fulfilled. Deferred income tax Deferred tax is provided in full on temporary differences between the carrying amounts of assets and liabilities and their tax bases, except when, at the initial recognition of the asset or liability, there is no effect on accounting or taxable profit or loss under a business combination or this does not give rise to equal taxable and deductible temporary differences. Deferred tax is determined using tax rates and laws that have been substantially enacted by the statement of financial position date, and that are expected to apply when the temporary difference reverses. Segmental reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. Te directors regard the operations of the Company as being one business segment. Further analysis of revenue is disclosed in note 3. Pensions Te Company operates a defined contribution pension scheme. Contributions payable for the year are charged to the income statement. PHSC plc 57 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 2. ACCOUNTING POLICIES – continued Property, plant and equipment Property, plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of non-current assets, less their estimated residual value, over the shorter of the expected useful life or lease term, on the following bases: Freehold buildings – 2% of cost on a straight-line basis Improvements to property – on a straight-line basis (10% of cost if expected useful life is shorter than the lease term) Plant and equipment – 25% reducing balance basis Investments Investments in subsidiary undertakings are stated at cost less amounts provided for any impairment in value. An impairment review is carried out each year. Impairment of tangible and intangible assets An impairment loss is recognised for the amount by which the investment’s carrying amount exceeds its recoverable amount. Te recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use, based on an internal discounted cash flow evaluation. Impairment losses are charged to administrative expenses. Taxation Current income tax assets/liabilities comprise those claims from or obligations to fiscal authorities relating to the current or prior reporting periods, that are unpaid at the statement of financial position date. Tey are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the year. Provisions Tese are recognised when the Company has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Te increase in the provision due to the passage of time is recognised as a finance cost. Financial instruments Trade receivables and contract assets are initially stated at the transaction price and subsequently measured at amortised cost using the effective interest method. Te carrying amounts for accounts receivable are net of allowances for expected credit losses. Te Company evaluated the expected credit losses on trade receivables by reviewing historical data, adjusted for forward-looking factors to the debtors and the economic environment. Individual receivables are only written off when management deems them not collectible. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Te proceeds of share issues received net of any directly attributable transaction costs are credited to share capital at nominal value and the excess credited to the share premium account. Te capital redemption reserve arose when the Company repurchased some of its own shares. At that point, the nominal value of those shares was transferred to the capital redemption reserve. Te merger relief reserve represents the premium of any shares issued in part consideration on acquisitions in accordance with section 612 of the Companies Act 2006. PHSC plc 58 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 2. ACCOUNTING POLICIES – continued Dividends Dividends received from subsidiary companies are recognised at the point that the right to receive the dividend has been established. 3. REVENUE Te revenue of the Company during the year was generated in the UK and derives from the management charge levied on the subsidiary companies and is recognised when the service is delivered. 4. PROFIT BEFORE TAXATION Te profit before taxation is stated after charging: 31.3.24 31.3.23 £ £ Depreciation – owned assets 13,199 13,446 5. DIRECTORS’ REMUNERATION Full details are given on page 48 of the Group accounts. 6. STAFF COSTS Te average number of employees during the year was as follows: 31.3.24 31.3.23 Directors 4 4 Consultants 1 1 Administration 2 2 7 7 £ £ Te aggregate payroll costs of these persons were as follows: Wages and salaries 185,728 163,747 Social security costs 20,552 21,265 Other pension costs 20,504 14,254 226,784 199,266 Te directors are considered to be key management personnel of the Company. 