RM plc Annual Report 2021

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FY2021 Annual Report · RM plc

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Annual Report and
Financial Statements

Year ended 30 November 2021

STRATEGIC REPORT

Operating Highlights

Chairman's Statement

Chief Executive Officer’s Statement

Market Trends

Strategy

Business Model and Operating Divisions

Key Performance Indicators

Purpose, Values and Culture

Section 172(1) Statement

Non-Financial Information Statement

Managing our Risks

Principal Risks and Uncertainties

Chief Financial Officer’s Statement

Group Financial Performance

Financial Viability Statement

Sustainability Report

CORPORATE GOVERNANCE

Board of Directors

Corporate Governance Report

Audit Committee Report

Remuneration Committee Report

Nomination Committee Report

103

Directors' Report

FINANCIAL STATEMENTS

108

Independent Auditor’s Report

118

Consolidated Financial Statements

123

Company Financial Statements

126

Notes to the Financial Statements

182

Shareholder Information

OPERATING HIGHLIGHTS
Improved 2021 performance despite continued COVID-19 disruption

Satisfactory results versus the prior year taking into account continued disruption

Revenue up 12% driven by strong trading in RM Resources enabling adjusted operating profit*

improvement of 22% (Statutory profit after tax down 45% with £8.3m (2020: £1.7m) of investment

program costs expensed following a change in accounting treatment)

Balance sheet remains resilient with net debt* at £18m and an improvement in the

pension funding position

Paid and proposed final dividend of 4.7 pence per share (2020: 3.0p)

Reset the strategy and established plans to deliver sustainable growth

Good early progress

*Alternative performance measure (APM), see reconciliation in Note 6.

OPERATING DIVISIONS NOTE

Following a review of strategy, the names of the Divisions have changed to align more closely
to their customer proposition.

RM Resources remains the same.

RM Results becomes RM Assessment, acknowledging its broader product portfolio
and the shift from a focus on digital marking only, to one engaged in digital solutions
throughout the assessment lifecycle.

RM Education becomes RM Technology highlighting the Division’s focus on improving
the technology environment in schools and colleges to support learner outcomes.

CHAIRMAN’S STATEMENT

Performance

Detailed assessment of the Group’s 2021 performance
is inevitably dominated by the pandemic. However, the
results reflect the successful efforts of the Group to adapt
to the resulting volatility of customer demand. The trading
performance did not match pre-pandemic levels but
was creditable in the light of the challenges presented,
and addressed.

In parallel with accommodating these day-to-day
fluctuations, good progress has been made on the
warehouse consolidation project and the Group-wide IT
investment. The new RM Resources distribution facility is
now complete, and the efficiency benefits will flow following
systems integration and the transition of activities from
existing sites. The IT project is in early testing and should
also begin to deliver benefits in the current year and will be
complete across all Divisions by the end of 2022.

The Resources Division, which provides teaching and
learning products to support the school curriculum, saw early
demand impacted by school closures in the first quarter but
experienced a strong and pleasing recovery in its UK market
following the return to face-to-face teaching. This produced a
sales rate which exceeded pre-pandemic levels. It is uncertain
how much of this volume was catch-up from earlier weakness,
but it appears that the Division has enjoyed a useful gain
in UK market share. This increase coincided with the
widely commented on supply chain constraints and the
consequent necessity for price increases, all of which tested
the organisation. Inevitably, operating costs increased as a
result and margins suffered. The picture overseas was less
buoyant as different regional effects of the pandemic made
themselves felt. The outlook for RM Resources is positive,
although unpredictable, given the short cycle nature of
the business.

The Assessment Division was again constrained by the
absence of formal school examinations in the UK and the
difficulties in negotiating new contracts overseas consequent
upon lack of an ability to engage directly with customers.
The business delivered a respectable result in the
circumstances. Although the business has good forward
visibility from longer term contracts, performance in 2022
will be affected by a low level of new awards in 2021 and
the extent to which UK school public examinations return
to normal. In the longer term, the increasing attention being
given to on-line examinations and assessment should
support positive progress in this Division.

The Technology Division, providing managed IT services
and software for schools had a steady, if unexciting, year as
schools maintained their systems, irrespective of short-term
attendance. The gradual trend to consolidation of schools
into multi-academy trusts will subtly change the nature of
the customer relationships and the Company will need to
offer a more sophisticated service package. The short-term
performance will be relatively flat but it is noteworthy that
the historically beneficial long-term Building Schools for the
Future contracts no longer make a contribution.

The Board

Neil Martin was appointed CEO, having previously been CFO,
in March 2021. Mark Berry was appointed CFO, after a period
as interim, in September 2021. Further appointments at
below-Board executive level have subsequently been made
to strengthen the management team.

Corporate governance procedures require that I stand down
as Chairman by the ninth anniversary of my appointment,
which occurs in May 2022. Accordingly, the Board has
conducted a process to identify and appoint Helen Stevenson
as my successor and she will assume the Chairmanship the
day after the announcement of the preliminary results in
February. I welcome her and the new executive team and
wish them all, and the Company, well.

Dividend

In the light of the results and the Group’s good cash
performance, the Board considers it appropriate to
recommend the payment of a final dividend of 3.0p/share,
which together with the interim dividend would amount to
a total of 4.7p/share.

Outlook

The short term remains subject to COVID-19 uncertainties,
but the achievements of the Company in 2021 set a firm base
from which to move forward, supported by the benefits of the
current capital investments.

John Poulter
Chairman
14 February 2022

STRATEGIC REPORTCHIEF EXECUTIVE OFFICER'S STATEMENT

RM delivered a resilient performance in 2021 in another year
impacted by COVID-19 with school closures, travel restrictions
and the cancellation of school exams in the UK and Ireland.

Our trading was satisfactory taking into account the market
conditions and the performance highlighted some areas of
our portfolio that were particularly encouraging, such as the
UK market share gains in our Resources Division alongside
some areas which require more focused attention and a
clearer direction such as in our Technology Division.

Another year impacted by COVID-19

COVID-19 continued to impact the sector with UK schools
closed for 8 weeks in the first quarter of 2021 and school
exams cancelled for a second year. School attendance
generally ran at a lower level due to isolation rules which
deteriorated further in the fourth quarter as more children
were forced to study from home. Disruption was not isolated
to the UK and school closures were a common occurrence
around the world, although we did see exams sat in the
majority of geographies in which we operate.

The related restrictions continued to impact the way
we operated with work-from-home guidance and travel
restrictions influencing the way we deliver projects and
progress sales pipelines. Although the organisation has
adapted, the changes have come at a time of significant
change in the sector and across our organisation with
new leadership, organisational structures, and the
delivery of a complex IT programme.

We also saw significant supply chain constraints build
through the year which impacted pricing, margins, and
customer engagement in some parts of the business.
Our procurement teams were agile in establishing
alternative supply channels to support the network and
we did increase prices, but the overall impact was negative.

Given the challenges of the year and the change profile in
our organisation I have been delighted by the response of
our colleagues who, despite facing a number of challenges,
continued to deliver for our customers and each other.

Whilst the current environment continues to remain uncertain
as we enter 2022, with the added financial challenge of rising
inflation impacting our costs and that of our customers, the
pandemic has accelerated a number of important market
trends that are positive to the longer-term outlook of RM.

MARKET TRENDS

The education marketplace is changing. Whilst in part,
this is a direct response to COVID-19, much reflects an
ongoing movement that has been evolving for some time.
Looking beyond the disruption of the current pandemic,
the longer-term market outlook should be positive for RM
and our strategy has been refreshed to ensure it is aligned to
capitalise on the benefit from these trends.

Use of technology in education

Accelerating as schools progress on long
digital maturity journey

Education has traditionally lagged many sectors with respect
to digital penetration, with currently only c.4% of the $6.5tn
global education and training market spend being digital.

In the UK, spend on education technology (defined as spend
on technology and support services, admin software and
digital content and learning) was estimated at c.£2bn in 2019.
UK education budgets remain challenged, but despite this,
it is anticipated that the proportion spent on technology
will increase over the medium term, given the growing
acceptance that technology can influence a reduction in
teacher workload and an improvement in student attainment.
That said, schools are at the start of a long digital maturity
journey, beginning from different places and with different
capabilities and resources.

Digital delivery of assessment

Aggregated school procurement

Growing engagement on digital solutions
post COVID-19 disruption

Growth in larger school groups is key disrupter
in buyer behaviour

COVID-19 has been accountable for a wide-ranging cancellation
of global examinations across a range of education sectors.
This has accelerated a review of the resilience of exam systems
and subsequently the wider value of digital assessment in
not only delivering flexibility and business continuity but also
the value it can bring to user experience and data feedback
into the learning process. Business models across education
sectors from schools to higher education and professional
qualifications are assessing the impact of learners studying
remotely and consuming materials in different ways and
therefore the opportunity for assessment to adapt accordingly.

Millions of exams are sat globally each year, and this continues
to be predominantly on paper. Indicatively in 2019, 94% of
the 38million UK examinations covering schools, professions,
vocation, higher education, and national proficiency tests were
done on paper rather than digitally. The UK is not a leader in
digital assessment and RM works with several customers in
different geographies who are further advanced in their digital
engagement, but it does give an indication of the structural
opportunity that exists globally for digital assessment solutions.

There has been a transition in recent years in England from
schools being maintained and managed by local authorities,
to schools becoming academies and receiving funding
directly from government. Many then come together as a
collection of schools in multi-academy trusts (MATs), the
average size of which continues to grow. This transition
remains a government policy focus and a trend that we
predict will continue.

Larger MATs are more likely to centralise the procurement of
some key services which leads to a demand for consistency
across the school estate and a higher requirement for
professionalism, partnering and demonstration of value
delivery. Trends are also starting to demonstrate an
increasing engagement with outsourced support in areas
beyond teaching and learning. This is a positive dynamic for
RM as a provider of services such as outsourced IT services
with a national scale and reach that is more mature than
many competitors.

School volumes by type of school, England

£2bn – Estimated size of the
UK education technology market

UK outsourced assessments, 2018/19 –
38 million, 94% on paper

National/
Progress

18%

13%

Higher
education

100%

80%

60%

40%

20%

15/16 16/17 17/18 18/19 19/20

20/21 21/22 22/23 23/24 24/25

Forecast

State maintaned
schools

School trusts
< 6 schools

School trusts
> 6 schools

Professional/
Vocational

Source: DfE/consultant advisor

61%

School

Source: consultant advisor

Support
services

17%

45%

Digital
learning

25%

ICT
services

15%

Admin software

Source: consultant advisor

STRATEGIC REPORTLooking ahead

Following my appointment as Chief Executive in the second
quarter of 2021, it was clear that the priority for RM moving
forward should be to establish a clear path to long-term
sustainable growth for the benefit of all stakeholders.

RM is a purpose-led organisation with a rich heritage in
the education sector following almost 50 years of working
exclusively with schools and education bodies globally.
Our business has a unique breadth of knowledge and
expertise, strong brands, market positions and industry
renowned customers and partners. We combine this with a
cash generative business model and a resilient balance sheet
which provides a positive foundation on which to build.

However, RM has not consistently delivered sustainable
growth and the Company needs to adapt its go-to-market
approach and customer propositions to the more
competitive landscape and a market that is changing
at an accelerating rate. Opportunities exist to improve
operational and commercial execution, reduce complexity
and establish clearer accountability.

To address this, we undertook a review of RM’s strategy
and business model in the second half of the year.
This review has been positive in its output and plans
are being progressed which will build on the strong
business foundations and address the opportunities for
improvement that I outlined above. We have made good
early progress in changing the go-to-market divisional
structure, maturing customer propositions and investing
in leadership positions across the Group. Importantly
in 2022, we move into the implementation phase of the
programme to change our IT platform. The organisation
is presently reliant on a legacy technology estate which
results in a higher cost to serve than some competitors,
a broader exposure to inflation and restricted digital and
data capabilities. The transition to the new system, which
should be complete by the end of 2022, will see us more
than close the technology gap with our peers.

STRATEGIC REPORTSTRATEGY

Operational excellence

At a Group level, we have established five simple overarching objectives which are critical to deliver our growth agenda:-

Reach more customers

WHY IS IT IMPORTANT?

WHERE ARE WE TODAY?

IN PROGRESS

Defined target customers

RM Resources

Refreshed propositions

Critical to optimise market share

RM Assessment

New technology platform

RM Technology

New structure and leadership

As an organisation focused on a single sector, customer market share is critical and provides broader commercial
opportunities to a portfolio group. It also highlights the value in looking at adjacent markets in education where
we are not currently focused but where the same customer need exists.

Example opportunity: whilst we are one of the leading brands in the sector, only 2% of UK schools have an
RM Technology managed service in a market where this need is increasing.

Improve share of customer spend

WHY IS IT IMPORTANT?

WHERE ARE WE TODAY?

IN PROGRESS

Optimise return on investment
where cost to sell is high

RM Resources

RM Assessment

RM Technology

RM Group

Refreshed propositions

New technology platform

New structure and leadership

The cost to acquire new customers is relatively high and therefore it is critical that once a relationship is
established, it is maintained, and the share of customer spend maximised.

Example opportunity: almost 90% of UK primary schools buy from the RM Resources brand, TTS. The opportunity
exists to further leverage the trust in this brand through this channel. For example, only one third of TTS customers
buy wider school supplies from their sister resources brand, Consortium.

WHY IS IT IMPORTANT?

WHERE ARE WE TODAY?

IN PROGRESS

Customer focus on trust

Tight budgets

High-touch requirements

Operational efficiency is
behind some competitors

New technology platform

Single automated warehouse

Good customer service and operational efficiency is essential to a sector that delivers a critical public service to
its end customers.

Example opportunity: RM currently trades with a higher cost to serve than some of its competitors due to its legacy
IT platform making it more people intensive to maintain the high customer service levels required by our customers.
As outlined, this platform is being replaced in the year ahead which will more than close the technology gap on our peers.

Attract and retain talent

WHY IS IT IMPORTANT?

WHERE ARE WE TODAY?

IN PROGRESS

Talent has functional expertise

Sector knowledge

Customer empathy

Purpose-led organisation
but very challenging
labour market

Employee engagement focus

New structure and leadership

New technology platform

RM prides itself on a workforce that has functional expertise, deep sector knowledge and customer empathy. Acquiring,
developing and retaining this talent and building a culture of positive employee engagement is a key success factor.

Example opportunity: in the year, we undertook a culture audit and are refreshing our employee engagement
approach based on the feedback. We have also recently appointed a number of senior leaders from the education
sector and specialisms in broader industry such as cloud and managed services, to support the strategy execution
and broader empowerment.

Maintain strong financial discipline

WHY IS IT IMPORTANT?

WHERE ARE WE TODAY?

IN PROGRESS

Need to invest whilst balancing
risk and stakeholder needs

Resilient balance sheet

Good cash generation

Prudent fiscal approach

Large capital programmes
conclude in 2022

RM has a resilient balance sheet, a cash generative business model and a track record of prudent fiscal
management. It is imperative that this is maintained and remains a focus on the path to more ambitious growth.

Example Opportunity: our large multi-year investment programmes will be completed in 2022 facilitating a
reduction in investment spend and delivery of the financial benefits.

STRATEGIC REPORTENABLERS TO UNLOCK GROWTH

New digital and automated platforms

Integrated end-to-end platform and automated warehouse
enable improved customer service and data insight

Portfolio and operating model

New divisional structure and operating model to
ensure the whole is greater than the sum of the parts

Talent and culture

Building talent and inspiring leadership
in a purpose-led organisation

Against the backdrop of these Group-level objectives and
coupled with an assessment of our current execution in light
of the changes in our respective markets, the three Divisions
revisited their strategies to ensure that they were ambitious
and aligned to the growth agenda. This exercise reconfirmed
the need to continue to build on our unique breadth and
depth of domain knowledge, brand strength and capabilities.
It also highlighted the necessity to focus and be clear on the
opportunities where we can grow at scale and sustainably
differentiate in the market. This has crystallised a number of
activities and exciting changes that are critical to our growth
agenda centred around the clarity of the customer need in
a post COVID-19 environment and the impact of the market
trends previously outlined.

Opportunities to unlock growth

Underpinning the five strategic objectives to unlock more
ambitious growth are three key opportunities that we will
progress and mature over the next 18 months.

The new digital and automated platforms that will
be implemented during 2022 constitute a significant
transformation for the Group. Replacing eight core, but
disparate, IT systems alongside consolidating five distribution
centres into a single automated facility will deliver key
benefits which include:

• a secure technology and data estate through connected

Group systems, a common financial system and a
Microsoft cloud estate for resiliency;

•

improved efficiency and customer experience through
automated, integrated processes, self-serve capability,
an integrated service management platform, and a
modern website with improved user interface;

improved revenue opportunities delivered through better
data insight from a single view of the customer, and a
consolidated CRM alongside tailored, targeted market
capabilities and delivery through upgraded digital channels;

• supply chain optimisation through improved warehouse
efficiency and fulfilment performance and integration of
demand with suppliers.

In parallel we have revisited our portfolio and operating
model establishing a new divisional structure with three
leadership teams aligned to the divisional model and market
focus. This provides greater customer and domain focus and
improved go-to-market execution. We are now developing
the operating model to ensure that the value of RM Group is
greater than the sum of its parts. This is being approached in
two ways:

• a focus on leveraging the relationships held in each

Division to bring broader value to our customers and
a greater awareness of the unique breadth of our
Group-wide knowledge and expertise we have in
the sector; and

•

revisiting the operating model to ensure that the
organisation is delivering efficiently and effectively. This
has identified centres of excellence that can deliver value
across the whole Group rather than being separately
delivered in each Division. Initial changes have seen
the creation of a single bid management function and
architecture and digital product development centres.

Talent and culture should always be at the heart of a
successful organisation, and this is particularly important to
RM. We have a strong purpose-led culture and committed
employees who care about education and learners, and
we see exciting opportunities to continue to evolve and
develop that culture. To support employee engagement, we
have undertaken a culture audit, initiated several equality,
diversity and inclusion initiatives and launched a new
quarterly engagement survey which will provide valuable
information to support our activities in this area. In addition,
the establishment of the new leadership structure and the
appointments made to key leadership positions in the
organisation are designed to foster greater empowerment.

Outlook

The evolving market backdrop provides convincing reasons
to believe that the sector is developing in a constructive and
commercially positive way.

The actions taken in the last year and the plans we have
in place to unlock growth will take time to mature and be
fully embedded. With the new IT platform and automated
warehouse expected to be fully operational by the end of
2022 and the changes we are making associated with the
strategy refresh and new leadership structure, we are entering
an 18 month period of transition. Following this, we will move
into a phase whereby we are able to leverage the changes
and investments made in the business alongside a greater
customer and market focus. It is at this stage where we move
beyond pre-COVID-19 levels of financial and operational
performance and will be able to more fully capitalise on the
organisation’s potential to deliver sustainable growth with
greater agility to exploit customer and market opportunities
as they arise in the future.

All of this represents material change for the organisation,
which is essential to achieve its potential and deliver a
sustainable pathway for growth and meet the changing
needs of the education sector. It has been a challenging
time to be involved in delivering and supporting education
over the last two years, but this now feels like an exciting
time for the sector and for RM. Our plans rely on dedicated
and passionate people to be successful and I continue to be
impressed by the commitment of our colleagues and their
desire to not only develop and advance the organisation
but importantly improve educational outcomes for
our customers.

Neil Martin
Chief Executive Officer
14 February 2022

STRATEGIC REPORTBUSINESS MODEL AND OPERATING DIVISIONS

RM RESOURCES

RM is a portfolio organisation with a common vision that aspires to
enable the improvement of education outcomes around the world
through bringing together inspiring resources, digital assessment
solutions and harnessing technology to support and improve
teaching and learning.

We do this through our three business Divisions:

• RM Resources – providing unique and innovative teaching resources

and education supplies to schools and nurseries globally.

• RM Assessment – providing assessment software to help our

customers accelerate their adoption of digital practices and transform
assessment across practice, progress, evidence collection and exams
to unlock teaching and learning benefits.

• RM Technology – providing strategic IT services to UK schools and

colleges that deliver an environment that improves learning outcomes
and makes the most of their IT investments.

Our Divisions are aligned to the trajectory of their respective markets whilst aspiring to bring the breadth of their expertise and
relationships together to create a cohesive organisation, ensuring the resources available to us have the biggest impact:

Strong market positions

Strong and distinctive brands that are well respected in the UK and internationally.

Breadth and depth of knowledge

RM has a rich heritage in education, trading since 1973, and across the Divisions has
established an extensive sector knowledge to enable it to bring unique breadth of value
to the customer.

Market-leading products

We have leading products and services in each of our respective markets focussed on the
domains of curriculum content, digital assessment and the use of technology to improve
education environments.

Insight from working with the
leading organisations in education

We benefit from long relationships with some of the leading organisations in their field
from globally renowned assessment organisations to ministries of education, leading
schools, trusts and nurseries, thought leaders and educators, universities and partners
that include the largest global technology organisations.

This creates a unique network of knowledge and insight with which to create value for
our customers.

Highly-skilled people with deep
domain knowledge

We employ some of the best and most passionate people in the education services sector
combining functional expertise, a deep sector knowledge and customer empathy.

Purpose-led culture

Above all we recognise our role in society and our people are united in seeking to enrich
the lives of learners worldwide.

WHAT WE DO

We improve learning outcomes by providing unique
and innovative teaching resources and education
supplies to schools and nurseries worldwide.
We are the UK market leader with 2 distinctive brands –
TTS and Consortium – whilst also selling internationally
to over 80 countries through a network of distributors or
directly to international school groups.

AMBITION

We will build on the trust of our market-leading position
to continue to grow share as the foremost provider of
resources to improve children's attainment in school
and nursery settings in the UK and internationally.

MARKET FOCUS

Leverage our market leading position and significant
customer reach in the UK to ensure that we are
meeting the evolving needs of educators to deliver the
curriculum to improve child attainment.

Invest internationally, building on our existing presence
in scaleable markets to leverage the TTS brand as
experts in our core strengths of STEAM, robotics,
early years and 21st century skills.

MARKET CHARACTERISTICS

UK Resources

Market

Growth

c.£1bn

0-3%

c.9%

International Resources

Market

Growth

>£1bn

2-5%

<2%

UK Digital Content

Market

Growth

c.£81m

5-10%

WHAT MAKES US DIFFERENT

We work with educationalists, practitioners, and
experts to develop unique ranges which address the
educational goals for learners worldwide.

We offer resources that cover the whole English
curriculum and are closely mapped to the improvement
of learning outcomes.

We are recognised experts and innovators with core
strength in early years, STEAM, robotics and 21st century
skill development.

OPPORTUNITY

APPROACH

• Sell to c.90% of UK primary schools and

• Assess further product penetration opportunities

c.30% of nurseries

• New technology platform will improve digital

• Only ⅓ of existing customers buy both brands

buying experience

•

Increase international penetration

• Follow post-COVID-19 global funding initiatives

Improve operational efficiency

• New technology platform and automated warehouse

STRATEGIC REPORTRM ASSESSMENT

RM TECHNOLOGY

WHAT WE DO

We provide software that helps our customers accelerate
their adoption of digital practices and transform
assessments to unlock teaching and learning benefits.

AMBITION

To become the essential digital assessment partner
to the world’s leading awarding and education
organisations. Innovating approaches to digital
assessment across practice, progress, evidence
collection and exams, and work with customers
throughout the lifelong learning journey.

MARKET FOCUS

Continue to build market share in digital assessment
globally as the market transforms. Focussing on general
school examinations, professional and vocational
awarding organisations and higher education.

MARKET CHARACTERISTICS

Global Assessment Services

Market

Growth

>£1bn

>5%

<5%

Addressable market primarily digital adoption of
paper-based processes.

RM supports 2.5m online tests and 21m online marked
tests across 180 countries.

WHAT MAKES US DIFFERENT

Our customers choose us because we navigate the
journey to digital assessment maturity irrespective of
their start point and make it easier to digitise across
practice, progress, evidence collection and exams.

We stand out because we don’t just provide a
technology platform. Our customers rely on our proven
domain expertise and experiences of working with
the world’s leading organisations to pre-empt and
overcome the challenges and barriers they face.

WHAT WE DO

We are the strategic IT services partner for UK schools
and colleges to deliver a technology environment that
improves learning outcomes and make the most of
IT investments.

AMBITION

To become the preferred technology partner for UK
trusts, schools and colleges and to lead the market
through a period of digital maturity.

MARKET FOCUS

Focussing on the UK schools market, building on our
customer reach of 19% and to improve our share of
customer spend. Focus on the growing need for a
strategic IT partner managing technology for schools.

MARKET CHARACTERISTICS

UK IT Services in Education

Market

Growth

£500m

2-5%

c.12%

Current market size excludes proportion of market
where schools run IT services in-house.

WHAT MAKES US DIFFERENT

Transforming how technology is used in schools today,
supported by almost 50 years of sector experience, and
a wide breadth of specialists and partners.

Provide access to a unique network of knowledge and
insight through our relationships with leading schools
and trusts, governments, global technology partners
and experts across education and technology.

We have the size and scale to maximise opportunities
across the UK, from meeting a simple software need
to supporting a nation-wide solution, and partnering
with others to meet a regional requirement or support
a local school.

OPPORTUNITY

APPROACH

OPPORTUNITY

APPROACH

• Global review of assessment delivery following the

disruption of COVID-19

•

Increase sales capacity to target existing and
adjacent markets

• COVID-19 has increased the need for effective

• Reposition RM as the strategic technology partner

and accessible technology

of choice

• Digital assessment solutions have a growing role in

• Re-position as a leading provider of digital

the learning process

assessment solutions

• 19% of UK schools buy at least one product,
only 2% have a managed IT service from RM

• RM support the leading global assessment

• Leverage experience of working with the leading

• Growth in larger school groups is changing the

brands today

global assessment brands

market need

•

Improve share of customer spend

• New technology platform to improve operational
efficiency, customer acquisition and retention

STRATEGIC REPORT

Value we create for our stakeholders

Educators

Learners

We believe that technology can help make teaching more engaging, encourage greater collaboration
between colleagues and have a positive impact on addressing teacher workloads.

Developing digital and 21st century skills is critical in later life, and equipping learners with the
opportunity early in their development prepares them for whatever comes next.

Governments and
awarding bodies

We innovate approaches to digital assessment across practice, progress, evidence collection and exams,
and we work with customers throughout the lifelong learning journey.

Employees

We are committed to building a workforce which reflects the diversity of the customers and communities
we serve, and to creating an inclusive and flexible workplace where all our employees can be themselves
and succeed on merit. Without diversity of thought, we cannot continue to innovate and grow.

Shareholders

We aim to provide long-term shareholder value creation.

Society

Education plays a crucial role in society and we are passionate about improving educational outcomes
which improves the life chances for people. As a purpose-led organisation this is at the heart of our
colleagues’ passion to deliver great value for all our stakeholders.

A Portfolio Group

RM plc is a portfolio Group that aspires to ensure that the whole is greater than the sum of its parts. It strives to ensure that the
Divisions have the freedom to focus on their market and deliver for their customers. The Group supports by providing a scaleable and
resilient foundation that can effectively and efficiently invest in expertise, provide capital, support strategic initiatives and partnerships
and sponsor cross-divisional customer engagement. The combination should deliver synergies internally and externally and enable
competitive differentiation and customer value. Aligned to this approach, several changes were made in the past year:

• The structure was changed to establish separate leadership teams for each of the three Divisions as previously two Divisions

were operating under a single leadership team.

• A greater focus on collaboration to bring together divisional domain knowledge to support a drive towards a greater share of

customer spend. To support this, we have established a new role on the Executive team. Our Group Strategy and Customer Director
will also lead on Group strategic partnerships.

• A review of the target operating model has identified the opportunity to establish a number of centres of excellence whereby

investment and expertise can be focused in one place rather than separately in each Division. These include bid management,
software architecture and digital product development.

Common purpose and vision

Strategic partnerships & Group customer leverage

RESOURCES

ASSESSMENT

TECHNOLOGY

Curriculum content

Digital assessment

Technology to
improve education

Management structure to enable three leadership teams to improve
go-to-market focus and execution

The Divisions are supported by central corporate function and centres of excellence
that deliver synergies and support Groupwide strategic initiatives

Supporting this model is our operation in India where one third of our colleagues are based. The Indian operation provides services
solely to RM Group companies. Activities include software development, customer and operational support, back-office services
(e.g. customer order entry, IT, Finance and HR) and administration to all the Divisions and the central Group functions.

STRATEGIC REPORTKEY PERFORMANCE INDICATORS

The key performance indicators are being expanded in line with the strategy refresh and there will be a
number of new non-financial measures which are being further developed. These are outlined below
and demonstrate how they are aligned to the five strategic objectives.

Financial measures

Revenue

Adjusted operating profit

Adjusted diluted EPS

2017 2018 2019 2020 2021

Net debt

Cash conversion

Dividends per share

2017 2018 2019 2020 2021

Adjusted operating profit, adjusted diluted EPS, net debt and cash conversion (adjusted) are alternative performance measures (see Note 6).

Business and non-financial measures

To measure performance against our strategy execution we
will begin to measure against the key strategic objectives by
Division or Group as appropriate.

Customer reach

This will look at customer growth by Division.

In order to better understand scope 3 impacts, we are
also gathering data on around 36,000 products that we
sell, including the material composition, manufacturing
methods, supply chain impacts, logistics and end of life
management so we can prioritise them for reduction and
set appropriate targets.

Share of customer spend

Data on emissions by scope is captured on page 44.

This will look at average customer value or product categories
by customer by Division.

Operational excellence

Attract and retain talent

This will look at employee engagement and
diversity measures for the Group.

This will look at operational efficiency metrics by Division.

Female representation measures are captured on page 49.

We will also report on progress towards our sustainability targets:

• Becoming net zero by 20351

• Reducing scope 1 and 2 carbon impacts, against our
2015 baseline, in line with the Government reduction
target of 78% by 2035

We are also striving to improve our racial and ethnic diversity.
We have started a program to enhance the data collection in
the UK to report on racial and ethnic diversity KPIs. Our initial
focus will be to report on diversity among senior positions
and then the wider workforce when we have sufficient data
collected to be representative.

• Becoming net zero across scope 3 ahead of 2050

Maintain financial discipline

1. This covers scope 1 and 2 emissions.

These are captured in the financial measures above.

STRATEGIC REPORT£m£m£mpp18.380%50%100%70%160%15.013.45.81.3210.9189.0185.9223.8221.021.328.027.518.56.621.225.826.413.616.45.67.63.02.015.1PURPOSE, VALUES AND CULTURE

RM is a purpose-led organisation with a strong culture that
binds the three operating Divisions behind a common vision.
As each Division has a different market and product focus,
they each deliver this vision through a different mission
statement. Our purpose, vision and mission statements
support our long-term sustainable growth and value for
our shareholders.

This is powerful for our colleagues and a source of pride as it
enables them to understand how the role they perform in the
organisation contributes to the vision of the organisation and
delivers significant value to wider society.

As a business that operates only in the education sector it
is critical that we understand the market and our customer
needs. Our vision is aligned to the vision of our customers
and therefore helps to ensure a clarity of understanding for
our colleagues on the objectives and values of our customers.
We are all focused on improving educational outcomes which
will fundamentally enrich the lives of learners.

During the year we undertook a culture audit acknowledging
the importance of culture to the long-term success of the
organisation. This involved a staff survey and covered 13
dimensions of culture which was followed up by one-to-one
interviews with leaders and focus groups with employees.

The results highlighted a very high level of cultural alignment
across the Group irrespective of Division or geography with
a strong sense of pride in our purpose and the important
role the organisation plays in education. There was a
clear desire to advance and improve the organisation,
and achieve greater strategic direction and empowerment in
a changing marketplace. This was important input into the
strategy refresh process we undertook in 2021.

Underpinning our culture are our set of behaviours which
inspire our approach and performance:

Consider it Done: We hold ourselves accountable, as
individuals and as a Company, for delivering on our
promises. We can be relied upon to get the job done
for our customers and ourselves. We are tenacious in
delivering positive results and respond energetically
when faced with new challenges.

Make it Simple: We make complex issues easy to
understand and we strive for the simplest solutions that
deliver the most significant results for our customers and
ourselves. We say it as it is and don’t assume that how we
have done it in the past will necessarily be how we do it in
the future.

Win Together: We are at our best when working with our
customers and with our colleagues – motivated by the
belief that diverse teams are much more successful than
the sum of their parts. We strive to see things from the
point of view of others, building trust, showing humility
and working collaboratively to get great results.

Be Brave: We are ambitious, and we push the boundaries
to deliver great results for our customers and for our
business. We do not settle for less than great, or shy
away from the difficult, and we don’t let fear stifle our
true potential.

Be Curious: We have an intense desire to understand
our customers and to imagine new possibilities for our
business and theirs. We are hungry to learn, seek out new
ideas and best practice, to expand our networks and to
develop our understanding. We are inquisitive, creative
and we question how things are and can be done.

These are intended to drive positive and aligned behaviours
throughout the organisation for the benefit of all stakeholders
with whom we do business. Aligned to these behaviours, it
was encouraging for the organisation to have been awarded
the 2021 LinkedIn Talent Award for the Best Culture of
Learning for organisations with employees between 1,000
and 5,000 and clear recognition of the desire of our staff to
develop, learn and be curious.

PURPOSE

Enriching the lives of learners

VISION

Enabling the improvement of educational outcomes around the world...

RESOURCES
Mission

ASSESSMENT
Mission

TECHNOLOGY
Mission

...through our innovative
curriculum resources,
inspiring content and
outstanding service.

...by enhancing the
role digital assessment
solutions play throughout
the lifelong learning
journey.

...by helping educators
harness technology to
improve the learning
environment.

This year we launched “High Five”, a new recognition scheme
for employees that have demonstrated our Five to Drive
behaviours. It supports a strong culture with a shared set
of behaviours that helps foster a real sense of community,
putting recognition at the heart of our Company culture.
High Five is a peer-to-peer recognition scheme and
employees who are recognised by colleagues in
two categories for demonstrating our behaviours,
receiving either a simple ‘thank you’ or a small,
points-based financial reward.

The Board receives regular reports and updates from the
CEO, CFO and General Counsel as well as other members of
the Executive team and the Group. These reports and updates
cover a wide range of matters to ensure that policy, practices
and behaviour in the Group are aligned with the Company’s
purpose, values and strategy and that any issues that may
give rise to concerns are brought to the attention of the
Board. This has included the following:

• A review of strategy, including external support, with
a resulting focussed refresh of the strategic direction
and approach

• Specific reviews on particular Divisions within the business

and key projects

• Workforce data including details with regard to leavers,
joiners, promotions, diversity and length of service

• Any significant customer issues, disputes

• Compliance updates including issues, training, system
availability and information security and data incidents

• Health and safety reports

• Disputes and whistle-blower concerns.

The Board requests further information on any matters that
they consider relevant. The Board requires ongoing updates,
seeks assurance as to the proposed actions to resolve
such matters and receives information on the corrective
actions taken.

STRATEGIC REPORTSECTION 172(1) STATEMENT

The Company’s Directors, individually and collectively, have acted in a way that they consider, in good faith, is most likely to promote
the success of the Company for the benefit of all its members as a whole. The Directors confirm that they have had appropriate regard
to the matters detailed in Section 172 of the Companies Act 2006 in making their decisions.

RM has a diverse and wide community of stakeholders, each with its own interests in and expectations of the Company. The Board
and each Director acknowledges that the success of RM’s strategy is reliant on the support and commitment of all the Company’s
stakeholders. During the year, the Board received reports from the business on engagement with stakeholders and took part in
discussions which considered, where relevant, the impact of the Company’s activities on its key stakeholders. These activities, together
with direct engagement by the Board and individual Directors with the Company’s stakeholders, helped to inform the Board in its
decision-making processes.

Details of the Company’s key stakeholders and how the Board has engaged with them during the year is set out on pages 65 to 67.
This includes details of workforce engagement by the designated Non-Executive Director on page 65 to 66.

As a Board, the role of the Directors is to act as effective and responsible stewards of the Company. RM’s culture promotes high standards
of business ethics and is focused on a long-term sustainable strategy which recognises the Group’s impact on the environment.
Examples of how the Board has had regard during the year to the various factors set out in Section 172(1), and the impact that regard
has had, are set out below.

Board decision

COVID-19 response

Over the course of the year, the Board considered the impact
and effect of the pandemic on the business of RM and of
its decisions on the stakeholders of the Group. The Board
received regular reports from the Executive Directors
throughout the year. When schools were closed early in the
year, the Board held an additional meeting to discuss how
this impacted RM, its customers and other stakeholders
including whether it should furlough staff. The Board regularly
reviewed, discussed and supported the steps taken by the
business to continue to supply schools and support their
IT systems during the pandemic.

Factors considered by the Board in accordance
with Section 172(1) and their consequent effect

Customers and community – Keeping RM’s distribution
centres open to continue to supply schools with the products
they needed for classes whilst maintaining their IT systems
during the various stages of the pandemic. This helped
minimise the impact on students’ education. Helping schools
stay open benefited the wider community, and reinforced
RM’s long-term customer relationships.

Employees – Protecting RM’s employees’ health, safety
and wellbeing during the pandemic has been a priority and
regularly discussed by the Board. The Board has supported
the Company’s decisions to achieve this through reconfigured
operating practices at distribution centres, additional
health support in India, the provision of equipment to assist

employees’ working at home, the provision of wellbeing
support available online and the introduction of extra
measures to aid safe working in the office as employees
returned to the workplace. See discussion on the actions
taken on page 66.

Suppliers – The Board supported various measures taken by
the Group to support suppliers through the pandemic, further
details on page 67.

Government – The Board supported RM’s involvement in
discussions with the Government on how disadvantaged
learners can be assisted with studying at home. Further
details are on page 50.

Shareholders – Minimising the impact of the pandemic
on the Group’s trading performance was an important
consideration in the Board’s deliberations on the Company’s
response to the pandemic.

Environment – Changing RM’s working practices in the last
year, with significantly increased working from home, reduced
the energy consumption of the Group and its carbon usage.
These changes were discussed at the Board during the course
of the pandemic.

Long term and fairness between stakeholders –
Maintaining the operations of the business so as to minimise
the impact on its stakeholders during the disruption caused
by the pandemic was a key consideration in all the Board’s
discussions and decisions in connection with the pandemic.

See also the details about risk elements caused by the
pandemic detailed in the principal risks on page 30.

Board decision

Final and interim dividend payments

The Board made the decision to cancel the 2019 final
dividend as well as the 2020 interim dividend and to award
the final dividend in 2020 and interim dividend in 2021 at
reduced rates. The Board considered the advantages and
disadvantages of the change to the dividend policy in making
these decisions and determined it was the right action to
ensure the Company’s long-term success.

Factors considered by the Board in accordance
with Section 172(1) and their consequent effect

Shareholders – The views of shareholders, RM’s broker and
other analysts on the expected market reaction, were taken
into account. The Board carefully considered the short-term
negative effect on shareholders and the need to manage the
short-term consequences of the COVID-19 pandemic taking
into the account the reduced profitability during this period.

Long term and fairness between stakeholders –
The need to maintain sufficient cash to maintain operations
and pay suppliers and employees and avoid any damage to
its operations that would impact its long-term sustainability.

Board decision

The approval of a new freight operator
providing a national service

The Board was informed of the tender process, the objectives
for the new partner and the companies participating.
Members of the Board had valuable experience in this area
which was factored into the process. They were also updated
on the impact on the timetable caused by the announcement
from the incumbent suppliers that they were ceasing
operations in the UK. The Board approved the appointment
of the preferred new partner.

Factors considered by the Board in accordance
with Section 172(1) and their consequent effect

Suppliers – Developing an important relationship with a new
supplier and as one of its key customers.

Customers – Ensuring that the Company continued to
provide a good service to customers was a key consideration
in this appointment. The Board supported the process, and
the selection of a new supplier, on the basis of the service it
will provide customers, whilst maintaining and enhancing
RM’s reputation as a reliable partner.

Environment – The consolidation of deliveries using one
freight operator at a single site will enable a more efficient
logistics operation. This will allow orders to be delivered
as one parcel from one location rather than as separate
deliveries from each of the five previous distribution centres.
This consolidation will also provide the opportunity for
faster deployment of innovations that reduce environmental
impacts associated with freight.

Long term – The importance of working with a reliable
freight provider that would provide a good service across the
UK in order to maintain RM’s reputation and its relationship
with customers.

STRATEGIC REPORTFurther information on how the Board have fulfilled their Section 172(1) duties can be found throughout
the Strategic and Governance Reports and the following sections are incorporated into this report.

NON-FINANCIAL INFORMATION STATEMENT
NON-FINANCIAL INFORMATION STATEMENT

Section 172(1) duties

Section

Consequences of decision
in the long term

Business Model

Going Concern and Viability Statement

Principal Risks and Uncertainties

Interest of employees

Sustainability Report (Workforce)

Stakeholder Engagement (Employees)

Stakeholder Engagement (Suppliers and Partners)

CEO Report

Foster relationships with
suppliers, customers and others

Impact on community
and environment

Maintaining high standards of
business conduct

Purpose, Values and Culture

Sustainability Report (Governance)

Acting fairly between members

Stakeholder Engagement (Shareholders)

Sustainability Report (Environmental Policy and Responsibility) and TCFD Report

40-47

Sustainability Report (Community)

Stakeholder Engagement (Environment/Community)

Pages

12-16

36-39

27-31

48-50

65-66

50-51

20-21

51-54

The Strategic Report (including the Sustainability Report) together with the Directors’ Report, Corporate Governance Report and
Audit Committee Report provide details of the non-financial matters required by sections 414CA and 414CB of the Companies Act 2006.

Reporting area

Policies and related due diligence and
outcomes

Principal risks

Environmental

Environmental Policy (pages 40-47)

Employees

Equal Opportunities Policy

Health and Safety Policy (page 53)

Social and community

Safeguarding Policy (page 53)

Respect for
human rights

Anti-corruption and
anti-bribery

Annual Modern Slavery Statement (page 53)

Data Protection Policy (page 52)

Supplier Code of Conduct (page 67)

Anti-Bribery Policy (page 51),

Anti-Money Laundering Policy (page 51)

Share Dealing Code (page 54)

RM considers the impact of climate-related
risks across the whole business
(see Environmental Risk on page 29).

RM reflects diversity and health and safety risks
in the People Risk section on page 29.

RM reflects safeguarding risk in the
Operational Execution Risk on page 27.

RM considers these risks with its suppliers
on page 67 and Data and Business Continuity
on page 28.

RM reflects anti-bribery and corruption risks in its
Operational Execution Risk on page 27.

See pages 12 to 16 for the description of the business model and page 18 for KPIs and non-financial targets.

Environmental Policy and Reporting

The Environmental Policy and Reporting section in the Sustainability Report on pages 40 to 47 is incorporated into this report.

Workforce

The section on Workforce in the Sustainability Report on pages 48 to 50 is incorporated into this report.

MANAGING THE GROUP'S RISKS

The management of the business and the execution of
the Company’s strategy are subject to a number of risks.
The Company has a structured approach to the assessment
and management of risks.

A detailed risk register is maintained, in which risks are:

• organised under the following categories: political,
strategic, operational, financial and emerging; and

• assessed in terms of probability of the risk occurring and

its potential impact on the Group and its key stakeholders.

RM assesses both the inherent risk, before any mitigating actions,
and the residual risk after such actions have been taken.

The Company also identifies any other activities that could
be undertaken to further mitigate risk where it is considered
too high. Whilst RM’s risk management systems are designed
to reduce risk as far as possible, the Company cannot
eliminate all risks.

During 2020 and into 2021, the Executive Response Group
for Business Continuity was activated and met regularly,
led by the CEO, to manage RM’s response to the COVID-19
pandemic. Whilst there was significant impact on the Group’s
operations, during the pandemic, RM has overall continued to
operate successfully and its risk management processes have
continued to operate as normal.

STRATEGIC REPORT

Emerging risks are those that do not currently have a
material impact on the business but have a reasonable
likelihood of impacting future strategy or operations.
Details of emerging risks, as a separate category of risk, are
identified and analysed, and mitigating actions proposed
and monitored as part of the risk management processes.
These risks are reviewed following the same process as for
principal risks. Whilst there are a number of risks that the
Company identifies and manages, currently, none of these
are expected to become future principal risks. Environmental
risks were an emerging risk but are now captured as a
principal risk based on an analysis of the probability and
potential impact. Current emerging risks include risks relating
to future pandemics, changes in government assessment
policy, the impact of political problems in Asia and evolving
climate change risks.

The full register including emerging risks, is reviewed at least
annually by each Division to ensure that the risks that could
potentially affect each Division are properly captured. The
register also includes a summary of the mitigation plans
for those risks and the person responsible for these. These
risks and their mitigation are monitored on a continual
basis by each Division. This register is then consolidated and
Group-wide risks added, to ensure that the register covers
the entire Group’s operations. This is then reviewed by the
Executive Committee.

The Audit Committee and Group Internal Audit provide
assurance that the risk management systems are effective.

The Board reviews the principal and emerging risks faced
by the Group and approves the Group Risk Register at least
twice a year.

The Group has a Risk Appetite and Tolerances Policy which
sets out the overarching risk tolerances across the Group.
There is zero tolerance for risks which:

• harm its employees, customers, learners or the

general public;

• create significant, unmanaged, adverse,

reputational damage;

•

lead to the loss of any application or IT service deemed
critical for RM customers or internal users or the loss of
any service beyond the ascertained maximum acceptable
outage; or

• would cause any failure to comply with legal and

regulatory requirements.

The Board confirms that it has carried out a robust
assessment of the principal and emerging risks faced by the
Group and appropriate processes have been put in place to
monitor and mitigate them. Further details are also set out in
the Corporate Governance Report.

RM has identified the principal risks set out in the table
below and it has continued to monitor these in 2021. These
are the risks with the highest probability and impact on the
business. While these risks are largely unchanged since last
year, the key changes reflect the impact of COVID-19 and
Brexit changes including supply chain issues, inflation and
workforce retention.

In addition, to these there are other risks that are reviewed
managed and mitigated throughout the year. The arrow in the
Trend column indicates the year-on-year change in the risk.

Link to strategic objectives:

Reach more customers

Improve share of wallet

Operational excellence

Attract and retain talent

Strong financial discipline

Year-on-year trend:

Increasing risk

Decreasing risk

Unchanged from previous year

PRINCIPAL RISKS AND UNCERTAINTIES

Risk and
categorisation Description and likely impact

Mitigation

Public policy
(Political Risk)

The majority of RM’s business is funded
from UK government sources. Changes
in political administration, or changes
in policy priorities, might result in
major changes to the exam system or a
reduction in education spending, leading
to a decline in market size.

UK government funding in the education
sector is constrained by fiscal policy.

Global economic conditions might result
in a reduction in budgets available for
public spending generally and education
spending specifically in the area in which
RM specialises.

The Company reviews the education policy
environment by the regular monitoring of
policy positions through our involvement
with industry trade bodies and responding to
government consultations.

The Group’s three Divisions have diverse revenue
streams and product/service offerings which
dilutes the impact of any change.

