RA International Group PLC
Annual Report 2023

Plain-text annual report

Annual Report 2023 R A I N T E R N A T I O N A L A N N U A L R E P O R T 2 0 2 3 Deliver. Regardless. Contents Highlights Strategic report 1 2 4 5 6 8 10 12 13 16 17 20 31 Highlights The world of RA Chair’s statement Strategy Our market environment Business model Chief Executive Officer’s review Key performance indicators Stakeholder engagement Risk management Principal risks Sustainability report Task force on climate-related financial disclosure statement Corporate governance 36 38 42 44 45 46 Board of Directors and Executive Management Team Corporate governance report Directors’ report Remuneration committee report Audit and risk committee report Environment, social and governance committee report Financial report 48 52 53 54 55 56 73 74 75 77 Independent auditor’s report Consolidated statement of comprehensive income Consolidated statement of financial position Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the consolidated financial statements Company statement of financial position Company statement of changes in equity Notes to the Company financial statements Shareholder information In unfamiliar countries and cultures In remote locations In conflict areas The Board is pleased with the progress made in 2023 towards its key objectives of improving RA’s financial stability, returning to profitability, and continuing to invest in the Group’s future growth and development. Financial and operating highlights USD 58.3m USD 1.1m USD 6.3m Revenue (2022: USD 62.9m) Net cash/(debt) (2022: USD (6.5)m) EBITDA profit/(loss) (2022: USD (4.1)m) USD 0.2m >90% 19 Revenue by service Statutory profit/(loss) Revenue by sector (2022: USD (13.2)m) Revenue from long-term customers (2022: >90%) Revenue by service Number of operating countries (2022: 14) Revenue by sector Revenue by sector Revenue by service 55% 44% 51% 51% 55% 44% 51% 51% 33% 21% 23% 24% 33% 28% 21% 16% 33% 21% 23% 24% 33% 28% 21% 16% 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 Integrated facilities management Construction Supply chain Humanitarian Government Commercial Integrated facilities management Construction Supply chain Humanitarian Government Commercial Sustainability highlights 51% 1.50 Local labour participation (2022: 51%) Lost time incident rate (“LTIR”)1 (2022: 1.17) 4,485.7 tCO2e Scopes 1 and 2 carbon emissions (2022: 4,913.0 tCO2e) 1 LTIR is defined as: (Lost time injuries x 1,000,000)/Total hours worked. 1 RA International Annual Report 2023Strategic reportThe world of RA What we do Many companies and organisations that aim to make a difference in this world work in locations and circumstances far outside their comfort zones. It could be a project in an unfamiliar country where they don’t speak the language and don’t know the rules, regulations, or commonly accepted ways of working. Perhaps partners and suppliers from several different countries and backgrounds need to be co-ordinated. Many face challenges even tougher than this. Their projects are remotely located in areas where there is no basic infrastructure such as water or electricity supply. To tackle the task, they need to overcome these challenges, bringing in food and equipment, securing a water supply, and building accommodation and facilities. Before they can begin their true mission, an expert is needed to cut through this complexity. That expert is RA International. Our mission Through infrastructure and support services, we simplify project success for organisations that aim to make a difference. Wherever there are challenges, in remote locations, conflict areas, or places that are demanding for other reasons, it’s our job to be a one-stop-shop to simplify project success. Through our research-led methodology, we know how to identify and handle challenges. Our vision The most reliable partner for projects with global impact. We are often considered the world’s leading remote site service provider. This has given us the experience and expertise to take on projects in other locations – both simple projects in challenging locations and complex projects in more quiet surroundings. Anywhere there are challenges, we can bring our expertise and experience to simplify success. Our purpose We deliver immediate results and lasting change. Our clients want results – fast. And that is what we deliver. But our ambitions reach further. We want to positively impact the societies and communities in which we operate. We improve lives and conditions by providing jobs, training and education, and by supporting local small and medium-sized enterprises. – – – Construction: We deliver construction works specialising in challenging environments on behalf of Governments and commercial entities. Integrated facilities management: We offer a diverse range of services to support our clients and protect their investments in a sustainable manner. This includes maintenance of buildings and infrastructure, as well as providing catering services to camps, corporate canteens, and restaurants. Supply chain: We procure goods and use our global supply chain to bring these goods to the country of operation, and deliver to site providing Last Mile Logistics – even under the most challenging circumstances. Find out more about our “one-supplier” business model on page 8 1,206 Staff (2023 average) 43 Nationalities 19 Countries Who we do it for Our growth is customer driven, following our customers from one country to another as we are called upon to support their mandates and workload. This is critical to understanding why we operate in many of the countries where we do. Humanitarian organisations Western Governments Commercial clients RA has a 20-year track record supporting humanitarian organisations in their peacekeeping operations and stabilisation activities. Our biggest client in this sector is the UN, with whom we have a long track record. RA has provided mission-critical goods and services to 20 UN agencies, the World Bank, ICC, and many other clients in this sector, enabling them to focus on the missions at hand. Frequently working alongside humanitarian organisations, western Governments support on advancing the rule of law, capacity building, and economic growth. The majority of work is with the US and UK Governments. We support US State Departments such as USAID and the US Department of Defense, as well as the UK MoD and the Foreign, Commonwealth and Development Office (“FCDO”). RA is contracted by a select number of commercial clients that share our values of doing business the right way. Our commercial partners seek out reliable service providers who can meet their stringent HSE and compliance requirements, support their sustainability goals, can offer cost savings through innovative solutions, and can deliver under tight schedules. 2 3 RA International Annual Report 2023RA International Annual Report 2023Strategic reportChair’s statement Sangita Shah | Non-Executive Chair In 2023, I am pleased to report that the Group successfully transitioned to stability, profitability, and positive cash generation. After several challenging years, RA achieved a significant turnaround from a substantial loss in 2022 to a modest profit in 2023. Bolstered by a series of refinancing efforts, we have strengthened the balance sheet and improved cash balances, setting a healthier financial foundation for the Group. This successful transition was underpinned by a decision to inject agility and proportionality and as such the year witnessed significant changes in the Board, its advisers and auditor. The Group Board was streamlined, with two Directors retiring, Alec Carstairs and Philip Haydn-Slater. The CFO, Andrew Bolter also stepped down following ten years of service to the Group. I would like to express my gratitude on behalf of the Board for their invaluable service and commitment to the Group. Additionally, in keeping with the Group strategy, we expanded the US-focused RA Federal Services (“RA FS”) board. Dave Marshall has been promoted to Group Finance Director, reporting directly to the Board. The year also saw the transition of RA’s auditor to PKF Littlejohn LLP following a competitive tender process. In addition, we are delighted to have appointed Strand Hanson as our Nominated and Financial Adviser and Broker, specialists in advising companies working in frontier and emerging markets. During the year we reported our inaugural Task Force on Climate-related Financial Disclosures (“TCFD”) framework. Given the size and complexity of the Group, where our locations are exposed to the physical risks associated with climate-related risks, the exercise was challenging. However, we recognise the importance of this initiative in understanding relevant climate-related risks and enhancing our risk management practices, and as such we established a cross-departmental TCFD Steering Committee responsible for analysing our climate-related risks. Additionally, the Group enhanced its risk management capabilities, adding a “four lines of defence” model for risk assurance. The Board is cognisant of the changes to the QCA Corporate Governance Code that will come into effect in 2025 and we remain committed to continue to adopt the code. In summary, RA is in a far stronger position than the very challenging years previously. The recent restructuring of the RA FS board, with the appointment of David Dacquino as its Chair, is already bearing fruit. We have been awarded strategically important US Government contracts and our pipeline includes several UK and UN mandates. I would personally like to take this opportunity to express my gratitude to the staff at RA, spearheaded by our founders Soraya and Lars, for their continued commitment, dogged persistence, and assiduous efforts in successfully transitioning the business. I would also like to thank all our stakeholders for their continued support. Sangita Shah | Non-Executive Chair 30 April 2024 Strategy Refreshing the Group strategy Strategy is not just a buzzword at our organisation; it serves as the foundation of our decision-making process. We recognise that thriving in today’s rapidly changing environment requires us to continually refine and strengthen our strategies, ensuring we remain agile and adapt to both our clients’ needs and the need for sustainable growth for the business units within the Group. Through a proactive approach, we consistently realign and improve our methods to ensure they align with our long-term vision. With our customers as our top priority, we are fully committed to delivering exceptional value to them. Our aim is to solidify our position as one of the most trusted partners for remote site projects with global impact. Upholding this commitment is paramount, and we do so by having unwavering dedication to integrity, innovation, and customer satisfaction. As we move forward, our strategy serves as our guiding compass, providing the clarity and determination necessary to exceed expectations and achieve our objectives. Our strategic vision The leading infrastructure and support services provider globally While working to consistently provide high- quality work that meets or exceeds customers’ expectations and ensuring that timeliness is equally critical; delivering projects on schedule and within budget, showcases reliability, especially in the field of remote site services. By delivering this and maintaining transparency in communication and consistently demonstrating integrity in all interactions, we build trust with our clients. This commitment to quality and efficiency makes us a trusted partner, fosters customer confidence, significantly enhances our ability to secure contracts, and leads to sustainable customer and business growth. Leading our industry with differentiable and sustainable solutions and initiatives Making a positive and sustainable impact in the communities where we operate is part of our core mission, reflecting our broader commitment to social responsibility and sustainability. By actively engaging with and benefiting local communities, we firmly uphold the principle of conducting business the right way. In the geographies we work and with the clients we support, sustainable results rely on innovation and a mindset of taking initiative. This is how we differentiate ourselves, through our focus on ESG, our willingness to learn, and our drive to seek out new technology to enhance our service offering. 4 5 Our strategic goalsFinancial stability through sustainable growthOur commitment to financial stability remains steadfast as we navigate the ever-changing economic landscape. We understand the importance of maintaining a strong foundation to support our continued sustainable growth. We leverage our unique competitive advantages to maximise our potential and remain ahead in the market. Additionally we are pursuing an agile strategy that will drive shareholder value, recognising that it is pivotal to our long-term success. By integrating these key elements into our business units, we are confident in our ability to maintain financial stability and contribute positively to the market and our stakeholders. Building a robust and qualified pipeline, leading to a more focused pursuit of attainable opportunities, aligned with the Group’s strategic objectives Growing a solid and stable orderbook through improved conversion ratio across the Group Actively expanding our geographic presence with existing customers, while seeking out new opportunities in a sustainable wayProfitabilityWe are reaffirming that profitability is a key element that drives our decision-making process. We understand the significance of striking a balance between delivering outstanding customer service and generating returns for our shareholders. This commitment to profitability enables us to secure the necessary funding to support our growth and maintain our position on the market. Through prudent financial management and a forward-thinking approach, we consistently seek to maximise profitability for the benefit of all stakeholders involved. Improving our operating margins, and ultimately our EPS, through focused cost control and an emphasis on efficiencies in our business units Work towards leveraging our resources, optimising operational productivity and exploring strategic opportunities that align with our core values Leveraging technology to enable efficiencies and build for the futureDoing business the right wayWe are building on our strategy of doing business the right way. Guided by a steadfast commitment to professionalism, we are dedicated to investing in the growth of our workforce, ensuring that they possess the necessary skills and expertise to excel in their respective roles. By bolstering the capacity and capability of our employees, we aim to foster an environment of continuous improvement and enable them to deliver outstanding results for our clients. Furthermore, we strive to promote a sustainable approach in all aspects of contract execution. From procurement to project management, we emphasise environmentally responsible practices with the aim of minimising our ecological footprint. By integrating sustainability into our business operations, we pave the way for a brighter and more sustainable future. Offering sustainable solutions to our clients while increasing sustainable results within our own organisation Using technology-enabled assessment in our projects to analyse and reduce the environmental impact, while engaging with innovation leaders to build capacity internally and externally for the future Understanding that our employees are our greatest asset, and by equipping them with the necessary skills, knowledge, and resources, we empower them to excel in their roles. We invest in our people to ensure and boost sustainable business growthRA International Annual Report 2023RA International Annual Report 2023Strategic reportOur market environment Large, stable, addressable budgets Our addressable market is best defined as humanitarian and western Government spend on official development assistance (“ODA”). In addition, we have a few select commercial clients working in the infrastructure development and natural resource industries. Whilst governments and humanitarian priorities change, and overseas budgets can be flexed, our market environment is also relatively stable. This creates a huge opportunity for RA. Adding value to humanitarian organisation projects The market for private sector delivery of humanitarian related services is large, with a fragmented supply-side of contractors spanning global multinationals, local suppliers, and more bespoke suppliers such as RA, competing on technical competency and value. Geopolitical and environmental events are driving an increase in demand for humanitarian assistance across the globe, with the UN leading as the primary agency for delivering humanitarian aid. The majority of RA’s support work is to UN peacekeeping operations which have an annual budget of c. USD 3.6b, of which RA has had an average annual capture rate of on average 1.25%. RA has a 20-year track record delivering on-the-ground know-how with 19 UN agencies, missions, and bodies to bid effectively for projects and to deliver mission-critical goods and services. In addition, we believe that there will be opportunities for RA through the Development Assistance Committee (“DAC”) Official Development Assistance Budget that was USD 204b in 2022 and will grow as the UN increases its appeals and moves countries towards the 0.7% of GDP. USD 204b Official development assistance (“ODA”) donated by member countries of the DAC in 2022 according to the OECD. 0.7% of Gross National Income Commitment call from the UN to the 32 members of the DAC with just six nations meeting this target in 2022. USD 46.4b appeal UN global appeal for 2024 on behalf of 1,900 humanitarian partners to help 180.5 million with life-saving assistance and protection. Source: ODA-2022-summary.pdf (oecd.org) 6 Building our platform with the US Government (“USG”) The scale of opportunity with the USG can be exemplified through RA’s existing client, the Bureau of Overseas Buildings Operations (“OBO”) Over the last few years, we have actively grown RA Federal Services (“RA FS”) through partnerships or as a sub-contractor on projects for the Bureau of Overseas Buildings Operations (“OBO”), the Department of Defense (“DoD”), the Department of State (“DoS”), and the US Agency for International Development (“USAID”). Opportunity RA FS is targeting funded projects outside continental US, focusing on markets where our competitors do not operate directly. This includes Central Asia, the Middle East, and Africa where we are able to prime and deliver cost advantage effectively. These projects range from supply chain and logistics to embassy refurbishment contracts, operations and maintenance, and life support services. US foreign aid budget 2022 USD 70.3b to 212 countries USD 16.7b USD 3.1b USD 31.8b USD 11.0b USD 17.7b USD 3.8b USD 16.0b USD 2.0b East Asia and Oceana South and Central Asia Europe and Eurasia Middle East and North Africa Western Hemisphere Sub-Saharan Africa World Source: https://www.foreignassistance.gov/ USD 3.1b RA FS is also partnered to compete on large USG IDIQ (indefinite delivery indefinite quantity) contracts primarily awarded through South and Central Asia framework agreements, which sees the top five to ten companies Middle East and North Africa selected go on to compete for individual Task Orders. Another feature of the USG is to use contract assistance programmes such as the 8(a) Business Development programme, which awards a minimum of 5% of all federal contract Dollars (c. USD 50b) to small, disadvantaged businesses (“SDBs”). These contracts are not competed but rather awarded as sole source acquisitions. RA FS is partnered with ten such companies and is currently executing four contracts with them. East Asia and Oceana Western Hemisphere Europe and Eurasia Sub-Saharan Africa World In 2023, RA served less than one per cent of the US foreign aid budget providing significant opportunities to grow. OBO’s mission is to provide the most effective facilities for United States diplomacy abroad 288 Locations USD 85.1b USD 2.6b 100,000+ Portfolio replacement value Deferred maintenance backlog Chief of mission personnel supported 26,061 assets 938 Office buildings 16,770 Residences 600+ project activities with a USD 37b value 55+/USD 20b workload 24+/USD 400m workload 45+/USD 850m workload Capital security construction Compound security upgrade Major renovation 15,800+ leases Property leases Source: https://www.state.gov/overseas-buildings-operations/ Strengthening our competitive position with UK Government departments Our relationship with the UK Government continues to develop since we delivered our first project for the UK Ministry of Defence (“MoD”) in 2018. In 2022, we established a UK office which has been staffed and equipped appropriately to operate within the UK defence operating model. This approach has secured further contracts such as a two-framework agreement with the Foreign, Commonwealth and Development Office (“FCDO”) to provide support capability for projects funded through the Conflict, Stability and Security Fund. Opportunity RA is targeting projects outside the United Kingdom, providing and delivering construction, operational, and technical support to UK embassies and departments operating in hostile environments, including Africa, Asia, and the Pacific. Further, we are leveraging our strong reputation in delivering projects in a socially and environmentally responsible manner, meeting the UK Government’s adoption of the Social Value Model as part of their procurement decision-making process, which requires a minimum of 10% of the total tender evaluation weighting to be allocated to specific social value criteria. GBP 12.8b ODA provided by the UK in 2022 Top 20 recipient countries of UK ODA in 2022 (GBP'000) Countries where RA has current projects or operational capability 352 342 Afghanistan Ukraine Nigeria Somalia Ethiopia Yemen South Sudan Syria Pakistan Bangladesh Colombia Mozambique Dem. Rep. Congo Myanmar India Kenya Uganda Jordan St Helena Zimbabwe 110 100 90 77 76 63 58 55 51 49 47 47 46 45 45 42 39 38 Source: Statistics on international development: final UK aid spend 2022 (publishing.service.gov.uk) 7 RA International Annual Report 2023RA International Annual Report 2023Strategic reportBusiness model What sets us apart Why our customers can believe in what we promise What we do A one-supplier approach We have experience. We have proven our capabilities in some of the toughest places on the face of the earth, from simple projects in conflict zones to complex projects in isolated areas with no infrastructure. For every challenging situation, there is often a precedent, allowing us to draw on our experience. We are focused. This is what we do. Nothing else. This allows us to be the best at what we do. And we continue to build expertise, allowing us to act based on an ever increasing amount of professional judgements and calculations. We operate based on expertise. We hire and train people for this purpose, and no other. We train and encourage them to take the right decisions, wherever they are. Our aim is to be better than anyone else at identifying risk. Our offer is comprehensive. We offer the complete package needed for comprehensive, high- quality mission support. And that is what makes us different. Three revenue streams We bring together Supply Chain, Construction, and Integrated Facilities Management under one umbrella. This gives customers greater comfort and assurance that their project can be delivered with minimum fuss, and also eliminates project inefficiency. Through detailed research, we know how to identify and overcome challenges. We work to international standards with a risk-based approach to everything we do. Our values What guides us forward Our outcomes Our clients want results – fast Empowering. At RA, the most important people are those who deliver on our promises to customers. Our business depends on individuals taking action on their own, applying their grit and determination to the task at hand. Therefore, we empower people to be proactive and take ownership of challenges. RA is a diverse and inclusive company with no room for discrimination. To succeed, we draw from co-operation between employees of different origin, race, gender, and age. Inventive. The work we do is often challenging, both difficult and risky, because of the location or the nature of the assignment. To succeed, we have a proven methodology and continually build expertise based on what we learn through our work. Almost always, finding a solution to the challenge at hand is about applying all our experience in an inventive way. Responsible. To earn and keep the trust of clients, employees, shareholders, and society, we make responsible choices regarding how we treat people, the environment, and the communities in which we operate. Everyone should be able to rely on RA to deliver on what we promise and set out to achieve. And that is what we deliver. We strive to consistently deliver high-quality work that meets or exceeds customer expectations. Equally critical is timeliness; delivering projects on schedule showcases reliability, especially in the field of remote site provision. This commitment to quality and punctuality ultimately fosters customer confidence, which, in turn, leads to customer growth. But our ambitions reach further: we want to positively impact the societies and communities in which we operate. We improve lives and conditions by providing jobs, training, and education, and by supporting local small and medium-sized enterprises. Anywhere we take on projects, we apply the highest standards, ensuring that we follow the principles of the UN Global Compact. Also, we have committed to cut our CO2 emissions in accordance with the Paris Agreement – even in the most distant corners of the world. In addition, we respond to important community needs where we are present, based on the principle of doing “what we can, where we are.” We believe our purpose supports us in delivering long-term value to our shareholders. 