7. AUDITOR’S REMUNERATION Full details are given on page 40 of the Group accounts. PHSC plc 59 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 8. FINANCE INCOME 31.3.24 31.3.23 £ £ Finance income Interest received 17,299 1,346 9. TANGIBLE FIXED ASSETS Freehold land and Freehold Plant and buildings improvements equipment Totals £ £ £ £ COST OR VALUATION At 1 April 2022 and 31 March 2023 441,908 42,814 19,157 503,879 Additions – – 874 874 At 31 March 2024 441,908 42,814 20,031 504,753 DEPRECIATION At 31 April 2022 76,218 29,599 11,690 117,507 Charge for year 8,838 2,741 1,867 13,446 At 31 March 2023 85,056 32,340 13,557 130,953 Charge for year 8,838 2,742 1,619 13,199 At 31 March 2024 93,894 35,082 15,176 144,152 NET BOOK VALUE At 31 March 2024 348,014 7,732 4,855 360,601 At 31 March 2023 356,852 10,474 5,600 372,926 At 31 March 2022 365,690 13,215 7,467 386,372 PHSC plc 60 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 10. INVESTMENT IN SUBSIDIARY UNDERTAKINGS Investment in shares of subsidiary undertakings 31.3.24 31.3.23 £ £ At 1 April 2022 and 2023 2,312,278 2,312,278 Impairment of investment in QLM (94,890) – At 31 March 2024 2,217,388 2,312,278 Every year the board assesses the value of investment in subsidiary undertakings in the Group statement of financial position and forms a view as to whether this value is realistic and justifiable. Following extensive discussion, the board determined that for technical reasons it must write down the investment value of QLM by £94,890 in PHSC plc’s company financial statements. Tis arises primarily from an increase in the discount rate used. Te board remains confident in its valuations of all subsidiary companies. Investments in subsidiary undertakings are stated at cost and include the following: Proportion Class of of voting Name of Company shares held rights held Registered office B2BSG Solutions Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR Camerascan CCTV Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR Envex Company Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR In House Te Hygiene Management Company Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR Inspection Services (UK) Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR Personnel Health & Safety Consultants Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR Quality Leisure Management Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR QCS International Limited Ordinary 100% 9 Cumbernauld Business Park, Cumbernauld, North Lanarkshire, Scotland G67 3JZ RSA Environmental Health Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR Safetymark Certification Services Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR SG Systems (UK) Limited Ordinary 100% Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR PHSC plc 61 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 10. INVESTMENT IN SUBSIDIARY UNDERTAKINGS – continued Te aggregate of the share capital and reserves as at 31 March 2024 and the statutory profit or loss for the year ended on that date for the subsidiary undertakings were as follows: Aggregate of Profit/(loss) share capital for year & reserves ended as at 31.3.24 31.3.24 £ £ B2BSG Solutions Limited (209,443) 124,261 Camerascan CCTV Limited 100 – Envex Company Limited 15,000 – In House Te Hygiene Management Company Limited 1 – Inspection Services (UK) Limited 13,785 2,716 Personnel Health & Safety Consultants Limited 228,830 228,120 Quality Leisure Management Limited 94,080 66,257 QCS International Limited 237,790 164,512 RSA Environmental Health Limited 6,323 (17,765) Safetymark Certification Services Limited 2 – SG Systems (UK) Limited 2,288 – For the year ended 31 March 2024, the Group made use of an exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies. Te Parent Company under this exemption has given guarantees for all the above named subsidiaries where an audit would have been required by law for the year ended 31 March 2024. 11. TRADE AND OTHER RECEIVABLES 31.3.24 31.3.23 £ £ Amount owed by subsidiary undertakings 831,393 963,188 Other debtors and prepayments 34,025 24,763 865,418 987,951 Te amount owed by subsidiary undertakings is subject to IFRS 9’s expected credit loss model. Te Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all balances owed from subsidiary undertakings. Tis did not lead to a material change in the assessment of the potential impairment of amounts owed from subsidiary undertakings, such that no adjustment has been made. 12. CASH AND CASH EQUIVALENTS 31.3.24 31.3.23 £ £ Bank 230,352 506,560 On 1 October 2008, PHSC plc entered into an unlimited multilateral guarantee with HSBC Bank plc. Until the middle of March 2023 each company within the Group operated its own current account, the balance on which was allowed to fluctuate according to trading conditions. Interest was only charged on a net overdrawn balance as the Group had the right to offset overdrawn accounts with accounts in credit across the Group. It is now the case that interest is charged on each account on a standalone basis necessitating funds to be moved between Group companies to avoid any interest