The Company’s strategy is to focus on areas
of education spend which are important
to meet customers’ objectives. Where the
revenue of an individual business is in decline,
management seeks to ensure that the cost base
is adjusted accordingly.

Trend and
likelihood

The likelihood of
this is currently
considered low.

Education
practice
(Political Risk)

Education and assessment practices
and priorities may change and, as a
result, RM’s products and services may
no longer meet customer requirements,
leading to a risk of lower revenue.

Operational
execution
(Operational
Risk)

RM provides sophisticated products
and services, which require a high level
of technical expertise to develop and
support, and on which its customers
place a high level of reliance. Any
significant operational or system failure
would result in reputational damage and
increased costs.

RM is engaged in the delivery of large,
multi-year projects, typically involving
the development and integration of
complex IT systems and may have
liability for failure to deliver on time.

RM’s increasing international business
makes it subject to laws in other
countries and higher risk jurisdictions.

RM employees enter school premises to
provide services and should be properly
cleared to do so.

The Company maintains knowledge of current
education practice and priorities through close
relationships with customers.

The Company is evolving its product and
service offering to help its customers with their
developing requirements.

The Company invests in maintaining a high level of
technical expertise (see also the People risk below).

Internal management control processes are
in place to govern the delivery of all projects
(including internal projects), including regular
reviews by relevant management. The operational
and financial performance of projects, including
future obligations, the expected costs of these
and potential risks are regularly monitored by
management and, as appropriate, the Board and
material projects are audited.

The Company has internal policies and procedures
across a wide range of areas including bribery
and corruption, health and safety, privacy,
employment, competition law and tax which are
regularly monitored and reviewed to ensure the
Company assesses and takes account of higher
risks levels and complies with all relevant laws and
regulations.

Procedures are adopted to ensure that all
employees are properly checked and receive
training before entering any school premises.
Further information is provided on this on page 53.

The likelihood of
this is currently
considered low.

This has
increased in
potential impact
and likelihood
due to the
implementation
of major
projects (see
Transformation
Risk section
below) and the
increasingly
competitive
market for talent
(see People risk
on page 29).

STRATEGIC REPORT

Risk and
categorisation Description and likely impact

Mitigation

Trend and
likelihood

Risk and
categorisation Description and likely impact

Mitigation

Supply Chain
(Operational
Risk)

RM is reliant on the cross-border
movement of goods which have
been affected by new Brexit related
requirements and the impact on supply
chains of the COVID-19 pandemic.

Data and
business
continuity
(Operational
and Emerging
Risk)

RM is engaged in storing and processing
personal data, where accuracy, privacy
and security are important.

Any significant security breach could
damage reputation, impact future profit
streams, lead to potential regulatory
action and raise concerns with affected
schools, parents and students.

The Group would be significantly
impacted if, as a result of a major
incident, one of its key buildings,
systems, key supply chain partners or
infrastructure components could not
function for a long period of time or at a
key time.

This has
increased
in potential
impact and
likelihood due
to the impact
of COVID-19
and new rules
of transport of
goods between
the UK and EU.

The likelihood
of this is
considered to
have increased
due to a
higher level of
information
security risks
from greater
homeworking by
RM’s customers,
a general
increase in
cyber-attacks
in the UK and
the risk from the
implementation
of major
projects (see
Transformation
Risk section
overleaf).

Changes resulting from Brexit have been managed
through the adoption of new processes to meet
the new requirements; potential improvements in
this process will continue to be assessed.

The Company continues to review and broaden
its sourcing and freight forwarding options,
has amended its safety stock policies and
has pre-committed with suppliers to increase
supply volumes.

The Company has made a commitment to
maintain effective Information Security and
Business Continuity management systems
maintaining ISO27001 and ISO22301 certifications
for key business areas to demonstrate the
robustness and effectiveness of those systems.
These are externally audited.

The Company has a rolling investment programme
managed by a dedicated security and compliance
function and overseen by the Group Security and
Business Continuity Committee, which reports into
the Group Executive Committee. This programme
covers data integrity and protection, defence
against external threats (including cyber risks) and
business continuity planning.

The Company analyses all information security
and data protection incidents (including their root
cause), changes in the regulatory framework, and
breaches that have occurred in other companies
to identify opportunities for improvement.

The Group seeks to protect itself against
the consequences of a major incident by
implementing a series of back-up and safety
measures. It also manages risks with key suppliers
by regularly reviewing their security and business
continuity systems, conducting assessments and
running joint tests.

There are strict access controls and permissions
across business applications and systems,
these are regularly monitored and reviewed and
improvements are made on an ongoing basis.

The Group has cyber insurance and property and
business interruption insurance cover.

Environmental
(Operational
Risk)

Changes required by legislation,
customer requirements and the
Group’s environmental targets impact
its current operations.

Legislation and standards are monitored and
plans put in place to manage compliance,
for example to reduce the compliance costs
associated with new packaging regulations.

People
(Operational
Risk

RM’s business depends on highly skilled,
diverse employees. Failing to recruit and
retain such employees could impact
operationally on RM’s ability to deliver
contractual commitments. There may
also be an impact on costs in such
recruitment and retention.

The Company seeks to be an attractive employer
and regularly monitors the engagement
of its employees. The Company has talent
management and career planning programmes.

The Company has a retention and recruitment
strategy in place to incentivise and retain its
skilled employees as well as recruiting new talent.

Failing to make sure RM’s colleagues
are safe at work would impact the
Company’s attractiveness as an
employer, impact RM operationally
and lead to financial penalties and
reputation damage.

The Company provides training to employees,
has an incident reporting system, and monitors
employee health, safety and wellbeing through
various groups and reports.

Transformation
(Operational
Risk)

Issues in implementing major programs
could lead to business disruption and
loss of intended benefits.

Steering committees are established for all major
programs which will include a member of the
Executive Committee. A number of mechanisms
are in place to monitor the ongoing impact of the
various activities, including where appropriate
staff consultations and satisfaction surveys, and
ongoing customer feedback.

Currently there are two major programmes
to develop a new automated warehouse at
Harrier Park, Hucknall for the RM Resources
Division and migration to new CRM and ERP
systems across the Company. The Company
has prioritised the delivery of these projects
and utilised the services of third parties where
needed, ensuring the Company has a scalable
platform to support current commitments and
growth plans.

The Board is kept appraised of the current status
of such activities and projects on a regular basis.

Trend and
likelihood

The potential
impact of this
has increased
due to new
legislation,
customer
requirements
and the change
required to meet
RM’s own targets
(see page 47).

The potential
impact and
likelihood of this
is considered to
have increased
in relation to
recruitment as
the market for
key IT talent has
become tighter.

The potential
impact and
likelihood of this
is considered to
have increased
as these projects
are now fully
underway.

STRATEGIC REPORT

Risk and
categorisation Description and likely impact

Mitigation

Trend and
likelihood

Risk and
categorisation Description and likely impact

Mitigation

The Company actively monitors technology and
market developments and invests to keep its
existing products, services and sales methods
up-to-date, as well as seeking new opportunities
and initiatives.

The Group works with teachers and educators to
understand opportunities and requirements.

The impact
and potential
likelihood of this
is considered
unchanged.

Pensions
(Financial Risk)

The Group operates two defined
benefit pension schemes in the UK
(the “RM Education Scheme” and
the “CARE Scheme” respectively)
both of which are closed to future
accrual. It also participates in a third
defined benefit pension scheme
(the “Platinum Scheme”).

Scheme deficits can adversely impact
the net assets position of the trading
subsidiaries RM Education Limited and
RM Educational Resources Limited.

Pension costs can be significant in
respect of staff that transfer across to
us, where they are members of Local
Authority pension schemes.

The Company evaluates risk mitigation proposals
with the trustees of these respective Schemes.

The Platinum Scheme is a multi-employer
scheme over which the Company has no direct
control. However, due to the small number of
the Company’s former employees who are in
this Scheme, the risk to the Company from this
Scheme is limited.

The Company assesses the potential pension
costs of staff from other employers, who would
transfer across to the Company, and takes this
into account in its bids for new contracts.

The Company now has one consolidated Trustee
and one common lead actuary. This improves the
ability to leverage expertise.

The Company invests in maintaining a high level
of technical expertise and in building effective
working relationships with its customers. The
Company has in place a range of customer
satisfaction programmes, which include
management processes designed to address
the causes of customers’ dissatisfaction.

The impact
and potential
likelihood of this
is considered
unchanged.

Treasury
(Financial Risk)

The Group is exposed to treasury risks
including fluctuating exchange rates
and liquidity.

The Company regularly monitors treasury risks.
It actively looks to create natural currency
hedges where possible balancing foreign
currency sales and purchase levels and hedges
net balances 9–12 months into the future for
material imbalances.

The Company remains cautious with liquidity risk
and carefully manages its debt leverage position.

The impact
and potential
likelihood of this
is considered
unchanged.

Trend and
likelihood

The likelihood
and potential
impact of this
has reduced
due to a higher
level of inflation
and interest
risk hedging
implemented
and improved
deficit position.

The IT market and elements of the
education resources market are subject
to change. As a result of inappropriate
technology, product and marketing
choices or a failure to adopt and
develop new technologies quickly
enough, difficulties recruiting and
retaining talent, the Group’s products
and services might become unattractive
to its customer base, or new market
opportunities missed.

The Group’s continued success depends
on developing and/or sourcing a stream
of innovative and effective products for
the education market and marketing
these effectively to customers.

The performance of the RM Technology
and RM Assessment Divisions is
dependent on the winning and
extension of long-term contracts
with an increasing diversity of
customer base of government, local
authorities, examination boards and
commercial customers

Innovation
(Strategic Risk)

Dependence
on key
contracts
(Strategic Risk)

Impact of
the COVID-19
pandemic
(Operational
Risk)

The impact of the COVID-19
pandemic has:

The Company manages its relationship with its
customers, supplier and other stakeholders.

• put pressure on those with whom
the Company trades with resultant
risks from customer closures, pricing
pressures and service delivery
pressures from delays to exams;

• caused general failures in the

education system to deliver exams
on time which has knock-on effects
on the RM Assessment Division; and

•

led to increases in the cost of
products and services which could
impact revenue and reduce profits.

It works closely with customers to:

• avoid potential bad debts and to manage the
impact of costs increases from key suppliers; and

• as it did after the exam cancellations in 2020,
manage the consequence of the cancellation
of summer 2021 exams.

The Company keeps its costs under review,
assesses potential alternative sources of supply
and revises its pricing to reflect cost increases.

The impact
and potential
likelihood of this
is considered
unchanged since
last year except
in relation to
emerging costs
increases in the
supply chain.

STRATEGIC REPORT

CHIEF FINANCIAL OFFICER'S STATEMENT

Overview

RM’s financial performance for the period was resilient despite being materially impacted by school closures, and the cancellation
of all 2021 UK school exams.

Group revenue increased by 11.6% to £210.9m (2020: £189.0m) driven by strong trading in RM Resources which recovered quickly
following the re-opening of UK schools in March 2021. Revenue growth was driven primarily by demand for UK curriculum resources as
schools focused on curriculum spending to support outdoor teaching, physical education and pupil well-being, alongside managing
COVID-19 transmission risks. Revenues in RM Assessment were broadly in line with prior year with the partial recovery of global exam
activity being offset by a significant customer in-sourcing a contract in 2020. Hardware and connectivity sales in RM Technology
improved reflecting the ongoing digitisation of school infrastructure.

Adjusted operating profit3 increased by 22.5% to £18.5m (2020: £15.1m) and was driven by revenue growth partially offset by increased
operating costs. Statutory operating profit decreased by 33.9% to £7.0m (2020: £10.6m) primarily as a result of the accounting policy
change described below.

The Group continued to experience higher frictional costs in respect of freight and Brexit; increased costs associated with the
resumption of key projects which were paused in 2020, and the non-repeat of prior year cost savings associated with our response
to the COVID-19 pandemic. In addition, the Group continued to face significant wage inflation pressure through the year, most
significantly in India.

Net debt3 closed the year at £18.3m (2020: £1.3m). The £17.0m net cash outflow reflected good operating cash generation, offset
by planned spending on two large capital programmes, Project Villa, which comprises the consolidation of five distribution centres
into a single automated facility, and Project Evolution, which comprises the implementation of a new Group-wide IT platform.
The completion of both programmes was extended by six months to ensure their successful implementation. This was due to a
need to de-risk the transition due to its inherent complexity and the impact of ongoing COVID-19 restrictions through the year.
Both programmes are expected to complete in 2022 and the Group continues to utilise its £70m revolving credit facility to fund the
investments in them.

Group Financial Performance

Income statement

Group revenue increased by 11.6% to £210.9m (2020: £189.0m).

The pandemic continued to impact revenues in the UK and internationally. UK revenues increased by 9.8% with
international revenues up 24.2%.

Adjusted operating profit margins3 improved to 8.8% (2020: 8.0%). Adjusted operating profit improved by 22.5% to £18.5m
(2020: £15.1m). Statutory operating profit decreased by 33.9% to £7.0m (2020: £10.6m).

In order to provide an understanding of underlying business performance, certain costs are identified as ‘adjustments’ 2 to underlying
business performance.

In 2021 Adjusted items comprised the following:

Amortisation charges associated with acquisition related intangible assets

Stock obsolescence associated with revised warehouse strategy4

Gain on sale of legacy property4

Dual running property & licence costs4

Gain on sale of legacy investment

Onerous lease commitments

Pension GMP

Restructuring costs

Net adjustments before SaaS related expenses

IT platform costs incurred and expensed under new accounting guidance2

Total adjustments²

2021
£m

2.0

(1.4)

2.0

0.5

3.1

8.3

11.5

2020
£m

2.0

0.4

(0.7)

0.6

(0.7)

0.2

1.0

2.8

1.7

4.5

4. The majority of adjusted items relate to planned spending on our two large capital programmes. These items have been disclosed

as adjustments because they are material to the relevant segment.

2021¹

2020¹

(i)

£3.1m of net adjustments relate to amortisation of acquisition intangibles, dual running and one-off property costs

£m

Revenue

Operating profit

Profit before tax

Tax

Profit after tax

Adjusted3

Adjustment²

Statutory

Adjusted3

Adjustment²

Statutory

210.9

18.5

17.1

(3.3)

13.8

(11.5)

1.9

(9.6)

210.9

189.0

7.0

5.6

(1.4)

4.2

15.1

14.0

(2.7)

11.4

(4.5)

0.8

(3.7)

189.0

10.6

9.5

(1.9)

7.6

1. Following the IFRS interpretations committee (“IFRIC”) agenda decision, we have changed our accounting treatment and policy for

IAS38 Intangible Assets accordingly. Prior year comparatives have been restated to derecognise previously capitalised SaaS related costs

amounting to £1.7 million. See Note 33.

2. Adjustments reflect the amortisation of acquisition related intangible assets; major investment strategy costs including dual run costs, profits on

sale of non-core assets, and other property related items. Further details can be found in Note 6.

3. Non-GAAP measures. See Note 6

in relation to the warehouse consolidation programme; and

(ii)

Implementation of Software as a Service (“SaaS”) accounting guidance

During the year the Group continued with its implementation of a new Group-wide IT platform. Following the IFRS interpretations committee

(“IFRIC”) agenda decision, we have changed our accounting treatment and policy for IAS38 Intangible Assets accordingly. The Directors

determined that £8.3m of SaaS related costs incurred during FY21 no longer meet the criteria for recognition as an asset under IAS38.

Accordingly, this amount has instead been expensed to the income statement. A total of £6.9 million SaaS related costs incurred in the year have

been capitalised and recognised on the balance sheet as an intangible asset.

Prior year comparatives have been restated to derecognise previously capitalised SaaS related costs amounting to £1.7m.

Taking into consideration the adjustments of £11.5m (2020: £4.5m), statutory operating profit decreased to £7.0m (2020: £10.6m).

Statutory profit before tax fell to £5.6m (2020: £9.5m) after deducting net interest charges of £1.4m in relation to the Group’s credit
facility and finance costs related to the defined benefit pension schemes.

The total tax charge for the year was £1.4m (2020: £1.9m). The Group’s tax charge measured as a percentage of profit before tax,
was 25.3% (2020: 19.9%) driven mainly by an increase in deferred tax rate which was partially offset by the effect of indexation
on the sale of property.

STRATEGIC REPORT

Statutory profit after tax decreased 45% to £4.2m (2020: £7.6m).

Adjusted diluted earnings per share3 increased to 16.4 pence
(2020: 13.6 pence). Statutory basic earnings per share were
5.0 pence (2020: 9.2 pence) and statutory diluted earnings per
share were 5.0 pence (2020: 9.1 pence).

Cash flow

RM generated cash from operations for the year of £8.4m
(2020: £25.9m).

Cash from operations is after charging £6.5m of SaaS related
costs incurred during FY21 which no longer meet the criteria
for recognition as an asset under IAS38. Net working capital
outflows for the year were £3.5m as the business returned to
growth, and the settlement of £3.5m of VAT liabilities that were
deferred from FY20 under the government’s deferral scheme.

The use of cash generated comprised net capital expenditure
of £11.8m (2020: £2.1m), contributions to the defined benefit
pension schemes of £4.4m (2020: £4.1m), and tax payments of
£0.1m (2020: £2.6m). Dividend payments were £3.9m having
been reinstated following their suspension in 2020.

Divisional performance

RM RESOURCES

RM Resources revenues increased by 24% to £114.4m
(2020: £92.4m) driven by strong curriculum sales following
the re-opening of schools in March. UK education revenue
increased by 22% with international revenues up 39%.

Divisional operating profit increased to £10.1m (2020: £3.1m)
and operating margins increased to 8.8% (2020: 3.3%).
The increase was predominantly driven by higher revenues
partially offset by higher product and freight costs associated
with COVID-19 and Brexit, reduced COVID-19 cost saving
benefits, and the resumption of the digital and automation
projects which were paused in 2020. Uncertainty remains
regarding the impact of the pandemic on supply chains in
both the UK and International markets.

RM Resources continues to make good progress with its
warehouse consolidation programme, with the fit out
of the new warehouse and associated office space now
complete. The automation and systems integration prior
to the majority of inventory transfer is ongoing, and two of
the five warehouses have now been exited with one exited
in the period.

Revenue in the UK increased by 22% to £98.4m (2020: £81.0m)
despite schools closed to face-to-face teaching for a similar
period in 2021 vs. 2020. Our TTS brand performed strongly,
particularly in curriculum sales supporting outdoor
teaching, physical education, pupil wellbeing and COVID-19
transmission management, benefitting from its differentiated
position and innovative, own-developed product portfolio.

International

International sales comprise two key channels,
international distributors, through which RM Resources
sells own-developed products to over 80 countries, and
international English curriculum schools to whom it sells a
wider portfolio of education supplies. International revenues
increased by 39% to £16.0m (2020: £11.5m) benefiting from
reduced restrictions in a number of key territories vs. the prior
year however volumes remain depressed vs. pre pandemic
levels as COVID-19 continues to impact the international
landscape with regard to pupil attendance.

RM ASSESSMENT

RM Assessment provides IT software and end-to-end digital
assessment services to enable online exam marking, online
testing and the management and analysis of educational
data. Customers include government ministries, exam boards
and professional awarding bodies in the UK and overseas.

Revenue increased by 1% on the prior year to £31.9m
(2020: £31.6m) with the partial recovery of global
examination activity in 2021 being offset by a significant
customer in-sourcing a contract in 2020. Revenues remain
heavily impacted by lower examination volumes with UK
general exams cancelled and reduced international exam
activity being offset by an increase in professional and
language qualification activity.

2021

RM Customers Exam activity

UK School
Exams

UK Other

International

vs 2020

+10%

+90%

+45%

Exam activity
vs 2019

-95%

+85%

-30%

Adjusted operating profit fell by 14% on the prior year to
£5.7m (2020: £6.6m), with operating margins decreasing
to 17.9% (2020: 20.9%).

Dividend

The Board took the decision not to pay a 2019 final dividend
or a 2020 interim dividend as a result of the pandemic.
However, whilst COVID-19 has continued to impact the
business, the Board reinstated the 2020 final dividend and
paid an interim dividend in the year of 1.7p (2020: nil).

In addition, the Board proposes a 2021 final dividend of 3.0
pence per share (2020: 3.0p) which is subject to shareholder
approval. The estimated cost of the final dividend proposed
is £2.5m.

The Board is committed to a long-term sustainable dividend
policy and the Company has £35.8m of distributable
reserves, as at 30 November 2021, available to support the
dividend policy.

RM plc is a non-trading investment holding Company
and derives its profits from dividends paid by subsidiary
companies. The Directors consider the Group’s capital
structure and dividend policy at least twice a year, ahead of
announcing results and during the annual budgeting process,
looking at longer-term sustainability. The Directors do so in
the context of the Company’s ability to execute the strategy
and to invest in opportunities to grow the business and
enhance shareholder value.

The dividend policy is influenced by a number of the principal
risks identified in the table of ‘Principal and Emerging Risks
and Uncertainties’ set out above which could have a negative
impact on the performance of the Group or its ability to
distribute profits.

COVID-19 disruption relating to ongoing international travel
restrictions and global lockdown measures continues to
adversely impact the sales pipeline development. Wage
inflation pressure through the year increased delivery
costs, driven in part by a shortage of in-demand skilled
developers in India.

RM TECHNOLOGY

Revenue decreased by 1% to £64.6m (2020: £65.0m) as
the Division showed its resilience to UK school closures as
schools continued to require technology support with the
challenge of progressing new opportunities.

Adjusted operating profit however decreased by 24% to
£7.1m (2020: £9.3m), the key drivers being the combination
of lower gross margins arising from a higher proportion of
hardware sales, together with increased operating costs post
lockdown, and the absence of prior-year, one-off benefits.

Services

The Services offering is primarily the provision of IT
outsourcing and associated technology services (managed
services) and managed broadband connectivity to UK
schools and colleges. Total Services revenues declined
by 1% to £53.6m (2020: £54.0m) with managed services
revenues declining 4% to £40.5m (2020: £42.0m). This was
driven primarily by a reduction in revenues from long term
contracts and a slight reduction in site numbers through the
year as converting the sales pipeline became challenging.
Connectivity increased 9% to £13.1m (2020: £12.0m).

Digital Software Platforms

The Digital Software Platform offering covers a number of
cloud-based products and services such as RM Integris (school
management system), RM Unify (authentication and identity
management system) and RM SafetyNet (internet filtering
system) as well as other content, finance and network software
offerings. Digital Platforms revenues increased marginally to
£11.0m (2020: £10.9m).

STRATEGIC REPORTFor going concern purposes, the Group has assessed a base
case scenario that assumes no significant downturn in UK
or International markets occurs from that experienced in the
year to 30 November 2021. The base case also incorporates
a reduced level of investment expenditure in 2022 versus
that incurred in 2021 relating to the anticipated completion
of its two large capital programmes and assumes a return
to shareholders through dividends. Under that base case
RM continues to maintain significant headroom against the
committed facility and are within the Group’s covenants.

The Group has assessed a further severe downside scenario
that adjusts the base assumptions to include:

• Further school closures for March through to May 2022 at
similar levels of trading experienced in 2021, comprising a
c.30% reduction in divisional revenue in those months;

• Reduced International trading and exams, including an
c.25% reduction in International general school exams
against budget;

• Assumes the UK exams that have been cancelled in 2021

are also cancelled in 2022;

• Slower pipeline conversion, a c .50% of budgeted

annuity contracts in RM Assessment and RM Technology
being achieved;

• Benefits from our ERP programme are delayed by

approximately 1 year;

• Business disruption for 2 months in our RM Resources

Division when the warehouse automation goes live in 2022
reducing order intake by c .50% in those 2 months;

• Minimal cost mitigations and no significant cash

flow deferrals.

The Directors do not believe that all these assumptions
occurring together are plausible, but under these scenarios, in
aggregate, the Company continues to have good headroom
against the facility and complies with bank covenants until
the facility concludes. Having considered the severity of
this scenario, the Board considers this to be an appropriate
worst case scenario.

The Board’s assessment of the likelihood of a further
downside scenario is remote, particularly with the continued
vaccine booster/roll out programmes and lifting of restrictions
in key countries and the indications from most governments
worldwide that they intend to lift remaining restrictions as
soon as practicable.

Therefore, the Board has a reasonable expectation that the
Group has adequate resources to continue in operational
existence and meet its liabilities as they fall due for a period
of not less than 12 months from the date of approval of these
Financial Statements. For this reason, the Group continues to
adopt the going concern basis of accounting in preparing the
annual Financial Statements.

Financial viability statement

The financial viability statement is set out on pages 38 to 39.

Mark Berry
Chief Financial Officer
14 February 2022

Defined benefit pension schemes

Going concern

The Company operates two defined benefit pension
schemes (“RM Education Scheme” and “Care Scheme”)
and participates in a third, multi-employer, defined benefit
pension scheme (the “Platinum Scheme”). Following
the closure of one warehouse during the prior year
(which impacted the Platinum Scheme), all schemes
are now closed to future accrual of benefits.

The IAS19 net position (pre-tax) across the Group improved
by £49.1m to a surplus of £30.4m (2020: £18.7m deficit) with
both the RM Education Scheme and the Platinum Scheme
being in surplus. The improvement was driven primarily by
better than expected returns on scheme assets, together
with an increase in the discount rate, which is based on
corporate bond yields, both of which were partially offset
by an increase in inflation.

The Group deficit recovery plan payments across all schemes
in 2021 were £4.4m (2020: £4.1m). The triennial valuation as at
31 May 2021 is nearing completion.

Treasury management

The Company’s financial position is supported by a
committed revolving credit facility of £70million that is
shared between two banks, HSBC and Barclays. It also has
an additional uncommitted accordion arrangement for a
further £30million, enabling the Group to extend the facility
to £100m. The facility was extended during the year, and
is now committed to July 2023 and retains the option of a
further 1-year extension. The associated financial covenants
are based on the definition of finance leases prior to the
implementation of the accounting standard, IFRS16.
The Group is reliant on the facility in the short term to
manage its net current liability position.

Treasury activities are managed centrally for the Group
including banking relationships and foreign currency
hedging. The Group has foreign currency denominated costs
that outweigh foreign currency denominated revenues and
therefore increased currency volatility creates an exposure.
This is primarily attributed to US Dollar and Indian rupee
exposure. This risk is managed through currency hedging
against exchange rate movements, typically 9-12 months
into the future. The Group is also working to rebalance its
exposure by growing its foreign currency denominated sales
ahead of its costs to reduce the currency imbalance and more
naturally hedge this risk over time.

The Financial Statements have been prepared on a going
concern basis which the Directors consider to be appropriate
for the following reasons.

The Directors have prepared cash flow forecasts for the
period to the end of May 2023 which indicate that, taking into
account reasonably plausible downsides as discussed below,
the Company has sufficient funds to meet its liabilities as they
fall due for at least 12 months from the date of this report.

In assessing the going concern position the Directors
have considered the balance sheet position as included
on page 120 and the level of available finance not drawn
down. The balance sheet shows net current liabilities of
£1.0m. At 30 November 2021, the Group had net debt of
£18.3m (November 2020: £1.3m) and drawn facilities of £20m
(November 2020: £5m). RM Group has a £70m committed
bank facility (“the facility”) at the date of this report. Further
details are set out in Note 31. Liquidity headroom at
30 November 2021 was £47.9m. Average net debt over the
year to 30 November 2021 was £15.8m (2020: £16.3m) with
a maximum borrowings position of £29.7m (2020: £29.6m).
The debt facilities are subject to financial covenants of a
maximum of 2.5 times Net Debt/EBITDA and at least 4 times
interest cover/EBITDA. These covenants are tested in May and
November. At 30 November 2021 the results of the covenant
tests were 0.84 and 22.6 respectively.

The facility was extended by 1 year during 2021 and is
committed until July 2023. During this extension process, the
Board initiated conversations regarding a 3-year facility to
replace the current facility when it expires and is confident in
obtaining a new or renewed facility at an appropriate time.

The Chief Financial Officer’s statement outlines the
performance of the Group in the year to 30 November 2021
including the impact of COVID-19. In this period UK schools
were closed for a number of weeks primarily during Q1, and
UK and Irish school exams were cancelled by respective
governments. Despite this backdrop, revenues increased
by 12% compared to 2020 and adjusted profit before tax
by 22%. RM Resources continued to provide products to its
customers during school closures and has experienced strong
curriculum sales in 2021. In RM Assessment, whilst the UK
general exams saw a significant reduction compared to 2019,
other UK assessment and international examination activity
recovered partially. RM Technology continues to be resilient
to UK school closures as it provides the technology support
to UK schools and colleges that has allowed them to operate
remotely. Performance by segment is set out in Note 4.
Net cash inflow from operating activities was £3.8m.

STRATEGIC REPORT
FINANCIAL VIABILITY STATEMENT

The Directors’ assessment of the Group’s current financial
position is set out in the Chief Financial Officer’s review on
pages 32 to 37.

In accordance with the UK Corporate Governance Code, in
addition to an assessment of going concern, the Directors
have also considered the prospects of the Group and the
Company over a longer period.

The principal operating subsidiaries of the Group are
RM Educational Resources Limited (the primary subsidiary
through which our Resources Division operates) and
RM Education Limited (the primary subsidiary through which
our Technology and Assessment Divisions operate).
The current performance of these Divisions is set out
in Note 4 of the Financial Statements.

We have significant investment programmes, our new
automated warehouse and a Group-wide ERP programme,
both anticipated to deliver significant benefits to the Group
but both largely funded by our debt facilities which are set
out in Note 30. Our Group Treasury team actively manage
the cash flow and funding requirements of the Group over
the financial viability timeframe. Our current utilisation of our
funding facility is summarised in our Going Concern review
on pages 36 to 37

We have an established process to assess the Group’s
prospects. The Board undertakes a detailed assessment of
the Group’s strategy on a regular basis (usually annually)
and the output from this assessment forms the framework
for our medium-term plan which we update annually. Our
medium-term plan comprises cash flows, income statements
and balance sheets.

Our medium-term plan reflects our prospects and considers
the potential impacts of the Principal Risks and Uncertainties
set out on pages 27 to 31. We perform stress tests to assess
the potential impact of combinations of those risks and
uncertainties. The plan also considers mitigating actions
that we may take to reduce the impact of such risks
and uncertainties, and the likely effectiveness of those
mitigating actions.

Period of assessment

The Directors have considered that a period of three years is
an appropriate timeframe to consider the financial viability of
the Company and the Group for a number of reasons.

The Group operates in the education sector, providing a range
of technological solutions and services to our customers
both in the UK and Internationally. Whilst in the longer term
the changing nature of technology, government policies and
digitalisation will impact the market in which RM plc Group
operates, changes in the shorter 3-year timespan are likely to
be less severe (subject to pandemic closures and associated
exam cancellations). A three-year period is also consistent
with the time period over which the Group’s medium-term
financial budgets are prepared.

A longer period of assessment introduces greater market
uncertainty and hence uncertainty in the viability assessment
because the variability of potential outcomes increases as the
period considered extends.

Viability assessment

The Group has considered the following scenarios for
financial viability:

Principal Risk

Impact of

COVID-19

pandemic

Public policy

risk

Scenario

COVID-19

The underlying budget reflects the continued

impact of increased frictional costs associated

with COVID-19 and a degree of uncertainly

in exams volumes. Additionally, a further

lockdown between January 2022 to

Easter 2022 was modelled for our Resources

business at sales levels experienced through

prior lockdowns. In our Assessment business

we have modelled an impact consistent with

that seen in FY21 i.e., majority of UK & Ire

general exams cancelled and reduced levels

of international general exams.

UK public policy changes

Short term public policy changes in education

primarily impacts the transactional nature of

UK schools purchases. We considered a further

market decline of 5% (in addition to COVID-19

scenario above) in FY22 and a 10% reduction

in FY23 and FY24 in our Resources Division. In

addition, a margin denigration was modelled.

Scenario

Principal Risk

Investment programmes

Transformation

risk

The ERP solution is scheduled to complete

in FY22 with some assumed benefits

in the medium-term plan. Our new

automated warehouse is also scheduled

to be fully operational in mid-2022 with

associated benefits. A reduction in sales

due to transitional problems, heightened

traditional costs and a reduction in expected

benefits modelled.

Adverse performance in key contracts

Dependence on

The Group has a number of significant

key contracts

contracts and the scenario assessed was the

Operational

loss of a significant contract that is due to be

execution/

Data and

business

continuity

Operational

execution

renewed in FY22.

We also considered the impact of a major

incident at a key contract, considering the

impact of data breaches, key supplier failures

or technological failure and the resultant

impact on brand.

Supply chain disruption

RM is reliant on the cross-border movement of

goods which have been affected by new Brexit

related requirements and the impact on supply

chains of the COVID-19 pandemic.

We have considered the impact on profitability

of this large-scale disruption continuing

throughout the period of assessment.

Growth targets

The medium-term plan has a number of

assumptions in respect to renewal rates,

new business wins and supplier inflation.

We considered the impact of no new

business wins in FY22 and a 50% reduction

in FY23–FY24 in our annuity Divisions in

Technology and Assessment.

Business continuity

Over the last few years there is increasing

legislation and the compliance requirements

continue to increase. A breach of GDPR

compliance and associated costs was modelled.

A major incident to our main Resources

warehouse was considered net of

insurance coverage.

Data and

business

continuity risk

The impact of the above scenarios was considered
individually and in combination. Where the timing is
unknown, the scenario was assumed to have occurred
in FY22 when the Group sensitivity is greatest (due to the
investment programmes’ impacts on cash flows).

There are a number of mitigations that were considered in
conjunction with the combined scenario risks which included:

• Cost mitigations (such as reduced marketing)

• Non-payment of discretionary bonuses

• Non-payment or reduction in dividend payments

The scenarios include a requirement for a reduced facility
beyond summer 2023. The existing bank facility was
extended by 1 year during 2021 and is committed until
June 2023. During this extension process, the Board initiated
conversations regarding 3-year facilities to replace the current
facility when it expires and is confident in obtaining a new or
renewed facility at an appropriate time. The Board is satisfied
that there are several other financing options that could be
put in place to maintain liquidity headroom over the financial
viability period and that there would be adequate time to
complete negotiation of such arrangements and the viability
statement is dependent on a reduced facility being available.

On this basis, the stress tests indicated that none of these
scenarios, including the combined scenario, would result in
an impact to the Group’s expected liquidity, solvency or debt
covenants that could not be addressed by mitigating actions
and are therefore not considered threats to the Group’s viability.

Governance and Assurance

The Board reviews and approves the medium-term plan
on which this Viability Statement is based. The Board also
considers the period of which it should make its assessment
of prospects and the Viability Statement. The Audit
Committee supports the Board in performing this review.
Details of the Audit Committee’s activity in relation to the
Viability Statement are set out in the Audit Committee Report
on page 71.

The Viability Statement is subject to review by Deloitte, our
external auditor. Their Audit Report is set out on page 108.

Assessment of Viability

The Board has assessed the viability of the Company over a
three-year period to November 2024, taking into account the
Company’s current position and Principal Risks.

Based on that assessment, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
period to 30 November 2024.

STRATEGIC REPORTSUSTAINABILITY REPORT

As a responsible business RM wants to ensure long term
sustainable success by tackling climate change and
environmental challenges, supporting communities,
promoting a diverse workforce, and protecting its reputation
through good governance. This is helps us to achieve our
purpose of enriching the lives of learners and deliver on our
vision of enabling the improvement of educational outcomes
around the world.

This report sets out the steps taken to provide a solid
foundation to further improve the sustainability of
RM’s business and deliver long term value.

Environmental Policy and Reporting

RM’s Environmental Policy states that it is committed to
conserving the Earth's resources through its objectives
to deliver net zero (see target on page 47), sustainable
consumption and production, and supply chain
sustainability. It also contains commitments on achieving
these objectives including encouraging innovative ideas and
enhancing the natural environment.

The key impact areas for the Group are transport, energy and
carbon, climate resilience, waste and packaging, materials in
its products and supply chain, and customer and employee
impacts. In the past year, RM has continued to progress plans
to reduce its impact. For example:

• RM has continued to focus on digitisation as a strategic

area of development through digital assessment,
development of cloud based managed services and
research into digital resources. These products enable
significant reductions in customers’ carbon and other
environmental impacts compared with traditional
methods. In pursuing the Company’s strategy, new digital
products and services and opportunities that support a
sustainability agenda will continue to be considered.

• RM Resources opened a new leased facility at Harrier Park
as part of a plan to rationalise and relocate its operational
base and activities to a central location and improve its
energy efficiency. Once this is fully operational, which
is planned by the end of 2022, it is expected to reduce
RM Resources’ overall energy and utility demand. Unlike
the current facilities used, Harrier Park has been built
to reduce utility consumption with heat retention glass,
rainwater harvesting and passive infra-red LED lighting.

RM Resources has continued to focus on reducing
packaging waste at its distribution centres. Since the peak
in 2019 following the acquisition of Consortium, packaging
waste volumes, as covered by the Packaging Waste
Regulations 2007, have been reduced by 27% per £m
turnover. Currently, 81% of this packaging waste is reused
or recycled through a compliance scheme.

An additional waste services supplier has been appointed
to deploy a circular economy approach to managing waste
at two RM Resources facilities: Harrier Park and Sherwood.

•

In tender responses, RM Technology has recently started
to offer customers the opportunity to (i) offset the carbon
impact associated with its engineers who may attend the
site by making a donation to the Woodland Trust; and
(ii) receive, through a third party, renewable energy options
such as the purchase of renewable energy utility supplies,
carbon assessment and on-site renewable generation.

• Through RM Technology’s Education Learning Partnership

Programme, 1016 Hewlett Packard computers were
returned for repurposing of components back into the
supply chain. Customers accrued £101,600 in rebates in
this way. RM remains one of the top resellers in education
for this scheme.

• RM Education Solutions India has an established

Green Team which seeks opportunities to improve
environmental performance across all three facilities
based at Carnival Techno Park - an ISO 9001 and 14001
certified business park. During the year, the improvements
made included replacing plastic single-use cups with steel
cups for employees and visitors and the introduction of a
new waste segregation process to reduce the amount of
waste sent to landfill.

• Where designing new products, RM Resources has focused

on introducing new, less environmentally impactful
materials. For example, the Company’s reliance on virgin
plastics has been reduced by launching products that
contain plant-based materials and wastes including
Eco Boulders, Eco Cones, Eco Sand & Water Kits and
Build a World.

Whilst good progress has been made in reducing impacts,
it is also accepted that the increase in employees working
at home during the COVID-19 pandemic has contributed to
these reductions.

Objectives

RM’s environmental strategic approach has been developed during the course of this year. It is based
on four key objectives. The diagram below gives examples of matters that were considered that helped
determine the key themes which feed into each of these objectives.

• Improving our energy efficiency

• Implementing renewable generation options

• Reducing our waste

• Avoiding the landfill of waste

• Eradicating non-recycled single use plastic

• Reducing our impacts

• Supporting our customers and

supply chains in reducing
their impacts

• Supporting trade

initiatives

Net zero

Reducing
our impacts
and supporting
stakeholders

Sustainable
consumption

The impact from
RM operations

• Leveraging our strategy for the

digitisation of services to reduce whole-

life impacts

• Enabling work practices that

reduce commuting and business
travel and encourage lower
impact transport

• Setting a Supply

Chain Charter that
encourages our suppliers
to implement net zero
and circular economy
opportunities

Supply chain
sustainability

Sustainable
production

The manufacturing and
logistics impacts of
our supply chain

The impact of our
products and
their use

• Prioritising with our suppliers works

that improves impacts

• Assuring the sustainability of our supply chain

during the pandemic

RM’s objectives are:

• To be net zero by 20351 – decarbonising through energy
efficiency, replacing fossil fuels with renewable and low
carbon energy, dematerialisation, digitisation, reducing
material losses and avoidance of waste. To achieve
net zero, RM will consider offsetting where there is strict
validation of the offset. A trajectory showing how net zero
will be delivered is being built.

• To achieve sustainable consumption – by being efficient
in operating RM’s facilities, buying what is needed and
using it as sustainably as possible. For example, by
using submetering throughout the Harrier Park site to
better understand where energy is consumed so that the
Company can seek ways to reduce it.

• Designing low carbon and
energy efficient products

• Designing products made from

ecologically sound materials

• Using natural resources efficiently

• To achieve sustainable production – through the
materials used in RM’s branded products and by
ensuring its suppliers are being energy and water
efficient in manufacturing those products.

RM is committed to eliminating non-recycled plastic in
new RM Resources branded products.

• To implement supply chain sustainability – by

being clear about RM’s expectations in tenders and
specifications and in working with the supply chain to
reduce environmental impacts associated with non-
branded goods and services provided to customers.
For example, there are plans to reduce packaging
and introduce re-usable packaging solutions to help
eliminate waste from the supply chain.

1 See target on page 47

STRATEGIC REPORT
Environmental Improvement Plan

• Preventing packaging waste by designing the packaging

Energy consumed in kWh by scope and region

RM is working on achieving ISO14001 certification and has
integrated sustainable procurement into its management
system. It has developed an ambitious improvement plan for
the forthcoming years:

• Zero waste to landfill by 2030

• Eliminate non-recycled plastic content in new
RM Resources branded products by 2024

• Eliminate non-recycled plastic content packaging used
in all (i) RM Resources branded products and products
repackaged by RM Resources by 2023 and (ii) other
products sold by RM Resources by 2030

• Remove excess, unnecessary packaging on all

products by 2024

• Replace hard-to-recycle packaging materials with easy-to-

recycle materials by 2030

• Develop new labelling for RM Resources’ branded Eco
products to enable the customer to understand the
features, environmental impact reduction and end of life
options by April 2023

• Run workshops in 2022 with key customers and suppliers

to agree environmental priorities

• Develop energy efficient design guidelines for RM’s various

software products by 2025

RM’s net zero and carbon targets can be found in the
TCFD Report on page 47.

Actions

In order to deliver on the improvement plan, the following
projects are currently underway:

• Reviewing renewable energy generation options at

Harrier Park.

• Trialling a carbon offset scheme with Ecologi that, if

successful, will be offered to customers.

• Embarking on a programme to better understand the

packaging of products. This will enable work to be carried
out with suppliers to reduce packaging volumes and
remove packaging that is difficult to recycle.

• Engaging with a consultancy to look at alternative low
impact materials for new products including bamboo,
bio-degradable plastic and natural additives to reduce the
overall amount of plastic used in products.

to be a long-term storage solution or utilised as part of the
product where possible.

• Designing products so that they are more durable and can

be repaired, repurposed or reused.

Plans are also being developed that go beyond RM’s
direct impacts, and include supporting its employees, and
working with its supply chain and customers to reduce their
environmental impact:

Employees - There are eV charging points available
at RM’s head office in Milton Park, Abingdon and
multiple eV charging points are provided at Harrier Park.
These measures help encourage employees to switch to
eVs and will support the anticipated change to fleet eVs for
warehousing activities.

Supply chain – The introduction of sustainable
procurement (ISO 20400) into RM’s environmental
management system will help identify key priorities.
The customer workshops that are part of RM’s
Environmental Improvement Plan aim to facilitate the
implementation of a supply chain charter that prioritises
the areas RM and its supply chain should focus on.

Customers – There is a range of ‘Eco’ and low energy
products that enable customers to reduce their impacts
and replace older HP technology with newer products
at a reduced cost through the Education Learning
Partnership Programme. Labelling of products as ‘Eco’
will also help customers make better decisions on
which products to purchase in order to reduce their own
environmental impacts.

Performance Metrics

RM measures key aspects of environmental performance
using industry standard metrics.

Energy Use Reporting

The annual quantity of energy consumed from activities
for which the Company is responsible is set out below.
The calculation applies to all Group companies. Data is
collected in kWh that relates to the consumption of gas,
electricity, and renewable energy from suppliers and or
use metered data.

Year ended 30 September 2021

Year ended 30 September 2020

Year ended 30 September 2015
(Baseline year)

Scope

Source

Region

Energy use
in kWh

Percentage of
total kWh

Energy use in
kWh

Percentage of
total kWh

Energy use
in kWh

Percentage of
total kWh

Scope 1

Gas

Scope 2

Electricity

2,293,260

2,578,439

(Location
based)

Total

Electricity

ROW

490,340

5,362,039

42.8%

48.1%

9.1%

2,722,046

1,849,273

704,687

5,276,006

51.6%

3,816,915

35.0%

5,158,845

13.4%

884,714

38.8%

52.3%

8.9%

9,860,4742

1 Actual data reported
2 Baseline updated to take account of the below adjustments

Scope 1 covers the annual quantity of energy consumption in kWh from activities for which the Group is responsible including
(a) the combustion of fuel; and (b) the operation of any facility.

Scope 2 covers the annual quantity of energy consumption in kWh from the purchase of electricity, heat, steam or cooling by the
Group for its own use.

In the year ending 30 September 2021, scope 1 and 2 as a % of total kWh consumption for UK is 90.9% and the rest of the world 9.1%.

Emissions Reporting

The Group is required to report scope 1 and 2 emissions for all Group companies within the Annual Report and has elected to report
emissions for the year to 30 September 2021.

The methodology in the GHG Protocol Corporate Accounting and Reporting Standard (revised edition)3 has been applied. The figures
include emissions arising from all financially controlled assets. The calculation applies to all Group companies. It is based on the
kWh data collected for all facilities, and the mileage of Company vehicles and business use of personal vehicles. This is converted to
carbon dioxide equivalents using conversion factors appropriate to the location of the impact taken for utility use and for vehicles.
Defra conversion factors are used for cars based on an average-sized car.

All other emissions factors have been selected from the emissions conversion factors published annually by the Department for
Business, Energy & Industrial Strategy4.

3 https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf
4 https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2021

STRATEGIC REPORTEmissions by scope

Year ended
30 September 2021

Year ended
30 September 2020

Year ended
30 September 2015
(Baseline year)

Scope

Source

Region

Tonnes
CO2℮

Percentage
of total CO2℮

Absolute totals
Tonnes CO2℮

Tonnes
CO2℮

Absolute totals
Tonnes CO2℮

Tonnes
CO2℮

Absolute totals
Tonnes CO2℮

110

7.4%

ROW

0.1%

Van/car
travel

Gas

Electricity

ROW

Scope 1

Scope 2
(location
based)

Total

465

547

358

31.4%

36.9%

24.2%

577

906

1,483

187

555

431

516

658

185

691

2,364

742

746

947

1,693

1,464

3,105

4,4721

Note: CO2℮ means CO2 equivalent
1 Baseline updated to take account of the below adjustments. Actual data reported 4,402 tonnes.

Scope 1 and 2 tonnes CO2℮

Tonnes CO2℮ per £m revenue

2021

2020

2015
(Baseline)

2021

2020

2015
(Baseline)

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Tonnes CO2℮

Tonnes CO2℮ per £m revenue

Scope 1

Scope 2

Emissions per £m of revenue

The improvement of emissions per £m revenue between the baseline year and 2021 is 71%.

Tonnes CO2℮/£m per revenue

Year ended 30 September 2021

Year ended 30 September 2020

Year ended 30 September 2015

2.76

4.32

7.08

3.84

4.88

8.72

(Baseline year)

7.95

16.86

24.81¹

Scope 1 covers the annual quantity of energy consumption in kWh from activities for which the Group is responsible including
(a) the combustion of fuel; and (b) the operation of any facility.