8 8 RA International Annual Report 2022 9 RA International Annual Report 2023RA International Annual Report 2023Strategic reportChief Executive Officer’s review Soraya Narfeldt | Chief Executive Officer Sale of impaired assets We were particularly encouraged by the success of previously impaired asset sales, which generated net income. Additionally, the client who purchased the assets requested RA to ship and erect the assets, creating additional revenue and cross-selling opportunities for our other business services. In total, USD 5.2m was recognised and these sales also removed the need for future storage costs. The disposals generated a net cash inflow of USD 3.5m in 2023, with USD 2.0m of income outstanding at 31 December 2023, and USD 0.4m of related costs due for payment in 2024. Refinancing During the year, the Group completed a refinancing and fundraising exercise. The purpose of the exercise was to extend the maturity of the USD 14.0m of loan notes issued by the Group in previous periods, and which were due to mature in the second half of 2023. USD 11.7m of loan notes were extended to mature in January 2027, with the Group aiming to repay USD 2.3m by November 2024 in order to begin reducing debt commitments. An additional USD 1.8m was also raised through the issue of new loan notes in order to maintain adequate liquidity. Contract awards and framework agreements The sale of impaired assets, as previously mentioned, not only contributed to our financial recovery but also led to follow-on work. This resulted in the expansion of our client base and global reach, adding Suriname, Ivory Coast, and Ethiopia to our portfolio. Our supply chain and logistics teams provided Last Mile Logistics to support these new clients, ensuring timely delivery of assets. Additionally, our construction team successfully installed all the assets that were sold. Pleasingly, our Integrated Facilities Management (“IFM”) teams will begin providing facilities management services and catering to these clients, demonstrating the effectiveness of the RA business model. This integration of services underscores our commitment to long-term partnerships and comprehensive support for our clients. During the period we received contracts with an aggregate value of over USD 25m, including three task orders for US Navy base on Diego Garcia awarded under an existing framework agreement. We were also pleased to announce a new framework agreement with the UK FCDO to provide operational support capability funded through the Conflict, Stability, and Security Fund (“CSSF”) in September 2023. Having scored highest out of 27 awardees, we are well placed to begin participating in task orders. From a standing start in 2021, western Government contracts now account for 51% of our revenue. Our success in winning UK and US Government framework agreements has opened up a large pool of potential projects, diversifying our client base and aligning with our strategic goal of extending our geographic reach. However, the nature of these framework agreements means that while we have visibility on the ceiling value of funds available, we cannot be certain of the timing, quantity, and exact value of future task orders. A key focus of our development is leveraging the knowledge gained from our own sustainability efforts to offer solutions to clients. We recognise that some clients struggle with sustainability due to limited resources or expertise on the ground, particularly in measuring supply chain impacts. We aim to assist by applying our knowledge to help them set achievable strategies and gather necessary information to show progress. This aligns with our commitment to deliver projects while positively impacting the environment and communities. Outlook We are making good progress in building a resilient business and our results for 2023 reflect this, with a return to profitability and cash generation. Furthermore, we built a broader customer base and enhanced our existing customer relationships, entering global framework agreements and delivering on our capabilities. Our efforts are paving the way for us to seize new opportunities within the commercial sector as well as adding to our service offering by strengthening our catering capabilities. In addition to progress made at RA FS, since entering 2024 we have seen a return in momentum in construction projects and have been invited to support UK Export Finance and the Togolese Republic in a rural electrification project funded by UK Export Finance. With the UN, we have won tenders in Western Sahara and are awaiting adjudication on other bids, including providing support on the border between South Sudan and Sudan. Furthermore, we are gaining momentum with our existing UK and US Government framework agreements. With an increased execution focus on service excellence to our customers, effective conversion of a substantial pipeline of opportunities, the safety and productivity of our colleagues, and progressing the technology-enablement of our business, we are well-aligned to grow our revenues and deliver improved profits. Soraya Narfeldt | Chief Executive Officer 30 April 2024 In contrast, humanitarian and commercial contracts are typically awarded on a fixed-value basis over a specified period of time. These contracts provide a more predictable and visible revenue stream, but may not offer the same level of growth potential as the government contracts. The shift in our business mix, along with a slowdown in the UN contract bid cycle in recent years, means that the order book at 31 December 2023 reduced to USD 49m (2022: USD 83m in 2022). Consequently, this is no longer fully representative of the scope and potential of the projects we are pursuing through our framework agreements and IDIQ (indefinite delivery indefinite quantity) contracts. However, we are optimistic about the future given the number of tenders submitted to UN organisations which, if successful, will significantly rebuild the order book. Additionally, bid activity with both commercial and humanitarian organisations is increasing once again, indicating a positive trend in both these sectors. RA Federal Services (“RA FS”) During the summer, we made changes to the RA FS board, appointing new Directors to lead the Company. Mr. Dave Dacquino, who has been the Chairman and CEO of Serco US for several years, now leads the Board. He brings a wealth of experience and knowledge to the table, and we believe he will help us grow this side of the business rapidly. Joining him are Brandon Weidenfeller as CEO, and Ms. Danielle Saunders and Ms. Sandy Peavy as board directors, who together bring extensive experience in US Government work. We are excited about this change and confident in the future it will bring. We have several promising opportunities in the pipeline and are preparing for an influx of work over the next few months. RA FS has been very successful with US Embassy projects, and we are currently working on projects in Suriname, Zimbabwe, and Thailand. As a result, RA FS has significant opportunities for growth, both overseas and within the US. There is a significant momentum with the Overseas Building Operations (“OBO”) work, with projects in several new countries. As a result, RA FS has significant opportunities for growth, both overseas and within the US. Strategy review In 2023, we conducted a thorough review of the Group’s strategy, setting our guiding compass for the future. This process provides the clarity and determination necessary to achieve our long-term vision of becoming the leading infrastructure and support services provider globally. In addition to our mission to deliver quality work on time, we aim to lead our industry with differentiable and sustainable solutions and initiatives, ensuring that we are at the forefront of innovation and excellence. The three pillars of our strategic goals can be summarised as follows: • • • A steadfast commitment to financial stability as we navigate the ever-changing economic landscape. We understand the importance of maintaining a strong foundation to support our continued sustainable growth Profitability is a key element that drives our decision-making process. We understand the significance of striking a balance between delivering outstanding customer service and generating returns for our shareholders Doing business the right way. We are dedicated to investing in the growth and development of our workforce, and strive to promote a sustainable approach in all aspects of contract execution Our focus on stability and cash generation is evident in our 2023 results, where the Group returned to profitability after navigating through some of the most challenging years we have faced. Throughout this period, we remained steadfast in recognising and building upon the strengths of our business. As a result, our operations performed well, we retained clients, and we enhanced the core values of our business. Furthermore, we continued to execute high-value facilities management projects and secured multiple supply chain contracts for asset delivery to regions such as South America, North Africa, and West Africa. Financial performance The Group achieved a significant turnaround from an EBITDA loss of USD 4.1m in 2022 to EBITDA profit of USD 6.3m, and a profit before tax of USD 0.2m (2022 loss: USD 13.0m). This result was delivered despite a reduction in reported revenue of 7.3% to USD 58.3m (2022: USD 62.9m). Gross profit margin increased to 14.5% (2022: 8.3%) due to the sales mix and an increase in higher-margin IFM revenue. IFM revenue increased 16.5% to USD 31.9m (2022: USD 27.4m), primarily relating to an increase in catering and hotel services, as well as upselling on long-term contracts. Construction revenue fell to USD 12.4m (2022: USD 21.3m) due to two significant projects being completed in the prior year. Supply chain revenue reduced marginally to USD 13.9m (2022: USD 14.2m). Cash increased by USD 9.4m during the year resulting in a net cash position (cash less loan notes) of USD 1.1m (2022 net debt: USD 6.5m). The basic earnings per share was 0.1 cents (2022 loss: 7.6 cents). 10 11 RA International Annual Report 2023RA International Annual Report 2023Strategic report Key performance indicators Stakeholder engagement The Directors use a range of financial and non-financial KPIs as a measure of the Company’s performance against its defined strategy. The Financial Report provides further detailed definitions and reconciliations of our use of Alternative Performance Measures (“APMs”). See note 14. Revenue (USD’000) 2019 69.1 Profit/(loss) before tax (USD’000) 2019 Financial KPIs Revenue (USD’000) Revenue (USD’000) Revenue (USD’000) Revenue (USD’000) 2019 2019 2020 2020 2021 2021 2022 2022 Revenue (USD’000) 2023 2023 2022 Revenue (USD’000) 2023 2020 2021 2019 2020 2021 2022 69.1 69.1 69.1 64.4 64.4 64.4 54.6 54.6 54.6 62.9 62.9 62.9 58.3 58.3 58.3 69.1 2019 2020 2023 Profit/(loss) before tax (USD’000) Profit/(loss) before tax (USD’000) Profit/(loss) before tax (USD’000) Profit/(loss) before tax (USD’000) 2019 2019 2020 2020 2021 2021 2022 2022 Profit/(loss) before tax (USD’000) 2023 2023 2019 2022 Profit/(loss) before tax (USD’000) 2023 (13.0) (13.0) (32.1) (32.1) (13.0) (32.1) 2021 2019 2020 2021 (32.1) 2022 2023 64.4 62.9 54.6 58.3 13.3 13.3 13.3 6.6 6.6 6.6 0.2 0.2 0.2 Net cash/(debt) (USD’000) 2019 2020 2021 2022 (6.5) 2023 (1.5) 2020 2019 Performance 2020 The slight fall in revenue was due to two significant construction projects 2021 being completed the prior year, offsetting an improved higher-margin 2022 IFM performance and steady supply chain revenues. 2023 58.3 64.4 64.4 54.6 54.6 62.9 62.9 69.1 2021 2022 2023 58.3 2019 2020 EBITDA (USD’000) EBITDA (USD’000) EBITDA (USD’000) EBITDA (USD’000) 2019 2019 2020 2020 2021 2021 2022 2022 EBITDA (USD’000) 2023 2023 2019 2022 EBITDA (USD’000) 2023 (26.0) (26.0) (26.0) 2019 2021 16.2 16.2 16.2 11.1 11.1 11.1 16.2 16.2 (4.1) (4.1) (4.1) 6.3 6.3 6.3 2020 2021 2022 2023 (26.0) Performance 2020 (26.0) The Group achieved a significant turnaround from an EBITDA loss of 2021 USD 4.1m in 2022 to EBITDA profit of USD 6.3m primarily due to the 2022 improving gross margin from 8.3% in 2022 to 16.5% in 2023, and the sale 2023 of impaired assets generating USD 5.2m of net income in the period. (4.1) (4.1) 6.3 6.3 11.1 11.1 2021 2020 (32.1) 2019 Performance 2020 The Group achieved a modest profit for the year, reporting a profit before EBITDA (USD’000) 2021 tax of USD 0.2m (2022: loss of USD 13.0m), resulting from the EBITDA (13.0) 2022 2019 16.2 improvement, together with the reductions in depreciation, impairment, Net cash/(debt) (USD’000) 2023 and finance costs. 2020 2019 2021 (13.0) (32.1) 0.2 0.2 6.6 6.6 11.1 13.3 21.4 13.3 21.4 21.4 2020 2022 (26.0) 2022 Net cash/(debt) (USD’000) 2023 Net cash/(debt) (USD’000) 2019 2019 2020 2020 2021 2021 2022 2022 Net cash/(debt) (USD’000) 2023 2023 2019 2022 Net cash/(debt) (USD’000) Net cash/(debt) (USD’000) 2023 (6.5) (6.5) (1.5) (1.5) 1.1 1.1 (6.5) 2021 2023 (1.5) 2019 1.1 (4.1) 11.2 11.2 11.2 6.3 11.2 11.2 21.4 21.4 2020 2020 2021 2021 (1.5) (1.5) 2022 (6.5) (6.5) 2022 1.1 1.1 2023 2023 Local labour participation (%) Performance 2019 Net cash increased, primarily as a result of a USD 11.3m net cash inflow 2020 55 generated from operating activities, offset by USD 3.6m of net cash 2021 42 outflows relating to investing and financing activities. 2022 51 2023 51 2019 2020 Local labour participation (%) Local labour participation (%) Local labour participation (%) 2019 2019 2020 2020 Non-financial KPIs 2021 2021 2022 2022 Local labour participation (%) 2022 Local labour participation (%) Local labour participation (%) 2023 2023 2023 2019 2019 2021 2020 2020 2021 2021 2022 2022 2023 2023 42 42 42 42 42 61 61 61 55 55 55 51 51 51 51 51 51 55 55 51 51 51 51 Lost time incident rate Lost time incident rate 61 61 2019 2020 2021 nil 2022 1.17 2023 1.50 59 2019 2020 Lost time incident rate Lost time incident rate Lost time incident rate Performance 2019 117 In 2023, the percentage remained the same as the previous year at 51%, 2019 117 2020 59 due to partnering with other local businesses on certain projects. Whilst 2020 2021 this may have resulted in local people being employed, we only record 2021 labour we employ directly in our calculations. We will continue to target 2022 2022 our goal of 70% by 2027 although there will continue to be fluctuations Lost time incident rate 2023 2023 as we enter new countries and build local teams. 2019 2022 Lost time incident rate 2023 nil nil 1.17 1.17 1.17 1.50 1.50 1.50 59 59 2019 2021 117 117 nil 117 2020 2020 59 59 Performance In 2023, we maintained a good health and safety track record with an LTIR of 1.50. 2021 2021 nil nil 1.17 1.17 1.50 1.50 2022 2022 2023 2023 12 61 117 The Board seeks to understand the expectations and interests of the Company’s stakeholders, and to reflect these in the choices it makes towards securing the long-term success of the business. (13.0) 0.2 13.3 6.6 Engagement with RA’s stakeholders is a central part in the Company’s decision-making process. The Board tailors its engagement approach to each stakeholder group to foster effective, sustainable, and mutually beneficial relationships. The Board considers stakeholder interests within boardroom discussions, how expectations may be met, and how decisions may impact their interests. The priorities of each stakeholder group may change over time, depending on actions taken by the management or because of external factors. 21.4 11.2 1.1 This section of the report serves as our Section 172 Statement of the Companies Act and should be read in conjunction with the Corporate Governance Report. The statement requires the Directors to act in a way that they consider, in good faith, would promote the success of the Company for the benefit of its members, considering the factors listed in Section 172. First, we explain some of the key decisions taken by the Board over the past year and how stakeholder interests were considered over the course of decision making. Then we outline in the form of tables how we engage with our stakeholders generally and the influence that such engagements have on our decision making as a Board. Key decisions in 2023 The Company utilised 2023 as a year to stabilise the business, with much focus on resolving the challenges from recent years and refocusing and refining its approach to underscore future sustainable, profitable growth. To this end, the Company took steps in the following areas: Strengthening US capability The Company previously made a strategic decision to its shift to focus on western Government funded contracts and in 2021 established RA FS to be the Company’s prime contractor in the US able to work directly with the US Government. In 2023, the Company bolstered its resourcing in RA FS, welcoming Dave Dacquino as Chairman of the RA FS Board of Managers. Both Executive Directors also now sit on the RA FS board and work closely with the local team to develop the pipeline. Change in operating model Through ongoing engagement with our teams on the ground, we developed a new way of working, incorporating a matrix approach that better reflects our priorities of maintaining a healthy client relationship throughout the project life cycle, utilising institutional knowledge, reducing siloed working and redundancies. This approach provides greater value overall to the customer and underpins sustainability in our growth. Change in governance structure The Company recognised the need for a lean and agile governance structure as it navigated the changes through the year. Alec Carstairs and Philip Haydn-Slater stepped down from the Board after five years of service. Strong experience and credentials in the remaining Non- Executive Directors enabled the Board to continue as a leaner, more agile Board of Directors of four members. Review of principal risks The Company reviewed its principal risks in light of the strategic refresh taken in the previous year. These are as communicated in the Strategic Report on page 17. An annual cycle has been scheduled for each principal risk to be reviewed in depth by the Board. Review of pay structures The Company recognises the need to attract and retain talent. In the year, the Board considered possible options within the constraints facing the Company. The decision was made to review the compensation and performance management system and this will be completed in 2024. The Company monitors the effectiveness and appropriateness of its employee incentive schemes on an ongoing basis. Outstanding share options to employees were cancelled in favour of a more appropriate incentive scheme to be implemented in the future. 13 RA International Annual Report 2023RA International Annual Report 2023Strategic reportStakeholder engagement continued Employees Customers Suppliers and partners Local governments and communities Investors In 2023, we employed on average 1,206 staff with more than 40 nationalities. Our employees are one of our primary assets, and are a key resource in delivering our services. We offer competitive pay and rewarding careers to both international and local staff, and apply best practice international employment standards for all. We conduct extensive research to understand our customers’ needs and how we can serve them better. We work with customers that share our values. Our customers are primarily made up of western Governments, UN organisations, and NGOs working in remote areas as well as select commercial clients. Fostering strong relationships with customers is a vital part of our growth strategy. Over 90% of our revenue in 2023 was repeat business. We work with suppliers that share our values. Our suppliers and partners consist of international, regional, and local organisations helping us to meet our requirements on the ground, delivering essential materials, equipment, food, and services. What is important to them • Fair treatment and stable long-term employment What is important to them • Delivery of projects on time, to the required quality and within budget • Fair remuneration, benefits, and timely pay • Training, skills development, and education • Opportunities for advancement and • Maintaining a close working relationship based on trust and quality of delivery • Working with service providers that have a What is important to them • Prompt payment of invoices • Regular day-to-day communication to allow for future planning and quick resolution of issues • Understanding of RA’s sustainability strong ethical approach to business and whose goals and values are aligned to their own goals in order to adapt their products and services to meet our requirements • Working with service providers that • Health and safety are committed to decarbonisation and that have responsible environmental and social practices, which can in turn support the customer in meeting their own sustainability targets • Health and safety • Due diligence across the supply chain How we engage We interact with customers regularly in the normal course of business as well as submitting scheduled progress reports and attending formal client meetings, which provide a forum for regular feedback and ensuring that expectations are met. How we engage We conduct a rigorous supplier vetting and selection process, and we procure services and materials through purchase orders, contracts, and master service agreements. All suppliers are required to complete Supplier Impact Assessments. We interact with suppliers regularly in the normal course of business and we conduct regular product inspections, visits, and audits. rewarding careers • Involved leadership and opportunities to provide feedback • Diversity, inclusion, and equal opportunity • Health and safety, and mental wellbeing • Community engagement and local support How we engage Our leadership conduct regular site visits where they engage directly with employees and deliver presentations and Toolbox Talks. HR manages employees’ career paths, personal development reviews, and work appraisals. Training, skills development, and education for low-skilled workers is managed at a local level by the country management team in conjunction with Heads of Department. We conduct regular team-building and social events, and employee engagement surveys. Activity in 2023 • Conducted a staff engagement survey in May 2023 to understand what additional support we can provide • Introduced quarterly online Group-wide “Town Hall” meetings for all members of staff to provide updates on key activities, address questions sent through in advance, and take appropriate action taken to address key concerns • Conducted a follow-up end of year survey to understand what impact our responses and actions have had on staff perception, with a view to track a net promoter score KPI in the future • Commenced review of compensation and performance management system to be completed in 2024 We foster good relationships with local governments to secure necessary permits and permissions, and work side by side with local communities, securing our licence to operate. In most locations, we are an important source of employment, supporting families, local services, and institutions. Our investors have provided capital for growth, are a potential source of funding for future expansion opportunities, and are an important source of feedback on our business model and strategy. The Board aims to maximise shareholder value in a sustainable manner. What is important to them • Local employment opportunities, economic development, community investment, and support and engagement with local charitable organisations • Human rights • Regulatory compliance, health and safety, and protection and enhancement of the environment • Community support and engagement with local charitable organisations • Local government engagement How we engage We maintain regular contact through meetings and correspondence with local governments and local community representatives. We support local and regional suppliers where we can and work with local and international organisations to provide charitable support and assistance to local communities. What is important to them • Financial stability and investor returns through capital gain and/or dividends • High standards of corporate governance and ethical behaviour • Strong risk management and anticipation of potential risks arising from changes in legislation and regulation • Regular engagement with management and understanding of strategy and potential risks • Information on remuneration policy • Information on sustainability strategy and rising expectation of alignment to the Paris Agreement and commitment to net zero • Impact investment opportunities How we engage The primary communication tool with investors is through the Regulatory News Service (“RNS”), on regulatory matters and matters of material substance. We hold regular meetings with our current and prospective shareholders, including our in-person Annual General Meeting, and deliver presentations to shareholders upon the release of our annual and interim results. Feedback received from investors via RA’s brokers is discussed and considered at Board meetings. Activity in 2023 • Refreshed the Group strategy with a focus on sustainable growth and creation of shareholder value • Obtained approval from shareholders to reduce the Group’s capital, by the cancellation of the Group’s share premium account, in order to create distributable reserves to support the future payment of dividends as and when deemed suitable in the future Activity in 2023 • Expanded our value-added approach to Activity in 2023 • Ensured that all active suppliers are our service offering • Increased our geographical reach with our clients fully compliant with RA’s vendor vetting regulations • Upgraded our enterprise resource planning software to better understand supplier interactions and requirements Activity in 2023 • Maintained the percentage of local employees at 51% year on year • Promoted 3% of local staff See page 27 for more information See page 10 for more information See page 26 for more information 14 See page 26 for more information See page 4 for more information 15 RA International Annual Report 2023RA International Annual Report 2023Strategic report Risk management Principal risks Our approach to risk The Company takes a top-down and bottom- up approach to risk management. This is to ensure that department, country, and project related risks are fully understood and planned for before high-value or strategically important contracts are undertaken. The Board and Executive Management Team (“EMT”) take their responsibility for risk management and internal controls very seriously. The Board is responsible for ensuring that the risk management process is effective and for providing reasonable assurance that identified risks are fully understood and managed. In 2023, the Board reviewed the risk management framework to incorporate climate-related and ESG risks into the process. Following a review of the Group strategy, the Board and EMT reviewed the principal risks as the potential uncertainties and threats that can hinder the achievement of the Group’s strategic objectives. These risks can arise from internal or external factors and have the potential to disrupt or impact the ability of the Group to execute its targeted strategy. KPIs are assigned to enable monitoring and to review changes in likelihood and impact of each risk. KPIs associated with each principal risk are reported on a quarterly basis, enabling the Group to evaluate and monitor the effectiveness of the internal controls. Heads of Department and Country managers are responsible for monitoring the key risk drivers associated with each principal risk on an ongoing basis. Risk assurance The Group adopts the “four lines of defence” as its assurance model for an enhanced approach that reinforces risk management, internal controls, and transparency within the Group. Risk management framework THE BOARD Principal risks are categorised into: Strategic, Operational, Financial, People, Legal and Compliance, and Sustainability. These risks are monitored by the Executive Management Team. We diligently monitor and review risks, however recognising the dynamic nature of risk, we remain committed to ongoing vigilance, continuously identifying, capturing, monitoring, and assessing risks as they arise. AUDIT AND RISK COMMITTEE See page 45 for more information ESG COMMITTEE See page 46 for more information STRATEGIC RISKS Principal risks Drivers Control measures EXECUTIVE MANAGEMENT TEAM (“EMT”) GROUP RISK ASSESSMENT COMMITTEE GROUP RISK REGISTER (“GRR”) Includes principal risks that could materially threaten the Group’s strategy, business model, future performance or prospects, solvency, liquidity, or reputation. TCFD STEERING GROUP See page 31 for more information HEAD OF DEPARTMENT AND COUNTRY Risk assurance BOARD OR DIRECTORS RA FS misalignment leading to ineffectiveness and loss of reputation • Lack of a shared strategy • Lack of clarity on Group processes and controls • Incoherent and poor reporting from RA FS • Appointing the Group CEO and COO as inside directors of RA FS ensures the alignment of RA FS’s strategy with the Group strategy • RA FS submits monthly financial statements to the Group Finance, enabling the Market misalignment leading to missing opportunities whether core clients or new markets, using our resources ineffectively (people/or cash) Environmental and geopolitical incident leading to loss of marketplace or ability to keep workforce or clients safe Failure to grow market share leading to loss of stakeholder confidence and value Group to monitor RA FS activities • Clear Group processes in key areas – Finance, Risk Management, Cyber and Security, and Health, Safety, Security, Environment, and Quality (“HSSEQ”) • Quarterly strategy report to the Board • Lack of resources to identify opportunities • Lack of understanding the opportunity • Lack of clarity on the strategy • Implementing a cross-departmental decision-making process when pursuing new opportunities • Aim to balance business pipeline between IFM, Construction, and Supply • Having a clear strategy communicated to all stakeholders • Sentinel events • Rapid change in political instability • Terrorist or armed actor action • Major natural disaster • Health crisis • Poor business continuity plans • Research and situational awareness through local and international intelligence sources • Dedicated HSSEQ department • Safety, security, and emergency management plan (“SSEMP”) for each location • Development of contingency plans for all contracts • Geographical and client diversification • Poor management of pipeline opportunities • Spreading competence too thinly • Not recognising and then managing risk effectively • Poor tendering • Lack of a strategic approach to growth and diversification • In-country fact finding • In-country business development units and develop a process for quicker catch of information flow between in-country and head office business development units • Filtering down the strategy • Change management process to optimise capabilities • Formulate a strategic plan for future profitability • Head of Sustainability to review all external ESG content pre-release OPERATIONAL RISKS Principal risks Drivers EXECUTIVE MANAGEMENT TEAM (“EMT”) AUDIT AND RISK COMMITTEE Contract delivery failure leading to loss of reputation and revenue 1 2 3 4 First line of defence Second line of defence Third line of defence Fourth line of defence Policies, procedures and processes and internal controls Functions that oversee risks and monitor new emerging risks and enforce the risk management process Internal functions that provide independent assurance defence External Audit Critical Information Technology and cyber security incidents leading to loss of technical equipment, loss of information, of reputation, loss of government accreditation, and eventually loss of business • Inability to recognise and effectively manage delivery risk • Failure or underperformance of supply chain, suppliers, and sub-contractors • Poor operational and commercial relationships with the customer • Misalignment of contract to customer’s operational needs • Poor quality of deliverables • Unfamiliarity with new contract models and deliverables required under the new contract models • Ineffective security and cyber processes • Lack assurance • Poor business continuity plans and cyber response plans • Ineffective training and employee awareness Control measures • Strong multi-disciplinary due diligence process before tendering • Introduce integrated project team approach to delivery • Clear, simple contract management