charges. Tese movements are reflected through inter-company accounts which accounts for some relatively large inter-company balances at the year end. Te Group has an overdraft facility of £50,000 which is secured by a debenture including a fixed charge over certain freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertakings both present and future. Te overdraft is next scheduled for review in October 2024. On 31 March 2024, PHSC plc’s Company balance was £230,352 (2023: £506,560) within the Group’s cash at bank and in hand figure of £488,375 (2023: £749,627). PHSC plc 62 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 13. TRADE AND OTHER PAYABLES 31.3.24 31.3.23 £ £ Trade payables 7,773 4,124 Social security and other taxes 9,211 8,264 Amounts owed to Group undertakings 118,702 48,213 Other payables 1,940 18,220 Accruals 62,606 28,970 200,232 107,791 14. DEFERRED TAXATION 31.3.24 31.3.23 £ £ Deferred taxation – accelerated capital allowances 47,714 48,274 At 1 April 48,274 48,823 Deferred tax credit in year (560) (549) At 31 March 47,714 48,274 15. SHARE CAPITAL Number of shares Ordinary Share (Nominal value shares premium Total Called up, allotted and fully paid of 10p each) £ £ £ At 1 April 2022 14,677,257 1,467,726 1,916,017 3,383,743 Cancellation of shares held in Treasury (2,830,238) (283,022) – (283,022) At 31 March 2023 11,847,019 1,184,704 1,916,017 3,100,721 Purchase of own shares (812,782) (81,278) – (81,278) At 31 March 2024 11,034,237 1,103,426 1,916,017 3,019,443 Te authorities granted by shareholders at the 2022 AGM and 2023 AGM were utilised to implement two share buyback programmes during the year ended 31 March 2024. Te first was announced on 15 August 2023 and completed on 23 August 2023. Over that period, the Company’s broker was able to repurchase a total of 812,782 ordinary shares on the Company’s behalf for a total consideration (including costs) of £208,555. Te repurchased shares were initially held in treasury but were subsequently cancelled on 29 September 2023. Te second was announced on 19 March 2024 and completed on 28 March 2024. Over that period, the Company’s broker was able to repurchase a total of 753,384 ordinary shares on the Company’s behalf for a total consideration (including costs) of £209,977. Te repurchased shares were held in treasury at the year end and were cancelled on 11 June 2024. Accordingly, the number of ordinary shares in issue as at 31 March 2024 was 11,034,237 but will subsequently reduce to 10,280,853 on cancellation of the shares. Te buyback programmes were funded from the surplus cash held on account. PHSC plc 63 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 16. RELATED PARTY DISCLOSURES A management charge is levied by PHSC plc on its subsidiary companies to reflect the central services it provides. 31.3.24 31.3.23 £ £ Management charge from PHSC plc to subsidiary companies 180,000 180,000 Te inter-company balances between PHSC plc and the other companies within the PHSC plc Group are summarised below. 31.3.24 31.3.23 £ £ Amounts owed by Group undertakings B2BSG Solutions Limited 53,410 170,456 Camerascan CCTV Limited 229,701 229,701 In House the Hygiene Management Company Limited 469,304 469,304 Inspection Services (UK) Limited 4,594 5,711 Personnel Health & Safety Consultants Limited 55,404 60,898 QCS International Limited – 14,884 RSA Environmental Health Limited 18,980 12,234 831,393 963,188 Amounts owed to Group undertakings QCS International Limited 70,512 – Quality Leisure Management Limited 48,190 48,213 118,702 48,213 PHSC plc received dividends from subsidiaries as follows: Personnel Health & Safety Consultants Limited 175,000 40,000 QCS International Limited 100,000 50,000 Quality Leisure Management Limited 50,000 50,000 RSA Environmental Health Limited 10,000 25,000 335,000 165,000 PHSC plc dividends were paid to directors as follows: S A King 37,534 25,618 N C Coote 41,160 25,303 G N Webb MBE 341 195 79,035 51,116 PHSC plc 64 NOTES TO THE FINANCIAL STATEMENTS (continued) for the year ended 31 March 2024 17. FINANCIAL INSTRUMENTS Set out below are the Company’s financial instruments: 31.3.24 31.3.23 £ £ Financial assets at amortised cost Trade and other receivables 865,418 987,951 865,418 987,951 Financial liabilities at amortised cost Trade and other payables 200,232 107,791 200,232 107,791 Due within 1 year 200,232 107,791 Due in over 1 year – – 200,232 107,791 Full details of the overdraft facility can be found in note 12. Te main risk arising from the Company’s financial instruments is liquidity risk. Te Company seeks to manage this risk by ensuring that sufficient liquidity is available from current banking facilities to meet foreseeable needs and to invest cash assets safely and profitably. Tis policy has remained unchanged from previous periods. Te fair values of the Company’s financial instruments are not considered to be materially different to their book value. 18. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Te Company may be required to make estimates and assumptions concerning the future. Tese estimates and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Te resulting accounting estimates will, by definition, seldom equal the related actual results. Te principal area where judgement was exercised is as follows: Impairment of investments An impairment of investments has the potential to significantly impact upon the Company’s statement of comprehensive income for the year. Te directors have estimated the value-in-use of investments by discounting estimated future cash flows in accordance with IFRS. Management have prepared forecasts for 2024-25 and have then assessed whether it is appropriate to assume that this level of performance will be maintained or improved over the following two years. A growth rate of 2% has been applied and forecast performance for the third year, 2026-27, is assumed to continue into perpetuity. Te impairment review calculations use estimated future cash flows based on these forecasts with a terminal value being calculated using the year 3 expected cash flows. Te cash flow projections are based on profits before inter group management charges but after tax and have been discounted using a discount rate of 15% (2023: 13%). Tis takes into consideration the weighted average cost of capital (WACC) and factors in an increased risk connected with being a company quoted on AIM. 19. PARENT UNDERTAKING Tere is no ultimate controlling party but the largest shareholder, Ms N Coote currently owns 21.36% (2023: 21.36%) of the issued share capital of PHSC plc. PHSC plc 65 NOTICE OF ANNUAL GENERAL MEETING (“AGM”) NOTICE IS HEREBY GIVEN that the AGM of PHSC plc will be held at 10.00 a.m. on Tursday 19 September 2024 at Te Old Church, 31 Rochester Road, Aylesford, Kent ME20 7PR to consider the following resolutions of which resolutions 1 to 5 will be proposed as ordinary resolutions and resolutions 6 to 10 will be proposed as special resolutions. 1. To receive the annual report and audited accounts for the year ended 31 March 2024. 2. To declare a final dividend of 1.25p per ordinary share. 3. To re-elect Stephen King as a director. 4. To reappoint Crowe UK LLP as auditor to the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the members and to authorise the directors to determine their remuneration. 5. THAT, in substitution for any existing such authority, the directors be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares in the Company or to grant rights to subscribe for, or to convert any security into, shares in the Company up to a total nominal amount of £342,695.10 during the period commencing on the date of the passing of this resolution and expiring at the conclusion of the AGM in 2025 or 15 months from the passing of this Resolution, whichever is earlier, but so that the authority shall allow the Company to make before the expiry of this authority offers or agreements which would or might require shares to be allotted, rights to be granted or securities to be converted after such expiry and notwithstanding such expiry the directors may allot shares, grant rights or convert securities under such offers or agreements. Special resolutions 6. THAT, subject to and conditional upon the passing as an ordinary resolution of resolution number 5 set out in this notice of meeting the directors be empowered under section 570 of the Companies Act 2006 (the Act) to allot equity securities (as defined in section 560 of the Act) for cash; under the authority conferred by resolution 5 above as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to: (a) the allotment of equity securities in connection with a rights issue, open offer or other offer of securities in favour of the holders of ordinary shares on the register of members at such record date(s) as the directors may determine where the equity securities respectively attributable to the interests of the ordinary shareholders are proportionate (as nearly as may be) to the respective numbers of ordinary shares held by them on any such record date(s), subject to such exclusions or other arrangements as the directors may deem necessary or expedient to deal with fractional entitlements or legal or practical problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock exchange or by virtue of shares being represented by depositary receipts or any other matter whatsoever; and (b) the allotment (otherwise than under sub-paragraph (a) above) of equity securities and/or the sale and transfer of shares held by the Company in treasury (as the directors shall deem appropriate) to any person or persons up to an aggregate nominal amount of £205,617.06, such power to expire at the conclusion of the AGM of the Company in 2025 or 15 months from the passing of this Resolution, whichever is earlier, unless such power is varied, revoked or renewed prior