Scope 2 covers the annual quantity of energy consumption in kWh from the purchase of electricity, heat, steam or cooling by
the Group for its own use.

Scope 1

Scope 2

Total

In the year ending 30 September 2021, scope 1 as a % of total CO2℮ for UK is 75.7% and the rest of the world is 24.3%.

1 Baseline updated to take account of the below adjustments

During the year ended 30 September 2020, the new facility at Harrier Park was assessed as ‘very good’ by BREEAM standards and
implemented efficient utility usage, waste reduction/recycling and use of energy saving features in products.

In 2015, India travel emissions were reported in the Annual Report as 18 tonnes, but it included scope 3 emissions and is restated
without scope 3 emissions in the baseline data used.

Adjustments

In the period since the start of the base line year there have been a number of business changes that impact these figures:

• There have been two acquisitions: the Consortium business, including its distribution facilities, in June 2017 which forms a

substantial part of RM Resources today and the SoNET business in June 2019. Both businesses have added emissions to the Group
and the baseline used has been adjusted to take this into account.

• The PC manufacturing business was closed prior to the base year. Emissions from building consolidations following the closure of

this business which occurred after the start of the base year have been removed from the baseline year figures.

Based on the data in the table above, the Group’s emissions have reduced, between the baseline year and 2021, by some 66.8%. This
reduction is due to office closures, relocations to properties which have LED lighting and more energy efficient heating/cooling systems
and the decarbonisation of the National Grid in Great Britain. However, some of the reduction between 2019 and 2021 is attributable to
offices being closed and hybrid working due to COVID-19 and we recognise that not all of this will be permanent.

Emissions have also been analysed using intensity metrics, which enable the Company to monitor how well emissions are controlled
on an annual basis, independent of fluctuations in the levels of activity. The metric used is ‘emissions per ‘£m of revenue’ in line with
industry standards. This is shown in the table overleaf.

The aggregate energy consumption of the Group during the year ended 30 September 2021 and 30 September 2020 was:

Electricity

Gas

Total

India

Australia

2021
kWh

2,578,439

466,987

23,353

2,293,260

5,362,038

2020
kWh

1,849,273

670,168

33,842

2,722,046

5,275,330

This comprises (i) the combustion of fuel and the operation of any facility; and (ii) the annual quantity of energy consumed resulting
from the purchase of electricity, heat, steam or cooling by the Group for its own use.

91% of consumption was in the United Kingdom and 9% was in the rest of the world based on the information provided by suppliers.
The Group purchases renewable electricity in the UK to support large scale renewable generation. However, carbon conversion factors
used do not take account of this.

STRATEGIC REPORT
Task force on climate-related
financial disclosures

The alignment of reporting on managing climate risk in line
with the TCFD framework will become mandatory for RM in
next year’s Annual Report. Work on this has begun and this
report is prepared on that basis. Reporting against the TCFD
recommendations will continue to evolve as climate risk and
opportunity scenario planning is carried out in 2022 and new
metrics around scope 3 will be progressed.

Governance

The risks and opportunities of climate change for RM is
overseen by the Board to ensure they are considered as part
of business strategy and risk management.

The Executive is responsible for overseeing the senior
management’s implementation of sustainability activities
including the handling of climate related risks and opportunities.

The following groups have recently been established:

• a Sustainable Development Governance Panel made up
of managers from across the Group. It is responsible for
managing the activities required to be carried out in order
to become a sustainable business, reviewing key risks and
opportunities, including those relating to climate change,
and developing and implementing a strategy and plans
to address those risks and opportunities. The agenda
for the Panel includes procurement, logistics, design,
finance and facilities management. The Panel is led by
the RM Resources Managing Director; and

• a Sustainable Development Working Group that is

subordinate to the Sustainable Development Governance
Panel. It establishes the technical requirements and
standards that need to be met. It makes proposals to the
Governance Panel and facilitates the wider understanding
of how to implement strategies and plans. It appoints the
Chair annually from its members.

A dedicated Environment Manager who reports into the
HR Director provides technical support to both groups.

The Governance Panel updates the Executive Committee at
least quarterly. This includes reviewing climate change risk
assessments and overseeing any related decision-making
and involves reporting against sustainability strategy targets.
The Board is updated quarterly.

The Environment Manager reviews RM’s own data and the
impact of climate change on its operations and keeps abreast
of publications and reports by leading climate risk research and
organisations including the Intergovernmental Panel on Climate
Change (IPCC) and the UK Committee on Climate Change.

Principal and emerging risks including climate change risks
are reviewed by the Board as part of the Company’s risk
management process and any material financial implications
of climate risk and potential impact on RM’s accounts are
shared with the Audit Committee.

Strategy and Risk Assessment

RM’s objectives are to achieve net zero, sustainable
consumption, production and procurement across its
business and supply chain. Its plans include actions to
address climate related risks and identify opportunities
for impact reduction, adaptation for climate change and
enhanced climate resilience. As RM’s approach evolves it
is increasingly influencing the products it develops and
purchases, its own operations and the operations of those in
its supply chain. Further information on this is on page 42.

To understand the effect of global warming and its impact
on operations, the risks and opportunities arising from a
global temperature change of no more than 1.5⁰C about
pre-industrial levels by 2100 will be reviewed. The risks
and impact on RM’s business in a world affected by climate
change greater than 4⁰C scenario will also be reviewed.

Risk assessments and scenario analyses are planned.
These will be completed via workshops across business
Divisions and corporate functions. These risks are considered
using the same format as for principal and emerging risks as
set out on pages 25 to 26 and mitigations are then developed
based on these assessments. They will look at the impact on
short, medium and long-term time horizons and the financial
implications, including capital deployment. Additionally,
RM will consider the speed of reaching temperature increases
and the impact of this on its activities. Further information on
this will be provided in next year’s report.

A macro-analysis has been developed this year using high
level scenario impact reports by the IPCC and has begun to
identify where some of the key risks lie. It indicates that in
the 1.5⁰C scenario, the risk to RM’s workforce and its own
operations in the UK will largely remain as currently to 2050
and in the and 4⁰C scenario this risk is considered to be low
to medium to 2050.

RM is committed to playing its part in managing down
the effect its carbon emissions have on climate change
by decarbonising its activities, moving towards a circular
economy and, should it become necessary, offsetting its
impact using schemes that permanently remove carbon from
the atmosphere.

Next year, the plan is to start work looking at climate change
resilience with partners dovetailing into the work that will
arise from the UK government net zero Strategy.

Metrics and Targets

RM’s approach has targets underpinning it which will be
further developed in conjunction with the results of the
climate change risk assessments and scenario analyses to
be carried out. This will be reviewed annually to ensure it
takes account of new developments in science, technology
and legislation.

RM’s current environmental improvement plan includes the
following climate change targets:

• Becoming net zero by 20351

• Reducing scope 1 and 2 carbon emissions, against the
2015 baseline, in line with the Government reduction
target of 78% by 20352

• Using 50% on site or locally generated renewable energy

at Harrier Park by 2024

• Supporting large scale renewable generation in the UK by
continuing to purchase renewable electricity for RM’s use

1. This covers scope 1 and 2 emissions, see following paragraph

for scope 3.
2. During the year ending 30 November 2021, scope 1 and 2 carbon

impacts reduced by 67.5% against the 2015 baseline.

In order to better understand scope 3 emissions, data is being
gathered on around 36,000 products that are sold, including
the material composition, manufacturing methods, supply
chain impacts, logistics and end of life management so they
can be prioritised for reduction and appropriate targets set.
Once this data is available, a net zero target including scope 3
emissions will be developed, progress will be reported in
next year’s Annual Report. Nevertheless, RM is committed to
delivering net zero across scope 3 ahead of 2050.

STRATEGIC REPORT
Workforce

The Group employs nearly 2000 people. Its aim is to create a culture and an environment that enables employees to work together
collaboratively, creatively, efficiently and in a safe way.

Average Headcount 2021

Average Headcount 2020

India Australia

Other1

Total

India

Australia

Other

All employees

1,100

861

1,990

1,072

729

Permanent

Temporary/
contract staff

1 Spain and Singapore

Health and Wellbeing

1,773

216

The Equal Opportunities Policy commits RM to preventing any form of discrimination, harassment, intimidation or victimisation,
promoting equal opportunities for everyone and promoting a good and harmonious working environment where everyone is treated with
respect and dignity. This Policy is available on RM’s website www.rm.com. The Anti-Bullying Policy encourages employees to come forward
with any concerns of bullying or harassment and sets out how such matters will be dealt with.

These policies and the actions referred to in this section support the strategy by helping create a better skilled workforce by encouraging
people from different backgrounds to apply and contribute to the business.

Employees with Disabilities: The Group gives equal consideration to applications for employment received from candidates with
disabilities, having regard to their aptitudes and abilities. Where existing employees develop a disability that materially affects their ability
to perform their work role, retraining, use of appropriate technology and making available suitable alternative employment within the
Group are explored and their further training, career development and promotion opportunities are supported.

The following table shows the percentage of employees who are female. The data is based on the number of permanent employees and
Board members on 30 November each year. Over recent years, the percentage of women across the Executive and senior management
has improved. The reduction in women at this level this year has been due to a combination of reporting line changes, unfilled vacancies
at the date of this report and recruitment for vacancies.

Total

1,837

1,716

121

RM is committed to supporting its employees and promoting positive Health and Wellbeing. The priority over the past year was to
ensure that the workforce remained safe and well, whilst continuing to provide the services its customers need. Further information on
the measures taken is set out on in the Employees section on pages 65-66.

As employees return to working in offices RM launched ‘My Work Blend@RM’ which is a hybrid working approach that enables employees
to work flexibly where appropriate and help them balance their roles and lives.

Board including Executive Directors

Senior Managers
(excluding Executive Directors)1

All employees

2021

14%

35%

38%

2020

17%

36.5%

38%

2019

17%

25%

39%

2018

17%

19%

38%

Equality, Diversity and Inclusion

RM believes equality, diversity and inclusion (‘EDI’) are important and its aim is that all employees receive fair and equal treatment.
The workforce needs to reflect and represent the needs of the customers and communities RM serves. RM seeks to create an inclusive and
flexible working environment for its employees.

The first step in achieving these goals has been to complete an EDI audit to understand how diverse and inclusive the Company is today.
This work was completed by a third party during the first half of FY21. The results indicated scope for further action as many of its people
and managers wanted to better understand how to make RM a more diverse and inclusive organisation.

Over the past year, RM has put in place new governance to oversee EDI projects and programmes, to ensure it is encouraging diversity
and inclusivity. There is now a voluntary network of 20 EDI advocates and a steering group to plan, execute and evaluate EDI initiatives.
These initiatives have included:

• Providing essential education and awareness. To support this, learning sessions have been held and resources shared through a

virtual EDI library on RM’s intranet. There is also an anonymous ‘Ask Us Anything’ service through the EDI advocates.

• RM has launched a recruitment pilot programme to help attract more diverse candidates. This programme trains people managers
to consider how they define and advertise job roles, and how they manage the evaluation process to support candidates from a
diverse range of backgrounds. There is also a multi-channelled approach to help identify a diverse range of individuals.

• Supporting diverse communities in RM is an important part of the plan and 4 new EDI networks been established. These provide
a safe space for these networks to share their experiences and provide representation to change policy and practice in RM. They
represent the People of the Global Majority, Women at Work, LBGTQIA and Neurodiversity. After the Women at Work network
championed the subject of menopause, the UK healthcare benefit has been updated to include menopause support.

• RM’s Executive is taking part in a Reverse Mentoring scheme, to improve its personal knowledge and awareness of EDI.

• As part of Inclusion Week in September 2021, RM has launched a programme to encourage UK employees to share diversity data.

¹ Covers those employees who have responsibility for planning, directing or controlling the activities of the Group, or a strategically significant part of it or the Company.

The following table sets out a more detailed summary of the permanent staff employed on 30 November 2021 (and as at 30 November 2020):

As at 30 November 2021

Male

Female

Total

Male

Female

All employees

1,179 (62%)

715 (38%)

1,894

1,055 (62%)

650 (38%)

Senior Managers
(excluding Executive Directors)1

Executive Committee and
direct reports2

37 (65%)

20 (35%)

27 (60%)

18 (40%)

Board

6 (86%)

1 (14%)

33 (63.5%)

19 (36.5%)

23 (53.5%)

20 (46.5%)

5 (83%)

1 (17%)

Total

1,705

¹ Covers those employees who have responsibility for planning, directing or controlling the activities of the Group, or a strategically significant part of it or the Company.

² Covers the ‘senior management’ as defined in the Code and excludes EAs and PAs.

There are ongoing initiatives to help ensure a balanced participation in the workforce:

• a pilot programme with The Academy of Women's Leadership to help create a stronger female talent pipeline for senior roles;

• women are represented on the shortlist for all senior vacancies; and

• flexible and agile working to support the need to balance careers.

Gender pay data is available on the public websites for subsidiaries (RM Technology, TTS and Consortium).

Nearly 30% have updated their data. This will help set objectives and targets to improve diversity across the Group.

The Corporate Governance Report sets out the Company’s Board Diversity Policy.

STRATEGIC REPORT
Development and Reward

The Company recognises that talented people are central
to the success of the business. Employees are encouraged
to set learning goals framed around their career aspirations
as well as what RM requires of them. Managers guide them
through monthly developmental coaching conversations.
Employees have access to online learning platforms, social
and peer learning opportunities, coaching and mentoring as
well as ‘on the job’ experiences. Employees are encouraged
to attain professional qualifications or certifications where
applicable to their role. Apprentices are supported in gaining
their qualifications and essential work experience. RM has
employed 14 apprentices over the past three years in the UK.

The Company’s emphasis is on fair pay structures across the
Group and bonus schemes that support and encourage a
high-performance culture. The Group incentivises employees
and senior management through the payment of bonuses
linked to business objectives, together with the other
components of remuneration detailed in the Remuneration
Report. The Company does not operate an employees’
share scheme due to the size and geography of the Group’s
workforce. Regular benchmarking is undertaken across the
sector in terms of pay and reward.

There are also policies setting out the working practices
and benefits available to employees. These policies are
published internally.

Community

RM’s purpose is to supply products and services which enrich
the lives of learners worldwide. It’s important therefore that
the Group has a positive impact across both the education
sector and communities.

RM is very conscious that one of the UN Sustainable
Development Goals is “quality education” and RM takes very
seriously its part in delivering and improving sustainability in
this critical area.

Beyond the classroom, this is achieved in the UK education
sector in many different ways:

•

In the last year RM has provided evidence to Government
consultations that have included the Department for
Education’s (DfE’s) consultation on “Helping Schools
Buy”; the Government’s (post-BREXIT) Taskforce on
Innovation, Growth and Regulatory Reform consultation;
the DfE's edTech 2.0 strategy and OFQUAL/DfE’s Summer
Exams consultation. RM also responded to the All-Party
Parliamentary Group for Education Technology which
published its inaugural report on “Lessons from Lockdown:
what was learnt about Education Technology in 2020”
which included evidence that the Company supplied.

• RM has been actively engaged with the DfE since the first
school lockdown – initially in their programme to roll-
out remote learning to schools via Microsoft Teams and
Google Classroom, and then in their 'Get Help With Tech'
programme, working with the Department (at their request
based on the Company’s work on remote learning) to help
review and shape the DfE’s thinking about what a 'post
platform implementation' support package looks like
for schools.

• Executive board positions are held on the Group’s primary
trade bodies: the British Educational Suppliers Association
(BESA) and the e-Assessment Association (eAA).

In communities:

• RM UK-based employees become School Governors and
MAT Trustees allowing employees to take up to 20 hours
paid time off per year for Governor activities, and some
senior employees take on broader industry roles. Over 30
colleagues have such roles.

• UK employees raised money for United World Schools
enabling 20 children to be educated for an entire year.

•

In India, the local business set up the RMESI Foundation
in 2007 to provide support in and around Trivandrum,
India to bright, underprivileged children in pursuing their
education. During the last academic year, it has through
the following:

◌ Graeme Dewart Scholarship: provided school fees
for 26 under-privileged students worth £11,900;

◌ Connect the Disconnected Programme: distributed

83 mobile devices to students in 11 schools in
Trivandrum to aid online learning worth £8,700; and

◌ School Adoption Programme: adopted 1 additional
school this year in addition to the 3 existing primary
schools. This programme contributes to the salaries
for Computer and English teachers and for school
supplies. Currently £1,000 has been provided
for salaries.

•

In May 2021, RM Resources employees at the Harrier
Park site in Hucknall delivered a significant volume of
educational resource to a local charity. Hucknall was
particularly hard hit by the pandemic with a high local
need for food banks and other donations and support.
The resources donated formed part of a new local
scheme to open pop-up mother and toddler schemes.
These schemes provided families in need of support with
access to world class resources and gave parents a little
respite from the stress of being locked down at home with
small children.

•

In October 2020, RM Resources donated £18,000 worth of
high-quality educational resources to 33 different multi-
academy trusts, nursery chains and charities in the UK.

RM continued to provide significant support for the UK
educational system and this year:

•

In response to the announcement of school closures,
RM Resources created and launched a series of ‘Learning
at Home’ downloads for EYFS, KS1 and KS2. The home
learning downloads were free and included activities and
resources for across the curriculum.

During the second closure of schools, RM Resources
were responsive and collated a ‘Wellbeing Collection’
that provided free activities and resources that
teachers and parents could use to support children’s
emotional wellbeing.

A series of blogs was also created from experienced
educationalists to provide teachers and parents with ideas
for home learning.

• RM Technology promoted a range of free content for the
entire sector on the RM website sharing best practice to
support with remote education. This included videos, help
sheets, case studies from schools and free webinars.

RM promoted a four-month free trial of RM Easimaths.

The RM Technology team was restructured in order to
extend its customer service desk support hours to 7am-
10pm Monday to Friday to support teachers who were
obliged to work outside normal school hours.

Support was offered to schools if their Network Manager
became sick or unavailable due to of COVID-19.

Guidance on remote learning for Account Managers was
promoted to better understand where help was required.

Governance

It is important at RM that governance ensures it can deliver
its purpose and strategy in a way that is aligned with its
values, so that it is a trusted partner to its customers and
other stakeholders.

RM is committed to conducting its business with integrity
and its approach to risk and compliance helps encourage the
right behaviours across the business.

The Corporate Governance Report on page 58 sets out the
framework for governance in RM and the role of the Board.

Code of Conduct

An employee Code of Conduct has been created and is
being prepared for roll-out across the Group. The Code
governs the ways of working across the business and sets out
the standards that employees are expected to follow. The
Code reflects RM’s culture and emphasises that employees
are trusted to behave with integrity and honesty, and in
accordance with applicable laws and regulations. There
are a comprehensive set of policies that set out guidance
and specific processes and procedures that employees are
required to follow.

Employees will be required to confirm annually that they
have read, understood and comply with the Code.

All policies are owned by a specified member of senior
management and policy review dates set in order to ensure
they are regularly assessed and kept up-to-date.

Anti-bribery and corruption

As part of the education sector, RM strongly supports the
prohibition against giving, receiving or offering any bribes
or any other forms of corruption. The Anti-Bribery Policy
sets out the standards and processes all employees and
relevant partners are required to follow. These are designed
to minimise the circumstances under which such behaviours
may occur. The policy also covers the giving and receiving of
gifts and hospitality and expenses.

The policy has been revised this year to give employees more
practical examples and to make it clearer and easier for them
to understand its application. Training on this has also been
given to relevant teams.

A formal assurance process is carried out twice a year that
requires employees to confirm that they understand and
comply with this policy.

There is also an Anti-Money Laundering Policy which
commits RM to promoting and maintaining the highest level
of ethical standards in relation to all its business activities and
a zero-tolerance approach to money laundering. It commits
RM to acting fairly and with integrity in all its business
dealings and relationships. It provides for procedures to
be followed, situations that may be considered suspicious,
action to be taken in such circumstances and record keeping
requirements. Only a limited group of employees can release
any payments and those employees are fully appraised of
these risks.

STRATEGIC REPORTCompetition Law

Data Security and Resilience

Health and Safety

Human Rights and Modern Slavery

A new Competition Policy was approved this year. To help
ensure it is understood across the business, training has been
given to all relevant employees to help them understand
the issues they need to be aware of. A register is maintained
by the Legal Department for all employees attending trade
association meetings and specific training is mandatory
for them.

Data Protection

Given the nature of its operations, RM has always taken
data protection matters seriously. The security and integrity
of customer data is critical to the Group and is noted in
the table of “Principal Risks and Uncertainties” in the
Strategic Report.

The Company has a formal Group Security and Business
Continuity Committee (‘GSBCC’), which oversees data
protection matters. That Committee is chaired by the Chief
Information Officer and attendees include the Group’s Data
Protection Officer (‘DPO’), Chief Financial Officer, senior HR
employees and representatives from each of the Divisions.

As part of its ongoing programme of GDPR compliance, the
Group has formal Data Protection Policies and a Cookies
Policy covering data of employees, customers, candidates,
examiners and visitors to its websites. The policies commit
RM to protecting and respecting the privacy of individuals
and complying with all legal requirements. New starters
are assigned mandatory training on GDPR and ongoing
training is provided to all staff, as well as to contractors and
temporary staff that have access to Company systems or
data. Security vetting of relevant suppliers and other third
parties is conducted when considered appropriate.

The DPO works independently of management in fulfilment
of the statutory duties required of that role and can, if
necessary, escalate issues directly to the Board via the
Company Secretary. As well as attending the GSBCC,
the DPO provides regular updates to the Board on data
protection matters. Both customers and employees can
raise queries with, and send complaints to, the DPO. All
potential personal data breaches are investigated and
recorded. No data breaches have been reported to the ICO,
the UK’s regulator, in the past year.

Given RM’s role supporting and advising schools and other
education bodies, data security and resilience are taken
seriously. For details of the actions taken, see the Principal
Risks and Uncertainties section at page 28.

The GSBCC, referred to in the Data Protection section above,
also oversees data security and resilience matters.

Access to systems is role based and applied with a principle
of least privilege. Access is reviewed regularly through
established internal processes and is subject to external
independent audits as part of maintaining ISO certifications.
The latest audits reported no non-conformances. The GSBCC
also maintains Cyber Essentials Certification. Business
accounts are additionally protected with multi-factor
authentication (MFA) and user behaviour analytics and are
monitored by a Security Information and Event Management
(SIEM) solution. The Company has a Cryptographic Policy that
governs encryption controls, with disk encryption applied to
all employee machines.

The RM Acceptable Usage Policy provides guidance for all
RM Group employees regarding how they may and may not
use Company systems and data, and their responsibility
for information security. The policy is reviewed annually
prior to formal approval by the GSBCC, which oversees
data protection matters. The Acceptable Usage Policy is
further supported by other specific policies including Data
Classification & Handling and Physical Controls.

Data security policies are controlled, reviewed and subject to
external audit as part of maintaining ISO certifications.

RM also runs a formal Security Awareness programme for
all new staff.

As part of ‘secure by design and by default’ principles,
business continuity management for the RM Assessment,
RM Technology and RM ESI Divisions is aligned to ISO
standards and subject to external audit, ISO 22301
certification is in place.

Were a breach to occur, the Company has established
relationships with third-party partners to support with cyber
incident response and crisis PR.

The Health and Safety Policy covers employees on its sites
and at customer sites. It commits RM to a safe working
environment, a culture of open discussion on health and
safety issues, transparent reporting and compliance with all
relevant laws and regulations. The Group has implemented
a health and safety management system which is designed
to continually improve health and safety and meet the
requirements of ISO45001.

The following objectives are incorporated into the health and
safety management system:

• Raising health and safety awareness;

• Effective training;

• Risk reduction and management; and

• Accident reduction.

The Group Health and Safety Committee includes
representatives from each of the Divisions and Corporate
Services. It meets quarterly and is chaired by the Group’s
Head of Health and Safety. Each RM site has a Site Health and
Safety Committee; this is chaired by the Health and Safety
Director. Each Site Safety Committee reviews health and
safety practices at that site.

A range of health and safety training is provided on an
ongoing basis to employees, contractors and temporary staff.

Significant work has continued this year in improving staff
induction and setting up processes at Harrier Park, and
there remains a continued focus on safe operations during
COVID-19 conditions. A Group level COVID-19 committee
meets every 2 weeks to review changing conditions and to
ensure regular and timely communications continue and
are effective for flexible working patterns. Accidents and near
misses are tracked and reviewed. There was one Lost Time
Incident reported during the year which related to Trowbridge
Distribution Centre (in the previous year there were 3 Lost
Time Incidents).

The Head of Health and Safety provides a quarterly report
to the Board on health and safety across the Group and can
escalate any issues to the Board via the Company Secretary.
The reports contain information relating to accidents and
near misses. Further information on this is detailed in the
Employees section on page 66.

RM is committed to minimising the opportunity for modern
slavery to take place within RM and its supply chain. It has this
year reviewed its internal processes and programme of review
for suppliers. The Modern Slavery statement is available on
the RM website.

Further information on the Supplier Code of Conduct for
the RM Resources Division, which manages a significant
majority of the suppliers of the Group and the commitments
required from them in relation to human rights is set out in
the Suppliers and Partners section on 61. This Code is being
reviewed with the intention that it will then be applicable to
all Group suppliers.

Political Donations

Neither the Company nor any of its subsidiaries made any UK
political donations or incurred any UK political expenditure,
nor made any contribution to any non-UK political party,
during the year.

Safeguarding

RM is committed to protecting students of its customers from
harm. The Safeguarding Policy applies to anyone working
on behalf of RM including employees, contractors and
agency staff.

The Policy states the principles that guide the approach
to child protection and online safeguarding covering
recruitment of staff, partnering with customers when any
allegation is made, the incident and whistleblowing measures
and the supply of products and services that help customers
keep children and young people protected from online harm.
There were no incidents reported in the last year.

The Policy further states the Company has a responsibility
to keep children and young people safe. This is regardless of
age, gender, race, religion or belief, sex or sexual orientation.
It recognises that some children are additionally vulnerable
because of the impact of previous experiences, their level of
dependency, communication needs or other issues.

All staff working in environments where children are present
must be familiar with policies at that place. Staff must report
any incident that may give rise to a concern to the nominated
child protection lead at that institution.

STRATEGIC REPORTShare Dealing Code

Whistleblowing

The Share Dealing Code is applicable to all employees and
Directors. It is designed to ensure that they do not misuse
any information about the Group which is not public.
There are clear processes for informing individuals
about their obligations under the Code and obtaining
authorisation to deal.

Tax

As a UK company, the Group pay taxes in the UK, contributing
some £12m in taxes to the UK Government over the past
three years. The approach to tax is aligned with RM’s purpose
and values and to ensure that RM pays the right amount of
tax at the right time based on laws, rules and regulations
in the territories in which it operates. The Tax Strategy is
on RM’s website.

Employees are encouraged to speak up if they feel that
something is not right. RM’s Whistleblowing Policy has been
updated this year and publicised to employees to make
this clear. The Policy states that employees can speak to
their manager, HR partner or other high-level person in the
Company in the first instance if they have any concerns and
there is also an independent third-party service they can
use to report any concerns in confidence and anonymously
if they wish. Information on this policy and the contact
details of the third party are readily available on the internal
employee portal.

The Policy provides that all allegations raised are forwarded
to the Chief People Officer (unless it relates to them) and
members of the RM People team are trained to handle
such matters. The individual will be informed of the
process in dealing with the matter. The Policy sets out
RM’s commitments in complying with the Public Interest
Disclosure Act 1998 to protect any person who raises a
relevant concern. The Policy states that any case that
poses a significant risk to the business is reported to the
Audit Committee with ultimate ownership by the Board.
No concerns were raised in the past year.

STRATEGIC REPORTBOARD OF DIRECTORS

JOHN POULTER

Chairman (r) (n)

John Poulter was appointed as Non-Executive Chairman of
RM plc on 1 May 2013. He is also Chairman of the Nomination
Committee of the Board. He is a former Executive Chairman
of 4imprint Group plc and a former Chairman and Chief
Executive of Spectris plc. He has also been a Non-Executive
Director of a number of public and private companies
including FTSE 250 constituents BTP plc, RAC plc and
Kidde plc. John will retire on 16 February 2022.

NEIL MARTIN

Chief Executive Officer

Neil Martin was appointed as the Chief Executive Officer of
RM on 1 March 2021. He was the Chief Financial Officer of
RM from 28 September 2015. Prior to joining RM, he was
CFO for UK and Ireland for the Adecco Group, the leading
provider of HR solutions listed on the Swiss Stock Exchange.
He was CFO at the UK listed, IT staffing company, Spring plc
until it was acquired by Adecco in 2009. He started his
career by spending seven years at Exxon Mobil. Neil is a
Chartered Accountant (CIMA).

MARK BERRY

Chief Financial Officer

Mark Berry was appointed as Chief Financial Officer and
Executive Director on 20 September 2021. He was the interim
Chief Financial Officer from 8 March 2021. Prior to joining
RM he was Chief Financial Officer and Executive Director at
Foxtons Group plc, the estate agent, for 3 years. Before that
he held a number of senior roles at Hays plc, the FTSE 250
listed specialist recruiter, including 5 years as Group Financial
Controller and prior to that as European FD and Head of M&A.
He started his career at Deloitte and is ACA qualified.

CHARLES BLIGH

Independent Non-Executive Director (r) (n)

Charles Bligh joined the Board on 2 July 2021 as a
Non-Executive Director. He is currently the Chief Executive
Officer at Restore plc and was appointed to this position
in April 2019. He was previously Chief Operating Officer
and main Board Director at TalkTalk Telecom Group plc,
which he joined in 2011. He previously spent 20 years at
IBM Corporation in various countries, culminating in his role
as Vice President, Commercial Sector in UK and Ireland.

PAUL DEAN

Independent Non-Executive Director (a) (r) (n)

Paul Dean joined the Board on 4 February 2020 as a
Non-Executive Director and Chairman of the Audit
Committee. He was previously the Non-Executive Director
and Chair of the Audit Committee of Wincanton plc and
Focusrite plc, the Senior Independent Director and Chair of
the Audit Committee at Porvair plc and Polypipe plc.
He was the Group Finance Director of Ultra-Electronics plc
from 2008 to 2013 and Group Finance Director of
Foseco plc from 2005 to 2008. Paul is a Chartered
Management Accountant.

VICKY GRIFFITHS

Independent Non-Executive Director (a) (r) (n)

Vicky Griffiths joined the Board on 1 July 2020 as a
Non-Executive Director. She spent five years as a teacher
of Maths and Economics at both primary and secondary
level and currently sits on the board of multi-academy
trust, Bellevue Place Education Trust. She trained at Bain
and Company and was responsible for operational and
business risk at Brevan Howard Asset Management. She is
now a Partner at executive search firm, Independent Search
Partnership. She is a Non-Executive Director at GB Bank, as
well as Senior Independent Director of the British Olympic
Foundation, a Trustee of Vincent’s Club at Oxford University
and she sits on the Main Committee of the MCC at Lords.

PATRICK MARTELL

Senior Independent Director (a) (r) (n)

Patrick Martell joined the Board on 1 January 2014 as a
Non-Executive Director and was appointed Chairman
of the Remuneration Committee on 19 March 2014. He
is the nominated Non-Executive Director for workforce
engagement. He is currently Group Chief Operating Officer
and Chief Executive of the Informa Intelligence Division of
Informa plc. He was previously the Group CEO of St Ives
plc, having joined in 1980. He was appointed to the Board
of St Ives plc on 1 August 2003 and held the position of
Managing Director, Media Products and Managing Director,
UK Operations from 2006 to 2009, at which point he was
appointed Group CEO.

Committee membership as at the date of this report:

(a)

Audit Committee Member

(r)

Remuneration Committee Member

(n)

Nomination Committee Member

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE REPORT

INTRODUCTION FROM THE CHAIRMAN

As Chairman, I am responsible for ensuring that the Company
has high standards of corporate governance. In respect of
the year ended 30 November 2021, RM plc was subject to the
UK Corporate Governance Code 2018 (‘Code’), which was
published by the Financial Reporting Council in July 2018
(available at www.frc.org.uk). The Board aims for the Group
to meet and exceed the standards of the Code and to foster a
culture of open and honest communication and constructive
challenge throughout the organisation. There is a governance
structure of checks and balances, a proper division of
responsibilities and active consideration given to all relevant
stakeholders. The Board sees this as a positive contributor to
effective business operations.

This Corporate Governance Report incorporates the relevant
sections of the reports of the three Board Committees. It
summarises how the provisions of the Code have been
applied and how the Board and Board Committees have
fulfilled their responsibilities during the year. It sets out
how RM’s approach to corporate governance supports the
Company’s strategy, the Board and its Committees’ key
focus areas during the year.

Governance
On behalf of the Board, I confirm that the Company has
applied the principles and complied with the provisions
of the Code throughout the 12-month period ended
30 November 2021 except in the case of provisions:

• 40 insofar as views were not sought from shareholders and

the workforce on remuneration and

• 41 insofar as we have not engaged with shareholders
on remuneration nor engaged with the workforce to
explain how executive remuneration aligns with wider
Company pay policy.

This is explained on page 79 (Stakeholder Engagement).

The table below sets out the where the relevant content on
the application of the Code’s principles can be found in this
Annual Report.

Composition
During 2021, Neil Martin became CEO and David Brooks
retired from the Board. Mark Berry was appointed Chief
Financial Officer and Executive Director and Charles Bligh was
welcomed as a new Non-Executive Director. My retirement
was also announced and Helen Stevenson will take over
as my successor with effect from 16 February 2022. These
appointments were made after extensive search processes and
the appointees bring skills and experiences that are valuable
and complementary to the Board. For further information on
how the Board managed succession during the past year, see
the Nomination Committee Report.

Effectiveness
During a year dealing with significant change to the Board
and the impact of the COVID-19 pandemic, the Board has
performed well and this was reflected in the feedback
during the Board evaluation this year. Further information is
contained in this Corporate Governance Report.

Stakeholders
RM believes strongly that the long-term success of the
Company is linked to ensuring accountability, transparency
and fairness in dealings with stakeholders. The strength of
the Company’s relationship with its suppliers has helped
the business to continue to provide goods and services to
RM’s customers during the pandemic. The relationships
the business has with other stakeholders has also been
important, particularly when the Company moved to protect
its cash position by suspending shareholder returns. You can
read more about RM’s engagement with shareholders
on page 66.

John Poulter
Chairman
14 February 2022

1. Board Leadership and Company Purpose

A: Leadership, long-term success, value
generation and societal contribution

Purpose, Values and Culture (20-21)

Throughout the Sustainability Report (40-54), Corporate Governance Report (58-68) and
Remuneration Committee Report (77-96) there are descriptions of how the long-term
sustainable success of the Company and its contribution to wider society is promoted and
shareholder value generated.

B: Purpose, values, strategy and culture

Purpose, Values and Culture (20-21)

Purpose and Culture (64)

Major Activities of the Nomination Committee (99-100)

C: Resources and controls

D: Stakeholder engagement

Resources (12)

KPIs (18)

Managing our Risks (25)

Internal Controls (67-68)

Review of Risk Management (73-74)

Stakeholder Engagement (65-67)

Section 172(1) Statement (22-24)

E: Workforce policies and practices

Remuneration Policy and Stakeholder Engagement (79-80)

2. Division of Responsibilities

F: The Chairman

Whistleblowing (54)

Employee Stakeholder Engagement (65-66)

Board of Directors (60)

Roles (61)

Board Evaluation (62-63)

G: Board composition and division of
responsibilities

Board of Directors, Board Committees (60-61)

Roles (61)

Directors’ Conflicts of Interest and Independence (63)

H: Role and time commitment of
non-executive directors

Board of Directors (60)

Board Attendance (62)

Committee Attendance (70, 78 and 98)

Roles (61)

Directors’ Conflicts of Interest and Independence (63)

I: Board function and the company secretary

Board of Directors (60)

3. Composition, Succession and Evaluation

J: Board appointments and
succession planning

K: Board and committee skills,
experience and knowledge

L: Board evaluation

4. Audit, Risk and Internal Control

Nomination Committee Report (99-100)

Board Diversity and Inclusion Policy (64)

Board Tenure (62)

Board Composition (101)

Board Evaluation (62)

M: Internal and external audit independence
and effectiveness

Internal Controls (67-68)

Audit Committee Report (70-74)

N: Fair, balanced and understandable
assessment of position and prospects

O: Risk management, internal control
framework and principal risks

Statement of Directors’ Responsibilities (107)

Managing our Risks (25)

Principal Risks and Uncertainties (27-31)

Internal Controls (67-68)

CORPORATE GOVERNANCE5. Remuneration

P: Remuneration policies and practices

Remuneration Committee Report (77-96)

Q: Executive remuneration

Remuneration Committee Report (87-91)

Remuneration Policy, Stakeholder Engagement (79-80)

R: Independent judgement and discretion in
remuneration outcomes

Discretion (80)

BOARD OF DIRECTORS

The Board consists of the Chief Executive Officer, Chief Financial Officer and five Non-Executive Directors including the Chairman.
The Chairman was considered independent on appointment. The Board considers all the Non-Executive Directors (including the
Non-Executive Director starting in the last 12 months) to be independent of the management of the Company and free from any
business or other relationship which could materially interfere with the exercise of their independent judgement (see further discussion
in the Directors’ Conflict of Interests and Independence section below). The Directors bring to the Board a wide range of financial and
business skills and extensive experience and knowledge suited to the nature of the Company.

The Board of Directors meets regularly on a formal basis and holds additional ad hoc meetings as necessary to review strategic,
operational and financial matters, including proposed acquisitions and divestments. It has a formal schedule of matters reserved to it
for decision-making. Those matters include the approval of interim and annual Financial Statements, the annual budget, significant
Stock Exchange announcements, significant contracts and capital investment. It also reviews the effectiveness of the internal control
systems and principal risks of the Group. The Chairman holds meetings with the Non-Executive Directors without the Executive
Directors present in circumstances where it is considered appropriate to do so.

A forward agenda for the Board is maintained to ensure that all necessary and appropriate matters are covered during the year.
The Board is provided with accurate, timely and clear information. As part of the Board pack prepared for each meeting, the Board
receives monthly management accounts and operational reports from the CEO, CFO and General Counsel and reports from other
members of the Executive and the Group. The Board is also provided with specific reports on key areas and projects and informed of
any key developments or issues that require their consideration. These reports and updates cover a wide range of matters in order to
ensure that policy, practices and behaviour in the Group are aligned with the Company’s purpose, values and strategy and any issues
that may give rise to concerns are brought to the attention of the Board. During the year, reports were presented on various matters
including regular updates on the development of the new national warehouse and the delivery of the new internal IT systems. Further
information on other reports it received are in the Stakeholder Engagement report below. The Board requests further information on
any matter that they consider relevant, which may include ongoing updates, assurance as to the proposed actions to resolve such
matters and information on corrective actions taken. This year this has included IAS38 treatment of project costs, environmental
matters and further information on various health and safety issues in connection with the pandemic.

Any concerns about the operation of the Board or the management of the Company that cannot be resolved are recorded in the
Board minutes.

All Directors have access to the advice and services of the Company Secretary, and all the Directors are able to take independent
professional advice, if necessary, at the Company’s expense.

All Directors are appointed for a defined term subject to annual re-election by shareholders at each Annual General Meeting.

BOARD COMMITTEES

The Board has delegated authority to three committees: Audit, Remuneration, and Nomination, the Executive Directors are not
members of these Committees. The Terms of Reference for each Committee setting out their responsibilities are available on
www.rmplc.com. For each Committee, information on their composition and activities is provided in the respective reports.

The Board

The Board is collectively responsible for the sustainable long-term success of the Group.

The key roles of the Board are:

• Setting the strategic direction of the Group to promote the long-term sustainable success

of the Company, generate value for shareholders and contribute to wider society.

• Overseeing implementation of the strategy and ensuring that the Group is suitably

resourced to achieve its objectives and effectively engages with stakeholders.

• Overall responsibility for the management of risk and for reviewing the effectiveness

of the framework for internal control and risk management.

Chairman

Senior Independent Director

Non-Executive Directors

• Responsible for overall leadership and

• Deputises for the Chairman and acts

• Share full responsibility for the

governance of the Board, effective

as intermediary for other Directors,

execution of the Board’s duties.

contribution from Non-Executive

if needed.

• Scrutinise and constructively

Directors and ensures constructive

• Meets with the Non-Executive Directors,

challenge strategic proposals and

relations between Executive and

Non-Executive Directors.

without the Chairman present,

when considered appropriate,

hold management to account

• Offer specialist advice and

• Sets the agenda, ensures adequate

and leads the appraisal of the

strategic guidance

time is available for discussion of

Chairman’s performance.

• Monitor the performance of

agenda items, promotes a culture

• Available to respond to shareholder

management on an ongoing basis

of openness and debate at Board

concerns if not resolved through the

meetings and ensures directors receive

normal channels

accurate, timely and clear information.

• Provides support and advice to the CEO.

• Ensures effective communications

with shareholders.

Audit Committee

Remuneration Committee

Nomination Committee

• Oversees and monitors the

• Reviews and recommends the

• Reviews the structure, size and

Group’s Financial Statements,

framework and policy for the

composition of the Board and

accounting processes and audits

remuneration of the Executive Directors

its Committees.

(internal and external)

and senior executives.

•

Identifies and nominates suitable

• Ensures that risks are identified and

• Reviews workforce remuneration and

executive candidates to be appointed

assessed, and that sound systems of

related policies.

to the Board.

risk management and internal control

• Considers how the remuneration

• Considers wider aspects of

are in place

policy supports the business strategy

succession planning.

• Reviews matters relating to fraud and

of the Group.

whistleblowing reports

Group Chief Executive Officer (CEO)

• Responsible for the executive management of the Group as a whole and delivering

the strategic and commercial objectives agreed by the Board.

• Leads the Executive management team.

• Maintenance and protection of the Group’s reputation.

• Ensures the affairs of the Group are conducted with the highest standards of integrity.

• Builds positive relationships with the Group’s stakeholders.

CORPORATE GOVERNANCEVicky Griffiths is a partner at Independent Search Partnership
(‘ISP’), which was engaged during the period in the search for
a new Non-Executive Director. The Board does not consider
this has impaired, or impairs, the independence of Vicky
Griffiths, owing to the fact this firm has only been engaged
once by RM and the fees relating to this engagement were
non-material and in any event Vicky agreed not to receive any
element of the fees as a partner at ISP. Vicky Griffiths did not
participate in the decision to use ISP.

There were no other conflicts of interest identified. None of
the independent Non-Executive Directors nor the Chairman
have any personal financial interest in the Company other
than through fees received or as a shareholder. They are
not involved in the day-to-day running of the business and
have no personal conflicts of interest which could materially
interfere with the exercise of their independent judgement.

ESG

See the various sections covering Environmental, Social and
Governance matters in the Company’s Sustainability Report
on page 40 to 54.

BOARD ATTENDANCE

INDUCTION

A number of practical suggestions were made with regard to:

The Board has 11 scheduled meetings a year. A record of
attendance for each Director is set out in the table below.
Additionally, there were several ad hoc meetings held by the
Board during 2021 to discuss the impact of the COVID-19
pandemic. Board meetings were mostly held virtually for
the majority of the year due to COVID-19 social distancing
requirements. The Board also approved a number of matters
during the year by written resolution.

Board meetings

No. of meetings held in the
period/Eligible to attend

John Poulter

11/11

Mark Berry
(from 20 September 2021)

Charles Bligh
(from 2 July 2021)

David Brooks
(until 1 April 2021)

Paul Dean

Vicky Griffiths

Patrick Martell

Neil Martin

3/3

4/4

2/2

11/11

All Directors received papers for all meetings in advance.
When a Director was unable to attend a meeting, they were
given the opportunity to provide comments.

The Board ensures that, on appointment and thereafter, all
Directors have sufficient time to carry out their duties.

No Director should undertake additional appointments
without the prior approval of the Board. No significant
appointments have been undertaken by a Director in the
year ended 30 November 2021.

BOARD TENURE

Details of the tenure of the members of the Board as at the
date of this report are set out in the table below.

Tenure

0-2 years

2-5 years

5+ years

Percentage of Board

43%

14%

43%

All Directors receive an induction on joining the Board.
Charles Bligh and Mark Berry joined the Board this year
and met with all Board Directors, members of the Executive
and other relevant employees individually. They also
received comprehensive resources on Board activities
and Company documents such as Committee Terms of
Reference, Delegation of Authority and Group structure. Visits
to Company sites have not been feasible due to COVID-19
restrictions for much of the year but they participated in a visit
to the new distribution centre at Harrier Park where they met
with members of the RM Resources Division.

BOARD EVALUATION

The performance of the Board, each Board Committee and
each Director is reviewed on an annual basis. A review was
conducted at a meeting in November 2021. The principles
and provisions of the Code and Guidance on Board
Effectiveness were covered.

The performance of the:

• Chairman was assessed by the Non-Executive Directors,

led by the Senior Independent Director;

• Chief Executive Officer was assessed by the Chairman, in
consultation with the other Non-Executive Directors; and

• Chief Financial Officer was assessed by the

Chief Executive Officer, in consultation with the
Chairman and other Non-Executive Directors.

As a result of these reviews, it is considered that the
performance of each of the Directors continues to be effective
and that each Director demonstrates sufficient commitment
to their role, enhances the collective effectiveness of the
Board, acts with integrity, leads by example and promote
the desired culture. Communication during the COVID-19
pandemic was felt to have continued to be good but that
it had impeded the Board’s effectiveness. A number of
additional meetings have been held due to the pandemic.
Relationships between Directors were considered to be
positive with an open and collaborative Board culture and
that members worked together to meet objectives. The Board
reviewed its composition and diversity.

The Committees were also reviewed and overall were felt
to function well. The Chairman is highly regarded by other
Directors and encourages constructive debate and his
knowledge of the Group was valued. The Chairman also
reviewed the performance of each member of the Board.

• finding more time for the Board to spend together

face to face particularly given the number of relatively
new members and the enforced distance as a result of
COVID-19;

• greater discussion on climate and sustainability plans and

strategies for the Company; and

•

further discussion on the broader competitive marketplace
for each Division to ensure a common understanding of
the complexity and landscape in which they compete.

The improvements suggested in the Board evaluation
last year on the running of meetings were felt to have
been implemented.

An external facilitated Board evaluation was considered but it
was felt it would not be useful given the recent changes to the
Board and retirement of the Chairman.

EXECUTIVE COMMITTEE

The Executive Committee is chaired by the Chief Executive
Officer. The Executive Committee comprises the Chief Executive
Officer, Chief Financial Officer and other senior managers
within the Group. The Executive Committee normally meets on
a monthly basis to discuss policy and operational issues. Those
issues outside the Executive Committee’s delegated authority
levels set by the Board are referred to the Board for its decision.
All Non-Executive Directors are invited to attend the Executive
Committee meetings.

DIRECTORS’ CONFLICTS OF INTERESTS AND
INDEPENDENCE

There are procedures in place to identify, authorise and
manage any conflict of interest of any Director with those of
the Company. These procedures have operated effectively
during the year.