processes with ISO accreditation where appropriate • Focus on customer relationship management • Contract manager to track contract changes and variations • HSSEQ control procedures and processes • Adopting the four lines of defence as assurance • Project manager recruited to be familiar with new contract models or provide adequate training for new projects manager • Refresh of security and cyber processes • Refreshed assurance processes and accreditation 27001 and cyber risk assessment • Crisis management team in place • Annual business continuity plans review and cyber exercises and tests • Due diligence when selecting sub-contractors and suppliers • Scheduled trainings to enhance employees awareness • Supplier performance risk system to ensure our suppliers and sub-contractors adhere to our cyber security 16 17 RA International Annual Report 2023RA International Annual Report 2023Strategic reportPrincipal risks continued FINANCIAL RISKS Principal risks Drivers Loss of liquidity leading to Company becoming insolvent • Poor financial controls • Inadequate debt provision • Over exposure on cash through contract delivery Control measures • Multiple facilities option on standby • Weekly and monthly cash flow forecasting • Accounts receivables monitored weekly • Board approval required for any capital expenditure above USD 2.5m Lack of cost control leading to an erosion of profit • Poor control of inventory • Failure to cost risk effectively • Lack of recognition and management of efficiencies • Unreasonable budgeting • Inventory transparency • Financial position and prospects procedures in place and updated annually • Enterprise resource planning system in place and monitored • Monthly budget and gross margin reviews • Level 1, 2, and 3 assurance programme developed for each area • Authority matrix LEGAL AND COMPLIANCE RISKS Principal risks Drivers Major regulatory failure leading to a loss of reputation and potential loss of business • Directly or indirectly involved in modern slavery • Environmental standards not met • Serious health and safety incident • Failure to comply with statutory laws and regulations • Financial and tax reporting standards not met • Failure to comply with UK and US related ESG regulation • Mistakes made with our CDP and TCFD reporting • RA unprepared for carbon taxing Control measures • Due diligence and assurance of suppliers and sub-contractors • Level 1, 2, and 3 assurance programme developed for each area • Suitably qualified experienced person appointed for each level of assurance • Engage local law firms to provide advice and updates on new laws and regulations • Group subsidiary database to track the annual and tax filing for each subsidiary • Ensuring our carbon footprint is fully auditable and conforming with GHG protocol • Head of Sustainability to ensure we keep up to date with UK and US progress in ESG and report the progress to ESG Committee and the Board • Carbon offsetting costs researched to understand cost implications if carbon taxes came into effect (2024) PEOPLE RISKS Principal risks Drivers Control measures HSSEQ and wellbeing leading to a negative impact on the Group’s culture • Ineffective HSSEQ processes • Ineffective training and engagement by management • Ineffective assurance process • Lack of an open culture to raise and discuss issues • Isolation and separation from home • Blasé approach to high risks • Poor health provision • Pay, working terms and conditions not being in line with the marketplace • Not demonstrating that individuals are valued • Lack of diversity • Lack of opportunity to grow within Company • Poor reporting and reward for performance Failure to retain and attract talent leading to poor performance • ISO accreditation • HSSEQ control procedure and processes • Weekly HSSEQ tool talk • Security protocols in place • Rotation and staff welfare programmes including mental health training • On-site medical facility • Medical and life insurance in place • Compliance speak-up function • Level 1 and 2 assurance programme developed for each area • Providing attractive salaries and benefits to attract the workforce • Bonus programmes • Upskilling and training of in-country local workforce • Training policy • Performance management system • Company townhall meetings • Succession programme • Staff survey People act without integrity leading to a loss of trust with stakeholders • Lack of clear policies, guidance, and training on corruption • Workforce uncomfortable to raise issues • Workforce not feeling recognised and appreciated • Policies, employee training, and independent whistleblowing channel • Gift and hospitality register • Level 1, 2, and 3 assurance programme developed for each area SUSTAINABILITY RISKS Principal risks Drivers Control measures Not meeting our 2027 ESG targets potentially leading to a damage in reputation, loss of workforce, and/or clients Global climate change impacts RA’s ability to operate effectively • Lack of buy-in and engagement from departments/ • Dedicated Head of Sustainability (“HOS”) to oversee ESG progress with direct Board communication to EMT • ESG being seen as a “department” rather than an approach that needs to be embraced across the organisation • In-country teams not implementing ESG into their operations • Lack of funding to run internal sustainability pilots/ initiatives or invest in green technology • Investment decisions not looked at through a sustainability lens • Recruitment process does not address diversity and gender balancing • ESG software is not in place to sufficiently record and monitor data and progress (both HR and Environmental data) • Training and development programme lacks robustness required to upskill staff • Hostile work environments for our staff – danger of heat related illness, increase in vectors, and disease resulting in high absenteeism, turnover of staff, and severe illness • Crop failures and water scarcity in our countries of operations result in civil unrest and scarcity of commodities • One-off climate event (flooding, sandstorms, tropical storms) damages our equipment and facilities, disrupts our operations (including incoming F&B), and endangers our staff • HOS to visit operations on an ad-hoc basis to raise awareness and provide country specific support • ESG Committee to ensure Board involvement • ESG KPIs are in the process of being included in performance reviews for management and linked to bonus structure • Sustainability budgets to be included in operating expenditure and capital expenditure and adequate sustainability budget • Currently investing in software for our carbon accounting and wider ESG and HR data • Sustainability training including department and in-country specific training • Develop RA’s training and development programme (2024) • Restructure RA’s recruitment process to support diverse recruitment (2024) • Implementation of TCFD reporting will ensure RA is analysing climate risk and designing a long-term action plan • Business continuity plan for each site including water access in case of borehole failure • Medivac and health insurance in place for staff • Adequate insurance in place for buildings and equipment Not being able to support our clients sufficiently with their climate ambitions despite claiming this as one of our USPs • Bids not including adequate information on our • Sustainability department to be included throughout the bid process and sustainability offerings copied into all new bid opportunities • Inadequate budget/manpower to conduct carbon • Research software that can provide oversight of energy efficiency and waste footprinting and other ESG projects for our clients if requested • Unclear within contracts the extent to which RA is responsible for carbon reduction projects for clients management for clients (2024) 18 19 RA International Annual Report 2023RA International Annual Report 2023Strategic reportSustainability report Chief Operating Officer’s introduction to the sustainability report Lars Narfeldt | Chief Operating Officer The success of RA comes from prioritising our efforts in the right direction, and from operating responsibly and sustainably. “RA has built considerable knowledge and is ahead of the curve when it comes to the sustainable delivery of projects, particularly in far-flung locations.” Our market is undergoing an exciting shift as organisations look towards their suppliers to fulfil their own ESG ambitions, and this is reflected in more requests for sustainability and decarbonisation information in bids. RA has built considerable knowledge and is ahead of the curve when it comes to the sustainable delivery of projects, particularly in far-flung locations. We believe there are opportunities to leverage this with our clients to offer sustainable-related services, for example, supporting clients in executing decarbonisation plans across their operations and supply chains, as well as designing the systems for their environmental and social reporting. In 2023, we initiated our Taskforce on Climate-related Financial Disclosures (“TCFD”) reporting (see page 31) and I would like to thank all those involved. While we are in the early stages of our TCFD reporting process, we have identified key environmental issues that require further consideration. Climate risk reporting is an iterative process, and we will build on the depth and quality of our disclosures in coming years under the new IFRS structure. Having previously used consultants to support our carbon footprinting accounting, we recently switched to a GHG protocol-aligned software. This is enabling us to include new categories in our Scope 3 data and is giving us greater clarity in our Company-wide carbon footprint, although we still have some refining to do before we can set Company-wide carbon-reduction targets across all three scopes. Meanwhile, we made solid progress towards our Scope 1 & 2 Science Based Targets initiative (“SBTi”) aligned reduction targets in Mogadishu for 2030 and continued in our efforts with our priority issues, making positive progress in eight out of fourteen of our KPI targets. The work around TCFD highlighted to the Board and ESG Committee the need to bring climate-related risks – and sustainability risks in general – to the fore in our Group risk management process. Consequently, key sustainability risks have been added to RA’s principal risks for the first time (see page 19). Looking forward, we will undertake a materiality refresh in 2024 so that we prioritise the issues that matter most to our stakeholders. For our part, our updated strategic vision (see page 5) reinforces the importance of making a positive and sustainable impact in the communities where we operate. Our mindset is to take the initiative and lead by example, through early adoption of technology, enhancing our services to clients, and highlighting what is possible when we work together for positive change. Lars Narfeldt | Chief Operating Officer 30 April 2024 20 21 RA International Annual Report 2023RA International Annual Report 2023Strategic reportSustainability report continued Environment Minimising our environmental impact Sustainability strategy The success of RA comes from prioritising our efforts in the right direction, and from operating responsibly and sustainably. We concentrate our activities where we can have the most impact and that are critical to the long-term economic, social, and environmental sustainability of our business. Our focus areas, carefully selected following a materiality assessment conducted in 2021, are aligned to the UN Sustainable Development Goals (“SDGs”) – the global framework that we use to help inform our approach and ensure that our strategy supports broader sustainable development priorities. ENVIRONMENT SOCIAL GOVERNANCE Managing our resources efficiently Making a positive impact on people and economies A culture of responsibility and accountability ALL SDGs ALL SDGs There is no escaping the serious supply and logistical challenges of operating in remote and underdeveloped parts of the world. By focusing on whole-life project costs and introducing innovation, we want to demonstrate that companies in our industry can be competitive, profitable, and environmentally responsible. We are acutely aware of the impact our operations can have on employment, skills transfer, and the creation of opportunities in local communities and economies. By employing and upskilling local people, we leave a lasting impact in the regions in which we operate. It is essential that we comply with relevant laws and regulations, treat people with respect, and behave with integrity as well as sensitivity towards local customs. We firmly believe that all our employees have the right to decent work, in a safe and secure environment. Focus areas 1. Carbon emissions 2. Energy use 3. Waste management 4. Materials and procurement Focus areas 1. Local economic impact 2. Equal opportunities 3. Training and development 4. Employment practices 5. Water and effluents management 5. Occupational health and safety 6. Community support Focus areas 1. Sustainability risks and organisation boundaries 2. Supplier impact 3. Client impact 4. Human rights, anti-bribery, and corruption 5. Whistleblowing We are a signatory of the United Nations Global Compact which sets out Ten Principles that closely reflect our own philosophy, standards, and values. 22 22 RA International Annual Report 2022 We focus on whole-life cycle impacts, operating in a way that saves both money and the environment. We recognise RA’s contribution to climate change and consider the environmental effect of our activities from the outset. We support innovation, either through behavioural change, new processes, or new technology, to achieve our environmental reduction targets. To ensure the best outcomes, we evaluate any innovations and carry out pilot schemes before rolling them out across our operations. 1. Carbon emissions1 We began exploring our carbon footprint in 2019 – well before there was any requirement to do so – to understand our impact and what we could do to reduce our emissions. With the support of external consultants, we started with our Scope 1 and 2 emissions and certain Scope 3 emissions in our permanent location in Mogadishu. Over the following years we added more data from temporary and permanent locations, while enhancing our methodology to align with evolving best practices. During this time, new technology came to the fore, making it easier to gather and record information, while regulation has also changed. To keep current, we decided to adopt a cloud-based carbon accounting software in 2023. This required new internal processes to be put in place which has significantly improved our understanding carbon accounting and our Company-wide footprint. For our 2023 carbon footprint, additional Scope 3 categories have been covered including employee commuting, all goods and services purchased for both our internal operations and client contracts (previously we had only been measuring goods and services purchased for internal use), and upstream transportation and distribution. While we feel we have good insight into our Scope 1 and 2 emissions, accounting for all our Scope 3 emissions is still a work in progress; certain downstream Scope 3 emissions still need developing and we have, at times, extrapolated data and used spend-based data rather than activity-based data. We are developing a far clearer picture of our Scope 3 carbon hotspots, which will bring greater focus to where we can make material improvements and where best to focus our efforts in moving to activity-based or supplier data. Company-wide emissions by Scope 2023 2022 % of overall emissions 12.2% 1.9% 85.9% tCO2e 3,885.2 600.5 27,406.6 31,892.3 % of overall emissions 41.5% 8.6% 49.9% tCO2e 4,066.1 846.9 4,884.4 9,797.3 Scope 1 Scope 2 Scope 3 Total Company-wide carbon intensity2 (tCO2e/USD 1m revenue) 2022 (baseline) 2023 All Scopes Scope 1 & 2 155.7 547.2 78.1 77.0 The carbon emissions result for 2023 reflects our expanding Scope 3 data, with logistics and additional goods and services being the principal contributors to the increase. We were aware that our logistics footprint would be substantial, since our business requires us to transport a large amount of goods and equipment across the world, often by air-freight due to security concerns or when dealing with perishable goods. Food and beverage is a significant component of Scope 3 category 1 emissions – an area we have already begun to target through minimising waste, changing our menus, and by buying locally or growing our own fresh produce where possible. 1 RA’s carbon emissions include all Scope 1 and 2 data. Scope 3 categories include purchased goods and services, capital goods, fuel and energy related activities, upstream transportation and distribution, waste, business travel and employee commuting. 2 Emissions from 90% of locations divided by total revenue for the year ended 31 December 2023. 23 RA International Annual Report 2023RA International Annual Report 2023Strategic reportWe aim to reduce our energy consumption by improving energy efficiency, increasing the amount of energy generated from renewable resources, and fostering energy-conscious behaviour. 5. Water and effluents Water consumed 2021 2022 2023 Water recycled 2021 2022 2023 m3 44,241.0 35,921.0 38,180.4 % 6.0% 6.8% 5.8% Water consumption intensity (including bottled water) 2022 2023 Target m3/USD 1m revenue 570.9 655.1 2% reduction per annum Sustainability report continued ENVIRONMENT CONTINUED Scope 1 emissions have reduced year on year but remain relatively high since the power we use in our temporary camps comes from diesel generators. Unfortunately, this is not something we can easily change as there is often limited or no infrastructure in the locations we work, and even when there is access to grid power it is often unreliable. We have made progress in this area with the installation of solar PV at our Mogadishu camp in 2020. However, making large CAPEX investments requires us to be certain about our long-term presence in the country. Unfortunately, this is not always possible given that most government and humanitarian contracts are only granted for two or three years before renewal. RA is committed to achieving Net Zero emissions by 2050 in line with the Paris Agreement. We are working with our carbon accounting provider to help us reduce our emissions across all three Scopes, focusing on hotspots such as upstream transport, our food-print, and increasing the percentage of renewable energy we produce ourselves. Mogadishu science-based target progress Mogadishu Scope 1 absolute emissions (tCO2e) 2020 (baseline) 2021 2022 2023 2025 target from baseline 2030 target from baseline Scope 1 4,500 3,643 3,128 2,914 3,555 2,610 -21% -42% We continue to make progress in reducing our Scope 1 emissions in Mogadishu, ahead of our 2025 target and now moving towards our 42% SBTi reduction target for 2030 from a 2020 baseline. Having made rapid progress, we are aware that our reduction will slow as we try to find new ways to reduce our reliance on diesel-generated power. From this year, our Scope 3 Mogadishu emissions data is incorporated within our Company-wide calculations, for which we will be setting targets. As a result, we are no longer reporting on Mogadishu Scope 3 data in isolation. 2. Energy use Total energy consumed 2021 2022 2023 MWh 5,694.2 5,279.1 5,564.5 Energy consumption intensity MWh/USD 1m revenue 2022 (baseline) 2023 Target 83.9 95.5 2% reduction per annum Energy self-generated from renewable sources 2021 2022 2023 24 % 3.4 3.0 3.6 Our approach is to: • • • Install energy efficient options wherever possible when replacing equipment Have regular maintenance programmes to ensure that our equipment runs as efficiently as possible Include renewable energy options in client bids that involve energy infrastructure or the supply of electrical equipment In 2023, we generated 74% of our own energy, of which 3.6% came from renewable sources, up from 3.0% in 2022. This small improvement comes from reconfiguring our solar panels in Mogadishu in 2023 to optimise performance. Our increase in energy consumption intensity is the result of reduced revenues in 2023 against a relatively fixed energy requirement in our business. 3. Waste While we can control how we manage our own waste, we are aware of the challenges outside our operations due to a lack of infrastructure. This often results in much of the waste exiting our sites to either go to landfill or to be incinerated. Our approach is to: • • • • Limit the amount of waste we produce in the first place, by making careful procurement choices and following the principles of “reduce, reuse, and repurpose” Invest in reverse osmosis plants to reduce our reliance on single-use plastic bottles Have standard operating procedures and targets to limit the amount of stock ordered which gives us visibility of the amount of waste per project Use biodegradable packaging, limit the use of single-use plastic, and compost any food waste In 2023, we began weighing waste that exits our operations to understand better what we are putting into local ecosystems. 4. Materials and procurement Our whole-life cycle approach aims to reduce the materials we use and increase their longevity. We face climate-related challenges such as high humidity and/or salinity which can affect the durability of materials. Having started replacing drainage systems in Mogadishu with a fibreglass-reinforced plastic (“FRP”) alternative, we have extended this to bigger areas such as walkways and stairs. Whilst replacing metal with the higher up-front cost of FRP may at first seem counter-intuitive, there are benefits to this choice. In addition to being longer-lasting, the material requires minimal maintenance such as sanding or painting. Our structures are designed to reduce the amount of concrete and metals used, and our camps are reused repeatedly. We try to influence our clients to make more sustainable choices in their procurement by offering alternatives. Historically this has not been a priority for them, although attitudes are changing as clients begin to set their own environmental strategies. We find we have more discretion in IFM rather than construction projects to offer a range of options so that clients can make their own decisions. Water security is a high key risk area for our business. Water is becoming increasingly scarce as water tables drop and boreholes dry up, and we are already reliant on third-party water suppliers and associated price fluctuations in some locations. Our approach to manage water consumption and effluents is to: • • • • Encourage responsible behaviour amongst our staff and clients Recycle grey water for construction projects and garden maintenance Where feasible contain or treat sewage, and drain any water that is not recycled into soakaways to limit the impact on the environment Treat water to WHO potable water standards to reduce plastic waste and costs associated with purchasing and shipping bottled water • Use washing and dishwashing machines that incorporate water efficiency technologies Our water intensity metric for 2023 is the result of a slight increase in water consumed of 6% whilst our revenues for the year fell. This reflects the partially fixed nature of water consumption in our operations. RA International Annual Report 2023 25 RA International Annual Report 2023Strategic reportSocial Making a positive impact on people and economies 2. Equal opportunities Female employees within the RA workforce 2021 2022 2023 2027 target Female employees at leadership level in Kenya, Dubai, and UK4 2022 2023 2027 target 3. Training and development Percentage of local workforce promoted each year 2021 2022 2023 % 13 15 17 20 Annual target % 5 4 3 5 % 35 24 50 We aim to offer secure employment and rewarding careers. In locations where there is high unemployment and few opportunities, developing skills and offering training can have a significant impact on local economies, communities, and families. We offer on-the-ground training, in-office skills, and education, as well as providing internship opportunities. We have a diverse workforce of 43 nationalities and are committed to supporting our employees in achieving their full potential, irrespective of gender, disability, age, race, colour, nationality, sexual orientation, religion, or personal beliefs. We have engaged an HR consultant to support the Company in developing a long-term talent and people strategy, which will be rolled out in 2024. We are excited about the stimulus this will bring to one of our most important social ambitions. We want to leave a lasting legacy on the communities where we have projects. The greatest impact we can make is by providing local employment and offering equal opportunities to gain experience and develop skills through training and education. By taking this approach, we can have a direct economic impact on families and local communities. 1. Economic impact Average percentage of local staff employed 2021 2022 2023 2027 target Product and services procured locally 2022 (restated)3 2023 2027 target % 42 51 51 70 % 54 57 65 Local labour participation is a cornerstone of our social ambitions, since employing just one person can have a profound impact on the local economy, communities, and families. We do all we can to employ locally, bringing in skilled labour from other developing countries where there might also be few stable employment opportunities, although these people are not included in our local staff employment calculations. In 2023, the percentage remained the same as the previous year at 51%, due to partnering with other local businesses on certain projects. Whilst this may have resulted in local people being employed, we only record labour we employ directly in our calculations. We will continue to target our goal of 70% by 2027 although there will continue to be fluctuations as we enter new countries and build local teams. Our commitment to local procurement in developing countries supports economic growth through employment and taxes. We take opportunities to increase the percentage of products and services we procure each year. However, we need to balance this with access to reliable supplies that meet international quality standards and clients often stipulate the vendors we can use, limiting our choices. When we do support a local supplier, the products are likely to be imported since we often work in locations where there is little manufacturing capability. In 2021, we established that each local salary we pay in Somalia, South Sudan, and the Central African Republic supports an average of ten dependants. From this we discovered that 88% of households are on a single income, showing just how important our commitment to employing local people really is. We are preparing to conduct another survey this year. We are on our way to reaching our target to achieve 20% female participation by 2027 following concerted effort to attract and recruit more females. In the context of our business this is a considerable achievement where cultural barriers and the prospect of international staff spending extended periods away from home can discourage women from working with us. The differences between locations are highlighted in the table below. Female staff by territory5 2023 % 2022 % Mozambique Kenya South Sudan Dubai USA UK Sudan Somalia Central African Republic 48 43 35 33 27 18 7 4 1 47 48 30 34 N/A N/A 5 3 12 At the leadership level we are targeting full gender parity by 2027 in Kenya, Dubai, and the UK, where we have permanent offices. Notably, our Chair and CEO, the Company’s two most senior leaders, are female. The drop in females at leadership level in 2023 reflects how a small turnover in senior staff can impact the percentage figure. Additionally, the fall in females in Kenya was due to a construction project resulting in an increase in male staff in the country. We have conducted a research project and are updating our recruitment policies to help us attract more female applicants. COMMUNITY SUPPORT Every location we work in has individual needs and therefore our principle is to do what we can, where we are. We provide materials and man power to charitable initiatives, and commit our time to community projects. Our pest and vector control team shared their knowledge at an orphanage on how to prevent mosquito outbreaks using home- made solutions. This was particularly welcomed given the real threat of malaria in the area. 3 Restated to exclude developed countries within the calculation methodology. 26 Board, Executive Management Team, Heads of Department, mid-level management and supervisory roles. 