to such time by the Company in general meeting by special resolution; except that the Company may before such expiry make offers or agreements which would or might require equity securities to be allotted after such expiry and notwithstanding such expiry the directors may allot equity securities under such offers or agreements. PHSC plc 66 NOTICE OF ANNUAL GENERAL MEETING (continued) 7. THAT, the Company be generally and unconditionally authorised to make market purchases (as defined in the Companies Act 2006) of ordinary shares of 10 pence each in the capital of the Company (ordinary shares) on such terms and in such manner as the directors may from time to time determine, provided that: (a) the maximum number of ordinary shares authorised to be purchased shall be 1,542,128; (b) the minimum price which may be paid for an ordinary share is 10 pence; (c) the maximum price which may be paid for an ordinary share is an amount equal to 105% of the average of the middle market quotations for an ordinary share (as derived from the London Stock Exchange) for the five business days immediately preceding the date on which the ordinary share is contracted to be purchased; (d) the minimum and maximum prices per ordinary share referred to in sub-paragraphs (b) and (c) of this resolution are in each case exclusive of any expenses payable by the Company; (e) the authority conferred by this resolution shall expire at the conclusion of the AGM of the Company in 2025 or 15 months from the passing of this Resolution, whichever is earlier, unless such authority is varied, revoked or renewed prior to such time by the Company in general meeting by special resolution; and (f) the Company may make a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be completed wholly or partly after the expiration of such authority. 8. THAT the Articles of Association be amended by the addition of the words: “Subject to CA 1985 and CA 2006, the Company may by ordinary resolution suspend or relax the provisions of this article to any extent or ratify any transaction or arrangement not duly authorised by reason of a contravention of this article or authorise or ratify any transaction or decision of the board where all directors are interested.” As a new paragraph in Article 39 after: “Where a company in which a director holds 1% or more is materially interested in a transaction, then that director shall also be deemed materially interested in such transaction.” 9. THAT, subject to the passing of resolution 8 above, the directors’ interests in all matters in connection with the rectification of the distribution and the release of claims as set out in resolution 10 below be approved and ratified. 10. THAT in relation to the interim dividend of 0.75 pence per ordinary share paid on 12 January 2024 (the distribution) paid to current and former shareholders: (a) the appropriation of distributable profits of the Company to the payment of the distribution, to the extent that such payment represented, at the time at which it was made, an unlawful dividend, be and is hereby ratified and confirmed and the payment of the distribution be and is hereby authorised by reference to the same record date as the original accounting entry for the distribution; (b) any and all claims which the Company has or may have arising out of or in connection with the payment of the distribution against its shareholders who appeared on the register of shareholders on the record date for the distribution (or the personal representatives and their successors in title (as appropriate) of a shareholder’s estate if he or she is deceased) be waived and released pursuant to a deed of release in favour of such shareholders (or the personal representatives and their successors in title (as appropriate) of a shareholder’s estate if he or she is deceased) to be entered into by the Company in the form produced to the AGM and initialled by the chair for the purposes of identification, and any director in the presence of a witness, any two directors or any director and the company secretary be authorised to execute the same as a deed poll for and on behalf of the Company; and PHSC plc 67 (c) any and all claims which the Company has or may have against each of its directors or their personal representatives and the successors in title (as appropriate) of his or her estate if such director is deceased, arising out of or in connection with the approval, declaration or payment of the distribution be waived and released pursuant to a deed of release in favour of each of such directors (or the personal representatives and their successors in title of his or her estate if such director is deceased), to be entered into by the Company in the form produced to the AGM and initialled by the chair for purposes of identification, and any director in the presence of a witness, any two directors or any director and the company secretary be authorised to