Charles Bligh is the CEO of Restore plc, which is a supplier
to RM of scanning and associated services. Further to
the considerations of the Board, as detailed on page 99,
the Board considered Charles to be independent on his
appointment in July 2021. The Board believes that, since his
appointment, Charles has constructively challenged matters
that come before the Board and the Committees on which
he serves, and effectively holds management to account.
Accordingly, the Board is satisfied that Charles demonstrates
the qualities of independence in carrying out his duties. The
Board will continue to monitor this on an ongoing basis.
Additionally, Charles was not involved in any discussions
relating to the use of Restore plc or that specifically affected
Restore’s relationship with RM.

CORPORATE GOVERNANCEBOARD DIVERSITY AND INCLUSION POLICY

The Board is committed to ensuring appointments to the Board promote diversity and an inclusive culture so that it has the range of
perspectives, experiences and backgrounds necessary to support good decision making. Diversity and inclusion are embraced at all
levels in RM and are reflected in the Company’s culture and values which will help deliver RM’s strategic objectives.

The Board recognises the following objectives

Objectives

Aim to achieve:

(i)

(ii)

female members representing 33% of the total
Board membership; and

increased ethnic diversity, within the context of
current Board size.

Action taken

Currently there is one female Board member but the new Chair
will increase this to two when her appointment commences on
16 February 2022 which will be equivalent to 29% of the Board.

Currently, there is no Board member from an ethnic minority
background on the Board.

Diversity has been and will continue to be an area of focus in
future Director searches.

A focus on diversity in succession planning and when
seeking to make Board level appointments.

Diversity was a key consideration in each of the appointments
made this year.

To consider composition and diversity as part of its review
of effectiveness in the Board evaluation.

These matters were considered in the 2021 Board evaluation.

To make key diversity and inclusion information about
the Board, senior management and its wider employment
population available in the Annual Report.

Over recent years there has been a substantial increase in the number
of female senior managers across the business, data on this is shown
on page 49.

Data on other aspects of diversity to help with transparency is being
collected where individuals consent to us doing so.

Further information including diversity statistics is in the Sustainability Report on page 49.

PURPOSE AND CULTURE

The Board is responsible for the Company’s purpose, values and strategy and for satisfying itself that these and its culture are aligned.
The Board monitors this in various ways:

• The reviews presented at each Board meeting highlight matters that show how the Company is pursuing its purpose and are indicators
of the health of the Company’s culture. This includes metrics and updates on workforce matters including figures on workforce changes
and feedback from workforce engagement, details of whistleblowing reports, health and safety statistics on incidents and performance
updates, legal compliance activities, and reports on any regulatory matters and disputes that have arisen.

• Whilst site visits have been limited in the last year, the Board has visited the new Harrier Park distribution centre. This provided the

Board with an opportunity to engage with senior managers and other employees to hear their views directly.

• The Board received reports on feedback from the Company’s audit of its culture.

• The Audit Committee receives reports from internal audits of procedure and practices across the Company providing alerts to issues

that could threaten the Company’s culture.

• The Remuneration Committee reviews workforce remuneration policies and practices and assesses their alignment with the culture
and strategy of the Company. Gender pay reports are reviewed annually to ensure these are consistent with the Company’s values.

• The Nomination Committee considers the Group’s diversity and inclusion strategy, practices and progress to ensure it reflects the

Company’s values.

The Board have also reviewed the Company’s new Code of
Conduct which sets out the standards of behaviour expected
from employees. This Code of Conduct embodies the culture
of the Company and highlights how employees are trusted to
comply with this code when acting on behalf of the Company.
The Board will receive reports on any activities reported that
are not in compliance with this Code.

STAKEHOLDER ENGAGEMENT

Engagement with the Company’s key stakeholders is vital
to building a business that provides valued products and
services to its customers, that employees are proud to be part
of and that rewards shareholders.

The Board takes steps to understand the priorities and
needs of stakeholders when setting the Company’s strategy
and when making decisions that are most likely to promote
the long-term sustainable success of the Company for the
benefit of its members as a whole. In doing so, the Board
has had regard to the matters set out in Section 172 of the
Companies Act 2006.

Examples of some of the principal decisions taken by the
Board during the year are set out below:

Customers

Customers are central in setting the strategy and direction for
the Company and this is reflected in the strategic objectives
to ‘Reach more customers’ and ‘Improve share of customer
spend’. The Company is in regular contact with its customers
and strives to better understand their expectations about
the products and services that will help customers deliver
their educational objectives. This includes the range of
products and services RM provides to support teachers
in the classroom and the development of examination
and assessment software that improves the efficiency and
effectiveness of learner assessment. The Board discusses at
each meeting any issues arising in relation to the Company’s
key customers, the services it provides to them and future
changes to those relationships. This year, this has included
the impact of increased complexity and delays in shipping
due to Brexit, the impact on supply chains due to the
COVID-19 pandemic, and a mid-year price increase by the
RM Resources business to reflect higher supply costs. The
Board has also been briefed on the plans to make the import
and sale of goods into the European Union more efficient.
The Board further receives regular updates on new customer
wins, significant tender process updates and approves all
major new contracts.

The impact of the COVID-19 pandemic on RM’s customers in
schools and examination authorities was considered by the
Board regularly during the year. The business continued to

supply schools and maintain the IT services of the schools
it supports so they could continue to stay open and to help
them when they were closed. RM worked with examination
authorities when exams were delayed or cancelled to help
manage the impact of these decisions.

The Company has launched RM Vantage, a new cloud-based
proposition for UK schools, to make it easier for pupils to
work at school and at home. RM Resources launched new
products including the Kitt learning companion robot and the
Early Years Projector, which allows children to create, build
and explore with light.

To ensure that the business continues to understand the
changing needs of its customers, the Company undertakes
regular UK and global independent market research
studies with its customers and others. This helps the
business understand customer needs, informs RM’s product
development teams of market demands and requirements
(especially post COVID-19) and improves the Company’s
ability to communicate the benefits of RM’s products and
services to its customers.

Employees

The Board considers workforce treatment and engagement
as an issue of core importance and as key to achieve its
strategic objective to ‘Attract and retain talent’. A number
of processes have been put in place to assist the Board in
monitoring such matters outlined below and in the Workforce
section on pages 48 to 51.

People at all levels of the organisation are invited to monthly
business unit briefings and regular senior leader catch-
up sessions with employees which also cover financial
updates and other important matters. Employees are given
the chance to ask questions and share their views on the
business at these meetings and through staff surveys.
These have been largely held digitally during 2021 given the
difficulty with face-to-face communication. In addition, as a
response to the COVID-19 pandemic, an Employee Forum of
approximately 40 employees was set up to help review the
impact of the pandemic on the business and staff. This Forum
has continued this year and seven meetings were held. Key
issues raised this year have included diversity and inclusivity,
working at home and RM’s new policy on place of work
(My Work Blend@RM - see Sustainability Report for further
details), the return to work in RM’s offices and the vision for
the Company. Feedback from such employee engagements
and the Employee Forum were shared with the Board. The
Board also visited the new distribution centre at Harrier
Park to review progress and talk with members of the RM
Resources business about the opportunities and impact of
the new facility.

CORPORATE GOVERNANCE

Patrick Martell is the designated Non-Executive Director for
workplace engagement. He was appointed as the Board
felt this was the best approach to engage with different
parts of the workforce, in order to provide feedback to the
Board from employees and this has been found to have
been successful. He was appointed in this role as it was felt
that the longevity of his tenure as a Non-Executive Director
and his position as Chair of the Remuneration Committee
and Senior Independent Director would be helpful. Patrick
agreed a timetable of activities to engage with employees in
different settings and with employees across the organisation
during the year. In this role, Patrick has met with groups of
employees in various formats including the Employee Forum
and the Senior Leadership Team to hear about and discuss
their experiences of working at RM. These meetings have had
to be virtual given the impact of the COVID-19 pandemic.
Patrick is supported by HR in the preparation for these
meetings and in putting the agenda together. Patrick reports
back to the Board on the outcome of these discussions to
help provide an insight into employee challenges, views
and priorities. This feedback has been helpful in Board
discussions and decision-making in connection with the
workforce as well as strategic business planning.

The health and safety of employees is of paramount
importance to the Board. The Board receives quarterly
reports on health and safety which cover key measures taken
and details of material incidents and trends. Updates on the
health and safety processes at the new distribution centre
at Harrier Park have been regularly provided to the Board.
The Board has also been keen to understand how health and
safety measures have been maintained at the distribution
centres that are closing down. Employee concerns about
working in the distribution centres and returning to offices
were listened to which influenced the measures taken and
communication of those measures to employees. In India, in
response to employee concerns, vaccinations were organised
and funded for staff and facilities, and oxygen concentrators
were available to help staff suffering from COVID-19.

In response to the pandemic, as part of prioritising the
wellbeing of employees, RM set up a Mental Health Network.
This is a group of Mental Health First Aiders and Champions
who are available to all employees for a confidential
conversation about how they are feeling and to direct them to
further help and support as necessary. Weekly wellbeing and
mental health virtual drop-in sessions were also set up. These
are initiatives led by employees, with the Company’s support,
to help other employees with mental health issues. There
is an online portal with information and access to online
courses to help build resilience. All employees have access to
an Employee Assistance Programme provided by Aviva which
offers access to a confidential helpline 365 days/24 hours

with online support and guidance, face-to-face counselling
and specialist bereavement counselling available if required.

During the COVID-19 pandemic, employees have been
provided with equipment to help them work from home and
training was made available to help employees understand the
health and safety aspects of homeworking. Distribution Centres
have remained in operation throughout the pandemic and
they have maintained the reconfigured processes that enable
social distancing even after lock-down was lifted. The Board
have received updates throughout the year on how COVID-19
was affecting employees and the steps taken to support them.
No employees were on furlough during the year.

Shareholders

The Annual General Meeting is attended by all Board
members and provides an opportunity for shareholders to
ask them questions directly. Due to the COVID-19 restrictions,
attendance at the last AGM was difficult; shareholders
were given the opportunity to raise questions in advance
and invited to attend a listen-only conference call of the
event. Each of the Directors were available to speak with
institutional shareholders on request.

During the year, virtual investor events and results conference
presentations were held by the Executive Directors to speak to
shareholders directly about RM’s strategy and performance.
In order to maintain dialogue with institutional shareholders,
the Executive Directors offer to speak with shareholders
following interim and final announcements of results, and
otherwise, as appropriate.

Key shareholder publications include the full and half
year results announcements and press releases as well as
information on the RM website.

The Board is kept appraised of the views of major
shareholders and market perceptions by the Executive
Directors and Chairman respectively, following meetings
held with shareholders, its brokers and advisers and reports
provided by them. Shareholder feedback this year has
covered performance, strategy, dividends, succession and the
impact of COVID-19, and this forms a part of the discussions
at Board meetings. The Company also receives enquiries
from shareholders during the year on a wide range of subjects
including this year, the use of AI in RM’s products. The
business individual responds to these. The appropriate level
of the final dividend to shareholders was given significant
consideration by the Board, taking into account the differing
expectations expressed by shareholders, as was the decision
to request that shareholders do not attend the Annual
General Meeting. The Board also receives regular updates on
shareholder register changes and analyst communications.

Suppliers and Partners

Regular review meetings are held with strategic suppliers
at least quarterly to review performance and potential
opportunities for improvement in how both RM and its
suppliers work together, in order to achieve RM’s strategic
objective of ‘Operational excellence’. Potential new suppliers
who may offer a sales opportunity for a new product,
additional production options, a new version of a product or
new service, or cost saving are reviewed for capacity to deliver
expected volumes, quality, innovation, financial solvency,
regulatory compliance and ethical position. Suppliers are
also assessed to identify potential risks through the lifecycle
of a contract and to highlight those suppliers in respect of
whom further due diligence is required.

The Resources Division, which handles the majority of
suppliers, requires its suppliers to accept its Supplier Code of
Conduct and to commit to labour practices such as:

• no child labour;

• no forced labour;

• no discrimination in hiring and employment practices on
the basis of race, religion, ethnicity, gender, age, marital
status, sexual orientation, disability union membership or
political affiliation;

•

fair wages and limits on working hours;

• humane treatment;

•

freedom of association; and

• safe working conditions.

This Code is being reviewed and it is intended the new
version will apply to all RM suppliers.

The Board approves material supply contracts and
were briefed on the tender process and the different
bidders for the new freight provider (further details in
the Section 172 Statement on page 22), the supply chain
challenges caused by the COVID-19 pandemic and Brexit,
and the impact on deliveries from suppliers and to customers
in the EU. RM supported its suppliers in a number of ways
during the pandemic including easier payment for those with
cash flow difficulties during difficult supply chain periods,
using the Company’s warehouse space for supplier stock
when third-party warehousing space was tight and making
commitments to give them business security and plan
production more easily.

In some jurisdictions, RM partners with local businesses
to support local customers and provide a more locally
orientated service. The Company works closely with such
partners to understand the local market and discuss how

RM’s products could benefit potential customers in that
market and working collaboratively.

Supplier reviews and audits are made to help ensure RM’s
supply chain is not involved in or connected in any way to
modern slavery. The Board received a report on this and has
approved the Modern Slavery Statement, which is regularly
reviewed and available on the Company’s website.

The Board reviews and discusses the six monthly payment
practices reports for all subsidiaries; the figures are available
to view at Companies House.

Environment/Community

The Company continues to be a trusted and reliable partner
to schools, nurseries and other educational organisations
across the UK and increasingly around the world. It was
important therefore during the pandemic for the Company to
ensure that its customers continued to receive the goods and
services they required to stay open and that it did so in a safe
way for the benefit of schools, students and the community.

Customer expectations regarding environmental
considerations in connection with the goods and services RM
provides is taken into account and has led to or influenced
some of the initiatives discussed on page 42 and is therefore
important to the Company’s strategic objectives to ‘Reach
more customers’ and ‘Increase share of customer spend’.

Further information on the activities that RM and its
employees have engaged in over the year to support
communities and in furtherance of its environmental
objectives is set out in the Sustainability Report.

INTERNAL CONTROL

The Group maintains an ongoing process in respect of
internal control to safeguard shareholders’ investments and
the Group’s assets and to facilitate the effective and efficient
operation of the Group.

These processes enable the Group to respond appropriately,
and in a timely fashion, to significant business, operational,
financial, compliance and other risks, in line with the Code,
which may otherwise prevent the achievement of the
Group’s objectives.

The Group recognises that it operates in a highly competitive
market that can be affected by factors and events outside
its control. Details of the main risks faced by the Group are
set out in the “Principal Risks and Uncertainties” table in
the Strategic Report. The Group is committed to mitigating
risks arising wherever possible. Internal controls that are
considered, applied and monitored appropriately, are an
essential tool in achieving this objective.

CORPORATE GOVERNANCEThe key elements of the framework for the Group’s internal
control, which have been effective during 2021 and up to the
date of approval of the Financial Statements, are set out below:

• The existence of a clear organisational structure

with defined lines of responsibility and delegation of
authority from the Board to its Executive Directors and
operating Divisions.

• A procedure for the regular review of reporting business

issues and risks by operating Divisions.

• Regular review meetings with the operating management.

• A planning and management reporting system operated

by each Division and the Executive Directors.

• The establishment of appropriate operating and

financial policies.

The Directors have overall responsibility for establishing
financial and other reporting procedures to provide them
with a reasonable basis on which to make proper judgements
as to the financial position and prospects of the Group, and
they have responsibility for establishing the Group’s system
of internal control and for monitoring its effectiveness. The
Group’s systems are designed to provide Directors with
reasonable assurance that physical and financial assets
are safeguarded, transactions are authorised and properly
recorded, and material errors and irregularities are either
prevented or detected with the minimum of delay. However,
systems of internal financial control can provide only
reasonable and not absolute assurance against material
misstatement or loss.

The main features of the Company and Group’s systems of
internal financial control and risk management include:

• A financial planning process with an annual budget

approved by the Board.

• Regular budget updates including updated forecasting

for the year.

• Monthly comparison of actual results against budget.

• Written procedures detailing operational and financial

internal control policies which are reviewed on a
regular basis.

• An internal audit function overseen by the

Group Financial Controller.

• Regular reporting to the Board on treasury and legal matters.

• Defined investment control guidelines and procedures.

• Regular reviews by the Executive Committee of the Group’s
systems and procedures, the principal risks facing the
Company and the steps taken to mitigate and address
those risks.

• Periodic reviews by the Board of the principal risks facing
the Company and mitigating actions as noted above, as
well as of the Group’s systems and procedures to identify
and address those risks.

• Strategic planning that anticipates both opportunities and

any resource challenges.

The majority of the Group’s financial and management
information is processed and stored on computer
systems. The Group is dependent on systems that require
sophisticated computer networks. The Group has established
controls and procedures over the security of data held on
such systems, including business continuity arrangements.

In assessing effectiveness, the Audit Committee reviewed a
report from management that enabled them to assess:

•

the inherent internal control system weaknesses (such
as formalised automated linkages between the many
systems, reliance on off system calculations for certain
revenue recognition) and how these are addressed by
appropriate management review and detailed process
and outcome checks, internal audits and external audit
findings (on a substantive based audit approach);

the consolidated risk register review carried out across the
Group and management’s actions to address risks;

the content of whistleblowing reports; and

the impact of planned improvements to controls in
particular the new Group IT system, enhanced plan
of internal audits and the set-up of a new Group
Risk Committee.

In relation to the new finance ERP system, the range of control
requirements that are defined in the new system are based
on improvements to the current system and best practise.
The system is tested by key business users. Progress on the
new system is tested and reported to the Steering Committee
(comprising selected members of the Executive and other
key stakeholders) who report highlights to the Board. The key
details of the improvements planned in this new system are
increased automation and system generated reporting on key
performance metrics and exceptions and which were detailed
in the report referred to above.

Both the Board and Audit Committee have reviewed
the operation and effectiveness of this framework of risk
management and internal control for the period and up to
the date of approval of the Annual Report and are satisfied
with its effectiveness. Further details are provided in the
Strategic and Audit Committee Reports.

CORPORATE GOVERNANCEAUDIT COMMITTEE REPORT

On behalf of the Board, I am pleased to present the Audit
Committee Report for the year ended 30 November 2021.

THE AUDIT COMMITTEE

The Audit Committee (‘Committee’) operates under terms of
reference approved by the Board. These can be found on the
Group’s website at www.rmplc.com.

COMMITTEE MEMBERSHIP AND ATTENDANCE

The Audit Committee during the year ended
30 November 2021 comprised Paul Dean FCMA (Chairman),
Vicky Griffiths and Patrick Martell, all of whom were
independent Non-Executive Directors. The Group considers
that Paul Dean (as a Chartered Management Accountant
and former FTSE250 Finance Director) has significant recent
and relevant financial experience, as further described in the
Directors’ Biographies section of this Annual Report.

To encourage effective communication, in addition to the
above members, the Board Chairman (John Poulter), the
CEO (David Brooks and after his resignation Neil Martin),
the CFO (Neil Martin and after his appointment as CEO,
Mark Berry), Charles Bligh (Non-Executive Director),
Group Financial Controller (Jo Bridgman) and other
management are invited to attend the Audit Committee
meetings as appropriate.

The Audit Committee met three times during the period,
attendance is set out below. All of these meetings were part of
the regular schedule of meetings set out in the Committee’s
Terms of Reference. These meetings are planning around the
Company’s financial calendar.

No. of meetings held in the
period/Eligible to attend

Paul Dean

Vicky Griffiths

Patrick Martell

3/3

Audit Committee meetings have formal agendas, which
cover all of the areas of responsibility set out in the
Committee’s Terms of Reference and also include an
evaluation of the Audit Committee. These agendas include
meetings with the external auditor without Executive
Directors or managers of the Company present.

ROLES AND RESPONSIBILITIES

FINANCIAL REPORTING

Matter considered: Long-term revenue recognition

The Audit Committee is responsible for carrying out the
audit functions as required by DTR 7.1.3R and assists
the Board in fulfilling its oversight responsibilities in
respect of the Company and the Group. The Committee’s
responsibilities include:

Financial reporting

To review the reporting of financial and other information
to the shareholders of the Company and to monitor
the integrity of the Financial Statements, including the
application of key judgements and estimates and to
ensure their application is presented in a fair, balanced
and understandable manner.

Risk management, internal control
and compliance

To review and assess the adequacy of the systems of
internal control and risk management, and monitor the
risk profile of the business.

Internal audit

To approve the internal audit plan. Review the
effectiveness of the internal audit function and review
all significant recommendations and ensure they are
addressed appropriately and in a timely manner.

External audit

To review the effectiveness and objectivity of the external
audit process, assess the independence of the external
auditor and ensure appropriate policies and procedures
are in place to protect such independence.

Effectiveness

To report to the Board on how it has discharged
its responsibilities.

Financial Statements

The Audit Committee reviewed the form and content of
the Annual Report and the interim results prior to their
publication to provide assurance that the disclosure made in
the Financial Statements was properly set in context.

The Audit Committee reviewed and considered the
following areas:

• The methods used to account for significant or unusual
transactions where different approaches are possible.

• Whether the Group has followed appropriate accounting

standards and made appropriate estimates and
judgements, taking into account the views of the
Company’s auditor.

• The consistency of, and any changes to, accounting
policies both on a year-on-year basis and across
the Group.

• The clarity of disclosure in the Company’s financial reports.

• The effect of the IFRIC interpretations of configuration

costs on SaaS software development in relation to IAS38
Intangible assets on the accounts of the Group and the
key judgements involved.

• The supporting assumptions and considerations behind
the adoption of the statements relating to going concern
and financial viability.

• Whether the Company’s financial report is fair, balanced

and understandable.

As part of this process the Audit Committee received reports
from the Company’s management and the external auditor.
The external auditor provided its audit opinion along with its
audit findings that were of significance in relation to the audit
of the annual Financial Statements and a high-level review
of the interim Financial Statements. The Audit Committee
reviewed these reports with the external auditor.

The significant areas of judgements and estimates identified
by the Committee, in conjunction with management and the
external auditor, together with a number of areas that the
Committee deemed significant are as follows:

In long-term customer contracts the arrangements are often
complex, particularly with respect to variable consideration
and service performance measures.

These contracts can involve significant judgements that may
impact the recognition of revenue including:

• The identification of performance obligations included

within the contract

• The allocation of revenue to performance obligations

including the impact of variable consideration

• The combination of goods and services into a single

performance obligation

• The measurement of progress for performance obligations

satisfied over time

• The consideration of onerous contract conditions and

associated loss provisions

Audit Committee action

The Audit Committee received papers which included regular
updates on the key judgements and estimates arising out
of the more complex and significant contracts in respect
of IFRS15, which in the period have related to Assessment
contracts. The Committee is also provided with a regular
update on any significant new contracts throughout the
business and the types of performance obligations and
judgements identified in these contracts.

Outcome

The revenue recognition policy includes the disclosure of
the significant judgements and estimates in relation to its
application and the Committee is satisfied that these have
been properly disclosed. The Committee is satisfied that the
disclosures given within the accounts are sufficient to gain
a proper understanding of the methodology of accounting
for revenue across the Group, including the recognition of
deferred income at the balance sheet date. The revenue
recognition policy has been updated to provide enhanced
clarification of our policy following external audit review.

CORPORATE GOVERNANCEMatter considered: IAS38 capitalisation of capital projects

Matter considered: Carrying value of goodwill and intangibles

APPOINTMENT OF EXTERNAL AUDITOR

The Group has invested in two significant capital projects,
RM’s new automated warehouse (primarily comprising
tangible fixed assets) and the new ERP solution (comprising
intangible assets). These programmes represent significant
cash investment projects and it is important that only items
that meet the capitalisation criteria are treated as fixed assets,
with appropriate useful economic lives.

Audit Committee action

The Audit Committee has reviewed management papers that
set out the approach to capitalisation and the adjustments
made in light of the IFRIC interpretation issued during the
year. The Audit Committee has reviewed the disclosures in
the Annual Report and the revised accounting policy.

Outcome

The Audit Committee is satisfied with the treatment of
capitalised intangibles particularly with respect to RM’s ERP
programme and believes the disclosures in the Annual Report
allow the reader to obtain a good understanding of the nature
of the adjustments made, and to understand the Group’s
revised accounting policy with respect to capitalisation.

Matter considered: Defined benefit pension scheme valuations

The measurement of the defined benefit liability in respect of
the defined benefit schemes within the Group is a complex
area, relying on assumptions on inflation, mortality, corporate
bond yields, expectations of returns on assets amongst
other assumptions. There is a risk that any one assumption
could lead to misstatement of the Group’s liability in respect
of these pension obligations and the pension charge or
movement recognised in the income statement or statement
of comprehensive income.

Audit Committee action

The Audit Committee reviewed the disclosures presented
in the Annual Accounts. They also challenged the key
assumptions and reviewed the sensitivity to changes in
some of the key assumptions and reviewed where those
assumptions lie in the context of other companies.

Outcome

The Audit Committee is satisfied that the estimation of the
Group’s pension liabilities and the narrative that accompanies
them gives the required level of information for the reader
of the accounts to determine the impact on the Group of its
pension obligations.

The Group carries significant asset balances in respect of
goodwill and intangible assets related to acquisition activity.
In addition, the parent Company carries a material balance
of investment in subsidiaries on its Financial Statements.
The impairment assessment requires the application of
judgement concerning future prospects and forecasts.

Audit Committee action

The Audit Committee has reviewed the robustness of the
impairment model and challenged the appropriateness of
assumptions used to calculate and determine the existence
of impairment.

Outcome

The Audit Committee is satisfied that no impairment of
goodwill or intangibles was recognised in these statements
which is in line with expectations given the assessment was
based on board-approved future projections. The Audit
Committee is also satisfied that the sensitised value in use
outcomes have significant headroom before impairment
would need to be considered and as such have not disclosed
sensitivity analysis in the Annual Report.

Management reported to the Committee that they were
not aware of any material misstatements. The auditor
reported to the Committee that they had not found any
material misstatements in the course of their work. The Audit
Committee was also satisfied that the significant assumptions
used for determining the value of assets and liabilities
had been appropriately scrutinised, challenged and were
sufficiently robust.

The Audit Committee, at the Board’s request also considered
whether the half year results and the Annual Report were fair,
balanced and understandable and whether the information
provided was sufficient for the reader of the statements to
understand the Group’s position and performance, business
model and strategy. The Audit Committee reviewed both the
narrative and financial sections of the reports to ensure they
were consistent and gave a balanced view of the performance
of the business in the year and that appropriate weight was
given to both positives and negative considerations. The
Audit Committee also considered whether the half Year and
full year results announcements were presented clearly.

The Audit Committee considered whether the Annual Report
and Accounts enables readers to understand the Company’s
financial position and prospects, as well as assess its going
concern status and longer-term viability.

The Audit Committee recommended, and shareholders
approved at the Company’s Annual General Meeting on 8
April 2021, the appointment of Deloitte LLP as Group external
auditor. This was the first year of appointment for Deloitte LLP.

During the prior year the Group conducted a formal
competitive and comprehensive audit tender process led
by the Audit Committee. The Board approved the Audit
Committee recommendation that Deloitte LLP be appointed
as external auditor for the financial year ending 30 November
2021. KPMG LLP remained as the external auditor for the
financial year ended 30 November 2020.

There were no contractual obligations restricting
the Group’s choice of external auditor, other than
PricewaterhouseCoopers LLP (who were not independent as
a result of working on RM’s ERP programme).

The Audit Committee are comfortable that the current audit
partner from Deloitte is independent from the Group This
assessment is based on internal review of relations and
confirmation by the audit firm itself. The Audit Committee
recommended to the Board (which was subsequently
approved) the reappointment of Deloitte be put to
shareholders for approval at the 2022 AGM.

OVERSIGHT OF EXTERNAL AUDIT

The Audit Committee has reviewed the scope and results
of the audit services, and the cost effectiveness and
independence and objectivity of the external auditor. This
includes discussions with the external auditor in relation
to areas of key focus and ensuring that the external auditor
challenges management appropriately, in particular in relation
to matters that require judgement to be exercised. The
Independent Auditor’s Report sets out the key external audit
risks and how these have been addressed by the external
auditor which were discussed with the Audit Committee.
The external auditor also reports on other matters such as
upcoming regulatory changes, control observations, peer
practises. The Audit Committee did not request additional
areas to be reviewed by the external auditor. Separately, the
external auditor briefs the Committee on new developments
that may affect the Company to help ensure that the
Company is suitably prepared and up-to-date with all new and
forthcoming accounting developments and disclosures.

POLICY ON NON-AUDIT WORK

The Audit Committee has considered the issue of the
provision of non-audit work by the external auditor and has
agreed a policy intended to ensure that the objectivity and
independence of the external auditor is not compromised.

The policy sets a limit for fees for non-audit work and states
that non-audit work should only be undertaken by the external
auditor where there is a clear commercial benefit to the
Company in doing so. Any significant activity must be approved,
in advance, by at least two Audit Committee members.

The Audit Committee’s policy is to include a cap on fees for
non-audit work of 15% of the annual audit fee (excluding
the interim review). In exceptional circumstances it may be
appropriate for the auditor to carry out non-audit work in
excess of this cap. If this is the case the type of work and
the fee is considered very carefully by the Audit Committee
in advance of appointing the auditor to the work and with
reference to the FRC’s 2019 Ethical Standard.

Fees for non-audit work in the period were 11.4% (£49k) of
the annual audit fee (or 1% excluding the interim review),
which relates to the Banking Facility Covenant Compliance
review (£4k) and the Interim Review (£45k). Whilst the Interim
Review is not required to be performed by the Auditor, it
is common practice to be performed by the Auditor. The
Banking Facility Covenant requires an external audit on the
covenant compliance and again it is common for this to be
performed by the Auditor as there is a significant leverage
from the audit work performed for the audit.

REVIEW OF RISK MANAGEMENT
AND INTERNAL CONTROL

As with any business, RM is exposed to risks as an inherent
part of creating value for shareholders. As described below,
the Group has put in place processes designed to identify
these principal risks and to manage and mitigate the effect of
them. The Audit Committee is responsible for ensuring that
risks are properly considered and the Board is responsible for
deciding what risks should be taken and how best to manage
and mitigate the risks.

The Committee is responsible for monitoring the
effectiveness of the Company’s internal system of control.
The Committee reviewed and assessed the need to address
certain control findings in respect of the process for approving
journal entries in the current IT systems and also in relation to
formality of controls operating over certain revenue contracts
accounted for under IFRS 15. The Committee is satisfied that
management has a plan in place to address these findings,
in part through the new IT systems, and will review the
implementation of this plan in 2022.

With the exception of those items referenced above, the Audit
Committee is satisfied that the Group’s risk management and
internal control processes are effective and appropriate to
the business and Executive management has identified and
addressed the principal risks affecting RM.

The most significant risks the Group is exposed to are set out
in the Strategic Report.

CORPORATE GOVERNANCEControl environment – The Board has put in place
an organisational structure with clearly defined lines of
responsibility and delegation of authority to Executive
management. A Group-wide approval matrix is in place.
Individuals are made aware of their level of authority and
their budgetary responsibility which enables them to identify
and monitor financial performance. There are established
policies and procedures, which are subject to regular review.
The Boards of the operating companies work within terms of
reference and any matters outside those terms or the agreed
business plan are referred to the Group Board for approval.

Identification and evaluation of business risks and control
objectives – The Board has the primary responsibility for
identifying the principal business risks facing the Group and
developing appropriate policies to manage those risks. It
delegates responsibility for operational risks to the Executive
Committee which meets monthly. Further details in relation to
the processes for identifying and managing Group risks are set
out in the Strategic Report and Corporate Governance Report.

Public reporting – The Audit Committee reviews and
comments upon both the Group’s annual and interim results
prepared by management, together with any other trading
statements that are issued.

Management information – Executive managers are
required to produce a budget for approval at the beginning of
each financial year and detailed financial reporting is formally
compiled monthly and reviewed by the Board. Consolidated
management accounts are produced each month and results
measured against budget and against the previous year to
identify any significant variances. Forecasts are produced
each month during the year, with variances to budget
being measured.

Main control procedures – The existing finance systems
and procedures allow the Board to derive confidence in the
completeness and accuracy of the recording of financial
transactions. Current system limitations are mitigated by
good analytical review controls. The Board are anticipating
the new IT systems will improve finance system controls. The
processes in place and the level of analytical detail given
within the management accounts facilitate the identification
of unreliable data. The Group’s treasury activities are
operated within a defined policy designed to control
the Group’s cash and to minimise its exposure to foreign
exchange and liquidity risk.

Monitoring – The Audit Committee meets periodically to
review reports from management and the external auditor
so as to derive reasonable assurance on behalf of the
Board that financial control procedures are in place and
operate effectively. An internal audit plan is set with the
Audit Committee and updates on progress are provided
periodically. The internal audit work is performed on a

peer-to-peer review basis or by engaging a third-party firm of
accountants and is directed by a qualified accountant who is
independent of the business Divisions.

INTERNAL AUDIT

The Audit Committee approved the continuation of RM’s
Group Financial Controller as Head of Internal Audit
(Jo Bridgman, Group Financial Controller). For the purposes
of this role, the Group Financial Controller reported directly to
the Chairman of the Audit Committee. The Audit Committee,
with the advice and support of the Head of Internal Audit, sets
an internal audit plan, focussed on financial controls and risk
areas. The financial controls include controls to address fraud
risks (and there have been no material fraud instances during
the year). The Head of Internal Audit reports on progress
against this plan at Audit Committee meetings.

Internal audit activities are undertaken on a peer-to-peer
basis, or by contracting a suitably qualified third-party firm of
accountants. The external auditor does not rely on internal
audit to substitute any audit work required to form their
opinion on the Financial Statements.

Whilst on-site internal audit activities have been reduced due
to COVID-19 pandemic impacts, the Group has continued
routine audits that review adherence to the agreed controls
and processes in its India subsidiary and have completed
audits of RM Technology’s credit note processes, GDPR
compliance (performed by external audit firms) and an
internal assessment on cyber and information security.

We have also produced and approved a more formalised
audit plan, whose implementation is in an early stage, that
focusses the internal audit activities on the Group’s revised
risk review undertaken during the year.

‘WHISTLEBLOWING’ POLICY

The Group has adopted a formal Whistleblowing Policy
and more details may be found in the Sustainability Report
at page 54.

ANTI-BRIBERY

RM conducts all its business in an honest and ethical manner
and seeks to ensure that all associates and business partners
do the same. The Group has implemented policies and
procedures to ensure that it is transparent and ethical in all
business dealings as referenced in the Sustainability Report
at page 51.

Paul Dean
Chairman, Audit Committee
14 February 2022

CORPORATE GOVERNANCEREMUNERATION REPORT

Part A - Remuneration Committee
Chairman’s Statement

On behalf of the Board, I am pleased to present the
Remuneration Report for the year ended 30 November 2021.

This report is divided into the following three sections:

Part A – Remuneration Committee Chairman’s statement:
which provides an overview of the Report, the functioning
and membership of the Remuneration Committee, and
the major activities and outcomes for the year ended
30 November 2021;

Part B – Directors’ Remuneration Policy: which provides
a summary of the Policy and which will continue to apply
without amendment for the forthcoming year; and

Part C – Implementation Report: which sets out the
payments and awards made to Directors for the year
ending 30 November 2021 and how the Directors’
Remuneration Policy will operate for the year ending
30 November 2022.

THE REMUNERATION COMMITTEE

The Remuneration Committee (‘Committee’) operates
under Terms of Reference approved by the Board. These
can be found on the Group’s website at www.rmplc.com.

No Director is involved in deciding their own remuneration.

ROLES AND RESPONSIBILITIES

The Remuneration Committee is responsible for setting
a formal and transparent procedure for developing the
Policy on Director remuneration in accordance with
the Code.

The Committee’s responsibilities include:

Reviewing the appropriateness of the Directors’
Remuneration Policy

Determining with the Board the policy for remuneration
of the Executive Directors, Chairman of the Company
and Executive, ensuring the alignment of the Company’s
purpose, values and strategy and promoting the long-term
success of the Company. Reviewing this policy annually.

Setting Remuneration

Setting and authorising annually the remuneration of the
Chairman, Executive Directors and Executive in accordance
with the policy and with due account taken of all relevant
factors, such as individual and Group performance and
remuneration payable by companies of a comparable size
and complexity.

Workforce remuneration

Reviewing workforce remuneration and related policies
across the Group and taking account of this in setting
Executive Director remuneration.

Incentive Plans

Approving all performance related pay schemes, targets
set and total annual payments made under these schemes.
Reviewing such schemes to ensure these plans are
structured appropriately and are consistent.

Discretion

Determining whether discretion should be exercised to
ensure payments are fair.

Effectiveness

To report to the Board on how it has
discharged its responsibilities and making
appropriate recommendations.

CORPORATE GOVERNANCECOMMITTEE MEMBERSHIP AND ATTENDANCE

The Remuneration Committee during the year ended
30 November 2021 comprised Patrick Martell (Chairman),
Charles Bligh, Paul Dean, Vicky Griffiths, and John Poulter,
at such times as they were members of the Board.

The members of the Committee comprise the independent
Non-Executive Directors and the Chairman of the Board.

The Remuneration Committee met six times during the
period, attendance is set out below. Meetings were mostly
held virtually for most of the year due to COVID-19 social
distancing requirements. The Committee also approved a
number of matters during the year by written resolution.

No. of meetings held in the
period/Eligible to attend

John Poulter

Charles Bligh
(from 2 July 2021)

Paul Dean

Vicky Griffiths

Patrick Martell

6/6

2/2

6/6

MAJOR ACTIVITIES OF THE
REMUNERATION COMMITTEE

Impact of COVID-19 on Remuneration

The Committee has given careful consideration to
remuneration in the context of the continuing COVID-19
environment. No employees have been furloughed or made
redundant during the past year as a result of the pandemic
and there are no plans to do so.

The Committee also considered the difficulty the COVID-19
pandemic has created in setting targets for Executive
Directors and Long-Term Incentive Plan (LTIP) performance
measures. The Committee were concerned to ensure that
targets were stretching and properly rewarded performance
and that they were aligned to strategy given the impact on
trading during the year ending 30 November 2020. As a result,
it was not felt appropriate to include an earnings per share
target for the bonus or LTIP. The bonus target was therefore
based on adjusted operating profit before interest and tax
and further details are on page 80. The bonus proposals
for employees were also reviewed to ensure the Executive
Directors’ targets were aligned.

The LTIP target for all awards granted in 2021 was based
solely on TSR, further details are on page 80. The targets
for LTIPs for Executive Directors are the same as for other
employees granted an LTIP award during the year ended
30 November 2021.

No performance targets for any bonus or LTIP awards were
altered during the year due to the impact on trading of the
COVID-19 pandemic.

Director Changes

The Committee considered and agreed the remuneration
to be given to Neil Martin on his appointment as
Chief Executive Officer and Mark Berry on his appointment
as the Chief Financial Officer.

• The base salary for each role is closely aligned to the base

salary paid to their respective predecessor.

• Other benefits including retirements benefits are in line

with the Remuneration Policy and the same as those given
to the majority of other employees.

• Bonus and LTIPs are expected to be equivalent to those
envisaged for their predecessors although Neil Martin’s
initial LTIP award was set at the maximum of 150% of his
base salary, further details below.

• Further details are in the report.

David Brooks whose resignation as Chief Executive Officer
was effective on 1 April 2021 was accordingly treated as a
Voluntary Leaver for the purposes of the termination policy
in the Remuneration Policy and no payments for loss of
office were made.

Charles Bligh was appointed as a Non-Executive Director
on 2 July 2021, his remuneration is in line with other
Non-Executive Directors.

UK Corporate Governance Code 2018 considerations

Throughout the year, the Committee has considered
the factors set-out in provision 40 of the 2018 Corporate
Governance Code. In the Committee’s view the Company’s
Directors Remuneration Policy, approved at the AGM last year,
and current practices are consistent with these provisions,
except as described in the section called Stakeholder
Engagement overleaf.

Factors in
provision 40

Clarity

Simplicity

Risk
Management

RM policy and practice

The Remuneration Policy and
arrangements for Directors are clearly
described each year in the Annual Report.
The disclosures related to remuneration,
the bonus targets and the performance
metrics for LTIPs are clear. This promotes
effective engagement with shareholders
and the workforce.

The Committee is mindful of the need
to avoid overly complex remuneration
structures which can be misunderstood
and deliver unintended outcomes.
Remuneration for Directors and the
workforce are therefore simple and
easily understood. Only a small number
of targets are used for bonuses and
LTIPs and these are based on the
Company’s performance.

Bonus and LTIPs awards are linked to
performance, have stretching targets with
low percentage pay-outs at threshold.
The Committee has broad discretion to
reduce bonuses if it does not consider
the formulaic outcome to be appropriate
in the circumstances and malus and
clawback provisions can also be operated
where appropriate.

Proportionality The Committee takes account of

underlying business performance and
the experience of shareholders and
other stakeholders when determining
outcomes to ensure poor performance
is not rewarded. The Committee also
considers the wider workforce pay
and policies.

The report includes scenario charts
showing the potential pay-out at various
levels and all awards are subject to
maximum levels as set out in the Policy.

Metrics for awards are closely aligned
to strategy. The Shareholding Policy
and holding periods provide a clear
link to long-term performance and
shareholder alignment.

Predictability

Alignment with
Culture

The remuneration is designed to support strategy and
long-term sustainable success. The performance metrics
chosen for variable pay were selected to take into account the
impact of the COVID-19 pandemic on performance. They were
designed to support the strategic objectives and long-term
sustainable success by rewarding profitable performance
in the short-term and to incentivise profitable sales during
a time of disruption to schools and exams and share price
performance in the longer term.

Remuneration Policy

The Remuneration Policy was approved at the AGM on
8 April 2021. It was approved by shareholders with 87% of
shares voted in favour. The Policy will remain in force until
a revised policy is approved by shareholders at the AGM in
2024 at the latest. The Policy is shaped by the principles in
provision 40 of the Code.

Stakeholder Engagement

During the year, we did not fully effectively engage with
shareholders or the workforce on Executive Director
remuneration matters. This was because:

• Employees did not raise any concerns as to the

alignment of Executive Director remuneration through
any of the employee engagement channels, including via
engagement with the designated Non-Executive Director
during the year.

◌ The Company’s approach to pay reviews and

bonuses across the Group in 2021 were shared with
employees. Employees were given the opportunity
to provide feedback and feedback was received from
employees and employees receive communications
through a variety of channels including regular
colleague briefings and the Group’s Employee Forum
but feedback was not obtained on alignment with
Executive Directors remuneration.

• Following the approval of the Remuneration Policy

at last year’s AGM, shareholders have not raised with
the Company any concerns with regard to Executive
Directors’ remuneration.

◌ Investor feedback received by relevant Directors

during the year on Director remuneration has been
broadly supportive.

◌ The Chairman of the Remuneration Committee was
available to discuss remuneration with shareholders
should it have been required.

CORPORATE GOVERNANCE• The Remuneration Policy was approved last year and

no change is proposed, in addition:

◌ there were no pay rises for or bonus payments

to Executive Directors during the year;

◌ Executive Director benefits and pension
entitlements are still the same as for the
majority of the workforce; and

◌ with the resignation of David Brooks as CEO, each

of the new CEO and CFO appointed during the year
were offered remuneration packages closely based
on their predecessors.

Engagement with shareholders and the workforce on
Executive Director remuneration is planned during 2022 and
will be part of shareholder meetings with the new Chairman.

Consideration of Workforce Remuneration, Policies
and other Measures

The Committee considered workforce remuneration and
policies and their alignment with rewards and incentives
offered in Executive Director remuneration and was regularly
updated on employee pay and benefits throughout the
Group. During the year, the Committee reviewed various
internal measures including pay ratios and pay gaps in
reviewing salaries and variable pay.

I have given feedback on the interactions I have had with
employees as the designated Non-Executive Director for
Employee Engagement. The impact of the new Labour Code
in India has been reviewed and discussed by the Board.

Advisers

No remuneration consultants were engaged during the
year. Benchmarking data on Executive Remuneration in the
FTSE SmallCap market data provided by a specialist executive
remuneration consultancy was reviewed and the Company
is broadly aligned with the lower quartile for FTSE SmallCap
companies; no fees were paid for such data and the
consultants do not have any other connection with the
Company or individual Directors. The Committee is satisfied
the data is objective and independent.

LTIP Awards

On 16 March 2021, the LTIP award granted in March 2018
vested. The performance against the targets for that award
were significantly impacted by the effect of the COVID-19
pandemic. The Earnings Per Share target was not met but
the TSR performance resulted in a partial satisfaction of that
target. The Committee approved the vesting of the 2018 LTIP
awards in line with the satisfaction of performance targets.

The award vested at 38.5% and the Board did not consider
that they needed to exercise any discretion to alter that
outcome. Further information relating to the vesting of that
award is set out in paragraph 1 of Part C of this report.

The Committee approved the grant of LTIP awards to senior
members of the workforce on 22 March 2021. The award
made to Neil Martin as the newly appointed CEO was
equivalent to 150% of base salary, as permitted by the Policy.
While the Committee recognises that 150% is a higher level,
than granted in previous years, it considered this level to be
necessary and appropriate to secure his appointment to the
role at that time.

The Committee also approved the grant of further awards on
10 August 2021 and 7 October 2021 to newly recruited senior
employees including one award to the Chief Financial Officer.
The award made to Mark Berry as the newly appointed CFO
was equivalent to 93% of base salary, as permitted by the
Policy. The Committee considered this level to be necessary
and appropriate to secure his appointment to the role at
that time.

2022 Pay Approach

The Committee reviewed the base salary levels for the
Executive Directors after considering workforce remuneration.

Pay rises have not yet been awarded to Executive Directors
for 2022. The average pay raise across the wider UK workforce
was 2.5%.

Bonus award for 2021

A bonus of 35.8% of base salary was paid to
Executive Directors for the year ended 30 November 2021
after considering the bonuses to be paid to the wider
workforce. Neil Martin’s bonus was based on his respective
base salary during the year. Mark Berry’s bonus was
pro-rated for his time in the role.

Discretion

The Board did not exercise discretion with regard to Directors’
remuneration outcomes during the year as it was felt the
Remuneration Policy and targets set for bonuses and LTIPs
worked as intended given performance during the year of the
individuals and the business and experience of shareholders,
employees and other stakeholders.

The Committee approved the Directors’ Remuneration Report
for the 2021 Annual Report and Accounts.

During the period, neither the Chief Executive Officer nor
the Chief Financial Officer held any Non-Executive Director
positions with other companies.

The Committee considers that the overall pay outcome for the year ended 30 November 2021 is justified given the
overall performance of the business, the context of the impact of the COVID-19 pandemic, its alignment with
workforce remuneration and the performance of the Executive Directors.

Patrick Martell
Chairman, Remuneration Committee
14 February 2022

P A R T B – R E M U N E R A T I O N P O L I C Y

This new Remuneration Policy became effective immediately following its approval at the 2021 Annual General Meeting,
on 8 April 2021. This section contains the main tables from the Policy. Certain details have been updated to reflect the
implementation of the Policy during the year. The full Remuneration Policy, as approved by shareholders, can be found in
the 2020 Annual Report and Accounts which are available at www.rmplc.com.

The following table sets out a summary of the various components of remuneration for Executive Directors.