4 5 Average percentage of full-time female staff in 2022 and 2023 for countries where we have more than ten employees. Kenya and Dubai both have permanent offices where female employees can live at home. 27 RA International Annual Report 2023RA International Annual Report 2023Strategic reportBALEDOGLE PRIMARY SCHOOL – SOMALIA Between January and February 2024, RA International spent approximately $15,000 constructing two new classrooms for Danaab Primary School under our community support mantra of “what we can, where we are.” Danaab School was established to provide education and support to approximately 80 children who have lost their fathers in active duty against the extremist group, Al Shabab. This school, which is located just outside the UNSOS camp, had been facing arduous challenges due to its unfavourable learning conditions. The students were being taught in classrooms made of tree branches and corrugated iron, with no proper flooring. As a result, the classrooms could not be utilised during the rainy season, and even during the dry season, they were extremely hot due to a lack of proper ventilation. Our project aims to provide these children with a conducive and safe learning environment. This was particularly welcomed given the real threat of malaria in the area. To ensure the project was delivered to RA standards, we flew in two of our international staff team from Mogadishu to oversee it. However, we also recognised the importance of local involvement and hired and trained seven local nationals from the district to support the build. This not only empowered the local community but also ensured that the project was in line with their needs and requirements. All materials were sourced within the Wanlaweyn district, further supporting the local economy. The new classrooms have transformed the students’ learning environment, enabling them to study year-round in clean, ventilated, and watertight facilities. To foster a stronger sense of community involvement and to gather valuable feedback we also arranged a handover ceremony. We made sure to invite a diverse group of attendees, including students, community leaders, and respected elders, to witness the unveiling of the facilities. This event was a wonderful opportunity to showcase our commitment to education and community development, and we were pleased to receive such positive feedback from all those in attendance. Sustainability report continued SOCIAL CONTINUED 4. Employment practices International staff turnover 2022 2023 Annual target Absentee days of total workdays for international staff 2022 2023 2027 target % 10 8 8 % 1.8 1.3 1.3 As a company, we have a strong reputation for looking after our staff and take pride that we are considered as being a good place to work. This is evidenced in relatively low staff turnover and absentee rates. Having conducted an engagement survey at the end of 2022, we carried out an interim survey in May 2023 to see what progress we had made in addressing issues raised. We conducted deep dives into where we could offer more support and sought to address concerns that some staff did not fully understand the direction of the Company. Further, we hosted a series of Town Halls where staff could pose questions directly to the EMT. This proved to be very helpful, and all questions were considered and answered. The annual engagement survey was taken again in December 2023 giving us a Likert score of 76% (target: 80% by 2027); our staff felt they were well looked after. We were pleased to see a reduction in absentee and staff turnover rates, hitting our 2027 targets in both cases for the first time. 5. Occupational health and safety Lost time incident rate6 (“LTIR”) 2022 2023 Annual target Environmental pollution incidents 2022 2023 1.17 1.50 0.90 3 3 We use a real-time, cloud-based health and safety management software platform, MANGO, to manage, report, and record all health and safety incidents. The system also sets standard procedures for repeatable activities which can be shared across our organisation, and which help limit the number of incidents and accidents. In 2023, we maintained a good health and safety track record with an LTIR of 1.50. We recorded three minor environmental pollution incidents; a leakage of sludge to the rainwater drainage and a diesel and oil spill from a generator. Prompt corrective action was taken for each incident as well as preventative actions put in place to avoid future episodes occurring. Security is a key concern for the Company. Each project undergoes a rigorous security-related risk assessment and has security management and emergency response plans. All security incidents however minor, are discussed in Board meetings and responding actions are carried out. 6 LTIR is defined as: (Lost time injuries x 1,000,000)/Total hours worked. 28 Governance A culture of responsibility and accountability Sustainability and accountability are at the core of RA. The challenges we face, due to the environments in which we operate, are huge and complex. I am proud that RA is, relative to its peers, leading the way in “Doing business the right way”. Our ESG Committee meets twice a year and is responsible for overseeing the Group’s sustainability strategy and execution. ESG matters are also discussed at every Board meeting. For more information on our governance structures and committees, please see pages 38 to 41. 1. Sustainability risks and organisation boundaries RA’s sustainability risks are incorporated within the Company’s risk management framework (see page 16) and identified risks are included on the Group Risk Register. For the first time this year, key sustainability risks are highlighted into the Group’s principal risks on page 17. Climate change risks and their potential impact are identified and discussed in our inaugural TCFD Statement on page 31. We concentrate our activities on the material topics where we can have the most impact and those that are critical to the long-term economic, social, and environmental sustainability of the Company. Since our business is often linked closely to our clients’ activities, we have clear organisational boundaries of what we can directly control and what we can influence only. RA complies with internationally recognised management systems for quality (ISO 9001:2015), environment (ISO 14001:2015), food safety (ISO 22000:2018), and occupational health and safety (ISO 451001:2018). These management systems stipulate consistent processes, fostering a culture of self-evaluation, correction, and continual improvement. RA uses a cloud-based software tool, MANGO, to support HSSEQ compliance and management. 2. Supplier impact Our suppliers and partnerships consist of international organisations as well as local and regional suppliers. All our suppliers undergo a vetting and reputation screening process to make sure that they share our values and uphold our standards. Each year we ask our suppliers to renew their commitment to our supplier Code of Conduct and our managers conduct regular supplier visits to ensure compliance. We conduct reputation screening and risk assessments linked to high- value and high-risk suppliers, such as sub-contractors, recruitment agencies, customs brokers, and other intermediary companies that represent RA. This includes checks to prevent human trafficking and child labour; there were no reported cases in our supply chain in 2023 (2022: nil). 3. Client impact When selecting clients, we consider social, environmental, and governance alignment. We stand out as a business because we commit to giving local people employment opportunities wherever we can, and this is a key consideration when engaging with new clients or projects. We maintain a list of industries and organisations, aligned to the UN Global Compact, with which we will not engage under any circumstances. This includes businesses engaged in the tobacco, ammunition, and armaments industries, as well as organisations and governments with links to terrorism, or with clear and documented evidence of human rights abuse, bribery, corruption, human trafficking, human slavery, money laundering, sexual exploitation, harassment, or discrimination. Human rights, modern slavery, anti-bribery, and corruption Our licence to operate is obtained by treating people with respect, complying with relevant laws and regulations, behaving with integrity and sensitivity to local cultures, as well as by upholding a firm belief that all our employees have the right to decent work in a safe and secure environment. This belief is enshrined in our Code of Conduct and Company policies, which reflect our stand against harassment, discrimination, human trafficking, and our zero tolerance of bribery and corruption. Our policies are made available to staff in English, French, and local languages, and are applied to service providers and suppliers as well as clients and visitors to our sites. We are committed to respecting and promoting human rights, including the eradication of modern slavery, within our business operations and supply chain. We acknowledge the significant impact our operations can have on vulnerable communities in the regions where we work. Recognising our responsibility, we are committed to upholding the highest standards of ethical conduct in our interactions with these communities and take a zero-tolerance approach to non-compliance. A full list of RA’s Policies can be found at: ragrpplc.co.uk/investors/policies/ We provide induction training and regular training is in the form of Toolbox Talks, on-site visits, inspections, and communications on this subject to maintain awareness and ensure compliance. In 2023, there was one reported case of harassment and discrimination during the year which was upheld following an independent investigation. This resulted in the termination of contract of the offender, along with additional awareness and compliance training on our Code of Conduct. There were no reported cases of human rights abuses, bribery, or corruption (2022: nil). 5. Whistleblowing It is important that our people act with integrity, and we encourage people to raise concerns and report any malpractice via an independent and anonymous whistleblower channel. In 2023, five whistleblowing complaints were received. Following investigation, one of these was upheld and appropriate action was taken. 29 RA International Annual Report 2023RA International Annual Report 2023Strategic report Sustainability report continued DATA Carbon footprint Company-wide carbon emissions (tCO2e) Scope 1 carbon emissions (tCO2e) Scope 2 carbon emissions (tCO2e) Scope 3 carbon emissions (tCO2e) Scope 3 category breakdown Purchased goods and services Capital goods Fuel and energy related activity Upstream transportation and distribution Waste Business travel Employee commuting Upstream leased assets Percentage change year on year 266% -4% -29% 461% 2023 31,892.3 3,885.2 600.5 27,406.6 2023 12,287.1 114.5 932.6 11,455.5 256.6 1,663.1 695.1 2.1 2022 9,797.3 4,066.1 846.9 4,884.4 2022 2,988.2 n/a 1,029.4 n/a 1.7 865.0 n/a n/a The carbon emissions result for 2023 reflects RA’s expanding Scope 3 data, with logistics and additional goods and services being the principal contributors to the increase. For more information see page 23. Energy consumption Total Energy Consumed (MwH) Grid Energy Consumed (MwH) Self-Generated Energy (non-renewable) (MwH) Self-Generated Energy (renewable) (MwH) Water consumption Water consumed (including bottled water) (m3) Water recycled (m3) 2023 5,564.5 1,069.9 3,971.7 148.3 2023 38,180.4 2,218.5 2022 5,279.1 754.0 4,053.6 127.0 Percentage change year on year 5% 42% -2% 17% 2022 Percentage change year on year 35,921.0 2,458.0 6% -10% Task force on climate-related financial disclosure statement Introduction We are pleased to publish our inaugural Task Force on Climate-related Financial Disclosures (“TCFD”) Report in accordance with Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022. We welcome the introduction of TCFD, recognising the motivation this will provide us to further understand relevant climate-related risks and strengthen appropriate risk mitigation processes. As a business, we are already feeling the impact of physical climate-related risk. This year, we have experienced flooding in multiple locations in both Somalia and Mozambique and were hit by supply chain challenges at our Libyan operations following the devastating collapse of the Derna dam. In light of this, we fully comprehend the need to play our part in reducing our environmental impact and must adapt our business to the changing climate to protect our staff, our customers, and our future viability as a company. Despite this being our first year of reporting and being a relatively small company to be completing TCFD, we have worked hard to address each disclosure with diligence. We aim to improve our data collection each year as our understanding of climate-related risk and resilience across our business and supply chain grows. Governance Board oversight The Board has overall responsibility for the Group’s climate-related risks and opportunities. The Board addresses climate-related risks in two forums: 1. ESG Committee: This comprises of three Board members and is chaired by the Group Chair, Sangita Shah. In these meetings, our Head of Sustainability is invited to update the Committee on ESG progress against 2027 targets and KPIs (including emissions and energy reduction targets) and our flight path to net zero. The ESG Committee also highlights potential upcoming regulation changes. Climate-related risks and opportunities are also presented to the Committee for review and final sign-off. Salient issues addressed at the ESG Committee are brought to the attention of the Board at the quarterly Board meetings. 2. Audit and Risk Committee: This year, the principal risks of the Company were reviewed and three of the fifteen risks relate to sustainability. The Audit and Risk Committee and Board will review these sustainability risks each year and ensure they are properly understood, quantified, and addressed by the organisation. For full details of Committee memberships see page 36. Management oversight Our COO and co-founder, Lars Narfeldt, is the EMT member responsible for delivering our sustainability strategy. Our Head of Sustainability reports directly to the COO and attends Operations Meetings to better understand climate-related risks and ensure sustainability is integral to operational decisions. In September 2023, we established an internal TCFD Steering Group comprising of the COO, FD, Legal Officer, and Head of Sustainability. The concept behind the group, which met twice during the year, is to enable management across departments to contribute to the analysis of our climate-related risks and opportunities and to engender a cross- organisation approach. From January 2024, our Logistics and Procurement Manager will join the TCFD Steering Group to support the identification of climate-related risks and opportunities in RA’s supply chain. In addition, the group seeks to understand where the Company already complies with TCFD and areas of non-compliance, and identifies best practices that could be adopted. Within this assessment the group considers what areas to focus on and what could be achieved within certain timeframes, based on resources, availability, experience, and current data. Key climate-related risks identified by the TCFD Steering Group are included on the Group Risk Register and as part of our wider risk assessment and management framework. Organisation and reporting structure for climate governance THE BOARD AUDIT AND RISK COMMITTEE ESG COMMITTEE EXECUTIVE MANAGEMENT TEAM (“EMT”) TCFD STEERING GROUP OPERATIONAL DEPARTMENTS Strategy Risk and opportunity identification To establish our climate-related risks and opportunities, the TCFD Steering Group ran a workshop where risks linked to climate change (physical and transition) impacting the organisation were discussed and documented. This workshop was supplemented by a risk assessment form completed by operational staff in the field to enrich qualitative data. We are aware that the Group faces different climate challenges depending on the geographical location and the nature of the project we are undertaking. As a result, physical and transition risks that might have a potential financial impact on the business – and that had not been identified by the TCFD Steering Group – were highlighted. Below, we have set out our principal climate-related risks and opportunities, detailing the type or risk/opportunity, the timeframe, and the impact each risk or opportunity could have on the business. For this exercise we defined our timeframes as follows: 1. Short term: 1-3 years 2. Medium term: 3-10 years 3. Long term: 10 years + We face potential physical risks, including extreme weather events, as well as risks and opportunities resulting from the transition to a lower- carbon economy, including transition products and services to lower- emissions options. Climate change and the climate transition also provide us with business opportunities both in terms of resource efficiency and the potential to extend our client offering as we are able to leverage our extensive experience operating in challenging environments where we have proactively implemented sustainable solutions. 30 31 RA International Annual Report 2023RA International Annual Report 2023Strategic report Task force on climate-related financial disclosure statement continued Risk/opportunity description Potential impact to RA International Opportunity Risk/opportunity description Potential impact to RA International Opportunity ACUTE Flooding, strong winds, or sandstorms halting operations and damaging assets. Timeframe: short term. CHRONIC Drop in the water tables, resulting in RA boreholes or client boreholes no longer functioning. Timeframe: short to medium term. • Flooding or other damage to facilities leading to short- term housing issues, stock damage, and long-term structural damage • Inability to supply food and water to our staff at camps • Challenges around the delivery of our IFM, supply chain, and construction projects • Sharp rise in insurance premiums and difficulty obtaining insurance in high-risk geographical regions • Increased cost in fleet maintenance and replacement Increase revenue streams from extended client offerings. • Supporting clients in sourcing and installing sustainable solutions, such as climate-resilient infrastructure, in the remote areas in which we operate • New contracts linked to climate-related risk resilience e.g. upgrades to flood defences and electrical grids • Reliance on third-party water contractors. If water is Increase revenue streams from extended client offerings. extremely scarce, there is a risk of not accessing this third-party water • No water available for reverse osmosis plants, resulting in drinking water shortages • Cost implications of drilling boreholes deeper or purchasing from third-party water suppliers • Human conflict due to the rise in water prices and limited availability endangering our staff and operations • Supporting clients in sourcing and installing sustainable solutions in the remote areas where we operate, such as borehole testing/hydroponics Increasing temperature in areas in which we operate. Timeframe: long term • Danger to our staff – high temperatures resulting in physical casualties, mental health conditions, respiratory conditions, and other diseases Increase revenue streams from extended client offerings. • Supplying and/or retrofitting air conditioning equipment and offering maintenance services Long-term heat increases and extreme weather leading to a decrease in food yields and an increase of disease and vectors. Timeframe: short to medium term MARKET Rising commodity prices and/or suppliers passing on higher energy or emissions- related costs to consumers. Timeframe: short to medium term Demand for low-carbon products. Timeframe: medium to long term A change in client behaviour and requirements as sustainability is embraced. Timeframe: medium to long term • Reduced work efficiency – the requirement to split shifts to avoid the midday sun, increased absenteeism, staff retention challenges, and low staff morale • Equipment and infrastructure failures • Overall cost of commodities rise globally, impacting our margin on client catering projects and our internal operating costs • Reduced agricultural productivity and food security for our national staff and potential civil unrest in countries of operation • Outbreaks of tropical illnesses and waterborne diseases impacting our staff and clients • Increase in medical repatriations due to staff illness in remote locations or even loss of life if not treated correctly Increase revenue streams from extended client offerings and resource efficiency. • Develop alternative food production such as hydroponics to secure food supply to clients and operations • Increase in demand for disease and vector control • Increase in demand for health services • Impact on our internal operating costs and client Energy and resource efficiency. contracts (rises in catering, shipping, material costs, flights, running our generators) • Reduce operating costs by transitioning to low-carbon energy sources • Operational efficiencies such as decreasing water consumption and waste production could lead to additional cost savings • Supply chain bottlenecks leading to operational delays Increase revenue streams from extended client offerings. • Supporting clients in sourcing and installing sustainable solutions in the remote areas in which we operate (renewables/energy efficient buildings/climate resilient infrastructure/borehole testing/hydroponics) • Risk of losing business opportunities if we do not meet Increase revenue streams from extended client offerings. client expectations • Danger that our competitors leapfrog us regarding their sustainability offerings, particularly from the technology angle • New business opportunities as potential clients engage with companies that promote a sustainable approach to business. RA has the potential to capitalise on this shift as we are ahead of the industry – sustainability is embedded within the organisation and the Group has the skill base to support clients with varying ESG requirements • Financial losses if RA invests in new low-carbon innovations e.g. carbon capture mechanisms or new forms of renewable energy that become obsolete. We will need to invest in these types of technologies to reach net zero, but these technologies are likely to require investment before full extent of effectiveness is known and could quickly become outdated Resource efficiency in increase in revenue streams from extend client offerings. • Increase in availability and affordability of tools and software to manage sustainability internally and for our clients • Fines or loss of licence to operate • Additional annual tax liabilities • Increase cost/workload of procurement team to access Increase revenue streams from extended client offerings. • New business opportunities as potential clients engage with companies that promote a sustainable approach to business Scope 3 data • Price increases and challenges over availability of products • Legal fee liability for RA • Loss of business due to reputation damage • Increase financial costs of reporting software and resources • Increase in operational costs across the Group to collect ESG-related data • Failure to win new contracts • Loss of trust from investors • Difficulty in securing finance facilities TECHNOLOGY Investing in technologies that are not successful in the market. Timeframe: medium to long term POLICY AND LEGAL GHG emissions-reduction laws, regulations, policies, and/or taxation introduced. • Direct carbon taxes • Enhanced Scope 3 emissions reporting mandated with direct data required from suppliers • Regulation impacting our suppliers and, in turn, availability and pricing issues e.g. a ban on single-use plastic Timeframe: short to medium term GHG- related lawsuits. • Local communities taking legal action over environmental safeguarding failures • Clients taking legal action if we do not adhere to ESG deliverables set out in contracts Timeframe: medium to long term Increase in ESG reporting requirements. Timeframe: short to medium term REPUTATION Client or stakeholder backlash, or negative media coverage. • Negative feedback if we delay or fail to achieve our sustainability goals or do not reduce our emissions • Greenwashing claims if the data we are releasing into the public domain is not watertight and auditable • Knock-on effect on our reputation if we work with clients or suppliers who gain negative ESG attention Timeframe: short to medium term 32 33 RA International Annual Report 2023RA International Annual Report 2023Strategic reportCorporate governance Task force on climate-related financial disclosure statement continued Scenario analysis For this first year of TCFD reporting, we qualitatively analysed two scenarios and considered how the world, and our business might look, drawing on relevant scientific papers. Scenario What will the world look like? How might our business look? Paris Aligned: 1.5⁰C to 2⁰C degrees warming by 2100. Business as Usual: 2.4⁰C to 3⁰C degrees warming by 2100. • High exposure to transition risks for businesses • Clients will embrace energy efficiency technology and low-carbon worldwide • Rapid changes in regulation, short notice legislative changes, stringent reporting, and widespread adoption of new technologies for decarbonisation building materials and assess their partners based on their sustainability experience and data • Carbon output from projects and materials will be considered as part of the overall procurement strategy • A global concern for sustainability • Cost to operate could rise due to increased costs in logistics and flights if carbon taxes are embedded into services • Businesses and individuals vulnerable to significant • Clients will continue to request materials based on cost with climate-related risk (both acute and chronic) • Low degree of investment in low-carbon technology • Increase in global demand for fossil fuels as global south countries grow and industrialise • Mass climate-related migration as certain regions become inhabitable little consideration of embedded carbon, but they will need their operations to be more resilient to extreme temperatures and weather events • Our operations will be more at risk from extreme weather events, which can result in damage, shortening of the lifespan of our assets, and prolongation of project delivery • Increased danger to our staff from extreme conditions and civil unrest at our operations • Material and food costs will increase significantly with the supply chain impacted by weather events and availability challenges Resilience RA has identified revenue, gross margin, overhead expenses, capital expenditure, and asset impairment as the key financial drivers associated with climate-related risks. • • It is worth noting that a key part of RA’s business model is to work in partnership with clients, including raising awareness of sustainability risks and finding strategies to manage them long term. In this way RA creates a “win-win” approach, delivering products and services that offer sustainable solutions that address potential climate-related risks. The Group has begun to assess and quantify the impacts on these drivers on its own operations as well as that of its clients. With several risks being long term and pervasive in nature for all countries and companies, and out of necessity there will be structural macroeconomic government responses which are as yet difficult to predict. As such we are unable to accurately assess the full impact and consequences to financial planning. In operating support camps in challenging environments, we can be impacted by sudden and hard-to-predict fluctuations in commodity prices and logistics costs due to dynamic conditions on the ground. In 2024, we will gather evidence so that we can begin to run specific scenario analyses to physical and operational risks and their cost implications to the business: An analysis of the impact of flooding at our permanent Mogadishu compound due to heavy rain in 2023, which led to structural and landscaping damage. This analysis will allow us to put in place contingency plans and necessary provisions to be better prepared for comparable weather-related incidents affecting our permanent camps An analysis of the impact of increased water prices due to water shortages in our current locations where water shortage is a real threat and will also be applied when bidding for contracts in new territories. The analysis will enable us to make provisions for potential financial and operational impacts in our budgets and bids • • 34 Impact of price increases for international travel by our staff due to carbon taxing. This analysis will allow us to set travel budgets more accurately and support us in our human resource planning The impact of adverse weather on logistics can lead to delays in the delivery of goods that are vital to our business. This analysis will allow us to create contingency plans for key materials for project delivery As a services business, we can incorporate inflation-linked price- adjustment and recovery mechanisms into bought-in goods and services in our contracts. Part of our analysis will include assessments of what costs can be passed onto customers and what must be managed through the Company. We continue to work to address these challenges as we develop our TCFD methodology going forward. Risk management We take climate risk seriously as an organisation and appreciate the impact climate has and will have on our operations. To this effect, we now class sustainability as a principal risk and have fully incorporated climate-related risks into our risk management framework. Please see page 19. Metrics and targets We use key risk indicators internally as part of our risk management process to assess climate-related risks and opportunities. Details of our Scopes 1, 2, and 3 emissions, along with science-based reduction targets