execute the same as a deed poll for and on behalf of the Company. By order of the board SGH Company Secretaries Limited Registered Office: Secretary Te Old Church 31 Rochester Road 6 August 2024 Aylesford Kent ME20 7PR PHSC plc 68 NOTICE OF ANNUAL GENERAL MEETING (continued) Notes: 1. Right to attend, speak and vote If you wish to attend, speak and vote at the AGM you must be on the Company’s register of members at 10.00 a.m. on 17 September 2024. Tis will enable us to confirm how many votes you have on a poll. Changes to the entries in the register of members after that time, or, if the AGM is adjourned, 48 hours before the time of any adjourned meeting, shall be disregarded in determining the rights of any person to attend, speak or vote at the AGM. 2. Appointment of proxies If you are a member of the Company you may appoint one or more proxies to exercise all or any of your rights to attend, speak and vote at the meeting. You may only appoint a proxy using the procedures set out in these notes and in the notes on the proxy form, which you should have received with this notice of meeting. A proxy does not need to be a member of the Company but must attend the meeting to represent you. Details of how to appoint the chair of the meeting or another person as your proxy using the proxy form are set out in the notes on the form. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not the chair) and give your instructions directly to them. You may appoint more than one proxy in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a different share or shares which you hold. If you wish to appoint more than one proxy you may photocopy the proxy form or alternatively you may contact the company secretary. 3. Appointment of proxy using hard copy proxy form Te notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If you do not indicate on the proxy form how your proxy should vote, they will vote or abstain from voting at their discretion. Tey will also vote (or abstain from voting) at they think fit in relation to any other matter which is put before the meeting. To appoint a proxy using the proxy form, the form must be completed, signed and received by the Company Secretary at Shakespeare Martineau, 6th Floor, 60 Gracechurch Street, London EC3V 0HR no later than 48 hours (excluding non-working days) before the meeting. Any proxy forms (including any amended proxy appointments) received after the deadline will be disregarded. Te completed form may be returned by any of the following methods: • Sending or delivering it to the Company Secretary, Shakespeare Martineau, 6th Floor, 60 Gracechurch Street, London EC3V 0HR • Scanning it and sending it by email to shaun.zulafqar@shma.co.uk If the shareholder is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer or attorney. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. 4. Appointment of proxy by joint members In the case of joint holders, where more than one joint holder purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the company’s register of members in respect of the joint holding (the first-named being the most senior). 5. Changing your instructions To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Te amended instructions must be received by the Company Secretary by the same cut-off time noted above. Where you have appointed a proxy using a hard copy proxy form and would like to change the instructions using another hard copy proxy form, please contact the Company Secretary on 020 7264 4546. If you submit more than one valid proxy form, the one received last before the latest time for the receipt of proxies will take precedence. 6. Termination of proxy appointments In order to revoke a proxy instruction, you will need to inform the Company by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to the Company Secretary, Shakespeare Martineau, 6th Floor, 60 Gracechurch Street, London EC3V 0HR. Alternatively, you may send the notice by email to shaun.zulafqar@shma.co.uk. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer or attorney. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. In either case, your revocation notice must be received by the Company no later than 48 hours (excluding non-working days) before the meeting. If your revocation is received after the deadline, your proxy appointment will remain valid. However, the appointment of a proxy does not prevent you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated. 7. Communications with the Company Except as provided above, members who have general queries about the meeting should telephone the Company Secretary on 020 7264 4457 (no other methods of communication will be accepted). You may not use any electronic address provided either in this notice of annual general meeting; or any related documents, to communicate with the Company for any purposes other than those expressly stated. 