Element

Fixed Pay

Base Salary

Purpose and
link to strategy Operation

Maximum
opportunity

Performance
metrics

To attract and
retain talent by
ensuring that
salaries are
competitive
in the market.

Base salaries will be set on appointment at the
appropriate level required to fill the role.

If there is a probationary period following
appointment, the base salary may increase as
appropriate following successful completion of that
probationary period.

None.

Base salaries will
be determined
as outlined in
the "Operation"
column opposite.1

Pension2

Benefits

To attract and
retain talent by
ensuring that
remuneration is
competitive in
the market.

Thereafter, base salaries will generally only be
increased in line with the increases in pay for the wider
workforce (either across single or multiple years),
except as justified by other circumstances.

Entitlement is the same as for the majority of the
UK workforce within the Group. Cash allowance
alternative is offered where individuals are subject to
HMRC pension limits (subject to there being the same
overall cost to the Group).

Up to 7% of
base salary
depending upon
level of employee
contribution.

None.

Pension benefits will not be augmented on exit.

The benefits are the same as for the majority of
employees within the Group and are reviewed
periodically to ensure that offerings are in line with
market practice.

The cost of such
benefits varies in
accordance with
market conditions.

None.

The main benefits are: private healthcare3,
group income protection, life assurance,
car allowance, mobile phone allowance,
enhanced family leave and sick pay.

Other benefits may be added or removed in line with
benefits awarded to the majority of employees.2

CORPORATE GOVERNANCEElement

Purpose and link to strategy Operation

Maximum opportunity

Performance metrics

Variable Pay

Annual Bonus

Provides an element of
at-risk pay, which
incentivises good
annual performance.

Members of the Committee keep the performance of the business under
continuous review, through regular financial and business reporting and these
reviews feed directly into annual and 3-yearly financial and strategic planning.

Formal reviews are then conducted to ensure that targets are set that support
short-term and long-term business strategy with such targets being intended to:

reflect expectations of the investor community;

• be stretching but realistic;
•
• avoid unnecessary risk-taking; and
• encourage long-term planning and decision-making.

The Remuneration Committee has discretion, where it believes it to be appropriate,
to override the formulaic outcome arising from the annual bonus plan.5

Annual bonuses are subject to malus and clawback provisions (see further overleaf).5

Annual bonuses are not pensionable.

55% of base salary for on-target performance, with a maximum figure
for over-performance of 110% of base salary.

At threshold performance, bonuses will be paid at no more than 20%
of the maximum opportunity.

Performance measures and weightings are set by the
Committee at the beginning of each year as outlined in
the “Operation” column opposite. Typically, they relate to
profit but may be other financial and strategic measures.4

Any bonuses more than 100% of base salary will be paid in the form of
shares that must be held for a minimum of 2 years (on the same basis
as LTIP vested shares subject to a holding period).

Details of the specific performance targets will be
disclosed retrospectively in the following year’s
Remuneration Report.

If personal targets are set, those targets will be subject to
an underpin based on Company performance.

LTIPs

Incentivises Directors
to achieve returns for
shareholders over a
longer time frame.

Awards (nil cost options or share awards) are granted to Executives and senior
management typically no more than once per year, with the vesting of awards
being based on criteria designed to align with shareholder interests and
encourage long-term performance.

200% of base salary per annum.

At threshold performance, no more than 25% of the award will vest.

Where LTIP awards vest, a post-vesting holding period of 2 years will apply
(save that Directors may sell sufficient shares on vesting/exercise to satisfy the
Income Tax/National Insurance liability that arises).

Once LTIPs have vested and been exercised, dividends or dividend equivalents
can be paid on the relevant shares.

LTIP awards are subject to the Remuneration Committee’s discretion, where it believes
it to be appropriate, to override the formulaic outcome arising from the LTIP.5

LTIP awards are subject to malus and clawback provisions (see further below).5

LTIP awards are not pensionable.

LTIP awards vest on a change in control of the Company, subject to assessment
by the Committee at the time as to the level of vesting (if any) that is appropriate,
considering (among other things) the extent to which the relevant performance
targets have been met and how much of the relevant performance period(s) has
passed. Awards subject to a holding period shall be released from this.

Performance measures and weightings are set by the
Committee at the date of grant to align with shareholders’
interests. These will normally be measured over a 3 year
period and may include EPS, TSR and other financial,
strategic or shareholder return measures.4

The vesting period for LTIPs will be a minimum of 3 years.

Details of performance targets will be disclosed
retrospectively in the Remuneration Report following the
year in which LTIPs are granted.4

All targets will be subject to an underpin based on the
underlying performance of the Company.

Notes:

1. There is no maximum base salary or maximum for any of the benefits.

3. Neil Martin was also provided with a private healthcare package for his immediate family [this ceased on 1 March 2021].

2. Group company RM Education Limited operates a defined benefit pension scheme. This closed to new members in 2003 and,
in respect of current members, closed to future accrual of benefits on 31 October 2012. David Brooks, CEO, has past benefits
accrued as at 31 October 2012. His entitlements under that scheme are calculated on the same basis as those of other members.
Since 1 November 2012, Mr Brooks has been a member of a defined contribution pension scheme.

4. The LTIP performance measures for LTIP awards are set out in paragraphs 2 and 11 of Part C of this report.

Details of the expected measures [for 2022] are set out in paragraph 8 of Part C.

5. These new provisions apply to bonuses paid and LTIPs granted after the date of this policy’s commencement.

CORPORATE GOVERNANCEThe following table sets out a summary of the various components of remuneration for Non-Executive Directors, their purpose
and link to strategy, its operation, the maximum opportunity available, the nature of any applicable performance metrics.

Element

Fixed Pay

Fee

Purpose and
link to strategy

Operation

Maximum
Opportunity

Performance
Metrics

None.

The maximum total
remuneration payable
to a Non-Executive
Director including the
Chairman is £160,000
per annum.

To reward
individuals for
fulfilling their roles
and attract good
candidates.

The Committee makes recommendations to
the Board on the Chairman’s remuneration.
The Chairman and the Executive Directors
determine the remuneration of Non-Executive
Directors. Remuneration data is considered during
the process, including fees paid for comparable
roles in companies of a similar size and complexity
as the Company.

The Chairman is paid a single fee. Other
Non-Executive Directors are paid an annual fee
covering Board and Committee membership, with
Committee chairs, the Senior Independent Director
and the designated HR representative receiving
an additional fee.

1. The annual and additional fees for additional responsibilities are paid monthly.

2. Fees were last reviewed during the year ended 30 November 2018 and increased to be more in line with current market rates.

3. Fees are not performance-related but reflect the time commitment and responsibilities of the role.

4. Out-of-pocket expenses (such as travel costs) incurred in performing those duties are reimbursed by the Company.

5. Remuneration for Non-Executive Directors does not include share options or other performance-related elements.

ILLUSTRATION OF REMUNERATION POLICY [UPDATED FOR THE YEAR ENDING 30 NOVEMBER 2021]

The graphs below and on page 85 provide estimates of the potential future reward for each of the Executive Directors based on their current
roles, the Remuneration Policy outlined above and base salaries as at 1 February 2022. However, it is noted that the illustrations show
maximum LTIP awards at 150% of base salary¹. The illustrations for LTIP awards assume (i) the position that there is no change in share price
between the date of grant of an award and the date of vesting and (ii) the effect of a 50% increase in the share price over this period.

Chief Executive Officer

£000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

+50%

LTIPs

Variable

Fixed

£000

Base

Benefits

Pension

Total

Minimum

365

On-target

On-target is assumed to be an annual

404

742

bonus equal to 55% (on target) of

base salary and an LTIP vesting of 25%

(threshold) of maximum

Maximum

Full pay-out of annual bonus equal to

1,353

110% of base salary

Maximum vesting of LTIP awards of 150%1

Maximum

As above for maximum plus 50% share

1,627

+50% share

price growth over the performance period

Minimum

On-target

Maximum

price growth

The respective proportions for the fixed, variable and LTIP components are:

Minimum: 100% fixed pay. On-target: 54% fixed pay, 27% variable pay & 19% LTIPs. Maximum: 30% fixed pay, 30%, variable pay & 40% LTIPs.

Maximum with 50% share price growth: 25% fixed pay, 25% variable pay & 50% LTIPs.

Chief Financial Officer

£000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

+50%

LTIPs

Variable

Fixed

£000

Base

Benefits

Pension

Total

Minimum

300

On-target

On-target is assumed to be an annual

324

602

bonus equal to 55% (on target) of

base salary and an LTIP vesting of 25%

(threshold) of maximum

Maximum

Full pay-out of annual bonus equal to

1,104

110% of base salary

Maximum vesting of LTIP awards of 150%1

Maximum

As above for maximum plus 50% share

1,329

+50% share

price growth over the performance period

Minimum

On-target

Maximum

price growth

The respective proportions for the fixed, variable and LTIP components are:

Minimum: 100% fixed pay. On-target: 54% fixed pay, 27% variable pay & 19% LTIPs. Maximum: 29% fixed pay, 30%, variable pay & 41% LTIPs.

Maximum with 50% share price growth: 24% fixed pay, 25% variable pay & 51% LTIPs.

Notes:

1. Although the maximum under the Policy is 200%, it is not proposed to award any LTIP at more than 150% so that figure is used in these illustrations.

MALUS AND CLAWBACK

Malus and clawback provisions are in place, and will continue to be maintained, in relation to the variable, performance-related
remuneration of the Executive Directors (annual bonus and LTIPs).

As the payment of annual bonuses are at the discretion of the Committee:

•

the malus provisions in force are such that the Committee can reduce the payment of any bonus payment if they consider that
there is any reason that makes it appropriate to do so. This includes (without limitation) the circumstances applicable to clawback
as outlined below but could also include any other matters that the Committee considers appropriate; and

the clawback applies where the bonus payment was based on erroneous or misleading data or any misstatement of accounts,
misconduct by an Executive Director, or the Group suffers serious reputational damage or corporate failure (‘Serious Grounds’).
The clawback operates for a period of up to 18 months after the end of the relevant financial year to which the bonus relates, or if
longer any holding period.

In respect of each award under the LTIP Schemes:

•

the malus applies when there are any Serious Grounds or any other circumstances where, in the reasonable opinion of the
Committee, the malus provisions should be operated in relation to that Participant; and

the clawback applies where there are any Serious Grounds where in the reasonable opinion of the Committee, the clawback should
be operated in relation to that Participant. The clawback under the LTIP Scheme operates to the later of (a) one year from the
relevant LTIP award vesting and (b) the completion of the next audit of the Group’s accounts after the award vests.

CORPORATE GOVERNANCE
DISCRETION

The Remuneration Committee retains discretion with regards to the variable elements of pay (annual bonuses and LTIP awards),
in relation to:

• The timing, size and type of awards and holding periods (subject always to the limits set out in the applicable Remuneration Policy).

• Adjustments required in certain circumstances (e.g. rights issues, corporate restructuring events and special dividends).

• Adjustment of targets and measures if events occur which cause it to determine that the conditions are no longer appropriate.

• When it believes it is appropriate, overriding the formulaic outcome, either upwards or downwards, applicable to the LTIP
or bonus scheme, discretion will only be applied in exceptional circumstances and will be explained to shareholders in the
following Remuneration Report.

• Amendments to plan rules in accordance with their terms or as required by law or regulation.

However, the Committee acknowledges the concerns of interested stakeholders that the discretion afforded to remuneration
committees in quoted companies should not be too broad or enable the payment of inappropriate or excessive amounts, especially
where payments to Executive Directors are not aligned with the expectations of shareholders.

DIRECTORS’ SERVICE CONTRACTS AND LETTERS OF APPOINTMENT

The Policy in relation to Executive Directors’ service contracts is for them to contain a maximum notice period of 12 months. Each
service contract is subject to earlier termination for cause. In exceptional circumstances, a longer notice period initially, reducing down
to 12 months, to secure the appointment of an external recruitment may be agreed.

All Non-Executive Directors have letters of appointment with the Company for an initial period of three years, subject to annual re-
appointment at each Annual General Meeting. Notice periods are as set out below. No compensation is payable on termination, other
than any accrued fees and expenses.

Details of the Directors’ service contracts and/or letters of appointment who served for all or part of the year ended 30 November [2021]
are shown in the table below:

John Poulter

Mark Berry

Charles Bligh

David Brooks

Paul Dean

Vicky Griffiths

Neil Martin

Patrick Martell

Expiry date of
current agreement

Notice to be given
by employer and individual

Initial agreement date

1 May 2013

20 September 2021

2 July 2021

1 July 2012

30 April 2022

Indefinite

1 July 2024

1 April 2021

4 February 2020

3 February 2023

1 July 2020

28 September 2015

30 June 2023

Indefinite

1 January 2014

31 December 2022

6 months

12 months

3 months

12 months

3 months

12 months

3 months

P A R T C – I M P L E M E N T A T I O N R E P O R T

1. DIRECTORS’ REMUNERATION – SINGLE FIGURE OF REMUNERATION

The tables below set out a single figure of remuneration for each of the Directors in respect of the year ended 30 November 2021 and,
in respect of those Directors, the equivalent figures for the year ended 30 November 2020. The table has been audited:

Salary/fees

£000

Taxable

benefits

£000

Annual

bonus

£000

LTIPs

(vested)

£000

Retirement

benefits

£000

Total

£000

Total Fixed

Total Variable

Remuneration6

£000

Name

2021

2020⁵ 2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Executive

David Brooks2

Neil Martin⁴

Mark Berry²

Non-Executive

122

348

319¹

261¹

John Poulter

135

118

Charles Bligh2

Paul Dean3

Vicky Griffiths3

Patrick Martell

Total

Notes:

125

116

438

400

241

211

133

628

792

697

133

387

354

297

241

438

400

135

118

135

118

819

827

146

116

838

1,133

1,736

871

898

262

838

1. The section below headed “Retirement Benefits” explains how those benefits have been calculated and presented in the above tables.

2. The fees show the portion of the year during which they were a Director during 2021.

3. The fees show the portion of the year during which they were a Director during 2020.

4. The figures shown cover the respective period as CFO and, from 1 March 2021, CEO.

In 2020, the Board members agreed to take a salary/fee reduction of 25% for 6 months from April 2020 to September 2020 and the salary/fees

figures above show the reduced amount paid in 2020.

6. Total fixed remuneration is the aggregate of the base salary, pensions and benefits, and total variable remuneration is the aggregate of the

bonus and LTIPs.

The following provides details of how the ‘single figure’ has been calculated:

Taxable benefits:

These comprise the benefits noted in Part B above other than retirement related benefits. The figure included in the above table in
respect of such benefits is calculated based on the taxable value of such benefits.

Annual bonus:

The Committee decided that on-target bonuses for the year ending 30 November 2021 for Executive Directors would be based upon
the Company achieving an adjusted operating profit before interest and tax target, with any pay-out to be determined on a straight line
basis between £16.5m (0% pay-out) to £22m (100% pay-out), subject to the Committee being satisfied as to the long-term underlying
performance of the business and the quality of operating profit delivered. Threshold performance at 20% would therefore be £17.6m
and on-target performance at 55% would therefore be £19.5m.

CORPORATE GOVERNANCEIn the event there is significant over-performance against
target then a bonus payment in excess of 100% could be
available, up to the maximum of 110% of base salary. This
would be reviewed by the Board in the context of full year
trading and outlook for the year ending 30 November 2021.

The Committee considered the Company’s performance
relative to that target. Group adjusted operating profit before
interest and tax was £18.5m. In light of that performance, the
Committee determined that a bonus of 35.8% of base salary
should be paid, in line with the performance measure.

As noted above, any annual bonuses are subject to the
Committee being satisfied that the achievement of annual
targets is not at the expense of the underlying long-term
performance or position of the Company or the quality of the
operating profit delivered. The Committee was satisfied that
this was the case.

LTIPs:

LTIP awards that vested in 2021

On 16 March 2021, the award granted to Neil Martin under
the LTIP Scheme in March 2018 vested in part, reflecting
the extent to which the performance criteria were met.
Each performance criteria was equal to 50% of the award.

The performance criteria were based on:

the Company’s relative Total Shareholder return
(TSR) performance measured from the average of
the FTSE SmallCap (ex IT) Index during January
and February 2018 to the average of the Index
during January and February 2021. The Company’s
performance placed it at the 67th percentile as
compared to the comparator group. Vesting was
based on a straight-line scale between 25% vesting
at the 50th percentile and 100% vesting at the 75th
percentile (or above). The vesting level was therefore
77%; and

the Company’s growth in adjusted earnings per share
(EPS) between the year ended 30 November 2017
and the year ended 30 November 2020. Vesting was
based on a sliding scale between a compound annual
growth rate (CAGR) in EPS of 7.5% pa (25%) and a
CAGR in EPS of 17.5% pa (100%), namely 26.1 pence
and 34.1 pence respectively. The minimum vesting
was not met for this target.

Based on the above performance criteria, the award
vested at 38.5% (based on fifty percent of the 77% vesting
level of the TSR performance measure). The Board
applied no discretion.

As such, 51,975 Options vested for Neil Martin. Based
on the share price at close on the date of vesting
(222.5 pence), the value of the award at that date for
Neil Martin was £115,644. While that figure is shown in the
table above, Mr Martin exercised those Options and on
16 March 2021 sold 24,478 shares at 215 pence (valued
at £52,627) for tax and National insurance purposes.
The remaining 27,497 shares are the subject to a 2 year
holding period and the shares are held on a nominee
basis by the LTIP trustees during this period.

Compared to the share price used to calculate the
number of shares granted (212 pence), this represents a
5% share price increase since the grant date to the end
of the performance period. The Committee is satisfied
that the implied value vesting and the overall single figure
of remuneration for the year are appropriate taking into
account the performance of the Company. No discretion
has therefore been exercised for the change in share
price. The amount of the award attributable to share
price appreciation for Neil Martin is £5,457. No dividend
equivalent (either in cash or shares) was paid on the
exercise of the award.

LTIP awards that vest in 2022

The LTIP award granted to Neil Martin in March 2019 will
vest in March 2022. The targets for this award are set out
in paragraph 11 of this Part C. The EPS target will not be
met and no options will vest for this part of the award.
The TSR target cannot be determined yet but is currently
not expected to be met and, if this is the case, options
would also not be expected to vest for this part of the
award. Details of the amount that vest will be contained
in the Remuneration Report next year.

Past Directors:

There were no payments made to past Directors in the year.

Retirement benefits:

Neil Martin is a member of a defined contribution pension scheme operated by RM Education Limited. The Group would ordinarily
make a contribution to that scheme of 7% of base salary (under the same arrangements, for that level of employee contribution,
as for the majority of other employees). However, due to HMRC limits, the amount paid into the scheme for Neil Martin is lower,
with the balance paid instead as a non-pensionable cash allowance. To make the figures in the above tables more meaningful, the
‘Retirement Benefits’ are stated prior to those adjustments.

Mark Berry become a member of a defined contribution pension scheme operated by RM Education Limited in December 2021
(under the same arrangements for that level of employee contribution, as for the majority of other employees).
He contributes 4.5% of his salary which is matched by the Company.

Termination Payments:

There were no termination payments in the year.

2. DIRECTORS’ LONG-TERM INCENTIVE PLANS

During the year ended 30 November 2021, the following long-term incentive awards were made.1

Type of
share
award

Grant date

Name

Face value
of award
at grant
£0002

No. of
Shares/
options

% of base
salary

22 March 2021

250,000

547

150%

7 October 2021 120,000

278

93%

Neil Martin Nil cost
Option

Mark Berry Nil cost
Option

Notes:

1. Awards granted under the LTIP Scheme.

The end of the
period over which
the performance
conditions have to be
fulfilled

February 2024

September 2024

Percentage
that would vest
at threshold
performance

25% for TSR
element

A summary of
performance targets
and measures

100% on relative TSR
performance4

2. The face value of the award has been calculated by multiplying the maximum number of shares in the award by the average share price over

the 5 preceding trading days on the date of grant of the award (219 pence for Neil Martin and 232 pence for Mark Berry). The exercise price per

share of £0.00.

3. One hundred percent (100%) of the award is based on the Company’s relative TSR performance for the period from 1 February 2021 to

31 January 2024. The Company’s TSR performance shall be measured against the TSR performance of the companies within the FTSE SmallCap

(ex IT) Index (‘Comparator Group’) over the above period and must be at least at the median of a ranking of the TSR of each of the members of the

Comparator Group. Vesting will occur on a sliding scale between median (25%) and upper quartile (100%).

4. One hundred percent (100%) of the award is based on the Company’s relative TSR performance for the period from 01 October 2021 to

30 September 2024. The Company’s TSR performance shall be measured against the TSR performance of the companies within the FTSE SmallCap

(ex IT) Index (‘Comparator Group’) over the above period and must be at least at the median of a ranking of the TSR of each of the members of the

Comparator Group. Vesting will occur on a sliding scale between median (25%) and upper quartile (100%).

5. This table has been audited.

CORPORATE GOVERNANCE3. PERFORMANCE GRAPH

Notes:

The following graph shows the value, by 29 November 2021, of £100 invested in RM plc on 30 November 2011 compared with the value
of £100 invested in the FTSE SmallCap Index (ex. Investment Trusts) on the same date. The reason for selecting that index is that this is
the one that is most closely aligned to the market capitalisation and relative position of the Company. The other points plotted are the
values at intervening financial year ends.

Total Shareholder Return

1. Rob Sirs from 1 December 2011 to 31 January 2012. Martyn Ratcliffe from 1 February 2012 to 30 November 2012.

2. Martyn Ratcliffe from 1 December 2012 to 28 February 2013. David Brooks from 1 March 2013.

3. During the year none of the Group’s LTIPs were due to vest.

4. No bonus was paid and the 1% discretionary payment made to all employees was not paid to Executive Directors.

5. David Brooks from 1 December 2020 to 31 March 2021. Neil Martin from 1 March 2021 to 30 November 2021.

£600

£500

£400

£300

£200

£100

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

RM plc

FTSE SmallCap Index (ex. Investment Trusts)

4. HISTORY OF CHIEF EXECUTIVE OFFICER PAY

The table below sets out details of:

• The total pay for each of the persons who have performed the role of Chief Executive for the current year and the preceding nine
financial years. The ‘single figure’ is calculated using the same methodology as that used for the “Single Figure of Remuneration”
table in paragraph 1 above.

• The pay-out of incentive awards as a proportion of the maximum opportunity for the period.

Year

2012¹

2013²

2014

2015

2016

2017

2018

2019

2020

2021⁵

CEO

Single Figure
(£000)

Annual variable element
award rates against
maximum opportunity

Long-term incentive
vesting rates against
maximum opportunity

Rob Sirs

Martyn Ratcliffe

David Brooks

Neil Martin

237

327

576

1,246

655

713

982

553

792

133

628

58%

75%

50%

45%

73%

64%

41%

0%⁴

35.8%

91%

100%

36%

100%

0%³

100%

38.5%

5. RELATIVE IMPORTANCE OF SPEND ON PAY

The following table sets out, in respect of the year ended 30 November 2020 and the immediately preceding financial year,
the total remuneration paid to all employees as compared to other significant distributions and payments.

Total remuneration to employees1

Dividends paid2

Corporation tax paid3

Defined benefit pension cash contribution3

Notes:

2021
£m

59.7

3.9

0.1

4.4

2020
£m

55.8

Nil

2.6

4.1

Includes remuneration paid to Executive Directors. Note 7 to the Financial Statements shows how this has been calculated, figures for social

security costs and share-based payments have been excluded. This includes the CEO salary paid to David Brooks and Neil Martin.

2. These figures have been extracted from Note 12 to the Financial Statements.

3. These payments have been added for context as other significant payments made by the Company. These figures have been extracted from the

Cash Flow Statement.

6. PERCENTAGE CHANGE IN REMUNERATION OF DIRECTORS

The following tables set out the percentage change for the following elements of remuneration paid to Directors and UK employees
over the period from 1 December 2020 to 30 November 2021 and previous year ended 30 November 2020.

1 December 2020 to 30 November 2021

1 December 2019 to 30 November 2020

Salary/Fees

Taxable
Benefits

Annual Bonus

Salary/Fees

Taxable
Benefits

Annual Bonus

Executive Directors

Neil Martin (CEO from 1 April 2021
and previously CFO)¹

David Brooks (ceased to be a
Director and CEO on 1 April 2021)

Mark Berry (appointed as CFO
from 20 September 2021)

33%

-2.4%

-²

-62%

-63%

N/A

-0.47%

-100%

-0.81%

-100%

N/A

Total UK Employees

5.6%

12.93%

-²

2.03%

2.01%

-34.02%

Notes:

1. This includes the increase in remuneration due to the change in role from CFO to CEO in March 2021.

No bonus was paid in the preceding year.

CORPORATE GOVERNANCE1 December 2020 to 30 November 2021

1 December 2019 to 30 November 2020

Salary/Fees

Taxable
Benefits

Annual Bonus

Salary/Fees

Taxable
Benefits

Annual Bonus

Non-Executive Directors

John Poulter
Chairman

Charles Bligh
(appointed as a Director
on 2 July 2021)

Paul Dean
(appointed as a Director and Chairman of
the Audit Committee on 4 February 2020)

Vicky Griffiths
(appointed as a Director
on 1 July 2020)

Patrick Martell
(Senior Independent Director
and Chairman of the
Remuneration Committee)

Notes:

N/A

The table below provides further information on the total remuneration figure used for each quartile employee, and the salary
component within this.

Year

2021

Notes:

Salary

Total Pay

25th Percentile

£22,500

£25,150

Median

£28,750

£35,211

75th Percentile

£48,875

£53,392

1. Method A was chosen as the statistically most accurate calculation. The total remuneration on a full-time equivalent basis as at 30 November 2021

for all UK employees was calculated and employees ranked accordingly.

2. The bonus calculation for employees was based on the actual bonus figures (adjusted to create FTE figures where individual are employed on

a part-time basis). The figures for the pay ratio in 2020 are based on the actual bonus calculation figures, which were zero. FY20 ratios have been

restated to include the LTIP of the CEO that vested in 2020.

3. Full-time equivalent P11D values for benefits such as Private Medical Healthcare have been used for anyone in receipt of the particular benefit as at

30 November 2021.

4. Pension values are not calculated on the same basis as the CEO’s figure, but rather based on the Employer contribution as a percentage of salary

as at 30 November 2021. This approach allows meaningful data for a large group of individuals to be obtained in a more efficient way.

5. CEO pay is as per the single figure of remuneration as at 30 November 2021, as disclosed on page 90. It covers the single figure of remuneration

for Neil Martin and David Brooks, each pro-rated for the time they were acting as CEO with the exception of Bonus and LTIP which are Neil Martin’s

complete figures.

1. RM plc does not have any employees. The comparator group therefore comprises all employees of the UK subsidiaries (excluding Directors) who

6. The median pay ratio is considered consistent with the pay, reward and progression policies for the Company’s UK employees taken as a whole.

were employed throughout the full financial year on a full-time equivalent basis.

2. The elements of remuneration have been calculated in the same way as the single figure of remuneration. The mean average has been used.

3. Bonus includes annual bonus and commission only and not any other non-performance related payments made to employees

(e.g. Christmas bonuses, long service awards). Bonuses in this paragraph 6 relate to those actually paid in respect of the years ended

30 November 2020 and 30 November 2021.

Individuals who were no longer Directors in the year ending 30 November 2021 have not been included in the above table. Details of their change

in remuneration are detailed in previous Annual Reports to the extent this was required to be provided. These are available at www.rmplc.com in

the Reports section.

7. CEO PAY RATIO

The following table sets out the CEO pay ratios for the year ended 30 November 2021. This compares the Chief Executive Officer’s total
remuneration (as shown above in paragraph 1 of this Part C) with the equivalent remuneration for the employees paid at the 25th, 50th
and 75th percentile of RM's UK workforce. The total remuneration for each quartile employee, and the salary component within this, is
also outlined in the table below.

The median for all employee to CEO pay ratio is 18.3 : 1 which the Committee considers is within a reasonable range considering the
structure and nature of the business. A large proportion of the CEO’s pay is in the form of variable pay through the annual bonus and
Long-Term Incentive Plan which link to and are therefore impacted by business performance.

The change in the ratio compared with 2020 is principally due to the reduced Long-Term Incentive Plan payment to the CEO this year
offset by no bonus payments being paid in 2020.

Year

2021

2020

Method

25th Percentile Pay Ratio

Median Pay Ratio

75th Percentile Pay Ratio

25.6 : 1

33.3 : 1

18.3 : 1

23.9 : 1

12.1 : 1

15.8 : 1

8. STATEMENT OF IMPLEMENTATION

This section sets out how the Remuneration Policy will be implemented in the year commencing on 1 December 2021. No significant
changes in remuneration are expected during this year.

Salary and fees: Since the start of the financial year, the Committee has not increased the base salary of the Executive Directors
or the fees for Non-Executive Directors. This is expected to be reviewed shortly and alignment with the workforce’s pay rises will
be considered. The base salary and fees of Directors at the date of this report is:

Executive

Neil Martin

Mark Berry

Non-Executive

Chairman (Including the Chairman of Nomination Committee)

Non-Executive Director base fee

Senior Independent Director (additional fee)

Chairman of Remuneration Committee/Designated Non-Executive Director for HR (additional fee)

Chairman of Audit Committee

£000

365

300

135

Benefits and pension benefits: These are expected to remain unchanged, as stated in paragraph 1 of Part C above.

Bonus: Due to issues of commercial sensitivity, it is not considered that it is in shareholders’ interests to disclose any further details
of these targets but we are committed to provide appropriate levels of disclosure of these performance measures and performance
against them in next year’s Annual Report and Accounts. Bonus levels will be in line with the Remuneration Policy.

CORPORATE GOVERNANCELTIPs: It is anticipated that, during the year ending 30 November 2022, an award will be made to Neil Martin and Mark Berry, under the
RM plc Performance Share Plan 2019. Those awards will be of options with an exercise price of £0.00 and the face value of the awards
is expected to be c.100% of base salary. Under the Remuneration Policy that was approved by shareholders at last year's AGM, the
maximum opportunity for LTIPs was increased from 150% to 200% of base salary per annum in order to give the flexibility to increase
the award when appropriate; this was considered to be in line with the median maximum potential opportunity, identified from
benchmarking studies, at peer companies. We sought to identify which of our shareholders voted against this change or abstained in
order to understand their reasons for doing so but had difficulty doing so and none of those shareholders contacted the Company in
order to explain their concerns.

The appropriate performance conditions is still being discussed at the date of this report but is expected to include relative TSR.
It is intended that the measures will encourage the generation of sustainable long-term returns to shareholders. The appropriate range
has yet to be finalised but will be confirmed by the Committee in due course. Full details will be disclosed in next year’s Annual Report
and Accounts.

9. STATEMENT OF SHAREHOLDER VOTING

Voting at the Annual General Meeting held on 8 April 2021 in respect of the Remuneration Policy and Report for the year ended
30 November 2020 was as follows:

Resolution to approve the Remuneration Policy in 2021

Resolution to approve the Remuneration Report in 2021

10. DIRECTORS’ SHAREHOLDINGS

% of votes
in favour

87.23%

99.63%

% of votes
against

12.77%

0.37%

Number of votes
withheld

8,833,873

497,051

The beneficial interests of the Directors including connected persons in the ordinary shares of RM plc as at 30 November 2021 were:

Holding as at
30 November 2021

Vested but
unexercised
scheme interests

Current holding
as % of base salary1

Shareholding
policy met2

Holding as at
30 November 2020

John Poulter

Mark Berry

Charles Bligh

Paul Dean

Vicky Griffiths

Patrick Martell

Neil Martin

Notes:

87,500

20,000

2,900

5,000

227,562

139%

87,500

20,000

2,900

5,000

115,416

11. DIRECTORS’ INTERESTS IN SHARE PLANS

As at 30 November 2020, the Executive Directors had the following interests in the Company’s share plans1:

LTIP Awards2

Neil Martin

Date of Grant

No. of Shares/Options

Performance Conditions

Share price at grant

14 March 2019

16 March 2020

22 March 2021

122,000

105,000

250,000

See notes 3, 4 and 5

(2019) 242 pence

See notes 3, 6 and 7

(2020) 171 pence

See notes 3 and 8

(2021) 220 pence

Mark Berry

Notes:

Date of Grant

No. of Shares/Options

Performance Conditions

Share price at grant

07 October 2021

120,000

See notes 3 and 8

(Oct 2021) 234 pence

1. To avoid duplication, and in accordance with Section 17(b)(iii) of The Large and Medium-sized Companies and Groups (Accounts and Reports)

(Amendment) Regulations 2013, the figures in the above table do not include the shares or share-based awards referred to in paragraph 1 of this Part C.

2. Granted under “The RM plc Performance Share Plan 2010” and from 16 March 2021 under the “RM plc Performance Share Plan 2019”. All LTIP

awards are subject to a minimum vesting period of 3 years.

3. The LTIP awards granted in 2019, 2020 and 2021 were awards of options, with an exercise price of £0.00 per option. If the options granted in March 2019

vest, they would be exercisable in the period 15 March 2022 to 26 October 2027. If the options granted in March 2020 vest, they would be exercisable

in the period 17 March 2023 to 16 March 2033. If the options granted in March 2021 vest, they would be exercisable in the period 25 March 2024 to

24 March 2034. If the options granted in October 2021 vest, they would be exercisable in the period 08 October 2024 to 07 October 2031.

4. Fifty percent of the award is based on the Company’s growth in adjusted earnings per share (EPS) between the year ended 30 November 2018 and

the year ended 30 November 2021. Vesting will occur on a sliding scale between a compound annual growth rate (CAGR) in EPS of 5% pa (25%)

and a CAGR in EPS of 15% pa (100%), namely 30.1 pence and 39.5 pence respectively.

5. Fifty percent of the award is based on the Company’s relative TSR performance which shall be measured against the average of the TSR performance

of the companies within the FTSE SmallCap (ex IT) Index (‘Comparator Group’) (Comparator Group) during January and February 2018 to the

average during January and February 2021 and must be at least at the median of a ranking of the TSR of each of the members of the Comparator

Group. Vesting will occur on a sliding scale between 25% vesting at the 50th percentile and 100% vesting at the 75th percentile (or above).

6. Fifty percent of the award is based on the Company’s growth in adjusted earnings per share (EPS) between the year ended 30 November 2019 and

the year ended 30 November 2022. Vesting will occur on a sliding scale between a compound annual growth rate (CAGR) in EPS of 5% pa (25%)

and a CAGR in EPS of 15% pa (100%), namely 30.8 pence and 40.5 pence respectively.

7. Fifty percent of the award is based on the Company’s relative TSR performance which shall be measured against the average of the TSR performance

of the companies within the FTSE SmallCap (ex IT) Index (‘Comparator Group’) (Comparator Group) during January and February 2020 to the average

during January and February 2023 and must be at least at the median of a ranking of the TSR of each of the members of the Comparator Group.

Vesting will occur on a sliding scale between 25% vesting at the 50th percentile and 100% vesting at the 75th percentile (or above).

1. Calculated based on the average share price for the period 1 December 2020 to 30 November 2021 (£2.23) and base salaries as at 1 January 2022.

8. The performance conditions and other information relevant to these awards are set out in paragraph 2 (Directors’ long-term incentive plans) above.

2. The Directors’ Remuneration Policy requires Executive Directors to build and maintain a shareholding requirement of at least 200% of base annual

salary within 5 years of the first opportunity for an LTIP to vest. For Neil Martin this is within 5 years of 4 October 2018; for Mark Berry this is expected

12. DETAILS OF DIRECTORS’ SERVICE CONTRACTS

to be within 5 years of 8 October 2024.

Relevant information relating to the Service Contracts of the Directors is set out in Part B.

3. There have been no changes in any of the above shareholdings since 30 November 2021 at the date of this report.

CORPORATE GOVERNANCE13. REMUNERATION COMMITTEE DETAILS

Details of the Remuneration Committee and its membership
are contained in the introduction of this report. No external
advice or services have been received during the year.
External benchmarking data has been provided by the HR
Department and the Company Secretary provides advice to
the Nomination and Remuneration Committees on Service
Contracts and LTIP schemes.

14. COMPLIANCE WITH REGULATIONS

This report has been prepared in accordance with Schedule
8 of the Large and Medium-Sized Companies and Group
(Accounts and Reports) Regulations 2008 (as amended). The
Report also meets the relevant requirements of the Listing
Rules of the UK Listing Authority and illustrates how the
principles of the UK Corporate Governance Code relating to
Directors’ remuneration are applied by the Company.

The Group’s auditors are required to comment on whether
certain parts of the Group’s Remuneration Report have been
prepared in accordance with Schedule 8 of the Large and
Medium-Sized Companies and Group (Accounts and Reports)
Regulations 2008. Accordingly, the following paragraphs of
this Part C of this report have been audited by Deloitte LLP:

• The “Single Figure of Remuneration” table in paragraph 1.

• Total pension entitlements, as described in the notes to

paragraph 1.

• Directors’ shareholdings, as set out in paragraph 10.

• Directors’ interests in share plans, as set out in

paragraphs 1, 2 and 11.

By Order of the Board

Patrick Martell
Chairman, Remuneration Committee
14 February 2022

CORPORATE GOVERNANCENOMINATION COMMITTEE REPORT

On behalf of the Board, I am pleased to present the
Nomination Committee Report for the year ended
30 November 2021.

THE NOMINATION COMMITTEE

The Nomination Committee (‘Committee’) operates under
terms of reference approved by the Board. These can be
found on the Group’s website at www.rmplc.com.

COMMITTEE MEMBERSHIP AND ATTENDANCE

The Nomination Committee during the year ended
30 November 2021 comprised John Poulter, Patrick Martell,
Paul Dean, Vicky Griffiths and, after his appointment as a
Non-Executive Director, Charles Bligh.

The members of the Committee comprise the independent
Non-Executive Directors and the Chairman of the Board.

ROLES AND RESPONSIBILITIES

The Nomination Committee is responsible for leading the
process for Board appointments, ensuring that plans are
in place for orderly succession to both the Board and the
Executive and overseeing the development of a diverse
pipeline for succession.

The Committee’s responsibilities include:

Board composition

Evaluating the size, structure and composition
(including the balance of skills, experience, knowledge,
independence and diversity) of the Board and making
recommendations to the Board with regard to
any changes.

Succession planning

The other Directors attend meetings as and when required
and by invitation.

Ongoing succession planning and appointment
procedures for Board and Executive level appointments.

The Nomination Committee held 3 scheduled meetings
during the period and several ad hoc meetings. Attendance
is set out below. Meetings were held virtually for most of the
year due to COVID-19 social distancing requirements. The
Committee also approved a number of matters during the
year by written resolution.

While the Chairman chairs the Nomination Committee, the
Senior Independent Director did so when the Committee was
dealing with the appointment of a new Chairman.

No. of meetings held in the
period/Eligible to attend

John Poulter

Charles Bligh
(from 2 July 2021)

Paul Dean

Vicky Griffiths

Patrick Martell

3/3

2/2

3/3

Appointment process

Leading the process for Board appointments and making
recommendations to the Board.

Sufficient Time

Assessing whether Directors can commit sufficient time to
fulfil their responsibilities.

Diverse pipeline

Overseeing the development of a diverse pipeline for
succession for the Board and Executive and monitoring the
impact of diversity initiatives across the Company.

Effectiveness

To report to the Board on how it has discharged
its responsibilities.

MAJOR ACTIVITIES OF THE
NOMINATION COMMITTEE

During the year, the following key matters and decisions were
considered by the Committee:

• The recommendation for reappointment at the Annual
General Meeting of all Directors based on the evaluation
of the Board and its Committees.

• The search for a new:

◌ CEO and an additional Non-Executive Director,

which was led by the Chairman;

◌ CFO, which was led by the CEO; and

◌ Chairman, which was led by the
Senior Independent Director.

All members of the Committee were involved in each
recruitment process, including the determination of the
required skills, knowledge and experience for each role
and offer made to the preferred candidate.

All preferred candidates were interviewed initially by the
Director leading the process, then by all members of the
Committee and the other Board members. A thorough due
diligence and referencing process was conducted for the
preferred candidate for each role.

Candidates were assessed against the required skills,
knowledge and experience determined for each role. The
benefits of diversity, independence and ability to devote
sufficient time to carry out the role were also considered in
each process. Executive recruitment search firms engaged
for each role were briefed to provide a diverse range
of candidates.

The Committee made recommendations to the Board in
respect of each appointment for the Board's approval.

Notwithstanding the above, Neil Martin was not involved
in the Committee meetings involving the appointment of a
new CEO and the Board Chairman was not involved in the
process for the appointment of a new Chairman.

The following executive recruitment search firms were
engaged as part of the recruitment process:

◌ Korn Ferry was engaged for the search for the new CEO;

◌ Odgers was engaged for the search for the new CFO;

◌ Independent Search Partnership was engaged for the
search for an additional Non-Executive Director; and

◌ Ridgeway Advisers was engaged for the search for the

new Chairman.

Vicky Griffiths is a partner in Independent Search
Partnership (see page 63, Directors, Conflicts of Interests
and independence). Korn Ferry, Odgers, Independent
Search Partnership and Ridgeway Advisers do not
have any other connection with the Company or
individual Directors (other than in relation to similar
previous appointments).

The appointment of Neil Martin as CEO was effective from
1 March 2021. Neil brings significant knowledge of the
Company and its evolution over the past several years and
the response to the COVID-19 pandemic, as well as the
education sector.

The appointment of Mark Berry as CFO was effective from
20 September 2021, although he started as interim CFO on
8 March 2021. Mark brings experience as the CFO of a listed
company and a broad range of finance roles in a large,
listed company.

The appointment of Charles Bligh as an independent
Non-Executive Director was effective from 2 July 2021.
Charles is the CEO of Restore plc, a listed company,
and brings substantial technology experience.

Restore plc is a supplier to RM of scanning and associated
services. Following careful consideration, the Committee
and the Board determined that Charles would be able
to provide constructive challenge at RM notwithstanding
his role at Restore plc. In reaching this conclusion, the
Board considered the non-material size of RM's business
relationship with Restore plc, and the fact that handling
of this business relationship at RM is delegated to
management as part of normal delegation of authority
by the Board. It was decided that, during his tenure,
Charles would not participate in discussions relating to
the use of Restore plc or which may otherwise specifically
affect Restore plc’s relationship with RM, and that Charles
would not be a member of the Audit Committee. It was
considered that these steps would avoid any potential
conflict of interest.

The nomination of Helen Stevenson as Non-Executive
Chairman will be effective from the day after the release of
the preliminary results for the year ending 30 November
2021. Helen is independent on appointment. Amongst the
requirements for the role, it was considered important that
the candidate had the ability to support the development
and delivery of the Group’s strategy, was enthusiastic
about the Group’s purpose and vision, and could lead
the Board and promote the right culture. Helen brings
broad experience as a member of Boards, including
of listed companies across a range of sectors, strong
communication skills to further the Company’s stakeholder
relationships and relevant professional experience.

CORPORATE GOVERNANCEFurther details on the skills, knowledge and experience
of each of the new appointments is set out below and in
their biographies on page 56 except in respect of Helen
which is in the AGM Notice and on the RM website at
www.rmplc.com.

• The review of succession plans and appointment

procedures, a number of times during the year, as the
changes to the Board were planned for and decisions
made. In doing so it assessed the skills, knowledge and
experience that new Board members would be required
to have as the composition of the Board changed and
considered how to achieve the objectives of the Board
Diversity Policy (set out in the Corporate Governance
Report). The Board remains committed to promoting
broader diversity and an inclusive culture and this was an
area of focus in its succession plans and appointments.

The Board has one Non-Executive Director, Patrick Martell,
who is nearing the ninth anniversary of his appointment.
The Committee intends to carry out a review of the
composition of the Board as part of its consideration for
the appointment of a new Non-Executive Director.

•

In addition to the changes referred to above, the Executive
team has been strengthened through the external hire of a
new Chief Information Officer.

The Executive considered the adequacy of the Group’s
succession plans, including gender balance and diversity
below the Board. These plans cover short term absences
and longer-term changes. The Group’s management has
also been strengthened through a number of external
appointments and internal promotions this year that have
maintained diversity. When search firms are used for such
appointments, they are also briefed to provide a diverse
range of candidates. There is a good gender balance
across these roles (see the Workforce section in the
Sustainability Report on page 49 for more information).

• Diversity and inclusion in the workforce potentially

create a better environment for innovation and service
excellence and achieve the strategic goals.
See page 48-49, the Sustainability Report, for further
information and details of RM’s policy on equal
opportunities and how it supports strategy.

• Details of the Board evaluation and the outcomes and

actions taken is set out on page 62-63.

• The approval of this Nomination Report for the

year ended 30 November 2021.

BOARD COMPOSITION

The Board reviews the composition of the Board and the skills, knowledge and experience of its members, taking into account tenure
and diversity. Information on the skills, experience and knowledge of each Director is set out below and on page 56 (Board of Directors).
With the changes to the Executive Director positions, the Committee identified that an additional Non-Executive Director, with
experience leading a listed technology business, would be beneficial and after following the process described above, it recommended
this appointment to the Board. The Committee considers the current Board membership provides the right mix of skills, knowledge
and experience.

Board Skill,
Knowledge and
Experience

Independence

Functional Background:
Operations

Functional Background:
Finance

CEO & Leadership
Experience

Education sector

Technology/
E-commerce sector

Supply Chain sector

M&A/Restructuring

Governance, Risk &
Regulatory

International

Stakeholder/IR/IP

Strategy development

People

John Poulter

Neil Martin

Mark Berry Charles Bligh

Paul Dean Vicky Griffiths Patrick Martell

John Poulter
Chairman, Nomination Committee
14 February 2022

100

101

CORPORATE GOVERNANCEDIRECTORS’ REPORT

The Directors submit their report together with the audited
consolidated and Company Financial Statements for the year
ended 30 November 2021.

The Strategic Report on pages 4 to 21 includes an indication
of likely future developments in the business of the Group
and details of the Company’s business model and strategy.
The Corporate Governance Report on pages 58 to 68 is
incorporated into this report by reference.

ANNUAL GENERAL MEETING

The forthcoming Annual General Meeting will be held on
7 April 2022 at 142B Park Drive, Abingdon, Oxfordshire
OX14 4SE, at the time set out in the Annual General Meeting
notice. The notice of the Annual General Meeting contains the
full text of resolutions to be proposed.

ARTICLES

The constitutional documents can only be amended,
or replaced, by a special resolution passed in a
General Meeting by at least 75% of the votes cast
and are available at www.rmplc.com.

AUDITOR: INDEPENDENCE AND DISCLOSURE OF
INFORMATION TO AUDITOR

As far as each of the Directors is aware, there is no relevant
audit information (as defined by section 418(3) of the
Companies Act 2006) of which the Company’s auditor,
Deloitte LLP, is unaware and each of the Directors confirms
that all steps have been taken that ought to have been taken,
as a Director, to make himself or herself aware of any relevant
audit information and to establish that the Company's
auditor has been made aware of that information.

A resolution to re-appoint Deloitte LLP as auditor of the
Company will be proposed at the next Annual General Meeting.