and our other climate-related metrics, including water use, energy use, and materials, can be found in the Sustainability Report on page 30. RA International Annual Report 2023 35 Corporate governanceRA International Annual Report 2023Board of Directors and Executive Management Team The Board is responsible for formulating, reviewing, and approving the Company’s strategy, budget, and corporate actions. Executive Management Team The CEO, COO, and FD constitute the Group Executive Management Team (“EMT”). Each member of the EMT is involved in operations, often down to the level of field implementation. Effective 1 March 2024, Roberto Bruni was appointed as Chief Commercial Officer and joined the EMT. The EMT is supported by a committed team of management and senior staff spread across the Company, at Head Office, regional, country, and project level, ensuring that the right resources are in place and available to deliver projects on time, on budget, and to the right quality standards. This team of talented individuals collectively contributes to the growth of the business and is committed to bringing about positive change to local communities. Sangita Shah Non-Executive Chair Soraya Narfeldt Chief Executive Officer Lars Narfeldt Chief Operating Officer Date of appointment: 3 May 2018 Date of appointment: 13 March 2018 Date of appointment: 13 March 2018 Sangita is a qualified accountant and has extensive experience in corporate finance, journalism, and senior consultancy. Sangita brings with her a wealth of AIM listed and public market experience. She has held a number of senior roles within blue chip organisations, including Unilever, Mars, Ernst & Young, and KPMG, and is a past President of the Chartered Institute of Journalists. Sangita is also a regular consultant to a number of companies and to HM Cabinet Office. Sangita is a frequent keynote speaker in forums for the Windsor Leadership Trust, European Parliament, and European School of Management. External appointments: Non-Executive Chair of AIM traded Kinovo plc, Non-Executive Director of Inspired plc, a director of NASDAQ listed Forward Industries Inc. and a director of the Quoted Companies Alliance. Committee membership: R A E (Chair) Soraya founded RA International in 2004 with Lars Narfeldt after witnessing large organisations unable to provide a comprehensive range of services or manage or implement projects effectively when operating in remote locations. This resulted in inefficiencies that hindered the progress of peacekeeping, humanitarian, and commercial projects. Soraya has been selected as one of the most influential women leaders by Arabian Business three times and was also a finalist for the Ernst & Young Entrepreneur of the Year award in 2012. As a strong advocate and supporter of responsible business practices and community-based businesses, Soraya has contributed to several high-profile journals including the Forced Migration Review and has spoken at international industry forums including the China Mining Summit, IPOA Annual Summit, and various UN Global Compact events as well as the WHO Vaccine summit in the EU. She has also consulted widely with officials in RA International’s countries of operations on issues such as Corporate Social Responsibility and on Aid Funded Projects. Lars has served for over two decades in pivotal leadership and development roles in some of the world’s most challenging environments. The first 15 years of his post university career were spent working with the Swedish Government and the UN. He worked with SIDA in Palestine and with the UN in the Democratic Republic of Congo, Uzbekistan, Sierra Leone, Kosovo, Ivory Coast, and Afghanistan. As COO, Lars leads the Project Management Office and is responsible for day-to-day operations across the Company. His role also encompasses setting the ESG strategy and leading the communications and marketing initiatives. He is also responsible for HR, IT and Governance, Compliance and Risk. Lars has been instrumental in developing the Company’s strong brand equity with clients and in geographies and markets. Committee membership: E Lieutenant General Paul Jaques CB CBE Non-Executive Director Date of appointment: 1 December 2022 Lieutenant General Paul Jaques CB CBE joined RA International as a Non-Executive Director on 1 December 2022. Prior to his retirement from the regular British Army in 2019, Paul served as Chief of Materiel (Land) in the Ministry of Defence (“MoD”) and Quarter Master General for the Army. He was commissioned into the Royal Electrical and Mechanical Engineers in 1983 and has a wealth of experience commanding engineering, infrastructure, and logistic units on operations in the Middle East and Former Yugoslavia, and delivering complex programmes across the whole of Defence. External appointments: Crown Representative appointed by the Cabinet Office Committee membership: R (Chair) A (Chair) E Dave Marshall Finance Director (“FD”) In the absence of an appointed CFO to the Board of Directors, Dave Marshall attends Board and Audit Committee meetings by invitation. Dave is a UK qualified chartered accountant, having begun his career in auditing at KPMG in 2008, before moving to the UAE to become Senior Finance Manager for Driver Group Plc. As FD, Dave is responsible for overseeing the finance function, including forecasting, financial reporting, audit, and taxation. Before becoming FD, Dave spent six years with RA as the Group Financial Controller, supporting the previous CFO, as well as taking ownership over the review, design, and implementation of all the Group’s financial processes and procedures, including managing cash flow. Committee key: R Remuneration A Audit and Risk E ESG 36 37 RA International Annual Report 2023RA International Annual Report 2023Corporate governance Corporate governance report Dear Shareholder, I am pleased to introduce the corporate governance section of our report. The corporate governance section of our report explains how the Company’s governance framework supports the principles of integrity, strong ethical values, and professionalism, which are integral to our business. It is within my role as Non-Executive Chair of the Company to manage the Board in the best interests of our many stakeholders. As a Board, we seek to ensure that the Company is committed to the highest standards of corporate governance and continually evaluates its policies, procedures, and structures to ensure they are fit for purpose. We believe that practising good corporate governance is essential for building a successful and sustainable business. Our commitment to good corporate governance has allowed us to build a healthy corporate culture throughout the organisation. The Company adopts the Quoted Companies Alliance (“QCA”) Corporate Governance Code 2018 (the “QCA 2018”) which it believes to be the most appropriate recognised corporate governance code for RA International. The QCA 2018 has ten principles which the Company is required to adhere to and to make certain disclosures both within this report and on its website. The Company’s website disclosures can be found at https://ragrpplc.co.uk/investors/corporate-governance/. Additional information relating to how we take into account wider stakeholder and social responsibilities can be found on pages 13 to 15 of this report. In November 2023, the QCA released its updated corporate governance code (“QCA 2023”) which places greater emphasis on corporate purpose, environmental and social impacts, risk management, the function and make-up of the Board, and corporate communications. The revised code applies to companies with accounting periods commencing on or after 1 April 2024. The Company intends to be fully compliant with the code by the end of this fiscal year. I am pleased that in June 2023, the Company was able to once again welcome its shareholders to meet at the AGM, which was held as a hybrid meeting. The importance of maintaining strong relationships and engaging with our shareholders continues, and we have an active investor relations and communications programme in place. The Board strives to ensure that there are numerous opportunities for investors to engage with both the Board and EMT. We continue to have an open dialogue with all our stakeholders and seek to ensure that our strategy, business model, and performance are clearly understood. The EMT are available to meet with institutional and retail shareholders and investment analysts, following the announcement of the Company’s interim and final results. Corporate governance framework Roles and responsibilities The Board The Board retains full and effective control over the Company and is accountable to the Company’s shareholders for the long-term success of the Company. The Board is responsible for the Group’s strategy, performance, key financial and compliance issues, approval of any major capital expenditure, and the framework of internal controls. The Company holds regular scheduled Board meetings throughout the year at which financial, operations, and other reports are considered and, where appropriate, voted on. Ad-hoc Board meetings are held as and when the demands of the business requires. Individual Directors may engage external advisers at the expense of the Company in appropriate circumstances. At the date of this report, the Board has four members comprising two Executive Directors and two Non-Executive Directors, and whose biographies and roles are set out on pages 36 to 37. The Directors believe that the Board as a whole has a broad range of commercial and professional skills which enable it to carry out its duties responsibly and effectively. In 2023, the Board reduced in number to form an agile Board and meets as regularly as required. Andrew Bolter stepped down as CFO in June 2023. Alec Carstairs and Philip Haydn-Slater stepped down from their INED positions after the AGM in June 2023. Dave Marshall has taken on the role of Group Finance Director and is regularly invited to Board meetings as required. The Board recognises the benefits of diverse skill sets, capabilities, backgrounds, and experience to the effective functioning of the Board and delivery of strategy. Board members come from different cultural backgrounds spanning from countries in Africa and Europe. The Chair and CEO both identify as female (50% of the Board). The Company embraces diversity and is dedicated to encouraging inclusion without compromising professionalism, experience, and expertise. The Non-Executive Directors bring an independent view to the Board and all of them are considered independent of management and free of any relationship that could materially interfere with the exercise of their independent judgement. The Chair has the responsibility of ensuring that the Board discharges its responsibilities and is also responsible for facilitating full and constructive contributions from each member of the Board in determination of the Group’s strategy and overall commercial objectives. The Non-Executive Directors bring an independent view to the Board and all of them are considered independent of management and free of any relationship that could materially interfere with the exercise of their independent judgement. The Chair has the responsibility of ensuring that the Board discharges its responsibilities and is also responsible for facilitating full and constructive contributions from each member of the Board in determination of the Group’s strategy and overall commercial objectives. Position Chair Executive Management Team Independent Non-Executive Directors Roles and responsibilities • • • • • • • • • • • The Chair’s primary responsibility is the leadership of the Board, showing objective judgement, promoting a culture of openness and debate, and ensuring the Board’s effectiveness in all aspects of its role including maintaining effective communication with RA’s shareholders and other stakeholders. The Chair is also responsible for ensuring the integrity, openness, and effectiveness of the Board/Executive relationship. This is affected through meetings, as well as through direct contact with other Board members The Chair also has the responsibility, in conjunction with the Company Secretary, for ensuring that all Directors are aware of their duties and able to perform them The Chair ensures that the Board Committees are appropriately structured The EMT is responsible for the delivery of the Company’s strategy once agreed by the Board as a whole The Chief Executive Officer is responsible for the day-to-day running of the Group’s operations, including HR, IT, and Governance. She plays a pivotal role in developing and reviewing the strategy in consultation with the Board and executing it with the support of the EMT The Chief Operating Officer is responsible for the Company’s daily operations and sustainability efforts The Finance Director is responsible for the Company’s financial controls and reporting to the Board The Chief Commercial Officer is responsible for the Company’s pipeline and customer relationship management practices The Independent Non-Executive Director brings independent judgement and has a particular responsibility to challenge independently and constructively the performance of Executive Management and to monitor the performance of the EMT in the delivery of agreed objectives and targets. In meeting this responsibility, the Independent Non-Executive Director meets with the Chair periodically without the EMT present. They must be satisfied with the integrity of the Group’s financial statements and with the robustness of RA’s internal control The Independent Non-Executive Director has the responsibility of ensuring that the Board discharges its responsibilities and is also responsible for facilitating full and constructive contributions from each member of the Board in determination of the Company’s strategy and overall commercial objectives The Independent Non-Executive Director is required to be free from any relationships or circumstances which are likely to affect the independence of their judgement and undertake that they have sufficient time to discharge their responsibilities effectively How the Board operates The Chair, in consultation with the CEO and Company Secretary, ensures that the Board functions effectively and has established Board processes designed for this purpose. Key aspects of these processes are outlined below. The Board meets formally four times a year with ad-hoc Board meetings as the business demands. There is a strong flow of communication between the Directors, and in particular between the CEO and Chair. The Board has a structured agenda for the year ensuring that all relevant matters are considered, with sufficient time allowed for discussion. Board meeting agendas are set in consultation with both the CEO and Chair, with consideration being given to both standing agenda items and the strategic and operational needs of the business. Comprehensive Board papers are circulated by the Company Secretary via board management software and well in advance of meetings, giving Directors ample time to review the documentation and enabling an effective meeting. Minutes are drawn up to reflect a true record of the discussions and decisions made. Resulting actions are tracked for appropriate delivery and follow-up. Time is regularly reserved in scheduled meetings for an external speaker to provide relevant specialist training and knowledge or help broaden horizons and instigate thinking outside the box. An annual strategy day is also scheduled to provide the Board with opportunity to consider the overall strategic direction and objectives of the Company. In addition to scheduled meetings, the Board maintains regular electronic communications and makes further decisions by way of written resolutions to address largely procedural issues. Meetings are held between the Chair and the NEDs during the year, without the Executive Directors being present, to discuss appropriate matters as necessary. The Directors have a broad knowledge of the business and understand their duties as directors of a UK company quoted on AIM. Both Executive and Non-Executive Directors are encouraged to undertake annual training in furtherance of their specific roles and general duties as a Director and to keep their skills up to date and relevant to the Company. The Directors have access to the Company’s Nominated Adviser (“NOMAD”) who provides annual training. The Company Secretary helps keep the Board up to date on corporate governance matters and liaises with the NOMAD on areas of AIM requirements. The Company Secretary has frequent communication with both the Chair and CEO and is available to other members of the Board as required. The Directors also have access to the Company’s auditor and lawyers and are able, at the Company’s expense, to obtain advice from other external advisers if required. 38 39 RA International Annual Report 2023RA International Annual Report 2023Corporate governanceCorporate governance report continued Matters reserved for the Board The Board retains full and effective control over the Company and is responsible for the Company’s strategy and key financial and compliance issues. There are certain matters that are reserved for the Board, and they include but are not limited to: Strategy and management Approval of: long-term objectives and commercial strategy, annual operating and capital expenditure budgets, extending the Company’s activities into new business, and any decision to cease to operate all or any material part of the Company’s business. Structure and capital Changes to the Company’s capital structure, major changes to the Company’s corporate structure, changes to the Company’s management and control structure, changes to the Company’s listing, alteration of the Company’s Articles of Association, and changes to the Company’s accounting reference date, registered name, or business name. Financial reporting and controls Approval of: half yearly results, interim management statements, preliminary announcement of the final results, Annual Reports and Accounts (including the corporate governance statement and remuneration report), dividend policy, declaration of any dividend, and significant changes in accounting policies or practices. Finance Raising new capital and confirmation of major financing facilities, and granting of security over any material Company asset. Contracts Major capital projects above USD 2.5m, all contracts above USD 7.0m or which are material strategically or by reason of size, contracts outside of the approved budget and not in the ordinary course of business, major investments including acquisitions or disposal of interests of more than 5% in the voting shares of any Company or the making of any takeover offer, and transactions with Directors or other related parties which are not in the ordinary course of business. Communications Ensuring satisfactory dialogue with shareholders based on the mutual understanding of objectives, approval of resolutions and corresponding documentation put forward to shareholders, approval of circulars, prospectuses and listing particulars, and approval of press releases concerning matters decided by the Board. Board and Board Committee attendance at meetings during 2023 Board membership and other appointments Changes to the structure, size, and composition of the Board, Board appointments and membership of Board committees, succession planning, continuation in office of Directors at the end of their term of office or at any time including the suspension of termination of service, appointment or removal of the Company secretary, recommendation of external auditor appointment, appointment to boards of subsidiaries. Delegation of authority Division of responsibilities between the Chair, the Chief Executive, and Executive Directors, approval of delegated levels of authority, including the Chief Executive’s authority limits, establishment of Board Committees and approval of terms of reference of Board Committees, and receiving reports from Board committees on their activities. Corporate governance matters Undertaking reviews of the Board’s own performance, that of its committees and individual Directors, determining the independence of Non-Executive Directors, considering the balance of interests between shareholders, employees, customers, and the community, reviewing the Company’s overall corporate governance arrangements, and authorising conflicts of interest where they are permitted by the Company’s Articles of Association. Other Approval of Company policies, appointment or change of the Company’s principal professional advisers and auditor, overall levels of insurance for the Company, material litigation, any decision likely to have a material impact on the Company from any perspective including, but not limited to, financial, operational, strategic, or reputational, matters reserved for Board decisions and which the Board considers suitable for delegation are contained in the terms of reference of its Committees, and the grant of options, warrants, or any other form of security convertible into shares. For further details see the Company website. Board Committees The Board has three sub-Committees, namely the Audit and Risk Committee, the Remuneration Committee, and the ESG Committee, each with delegated responsibility to monitor their respective areas and to report back to the full Board. Board Committees operate under clearly defined terms of reference to ensure proper functioning of the Committees and effective application of best practice and these are reviewed on an annual basis. Board Committees are required to report back to the Board following each Committee meeting. The Remuneration Committee Report can be found on page 44, the Audit and Risk Committee Report can be found on page 45, and the ESG Committee Report can be found on page 46. Board meetings (attended/possible) Audit and Risk Committee meetings (attended/possible) Remuneration Committee meetings (attended/possible) ESG Committee meetings (attended/possible) 5/5 5/5 5/5 1/1 1/2 1/2 5/5 5/6 N/A N/A N/A 3/3 N/A 6/6 4/4 N/A N/A N/A 1/1 1/1 3/3 3/3 N/A 3/3 N/A 1/1 N/A 2/2 Sangita Shah Soraya Narfeldt Lars Narfeldt Andrew Bolter* Alec Carstairs** Philip Haydn-Slater** Paul Jaques * Resigned 15 June 2023. ** Resigned 28 June 2023. 40 Culture and social responsibility The Board believes that running a sustainable business should benefit everyone, including its customers, employees, and the host communities in locations in which the Company operates. Having a multi-cultural and multi-lingual workforce of people who are experienced with the way in which operations work in Africa and beyond is key to delivering this. The Company provides stable employment and training to local unskilled or semi-skilled labourers and seeks to employ local talent wherever possible. To this end, the Company has a direct impact on the wellbeing of its employees’ families, and on the local economy in general. Since 2008, the Company has been a signatory to the UN Global Compact, a non-binding United Nations pact that declares a commitment to adopting sustainable and socially responsible policies and to reporting on their implementation. More information can be found in the Company’s Sustainability Report 2023, which can be found on page 20. On behalf of the Board Sangita Shah, Non-Executive Chair 30 April 2024 Review of Board effectiveness The Company makes an ongoing effort to improve on the existing processes that ensure Board effectiveness. The Board considers that its effectiveness and the individual performance of its Directors is vital to the success of the Company. In keeping with the requirements of the QCA for a formal Board evaluation process, the Company has conducted its annual internal review of Board effectiveness. As part of the process, Directors were asked to evaluate the Board Meeting Structure, Membership & Functioning, Compensation, Culture & Ethics, and Corporate Governance. Following this, one-to-one interviews were held between the Chair and each Board member and a full Board discussion was held to review and reflect on the findings. The key findings related to Board composition, relevance, and proportionality. Given the structure of the Group where the shareholders are also the Executive Directors, with the CFO being the independent executive member, the Board has been reconstituted with an independent Non-Executive Director with direct sector operational experience. Furthermore, a new risk framework has been implemented throughout the Company with the Board meeting reviewing one of these risks in depth. Governance structure The Company is committed to a corporate culture that is based on sound ethical values and behaviours and it seeks to instil these values across the organisation as a whole. The Board is fully committed to taking this responsibility very seriously. The Company has adopted a code on dealings in securities which the Board regards as appropriate for an AIM listed company and is compliant with the UK Market Abuse Regulations. The Company takes all reasonable steps to ensure compliance by the Directors, employees, and agents with the provisions of the AIM rules relating to dealings in the Company’s securities. The Directors take the issue of bribery and corruption seriously. The Directors acknowledge the importance of ensuring that the Company, its employees, and those third parties to which the business engages with are operating within the requirements of the Bribery Act. The Company has adopted and implemented comprehensive anti-bribery and corruption policies and procedures (the “ABC Policies”) and the Directors impose a zero-tolerance approach to non-compliance. It is the Executive Directors’ responsibility to ensure that all of the Company’s employees, in the various locations, are complying with the ABC policies and that the Company has in place adequate procedures to ensure that its partners, contractors, and suppliers do not engage in bribery or corrupt activity. The Board adopts a retire by rotation policy, in which one-third of Directors retire and submit themselves for re-election each year at the AGM. New Directors are subject to election at the first AGM of the Company following their appointment. The maximum service length of any NED is nine years. 41 RA International Annual Report 2023RA International Annual Report 2023Corporate governanceDirectors’ report The Company is a global provider of services in remote and challenging locations. It specialises in three service channels: construction, integrated facilities management, and supply chain. The Company has a strong and loyal customer base, largely comprising UN agencies, western Governments, and global corporations. The Company provides comprehensive, flexible, mission-critical support to its clients, enabling them to focus on the delivery of their respective projects and services. The Company’s focus on integrity and values alongside ongoing investment in people, locations, and operations has over time created a reliable and trusted brand within its sector. A detailed explanation of the Company’s principal activities and business model can be found on page 2 and page 8 respectively. Results and dividends The profit for the year ended 31 December 2023 was USD 0.2m. The Board will not be recommending a final dividend in respect of the financial year ended 31 December 2023. Directors The Directors who served during the period and at the date of this Report are as follows: Director Role Appointment date Sangita Shah Non-Executive Chair 3 May 2018 to present Directors’ responsibility statement The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations. Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare Group financial statements in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006 and have elected under company law to prepare the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (“United Kingdom Accounting Standards and applicable law”), including Financial Reporting Standard 101 “Reduced Disclosure Framework” (“FRS 101”). The Company financial statements are required by law and UK-adopted international accounting standards in conformity to present fairly the financial position and performance of the Company. 