8. Issued shares and total voting rights As at 5.00 p.m. on the day immediately prior to the date of posting of this notice of meeting, the Company’s issued share capital comprised 10,280,853 ordinary shares of 10p each (excluding treasury shares). Each ordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company at that time was 10,280,853. PHSC plc 69 Job No: 52838 Proof Event: 3 Black Line Level: 0 Park Communications Ltd Alpine Way London E6 6LA Customer: PHSC plc Project Title: Annual Report & Accounts 2024 T: 0207 055 6500 F: 020 7055 6600 ANNEX I FORM OF DIRECTORS’ DEED OF RELEASE DEED POLL THIS DEED POLL is made on • 2024 BY PHSC PLC ME20 7PR (the Company) in favour of the current directors of the Company (or the personal representatives and their successors in title (as appropriate) of his or her estate if such director is deceased). WHEREAS: (A) As explained in the annual report and accounts for the year ended 31 March 2024 sent to the shareholders of the Company dated 1 August 2024 that is appended to this deed poll (the annual report), the board of directors of the Company has become aware of a technical issue in respect of the Company’s procedure for payment of the dividend of 0.75 pence per ordinary share paid by the Company on 12 January 2024 (the relevant dividend meaning given to them in the annual report. (B) with the Companies Act 2006, it may have claims against each of the current directors of the Company (directors) (or the personal representatives and their successors in title (as appropriate) of his or her estate if such director is deceased). (C) Pursuant to the Non-Compliant Dividend Resolution as set out in the Notice of AGM contained in the annual report and duly passed by the Company’s shareholders at the Company’s AGM held on 19 September 2024, the Company proposes to waive and release any and all claims which it has or may have in respect of the relevant dividend against each of the directors (or the personal representatives and their successors in title (as appropriate) of his or her estate if csuch director is deceased) and wishes to enter into this deed poll in favour of the directors and the personal representatives and their successors in title of the estate THIS DEED POLL WITNESSES as follows: 1. RELEASE their successors in title (as appropriate) of his or her estate if such relevant director is deceased) from any and all liability that any of them has or may have to the Company and all claims and demands the Company has or may have against each of them, including, without limitation, any derivative action from or on behalf of shareholders of the Company, in connection with the declaration, making and payment of all or part of the relevant dividend. 2. GOVERNING LAW be governed by English law. IN WITNESS of which this deed poll has been executed and has been delivered on • 2024. EXECUTED as a deed poll by PHSC PLC acting by, ) a director ) Director in the presence of: Witness signature: Witness name: Witness address: Witness occupation: PHSC plc 70 ANNEX II FORM OF SHAREHOLDERS’ DEED OF RELEASE DEED POLL THIS DEED POLL is made on • 2024 BY PHSC PLC (registered number 04121793) whose registered office is at Te Old Church, 31 Rochester Road, Aylesford, Kent, ME20 7PR (the Company) in favour of the recipient shareholders (as defined below). WHEREAS: (A) As explained in the annual report and accounts for the year ended 31 March 2024 sent to the shareholders of the Company dated 1 August 2024 that is appended to this deed poll (the annual report), the board of directors of the Company has become aware of a technical issue in respect of the Company’s procedure for payment of the dividend of 0.75 pence per ordinary share paid by the Company on 12 January 2024 (the relevant dividend). Terms unless otherwise defined in the deed poll shall have the meanings given to them in the annual report. (B) Te Company has been advised that, as a consequence of the relevant dividend having been made otherwise than in accordance with the Companies Act 2006, it may have claims against the past and present shareholders who were recipients of the relevant dividend (or their personal representatives and their successors in title (as appropriate) if they are deceased) (recipient shareholders). (C) Pursuant to the Non-Compliant Dividend Resolution as set out in the Notice of AGM contained in the annual report and duly passed by the Company’s shareholders at the Company’s AGM held on 19 September 2024, the Company proposes to waive and release any and all claims which it has or may have in respect of the relevant dividend against the recipient shareholders and wishes to enter into this deed poll in favour of the recipient shareholders in order to effect the same. THIS DEED POLL WITNESSES as follows: 1. RELEASE Te Company hereby unconditionally and irrevocably waives and releases each of the recipient shareholders from any and all liability that any such recipient shareholder has or may have to the Company and all claims and demands the Company has or may have against each of them in connection with receipt by them of all or part of the relevant dividend. 