DIRECTORS

Details of those Directors who have held office during the
financial year and up to the date of signing this report
and any changes since the start of the financial year are
given below:

John Poulter
Mark Berry (from 20 September 2021)
Charles Bligh (from 2 July 2021)
David Brooks (until 1 April 2021)
Paul Dean
Vicky Griffiths
Patrick Martell
Neil Martin

Biographical details of the current Directors are given in the
Board of Directors section of the Annual Report on page 56.

The appointment and removal of Directors is governed
by the constitutional documents of the Company and the
Companies Act 2006. Under the constitutional documents
of the Company, either the shareholders of the Company by
ordinary resolution, or the Board, can appoint a Director. The
appointment can be either to fill a vacancy or as an addition
to the existing Board, provided that the maximum number
of Directors shall in no event exceed 12. At the forthcoming
Annual General Meeting, all Directors will stand for re-
election in accordance with best practice and guidance set
out in the UK Corporate Governance Code. Directors can be
removed pursuant to an ordinary resolution passed by the
Company. All Directors have either a letter of appointment
or a service contract, details of which can be found in the
Remuneration Report on page 86.

DIRECTOR INSURANCE AND INDEMNIFICATION

The Group has provided indemnity insurance for the Directors
and officers of Group companies during the financial year
and at the date of signing this report. All the Directors also
have the benefit of a Deed of Indemnity entered into with the
Company in respect of liabilities which may attach to them in
their capacity as Directors of the Company. These provisions
are qualifying third-party indemnity provisions as defined by
section 234 of the Companies Act 2006.

DIRECTORS’ POWERS

The Board manages the business of the Company under
the powers set out in its constitutional documents, which
power is subject to the provisions of the Companies Act
2006 and to any directions given by special resolution of
the Company. These powers include the Directors’ ability
to allot or purchase shares in the Company, the exercise of
which in each case is subject to the Companies Act 2006
which provides, amongst other things, that the Directors must
seek shareholder authority for the allotment of shares in the
Company and the market purchase of shares in the Company.
Accordingly, the Directors seek shareholders’ authority to
allot shares in the Company, and to purchase the Company’s
own shares in the market, at each AGM.

DIRECTORS’ RESPONSIBILITIES STATEMENT

The Directors’ responsibilities statement on page 107 is
incorporated by reference into this report.

102

CORPORATE GOVERNANCE

103

DIVIDENDS

SHARE CAPITAL

SHARES: ALLOTMENT AND PURCHASE

The total dividend paid and proposed for the year is
4.7 pence per share. This is compromised of the interim
dividend of 1.7 pence per share as approved by the Directors
and paid in August 2021 and, subject to shareholder approval
at the Annual General Meeting on 7 April 2022, a final dividend
(as recommended by the Directors) of 3.0 pence per share.

MANAGEMENT REPORT

For the purposes of compliance with DTR 4.1.5R(2)
and DTR 4.1.8R, this Directors’ Report, together with
the Strategic Report and the material incorporated
by reference into each report, comprise the
Management Report. As permitted, some of the
matters to be included in the Directors’ Report
have been included in the Strategic Report such
as the business review, future prospects and
principal risks and uncertainties.

OVERSEAS BRANCHES

The Group has an overseas branch in Singapore.

RESEARCH AND DEVELOPMENT

The Group continues to develop and maintain its existing
software products whilst staff work to develop new and more
effective systems and products. The Group incurred £1.3m of
research and development in the year, which was expensed
in the income statement (2020: £2.7m). This primarily relates
to product research, maintenance and related expenditure
which does not meet capitalisation criteria.

The Company has one class of share capital, ordinary shares.
All the shares rank pari passu. There are no special control
rights in relation to the Company’s shares. On a show of
hands, each shareholder present in person or by proxy at a
general meeting and, on a poll, every shareholder present
in person or by proxy, has one vote for which they hold. All
of the shares in the Company carry the same rights, include
the right to participate in dividends and in any distribution
of surplus assets on a winding-up. Under the Company's
constitutional documents, the right to vote in respect of any
share is subject, amongst other things, to there being no
unpaid call on that share nor there being any outstanding
notice given under section 793 of the Companies Act 2006
in respect of that share. The right to vote is also subject to
the provisions of the Companies Act 2006. Electronic and
paper proxy appointments and voting instructions must be
received by RM’s registrar, Link Group, not less than 48 hours
(excluding, in the calculation of such time period, any part of
a day that is not a working day) before the time of the holding
of the relevant meeting or adjourned meeting.

As at 30 November 2021, the RM plc Employee Share Trust
owned 618,796 ordinary shares in the Company (0.74% of the
issued share capital) to satisfy awards under the Company’s
employee share plan. Any voting or other similar decisions
relating to those shares would be taken by the Trustees, who
may take account of any recommendation of the Board of
the Company. The Trustees have waived the right to receive
dividends on shares held in the Company. Employees, with
vested share plan awards whose shares are subject to a holding
requirement and held on their behalf by the Trust on a nominee
basis, are able to give directions to the Trust to vote on their
behalf and to receive dividends in relation to those shares.

At the Annual General Meeting held on 8 April 2021, members renewed the authority under:

(1) section 551 of the Companies Act 2006 to allot ordinary shares up to an aggregate nominal authority of £639,047. This authority has
not been used since the Annual General Meeting; and

(2) section 701 of the Companies Act 2006 to make market purchases on the London Stock Exchange of up to 8,387,501 ordinary
shares, being 10% of the issued share capital of the Company as at 8 March 2021. The minimum price which may be paid for each share
is the nominal value. The maximum price which may be paid for a share is an amount equal to the higher of (1) 5% above the average
of the middle market quotations of the Company’s ordinary shares as derived from the London Stock Exchange Daily Official List for
the five business days immediately preceding the day on which such share is contracted to be purchased, and (2) the higher of the last
independent trade and the highest current independent bid on the London Stock Exchange at the time the purchase is carried out.
This authority has not been used since the Annual General Meeting and the Company did not purchase or otherwise acquire any of its
own shares during the financial year.

The Directors will seek to renew these authorities at the next Annual General Meeting scheduled for 7 April 2022.

SIGNIFICANT AGREEMENTS

The Group enters into long-term contracts to supply IT products and services to its customers. Wherever possible, these contracts do
not have change of control provisions, but some significant contracts do include such provisions.

In September 2021, the Company entered into a revised agreement extending the term of the revolving credit facility, with Barclays
Bank plc and with HSBC Bank plc, to June 2023. The principal facility of £70m has not changed. In addition, the Company has a £30m
accordion facility, enabling the Company to extend the total facility up to £100m. That facility is subject to termination in the event of a
change of control of the Company or the de-listing of any part of the share capital of the Company from the Official List.

IMPORTANT EVENTS SINCE THE END OF THE FINANCIAL YEAR

There have been no events affecting the Company, and its subsidiary undertakings in the consolidation, since the end of the financial year.

SUBSTANTIAL SHAREHOLDINGS

On 30 November 2021, the Company had received notifications that the following parties were interested in accordance with DTR 5:

Shareholder

No. of voting rights
Direct

No. of voting rights
Indirect

% of voting rights as at
30 November 2021

Schroders Investment Management Ltd

14,263,444

Castlefield Fund Partners Ltd

13,000,000

Aberforth Partners LLP

BlackRock Inc

Canacord Genuity Group Inc

10,967,211

8,779,532

4,725,312

Since 1 December 2021, the Company has received notifications from:

17.01%

15.50%

13.08%

Date of TR1

5 June 2020

31 March 2020

17 March 2021

10.46%

10 November 2020

5.63%

14 March 2019

• BlackRock Inc on 10 December 2021 notifying us of 9,261,532 indirect voting rights and 11.04% of voting rights and on

11 February 2022 notifying us of 9,205,760 indirect voting rights and 10.97% of voting rights; and

• Sandford Deland Asset Management on 14 January 2022 notifying us of 14,340,000 direct voting rights and 17.10% of voting rights.

The percentage interest is as stated by the shareholder at the time of the notification and current interests may vary.

104

CORPORATE GOVERNANCE

105

TREASURY AND FOREIGN EXCHANGE

The Group has in place appropriate treasury policies and
procedures, which are approved by the Board. The treasury
function manages interest rates for both borrowings and cash
deposits for the Group and is also responsible for ensuring
there is sufficient headroom against any banking covenants
contained within its credit facilities, and that appropriate
facilities are available in order that the Group can continue to
meet its strategic plans.

In order to mitigate and manage exchange rate risk,
the Group routinely enters into forward contracts and
continues to monitor exchange rate risk in respect of foreign
currency exposures.

All these treasury policies and procedures are regularly
monitored and reviewed. It is the Group’s policy not to
undertake speculative transactions which create additional
exposures over and above those arising from normal
trading activity.

For further information see the Notes to the Financial
Statements and Note 31 (Financial Risk Assessment)
of the Financial Reports.

ADDITIONAL DISCLOSURES

Disclosures required by Schedule 7 of the Large and
Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended), to the extent not
already disclosed or referred to in this report, can be found
on the pages specified in the table below, all of which are
incorporated into this report by reference.

Disclosures required by Listing Rule 9.8.4R can be found
on the pages specified in the table below, all of which are
incorporated into this report by reference. There is nothing
further to disclose pursuant to Listing Rules 9.8.4R:

Allotment for cash of equity securities

Contracts of significance

Directors’ waived emoluments

Dividend waiver

Employee engagement, interests
and effect

Employee share scheme

Employees with disabilities

Page

N/A

105

N/A

65-66 (Employees)

50 (Development
and Reward)

Engagement with suppliers, customers
and others and effect

67 (Suppliers and
Partners)

Greenhouse gas emissions, energy
consumption and energy efficiency

Interest capitalised and tax relief

42-47

N/A

Long Term Incentive schemes

95 (section 11)

Statement of Directors’ Responsibilities in respect
of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report
and the Group and parent Company Financial Statements in
accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and
parent Company Financial Statements for each financial
year. Under that law they are required to prepare the Group
Financial Statements in accordance with International
Financial Reporting Standards as adopted by the European
Union (IFRSs as adopted by the EU) and applicable law
and have elected to prepare the parent Company Financial
Statements on the same basis.

Under company law the Directors must not approve the
Financial Statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent Company and of their profit or loss for that period.
In preparing the parent Company Financial Statements, the
Directors are required to:

• select suitable accounting policies and then apply

them consistently;

• make judgements and accounting estimates that are

Political donations

By Order of the Board

Mark Lágler
General Counsel and Company Secretary, RM
14 February 2022

Registered in England and Wales No 1749877

reasonable and prudent;

• state whether Financial Reporting Standard 101 Reduced
Disclosure Framework has been followed, subject to
any material departures disclosed and explained in the
Financial Statements; and

• prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.

In preparing the Group Financial Statements, International
Accounting Standard 1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a

manner that provides relevant, reliable, comparable and
understandable information;

• provide additional disclosures when compliance with the
specific requirements in IFRS Standards are insufficient
to enable users to understand the impact of particular
transactions, other events and conditions on the entity's
financial position and financial performance; and

• make an assessment of the Company's ability to continue

as a going concern.

The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy

at any time the financial position of the parent Company and
enable them to ensure that its Financial Statements comply
with the Companies Act 2006. They are responsible for such
internal control as they determine is necessary to enable the
preparation of Financial Statements that are free from material
misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of Financial Statements
may differ from legislation in other jurisdictions.

The Directors consider the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders
to assess the Group’s position and performance, business
model and strategy, and provide appropriate guidance on its
future prospects.

Responsibility Statement of the Directors in
respect of the Annual Financial Report

Each of the Directors, whose names are listed in the Directors’
Report, confirm that to the best of our knowledge:

•

the Financial Statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit
or loss of the Company and the undertakings included in
the consolidation taken as a whole; and

the Strategic Report and Directors’ Report include a
fair review of the development and performance of
the business and the position of the Company and the
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks
and uncertainties that they face.

A copy of the Group Financial Statements is posted on the
Group’s website www.rmplc.com.

This Responsibility Statement was approved by the Board of
Directors and is signed on its behalf by:

By Order of the Board

Neil Martin
Chief Executive Officer
14 February 2022

Mark Berry
Chief Financial Officer
14 February 2022

106

107

CORPORATE GOVERNANCE

INDEPENDENT AUDITOR’S REPORT

4. CONCLUSIONS RELATING TO GOING CONCERN

5. KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
Financial Statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These
matters included those 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.

to the members of RM plc

REPORT ON THE AUDIT OF THE
FINANCIAL STATEMENTS

1. OPINION

In our opinion:

•

the Financial Statements of RM plc (the ‘parent
Company’) and its subsidiaries (the ‘Group’) give a true
and fair view of the state of the Group’s and of the parent
Company’s affairs as at 30 November 2021 and of the
Group’s profit for the year then ended;

the Group Financial Statements have been properly
prepared in accordance with international accounting
standards in conformity with the requirements of
the Companies Act 2006 and International Financial
Reporting Standards (IFRSs) as adopted by the
European Union;

the parent Company Financial Statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice, including
Financial Reporting Standard 101 “Reduced Disclosure
Framework”; and

•

the Financial Statements have been prepared in accordance
with the requirements of the Companies Act 2006.

We have audited the Financial Statements which comprise:

•
•
•
•

•
•

the consolidated income statement;
the consolidated statement of comprehensive income;
the consolidated and parent Company balance sheets;
the consolidated and parent Company statements of
changes in equity;
the consolidated cash flow statement; and
the related Notes 1 to 33.

The financial reporting framework that has been applied
in the preparation of the Group Financial Statements is
applicable law, international accounting standards in
conformity with the requirements of the Companies Act 2006
and IFRSs as adopted by the European Union. 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).

2. BASIS FOR OPINION

We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit of the
Financial Statements section of our report.

We are independent of the Group and the parent Company in
accordance with the ethical requirements that are relevant to
our audit of the Financial Statements in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard
as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We confirm that the non-audit services
prohibited by the FRC’s Ethical Standard were not provided to
the Group or the parent Company.

We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

3. SUMMARY OF OUR AUDIT APPROACH

Key audit
matters

The key audit matters that we identified in
the current year were:

• The appropriateness of management
estimates in revenue recognition for
certain long-term contracts in the
RM Assessment business; and

• The valuation of intangible assets on
major IT development programmes.

The materiality that we used for the
Group Financial Statements was £725,000
which was determined as approximately
5% of profit before tax adjusted for
non-recurring items.

Materiality

Scoping

Our audit scope covered 98% of the Group’s
revenue, 95% of the Group’s profit before tax
and 92% of the Group’s total assets.

In auditing the Financial Statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the Financial Statements is appropriate.

Our evaluation of the Directors’ assessment of the Group’s
and parent Company’s ability to continue to adopt the going
concern basis of accounting included:

• Evaluation of the processes and controls underpinning
management’s forecasting of financial performance and
cash flow and determination of downside scenarios
including those to support accuracy of the models and the
underlying data;

• Assessment of the Group’s borrowing facilities as set out
in Note 31 of the Financial Statements, including the
extension of the Group’s revolving credit facility in the year;

• Performing procedures to assess liquidity headroom in the
going concern period and actual and forecast covenant
positions based on the base case assessment and severe
downside scenario as set out in the Going concern section
of Note 2;

• Challenge of the adequacy of downside scenarios

including reperformance of the reverse stress tests and
performing sensitivity testing, considering the plausibility
of a break-even scenario;

• Assessment of whether there is a material inconsistency
between the viability statement and the knowledge we
obtained during the audit;

• Evaluation of whether events or conditions give rise to a

risk of management bias; and

• Assessment of the adequacy of the going concern

disclosures in the annual report.

Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt
on the Group's and parent Company’s ability to continue as
a going concern for a period of at least twelve months from
when the Financial Statements are authorised for issue.

In relation to the reporting on how the Group has applied
the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the
Directors’ statement in the Financial Statements about
whether the Directors considered it appropriate to adopt
the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.

108

109

FINANCIAL STATEMENTS
5.1

Appropriateness of management estimates in revenue recognition for certain long-term contracts
in the RM Assessment business

5.2

Valuation of intangible assets on major IT development programmes

Key audit
matter
description

The RM Assessment business generated revenue in the year of £31.9m, (2020: £31.6m). As set out in the
accounting policies, within Note 2 to the Financial Statements, there are a number of judgements taken in
applying IFRS 15 Revenue from Contracts with customers for the contracts in this business.

£11.7m of the revenue generated in the year, (2020: £11.4m), relates to five contracts with multiple performance
obligations and a variable transaction price based on the number of exam scripts. In accounting for these
contracts there is a key source of estimation uncertainty relating to the estimate of exam scripts, which earn
variable consideration over the life of the contract. The impact of the COVID-19 pandemic on exam sittings and the
format of assessment in the current and prior year create a greater level of uncertainty in this estimate. Given this
estimate could be the subject of management bias and has a material impact on revenue recognised in the year
we identified a risk of potential fraud in respect of revenue recognition for these contracts. The complexity of this
estimate also impacted the audit team’s allocation of resources, particularly as regards the seniority of staff who
worked on this area. For these reasons, we identified this element of revenue recognition as a key audit matter.

Further details are included within the Audit Committee report on page 71, and Notes 2 and 3 to the
Financial Statements on pages 129 and 138.

How the scope
of our audit
responded to
the key audit
matter

In response to the identified key audit matter we have performed the following procedures for contracts with
material variable revenue:

• obtained an understanding of relevant controls used by the Company when determining the assumptions

applied in the models that drive revenue recognition;

• assessed the appropriateness of the revenue recognition policies applied against the five step model in

IFRS 15 Revenue from Contracts with customers through a review of the underlying contract terms;

• assessed the accuracy of management’s revenue models against contractual terms and compliance with the

principles within IFRS 15 Revenue from Contracts with customers; we did this through independently modelling
the contracts to form our own expectation of the outputs and compared those to management’s calculations;

• challenged key estimates made by management in determining the total transaction price in respect of

exam volumes. This included assessing forecasting accuracy, understanding the level of constraint relative
to operational forecasts, reviewing the latest correspondence with customers and assessing the available
confirmatory and contradictory external market evidence; and

• assessed the appropriateness of management’s sensitivity analysis for key estimates and the clarity of related

disclosures as required under IAS 1 for significant judgements and key areas of estimation uncertainty.

Key
observations

We are satisfied that revenue recognised for contracts with material variable consideration is appropriate and we
did not identify any differences of judgement or calculation that are material.

We tested the revenue recognition models using a fully substantive approach and placed no reliance on controls.
There are significant complexities in management’s models that drive revenue recognition that create risk of error
or manipulation. We observed that controls over these models, including the inputs in relation to volume of exam
scripts, could be improved through a greater extent of automation and more formalised review. Further details are
included within the Audit Committee report on page 73.

Key audit
matter
description

The Group is investing in a major programme to implement new IT systems, referred to as Evolution, which are
predominately using cloud based Software-as-a-Service (‘SaaS’) arrangements and third-party implementation
partners to improve systems and processes.

In April 2021 the IFRS Interpretations Committee published an agenda decision in relation to the accounting
treatment for configuration and customisation costs in SaaS arrangements. The committee concluded that
typically these costs do not result in an intangible asset of the customer and should be recognised as an expense
unless the criteria for recognising a separate asset are met. The Group performed a detailed analysis of the nature
of expenditure incurred and determined that £12.2 million of total spend to date should be expensed. £3.9 million
of this amount was incurred and previously capitalised in prior periods and therefore management have restated
the prior year Financial Statements to reflect this change in accounting policy.

Given the size of the amounts and the complexity and judgement in applying the interpretation we identified this
to be a key audit matter.

Further details are included within the Chief Financial Officer’s statement on page 33, the Audit Committee report
on page 72, and Notes 2 and 33 to the Financial Statements on pages 132 and 178.

In response to the identified key audit matter we have performed the following procedures:

• obtained an understanding of relevant controls used by the Company when determining amounts to be

capitalised or expensed and in assessing the impact of the change in accounting policy;

•

reviewed and challenged management’s accounting policy to assess whether it aligns with the IFRIC
interpretation on IAS 38 Intangible assets;

tested, on a sample basis, the nature of the configuration and customisation costs and the related systems
through review of the underlying contracts of relevant providers and system integrators and involvement of IT
specialists to independently assess whether items should be capitalised or expensed;

• challenged whether any elements of the prior period adjustments related to errors in the historical application

of IAS 38 rather than adoption of a new accounting policy; and

• assessed the disclosures relating to the change in accounting policy against the requirements

of IAS 8 Accounting policies, changes in accounting estimates and errors.

How the scope
of our audit
responded to
the key audit
matter

Key
observations

We are satisfied that amounts capitalised and expensed are materially accurate and in line with the latest guidance
from the IFRS Interpretations Committee on IAS 38 Intangible assets.

We are satisfied that the impact of the change in accounting policy has been appropriately disclosed in the
Financial Statements.

110

111

FINANCIAL STATEMENTS
6. OUR APPLICATION OF MATERIALITY

6.1

Materiality

We define materiality as the magnitude of misstatement in the Financial Statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.

6.2

Performance materiality

Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:

Group Financial Statements

Parent Company Financial Statements

Group Financial Statements

Parent Company Financial Statements

Materiality

65% of Group materiality

70% of parent Company materiality

Materiality

£725,000

£350,000

(2020 previous auditor: £880,000)

(2020 previous auditor: £700,000)

Basis for
determining
materiality

Rationale
for the
benchmark
applied

5% of profit before tax adjusted for material
non-recurring items.

In the year ended 30 November 2021 the adjustments
made for non-recurring items are consistent with
those presented in Note 6; however we did not exclude
amortisation of acquisition related intangibles from our
determination of materiality as it is a recurring item.

In 2020 the previous auditor set materiality based on
5% of profit before tax adjusted for material non-recurring
items averaged over the previous three years.

Parent Company materiality equates to less than
0.2% of net assets, which is capped at approximately
50% of Group materiality.

In 2020 the previous auditor set materiality based on
0.5% of the Company’s total assets.

Adjusted profit before tax reflects the manner in which
the underlying business performance is reported and
assessed by external users of the Financial Statements.

Net assets are considered to be an appropriate
benchmark for the parent Company given that it is
a holding company.

Group materiality
£725k

Component
materiality range
£245k to £350k

Audit Commitee
reporting threshold
£36k

Proﬁt before tax
adjusted for material
non-recurring items
£15,091k

112

Basis and
rationale for
determining
performance
materiality

In setting performance materiality, we considered:

• The quality of the control environment in the Group, including the systems in place and informality of

certain controls, and the extent to which it has been impacted by COVID-19;

• The fact that it was our first year as auditors of the Group and parent Company;

• The low number of corrected and uncorrected misstatements identified in the prior year; and

• The level of consistency in key personnel within the finance team.

Given the nature of the parent Company’s operations as a holding company, we considered that a reduction of
performance materiality to 70% was sufficient.

6.3

Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £36,250 (2020 previous
auditor: £44,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report
to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the Financial Statements.

7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT

7.1

Identification and scoping of components

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and
assessing the risks of material misstatement at a Group level.

Based on that assessment we focussed our Group audit scope on the audit work at three components, which were subject to a full
scope audit. This included the parent Company, and the three principal UK based trading businesses; RM Resources, RM Technology
and RM Assessment. These account for 98% of the Group’s revenues, 95% of profit before tax and 92% of total assets. Our audit work
at these components was executed at levels of materiality applicable to each individual component, which were lower than Group
materiality ranging from £245,000 to £350,000.

All work was carried out by the Group engagement team for both the Group and component audits.

At the Group level, we also tested the consolidation process and carried out analytical procedures to re-confirm our conclusion that
there were no significant risks of material misstatement of the aggregated financial information of the remaining components not
subject to full scope audit.

Revenue

Proﬁt
before tax

Total assets

98%

95%

92%

Full audit scope

Review at
Group level

113

FINANCIAL STATEMENTS7.2

Our consideration of the control environment

9. RESPONSIBILITIES OF DIRECTORS

The Group operates a diverse IT infrastructure. With
the involvement of our IT specialists we obtained an
understanding of the relevant IT environment which included,
in some instances, performance of general IT control (“GITC”)
testing. Weaknesses in the IT control environment meant we
did not place reliance on those controls for the purposes of
our substantive audit procedures.

For all components we obtained an understanding of the
relevant controls associated with the financial reporting
process, key audit matters, and in relation to significant
accounting estimates. We have taken a non-controls reliance
approach throughout our audit.

As discussed in the Audit Committee Report on page 73
there is currently a lack of formality and documentation in
the Group’s control environment, particularly in relation
to journal approvals. However, management mitigate the
systems deficiencies with management review controls and
are implementing a significant IT transformation programme
which will allow a greater degree of automation. A more
formal control framework will be developed alongside the
system implementation.

8. OTHER INFORMATION

The other information comprises the information included in
the annual report, other than the Financial Statements and
our auditor’s report thereon. The Directors are responsible for
the other information contained within the annual report.

Our opinion on the Financial Statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.

Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the Financial Statements or our knowledge
obtained in the 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.

As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation
of the Financial Statements and for being satisfied that they
give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation
of Financial Statements that are free from material
misstatement, whether due to fraud or error.

In preparing the Financial Statements, the Directors are
responsible for assessing the Group’s and the parent
Company’s ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either
intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.

10. 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.

A further description of our responsibilities for the audit of
the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.

11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED

CAPABLE OF DETECTING IRREGULARITIES,
INCLUDING FRAUD

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.

11.1

Identifying and assessing potential risks
related to irregularities

In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:

the nature of the industry and sector, control environment
and business performance including the design of the
Group’s remuneration policies, key drivers for Directors’
remuneration, bonus levels and performance targets;

In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the Financial
Statements but compliance with which may be fundamental
to the Group’s ability to operate or to avoid a material penalty.

•

the Group’s own assessment of the risks that irregularities
may occur either as a result of fraud or error;

results of our enquiries of management, internal audit and
the audit committee about their own identification and
assessment of the risks of irregularities;

• any matters we identified having obtained and reviewed

the Group’s documentation of their policies and
procedures relating to:

◌ identifying, evaluating and complying with laws and
regulations and whether they were aware of any
instances of non-compliance;

◌ detecting and responding to the risks of fraud

and whether they have knowledge of any actual,
suspected or alleged fraud;

◌ the internal controls established to mitigate risks of

fraud or non-compliance with laws and regulations; and

•

the matters discussed among the audit engagement team
and relevant internal specialists, including tax, valuations,
pensions, and IT specialists regarding how and where
fraud might occur in the Financial Statements and any
potential indicators of fraud.

As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for
fraud in the following areas:

• Management estimates of variable consideration in

revenue recognition for certain long term contracts in the
RM Assessment business;

• Accounting for major capital programmes in accordance

with IAS 38 Intangible assets and IAS 16 Property, plant and
equipment; and

• The potential for bias in the presentation of items as

adjustments to profit.

In common with all audits under ISAs (UK), we are also
required to perform specific procedures to respond to the risk
of management override.

We also obtained an understanding of the legal and
regulatory frameworks that the Group operates in, focusing
on provisions of those laws and regulations that had a
direct effect on the determination of material amounts
and disclosures in the Financial Statements. The key laws
and regulations we considered in this context included the
UK Companies Act, Listing Rules, pensions legislation and tax
legislation in relevant jurisdictions.

11.2

Audit response to risks identified

As a result of performing the above, we identified
management estimates of variable consideration in
revenue recognition for certain long term contracts in the
RM Assessment business and the valuation of intangible
assets on major IT development programmes as key
audit matters related to the potential risk of fraud or non-
compliance with laws and regulations. The key audit matters
section of our report explains the matters in more detail
and also describes the specific procedures we performed in
response to those key audit matters.

In addition to the above, our procedures to respond to risks
identified included the following:

•

reviewed the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the Financial Statements;

• enquired of management, the audit committee and

legal counsel concerning actual and potential litigation
and claims;

• performed analytical procedures to identify any unusual
or unexpected relationships that may indicate risks of
material misstatement due to fraud;

•

read minutes of meetings of those charged with
governance, reviewing internal audit reports and reviewed
correspondence with HMRC;

in addressing the risk of bias in the presentation of items
as adjustments to profit, we have reviewed the accounting
policy to assess whether it is in line with regulatory
guidance, and we have challenged whether items
presented as adjustments are classified in line with this
policy; and

in addressing the risk of fraud through management
override of controls, we tested the appropriateness of
journal entries and other adjustments; assessing whether
the judgements made in making accounting estimates are
indicative of a potential bias; and evaluated the business
rationale of any significant transactions that are unusual or
outside the normal course of business.

We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members, including internal specialists, and remained alert
to any indications of fraud or non-compliance with laws and
regulations throughout the audit.

114

115

FINANCIAL STATEMENTS

Report on other legal and
regulatory requirements

12. OPINIONS ON OTHER MATTERS PRESCRIBED

BY THE COMPANIES ACT 2006

In our opinion the part of the Directors’ remuneration report
to be audited has been properly prepared in accordance
with 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.

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
any material misstatements in the strategic report or the
Directors’ report.

13. CORPORATE GOVERNANCE STATEMENT

14. MATTERS ON WHICH WE ARE

The Listing Rules require us to review the Directors' statement
in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the
Group’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.

Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the Financial Statements and our knowledge obtained
during the audit:

•

the Directors’ statement with regards to the
appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set
out on page 36;

the Directors’ explanation as to its assessment of the
Group’s prospects, the period this assessment covers and
why the period is appropriate set out on page 36;

the Directors' statement on fair, balanced and
understandable set out on page 107;

the Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
pages 25 to 26;

the section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 73; and

the section describing the work of the Audit Committee
set out on pages 71-74.

REQUIRED TO REPORT BY EXCEPTION

14.1

Adequacy of explanations received and
accounting records

Under the Companies Act 2006 we are required to report
to you if, in our opinion:

• we have not received all the information and explanations

we require for our audit; or

• 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.

We have nothing to report in respect of these matters.

14.2

Directors’ remuneration

Under the Companies Act 2006 we are also required to report
if in our opinion certain disclosures of Directors’ remuneration
have not been made or the part of the Directors’
remuneration report to be audited is not in agreement with
the accounting records and returns.

We have nothing to report in respect of this matter.

15. OTHER MATTERS WHICH
WE ARE REQUIRED TO ADDRESS

15.1

Auditor tenure

Following the recommendation of the audit committee, we
were appointed by the board on 8th April 2021 to audit the
Financial Statements for the year ending 30 November 2021
and subsequent financial periods.

15.2

Consistency of the audit report with the
additional report to the audit committee

Our audit opinion is consistent with the additional
report to the audit committee we are required to
provide in accordance with ISAs (UK).

16. 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.

Kate Hadley (Senior statutory auditor)
For and on behalf of Deloitte LLP

Birmingham, United Kingdom
14 February 2022

116

117

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME

Revenue

Cost of sales

Gross profit

Operating expenses

Impairment losses

Profit from operations

Other income

Finance costs

Profit before tax

Tax

Profit for the year

Year ended 30 November 2021

Restated
Year ended 30 November 2020

Adjusted

Adjustments

Note

£000

Total

£000

Adjusted

Adjustments

£000

Total

£000

210,853

(140,220)

70,633

210,853

188,999

(140,220)

(121,551)

(365)

(121,916)

70,633

67,448

(365)

67,083

(52,164)

(11,483)

(63,647)

(52,119)

(4,154)

(56,273)

(248)

18,469

(11,483)

6,986

15,081

(4,519)

10,562

(1,396)

(1,055)

17,101

(11,483)

5,618

14,047

(4,519)

(3,282)

1,858

(1,424)

(2,668)

775

13,819

(9,625)

4,194

11,379

(3,744)

Earnings per ordinary share

- basic

- diluted

Paid and proposed dividends per share

16.6p

16.4p

- interim

- final

13.8p

13.6p

5.0p

1.70p

3.00p

(1,055)

9,528

(1,893)

7,635

9.2p

9.1p

3.00p

Year ended
30 November 2021

Restated
Year ended
30 November 2020

Profit for the year

Items that will not be reclassified subsequently to profit or loss

Defined benefit pension scheme remeasurements

Tax on items that will not be reclassified subsequently to profit or loss

Items that are or may be reclassified subsequently to profit or loss

Fair value gain on hedged instruments

Note

Tax on items that are or may be reclassified subsequently to profit or loss

Exchange loss on translation of overseas operations

Other comprehensive income/(expense)

Total comprehensive income/(expense)

£000

4,194

44,860

(10,364)

242

(45)

(180)

34,513

38,707

£000

7,635

(16,302)

2,854

346

(3)

(205)

(13,310)

(5,675)

The notes on pages 126 to 180 form an integral part of these Financial Statements. The restatement is detailed in Note 33.

Throughout this statement, adjusted profit and EPS measures are stated after adjusting items which are identified by virtue of their size,
nature and/or incidence. The treatment of adjusted items is applied consistently period on period and is consistent with the way that
underlying trading performance is measured by management (see Note 6 for details).

All amounts were derived from continuing operations. The restatement is detailed in Note 33.

The notes on pages 126 to 180 form an integral part of these Financial Statements.

118

119

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET

At 30 November 2021

Restated
At 30 November 2020

Restated
At 1 December 2019

CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY

Note

13
14
15
16
26
20
19
10

18
20
19
21

22
24
10
26
23

Non-current assets

Goodwill
Intangible assets
Property, plant and equipment
Right-of-Use assets
Defined benefit pension scheme surplus
Other receivables
Contract fulfilment assets
Deferred tax assets

Current assets
Inventories
Trade and other receivables
Contract fulfilment assets
Held-for-sale asset
Tax assets
Cash at bank

Total assets
Current liabilities

Trade and other payables
Tax liabilities
Provisions
Overdraft

Net current (liabilities)/assets
Non-current liabilities

Other payables
Provisions
Deferred tax liability
Defined benefit pension scheme obligation
Borrowings

Total liabilities
Net assets

Equity attributable to shareholders

Share capital
Share premium account
Own shares
Capital redemption reserve
Hedging reserve
Translation reserve
Retained earnings

Total equity

£000

49,202
23,405
16,217
18,018
35,037
82
4,169
156
146,286

19,055
33,865
1,360
3,034
3,665
3,560
64,539
210,825

(61,369)
-
(2,066)
(2,082)
(65,517)
(978)

(21,072)
(1,475)
(10,830)
(4,686)
(19,744)
(57,807)
(123,324)
87,501

1,917
27,080
(444)
94
177
(882)
59,559
87,501

£000

49,322
19,016
8,423
19,391
665
63
3,420
5,333
105,633

18,594
31,475
728
4,793
2,633
5,941
64,164
169,797

(61,491)
(163)
(435)
(2,480)
(64,569)
(405)

(20,987)
(3,998)
(3,339)
(19,318)
(4,779)
(52,421)
(116,990)
52,807

1,917
27,080
(841)
94
(65)
(702)
25,324
52,807

£000

49,107
21,054
9,183
-
976
939
2,193
3,457
86,909

22,151
31,238
844
1,428
804
5,534
61,999
148,908

(51,231)
(117)
(1,585)
(4,006)
(56,939)
5,060

(3,483)
(3,868)
(3,356)
(6,951)
(16,534)
(34,192)
(91,131)
57,777

1,917
27,080
(1,007)
94
(411)
(497)
30,601
57,777

The notes on pages 126 to 180 form an integral part of these Financial Statements.
The prior years have been restated (see Note 33 for further details).

These Financial Statements of RM plc, registered number 01749877, were approved and authorised for issue by the Board of Directors
on 14 February 2022.

On behalf of the Board of Directors
Neil Martin
Director

Mark Berry
Director

redemption

Hedging

Translation

Retained

Share capital

premium

Own shares

reserve

earnings

Capital

Note

£000

At 1 December 2019 - as reported

1,917

27,080

(1,007)

Configurations
costs expensed

At 1 December 2019 - as restated

1,917

27,080

(1,007)

Profit for the year -
restated

Other comprehensive
income/(expense)

Total comprehensive
income/(expense)

Transactions with owners of the Company:

Share-based payment
awards exercised

Share-based payment
fair value charges

At 1 December 2020 - as restated

1,917

27,080

Profit for the year

Other comprehensive
income/(expense)

Total comprehensive
income/(expense)

Transactions with owners of the Company:

Share-based payment
awards exercised

Share-based payment
fair value charges

Ordinary dividends paid

166

(841)

397

£000

(411)

£000

(497)

£000

Total
£000

32,399

59,575

(1,798)

(411)

(497)

30,601

57,777

7,635

346

(65)

242

(205)

(13,451)

(13,310)

(205)

(5,816)

(5,675)

(166)

705

(702)

25,324

52,807

4,194

(180)

34,451

34,513

(180)

38,645

38,707

(397)

(100)

(3,913)

At 30 November 2021

1,917

27,080

(444)

177

(882)

59,559

87,501

The notes on pages 126 to 180 form an integral part of these Financial Statements.

120

121

FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENT

COMPANY BALANCE SHEET

Year ended
30 November 2021

Restated
Year ended
30 November 2020

Note

8
9

6
14
15, 16
5
5

15
14

12
23

Profit before tax
Investment income
Finance costs
Profit from operations
Adjustments for:
Pension GMP
Amortisation and impairment of intangible assets
Depreciation and impairment of property, plant and equipment
Gain on disposal of other asset
Gain on disposal of property, plant and equipment
Loss/(gain) on foreign exchange derivatives
Share-based payment (credit)/charge
(Decrease)/increase in provisions
Defined benefit pension scheme administration cost

Operating cash flows before movements in working capital
(Increase)/decrease in inventories
(Increase)/decrease in receivables
Increase in contract fulfilment assets
Movement in payables:

Increase in trade and other payables
Utilisation of provisions

Cash generated from operations
Defined benefit pension scheme cash contributions
Tax paid
Net cash inflow from operating activities
Investing activities
Interest received
Proceeds on disposal of investment asset
Proceeds on disposal of property, plant and equipment
Purchases of property, plant and equipment
Purchases of other intangible assets
Net cash used in investing activities
Financing activities
Dividends paid
Drawdown/(repayment) of borrowings
Borrowing facilities arrangement and commitment fees
Interest paid
Payment of leasing liabilities

Net cash generated by/(used in) financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the year

Bank overdraft
Cash at bank
Cash and cash equivalents at the end of the year

£000

5,618
(28)
1,396
6,986

-
2,406
4,281
-
(1,449)
64
(100)
(353)
52
11,887
(460)
(2,318)
(1,381)

1,177
(528)
8,377
(4,450)
(135)
3,792

28
-
3,214
(8,024)
(6,977)
(11,759)

(3,913)
15,000
(497)
(675)
(3,889)
6,026
(1,941)
3,461

(42)
1,478

(2,082)
3,560
1,478

Cash and cash equivalents include bank overdrafts as these form an integral part of the Group's cash management.

The notes on pages 126 to 180 form an integral part of these Financial Statements. The restatement is detailed in Note 33.

£000

9,528
(21)
1,055
10,562

170
3,038
3,718
(713)
(949)
(625)
705
1,443
37
17,386
3,557
2,362
(1,111)

6,012
(2,284)
25,922
(4,094)
(2,589)
19,239

21
1,560
2,900
(5,801)
(801)
(2,121)

-
(12,000)
(226)
(501)
(2,523)
(15,250)
1,868
1,528
65
3,461

(2,480)
5,941
3,461

Non-current assets

Investments

Other receivables

Current assets

Trade and other receivables

Tax assets

Total assets

Current liabilities

Accruals

Trade and other payables

Net current liabilities

Non-current liabilities

Borrowings

Total liabilities

Net assets

Equity attributable to equity holders

Share capital

Share premium account

Own shares

Capital redemption reserve

Retained earnings

Total equity

At 30 November 2021

At 30 November 2020

Note

£000

126,430

7,263

133,693

106

526

632

134,325

(118)

(49,602)

(49,720)

(49,088)

(19,744)

(69,464)

64,861

1,917

27,080

(444)

36,214

64,861

126,530

7,329

133,859

411

459

134,318

(151)

(64,122)

(64,273)

(63,814)

(4,779)

(69,052)

65,266

1,917

27,080

(841)

37,016

65,266

The notes on pages 126 to 180 form an integral part of these Financial Statements. The Company has taken the exemption under
Section 408 of the Companies Act 2006, not to produce an Income Statement. The profit for the year was £3,608,000 (2020: £3,581,000).
These Financial Statements of RM plc, registered number 01749877, were approved and authorised for issue by the Board of Directors
on 14 February 2022.

On behalf of the Board of Directors

Neil Martin
Director

Mark Berry
Director

122

123

FINANCIAL STATEMENTS

COMPANY STATEMENT OF CHANGES IN EQUITY

redemption

Retained

Capital

Share capital

premium

Own shares

reserve

earnings

Note

£000

Total
£000

1,917

27,080

(1,007)

32,896

60,980

At 1 December 2019

Profit for the year

Total comprehensive income

Transactions with owners of the Company:

Share-based payment awards exercised

Share-based payment fair value charges

At 30 November 2020

Profit for the year

Total comprehensive income

Transactions with owners of the Company:

Share-based payment awards exercised

Share-based payment fair value charges

Ordinary dividends paid

At 30 November 2021

1,917

27,080

166

(841)

397

3,581

(166)

705

3,581

705

37,016

65,266

3,608

(397)

(100)

(3,913)

1,917

27,080

(444)

36,214

64,861

The notes on pages 126 to 180 form an integral part of these Financial Statements.

124

FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

RM plc (‘Company’) is incorporated in England and Wales
and listed on the London Stock Exchange. It is the parent
company of a group of companies (‘Group’) whose business
activities and financial position, together with the factors
likely to affect its future development, performance and
position, and risk management policies are presented in the
Strategic Report and the Directors’ Report.

Consolidated Income Statement presentation

The Directors assess the performance of the Group using an
adjusted operating profit and profit before tax. The policy for
the use of Alternative Performance Measures is explained in
Note 2 with further details provided in Note 6.

2. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies are drawn up in accordance
with those International Accounting Standards (IAS) and
International Financial Reporting Standards (IFRS) issued
by the International Accounting Standards Board (IASB) and
adopted for use in the EU and therefore comply with Article 4
of the EU IAS Regulation applied in accordance with the
provisions of the Companies Act 2006.

These accounting policies have been consistently applied
to the years presented with the exception of capitalisation
of configuration costs of a SaaS based solution. During the
year, the Group revised its accounting policy in relation to
upfront configuration and customisation costs incurred
in implementing SaaS arrangements in response to the
IFRS Interpretations Committee agenda decision clarifying
how IFRS Standards apply to these types of arrangements.
The new accounting policy is presented below. Historical
financial information has been restated to reflect the impact
of the change—refer Note 33. Software-as-a-Service (SaaS)
arrangements are service contracts providing the Group with
the right to access the cloud provider’s application software
over the contract period. Costs incurred to configure, and
the ongoing fees to obtain access to the cloud provider’s
application software, are recognised as operating expenses
when the services are received.

Some of the costs incurred relate to the development
of software code that enhances or modifies, or creates
additional capability to, existing on-premise systems and
meets the definition of, and the recognition criteria for, an
intangible asset. These costs are recognised as intangible
software assets and amortised over the useful life of the
software on a straight-line basis. The useful lives of these

assets are reviewed at least at the end of each financial year,
and any change accounted for prospectively as a change in
accounting estimate.

The Financial Statements are prepared on a going concern
basis. The Directors’ reasons for continuing to adopt
this basis are set out in the Going Concern section of the
Strategic Report and below.

Basis of preparation

The Financial Statements have been prepared in accordance
with international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006 (“Adopted IFRS”). They are prepared on
a historical cost basis except for certain financial instruments,
share-based payments and pension assets and liabilities
which are measured at fair value. In addition, assets held for
sale are stated at the lower of previous carrying amount and
the fair value less costs to sell. The preparation of Financial
Statements, in conformity with generally accepted accounting
principles, requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the Financial Statements and the reported amounts of
revenues and expenses during the reporting period. Although
these estimates are based on the Directors’ best knowledge
of current events and actions, actual results ultimately may
differ from those estimates.

In the year, the Company decided to apply Financial
Reporting Standard 101 ‘Reduced Disclosure Framework’
(FRS 101) in place of IFRS. The Company has applied
FRS 101 issued by the Financial Reporting Council (FRC)
incorporating the Amendments to FRS 101 issued by the FRC
in July 2015, and the amendments to Company law made
by The Companies, Partnerships and Groups (Accounts and
Reports) Regulations 2015. In these Financial Statements,
the Company has applied the exemptions available under
FRS 101 in respect of the following disclosures:

• A Cash Flow Statement and related notes;

• Comparative period reconciliations for share capital and

tangible fixed assets;

• Disclosures in respect of transactions with wholly owned

subsidiaries;

• Disclosures in respect of capital management;

• The effects of new but not yet effective IFRSs; and

• Disclosures in respect of the compensation of

Key Management Personnel.

The Company produces consolidated Financial Statements
which are prepared in accordance with International
Financial Reporting Standards. As the consolidated
Financial Statements of the Company include the equivalent
disclosures, the Company has also taken the exemptions
under FRS 101 available in respect of the following
disclosures:

•

IFRS 2 Share-Based Payments in respect of group settled
share based payments; and

• The disclosures required by IFRS 7 and IFRS 13 regarding
financial instrument disclosures have not been provided.

As permitted by s408 of the Companies Act 2006 the
Company has elected not to present its own profit and loss
account or statement of comprehensive income for the year.
The profit attributable to the Company is disclosed in the
footnote to the Company’s balance sheet.

Going concern

The Financial Statements have been prepared on a going
concern basis which the Directors consider to be appropriate
for the following reasons.

The Directors have prepared cash flow forecasts for the
period to the end of May 2023 which indicate that, taking into
account reasonably plausible downsides as discussed below,
the Company have sufficient funds to meet its liabilities
as they fall due for at least 12 months from the date of
this report.

In assessing the going concern position the Directors have
considered the balance sheet position as included on
page 120 and the level of available finance not drawn down.
The balance sheet shows net current liabilities of £1.0m.
At 30 November 2021, the Group had net debt of £18.3m
(November 2020: £1.3m) and drawn facilities of £20m
(November 2020: £5m). RM Group has a £70m committed
bank facility (“the facility”) at the date of this report. Further
details are set out in Note 31. Liquidity headroom at
30 November 2021 was £47.9m. Average net debt over the
year to 30 November 2021 was £15.8m (2020: £16.3m) with
a maximum borrowings position of £29.7m (2020: £29.6m).
The debt facilities are subject to financial covenants of a
maximum of 2.5 times Net Debt/EBITDA and at least 4 times
interest cover/EBITDA. These covenants are tested in May and
November. At 30 November 2021 the results of the covenant
tests were 0.84 and 22.6 respectively.

The facility was extended by 1 year during 2021 and is
committed until July 2023. During this extension process, the
Board initiated conversations regarding 3 year facilities to
replace the current facility when it expires and is confident
in obtaining a new or renewed facility at an appropriate
time. The Board is satisfied that there are several other
financing options that could be put in place to maintain
liquidity headroom and that there would be adequate time to
complete negotiation of such arrangements.