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 the Company and of the profit or loss of the Company for that period. In preparing each of the Group and Company financial statements, the Directors are required to: • Select suitable accounting policies and then apply them consistently Soraya Narfeldt Executive Director 13 March 2018 to present • Make judgements and accounting estimates that are reasonable Lars Narfeldt Executive Director 13 March 2018 to present Andrew Bolter Executive Director 3 May 2018 to 15 June 2023 Alec Carstairs Non-Executive Director 3 May 2018 to 28 June 2023 Philip Haydn-Slater Non-Executive Director 3 May 2018 to 28 June 2023 Paul Jaques Non-Executive Director 1 December 2022 to present Substantial shareholders As at 31 December 2023 the Company was aware of the following major shareholders representing 3% or more of voting rights attached to the issued ordinary share capital of the Company. Soraya Narfeldt Lars Narfeldt Henry Spain Investment Services Jupiter UK Smaller Equity Fund 55.22% 24.20% 7.33% 5.55% Directors’ interests The Directors who held office at 31 December 2023 had the following interests in the ordinary shares in the capital of the Company: No. of consolidated ordinary shares 151,483 95,857,145 42,000,000 • • • For the Group financial statements, state whether they have been prepared in accordance with UK-adopted international accounting standards as adopted by the EU and, for the Company financial statements, state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the Company financial statements Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business Provide additional disclosures when compliance with the specific requirements in IFRSs, and in respect of the parent company financial statements, FRS 101, is insufficient to enable users to understand the impact of particular transactions, other events, and/ or conditions of the Group and Company financial position and financial performance The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Sangita Shah Soraya Narfeldt Lars Narfeldt Paul Jaques 42 Auditor Each person who is a Director at the date of approval of this Annual Report confirms that: • • So far as the Director is aware, there is no relevant audit information of which the auditor is unaware The Director has taken all steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information This information is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006. Streamlined energy and carbon reporting RA International is committed to sustainability and minimising its environmental impact. As part of this commitment, we are pleased to present our Streamlined Energy and Carbon Reporting (“SECR”) statement for the 2023 reporting period. This is our first year of reporting under SECR, as we had not previously been conducting physical activities within the United Kingdom. The data below is representative of our UK operations only as per SECR guidelines. Please note that our Company-wide energy and carbon data can be found on pages 23 to 24 as well as information on our approach to decarbonisation and energy efficiency. Total UK energy use Total UK electricity use Total UK gas combustion Total UK Transport fuel consumption Scope 1 Associated greenhouse gas emissions Scope 1 Associated greenhouse gas emissions Scope 2 (Market-based) Associated greenhouse gas emissions Scope 2 (Location-based) Intensity ratio*: Scope 1 & Scope 2 (Market-based) Intensity ratio*: Scope 1 & Scope 2 (Location-based) * UK emissions divided by number of full-time employees (FTE:4). 5,073.66 kWh 5,073.66 kWh Nil kWh Nil kWh Nil tCO2e Nil tCO2e 1.85 tCO2e 0.46 tCO2e /FTE 0.28 tCO2e /FTE Strategic report The Company is required by the Companies Act 2006 to include a Strategic Report in its Annual Report. The information that fulfils this requirement can be found on pages 1 to 34. Please refer to our Section 172 Statement, specifically pages 13 to 15, for evidence of the Directors’ engagement with suppliers, customers, and others during the financial year. Signed by order of the Directors On behalf of the Board — Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Sangita Shah | Non-Executive Chair 30 April 2024 RA International Annual Report 2023 43 RA International Annual Report 2023Corporate governanceRemuneration committee report Audit and risk committee report Key activities: • Increased executive pay by 2% in line with the inflation rise for all employees • Considered bonus targets for measurement in 2023 • Cancelled outstanding share options to employees in favour of a more appropriate incentive scheme to be implemented in the future The Remuneration Committee is a standing committee of the Board of the Company and is comprised of Paul Jaques as chair and Sangita Shah, whose names and profiles are set out on pages 36 and 37. It is the Remuneration Committee’s responsibility to review the performance of the Executive Directors and to make recommendations to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee assists the Board in discharging its oversight responsibilities relating to the attraction, compensation, evaluation, and retention of Executive Directors and key senior management employees. It aims to ensure that the Company’s remuneration policy attracts and retains employees with the right skills and expertise needed to enable the Company to achieve its goals and strategies and that fair and competitive compensation, with appropriate performance incentives, are awarded. The Remuneration Committee aims to ensure that the Company’s remuneration policy is aligned with and promotes the implementation of the Company’s strategy and effective risk management for the long term and all employees and Executive Directors are appropriately remunerated. The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. The Remuneration Committee held four meetings during 2023. Members’ attendance records are disclosed in the Corporate Governance Report on page 40 contained in this Annual Report. Executive Directors’ service contracts The Company’s policy on Directors’ service contracts are indicated below: Director Soraya Narfeldt Lars Narfeldt Effective term Notice period 29 June 2018 29 June 2018 6 months 6 months Non-Executive letters of appointment Director Sangita Shah Paul Jaques Start of initial term Start of current term Appointment term 29 June 2018 29 June 2021 1 December 2022 1 December 2022 3 years 3 years Notwithstanding the above terms, the Company’s policy is that each Director will retire and stand for re-election at the AGM every three years by rotation. This is in line with corporate governance best practice. Sangita Shah was re-elected at the 2021 AGM; Soraya Narfeldt and Lars Narfeldt were last re-elected at the 2022 AGM; Paul Jaques was elected for the first time at the 2023 AGM. The maximum number of terms that any Independent Non-Executive Director may serve is three (totalling nine years’ service). Directors’ remuneration Fees/basic 7 salary USD'000 Benefits in kind USD'000 Other 8 remuneration USD'000 Total 2023 USD'000 Total 2022 USD'000 Executive Soraya Narfeldt Lars Narfeldt Andrew Bolter Non-Executive Sangita Shah Paul Jaques Alec Carstairs Philip Haydn-Slater Ian Henderson 430 294 199 108 68 51 51 — 30 43 41 — — — — — 27 14 12 — — — — — 487 351 252 108 68 51 51 — 466 329 540 107 5 67 67 76 Total 1,201 114 53 1,368 1,657 7 The Executive Directors each have two employment contracts with the Company. One with the Company, denominated in Great British Pounds, in connection with their role as a Director, and another with a subsidiary, denominated in United Arab Emirates Dirhams, reflecting their role as a member of Executive Management. The above figure denotes the total base salary for both employment contracts. Non-Executive Directors contracts are denominated in Great British Pounds. The figures have been converted to US Dollars at a rate of 1 USD: AED 3.66 and 1 USD: GBP 0.8087, being the average exchange rate during 2023. 8 Other remuneration includes end of service benefits which are defined in note 24 of the annual financial statements and share based payments which are detailed in note 13. There were no outstanding performance options granted to the Executive Directors as at 31 December 2023. The Company’s stock price was GBP 10.25p as at the close of 31 December 2023. Consideration by the Directors of matters relating to Directors’ remuneration The Remuneration Committee is responsible for making recommendations to the Board regarding the framework for the remuneration of the Executive Directors and other members of the EMT. The Committee works within its terms of reference, and its role includes: • • • • • Determining and agreeing with the Board the remuneration policy for all Executive Directors and under guidance of the Executive Directors, other members of the EMT Ensuring Executive Director remuneration packages are competitive Determining whether annual bonus payments should be made and approving levels for individual Executive Directors Determining each year whether any awards/grants should be made under the incentive schemes and the value of such awards Considering any new long-term incentive scheme awards and performance criteria • Agreeing Directors’ service contracts and notice periods The Company is committed to maintaining an open and transparent dialogue with shareholders on all aspects of remuneration within the Company. Paul Jaques | Chair of the Remuneration Committee 30 April 2024 Key activities: • Reviewed and approved the Company’s 2023 Interim Report Oversaw a change in the Company’s auditor from Ernst & Young to PKF Littlejohn The Committee also seeks the views of key members of the finance team and senior management on the audit process and the quality and experience of the audit partner. Their feedback confirmed that PKF had performed well during their first year and had provided an appropriate level of challenge to management. Reviewed and approved the 2023 audit plan presented by the Company’s new auditor The total fees paid to the Company’s auditor in the year are shown on page 63. The Company used separate advisers for taxation. • • • Established a “four lines of defence” model for risk assurance The Audit and Risk Committee is responsible for reviewing and monitoring the effectiveness of the Company’s financial reporting, internal control policies and procedures for the identification, assessment, and reporting of risk. The latter two areas are integral to the Company’s core management processes and the Committee devotes significant time to reviewing reports from the EMT and external auditor relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit and Risk Committee is also responsible for overseeing the relationship with the external auditor. An essential part of the integrity of the financial statements lies around the key assumptions, estimates, and judgements to be made. The Committee reviews key judgements prior to publication of the financial statements at both the end of the financial year and at the end of the six-month interim period, as well as considering significant issues throughout the year. In particular, this includes reviewing any subjective material assumptions within the Company’s activities to enable an appropriate determination of asset valuation, provisioning, and the accounting treatment thereof. The Audit and Risk Committee reviewed and was satisfied that the judgements exercised by management on material items contained within the Report and financial statements are reasonable. The Audit and Risk Committee comprises of Paul Jaques as the chair and Sangita Shah, whose names and profiles are set out on pages 36 and 37. Although not a member of the Audit and Risk Committee, the Finance Director, whose name and profile is set out on page 37, is invited to attend meetings. Following the completion of the 2022 Group audit, the Audit and Risk Committee determined that a competitive tender process be undertaken for external audit services to change from Ernst & Young LLP, whose audit partner was due to rotate off RA’s audit after five years in post. PKF Littlejohn LLP (“PKF”) was selected as a result of this process. PKF are invited to attend Committee meetings, unless they have a conflict of interest. The Audit and Risk Committee also meets with the auditor without management in attendance. The Audit and Risk Committee has committed to meet no less than three times in each financial year and has unrestricted access to the Company’s external auditor. In 2023, the Audit and Risk Committee met six times and the members’ attendance record at Committee meetings during the financial year is set out in the Corporate Governance Report on page 40. The Audit and Risk Committee undertakes a comprehensive review of the quality, effectiveness, value, and independence of the audit provided each year by the external auditor. The Committee considers several factors when determining the effectiveness of the external auditor, including: the overall quality and scope of the audit; the audit partner and team; communication and engagement with the Audit and Risk Committee, both formal and informal, and how issues are reported, followed up, and resolved; the independence of the auditor and whether an appropriate level of challenge and scepticism exist in their work. In 2023, the Company reviewed its principal risks in light of the strategic refresh taken in 2022. These are as communicated in the Strategic Report on page 17. An annual cycle has been scheduled for each principal risk to be reviewed in depth by the Board. An enhanced “four lines of defence” model has been adopted by the Company, consisting of (i) day-to-day controls, (ii) risk management oversight, (iii) internal independent assurance, and (iv) external audit, and the Audit and Risk Committee is satisfied that this provides the appropriate level of risk assurance. The Audit and Risk Committee has considered the Company’s internal control, their effectiveness, and the requirements for an internal audit function in the context of the Company’s overall risk management system. The Audit and Risk Committee is satisfied that the Company does not currently require an internal audit function, however, it will continue to periodically review the situation. The Audit and Risk Committee has responsibility for reviewing the adequacy and security of the Company’s arrangements for its employees and contractors to raise concerns about possible wrongdoing in financial reporting, fraud, and bribery, and ensure that appropriate follow-up action is taken. Responsibilities The Committee reviews and makes recommendations to the Board on: • Any change in accounting policies • Decisions requiring a major element of judgement and risk • • • • • Compliance with accounting standards and legal and regulatory requirements Disclosures in the Interim and Annual Report and financial statements Reviewing the effectiveness of the Company’s financial and internal controls Any significant concerns of the external auditor about the conduct, results, or overall outcome of the annual audit of the Company Any matters that may significantly affect the independence of the external auditor Paul Jaques | Chair of the Audit and Risk Committee 30 April 2024 44 45 RA International Annual Report 2023RA International Annual Report 2023Corporate governanceFinancial report Environment, social and governance committee report Key activities: • Assigned KPIs to material sustainability issues for the Company • • Established the ESG Risk Register Began the process to understand relevant climate-related risks and appoint appropriate risk mitigation processes in line with Task Force on Climate-related Financial Disclosures (“TCFD”) The ESG Committee is responsible for overseeing the creation and implementation of ESG policies and practices, that they are effective in supporting the sustainability strategy; for ensuring that ESG performance is aligned to the Company’s purpose, values, and long-term strategy; and for assessing emerging ESG issues, challenges, and opportunities relevant to the Company and bringing them to the Board’s attention as necessary. The Committee began the process to understand relevant climate- related risks and appoint appropriate risk mitigation processes in line with TCFD with the support of the TCFD Steering Committee. As this is the first year of reporting, it is the Committee’s aim to build and develop the depth and quality of RA’s disclosures year on year as internal capacity and knowledge of climate risk and climate resilience grows within the organisation. The inaugural TCFD Report can be found on page 31. A summary of our wider sustainability progress is detailed in the Sustainability Report on page 20. RA engages with its stakeholders across the organisation as we embrace the wider ESG agenda. More details are set out in our Section 172 Statement on page 13. Sangita Shah | Chair of the ESG Committee 30 April 2024 The Committee held three meetings in 2023. The priority was to monitor ESG endeavours against the ESG Strategy. Through the year, this was further built upon as the Committee oversaw the production of key underlying policies and procedures, including: client assessment scorecard, the net zero strategy, and carbon reduction plan. The Committee recognised the importance of mental wellbeing to the delivery of RA’s services and has highlighted this as a key area of focus. 46 RA International Annual Report 2023 47 Financial reportRA International Annual Report 2023Independent auditor’s report to the members of RA International Group Plc Opinion We have audited the financial statements of RA International Group plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK-adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice) and as applied in accordance with the provisions of the Companies Act 2006. In our opinion: • • • the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2023 and of the group’s profit for the year then ended; the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • the financial statements 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 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 director’s 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: • • • • • Documenting our understanding of the financial forecasting process and assessing the reasonableness and accuracy of the sources of information used; Obtaining management’s going concern assessment and ensuring this stretched to a period of greater than twelve months from the date of approval of these financial statements. Challenged management on the key inputs and drivers into the forecast, being expected revenues, gross margins and forecasted cash outflows. Obtaining collaborative documentation to support decisions made as well as researching any contradictory information available to ensure the inputs are reasonable; Reviewing historical forecasts made by management and assessing against actual results, in order to assess the ability of management to accurately forecast. Ensuring that there is consistency with the going concern forecast with all other financial models used by management, as well as ensuring mathematical accuracy of the forecast provided; Obtaining supporting documentation to confirm the extension of repayment terms of the loan notes, and ensuring that this was appropriately reflected within the going concern assessment performed by management; Performing sensitivity analysis on key drivers into the going concern forecast being; forecasted revenues and gross margins, as well as stress testing to a point in which the group would no longer be considered a going concern, and assessing the likelihood of such outcomes; • Ensuring appropriate disclosures are made in the financial statements which show a true and fair position of the group. 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 or parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Our application of materiality The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. The materiality for the Group financial statements was set at $587,000, with performance materiality set at $352,200. The materiality for the Group financial statements as a whole has been calculated at 1% of revenue, which we have determined in our professional judgement, to be one of the principal benchmarks within the financial statements relevant to members of the Group in assessing financial 48 performance. Performance materiality was set at 60% of headline materiality based on our inherent risk assessment calculation of a publicly traded company and being the first year of engagement. The parent company materiality for the financial statements as a whole was set at $520,000, which is based on 1% of net assets. The parent company is non-trading therefore we consider the key area of focus to be the recoverability of investments in and loans to subsidiaries. Parent company performance materiality was set at $312,000, being 60% of headline materiality in line with the assessment for the group. Audit work performed in respect of significant and material components for the purpose of obtaining audit coverage over significant financial statement accounts is undertaken based on 1% of revenue of said component, with performance materiality set at 60% across each component in line with the group assessment. In the current year, the range of headline materiality allocated to components was $59,000 to $176,000 and the range of performance materiality was $35,400 to $105,600. We agreed with the Audit Committee that we would report to them misstatements identified during our audit above $29,350 and $26,000 for the Group and parent company respectively, in addition to other identified misstatements that warranted reporting on qualitative controls. Our approach to the audit In designing our audit approach, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we assessed the areas requiring the board and management to make subjective judgements, for example in respect of significant accounting estimates including the carrying value of Property, Plant and Equipment, Investments in subsidiaries, revenue recognition and management override of controls. We performed an audit on the financial information of the group’s five significant operating segments which were located in the United Kingdom (UK), UAE, Somalia, South Sudan and USA which were assigned as full scope audits. A further five entities were assigned as specific scope audits with work performed on specific accounts within those components that were considered greater risk or material to the group. All work was carried out by the group audit team, and no component auditors were used. There are a number of other components within the group which were not assessed as material or significant components. Consequently, the audit work performed on these components consisted of testing specific balances and analytical procedures at group level. Key audit matters Key audit matters are those matters that, in our professional judgment, 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) we identified, including 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. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter Revenue Recognition (Notes 4, 5 and 7) How our scope addressed this matter Under ISA (UK) 240, there is a rebuttable presumption that revenue recognition is a significant fraud risk. Our work in this area included, but was not limited to: • Documenting our understanding of the information system and related Revenue is generated through three different service lines, being: controls relevant to each material income stream. • Construction • Supply Chain • Integrated Facilities management Risks arising from both supply chain and integrated facilities management revenue relates to improper revenue recognition in relation to the completeness of revenue. Construction revenue gives rise to complex judgements relating to the estimation of the cost to complete projects, expected revenues and the related percentage of completion for long-term construction contracts in order to recognise revenue. The key risks arising from the construction revenue are in relation to the completeness and cut-off of revenue. The determination of the cost to complete impacts the value and timing of revenue and profit recognised over the life of the project and is the key area of judgement and estimation that could have a material impact on the financial statements, and thus has been recorded as a Key Audit Matter. • Evaluation of the appropriateness of the information system and the effectiveness of the design and implementation of the related controls. • Substantive transactional testing of income recognised in the financial statements, including deferred and accrued income balances recognised at the year-end; • Reviewing post-year end receipts to ensure completeness of income recorded in the accounting period; • Performing a gross margin analysis for each project to identify any projects which do not fall in line with our expectations; • Performing sales cut-off testing by focusing on revenue recognised to ensure that it has been recorded in the correct period; • Reviewing the contract terms of key contracts to obtain an understanding of the performance obligations and when revenue should be recorded; • Performing substantive testing and ensuring that costs are allocated to the correct project, reviewing the appropriateness of managements estimation of total costs by comparing prior year estimates to current year actuals, as well as reviewing contracts in progress at the year end and following through to their completion and/or progress post year end; • Performing substantive testing for revenue received in cash tracing through from initial quote from the company to the customer through to receipt of cash by the company; and • Reviewing the disclosures relating to revenue recognition to ensure that they are in line with UK-adopted international accounting standards. 49 Financial reportRA International Annual Report 2023RA International Annual Report 2023Independent auditor’s report continued Key Audit Matter Carrying value of investments in subsidiaries and recoverability of loans to subsidiaries (Notes 2, 4 and 5) How our scope addressed this matter As per IAS 36, an entity shall assess at the end of each reporting period whether there is an indication that an asset may be impaired. If such indications exist, the entity shall estimate the recoverable amount of the asset. As per IFRS 9, an expected credit loss provision is required to be recognised for receivables. The Company holds investments in subsidiaries of $29.8m and intercompany receivables of $40.0m. There is a risk relating to valuation and allocation that the investments may have been impaired during the year end therefore an impairment charge may be required if the book value exceeds the recoverable amount of the investments, and thus this has been recorded as a Key Audit Matter. Our work in this area included, but was not limited to: • Reviewing management’s assessment of impairment of investments held by the company, and challenging assumptions made thereto; • Performing an assessment of the underling performance of the company and the net asset position of the subsidiary for evidence of any indicator of impairment; • Obtaining ownership documentation for a sample of investments and ensuring the company hold title to the investments; and • Reviewing managements assessment of Expected Credit Losses against loans issued to subsidiaries, and challenging key inputs and assumptions made. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of 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. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: • the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • • • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or the parent company financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Responsibilities of directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the group and parent company 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 group and parent company financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. 50 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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: • • • • • • We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management and the legal team, industry research and experience of the sector. We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from the Companies Act 2006, IFRSs and UK GAAP, AIM rules, local tax laws and regulations, local and contractual health and safety regulations, employment laws, Anti-Bribery and Anti-Money Laundering Regulations. We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to: o Enquiring of management regarding non-compliance; o Reviewing legal and professional fees and understanding the nature of these costs and the existence of any non-compliance with laws and regulations; o Reviewing minutes of meetings of those charged with governance and Regulatory News Service announcements; o Reviewing accounting ledgers for any unusual journal entries which may indicate non-compliance; and o Discussion with the in-house legal team regarding any open cases, any pending lawsuits, any recent investigations and any relevant significant provisions the group and company are exposed to. We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the potential for management bias was identified in relation to revenue recognition and the recoverability of Property, Plant and Equipment, the carrying value of investments in subsidiaries and recoverability of intercompany loans. Further details of the procedures performed are described in the Key Audit Matter section above. As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We obtained an understanding and evaluated the design and implementation of controls that address fraud risks of the group and parent company through performing our own assessment and discussions with both the group and local teams and gaining an understanding of all significant systems, processes and controls in place. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Zahir Khaki (Senior Statutory Auditor) For and on behalf of PKF Littlejohn LLP Statutory Auditor 30 April 2024 15 Westferry Circus Canary Wharf London E14 4HD 51 Financial reportRA International Annual Report 2023RA International Annual Report 2023 Consolidated statement of comprehensive income Consolidated statement of financial position For the year ended 31 December 2023 As at 31 December 2023 Revenue Cost of sales Gross profit Administrative expenses Underlying operating loss Non-underlying items Operating profit/(loss) Investment revenue Finance costs Profit/(loss) before tax Tax expense Profit/(loss) and total comprehensive income for the year Basic earnings per share (cents) Diluted earnings per share (cents) The attached notes 1 to 32 form part of the Consolidated Financial Statements. Notes 7 9 9 9 11 12 12 2023 USD’000 58,286 (49,853) 8,433 (11,587) (3,154) 5,211 2,057 188 (2,044) 201 (7) 194 0.1 0.1 2022 USD’000 62,917 (57,717) 5,200 (11,695) (6,495) (4,217) (10,712) 206 (2,491) (12,997) (169) (13,166) (7.6) (7.6) 52 Notes 2023 USD’000 2022 USD’000 Assets Non-current assets Property, plant, and equipment Right-of-use assets Current assets Inventories Trade and other receivables Cash and cash equivalents Total assets Equity and liabilities Equity Share capital Share premium Merger reserve Share based payment reserve Retained earnings Total equity Non-current liabilities Loan notes Lease liabilities Employees’ end of service benefits Current liabilities Loan notes Lease liabilities Trade and other payables Provisions Total liabilities Total equity and liabilities 15 16 17 18 19 20 22 23 24 22 23 25 26 17,024 4,353 21,377 4,147 15,741 16,843 36,731 58,108 24,300 — (17,803) — 18,417 24,914 13,495 4,318 1,502 19,315 2,280 833 10,766 — 13,879 33,194 58,108 The financial statements were approved by the Board of Directors on 30 April 2024 and signed on its behalf by: Soraya Narfeldt | CEO The attached notes 1 to 32 form part of the Consolidated Financial Statements. 19,590 4,421 24,011 5,154 16,389 7,514 29,057 53,068 24,300 18,254 (17,803) 574 (457) 24,868 14,000 4,556 928 19,484 — 650 6,974 1,092 8,716 28,200 53,068 53 Financial reportRA International Annual Report 2023RA International Annual Report 2023 Consolidated statement of changes in equity Consolidated statement of cash flows For the year ended 31 December 2023 For the year ended 31 December 2023 Share capital USD’000 24,300 Share premium USD’000 18,254 Merger reserve USD’000 (17,803) Treasury shares USD’000 (1,199) As at 1 January 2022 Total comprehensive income for the period Share based payments (note 13) Non-cash employee compensation (note 13) Lapsed share options (note 13) Issuance of treasury shares (note 21) As at 31 December 2022 Total comprehensive income for the period Share based payments (note 13) Lapsed/cancelled share options (note 13) Capital reduction* — — — — — — — — — — — — — — — 24,300 18,254 (17,803) — — — — — — — (18,254) — — — — As at 31 December 2023 24,300 — (17,803) Share based payment reserve USD’000 534 — 311 — (94) (177) 574 — 57 (631) — — Retained earnings USD’000 13,223 (13,166) — (608) 94 — (457) 194 — 426 18,254 18,417 Total USD’000 37,309 (13,166) 311 373 — 41 24,868 194 57 (205) — 24,914 — — 981 — 218 — — — — — — * On 21 December 2023 the Registrar of Companies registered the cancellation of RA International Group plc’s share premium account. USD 18,254,000 of share premium was accordingly transferred to retained earnings, creating distributable reserves and enabling the Company to become dividend paying. The attached notes 1 to 32 form part of the Consolidated Financial Statements. 54 Notes 2023 USD’000 2022 USD’000 Operating activities Operating profit/(loss) Adjustments for non-cash and other items:  Depreciation and impairment of property, plant, and equipment  Loss/(profit) on disposal of property, plant, and equipment  Unrealised differences on translation of foreign balances  Provision for employees’ end of service benefits  Share based payments  Non-underlying items Working capital adjustments:  Inventories  Trade and other receivables  Trade and other payables Cash flows generated from/(used in) operations  Tax paid  Employees’ end of service benefits paid  Settlement of share options Net cash flows generated from/(used in) operating activities Investing activities Investment revenue received Purchase of property, plant, and equipment Proceeds from disposal of property, plant, and equipment Net cash flows used in investing activities Financing activities Repayment of borrowings Proceeds from borrowings Repayment of lease liabilities Finance costs paid Proceeds from share options exercised Net cash flows (used in)/generated from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents as at start of the period Effect of foreign exchange on cash and cash equivalents Cash and cash equivalents as at end of the period The attached notes 1 to 32 form part of the Consolidated Financial Statements. 2,057 4,241 40 105 859 57 (1,668) 5,691 1,071 2,691 2,446 11,899 (129) (285) (205) 11,280 188 (1,101) 309 (604) — 1,775 (973) (2,044) — (1,242) 9,434 7,514 (105) 16,843 15,16 15 24 13 9 11 24 15 15 22 22 23 21 21 (10,712) 6,566 (3) (35) 526 489 3,334 165 2,067 (257) (3,362) (1,387) — (329) — (1,716) 206 (618) 359 (53) (11,500) 15,500 (834) (2,491) 41 716 (1,053) 8,532 35 7,514 55 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements For the year ended 31 December 2023 1 Corporate information The principal activity of RA International Group plc (“RAI” or the “Company”) and its subsidiaries (together the “Group”) is providing services in demanding and remote areas. These services include construction, integrated facilities management, and supply chain services. RAI was incorporated on 13 March 2018 as a public company limited by shares in England and Wales under registration number 11252957. The address of its registered office is One Fleet Place, London, EC4M 7WS. 2 Basis of preparation The consolidated financial statements have been prepared in accordance with UK adopted international accounting standards. They have been prepared under the historical cost basis and have been presented in United States Dollars (“USD”). All values are rounded to the nearest thousand (USD’000), except where otherwise indicated. Going concern The Group has a sufficient level of cash and access to liquidity to be able to operate for the foreseeable future and accordingly it is appropriate to prepare the financial statements on a going concern basis. Climate change In preparing the financial statements, the management has considered the impact of the physical and transition risks of climate change and identified this as an emerging risk but has concluded that it does not have a material impact on the recognition and measurement of the assets and liabilities in these financial statements as at 31 December 2023. Further details are available in our Sustainability Report on page 20 and TCFD Statement on page 31. 3 Basis of consolidation The financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2023. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: • • Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee) Exposure, or rights, to variable returns from its involvement with the investee • The ability to use its power over the investee to affect its returns Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: • The contractual arrangement with the other vote holders of the investee • Rights arising from other contractual arrangements • The Group’s voting rights and potential voting rights The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the 56 Company loses control over the subsidiary. Assets, liabilities, income, and expenses of a subsidiary acquired or disposed of during the year are included in the financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. When necessary, adjustments are made to the financial statements of a subsidiary to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses, and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest, and other components of equity while any resultant gain or loss is recognised in the profit or loss. Any investment retained is recognised at fair value. Current versus non-current classification The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: • Expected to be realised or intended to be sold or consumed in the normal operating cycle • Held primarily for the purpose of trading • • Expected to be realised within twelve months after the reporting period Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period All other assets are classified as non-current. A liability is current when: • • • • It is expected to be settled in the normal operating cycle It is held primarily for the purpose of trading It is due to be settled within twelve months after the reporting period There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The Group classifies all other liabilities as non-current. 4 Significant accounting policies Revenue recognition Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group has concluded that it is acting as a principal in all its revenue arrangements. Sale of goods (supply chain) Revenue from the sale of goods and the related logistics services is recognised when control of ownership of the goods have passed to the buyer, usually on delivery of the goods. Construction Typically, revenue from construction contracts is recognised at a point in time when performance obligations have been met. Generally, this is the same time at which client acceptance has been received. Dependent on the nature of the contracts, in some cases revenue is recognised over time using the percentage of completion method on the basis that the performance does not create an asset with an alternative use and the Group has an enforceable right to payment for performance completed to date. Contract revenue corresponds to the initial amount of revenue agreed in the contract and any variations in contract work, claims, and incentive payments are recognised only to the extent that it is highly probable that they will result in revenue, and they are capable of being reliably measured. Services (integrated facilities management) Revenue from providing services is recognised over time, applying the time elapsed method for accommodation and similar services to measure progress towards complete satisfaction of the service, as the customers simultaneously receive and consume the benefits provided by the Group. Cost of sales Cost of sales represent costs directly incurred or related to the revenue generating activities of the Group, including staff costs, materials, and depreciation. Contract balances Trade receivables A receivable represents the Group’s right to an amount of consideration that is unconditional, meaning only the passage of time is required before payment of the consideration is due. Accrued revenue Accrued revenue represents the right to consideration in exchange for goods or services transferred to a customer in connection with fulfilling contractual performance obligations. If the Group performs by transferring goods or services to a customer before invoicing, accrued revenue is recognised in an amount equal to the earned consideration that is conditional on invoicing. Once an invoice has been accepted by the customer accrued revenue is reclassified as a trade receivable. Customer advances If a customer pays consideration before the Group transfers goods or services to the customer, a customer advance is recognised when the payment is received by the Group. Customer advances are recognised as revenue when the Group meets its obligations to the customer. Borrowing costs Borrowing costs directly attributable to the construction of an asset are capitalised as part of the cost of the asset. Capitalisation commences when the Group incurs costs for the asset, incurs borrowing costs, and undertakes activities that are necessary to prepare the asset for its intended use or sale. Capitalisation ceases when the asset is ready for use or sale. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that are incurred in connection with the borrowing of funds. Tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying value amount of assets and liabilities, using tax rates enacted or substantively enacted at the Statement of Financial Position date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Property, plant, and equipment Property, plant, and equipment are stated at cost less accumulated depreciation and any impairment in value. Capital work-in-progress is not depreciated until the asset is ready for use. Depreciation is calculated on a straight line basis over the estimated useful lives. At the end of the useful life, assets are deemed to have no residual value. Contract specific assets are depreciated over the lesser of the length of the project, or the useful life of the asset. The useful life of general property, plant, and equipment is as follows: Land Buildings Unlimited (not depreciated) Lesser of 5 to 20 years and term of land lease Machinery, motor vehicles, furniture, and equipment 2 to 10 years Leasehold improvements Lesser of 10 years and term of lease The carrying values of property, plant, and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down, with the write down recorded in profit or loss to their recoverable amount, being the greater of their fair value less costs to sell and their value in use. Expenditure incurred to replace a component of an item of property, plant, and equipment that is accounted for separately is capitalised and the carrying amount of the component that is replaced is written off. Other subsequent expenditure is capitalised only when it increases future economic benefits of the related item of property, plant, and equipment. All other expenditure is recognised in profit or loss as the expense is incurred. An item of property, plant, and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised. Assets’ residual values, useful lives, and methods of depreciation are reviewed at each financial year end, and adjusted prospectively, if appropriate. Inventories Inventories are stated at the lower of cost and net realisable value. Costs include those expenses incurred in bringing each product to its present location and condition. Cost is calculated using the weighted average method. Net realisable value is based on estimated selling price less any further costs expected to be incurred in disposal. 57 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements continued Cash and cash equivalents Cash and cash equivalents comprise cash in hand and balances with banks, which are readily convertible to known amounts of cash and have a maturity of three months or less from the date of acquisition. This definition is also used for the consolidated cash flow statement. Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use. An asset’s recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used maximising the use of observable inputs. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded entities, or other available fair value indicators. The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecasts generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase. Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit or loss. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. 58 Financial instruments i) Financial assets Initial recognition and measurement The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15. Subsequent measurement Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified, or impaired. Other receivables are subsequently measured at amortised cost. Derecognition of financial assets A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the asset has expired. Impairment of financial assets The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next twelve months (a twelve-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. When arriving at the ECL we consider historical credit loss experience including any adjustments for forward-looking factors specific to the debtors and the economic environment. A financial asset is deemed to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Income from financial assets Investment revenue relates to interest income accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. ii) Financial liabilities Initial recognition and measurement Financial liabilities are initially recognised at fair value and subsequently classified at fair value through profit or loss, loans and borrowings, or payables. Loans and borrowings and payables are recognised net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables and loan notes. Subsequent measurement The measurement of financial liabilities depends on their classification as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as held at fair value through profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Loans and payables This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss. Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit or loss. Leases Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liability. The cost of right-of-use assets includes the amount of lease liabilities recognised and initial direct costs incurred. Right-of-use assets are depreciated on a straight line basis over the shorter of the lease term and the estimated useful lives of the assets. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payment made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, or a change in the lease payments. Short-term leases and leases on low-value assets The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of twelve months or less from the commencement date). It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight line basis over the lease term. Employees’ end of service benefits The Group provides end of service benefits to its employees in accordance with local labour laws. The entitlement to these benefits is based upon the employees’ final salary and length of service, subject to the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment. The Group accounts for these benefits as a defined contribution plan under IAS 19. Share based payments Employees (including senior executives) of the Group receive remuneration in the form of share based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are provided in note 13. That cost is recognised in employee benefits expense, included in administrative expenses, together with a corresponding increase in equity (share based payment reserve), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions. 59 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements continued No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. Contingencies Contingent liabilities are not recognised in the financial statements, they are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial statements but disclosed when an inflow of economic benefits is probable. Foreign currencies The Group’s financial statements are presented in USD, which is the functional currency of all Group companies. Items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange prevailing at the reporting date. All differences are taken to profit or loss. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Foreign currency share capital (including any related share premium or additional paid-in capital) is translated using the exchange rates as at the dates of the initial transaction. The value is not remeasured. 5 Changes in accounting policies and disclosures New and amended standards and interpretations Amendments and interpretations that apply for the first time in 2023 do not have a significant impact on the financial statements of the Group. The Group has not early adopted any standards, interpretations, or amendments that have been issued but are not yet effective. 6 Significant accounting judgements, estimates, and assumptions The preparation of the financial statements requires management to make judgements, estimates, and assumptions that may affect the reported amount of assets and liabilities, revenue, expenses, disclosure of contingent liabilities, and the resultant provisions and fair values. Such estimates are necessarily based on assumptions about several factors and actual results may differ from reported amounts. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. a) Judgements Use of Alternative Performance Measures (note 14) IAS 1 requires material items to be disclosed separately in a way that enables users to assess the quality of a company’s profitability. In practice, these are commonly referred to as “exceptional” items, but this is not a concept defined by IFRS and therefore there is a level of judgement involved in arriving at an Alternative Performance Measure (“APM”) which excludes such exceptional items. The Group refers to these as non-underlying items and considers items suitable for separate presentation that are outside normal operations and are material to the results of the Group either by virtue of size or nature. See note 9 for further details on specific balances which are classified as non-underlying items. b) Estimates and assumptions Impairment reviews (note 15) Determining whether property, plant and equipment is impaired requires an estimation of the value in use of the cash-generating units. The value in use calculation requires the Group to estimate the future cash flows and a suitable discount rate in order to calculate present value. An impairment review has been performed at the reporting date and no impairment is required. Percentage of completion (note 18) The Group primarily uses the output percentage-of-completion method when accounting for contract revenue on its long-term construction contracts. Use of the percentage-of-completion method requires the Group to estimate the progress of contracts based on surveys of work performed. The Group has determined this basis of revenue recognition is the best available measure on such contracts and where possible seeks customer verification of percentage-of-completion calculations as at financial reporting dates. The accuracy of percentage-of-completion estimates has a material impact on the amount of revenue and related profit recognised. As at 31 December 2023, USD 745,000 of accrued revenue had been calculated using the percentage-of-completion method (2022: USD nil). Revisions to profit or loss arising from changes in estimates are accounted for in the period when the changes occur. IFRS 16 – interest rate (note 23) In some jurisdictions where the Group holds long-term leases, the incremental borrowing rate is not readily determinable. As a result, the incremental borrowing rate is estimated with reference to risk adjusted rates in other jurisdictions where a market rate is determinable, and the Group’s cost of funding. 7 Segmental information For management purposes, the Group is organised into one segment based on its products and services, which is the provision of services in demanding and remote areas. Accordingly, the Group only has one reportable segment. The Group’s Chief Operating Decision Maker (“CODM”) monitors the operating results of the business as a single unit for the purpose of making decisions about resource allocation and assessing performance. The CODM is considered to be the Board of Directors. 60 Operating segments Revenue, operating results, assets, and liabilities presented in the financial statements relate to the provision of services in demanding and remote areas. Revenue by service channel: Integrated facilities management Construction Supply chain Revenue by recognition timing: Revenue recognised over time Revenue recognised at a point in time 2023 USD’000 31,947 12,407 13,932 58,286 2023 USD’000 44,354 13,932 58,286 2022 USD’000 27,411 21,276 14,230 62,917 2022 USD’000 48,160 14,757 62,917 Geographic segment The Group primarily operates in Africa and as such the CODM considers Africa and Other locations to be the only geographic segments of the Group. The below geography split is based on the location of project implementation. Revenue by geographic area: Africa Other Non-current assets by geographic area: Africa Other Revenue split by customer Customer A Customer B Customer C Customer D Customer E Customer F Other 2023 USD’000 50,863 7,423 58,286 2023 USD’000 19,489 1,888 21,377 2023 % 22 14 10 10 8 5 31 100 2022 USD’000 61,012 1,905 62,917 2022 USD’000 22,223 1,788 24,011 2022 % 19 12 9 8 – 7 45 100 61 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements continued 8 Group information The Company operates through its subsidiaries, listed below, which are legally or beneficially, directly or indirectly owned and controlled by the Company. 9 Profit/(loss) for the period Profit/(loss) for the period is stated after charging: The extent of the Company’s beneficial ownership and the principal activities of the subsidiaries are as follows: Name of the entity Country of incorporation RA Africa Holdings Limited British Virgin Islands RA International Commercial Services Limited RA International Limited British Virgin Islands Cameroon RA International RCA RA International Chad RA International DRC SARL Central African Republic Chad Democratic Republic of Congo RA International Guyana Inc. Raints Kenya Limited Guyana Kenya RA International SARL Lebanon Al Mutaheda Al-Alamia Ltd. Raints Mali Libya Mali RA International Limitada Mozambique RA Facilities Services S.A Mozambique RA International Niger Niger RA International Poland Poland RA International* RA International FZCO Somalia South Sudan Reconstruction and Assistance Company Ltd Sudan RA International Limited Tanzania RA International FZCO RA International General Trading LLC RA International Global Operations Limited RA International Limited UAE UAE UK Uganda RA Federal Services LLC United States of America Berkshire General Insurance Limited United States of America * RA International in Somalia is not an incorporated legal entity. Beneficial ownership Registered address 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 3rd floor, J&C Building, PO Box 362, Road Town, Torola Virgin Islands (British) VG110 3th floor, J&C Building, PO Box 362, Road Town, Torola Virgin Islands (British) VG110 537 Rue Njo-Njo, Bonaprisi, PO Box 1245, Douala, Cameroon Avenue des Martyrs, Bangui, Central African Republic N'djamena, Chad Kinshasa, Sis No106, Boulevard Du 30 Juin, Dans La Commune De La Gombe EN RD, Congo 210 New Market Street, Georgetown, Guyana The Pavilion 6th Floor, Lower Kabete Road, Westlands, PO Box 2691-00621, Nairobi, Kenya Beirut Souks, Souk El Dahab, section no 1144, plot no 1479, Beirut, Lebanon Suq El Jumah- Tripoli Libya Bamako-Niarela Immeuble Sodies Appartement C/7, Mali Distrito KAMPFUMO, Bairro Sommarchield, Rua. Jose Graverinha, no 198, R/C, Maputo, Mozambique Distrito Urbano 1, Bairro Central, Rua do Sol, 23 Maputo, Mozambique Niamey, Quartier Cite Piudriere, Avenue du Damergou, CI-48, Niger UL. MŁYŃSKA, numer 16, lokal 8 PIĘTRO, kod poczt. 61-730, poczta POZNAŃ Mogadishu, Somalia Plot no. 705, Block 3-K South, , Airport Road, Hai Matar South Sudan 115 First Quarter Graif west-Khartoum, Khartoum, Republic of Sudan 369 Toure Drive, Oysterbay, PO Box 62, Dar Es Salaam, Tanzania Office Number S101221O39, Jebel Ali Free Zone, Dubai, United Arab Emirates Building 41, 3B Street, Al Quoz Industrial Area 1, PO Box 115774, Dubai, United Arab Emirates 1 Fleet Place, London, EC4M 7WS, United Kingdom 4th Floor, Acacia Mall, Plot 14-18, Cooper Road, Kololo, Kampala, Uganda 3411 Silverside Road, Tatnall Building #104, Wilmington, DE 19810 1 Church Street, 5th Floor, Burlington, Chittenden, Vermont, 05401, United States of America Staff costs Materials Depreciation of property, plant, and equipment Impairment of property, plant, and equipment Staff costs relate to wages and salaries plus directly attributable expenses. Non-underlying items Restructuring costs Palma Project, Mozambique Restructuring costs During the year, USD 2,245,000 of net income was recognised relating to the sale of assets previously impaired by the Group. All cash from the transaction was received during the year. Palma Project, Mozambique During the year, a number of Palma Project assets were disposed of, generating net proceeds of USD 2,966,000 (2022: USD 114,000). These assets had been fully impaired in 2021 and as a result, the disposal resulted in a recovery which has been recorded in the current year. At 31 December 2023, USD 2,045,000 relating to the disposals was outstanding and recognised as a receivable, with USD 377,000 of costs due for payment in 2024. The sale of assets removed the requirement for continued storage costs, and as such, no provision for unavoidable costs has been recognised at 31 December 2023 (2022: USD 1,092,000). The Group reassessed the recoverable amount of all other impaired assets and deemed there was no further reversals necessary. Auditor compensation Amounts paid or payable by the Group in respect of audit and non-audit services to the Auditor are shown below. Fees for the audit of the Company annual accounts Fees for the audit of the subsidiary annual accounts Additional fee for the prior year audit of the Group annual accounts Total audit fees Total non-audit fees 10 Employee expenses The average number of employees (including Directors) employed during the period was: Directors Executive management Staff 2023 USD’000 23,655 18,683 4,241 — 2022 USD’000 24,382 24,079 5,110 1,456 2023 USD’000 2022 USD’000 2,245 2,966 5,211 (3,502) (715) (4,217) 2023 USD’000 2022 USD’000 225 — — 225 — 2023 5 3 1,198 1,206 2023 USD’000 19,743 142 57 19,942 188 75 25 288 — 2022 7 5 1,356 1,368 2022 USD’000 19,820 148 684 20,652 63 RA International Global Operations Limited, registered number 12672019 is exempt from the requirements of Company Act 2006 relating to the audit of individual accounts by virtue of Section 479A. The aggregate remuneration of the above employees was: 62 Wages and salaries Social security costs Share based payments The remuneration of the Directors and other key management personnel of the Group are detailed in note 31. Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements continued 11 Tax The tax expense on the profit/(loss) for the year is as follows: Current tax: UK corporation tax on loss for the year Non-UK corporation tax Tax expense/for the year 2023 USD’000 2022 USD’000 — 7 7 — 169 169 Factors affecting the tax expense The tax assessed for the year varies from the standard rate of corporation tax in the UK. The difference is explained below: Profit/(Loss) before tax Expected tax credit based on the standard average rate of corporation tax in the UK of 23.5% (2022: 19.0%) Effects of: Deferred tax asset not recognised Exemptions and foreign tax rate difference Tax expense for the year 2023 USD’000 201 47 138 (178) 7 2022 USD’000 (12,997) (2,469) 115 2,523 169 From 1 April 2023, the UK Corporation tax rate increased from 19.0% to 25.0%, resulting in an average tax rate for the period of 23.5% (2022: 19.0%). The Group benefits from tax exemptions granted to its customers who are predominantly governments and large intragovernmental organisations. The CODM is not aware of any factors that tax exemptions granted will no longer be available to the Group. The Group has USD 5,109,000 (2022: USD 3,463,000) of unused tax losses for which no deferred tax asset has been recognised. 12 Earnings per share The Group presents basic earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by dividing the profit attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. At 31 December, the following unexercised share options to acquire ordinary shares under the ERSP were outstanding: Year of grant Share plan Vesting date Exercise price GBP Number of options 2023 Number of options 2022 2020 2021 2022 ERSP ERSP ERSP ERSP ERSP ERSP ERSP ERSP ERSP ERSP ERSP ERSP 1 May 2022 1 May 2023 1 May 2021 1 May 2022 1 May 2023 1 May 2024 1 Dec 2022 1 Dec 2023 1 Dec 2024 1 May 2023 1 May 2024 1 May 2025 0.10 0.10 0.10 0.10 0.10 0.10 0.22 0.22 0.22 0.10 0.10 0.10 — — — — — — — — — — — — — The weighted average remaining contractual life for the shares options outstanding as at 31 December 2023 is nil (2022: 0.9 years). Outstanding at 1 January Granted during the year Exercised during the year Settled during the year Forfeited during the year Lapsed during the year Outstanding at 31 December Weighted average exercise price 2023 GBP 0.16 — — 0.10 0.21 0.20 — Number of options 2022 3,875,019 3,009,891 (324,463) — (328,476) (2,065,216) 4,166,755 Number of options 2023 4,166,755 — — (1,771,238) (1,574,799) (820,718) — 229,710 671,510 17,212 47,776 107,243 83,413 741,457 741,457 741,457 130,920 261,840 392,760 4,166,755 Weighted average exercise price 2022 GBP 0.10 0.18 0.10 — 0.10 0.10 0.16 Profit/(loss) for the period (USD’000) Basic weighted average number of ordinary shares Effect of employee share options Diluted weighted average number of shares Basic earnings per share (cents) Diluted earnings per share (cents) 13 Share based payment expense The Group recognised the following expenses related to equity-settled payment transactions: Employee retention share plan Other share based payments Other share based payments – non-underlying 2023 2022 194 173,575,741 — (13,166) 172,601,934 728,394 173,575,741 173,330,328 0.1 0.1 (7.6) (7.6) 2023 USD’000 2022 USD’000 57 — — 57 311 178 195 684 Options issued under the ERSP were valued using the Black Scholes model using the following inputs: 2020 2021 2022 Weighted average share price 49p (USD 0.64) 49p (USD 0.68) 22p (USD 0.28) Expected volatility 49.70% 48.60% 46.80% Risk free rate 0.00% 0.00% 1.69% The total fair value of the options at the grant date was USD 1,100,000. A charge of USD 15,000 (2022: USD 66,000) was recognised in cost of sales and USD 41,000 (2022: USD 245,000) was recognised in administrative expenses for the fiscal year ended 2023. The expected volatility input utilised represents the historic volatility of the share price of the Company since Admission. Other share based payments On 26 July 2022, the Company agreed to issue a total of 1,459,435 ordinary shares to senior members of staff, including certain persons discharging managerial responsibilities. Ordinary shares issued pursuant to the award were satisfied from the pool of ordinary shares held in Treasury. The fair value of the shares on the grant date was GBP 0.21 (USD 0.25) per share. A total charge of USD 373,000 was recognised, with USD 178,000 recognised as an administrative expense and USD 195,000 recognised as a non-underlying restructuring cost given the non-reoccurring nature of the transaction. Employee Retention Share Plan In October 2020, the Company introduced an Employee Retention Share Plan (“ERSP”) and granted share options to a number of senior employees. Awards vest annually subject to continuous employment. There are no TSR linked vesting conditions associated with these options. 64 65 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements continued 14 Alternative Performance Measures Alternative Performance Measures (“APMs”) used by the Group are defined below along with a reconciliation from each APM to its IFRS equivalent, and an explanation of the purpose and usefulness of each APM. APMs are non-IFRS measures. In general, APMs are presented externally to meet investors’ requirements for further clarity and transparency of the Group’s financial performance. APMs are also used internally by management to evaluate business performance and for budgeting and forecasting purposes. Profit/(loss) Tax expense Profit/(loss) before tax Finance costs Investment income Operating profit/(loss) Depreciation Impairment EBITDA 2023 USD’000 194 7 201 2,044 (188) 2,057 4,241 — 6,298 2022 USD’000 (13,166) 169 (12,997) 2,491 (206) (10,712) 5,110 1,456 (4,146) EBITDA Management defines EBITDA as Operating Profit adjusted for depreciation and impairment. EBITDA facilitates comparisons of operating performance from period to period and company to company by eliminating potential differences caused by variations in capital structures, tax positions, and the age and booked depreciation on assets. Net cash Net cash represents cash less overdraft balances, term loans, and notes outstanding. This is a commonly used metric, helpful to stakeholders when analysing the business. Negative net cash is referred to as a net debt position. Cash and cash equivalents Loan notes – non-current Loan notes – current Net cash/(debt) 15 Property, plant, and equipment Cost: At 1 January 2023 Additions Disposals Transfer to inventory At 31 December 2023 Depreciation: At 1 January 2023 Charge for the year Relating to disposals Transfer to inventory At 31 December 2023 Net carrying amount: At 31 December 2023 66 Machinery, motor vehicles, furniture, and equipment USD’000 13,683 251 (548) — 13,386 10,406 1,188 (201) — 11,393 Land and buildings USD’000 39,325 745 (5) (107) 39,958 23,780 1,804 (3) (43) 25,538 14,420 1,993 2023 USD’000 16,843 (13,495) (2,280) 1,068 2022 USD’000 7,514 (14,000) — (6,486) 1,370 106 — — 1,476 602 263 — — 865 611 54,378 1,101 (553) (107) 54,820 34,788 3,255 (204) (43) 37,796 17,024 Cost: At 1 January 2022 Additions Disposals At 31 December 2022 Depreciation: At 1 January 2022 Charge for the year Relating to disposals Provision for impairment At 31 December 2022 Net carrying amount: At 31 December 2022 16 Right-of-use assets Cost: At 1 January Additions At 31 December Depreciation: At 1 January Charge for the year Provision for impairment At 31 December Net carrying amount: At 31 December Machinery, motor vehicles, furniture, and equipment USD’000 14,115 424 (856) 13,683 8,089 1,893 (491) 915 10,406 Land and buildings USD’000 39,919 194 (788) 39,325 21,438 2,040 (226) 528 23,780 15,545 3,277 Leasehold improvements USD’000 Total USD’000 1,370 — — 1,370 365 237 — — 602 768 55,404 618 (1,644) 54,378 29,892 4,170 (717) 1,443 34,788 19,590 2023 USD’000 2022 USD’000 7,887 918 8,805 3,466 986 — 4,452 7,887 — 7,887 2,513 940 13 3,466 4,353 4,421 Information related to lease liabilities is available in note 23. The table below details rent resulting from lease contracts which are not capitalised and are therefore expensed in the year. 2023 USD’000 653 2022 USD’000 715 2023 USD’000 2022 USD’000 3,607 540 4,147 4,442 712 5,154 17 Inventories Materials and consumables Goods-in-transit No provision has been recognised in 2023 reflecting the cost of prefabricated camp assets held in inventory (2022: USD 2,478,000). 67 Leasehold improvements USD’000 Total USD’000 Short-term leases Short-term leases include amounts paid for vehicles and heavy equipment rental, as well as short-term property leases. Financial reportRA International Annual Report 2023RA International Annual Report 2023 Notes to the consolidated financial statements continued 18 Trade and other receivables Trade receivables Accrued revenue Deposits Prepayments Other receivables 2023 USD’000 11,196 2,265 80 1,173 1,027 15,741 2022 USD’000 10,697 3,765 112 514 1,301 16,389 Invoices are generally raised on a monthly basis, upon completion, or part completion of performance obligations as agreed with the customer on a contract by contract basis. During the year 100% of accrued revenue was subsequently billed and transferred to trade receivables from the opening unbilled balance in the period (2022: 100%). As at 31 December the transaction price allocated to remaining performance obligations was USD 49,000,000 (2022: USD 83,000,000). This represents revenue expected to be recognised in subsequent periods arising on existing contractual arrangements. The Group has not taken the practical expedient in IFRS 15.121 not to disclose information about performance obligations that have original expected durations of one year or less and therefore no consideration from contracts with customers is excluded from these amounts. All revenue is expected to be recognised within the next five years. As at 31 December the ageing of trade receivables was as follows: Not past due Overdue by less than 30 days Overdue by between 30 and 60 days Overdue by more than 60 days 2023 USD’000 2022 USD’000 8,127 1,843 805 421 11,196 5,609 3,705 831 552 10,697 Trade receivables are non-interest bearing and generally have payment terms of 30 days. No ECL was recorded as at 31 December 2023 or 31 December 2022. All receivables are expected, on the basis of past experience, to be fully recoverable. 19 Cash and cash equivalents Cash and cash equivalents in the consolidated statement of financial position comprised of cash at bank of USD 16,843,000 (2022: USD 7,514,000). 22 Loan notes The table below summarises the loan notes: As at 1 January Additions Repayments As at 31 December Current Non-current 2023 USD’000 14,000 1,775 — 15,775 2,280 13,495 2022 USD’000 10,000 15,500 (11,500) 14,000 — 14,000 During the year, the Group completed a refinancing and fundraising exercise. The purpose of the exercise was to extend the maturity of the USD 14.0m of loan notes issued by the Group in previous periods which were due to mature in the second half of 2024. USD 11.7m of notes were extended to mature in January 2027, with the remaining USD 2.3m to be repaid in November 2024. An additional USD 1.8m was also raised through the issue of new loan notes. The notes with a 2027 maturity date carry an annual fixed interest rate of 8.50% (2022: 7.50%) for GBP denominated notes and 9.50% (2022: 8.00%) for USD denominated notes. The term of the note issuance is up to 37 months with principal to be repaid as a bullet payment upon maturity in January 2027. Interest is paid on a quarterly basis. 23 Lease liabilities Movements in the provision recognised in the consolidated statement of financial position are as follows: As at 1 January Additions Interest Payments As at 31 December Current Non-current 2023 USD’000 5,206 2022 USD’000 6,040 918 436 (1,409) 5,151 833 4,318 — 476 (1,310) 5,206 650 4,556 Interest of USD 436,000 (2022: USD 476,000) relating to the above lease liabilities has been included in Finance Costs for the year. As at 31 December the maturity profile of lease liabilities was as follows: 20 Share capital Authorised, issued, and fully paid 2023 USD’000 2022 USD’000 3 months or less 3 to 12 months 1 to 5 years Over 5 years 173,575,741 shares (2022: 173,575,741 shares) of GBP 0.10 (2022: GBP 0.10) each 24,300 24,300 21 Treasury shares As at 1 January Issued in the period As at 31 December 68 2023 Number 2023 USD’000 — — — — — — 2022 Number 1,783,898 (1,783,898) — 2022 USD’000 1,199 (1,199) — The Group had total cash outflows relating to leases of USD 2,062,000 in 2023 (2022: USD 2,025,000). This is the total of short-term lease payments from note 16 and payments from note 23. 24 Employees’ end of service benefits Movements in the provision recognised in the consolidated statement of financial position are as follows: As at 1 January Provided during the year End of service benefits paid As at 31 December 2023 USD’000 2022 USD’000 928 859 (285) 1,502 731 526 (329) 928 69 2023 USD’000 2022 USD’000 163 670 1,806 2,512 5,151 124 526 1,746 2,810 5,206 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements continued 25 Trade and other payables 28 Financial risk management objectives and policies Trade payables Accrued expenses Accrued tax expense Customer advances 2023 USD’000 2022 USD’000 6,321 2,338 193 1,914 10,766 3,744 2,309 388 533 6,974 All customer advances recorded at 31 December 2022 were subsequently recognised as revenue in 2023 and all customer advances held at 31 December 2023 were subsequently recognised as revenue in 2024. 26 Provisions As at 1 January Provided during the year Utilised during the year Reversed during the year As at 31 December 2023 USD’000 2022 USD’000 1,092 — (1,013) (79) — 1,422 1,092 (1,422) — 1,092 Following the March 2021 attack on Palma, Mozambique the Group began incurring unavoidable costs relating to the Offsite Assets. All assets were disposed of in 2023. As such, no provision is held at 31 December 2023. 27 Changes in liabilities arising from financing activities Non-current liabilities Loan notes Lease liabilities Current liabilities Loan notes Lease liabilities Non-current liabilities Loan notes Lease liabilities Current liabilities Loan notes Lease liabilities 1 January 2023 USD’000 14,000 4,556 — 650 19,206 1 January 2022 USD’000 — 5,206 10,000 834 16,040 Cash flows USD’000 New leases USD’000 Other USD’000 31 December 2023 USD’000 1,775 — — (1,409) 366 — 286 — 632 918 (2,280) (524) 2,280 960 436 13,495 4,318 2,280 833 20,926 Cash flows USD’000 New leases USD’000 Other USD’000 31 December 2022 USD’000 14,000 — (10,000) (1,310) 2,690 — — — — — — (650) — 1,126 476 14,000 4,556 — 650 19,206 The “Other” column includes the effect of reclassification of non-current portion of leases to current due to the passage of time, the effect of contracted loan note amounts not yet received, and the effect of accrued interest not yet paid. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group was not exposed to any significant interest rate risk on its interest-bearing liabilities. Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities when revenue or expenses are denominated in a different currency from the Group’s functional currency, as well as cash and cash equivalents held in foreign currency accounts. At 31 December 2023, the Group held foreign cash and cash equivalents of GBP 948,000 (USD 1,207,000). Additionally, the Group held GBP denominated loans of GBP 2,239,000 (USD 2,850,000). UK Pound Sterling is primarily held by the Group to settle payment obligations denominated in GBP. As at 31 December 2022, the Group held GBP 364,000 (USD 440,000) and GBP denominated loans of GBP 1,970,000 (USD 2,382,000). The Group’s exposure to foreign currency variances for all other currencies is not material. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Group is exposed to credit risk on its bank balances and receivables. The Group seeks to limit its credit risk with respect to banks by only dealing with reputable financial institutions as determined by the CODM and with respect to customers by only dealing with creditworthy customers and continuously monitoring outstanding receivables. The Company’s five largest customers account for 50% of outstanding trade receivables at 31 December 2023 (2022: 61%). Receivables split by customer: Customer G Customer A Customer B Customer C Customer D Customer F Other 2023 % 21 18 14 9 9 3 26 100 2022 % — 14 22 7 7 11 39 100 No material credit risk is deemed to exist due to the nature of the Group’s customers, who are predominantly governments and large intragovernmental organisations. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group limits its liquidity risk by ensuring bank facilities are available. The Group’s terms of sale generally require amounts to be paid within 30 days of the date of sale. Trade payables are settled depending on the supplier credit terms, which are generally 30 days from the date of delivery of goods or services. As at 31 December the maturity profile of trade payables and loan notes was as follows: As at 31 December 2023 Loan notes Trade payables As at 31 December 2022 Loan notes Trade payables Less than 3 months USD’000 3 to 6 months USD’000 — 6,321 6,321 — — — 6 to 12 months USD’000 2,280 — 2,280 Less than 3 months USD’000 3 to 6 months USD’000 6 to 12 months USD’000 — 3,744 3,744 — — — — — — 12 to 24 months USD’000 13,495 — 13,495 12 to 24 months USD’000 14,000 — 14,000 Total USD’000 15,775 6,321 22,096 Total USD’000 14,000 3,744 17,744 70 Liabilities falling due within twelve months are recognised as current on the consolidated statement of financial position. Liabilities falling due after twelve months are recognised as non-current. 71 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the consolidated financial statements continued Company statement of financial position As at 31 December 2023 The unutilised bank overdraft facilities at 31 December 2023 amounted to USD 10,000,000 (2022: USD 10,000,000) and carry interest of 1m Term SOFR +3.50% per annum (2022: 1m Term SOFR +3.50%). The facilities require a 100% cash margin guarantee to be paid upfront. The Group manages its liquidity risk by maintaining significant cash reserves. The Group’s cash and cash equivalents balance is substantially all held in institutions holding a Moody’s long-term deposit rating of Aa3 or above. Capital management The primary objective of the Group’s capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it in light of changes in business conditions. No changes were made in the objectives, policies or processes during the year ended 31 December 2023. Capital comprises share capital, share premium, merger reserve, treasury shares, share based payment reserve, and retained earnings and is measured at USD 24,914,000 as at 31 December 2023 (2022: USD 24,868,000). 29 Related party disclosures Related parties represent shareholders, Directors, and key management personnel of the Group, and entities controlled, jointly controlled, or significantly influenced by such parties. Pricing policies and terms of these transactions are approved by the Group’s management. There were no transactions with related parties during the year (2022: USD nil). No outstanding balances with related parties are included in the consolidated statement of financial position at 31 December 2023 (2022: USD nil). 30 Ultimate controlling party The ultimate controlling party of the Company, as shown within the substantial shareholders breakdown within the Directors’ Report, is Soraya Narfeldt. 31 Compensation Compensation of key management personnel The remuneration of key management during the year was as follows: Short-term benefits Stock based compensation 2023 USD’000 2022 USD’000 1,272 — 1,272 1,379 373 1,752 The key management personnel comprise of 3 (2022: 3) individuals. Included in key management personnel are 2 (2022: 3) Directors. Compensation of Directors The remuneration of Directors during the year was as follows: Short-term benefits Stock based compensation Highest paid Director The remuneration of the highest paid Director during the year was as follows: Short-term benefits Stock based compensation Assets Non-current assets Investments Loan to subsidiary Current assets Trade and other receivables Cash and cash equivalents Total assets Equity and liabilities Equity Share capital Share premium Merger reserve Treasury shares Share based payment reserve Retained earnings Total equity Liabilities Non-current liabilities Loan from subsidiary Current liabilities Trade and other payables Total liabilities Total equity and liabilities Notes 2023 USD’000 2022 USD’000 4 5 6 7 8 9 10 28,606 1,000 29,606 4,190 320 4,510 34,116 24,300 — — — — 9,408 33,708 — — 408 408 34,116 28,606 1,000 29,606 5,984 157 6,141 35,747 24,300 18,254 — — 574 (8,680) 34,448 1,000 1,000 299 1,299 35,747 2023 USD’000 2022 USD’000 1,411 — 1,411 1,574 178 1,752 2023 USD’000 2022 USD’000 492 — 492 393 178 571 The Company has taken the exemption conferred by Section 408 of the Companies Act 2006 not to publish the profit and loss of the parent company within these accounts. The result for the Company for the year was a loss of USD 592,000 (2022 loss: USD 22,396,000). The financial statements of the Company (registration number 11252957) were approved by the Board of Directors on 30 April 2024 and signed on its behalf by: Soraya Narfeldt | CEO The attached notes 1 to 11 form part of the financial statements. The amount disclosed in the tables is the amount recognised as an expense during the reporting year related to key management personnel and Directors of the Group. 32 Standards issued but not yet effective No other standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are expected to have a material impact on the Group. 72 73 Financial reportRA International Annual Report 2023RA International Annual Report 2023Company statement of changes in equity Notes to the Company financial statements For the year ended 31 December 2023 For the year ended 31 December 2023 As at 1 January 2022 Total comprehensive income for the period Share based payments Non-cash employee compensation Lapsed share options Issuance of treasury shares (note 8) Transfer of reserve As at 31 December 2022 Total comprehensive income for the period Share based payments Lapsed/cancelled share options Capital reduction* Share capital USD’000 24,300 — — — — — — 24,300 — — — — As at 31 December 2023 24,300 Share premium USD’000 18,254 — — — — — — 18,254 — — — (18,254) — Merger reserve USD’000 9,897 — Treasury shares USD’000 (1,199) — — — — — (9,897) — — — — — — — 981 — 218 — — — — — — — Share based payment reserve USD’000 534 — 311 — (94) (177) — 574 — 57 (631) — — Retained earnings USD’000 3,819 (22,396) — — — — 9,897 (8,680) (592) — 426 18,254 9,408 Total USD’000 55,605 (22,396) 311 981 (94) 41 — 34,448 (592) 57 (205) — 33,708 * On 21 December 2023 the Registrar of Companies registered the cancellation of RA International Group plc’s share premium account. USD 18,254,000 of share premium was accordingly transferred to retained earnings, creating distributable reserves and enabling the Company to become dividend paying. 1 Basis of preparation The financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and the Companies Act 2006), including Financial Reporting Standard 101 “Reduced Disclosure Framework” (“FRS101”) under the historical cost basis and have been presented in USD, being the functional currency of the Company. The Company has applied a number of exemptions available under FRS 101. Specifically, the requirement(s) of: (a) paragraphs 91-99 of IFRS 13 “Fair Value Measurement”; (b) paragraph 38 of IAS 1 “Presentation of Financial Statements” to present comparative information in respect of paragraph 79(a)(iv) of IAS 1; (c) paragraphs 10(d), 10(f), and 134-136 of IAS 1 “Presentation of Financial Statements”; (d) IAS 7 “Statement of Cash Flows”; (e) paragraphs 30 and 31 of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”; (f) paragraph 17 of IAS 24 “Related Party Disclosures” to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member; and (g) paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 “Impairment of Assets”. 2 Significant accounting policies Except noted below, all accounting policies applied to the Company are consistent with that of the Group. Investments Investments held by the Company are stated at cost less provision for diminution in value. Merger reserve A merger reserve is a non-distributable reserve often arising from a share for share exchange transaction, such as that undertaken by the Company in 2018. The merger reserve is held at carrying value and maybe transferred to distributable reserves upon the disposable, write down, depreciation, amortisation, or diminution in value or impairment of the related asset. 3 Employee expenses The average number of employees employed during the period was: Directors The aggregate remuneration of the above employees was: Wages and salaries Social security costs 4 Investments As at 1 January Additions Diminution in value As at 31 December 2023 5 2022 7 2023 USD’000 2022 USD’000 389 43 432 447 53 500 2023 USD’000 28,606 — — 28,606 2022 USD’000 50,047 350 (21,791) 28,606 During the prior year, the Company recognised a provision of USD 21,791,000 relating to diminution in value of the investment as at 31 December 2022. The provision was calculated with reference to the Company’s market capitalisation at the year end date, adjusted to reflect cost of disposal, in order to determine the recoverable amount of the investment on a fair value less cost to sell basis. Additionally, the Company invested USD 350,000 in RA Federal Services LLC, a 100% owned subsidiary. 74 75 Financial reportRA International Annual Report 2023RA International Annual Report 2023Notes to the Company financial statements continued 5 Loan to subsidiary As at 1 January Additions As at 31 December 2023 USD’000 2022 USD’000 1,000 — 1,000 — 1,000 1,000 During the prior year, the Company advanced a loan of USD 1,000,000 to a subsidiary. This note carries an annual fixed interest rate of 9.56%. The term of the note issuance was 25 months with the principal to be repaid as a bullet payment upon maturity in November 2024. In December 2023, the loan was extended by 14 months to January 2026. Interest is to be received on an annual basis. 6 Trade and other receivables Prepayments Due from subsidiary VAT recoverable 2023 USD’000 2022 USD’000 99 4,057 34 4,190 67 5,879 38 5,984 Amounts due from subsidiary represent amounts due from RA International FZCO, an immediate subsidiary, and are non-interest bearing and payable on demand. 7 Share capital Authorised, issued, and fully paid: Ordinary shares of GBP 0.10 each 8 Treasury shares As at 1 January Issued in the period As at 31 December 9 Loan from subsidiary As at 1 January Additions Repayments As at 31 December 2023 Number 2023 USD’000 2022 Number 2022 USD’000 173,575,741 24,300 173,575,741 24,300 2023 Number 2023 USD’000 — — — — — — 2022 Number 1,783,898 (1,783,898) — 2022 USD’000 1,199 (1,199) — 2023 USD’000 2022 USD’000 1,000 — (1,000) — — 1,000 — 1000 During the prior year, the Company subscribed to a loan from a subsidiary for USD 1,000,000. This note carries an annual fixed interest rate of 9.56%. The term of the note issuance was 25 months with the principal to be repaid as a bullet payment upon maturity in November 2024. Interest is paid on an annual basis. The note was cancelled in January 2023 for no penalty. 10 Trade and other payables Trade payables Accruals 2023 USD’000 2022 USD’000 149 259 408 176 123 299 11 Related party transactions The Directors have taken advantage of the exemption under paragraph 8(j) and 8(k) of FRS101 and have not disclosed transactions with other wholly owned Group undertakings. There are no other related party transactions. Shareholder information For the year ended 31 December 2023 Corporate information Registered office One Fleet Place London EC4M 7WS Website www.raints.com Registered number 11252957 Legal entity identifier code 213800N6RTATELJU6797 Listing information AIM, London Symbol: RAI Date of Annual General Meeting 26 June 2024 Advisers: Nominated adviser and broker Strand Hanson 26 Mount Row London W1K 3SQ Solicitors to the Company Dentons UK and Middle East LLP One Fleet Place London EC4M 7WS Auditor PKF Littlejohn LLP 15 Westferry Circus London E14 4HD Registrars Equiniti Limited Aspect House Spencer Road Lancing BN99 6DA Equiniti provide a range of services to shareholders and extensive information including many answers to frequently asked questions can be found online. Register for FREE at www.shareview.co.uk or use the QR code. Company secretary Elemental Company Secretary Limited 27 Old Gloucester Street London WC1N 3AX Shareholder queries The investors section of our website contains a wide range of information of interest to institutional and private investors, including: latest news and press releases, annual reports, investor presentations and sustainability reports. For investor queries please email: investors@raints.com 76 RA International Annual Report 2023 77 RA International Annual Report 2023R A I N T E R N A T I O N A L A N N U A L R E P O R T 2 0 2 3 

Continue reading text version or see original annual report in PDF format above