2. GOVERNING LAW Tis deed poll is governed by English law. Any non-contractual obligations arising out of or in connection with this deed poll shall be governed by English law. IN WITNESS of which this deed poll has been executed and has been delivered on • 2024. EXECUTED as a deed poll by PHSC PLC acting by, ) a director ) Director in the presence of: Witness signature: Witness name: Witness address: Witness occupation: PHSC plc Please read carefully the formal notice of meeting, the accompanying notes and the explanation of the business to be transacted at the AGM (contained in the directors’ report) before completing this form. As a member of PHSC plc you have the right to attend, speak at and vote at the AGM. If you cannot or do not wish to attend the AGM but still want to vote you can appoint someone to attend the AGM and vote on your behalf. Tat person is known as a “proxy”. You can use the proxy form to appoint the chair of the meeting or someone else, as your proxy. Your proxy does not have to be a member of the company. I/We …………………………………………………………………………………… (FULL NAME IN BLOCK CAPITALS) being a member(s) of PHSC plc, appoint the chair of the meeting or ….........………………………………………………….... …………………..................................….. (see note 1) as my/our proxy to attend and, on a poll, to vote for me/us and on my/ our behalf as indicated below at the AGM and at any adjournment (see notes 2, 3 and 4). Please clearly mark the boxes below to instruct your proxy how to vote on each resolution. VOTE AT RESOLUTIONS FOR AGAINST WITHHELD DISCRETION 1. To receive the report and accounts 2. To declare a final dividend 3. To re-elect Stephen King as a director 4. To reappoint the auditors and authorise the directors to set their fees 5. To authorise the directors to allot shares 6. To disapply pre-emption rights 7. To authorise share buybacks 8. To amend the Company’s Articles of Association 9. Subject to passing of Resolution 8, the directors’ interests in all matters in connection with the rectification of the distribution and the release of claims as set out in resolution 10 below be approved and ratified 10. To ratify the interim dividend Signature(s) ………………………………......…..…..................….. (see note 5) Date …………………..…………2024 Notes: 1. If you wish to appoint as a proxy someone other than the chair of the meeting, please delete the words “the chair of the meeting” and insert the name of the other person (who need not be a member of the Company). All alterations made to the proxy form must be initialled by the signatory. 2. Te completion and return of the proxy form will not prevent you from attending the AGM and voting in person should you subsequently decide to do so. 3. If you wish your proxy to cast all of your votes for or against a resolution you should insert an “X” in the appropriate box. If you wish your proxy to cast only some votes for and some against insert the relevant number of shares in the appropriate box. In the absence of instructions your proxy may vote or abstain from voting as they think fit on the specified resolutions, and, unless instructed otherwise, may also vote or abstain from voting as they think fit on any other business (including on a resolution to amend a resolution, to propose a new resolution or to adjourn the meeting) which may properly come before the meeting. 4. Te “Vote Withheld” option is provided so that you can instruct your proxy to abstain from voting on a particular resolution. A “Vote Withheld” is not a vote in law and will not be counted in the calculation of the proportion of the votes “for” or “against” a resolution. Te “At discretion” option is provided so that you can give discretion to your proxy to vote or abstain from voting on a particular resolution as they think fit. 5. Te proxy form must be signed by the shareholder or their attorney. Where the shareholder is a corporation the signature must be under seal or that of a duly authorised representative. In the case of joint holders, anyone may sign the form. Te vote of the senior joint holder (whether in person or by proxy) will be taken to the exclusion of all others, seniority being determined by the order in which the names appear in the register of members for the joint shareholding. 6. To be valid, this proxy form and any power of attorney or other authority under which it is signed or a certified copy of such authority, must be deposited with the company secretary, Shakespeare Martineau, 6th Floor, 60 Gracechurch Street, London EC3V 0HR no later than 48 hours (excluding non-working days) before the time of the AGM or any adjournment thereof. Proxy form for use by holders of ordinary shares in PHSC plc at the Annual General Meeting (AGM) to be held on Tursday 19 September 2024 71