The CFO report outlines the performance of the Group in the
year to 30 November 2021 including the impact of COVID-19.
In this period UK schools were closed for a number of weeks
primarily during Q1, and many UK and Irish exams were
cancelled by respective governments. Despite this backdrop,
revenues increased by 12% compared to 2020 and adjusted
profit before tax by 22%. In RM Resources, we continued to
provide products to our customers during school closures
and have experienced strong curriculum sales in 2021. In
RM Assessment (formerly RM Results), whilst the UK general
exams saw a significant reduction compared to 2019, other UK
assessment and international examination activity recovered
partially. RM Technology (formerly RM Education) continues to
be resilient to UK school closures as it provides the technology
support to UK schools and colleges that has allowed them
to operate remotely. Performance by segment is set out in
Note 4. Net cash inflow from operating activities was £3.8m.

For going concern purposes the Group has assessed a base
case scenario that assumes no further significant downturn
in UK or International markets occurs than that experienced
in the year to 30 November 2021. The base case also
incorporates a reduced but still significant level of investment
expenditure in 2022 as we have spent in 2021 relating to
our major transformation projects and assumes a return
to shareholders through dividends. Under that base case
we continue to maintain significant headroom against our
committed facility and are comfortably within our covenants.

The Group has assessed a further severe downside scenario
that adjusts our base assumptions to include:

• Further school closures for March through to May 2022 at
similar levels of trading experienced in 2021, comprising a
c.30% reduction in divisional revenue in those months;

• Reduced International trading and exams, including an
c.25% reduction in International general school exams
against budget;

• Assumes the UK exams that have been cancelled in 2021

are also cancelled in 2022;

• Slower pipeline conversion, a c.50% of budgeted

annuity contracts in RM Assessment and RM Technology
being achieved;

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FINANCIAL STATEMENTS• Benefits from our ERP programme are delayed by

approximately 1 year;

• Business disruption for 2 months in our RM Resources

Division when the warehouse automation goes live in 2022
reducing order intake by c.50% in those 2 months;

• Minimal cost mitigations and no significant

cash flow deferrals.

The Directors do not believe that all these assumptions
occurring together is plausible, but even considering all these
scenarios in aggregate we continue to have good headroom
against the facility and comply with bank covenants until
the facility concludes. The Directors also believe there is
reasonable expectation of entering into a new agreement
on similar terms as the existing renewed facility. Having
considered the severity of this scenario, the Board considers
this to be an appropriate worst case scenario.

The Board’s assessment of the likelihood of a further
downside scenario is remote, particularly with the continued
vaccine booster/ roll out programmes and lifting of
restrictions in key countries and the indications from most
governments worldwide that they intend to lift remaining
restrictions as soon as practical.

Therefore, the Board has a reasonable expectation that the
Group has adequate resources to continue in operational
existence and meet their liabilities as they fall due for a period
of not less than 12 months from the date of approval of these
Financial Statements. For this reason, the Group continues to
adopt the going concern basis of accounting in preparing the
annual Financial Statements.

Alternative Performance Measures (APMs)

In response to the Guidelines on APMs issued by the
European Securities and Markets Authority (ESMA) and the
Financial Reporting Council (FRC), additional information on
the APMs used by the Group is provided below.

The following APMs are used by the Group:

- Adjusted operating profit
- Adjusted operating margin
- Adjusted profit before tax
- Adjusted tax
- Adjusted profit after tax
- Adjusted earnings per share
- Adjusted diluted earnings per share
- Adjusted cash conversion
- Net debt
- Average net debt

Further explanation of what each APM comprises and
reconciliations between Statutory reported measures and
adjusted measures are shown in Note 6.

The Board believes that presentation of the Group results
in this way is relevant to an understanding of the Group’s
financial performance (and that of each segment). Underlying
performance excludes adjusted items which are identified
by virtue of their size, nature and/or incidence. The
treatment of adjusted items is applied consistently period
on period. This presentation is consistent with the way
that financial performance is measured by management,
reported to the Board, the basis of financial measures for
senior management’s compensation schemes and assists in
providing supplementary information that assists the user to
understand the underlying financial performance, position
and trends of the Group.

The APMs used by the Group are not defined terms under
IFRS and may therefore not be comparable with similarly
titled measures reported by other companies. They are
not intended to be a substitute for, or superior to, GAAP
measures. All APMs relate to the current year results and
comparative periods where provided.

Consolidation

The Group Financial Statements incorporate the Financial
Statements of the Company and all its subsidiaries for the
periods during which they were members of the Group.

Inter-company balances and transactions between Group
companies are eliminated on consolidation. On acquisition,
assets and liabilities of subsidiaries are measured at their fair
values at the date of acquisition with any excess of the cost of
acquisition over this value being capitalised as goodwill.

Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and
has the ability to affect those returns through its power
over the entity. In assessing control, the Group takes into
consideration potential voting rights. The acquisition date
is the date on which control is transferred to the acquirer.
The Financial Statements of subsidiaries are included in the
consolidated Financial Statements from the date that control
commences until the date that control ceases.

Investment in subsidiaries

In the Company accounts, investments in subsidiaries
are stated at cost less any provision for impairment
where appropriate.

Business combinations

RM Assessment revenue judgements:

For acquisitions on or after 1 January 2010, the Group
measures goodwill at the acquisition date as:

•

the fair value of the consideration transferred; less

the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.

Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed
as incurred.

For acquisitions before 1 January 2010, goodwill represents
the excess of the cost of the acquisition over the Group’s
interest in the recognised amount (generally fair value) of the
identifiable assets, liabilities and contingent liabilities of the
acquiree. When the excess was negative, a bargain purchase
gain was recognised immediately in profit or loss.

Transaction costs, other than those associated with the
issue of debt or equity securities, that the Group incurred in
connection with business combinations were capitalised as
part of the cost of the acquisition period.

Revenue

The Group operates a number of diverse businesses and
accordingly applies a variety of methods for revenue
recognition, based on the principles set out in IFRS15. The
revenue and profits recognised in any period are based on
the delivery of performance obligations and an assessment of
when control is transferred to the customer.

RM Resources provides educational supplies and curriculum
products for schools and nurseries and revenues are
recognised when products are delivered to our customers i.e.
point in time basis for each product delivered.

RM Technology provides software, services and technology
to UK schools and colleges. Hardware, Right-to-Use licenses
and related installation revenues are recognised on delivery
to our customers at a point in time. Provision of services and
Right-to-Access software are recognised over time.

RM Assessment provides digital assessment solutions that
support lifelong learning. Revenues are recognised over-
time based on the delivery of performance obligations. In
certain contracts there are judgements in determining the
basis of revenue recognition particularly for long-term and
complex contracts.

In respect of certain contracts in the RM Assessment Division
management is required to form several judgements and
assumptions. These include determining the amount of
revenue and profits to record, and related balance sheet
items (such as contract fulfilment assets, trade receivables,
accrued income and deferred income) to recognise in the
period. Judgements and assumptions include:

• The identification of performance obligations included

within the contract

• The allocation of revenue to performance obligations

including the impact of variable consideration

• The combination of goods and services into a single

performance obligation

• The measurement of progress for performance obligations

satisfied over time

• The consideration of onerous contract conditions and

associated loss provisions

The impact on revenue recognition of these judgements and
assumptions is set out below.

The most significant judgements relate to contracts with
multiple performance obligations and where there is a
variable transaction price based on the number of exam
scripts. There is significant estimation uncertainty in some
contracts relating to the estimate of scanning and script
volumes over the contract. There is also judgement in
the determination, that the provision of technology is a
Right-to-Access arrangement and therefore should be
recognised over time, and the basis on which the transaction
price is allocated to separate performance obligations. These
are explained in key sources of estimation uncertainty and
key sources of critical accounting judgements below.

Basis of revenue recognition

Revenue is recognised either when the performance
obligation in the contract has been performed (so “point in
time” recognition or “over time” as control of the performance
obligation is transferred to the customer). For all contracts,
the Group determines if the arrangement with a customer
creates enforceable rights and obligations.

For contracts with multiple components to be delivered,
management applies judgement to consider whether these
promised goods or services are; (i) distinct – to be accounted
for as separate performance obligations; (ii) not distinct – to
be combined with other promised goods or services until a
bundle is identified that is distinct; or (iii) part of a series of
goods and services that are substantially the same and have
the same pattern of transfer to the customer.

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FINANCIAL STATEMENTSAt contract inception the total transaction price is estimated,
being the amount to which the Group expects to be entitled
and has rights to under the present contract. This includes
an assessment of any variable consideration where the
performance obligation is satisfied over time. Such amounts
are only included based on the expected value or the most
likely outcome method, and only to the extent it is highly
probable that no revenue reversal will occur.

The transaction price does not include estimates of
consideration resulting from change orders for additional
goods and services until these are agreed.

Once the total transaction price is determined, the Group
allocates this to the identified performance obligations in
proportion to their relative stand-alone selling prices and
recognises revenue when those performance obligations are
satisfied. In our RM Assessment Division the Group may sell
customer bespoke solutions, and in these cases the Group
typically uses the expected cost plus margin or a contractually
stated price approach (if set out by performance obligation
in the contract) to estimate the stand-alone selling price of
each performance obligation. Any remaining performance
obligations for which the stand-alone selling price is highly
variable or uncertain, due to not having previously been sold on
a stand-alone basis, is allocated applying the residual approach.

For each performance obligation, the Group determines if
revenue will be recognised over time or at a point in time.
Where the Group recognises revenue over time for long term
contracts, this is generally due to the Group performing and
the customer simultaneously receiving and consuming the
benefits provided over the life of the contract.

For each performance obligation to be recognised over
time, the Group applies a revenue recognition method that
faithfully depicts the Group’s performance in transferring
controls of the good or services to the customer. This
decision requires assessment of the real nature of the goods
or services that the Group has promised to transfer to the
customer. The Group applies the relevant input or output
method consistently to similar performance obligations in
other contracts.

When using the output method the Group recognises
revenue on the basis of direct measurements of the value
to the customer of the goods and services transferred to
the date relative to the remaining goods and services under
the contract. Where the output method is used, where the
series guidance is applied (see below for further details), the
Group often uses a method of time elapsed which requires
minimal estimation. Certain long term contracts use output
method based on estimation of number of scripts, or level of
service activity. There is variable consideration relating to the
number of scripts.

There is judgement in determining whether a contract has
onerous conditions. When identified the expected loss is
provided for at the time identified.

Revenue: Transactional (point in time) contracts

The Group delivers goods and services in RM Technology
and RM Resources that are transactional services for which
revenue is recognised at the point in time when the control
of the goods or services has transferred to the customer.
This may be at the point of physical delivery of goods and
acceptance by a customer or when the customer obtains
control of an asset or service in a contract with customer-
specified acceptance criteria.

The nature of contracts or performance obligations
categorised within this revenue type includes: (i) provision
of curriculum and educational resources for schools and
nurseries; (ii) provision of IT hardware goods and (iii)
installation of IT hardware goods.

Revenue: Over time contracts

The Group delivers services in RM Technology and
RM Assessment Divisions under customer contracts with
variable duration. The nature of contracts and performance
obligations categorised within this revenue type is diverse
and includes: (i) outsourced service arrangements in the
public and private sectors; and (ii) Right- to-Access licenses
(see below).

The Group considers that the services provided meet the
definition of a series of distinct goods and services as they
are: (i) substantially the same; (ii) have the same pattern
of transfer (as the series constitutes services provided in
distinct time increments (e.g. daily, monthly, quarterly, exam
session, or annual service)) and therefore treats the series as
one performance obligation. Even if the underlying activities
performed by the Group to satisfy a promise vary significantly
throughout the day and on a day by day basis, that fact, by
itself, does not mean the distinct goods or services are not
substantially the same. For the majority of the over time
contracts with customers are in this category, the Group
recognises revenues using the output method as it best
reflects the nature in which the Group is transferring control
of the goods or services to the customer.

Right-to-Access licenses are those where the Group has a
continuing involvement after the sale or transfer of control
to the customer, which significantly affects the intellectual
property to which the customer has rights. The Group is
responsible for maintenance, continuing support, updates
and upgrades and accordingly the sale of the initial software
is not distinct. The Group’s accounting policy for licenses is
discussed in more detail below.

Revenue: Licenses

Software licenses delivered by the Group can be either
“Right-to-Access” or “Right-to-Use” licenses. Right-to-Access
licenses require continuous upgrade and updates for the
software to remain useful, all other licenses are treated as
Right-to-Use licenses. The assessment of whether a license
is a Right-to-Access license or a Right-to-Use license involves
judgement. The key determinant of whether a license is a
Right-to-Access license is whether the Group is required
to undertake activities that significantly affect the license
intellectual property (or the customer has a reasonable
expectation that it will do so) and the customer is, therefore
exposed to positive or negative impacts resulting from
those changes.

The Group considers for each contract that includes a
separate license performance obligation all the facts and
circumstances in determining whether the license revenue
is recognised over time or at a point in time from the go live
date of the license.

Revenue: Contract modifications

The Group’s over time contracts are often amended for
changes in contract specifications and requirements.
Contract modifications exist when the amendment either
creates new or changes the existing enforceable rights
and obligations. Material modifications are predominantly
extension to contract and in the current year also relate to
cancellation of exam sessions. The Group considers whether
each contract modification is part of the original contract
or is a separate contract and allocates the transaction
price accordingly.

Revenue: Contract fulfilment costs

Contract fulfilment costs are divided into: (i) costs that give
rise to an asset; and (ii) costs that are expensed as incurred.

When determining the appropriate accounting treatment for
such costs, the Group firstly considers any other applicable
standards. If those other standards preclude capitalisation of a
particular cost, then the asset is not recognised under IFRS15.

If other standards are not applicable to contract fulfilment
costs, the Group applies the following criteria which, if met,
result in capitalisation: (i) the costs directly relate to a contract
or to a specifically identifiable anticipated contract; (ii) the
costs generate or enhance resources of the entity that will
be used in satisfying (or continuing to satisfy) performance
obligations in the future; and (iii) the costs are expected to
be recovered. The assessment of this criteria requires the
application of judgement, in particular at which point the
capitalisation ceases and the performance obligation begins.

Revenue: Amortisation, derecognition and
impairment of contract fulfilment assets

The Group amortises contract fulfilment assets to cost of
sales over the expected contract period using a systematic
basis that mirrors the pattern in which the Group transfers
control of the service to the customer. The amortisation
charge is included within cost of sales.

A contract fulfilment asset is derecognised either when it
is disposed of or when no further economic benefits are
expected to flow from its use or disposal.

Management is required to determine the recoverability of
contract related assets within property, plant and equipment,
intangible assets as well as contract fulfilment assets, accrued
income and trade receivables. At each reporting date, the
Group determines whether or not the contract fulfilment
assets are impaired by comparing the carrying amount of
the asset to the remaining amount of consideration that the
Group expects to receive less costs that relate to providing
services under the relevant contract. In determining the
estimated amount of consideration, the Group uses the same
principles as it does to determine the contract transaction
price, except that any constraints used to reduce the
transaction price will be removed for the impairment test.

Revenue: Deferred and accrued income

The Group’s customer contracts include a diverse range of
payment schedules dependent upon the nature and type
of goods and services being provided. The Group often
agrees payment schedules at the inception of long-term
contracts under which it receives payments throughout
the term of the contracts. These payment schedules may
include progress payments as well as regular monthly or
quarterly payments for ongoing service delivery. Payments
for transactional goods or services may be at delivery date,
in arrears or part payment in advance. There are no material
financing arrangements.

Where payments made are greater than the revenue
recognised at the period end date, the Group recognises a
deferred income contract liability for this difference. Where
payments made are less than the revenue recognised at the
period end date, the Group recognises an accrued income
contract asset for this difference. Where accrued income and
deferred income exist on the same contract these balances
are shown net.

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131

FINANCIAL STATEMENTSIntangible assets

All intangible assets, except goodwill, are stated at cost
less accumulated amortisation and any accumulated
impairment losses.

Goodwill

Goodwill represents the amount by which the fair value of the
cost of a business combination exceeds the fair value of net
assets acquired. Goodwill is not amortised and is stated at
cost less any accumulated impairment losses.

The recoverable amount of goodwill is tested for impairment
annually or when events or changes in circumstance indicate
that it might be impaired. Impairment charges are deducted
from the carrying value and recognised immediately in profit
or loss. For the purpose of impairment testing, goodwill
is allocated to each of the Group’s cash generating units
expected to benefit from the synergies of the combination.
If the recoverable amount of the cash generating unit is less
than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit
pro-rata on the basis of the carrying amount of each asset in
the unit. An impairment loss recognised for goodwill is not
reversed in a subsequent period.

Research and development costs

Research and development costs associated with the
development of software products or enhancements and
their related intellectual property rights are expensed
as incurred until all of the following criteria can be
demonstrated, in which case they are capitalised as an
intangible asset:

a. the technical feasibility of completing the intangible asset

so that it will be available for use or sale; and

b. an intention to complete the intangible asset and use or

sell it; and

c. ability to use or sell the intangible asset; and

d. how the intangible asset will generate probable future
economic benefits. Among other things, the Group can
demonstrate the existence of a market for the output of
the intangible asset or the intangible asset itself or, if it
is to be used internally, the usefulness of the intangible
asset; and

the availability of adequate technical, financial and other
resources to complete the development and to use or sell
the intangible asset; and

f. an ability to measure reliably the expenditure attributable

to the intangible asset during its development.

g. the Group has the ability to control the asset and
it is separately identifiable. Configuration costs of
development activity on a third-party SaaS solution are
not deemed to be controlled by the Group unless we
have the contractual rights to control that software.
Any configuration activity provided by the SaaS supplier
is expensed as incurred. Customisation costs of
development activity on a third-party SaaS solution will
only be capitalised where we have a contractual right
to control the asset and it is separately identifiable. Any
customisation activity provided by the SaaS supplier is
expensed as incurred. In the majority of instances where
configuration or customisation on a third-party SaaS
solution is performed, the development work does not
meet the criteria of ability to control the asset nor is it
separately identifiable, so is expensed. This is a change
in accounting policy and the impact is set out in Note 33.

The technological feasibility for the Group’s software products
is assessed on an individual basis and is generally reached
shortly before the products or services are released, and late
in the development cycle. Capitalised development costs are
amortised on a straight-line basis over their useful lives, once
the product is available for use. Useful lives are assessed on a
project-by-project basis.

Other intangible assets

Expenditure on internally generated goodwill and brands is
recognised in the income statement as an expense as incurred.

Other intangible assets that are acquired by the Group
are stated at cost less accumulated amortisation and
accumulated impairment losses.

Amortisation

Amortisation is charged to the income statement on a
straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with
an indefinite useful life and goodwill are systematically tested
for impairment at each balance sheet date. Other intangible
assets are amortised from the date they are available for use.
The estimated useful lives are as follows:

Brand

Website platform

Other software assets

Customer relationships

15 years

5 years

2–8 years

3–5 years

Intellectual property and database assets

3–10 years

Property, plant and equipment

Held-for-sale asset

Property, plant and equipment assets are stated at cost,
less accumulated depreciation and any accumulated
impairment losses where appropriate.

Property, plant and equipment are depreciated by equal
annual instalments to write down the assets to their
estimated disposal value at the end of their useful lives
as follows:

Freehold property

Up to 50 years

Leasehold building improvements

Up to 25 years

Plant and equipment

Specialised plant and equipment

Computer equipment

Vehicles

3–10 years

7–15 years

2–5 years

2–4 years

Impairment of tangible and intangible assets
excluding goodwill

At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to
determine the extent of any impairment loss. Where the asset
does not generate cash flows that are independent from
other assets, the Group estimates the recoverable amount of
the cash generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less
costs to sell and value in use. 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 for which the estimates of future cash flows have
not been adjusted.

If the recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately.

Where an impairment loss subsequently reverses, the
carrying amount of the asset (or cash generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash
generating unit) in prior periods. A reversal of an impairment
loss is recognised as income immediately.

Held-for-sale assets are stated at the lower of cost less
accumulated depreciation and any impairment losses where
appropriate or fair value less costs to sell.

Financial instruments

Trade and other receivables

Trade and other receivables are not interest bearing,
except those specifically detailed in Note 20. Trade and
other receivables are recognised initially at fair value and
subsequent to initial recognition they are measured at
amortised cost using the effective interest method, less any
impairment losses.

The Group assesses on a forward-looking basis the expected
credit losses associated with its receivables carried at
amortised cost. The impairment methodology applied
depends on whether there has been a significant increase
in credit risk and this is assessed between government and
commercial organisations. For trade receivables, the Group
applies the simplified approach permitted by IFRS 9, resulting
in trade receivables recognised and carried at original invoice
amount less an allowance for any uncollectible amounts
based on expected credit losses.

Accrued income is recognised when services are performed
and revenue recognised in advance of an invoice being raised.

Cash and short-term deposits

Cash comprises cash at bank and in hand and deposits with
a maturity of three months or less from initial investment.
Bank overdrafts are included in cash only to the extent that
the Group has the right of set-off.

Borrowings

Borrowings relate to an unsecured revolving cash facility,
detailed in Note 31. All loans and borrowings are initially
recognised at their fair value less any directly attributable
transaction costs. After initial recognition, loans and
borrowings are subsequently measured at amortised cost
using the effective interest method.

Trade and other payables

Trade payables on normal terms are not interest bearing.
Trade and other payables are recognised initially at fair value
and subsequent to initial recognition they are measured at
amortised cost using the effective interest method.

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FINANCIAL STATEMENTS

Derivative financial instruments

Other non-trading derivatives

Leases

Share-based payments

The Group holds derivative financial instruments to hedge its
foreign currency exposure.

On initial designation of the derivative as the hedging
instrument, the Group formally documents the relationship
between the hedging instrument and hedged item, including
the risk management objectives and strategy in undertaking
the hedge transaction and the hedged risk, together with
the methods that will be used to assess the effectiveness of
the hedging relationship. The Group makes an assessment,
both at the inception of the hedge relationship as well as on
an ongoing basis, as to whether the hedging instruments are
expected to be “highly effective” in offsetting the changes in
the fair value or cash flows of the respective hedged items
attributable to the hedged risk. For a cash flow hedge of
a forecast transaction, the transaction should be highly
probable to occur and should present an exposure to
variations in cash flows that could ultimately affect reported
profit or loss.

Derivatives are recognised initially at fair value and
attributable transaction costs are recognised in profit or loss
as incurred. Subsequent to initial recognition, derivatives are
measured at fair value, and changes therein are accounted for
as described below. Fair value measurements are classified
using a fair value hierarchy.

Cash flow hedges

When a derivative is designated as the hedging instrument
in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognised asset or liability or
a highly probable forecast transaction that could affect profit
or loss, the effective portion of changes in the fair value of the
derivative is recognised in Other Comprehensive Income and
presented in the hedging reserve in equity. Any ineffective
portion of changes in the fair value of the derivative is
recognised immediately in profit or loss.

For all hedging of forecast financial transactions, the
associated cumulative gain or loss is removed from equity
and recognised in the income statement in the same period
or periods during which the hedged expected future cash
flows affect profit or loss. When the hedging instrument is
sold, expires, is terminated or exercised, or the entity revokes
designation of the hedge relationship but the hedged forecast
transaction is still expected to occur, the cumulative gain
or loss at that point remains in equity and is recognised in
accordance with the above policy when the transaction
occurs. If the hedged transaction is no longer expected to
take place, the cumulative unrealised gain or loss recognised
in equity is recognised in the income statement immediately.

When a derivative financial instrument is not designated in
a hedge relationship that qualifies for hedge accounting,
all changes in its fair value are recognised immediately in
profit or loss.

Inventories

Finished goods are valued at cost on a first in first out basis,
including appropriate labour costs and other overheads.
Stocks are recognised when the Group has the rights and
obligations of ownership, which in the case of supply from the
Far East may be from the point of production or the point of
shipment. All inventories are reduced to net realisable value
where lower than cost. Provision is made for obsolete, slow
moving and defective items where appropriate.

Provisions

A provision is recognised if, as a result of a past event, the
Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation.

Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific
to the liability. The unwinding of the discount is recognised as
a finance cost.

Restructuring

A provision for restructuring is recognised when the Group has
approved a detailed and formal restructuring plan, and the
restructuring either has commenced or has been announced
publicly. Future operating losses are not provided for.

Onerous contracts

A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from a contract
are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present
value of the lower of the expected cost of terminating the
contract and the expected net cost of continuing with
the contract. Before a provision is established, the Group
recognises any impairment loss on the assets associated with
that contract.

Dilapidations provision

A dilapidations provision is recognised when the Group
has an obligation to rectify, repair or reinstate a leased
premises to a certain condition in accordance with the lease
agreement. The provision is measured at the present value
of the estimated cost of rectifying, repairing or reinstating the
leased premises at a specified future date.

At the inception of the lease, the Group recognises a
Right-of-Use asset at cost, which comprises the present value
of minimum lease payments determined at the inception of
the lease. Right-of-Use assets are depreciated using the
straight-line method over the shorter of estimated life or the
lease term. Depreciation is included within administrative
expenses in the consolidated income statement. Amendment
to lease terms resulting in a change in payments or the length
of the lease results in an adjustment to the Right-of-Use asset
and liability. Right-of-Use assets are reviewed for impairment
when events or changes in circumstances indicate the carrying
value may not be fully recoverable. Right-of-Use assets
(excluding property leases) exclude leases with a low value and
term of 12 months or less. These leases are expensed to the
income statement as incurred on a straight-line basis.

Where a Right-of-Use property lease is not fully operational but
is an asset under construction, the depreciation on the asset
that relates to the non-operational period is recapitalised as a
leasehold improvement within property, plant and equipment.

On initial recognition, lease liabilities are recorded at the
present value of lease payments, which include:

• fixed lease payments;

• variable payments that depend on an index or rate, initially
measured using the commencement date index or rate;

• any amounts expected to be payable under

residual guarantees.

The interest rate implicit in the lease is used to discount lease
payments, or, if that rate cannot be determined, the Group’s
incremental borrowing rate is used, being the rate that the
Group would have to pay to borrow the funds necessary
to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.

The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying
amount to reflect the lease payments made.

Interest is recognised on the lease liability, resulting in higher
finance cost in the earlier years of the lease term.

The Group operates a number of executive and employee
share schemes. For all grants of share-based payments, the
fair value as at the date of grant is calculated using a pricing
model and the corresponding expense is recognised over
the vesting period. Where the vesting period is shortened
after the date of grant, the remaining expense is recognised
over the shortened vesting period. Over the vesting period
and at vesting the cumulative expense is adjusted to take
into account the number of awards expected to or actually
vesting as a result of survivorship and where this reflects non-
market-based performance conditions. Share-based payment
charges which are incurred by a subsidiary undertaking
are included as an increase in Investments in subsidiary
undertakings within the parent Company, and a capital
contribution in the subsidiary.

Employee benefits

The Group has both defined benefit and defined contribution
pension schemes. There are three defined benefit pension
schemes, the Research Machines plc 1988 Pension Scheme
(the “RM Scheme”) and, following the acquisition of
The Consortium in June 2017, The Consortium CARE Scheme
(the “CARE Scheme”) and the Platinum Scheme. The
RM Scheme and the CARE Scheme are both operated
for employees and former employees of the Group only.
The Platinum Scheme is a multi-employer scheme,
with The Consortium being just one of a number of
employers. The number of the Group’s former employees
in that Scheme is small and so the impact/risk to the Group
from that Scheme is limited.

For all defined benefit pension schemes, based on the advice
of a qualified independent actuary at each balance sheet
date and using the projected unit method, the administrative
expenses and current service costs are charged to operating
profit, with the interest cost, net of interest on scheme assets,
reported as a financing item.

Defined benefit pension scheme remeasurements are
recognised as a component of Other Comprehensive Income
such that the balance sheet reflects the scheme’s surplus or
deficit as at the balance sheet date. Contributions to defined
contribution plans are charged to operating profit as they
become payable.

Scheme assets are measured at bid-price, where available, at
30 November 2021. The present value of the defined benefit
obligation was measured using the projected unit method.

Under the guidance of IFRIC 14, the Group are able to
recognise a pension surplus on the balance sheet for all three
schemes. In the year the Platinum and RM schemes show a
surplus and the CARE scheme is in deficit.

134

135

FINANCIAL STATEMENTSEmployee Share Trust

The Employee Share Trust, which holds ordinary shares of
the Company in connection with certain share schemes, is
consolidated into the Financial Statements. Any consideration
paid to the Trust for the purchase of the Company’s own
shares is shown as a movement in shareholders’ equity.
The Employee Share Trust is treated as a branch in the
consolidated Financial Statements.

Own Shares Held

The “Own Shares Reserve” figure is calculated based on the
number of shares held by the Employee Share Trust (“EST”) as
at 30 November 2021 (being 618,796 shares) multiplied by the
weighted average cost of those shares.

Translation reserve

The translation reserve comprises all foreign exchange
differences from the translation of the Financial Statements
of foreign operations. This is not distributable.

Cash flow hedging reserve

The hedging reserve comprises the effective portion of
the cumulative net change in the fair value of cash flow
hedging instruments related to hedged transactions that
have not yet occurred. Only realised gains and total losses
are distributable.

Taxation

Current tax, including UK corporation tax and foreign tax,
is provided at amounts expected to be paid or recovered
using the tax rates and laws that have been enacted or
substantively enacted by the balance sheet date.

Deferred taxation is accounted for using the balance sheet
liability method in respect of temporary differences arising
from differences between the carrying amount of assets and
liabilities in the Financial Statements and the corresponding
tax bases used in computation of taxable profit. Deferred tax
liabilities are recognised for all taxable temporary differences
except in respect of investments in subsidiaries where
the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference
will not reverse in the foreseeable future.

Current tax balances are offset when there is a legally
enforceable right to set off current tax assets against
current tax liabilities.

Deferred tax assets are recognised to the extent that it is
probable that future taxable profit will be available against
which the temporary difference can be utilised.
Their carrying amount is reviewed at each
balance sheet date on the same basis.

Deferred tax is measured on an undiscounted basis, and
at the tax rates that are expected to apply in the periods in
which the asset or liability is settled. It is recognised in the
income statement except when it relates to items credited or
charged directly to equity, in which case the deferred tax is
also dealt with in equity. Deferred tax assets and liabilities are
offset when they relate to income taxes levied by the same
taxation authority and when the Group intends to settle its
current tax assets and liabilities on a net basis.

Foreign currencies

The Group presents its Financial Statements in Sterling
because this is the currency in its primary operating
environment. Balance sheet items of subsidiary
undertakings whose functional currency is not Sterling
are translated into Sterling at the period-end rates of
exchange. Income statement items and the cash flows of
subsidiary undertakings are translated at the average rates
for the period. Exchange differences on the translation of
subsidiary opening net assets at closing rates of exchange
and the differences arising between the translation of profits
at average and closing exchange rates are recorded as
movements in the currency translation reserve.

Transactions denominated in foreign currencies are
translated into Sterling at rates prevailing at the dates of the
individual transactions. Foreign currency monetary assets
and liabilities are translated at the rates prevailing at the
balance sheet date. Exchange gains and losses arising are
charged or credited to the income statement within operating
costs. Foreign currency non-monetary amounts are translated
at rates prevailing at the time of establishing the fair value of
the asset or liability.

Dividends

Dividends are recognised as a liability in the period in which the
shareholders’ right to receive payment has been established.

Key sources of estimation uncertainty

In applying the Group’s accounting policies the Directors are
required to make estimates and assumptions. Actual results
may differ from these estimates. The Group’s key risks are
set out in the Strategic Report and give rise to the following
estimations which are disclosed within the relevant note to
the Report and Accounts:

• Retirement benefit scheme valuation – The key estimation

sensitivities are the discount rate applied to pension
liabilities RPI/CPI and mortality. As disclosed in Note 26,
a 0.1% movement in discount rate has a c.£7m impact
on the net surplus, a 0.1% movement in RPI has a c.£6m
impact and a 1 year average life extension has a c.£10m
impact. A 0.1% sensitivity is disclosed as it is easily
understood and can be scaled relatively linearly.

• Revenue from RM Assessment contracts which contain

• Revenue from RM Technology contracts – A number

of judgements are made in the application of
IFRS 15 Revenue from contracts with customers to
certain RM Technology contracts. The most significant
judgement relates to the determination that the provision
of technology is a Right-to-Access arrangement and
therefore should be recognised over time. The factors
considered in making this judgement were the nature of
services provided, i.e., licensed on a subscription basis,
being centrally hosted and the customer is unable to take
possession of the software.

Adoption of new and revised International Financial
Reporting Standards

The IFRIC interpretations, amendments to existing standards
and new standards that are mandatory and relevant for
the Company’s accounting periods beginning on or after
1 December 2020 have been adopted. The following new
interpretation has been adopted in the current period and
have had limited impacted on the reported results or the
financial position other than that set out in Note 33.

• As set out in more details in Note 33, the IFRIC

interpretation of IAS 38 for customisation or configuration
costs in a SaaS arrangement has meant that we have
expensed configuration costs (and some other associated
development costs where we could not identify a
separate asset) associated with the development of our
ERP programme amounting to £8.3m in the year and
a restatement of £3.9m in the amounts capitalised at
1 December 2020.

variable revenues based on the number of exam scripts –
There is estimation relating to estimate of total script
volumes to determine the transaction price over the
life of the contract. This estimation was reassessed at
30 November 2021 in light of the impact of COVID-19 on
the UK and Internationally and experienced throughout
2021. The Group has assumed that script volumes in the
UK will be higher in 2022 than in 2021 (with no government
announcements to balance sheet date cancelling exams)
but still reduced against 2019 pre-COVID-19 volumes.
International exam scripts will remain slightly lower than
2019 pre-COVID-19 volumes but at similar levels to that
experienced during 2021.

◌ The sensitivity analysis related to future script

volumes show that if UK and International exams
increased or reduced 15% against our assumed
volumes from 2022 onwards, then revenue in 2021
would be increased or reduced by c.£0.7m

Key sources of critical accounting judgements

In applying the Group’s accounting policies the Directors
are required to make judgements and assumptions, actual
results may differ from these. The Group’s key risks are set
out in the Strategic Report and give rise to the following
judgements which are disclosed within the relevant note to
the Report and Accounts:

• Revenue from RM Assessment contracts – A number

of judgements are made in the application of
IFRS 15 Revenue from contracts with customers to
certain RM Assessment contracts. The most significant
judgements relate to contracts with multiple performance
obligations and where there is a variable transaction
price based on the number of exam scripts. In these
contracts there is judgement in the determination
that the provision of technology is a Right-to-Access
arrangement and therefore should be recognised over
time. The factors considered in making this judgement
were the nature of services provided, including hosting,
ongoing maintenance and system support. Judgement
is also required to allocate the transaction price to each
performance obligation, based on an estimation of the
standalone selling price for scanning and the use of the
residual method to determine a value for the provision of
technology and support services.

136

137

FINANCIAL STATEMENTS3. REVENUE

Year ended 30 November 2021

Supply of products

Rendering services

Licences

Year ended 30 November 2020

Supply of products

Rendering services

Licences

RM Resources

RM Technology

RM Assessment

Transactional

Over time

£000

114,352

£000

14,755

425

114,422

15,180

£000

34,828

14,553

49,381

£000

30,780

1,090

31,870

RM Resources

RM Technology

RM Assessment

Transactional

Over time

£000

92,356

92,442

£000

13,809

533

14,342

£000

36,319

14,317

50,636

£000

30,542

1,037

31,579

Total

Over time

£000

129,107

65,678

16,068

210,853

Total

Over time

£000

106,165

66,947

15,887

188,999

Each contract is analysed separately to identify the performance obligations and judgements made as to whether, for example,
goods and services should be combined. For some contracts judgement is also required to allocate the transaction price to each
performance obligation based on the standalone selling price or, for licenses, the residual amount. Judgements include determination
of performance obligations and allocation of revenue to performance obligations. Scanning revenues of £3,714,000 (2020: £2,305,000)
are judged to be delivered over time. The associated transaction price will be dependent on over-time variables (such as volumes).
The over-time period for scanning related revenues is over exam sessions, but this relatively short time span may fall into different
external reporting periods. Revenue is then recognised based on these judgements which are set out in more detail in Note 2.

There is estimation relating to the output methodology (of script volumes) to determine the transaction price as described in Note 2.
This estimation was reassessed at 30 November 2021 in light of the impact of COVID-19 (on the UK and Internationally) and the Group
have not had to materially change these estimates during the year. The Group assumes that script volumes will be lower in the UK in
2022 to those experienced in 2019 (pre- COVID-19) but higher than 2021.

The table below shows the time bands of the expected timing of revenue to be recognised on over time contracts at 30 November 2021.

Time bands of over-time contracts order book

At 30 November 2021

< 1 year

1-2 years

2-5 years

>5 years

At 30 November 2020

< 1 year

1-2 years

2-5 years

>5 years

RM Technology

RM Assessment

Total

Over time

£000

6,125

5,044

7,934

19,103

£000

22,270

19,417

18,224

1,040

60,951

RM Technology

RM Assessment

Over time

£000

5,812

5,005

8,868

19,685

£000

17,324

15,505

22,848

1,429

57,106

£000

28,395

24,461

26,158

1,040

80,054

Total

Over time

£000

23,136

20,510

31,716

1,429

76,791

The order book represents the consideration the Group will be entitled to receive from customers when the Group satisfies the
remaining performance obligations that are not yet met from contracts in place at the balance sheet date. However the total revenue
that will be earned from the order book in future may change through non-contracted volumetric revenue, scope changes and
contract extensions. These elements have been excluded from the figures in the table above as they are not contracted.

4. OPERATING SEGMENTS

The Group's business is supplying products, services and solutions to the UK and international education markets. Information
reported to the Group's Chief Executive for the purposes of resource allocation and assessment of segmental performance is focused
on the nature of each type of activity.

The Group is structured into three operating Divisions: RM Resources, RM Assessment (formerly RM Results) and RM Technology
(formerly RM Education). The Chief Operating Decision Maker reviews segments at an adjusted operating profit level and adjustments
are not allocated to segments.

A full description of each revenue generating Division, together with comments on its performance and outlook, is given
in the Strategic Report. Corporate Services consists of central business costs associated with being a listed Company and
non-Division-specific pension costs.

This Segmental analysis shows the result and assets of these Divisions. Revenue is that earned by the Group from third parties.
Net financing costs and tax are not allocated to segments as the funding, cash and tax management of the Group are activities carried
out by the central treasury and tax functions.

Segmental results

Year ended 30 November 2021

£000

RM Resources*

RM Assessment

RM Technology

98,448

8,849

1,882

772

2,004

2,469

114,424

10,073

18,846

6,104

1,036

159

5,724

31,869

5,706

64,265

138

64,560

7,098

Revenue

Europe

North America

Asia

Middle East

Rest of the world

Adjusted profit/(loss) from operations

Investment income

Finance costs

Adjusted profit before tax

Adjustments (see Note 6)

Profit before tax

Corporate

Services

£000

Total

£000

181,559

15,044

2,020

1,808

2,163

8,259

210,853

(4,408)

18,469

(1,396)

17,101

(11,483)

5,618

138

139

FINANCIAL STATEMENTS

Year ended 30 November 2020

£000

RM Resources*

RM Assessment

RM Technology

Revenue

Europe

North America

Asia

Middle East

Rest of the world

Adjusted profit/(loss) from operations - restated

Investment income

Finance costs

Adjusted profit before tax - restated

Adjustments (see Note 6) - restated

Profit before tax - restated

80,956

6,362

777

848

2,196

1,303

92,442

3,081

20,473

5,042

1,250

225

4,589

31,579

6,607

63,977

533

412

64,978

9,296

Corporate

Services

£000

(3,903)

* Included in UK are International Sales via UK Distributors of £1,186,000 (2020: £1,352,000).

There are no customers that individually represent over 10% of the Group’s turnover.

Segmental assets

At 30 November 2021

Segmental

Other

Total assets

At 30 November 2020 - restated

Segmental

Other

Total assets

RM Resources

RM Assessment

RM Technology

Corporate Services

£000

125,670

£000

24,153

£000

15,960

£000

2,517

RM Resources

RM Assessment

RM Technology

Corporate Services

£000

116,489

£000

21,419

£000

15,758

£000

1,510

Total

£000

165,406

11,937

1,189

2,098

2,421

5,948

188,999

15,081

(1,055)

14,047

(4,519)

9,528

Total

£000

168,300

42,525

210,825

Total
£000

155,176

14,621

169,797

Included within the disclosed segmental assets are non-current assets (excluding deferred tax assets) of £138,439,000 (2020: £92,312,000)
located in the United Kingdom, £7,124,000 (2020: £7,343,000) located in Australia and £554,000 (2020: £645,000) located in India.
Other non-segmented assets includes defined benefit pension surplus, other receivables, tax assets and cash and short-term deposits.

5. PROFIT FROM OPERATIONS

Profit from operations is stated after charging/(crediting):

Amortisation and impairment of intangible assets

Depreciation and impairment of property, plant and equipment:

- charged in cost of sales

- charged in operating expenses

Selling and distribution costs

Research and development costs

Administrative expenses - adjusted

Operating expenses - adjusted

Adjustments to administrative expenses (see Consolidated Income Statement)

Total operating expenses

Gain on disposal of property, plant and equipment

Gain on disposal of other asset

Cost of inventories recognised as an expense

Staff costs

Operating lease expense

Foreign exchange loss/(gain)

Inventory write-offs

Decrease in inventory obsolescence provision

Note

15, 16

Fees payable to the Company's auditor

Fees payable to the Company's auditor for the audit of these financial statements:

- the audit of the Company's Financial Statements

- the audit of the Company's subsidiaries pursuant to legislation

Other fees payable to the Company's auditor:

- other services

Year ended
30 November 2021

Restated
Year ended
30 November 2020

£000

2,406

631

4,493

5,124

24,642

1,322

26,200

52,164

11,483

63,647

(1,449)

76,746

63,733

127

233

506

(419)

335

434

£000

3,004

686

3,032

3,718

22,919

2,678

26,522

52,119

4,154

56,273

(949)

(713)

68,653

60,561

121

(229)

1,529

(57)

334

393

140

141

FINANCIAL STATEMENTS

6. ALTERNATIVE PERFORMANCE MEASURES

As set out in Note 2, the Group uses alternative performance measures that the Board believes reflects the underlying performance of the
Group, and it is these adjusted measures that the Board use as the primary measures of performance measurement during the year.

Adjustments to cost of sales and administrative expenses

Year ended
30 November 2021

Restated
Year ended
30 November 2020

Adjustments to cost of sales

Exceptional inventory adjustments

Adjustments to administrative expenses

Amortisation of acquisition-related intangible assets

Dual running cost related to investment strategy

Sale of property

Configuration of SaaS licenses (ERP)

Onerous lease

Gain on sale of Essex LEP loan

Pension GMP

Restructuring costs

Total adjustments to administrative expenses

Total adjustments

Tax impact (Note 10)

Total adjustments after tax

£000

2,010

2,064

(1,399)

8,337

471

11,483

(1,858)

9,625

£000

365

1,986

611

(670)

1,701

(673)

170

1,029

4,154

4,519

(775)

3,744

During the year this programme included the following costs
and income:

During the year ended 30 November 2020 these
items comprised:

• Dual run related costs during the period (£1.0m), relate
to costs associated with the new warehouse that is
not yet fully operational but was acquired at the end
of November 2020. These costs include items such as
utilities, security and increased warehouse staff to test
the new facility and to transfer inventory. Other dual run
costs include IT costs (excluding configuration costs of
SaaS licenses) being expensed that relate to running of
IT systems not yet in use (£1.1m).

• During the period the Group disposed of one of the assets
held for sale at 30 November 2020, which was a warehouse
that will no longer be required following the estates
strategy review. This warehouse sale generated proceeds
of £3.2m and a profit after direct selling costs and costs of
moving from the warehouse of £1.4m.

During the prior year this programme included the following
costs and income:

• The gain on sale of a held-for-sale asset, which was a

warehouse that will no longer be required following the
estates strategy review (£0.7m).

• An adjustment to restructuring costs that related to the

warehouse disposal (£0.1m) that were originally provided
in 2018 as an adjusting item.

• The sale of our investment in Essex LEP (£0.7m).

• A material restructuring programme that spanned

3 months was announced and completed prior to the
COVID-19 pandemic (£0.9m) relating to the RM Technology
and RM Assessment businesses.

• An adjustment to the estimated liability of equalising
our GMPs in our defined benefit schemes and was
treated as an adjustment for consistency, period to
period. This followed a Court ruling in 2020 relating to
the valuation of transfer values (£0.2m). In 2018 a charge
of £1.2m was treated as an adjusting item.

• Following the IFRIC interpretation in 2021 relating to the

accounting treatment for configuration and customisation
costs in a cloud computing arrangement the costs
associated with our ERP programme have been restated
(as set out in Note 33) and amount to £1.7m.

Net debt is the total of borrowings (£19.7m (2020: £4.8m)),
cash at bank (£3.6m (2020: £5.9m)) and overdraft (£2.1m
(2020: £2.5m)) which was £18.3m as at 30 November 2021
(2020: £1.3m). Lease liabilities of £20.9m (2020: £22.2m)
are excluded from this measure as they are not included
in the measurement of net debt for the purpose of
covenant calculations.

• An inventory obsolescence charge for inventory that was
not compliant with the new automated solution (£0.4m).

Average net debt is calculated by taking the net debt on a
daily basis and dividing by number of days.

The amortisation of acquisition related intangible assets is an annual recurring adjustment to profit that is a non-cash charge arising
from investing activity. This adjustment is to clearly communicate with the investment analyst community in common with peer
companies across the technology sector. The income generated from the use of these intangible assets is, however, included in the
adjusted profit measures.

Other adjusted items:

These are items which are identified by virtue of either their size or their nature to be important to understanding the performance of
the business including the comparability of the results year on year. These items can include, but are not restricted to, impairment; gain
on held-for-sale assets and related transaction costs; changes in the provision for exceptional property costs; the gain/loss on sale of
operations and restructuring and acquisition costs.

In 2018, following a large acquisition in the Resources Division, the Group announced a new warehouse strategy which involved the
disposal of 5 warehouses (including 3 warehouses from the newly acquired group of companies) into one new automated warehouse.
Interlinked with the automation software is a requirement to change the ERP solution which is being rolled out across the whole Group.
The Group believes that whilst this programme spans a number of years, it’s size, complexity and number of unusual costs and income
are material to the understanding of the trading performance of the business including the comparability of results year on year. As a
result, all significant costs or income relating to this programme have been treated as an adjustment to profit, consistently period to
period. This programme is expected to complete by the end of 2022. The cumulative net adjustments of these interlinked investment
programmes has been £15.8m expense to 30 November 2021 of which £0.9m remains unpaid.

• Dual run IT costs (excluding configuration costs of

SaaS licenses) being expensed that relate to running of
IT systems not yet in use (£0.6m).

In addition to the warehouse programme, the Group
believes the following items to be significantly large enough
and unusual enough to impact the understanding of the
performance of the Group if not adjusted. In the year ended
30 November 2021, these items comprised:

• The impairment of a Right-of-Use asset and onerous
service charges relating to a leased office, which no
longer meets our requirements following a change in
working practises after the COVID-19 pandemic (£0.5m).
The costs relating to the new replacement leased office
that meets working practises requirements is included in
the segmental results.

• The configuration and customisation costs relating to our
ERP programme “Evolution”, which represents a significant
investment. These costs total £8.3m.

142

143

FINANCIAL STATEMENTS

The above adjustments that arise during the year have the following impact on the cash flow statement:

Aggregate emoluments of persons employed by the Group comprised:

Wages and salaries

Termination costs

Social security costs

Other pension costs

Share-based payments (Note 28)

Year ended
30 November 2021

Year ended
30 November 2020

£000

56,828

367

4,217

2,421

(100)

63,733

£000

51,025

1,261

4,004

3,566

705

60,561

Information regarding the remuneration of the Directors is shown in the Remuneration Report.

8. INVESTMENT INCOME

Bank interest

Other finance income

9. FINANCE COSTS

Borrowing facilities arrangement fees and commitment fees

Net finance costs on defined benefit pension scheme

Interest on lease of Right-of-Use assets

Interest on bank loans and overdrafts

Year ended
30 November 2021

Year ended
30 November 2020

£000

Note

Year ended
30 November 2021

Year ended
30 November 2020

£000

462

254

361

319

1,396

£000

469

151

352

1,055

Year ended 30 November 2021

Restated
Year ended 30 November 2020

Statutory

Adjustment

cash flows

Statutory

Adjustment

cash flows

Adjusted

Profit before tax

Profit from operations

Net cash inflow from operating activities

£000

5,618

6,986

3,792

£000

11,483

8,917

£000

17,101

18,469

12,709

Net cash used in investing activities

(11,759)

(3,214)

(14,973)

Net cash used in financing activities

Net increase in cash and cash equivalents

6,026

(1,941)

5,703

6,026

3,762

£000

9,528

10,562

19,397

(2,279)

(15,250)

1,868

£000

4,519

3,511

(4,460)

(949)

£000

14,047

15,081

22,908

(6,739)

(15,250)

919

Adjusted cash conversion percentage is defined as adjusted cash inflow from operating activities as a percentage of adjusted profit before tax.

The adjustments have the following impact on key metrics:

Year ended 30 November 2021

Restated
Year ended 30 November 2020

Statutory

measure

Adjustment

Adjusted

measure

Statutory

measure

Adjustment

Adjusted

measure

Gross profit (£000)

Profit from operations (£000)

Operating margin

Profit before tax (£000)

Tax (£000)

Profit after tax (£000)

Earnings per share (see Note 11)

Basic

Diluted

70,633

6,986

3.0%

5,618

(1,424)

4,194

5.0p

11,483

5.0%

11,483

(1,858)

9,625

11.6p

11.4p

70,633

18,469

9.0%

17,101

(3,282)

13,819

16.6p

16.4p

73,965

10,562

6.0%

9,528

(1,893)

7,635

9.2p

9.1p

365

4,519

2.0%

4,519

(775)

3,744

4.6p

4.5p

74,330

15,081

8.0%

14,047

(2,668)

11,379

13.8p

13.6p

Adjusted operating profit is defined as the profit before operations excluding the adjustments referred to above. Operating margin is
defined as the operating profit as a percentage of revenue. The impact of tax is set out in Note 10.

7. STAFF NUMBERS AND COSTS

The average number of persons (including Directors) employed by the Group during the year was as follows:

Year ended 30 November 2021

Year ended 30 November 2020

Research and development, products and services

Marketing and sales

Corporate services

Number

1,474

280

239

1,993

Number

1,346

258

199

1,803

The above figures have been calculated on a Full Time Equivalent basis. The actual average number for the year is 1,990.

144

145

FINANCIAL STATEMENTS
10. TAX

c) Reconciliation of Consolidated Income Statement tax charge

a) Analysis of tax charge in the Consolidated Income Statement

The tax charge in the Consolidated Income Statement reconciles to the effective rate applied by the Group as follows:

Year ended 30 November 2021

Restated
Year ended 30 November 2020

Year ended 30 November 2021

Restated
Year ended 30 November 2020

Current taxation

UK corporation tax

Adjustment in respect of prior years

Overseas tax

Total current tax charge

Deferred taxation

Temporary differences

Adjustment in respect of prior years

Overseas tax

Total deferred tax charge

Total Consolidated Income Statement tax charge

£000

442

(58)

(94)

290

1,398

(258)

(6)

1,134

1,424

£000

1,450

(305)

391

1,536

345

(9)

357

1,893

The adjustment in respect of prior years’ primarily relates to the final tax assessment relating to the property sold in the year ended
30 November 2020.

b) Analysis of tax charge/(credit) in the Consolidated Statement of Comprehensive Income

Adjusted

Adjustments

£000

Total

£000

Adjusted

Adjustments

£000

Profit/(loss) on ordinary activities before tax

17,101

(11,483)

5,618

14,047

(4,519)

Tax at 19% (2020: 19%) thereon:

3,249

(2,182)

1,067

2,669

(859)

Effects of:

- change in tax rate on carried forward deferred tax assets

- other expenses not deductible for tax purposes

- non-taxable gains

- other temporary timing differences

- effect of profits in various overseas tax jurisdictions

- prior period adjustments - UK

- prior period adjustments - overseas

(27)

(52)

212

(60)

(58)

788

761

(52)

(266)

(198)

212

(258)

(58)

(137)

187

391

(111)

(158)

(196)

(354)

Total

£000

9,528

1,810

254

Year ended
30 November 2021

Year ended
30 November 2020

Tax charge/(credit) in the Consolidated Income Statement

3,282

(1,858)

1,424

2,668

(775)

1,893

UK corporation tax

Defined benefit pension scheme

Shared based payments

Pension escrow account

Deferred tax

Defined benefit pension scheme movements

Defined benefit pension scheme escrow

Share-based payments

Fair value movements of hedging instruments

Deferred tax relating to the change in rate

Total Consolidated Statement of Comprehensive Income tax charge/(credit)

£000

(800)

(10)

(328)

9,310

328

1,822

10,409

£000

(240)

(18)

(328)

(2,408)

297

(223)

(2,851)

146

The tax impact on the adjustments set out in Note 6 are as follows:

2021

Charge/(income)

Change in deferred tax rate

Prior year adjustments

Exceptional inventory adjustments

Amortisation of acquisition-related intangible assets

Dual running costs

Sale of property

Configuration of SaaS licenses (ERP)

Onerous lease

Gain on sale of Essex LEP loan

Pension GMP

Restructuring costs

Prior year adjustments

£000

2,010

1,017

(1,399)

9,384

471

11,483

2020

Charge/(income)

£000

365

1,986

(670)

2,312

(673)

170

1,029

4,519

Tax

£000

788

(383)

(193)

(1,783)

(89)

(198)

(1,858)

The impact of the change in deferred tax rate of £788,000 relates only to those items that have been previously classified as
adjusting items. The impact of the change in deferred tax on other items is not included in the £788,000 above.

Tax

£000

391

(196)

(69)

(377)

(439)

(196)

(775)

147

FINANCIAL STATEMENTS

Factors that may affect future tax charges

11. EARNINGS PER SHARE

The standard rate of corporation tax in the UK for the period is 19%. An increase in the UK corporate tax rate from 19% to 25% from
April 2023 was substantially enacted in May 2021. The deferred tax balances that are anticipated to unwind after April 2023 have been
updated to reflect this change in legislation.

d) Deferred tax

The Group has recognised deferred tax assets as these are anticipated to be recognised against profits in future periods.
The major deferred tax assets and liabilities recognised by the Group and the movements thereon are as follows:

Group

At 1 December 2019

(Credit)/charge to income

Credit/(charge) to other
comprehensive income

At 30 November 2020

(Credit)/charge to income

Charge to other
comprehensive income

At 30 November 2021

Defined

Accelerated tax

benefit pension

Share-based

Short-term timing

Acquisition-related

depreciation

scheme obligation

payments

differences

intangible assets

£000

716

(387)

329

(564)

(235)

£000

1,016

2,527

3,543

(11,131)

(7,588)

£000

423

162

(66)

519

(241)

(42)

236

£000

1,274

(121)

(211)

942

(362)

657

£000

(3,328)

(11)

(3,339)

(405)

(3,744)

Total

£000

101

(357)

2,250

1,994

(1,133)

(11,535)

(10,674)

Certain deferred tax assets and liabilities have been offset above.

The Group has recognised deferred tax assets in jurisdictions where these are expected to be recoverable against profits in
future periods.

No deferred tax liability is recognised on temporary differences of £486,000 (2020: £561,000) relating to the unremitted earnings of
overseas subsidiaries as the Group is able to control the timings of the reversal of these temporary differences and it is probable that
they will not reverse in the foreseeable future.

Year ended 30 November 2021

Restated
Year ended 30 November 2020

Profit for

Weighted average

Profit for

Weighted average

the year

number of shares

Pence per share

the year

number of shares

Pence per share

£000

‘000

£000

‘000

Basic earnings per ordinary share

Basic earnings

Adjustments (see Note 6)

4,194

9,625

83,150

Adjusted basic earnings

13,819

83,150

Diluted earnings per ordinary share

Basic earnings

4,194

83,150

Effect of dilutive potential ordinary shares:
share-based payment awards

Diluted earnings

Adjustments (see Note 6)

4,194

9,625

1,302

84,452

Adjusted diluted earnings

13,819

84,452

The adjustments are detailed in Note 6.

12. DIVIDENDS

Amounts recognised as distributions to equity holders were:

Final dividend for the year ended 30 November 2020 – 3.0p per share (2019: nil p)

Interim dividend for the year ended 30 November 2021 – 1.7p per share (2020: nil p)

5.0

11.6

16.6

5.0

11.4

16.4

7,635

3,744

82,576

11,379

82,576

7,635

82,576

7,635

3,744

888

83,464

11,379

83,464

9.2

4.6

13.8

9.2

(0.1)

9.1

4.5

13.6

Year ended
30 November 2021

£000

2,497

1,416

3,913

Year ended
30 November 2020

£000

The proposed final dividend of 3.00p per share for the year ended 30 November 2021 was approved by the board on 14 February 2022.
The dividend is subject to approval by Shareholders at the annual general meeting. The anticipated cost of this dividend is £2,481,000.

148

149

FINANCIAL STATEMENTS

13. GOODWILL

Group

Cost

At 30 November 2019

Exchange differences

At 30 November 2020

Exchange differences

At 30 November 2021

Accumulated impairment losses

At 1 December 2019, 30 November 2020 and 30 November 2021

Carrying amount

At 30 November 2021

At 30 November 2020

The carrying amount of goodwill is allocated to two cash-generating units as follows:

£000

58,801

215

59,016

(120)

58,896

(9,694)

49,202

49,322

Group

RM Resources

RM Assessment

Year ended
30 November 2021

Year ended
30 November 2020

£000

42,208

6,994

49,202

£000

42,208

7,114

49,322

Further information pertaining to the performance and future strategy of the Divisions can be found within the Strategic Report.

The recoverable amounts of the Cash Generating Units (‘CGU’) are determined from value in use calculations. The key assumptions
for the value in use calculations are those regarding the cash flows, the discount rates and the growth rates. The Group prepares cash
flow forecasts derived from the most recent annual financial budget approved by the Board, which also contains forecasts for the
two years following, and extrapolates cash flows based on internal forecasts with terminal rates of 2.0% (2020: 2.0%) which aligns to
market growth and inflation expectations.

Pre-tax discount rates used are 13.4% for RM Resources and 12.4% for RM Assessment (2020: RM Resources 15.3% and RM Assessment 13.9%).
The Group monitors its post-tax Weighted Average Cost of Capital and those of its competitors using market data. In considering
the discount rates applying to CGUs, the Directors have considered the relative sizes and risks of its CGUs and their relatively narrow
operation within the education products and services market. The impairment reviews use a discount rate adjusted for pre-tax cash
flows. Reasonable changes in discount rate used do not change the outcome of the impairment review so no sensitivity data is disclosed.

A review of the forecast future cash flows of RM Resources and of RM Assessment indicated no impairment was required.

Sensitivity analysis

The sensitivity of goodwill carrying values to reasonably possible changes in key assumptions has been performed and would not
give rise to an impairment.

14. OTHER INTANGIBLE ASSETS

Group

Cost

Customer

Intellectual

property &

Website

Other

relationships

Brands

database assets

platform

software assets

£000

At 1 December 2019 - as reported

2,187

18,066

IAS 38 restatement (Note 33)

At 1 December 2019 - as restated

2,187

18,066

Additions

Exchange differences

Disposals

2,876

149

1,958

(4)

At 30 November 2020 - as restated

2,285

18,066

3,025

1,954

Additions

Transfers between categories

Exchange differences

Disposals

(54)

(89)

At 30 November 2021

2,231

18,066

2,936

Accumulated amortisation and impairment losses

At 1 December 2019 - as reported

IAS 38 restatement (Note 33)

At 1 December 2019 - as restated

Charge for the year

Impairment

Exchange differences

Disposals

626

454

At 30 November 2020 - as restated

1,108

Charge for the year

Transfers between categories

Exchange differences

Disposals

428

(29)

3,026

1,207

4,233

1,257

At 30 November 2021

1,507

5,490

154

325

499

325

(22)

802

(630)

1,324

1,268

473

(4)

1,737

216

(630)

1,323

Total

£000

31,188

(2,226)

28,962

768

234

(4)

29,960

6,977

(110)

(144)

(630)

6,101

(2,226)

3,875

768

(13)

4,630

6,977

(110)

(1)

11,496

36,053

2,840

(6)

2,834

297

248

(12)

3,367

180

(20)

(1)

7,914

(6)

7,908

2,756

248

(4)

10,944

2,406

(20)

(52)

(630)

3,526

12,648

Carrying amount

At 30 November 2021

At 30 November 2020

724

1,177

12,576

13,833

2,134

2,526

217

7,970

1,263

23,405

19,016

Other software assets additions include £6.9m (2020: £0.8m) relating to the new ERP solution under construction.

150

151

FINANCIAL STATEMENTS

15. PROPERTY, PLANT AND EQUIPMENT

16. RIGHT-OF-USE ASSETS

Freehold land

Short leasehold

Computer

& buildings

improvements

Plant & equipment

equipment

£000

Vehicles

£000

Group

Cost

At 30 November 2019

Additions

Transfers between categories

Exchange differences

6,233

(433)

Reclass to assets held for sale (Note 20)

(5,800)

Disposals

At 30 November 2020

Additions

Transfers between categories

Exchange differences

Reclass to assets held for sale (Note 20)

Disposals

At 30 November 2021

Accumulated depreciation and impairment

At 30 November 2019

Charge for the year

Transfers between categories

Reclass to assets held for sale (Note 20)

Exchange differences

Disposals

At 30 November 2020

Charge for the year

Transfers between categories

Reclass to assets held for sale (Note 20)

Exchange differences

Disposals

At 30 November 2021

Carrying value

At 30 November 2021

At 30 November 2020

118

(430)

(752)

(1)

4,584

(52)

(326)

4,249

842

(5)

5,230

5,237

430

(48)

(9)

(40)

10,800

7,097

(5)

427

(5)

5,086

18,314

(143)

(38)

3,930

(3)

3,339

588

(1)

(46)

(40)

3,870

566

375

(4)

(2)

4,026

4,805

1,060

319

13,509

6,930

8,403

521

(83)

(119)

(143)

8,579

926

110

(15)

(404)

9,196

6,960

356

400

(34)

(72)

(143)

7,467

443

(5)

(357)

7,568

1,628

1,112

248

(14)

(10)

227

(2)

(20)

206

137

(7)

(10)

165

(2)

(16)

186

1,065

4,014

Group

Cost

At 30 November 2019

Adoption of IFRS 16

Additions

Disposals

At 30 November 2020

Additions

Disposals

At 30 November 2021

Accumulated depreciation and impairment

At 30 November 2019

Charge for the year

Disposals

At 30 November 2020

Charge for the year

Impairment

Disposals

Transfers

At 30 November 2021

Carrying value

At 30 November 2021

At 30 November 2020

Land & buildings

Plant & equipment

£000

Vehicles

£000

5,688

15,574

(1,411)

19,851

1,322

(1,215)

19,958

1,648

(150)

1,498

2,785

366

(793)

(1)

3,855

920

472

1,392

1,682

(504)

2,570

678

653

(489)

843

16,103

18,353

1,727

714

423

120

(51)

492

(25)

517

188

(20)

168

173

(12)

329

188

324

Total

£000

7,031

16,166

(1,462)

21,735

3,054

(1,744)

23,045

2,514

(170)

2,344

3,611

366

(1,294)

5,027

18,018

19,391

The most significant Right-of-Use asset is the new automated warehouse (see Note 6) of circa £13.4m cost and a net book value
at 30 November 2021 of £12.5m.

Total

£000

24,698

5,801

(197)

(6,254)

(193)

23,855

8,866

110

(27)

427

(429)

32,802

15,515

1,204

(930)

(163)

(194)

15,432

1,147

375

(14)

(375)

16,585

16,217

8,423

The leasehold improvements during the year relate to the depreciation charged on the Right-of-Use lease for our new warehouse
recapitalised whilst work is ongoing to make it fully operational.

152

153

FINANCIAL STATEMENTS

17. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS

The subsidiary undertakings of the Company at 30 November 2021 were:

Name

RM Education Limited

TTS Group Limited

Software, services & systems

Dormant

RM Education Solutions India Pvt Limited *

Software and corporate services

RM Pension Scheme Trustee Limited

Corporate Trustee

Hedgelane Limited

SoNET Systems Pty Ltd *

RM PLC Australia Pty Ltd

Dormant

Software

Holding company

RM Educational Resources Limited

Resource supply

* Held through subsidiary undertaking.

Principal activity

Country of incorporation

Class of share

% held

England

India

England

Australia

England

Ordinary

100%

All UK subsidiary companies are registered at 142B Park Drive, Milton Park, Abingdon, Oxfordshire OX14 4SE.

RM Education Solutions India Pvt Limited is registered at Unit No.8A, Carnival Techno Park Technopark, Kariyavattom, PO Trivandrum,
Thiruvananthapuram, Kerala 695581, India.

SoNET Systems Pty Ltd is registered at 179 Queen Street, Melbourne, Victoria, VIC 3000, Australia. RM PLC Australia Pty Ltd is registered
at Level 17, 181 William Street, Melbourne, Victoria, VIC 3000, Australia.

During the year RM Schools Limited and Hammond Bridge Limited were liquidated.

The investment in subsidiary undertakings comprises:

Company

Cost

At 1 December 2019

Share-based payments

At 30 November 2020

Share-based payments

At 30 November 2021

Carrying value

At 30 November 2021

At 30 November 2020

Investment in

Capital contribution

share capital

share-based payments

£000

112,470

13,355

705

14,060

(100)

13,960

14,060

Total

£000

125,825

705

126,530

(100)

126,430

126,530

At 30 November 2021 an impairment review was undertaken which indicated that no impairment in the investments held by the
Company was required (2020: nil). The impairment review was performed using a value in use model which uses the same cash flows
used in the impairment review performed in relation to the Group’s assets which are disclosed in Note 13 of the consolidated Financial
Statements. The impairment review is sensitive to a change in key assumptions used in the value in use calculations relating to the
discount rate and future growth rates.

A reasonably possible change in cash flows would not give rise to an impairment.

18. INVENTORIES

Group

Finished goods

Any inventory that is not expected to be turned over within 24 months has been provided for.

19. CONTRACT FULFILMENT ASSETS

Group

At 1 December

Additions

Foreign exchange

Amortised in the period

At 30 November

Analysed by:

Current

Non-current

At 30 November

2021

£000

2020

£000

19,055

18,594

2021

£000

4,148

2,862

(35)

(1,446)

5,529

2021

£000

1,360

4,169

5,529

2020

£000

3,037

1,906

(861)

4,148

2020

£000

728

3,420

4,148

Contract fulfilment assets represent investment in contracts which are recoverable and are expected to provide benefits over the life
of the contract. These costs, which relate to contract set up costs, are capitalised only when they relate directly to a contract and are
incremental to securing the contract.

154

155

FINANCIAL STATEMENTS

20. TRADE AND OTHER RECEIVABLES

Analysis of trade receivables and customer contracts by type of customer

Group

Company

Restated
2020

£000

2021

£000

2020

£000

Group

Government

Commercial

2021

£000

13,241

11,218

24,459

2020

£000

14,033

10,618

24,651

Current

Financial assets

Trade receivables
Other receivables

Derivative financial instruments

Accrued income from customer contracts
Amounts owed by Group undertakings

Non-financial assets

Prepayments

Non-current

Financial assets

Amounts owed by Group undertakings
Other receivables

Currency profile of receivables

Sterling
US Dollar
Australian Dollar
Euro
Indian Rupee
Singapore Dollar

Other

2021

£000

21,792
1,629

164

2,667
-

26,252

7,613

33,865

-
82

22,907
1,751

1,744
-

26,402

5,073

31,475

-
63

33,947

31,538

29,332
2,613
178
112
657
341

714

33,947

28,162
1,190
390
143
619
613

421

31,538

-
-

-
1

105

106

7,263
-

7,263

7,369

106
-
7,263
-
-
-

7,369

-
-

7,329
-

7,329

7,377

48
-
7,329
-
-
-

7,377

The amounts owed by Group undertakings to the Company are repayable on demand and bear interest at SONIA plus 2% although
they are repayable on demand the Directors have no expectation that the amounts will be collected in the next 12 months and have
therefore presented these as non-current.

The Directors consider that the carrying amounts of trade and other receivables approximates their fair values.

The Group’s accrued income from customer contracts balances solely relate to revenue from contracts with customers. Movements in
the accrued income balances were driven by transactions entered into by the Group within the normal course of business in the year.

Trade receivables included an allowance for estimated irrecoverable amounts at 30 November 2021 of £1,080,000 (2020: £1,030,000),
based on management's knowledge of the customer, externally available information and expected payment likelihood. This
allowance has been determined by reference to specific receivable balances and past default experience and considers lifetime
expected credit losses. New customers are subject to credit checks where available, using third-party databases prior to being
accepted. The Group uses the practical expedient of measuring impairment using a provision matrix which is consistent with applying
a full credit loss model for the Group. Amounts are written off when there is no further cost benefit in pursuing further legal action.

Allowance for estimated irrecoverable amounts

Group

At 1 December

Increase in allowance

Amounts written off in the year

2021

£000

1,030

157

(107)

1,080

2020

£000

259

1,032

(261)

1,030

No expected credit losses have been recognised on contract assets or intercompany receivables as these are not considered material.

Ageing of customer contract balances

Group

Not past due

Overdue by less than 60 days

Overdue by between 60 and 90 days

Overdue by more than 90 days

Customer
contracts

2021

Allowance

£000

17,522

5,357

1,049

1,611

(89)

(991)

Customer
contracts

£000

19,433

3,826

783

1,639

2020

Allowance

£000

(122)

(908)

Net

£000

17,522

5,357

960

620

Net

£000

19,433

3,826

661

731

25,539

(1,080)

24,459

25,681

(1,030)

24,651

156

157

FINANCIAL STATEMENTS

The following table shows the movements in customer contract balances and the performance obligations satisfied in the year:

21. ASSETS HELD FOR SALE

Trade

Receivables*

£000

21,343

225,782

(224,969)

981

(261)

22,907

243,122

(244,283)

171

(107)

(18)

21,792

Accrued

income

£000

2,384

(52,136)

51,495

1,743

(47,681)

48,778

(173)

2,667

At 1 December 2019

Invoices generated in period

Performance obligations satisfied

New performance obligations accrued

New contract fulfilment costs incurred

Contract fulfilment assets amortised in line
with performance obligations satisfied

Cash paid

Movement in provision

Written off

Impact of foreign exchange

At 30 November 2020

Invoices generated in period

Performance obligations satisfied

New performance obligations accrued

New contract fulfilment costs incurred

Contract fulfilment assets amortised in line
with performance obligations satisfied

Cash paid

Movement in provision

Written off

Impact of foreign exchange

At 30 November 2021

* Includes sales taxes

Deferred

Total customer

Contract

revenue

contract balances

fulfilment asset

£000

(16,823)

63,088

(65,670)

(73)

(19,478)

£000

6,904

225,782

10,952

(14,175)

(224,969)

981

(261)

(42)

5,172

243,122

54,819

(52,680)

(17,296)

7,138

(3,902)

(244,283)

171

(280)

7,163

£000

3,037

1,907

(862)

4,148

2,862

(1,446)

(35)

5,529

Customer contract invoices are raised on the following basis:

• For point in time revenue streams – invoicing raised on delivery of performance obligations.

• For over time revenue streams in RM Technology – the majority of contract invoicing is either in advance

(monthly, quarterly, or annually) or quarterly in arrears.

For over time revenue streams in RM Assessment – invoicing varies contract to contract and between performance obligations
and can be materially different to the satisfaction of the related performance obligations in timing.

Following the acquisition of The Consortium in 2017, the Group had five distribution centres across three locations. RM is moving to a
single, automated distribution site. As part of this process, the Group sold the freehold property in Shrewsbury during the year ended
30 November 2020, and the property in Kirby-in Ashfield in 2021 (the amortised cost of the property and other fixed assets integral to
the property was £1,712,000). One remaining property in Trowbridge remains as held for sale on which we have exchanged contracts
and anticipate completion in 2022. The amortised cost of the property and other fixed assets integral to the remaining property is
£3,034,000 and was reclassified (from property, plant and equipment and selected computer hardware) to a current asset held for sale
in the year ended 30 November 2020. The assets are included within the Resources Division.

22. TRADE AND OTHER PAYABLES

Current liabilities

Financial liabilities

Trade payables

Lease liabilities

Other taxation and social security

Other payables

Derivative financial instruments

Accruals

Amounts owed to Group undertakings

Non-financial liabilities

Deferred income from customer contracts

Non-current liabilities

Financial liabilities

Lease liabilities

- due after one year but within two years

- due after two years but within five years

- after five years

Non-financial liabilities

Deferred income from customer contracts

- due after one year but within two years

- due after two years but within five years

- after five years

Group

2021

£000

2020

£000

Company

2021

£000

2020

£000

21,277

3,126

4,603

2,893

15,443

47,342

14,027

61,369

1,993

4,975

10,835

1,496

1,138

635

21,072

82,441

20,620

4,067

6,847

2,503

10,740

44,853

16,638

61,491

2,301

4,500

11,346

1,356

1,309

175

20,987

82,478

118

49,602

49,720

151

64,122

64,273

49,720

64,273

The amounts owed to Group undertakings by the Company are payable on demand and bear interest at SONIA plus 2%.

158

159

FINANCIAL STATEMENTS

Group

Company

24. PROVISIONS

Currency profile of trade and other payables

Sterling

US Dollar

Australian Dollar

Indian Rupee

Other

2021

£000

73,882

699

3,586

1,704

2,570

82,441

2020

£000

77,072

972

1,600

755

2,079

82,478

2021

£000

49,720

2020

£000

64,273

49,720

64,273

The Group’s deferred revenue balances solely relate to revenue from contracts with customers. Movements in the deferred revenue
balances were driven by transactions entered into by the Group within the normal course of business in the year.

23. BORROWINGS

Group and Company

Bank loan

Add capitalised fees

Borrowings

2021

£000

(20,000)

256

(19,744)

2020

£000

(5,000)

221

(4,779)

The borrowings in the year and details of the facility are detailed in Note 31. Bank and professional service fees relating to securing the
loan have been capitalised and are amortised over the length of the loan.

Changes in liabilities arising from financing activities

At 1 December 2020

Financing
cash flows

New leases

Lease break
exercised

Other

At 30 November 2021

£000

22,214

4,779

(4,250)

14,189

£000

3,054

£000

(450)

£000

361

776

26,993

9,939

3,054

(450)

1,137

£000

20,929

19,744

40,673

Lease liabilities

Bank loan

Total liabilities from
financing activities

Group

At 1 December 2019

Utilisation of provisions

Release of provisions

Increase in provisions

Impact of foreign exchange

At 30 November 2020

Utilisation of provisions

Release of provisions

Increase in provisions

Impact of foreign exchange

At 30 November 2021

Dilapidations and

Employee-related

onerous lease

restructuring

Contract risk

provisions

£000

853

381

1,236

(90)

316

(12)

1,450

£000

2,220

(2,284)

1,092

1,028

(80)

(33)

916

£000

2,380

(525)

314

2,169

(358)

(806)

170

1,175

Total

£000

5,453

(2,284)

(525)

1,787

4,433

(528)

(839)

486

(11)

3,541

Employee-related restructuring provisions refer to costs arising from restructuring to meet the future needs of the Group.
As described in Note 6, the Group is undergoing an estates review and in 2020 £0.1m of the utilisation related to this programme.
A separate restructuring programme was announced in December 2019 and completed during the prior year with £0.1m paid in 2021.
The remaining restructuring provision is expected to be utilised during 2022 as we complete the estates strategy.

Contract risk provisions includes items not covered by any other category of which the most significant items are the risk provisions
from ended long term contracts. During 2021, the release of £806,000 (2020: £525,000) primarily relates to onerous contract risks that
have either been re-negotiated or terminated during the year and the increase in provisions relate to new contract risks identified in
the year. During 2021 the Group utilised part of an onerous contract provision and was able to release the remaining provision on
contract re-negotiation.

During the year the Group decided to leave one property that was no longer suitable in a post COVID-19 environment requiring
collaborative working and have expensed an onerous lease provision of £104,000. Dilapidations increased by £212,000 during the year
and arise from an updated surveyors report on one lease.

During the year the overall movement on long-term provisions was a decrease of £2,523,000 (2020: increase of £130,000). This is
primarily a reclassification to current provisions as certain dilapidation provisions and redundancy provisions are anticipated to be
paid in 2022 aligned to the warehouse strategy.

At 1 December 2019

£000

7,031

16,534

Financing
cash flows

£000

(2,674)

(12,576)

New leases

Lease break
exercised

£000

19,168

£000

(1,462)

23,565

(15,250)

19,168

(1,462)

Other

At 30 November 2020

£000

151

821

972

£000

22,214

4,779

26,993

Lease liabilities

Bank loan

Total liabilities from
financing activities

Disclosure of provisions

Group

Current liabilities

Non-current liabilities

2021

£000

2,066

1,475

3,541

2020

£000

435

3,998

4,433

The total cash outflow from leases was £4.4m (2020: £2.8m).

The non-current liabilities include onerous property provisions and dilapidations provisions of £370,000 which are anticipated to be
paid over 2–5 years, with the remaining non-current provisions relating to certain contract risk provisions.

160

161

FINANCIAL STATEMENTSPrudential Platinum Pension (Platinum Scheme)

The Consortium acquired West Mercia Supplies in April 2012
(prior to the Company acquiring The Consortium).
Upon acquisition by The Consortium of West Mercia
Supplies, a pension scheme (the Platinum scheme)
was set up providing benefits on both a defined benefit
(final salary linked) and a defined contribution basis for West
Mercia employees. The most recent full actuarial valuation
was carried out by the independent actuaries XPS Pensions
Group on 31 December 2018. The results of the full valuation
were adjusted and rolled forward to form the basis for the
current year valuation. The scheme is administered within a
legally separate trust from The Consortium and the Trustees
are responsible for ensuring that the correct benefits are
paid, that the scheme is appropriately funded and that the
scheme assets are appropriately invested. The valuation of
the scheme at 31 December 2018 was a surplus of £213,000
(31 December 2015: deficit £70,000).

25. SHARE CAPITAL AND RESERVES

Company and Group share capital

Allotted, called-up and fully paid:

As at 30 November 2019, 2020 and 2021

Ordinary shares issued carry no right to fixed income.

Ordinary shares of 22/7p

‘000

83,875

£000

1,917

The capital redemption reserve in the Company and Group, arose from the repurchase of issued share capital. It is distributable.

The Group hedging reserve arises from cash flow hedges entered into by the Group. The reserve is distributable in the entities in
which it arises unless it relates to unrealised gains £164,000 (2020: £nil).

The Group translation reserve arises on consolidation from the unrealised movement of foreign exchange on the net assets of
overseas entities. This reserve is not distributable.

26. PENSION SCHEMES

a. Defined contribution scheme

The Group operates or contributes to a number of defined contribution schemes for the benefit of qualifying employees. The assets
of these schemes are held separately from those of the Company. The total cost charged to income of £2,255,000 (2020: £2,861,000)
represents contributions payable to these schemes by the Group at rates specified in employment contracts. At 30 November 2021
£257,000 (2020: £223,000) due in respect of the current financial year had not been paid over to the schemes.

b. Local government pension schemes

The Group has TUPE employees who retain membership of local government pension schemes. The Group makes payments to these
schemes for current service costs in accordance with its contractual obligations. The total costs charged to income for these schemes
was £165,000 (2020: £157,000). The amount due in respect of these schemes at 30 November 2021 was £77,000 (2020: £75,000).
The balance sheet liability is included within provisions and incorporates information from over 17 local government pension schemes.
The provision is calculated by reference to the latest published triennial valuations and the Group discloses the net position of the
Group's share of assets and liabilities.

There is judgement in determining the appropriate accounting treatment for the participation in these schemes as either a defined
benefit or defined contribution scheme, in particular as to whether actuarial and investment risk fall in substance on the Company.

c. Defined benefit pension schemes

As described in Note 2, the Group has both defined benefit and defined contribution pension schemes.
There are three defined benefit pension schemes.

The Research Machines plc 1988 Pension Scheme (RM Scheme)

The Scheme provides benefits to qualifying employees and former employees of RM Education Limited, but was closed to new
members with effect from 1 January 2003 and closed to future accrual of benefits from 31 October 2012. The assets of the Scheme are
held separately from RM Education Limited's assets in a trustee-administered fund. The Trustee is a limited company. Directors of the
Trustee company are appointed by RM Education Limited and by members. The Scheme is a funded scheme.

Under the Scheme, employees were entitled to retirement benefits of 1/60th of final salary for each qualifying year on attainment of
retirement age of 60 or 65 years and additional benefits based on the value of individual accounts. No other post-retirement benefits
were provided by the Scheme.

The most recent actuarial valuation of Scheme assets and the present value of the defined benefit obligation was carried out for
statutory funding purposes at 31 May 2018 by a qualified independent actuary. IAS 19 Employee Benefits (revised) liabilities at
30 November 2021 have been rolled forward based on this valuation’s base data.

As at 31 May 2018, the triennial valuation for statutory
funding purposes showed a deficit of £40,600,000
(31 May 2015: £41,800,000). The Group agreed with
the Scheme Trustees that it will repay this amount via
deficit catch-up payments of £3,700,000 per annum until
31 May 2026. The triennial valuation as at 31 May 2021 is in
progress but not yet finalised.

At 30 November 2020 there were amounts outstanding of
£308,300 (2020: £308,000) for one month's deficit payment
and £nil (2020: £nil) for Scheme expenses.

The parent Company RM plc has entered into a pension
protection fund compliant guarantee in respect of scheme
liabilities. No liability has been recognised for this within the
Company as the Directors consider that the likelihood of it
being called upon is remote.

The Consortium CARE Scheme (CARE Scheme)

Until 31 December 2005, The Consortium for Purchasing and
Distribution Ltd (“The Consortium”, acquired by the Company
on 30 June 2017 and now RM Educational Resources Limited)
operated a pension scheme (the “Consortium CARE” scheme)
providing benefits on both a defined benefit (final salary linked)
and a defined contribution basis. From 1 January 2006, the
defined benefit (final salary linked) and defined contribution
sections were closed and all employees, subject to the
eligibility conditions set out in the Trust Deed and Rules,
joined a new defined benefit (Career Average Revalued
Earnings) section. From 28 February 2011 the scheme was
closed to future accruals.

The most recent actuarial valuation of Scheme assets
and the present value of the defined benefit obligation
was carried out for statutory funding purposes at
31 December 2019 by a qualified independent actuary.
IAS 19 Employee Benefits (revised) liabilities at
30 November 2021 have been rolled forward based
on this valuation’s base data.

As at 31 December 2019, the triennial valuation for statutory
funding purposes showed a deficit of £5.9m. The Group
agreed with the Scheme Trustees that it will repay this
amount via deficit catch-up payments of £703,000 per annum
until 31 December 2028. The triennial valuation as at
31 May 2021 is in progress but not yet finalised.

162

163

FINANCIAL STATEMENTSAmounts recognised in the Income Statement and in the Statement of Comprehensive Income

Reconciliation of the Scheme assets and obligations through the year

Administrative expenses and taxes

Current service costs

Operating expense

Interest cost

Interest on Scheme assets

Net interest expense

Past service costs

Expense recognised in the Income Statement

Effect of changes in demographic assumptions

Effect of changes in financial assumptions

Effect of experience adjustments

Total actuarial losses

Return on Scheme assets excluding interest on Scheme assets

Income/(expense) recognised in the Statement of Comprehensive Income

Income/(expense) recognised in total comprehensive income

Note

Year ended
30 November 2021

Year ended
30 November 2020

£000

(52)

(4,827)

4,573

(254)

(306)

620

(3,203)

847

(1,736)

46,596

44,860

44,554

£000

(7)

(30)

(37)

(5,611)

5,528

(83)

(350)

(470)

(406)

(44,944)

2,197

(43,153)

26,851

(16,302)

(16,772)

The effect of changes in financial assumptions is principally due to the reduction in the discount rate, see sensitivity information further
below in this Note 26. The strong returns on assets over the period are largely as a result of the ongoing market recovery following the
COVID-19 pandemic. In particular the RM Scheme invests significantly in return-seeking assets such as global equities which have seen
very strong returns. The effect of strong equity returns coupled with the Scheme’s high levels of hedging have had a positive impact on
the assets over the year.

RPI/CPI reform

On 25 November 2020, the government and UK Statistics Authority confirmed that RPI will be changing from February 2030 to
bring it into line with the CPIH index, with no compensation to the holders of index-linked gilts. In the year ended 30 November 2021,
the Group has reviewed and revised the previous approach to setting the RPI and CPI assumptions to reflect the expectations that
these reforms proceed as planned.

Assets

At start of year

Interest on Scheme assets

Return on Scheme assets
excluding interest on Scheme assets

Administrative expenses

Contributions from Group

Contributions from employees

Benefits paid

At end of year

Obligations

At start of year

Interest cost

Actuarial losses

Benefits paid

Past service cost (GMP)

Current service costs

Contributions from employees

At end of year

Pension deficit

Pension surplus

Net pension surplus/(deficit)

RM Scheme

CARE Scheme

Platinum Scheme

Year ended
30 November 2021

Year ended
30 November 2020

£000

268,149

4,285

44,910

3,700

(4,322)

15,918

240

1,631

696

(627)

2,994

(52)

(38)

316,722

17,858

3,061

287,061

4,573

46,596

(52)

4,450

(4,987)

337,641

(280,888)

(22,497)

(2,329)

(305,714)

(4,460)

(1,152)

4.322

(282,178)

34,544

(331)

(342)

626

(22,544)

(4,686)

(36)

(242)

(4,827)

(1,736)

4,987

(2,568)

(307,290)

493

(4,686)

35,037

30,351

257,164

5,528

26,851

(7)

4,094

(6,575)

287,061

(263,139)

(5,611)

(43,153)

6,575

(350)

(30)

(6)

(305,714)

(19,318)

665

(18,653)

Included within the CARE Scheme obligations is an unfunded liability of £161,000 (2020: £183,000) which is a liability of the Group and
not the Scheme.

Reconciliation of net defined benefit obligation

Year ended
30 November 2021

Year ended
30 November 2020

Net obligation at the start of the year

Cost included in Income Statement

Scheme remeasurements included in the Statement of Comprehensive Income

Cash contribution

Net pension surplus/(deficit)

£000

(18,653)

(306)

44,860

4,450

30,351

£000

(5,975)

(470)

(16,302)

4,094

(18,653)

164

165

FINANCIAL STATEMENTS

Obligation by participant status

Year ended
30 November 2021

Year ended
30 November 2020

Expected cash flows

Expected employer contributions for the following year ended 30 November

Expected total benefit payments

Year 1

Year 2

Year 3

Year 4

Year 5

Years 6–10

Key risks

Year ended
30 November 2021

Year ended
30 November 2020

£000

4,450

4,194

4,369

4,493

4,780

5,346

£000

4,583

3,831

4,258

4,625

4,860

5,334

33,612

33,946

The Schemes expose the Group to a number of risks:

•

Investment risk
The Scheme holds investments in asset classes, such as equities, which have volatile market values and while these assets are
expected to provide real returns over the long term, the short-term volatility can cause additional funding to be required if a
deficit emerges.

Interest rate risk
The Scheme's liabilities are assessed using market yields on high quality corporate bonds to discount the liabilities. As the Scheme
holds assets such as equities and diversified growth funds the value of the assets and liabilities may not move in the same way.

Inflation risk
A significant proportion of the benefits under the Scheme are linked to inflation. Although the Scheme's assets are expected to
provide a good hedge against inflation over the long term, movements over the short term could lead to deficits emerging.

• Mortality risk

In the event that members live longer than assumed a deficit will emerge in the Scheme.

Active

Vested deferreds

Retirees

£000

1,611

243,139

62,540

307,290

£000

1,463

254,650

49,601

305,714

Under the current agreements, the Group expect to pay approximately £4,400,000 in contributions in the year ending 30 November 2022.

Value of Scheme assets

Cash and cash equivalents, including escrow

Equity instruments

Debt instruments

Liability-driven investments

Insurance contract

Significant actuarial assumptions

Discount rate (RM Scheme)

Discount rate (CARE Scheme)

Discount rate (Platinum Scheme)

Rate of RPI price inflation

Rate of CPI price inflation - period before 1 January 2030

Rate of CPI price inflation - period after 1 January 2030

Rate of salary increases (Platinum Scheme)

Rate of pensions increases

pre 6 April 1997 service

pre 1 June 2005 service

post 31 May 2005 service

Fair value

hierarchy

Level 1

Level 2

Level 3

Year ended
30 November 2021

Year ended
30 November 2020

£000

542

129,809

27,529

3,061

150,147

26,553

337,641

£000

1,629

111,373

24,174

2,995

117,486

29,404

287,061

Year ended
30 November 2021

Year ended
30 November 2020

1.75%

3.15%

2.15%

3.15%

N/A

1.50%

2.90%

2.05%

1.60%

1.50%

1.60%

2.90%

2.10%

N/A

1.50%

2.80%

2.00%

Post retirement mortality table

S2PA CMI 2020 1.25%

S2PA CMI 2019 1.25%

Weighted average duration of defined benefit obligation

24 years

23 years

Assumed life expectancy on retirement at age 65:

Retiring at the accounting date (male member aged 65)

Retiring 20 years after the accounting date (male member aged 45)

21.9

23.3

22.4

23.7

166

167

FINANCIAL STATEMENTS

Sensitivities to assumptions - one item changed with all others held constant

27. OWN SHARES

--------------------------------- 30 November 2021 ---------------------------------

30 November 2020

Base

£m

287.1

(305.7)

(18.6)

1.60%

1.50%

1.60%

2.90%

2.10%

-0.1%

+0.1%

discount

Base

£m

rate

£m

rate

-0.1% RPI

+0.1% RPI

Life +1 yr

£m

Analysis of net balance sheet position:

Fair value of Scheme assets

337.6

337.9

337.3

337.9

338.8

Present value of Scheme obligations

(307.3)

(314.3)

(300.6)

(301.4)

(313.5)

(318.7)

Net pension surplus/(deficit)

30.3

23.6

36.7

35.9

24.4

20.1

Actuarial assumptions:

Discount rate (RM Scheme)

1.75%

1.65%

1.85%

1.75%

Discount rate (CARE Scheme)

1.75%

1.65%

1.85%

1.75%

Discount rate (Platinum Scheme)

1.75%

1.65%

1.85%

1.75%

Rate of RPI

Rate of CPI

Mortality table

3.15%

3.05%

3.25%

3.15%

2.15%

2.05%

2.25%

2.15%

--------------------------- S2PA CMI 2020 1.25% ---------------------------

S2PA CMI 2019 1.25%

The significant actuarial assumptions are the discount rate applied to pension liabilities together with RPI/CPI and mortality as
shown in the above table. We note that every 0.1% movement in discount rate has a c.£7m impact on the deficit (2020: £7m) and
a 0.1% movement in RPI has a c.£6m impact (2020: £5m).

Insurance assets

The RM Scheme also holds insurance policies covering benefits for some pensions in payment. The value of these annuities is £26.6m
at 30 November 2021. This value has been calculated using the same assumptions as used to value the liabilities. The method
of determining the value of the insurance annuities is determined by projecting the expected benefit payments using the agreed
assumptions and then discounting the resulting cash flows back to 30 November 2021.

Liability driven investments (LDI)

The RM Scheme contains LDI portfolio of £150.18m at 30 November 2021. The portfolio is valued at market value as no bid valuation
is available. The components of the LDI portfolio are determined by the Trustee’s investment adviser with the aim to provide a good
match to the Scheme’s exposure to interest rate and inflation risks within the value of its liabilities.

Liability driven investments are expected to move broadly in line with the rise and fall in liability values, thus providing a degree of
protection to the Scheme’s funding position.

168

The RM plc Employee Share Trust (EST) was established in March 2003 to hedge the future obligations of the Group in respect of shares
awarded under the RM plc Co-Investment Plan, RM plc Performance Share Plan and Deferred Bonus Plan. The EST has waived any
entitlement to the receipt of normal dividends in respect of all of its holding of the Company’s ordinary shares. The EST’s waiver of
dividends may be revoked or varied at any time.

Company and Group

At 1 December 2019

Shares released to award holders

At 30 November 2020

Shares released to award holders

At 30 November 2021

Ordinary shares of 22/7p

Number ‘000

1,399

(230)

1,169

(550)

619

£000

1,007

(166)

841

(397)

444

The valuation of the shares is weighted average cost. The maximum number of own shares held in the year was 1,168,921.

28. SHARE-BASED PAYMENTS

The Group operates the following executive and employee equity-settled share-based payment scheme known as the RM plc
Performance Share Plan 2010 (the “PSP Scheme”).

Three awards were made under the PSP Scheme during the year ended 30 November 2021. The fair values of awards made under this
Scheme have been assessed using Black-Scholes and Monte-Carlo models, as appropriate to the scheme, at the date of grant. The fair
values of awards are expensed over the period between grant and vesting. The weighted average fair value of the award made during
the year was £1.416 per share and key assumptions include risk free rate of 0.17%, dividend yield of 1.48% and volatility of Company
share price of 47%.

Share-based payment awards exercised in the period and disclosed in the statement of changes in equity represents the impact on
retained earnings of releasing the fair value charge accrued under IFRS 2 Share-based payment, which for deferred bonus scheme is
partially matched by the release of own shares held.

RM plc Performance Share Plan 2010 ('PSP Scheme')

The Group uses the PSP Scheme for the remuneration of senior executives and senior management. Details of Directors’ awards
are contained within the Remuneration Report. Participation has been subject to various vesting conditions, including EPS,
total shareholder return (TSR) and share price conditions. The awards issued in 2021 do not include an EPS vesting condition.
If the participants leave the Group’s employment, in most circumstances the award lapses.

Details of performance share plan shares are as follows:

Group

At 1 December 2019

Granted during the year

Lapsed during the year

Exercised during the year

At 30 November 2020

Granted during the year

Lapsed during the year

Exercised during the year

At 30 November 2021

Maximum number of shares

Market price on grant

2,091,000

712,500

(530,000)

(270,000)

2,003,500

905,000

(710,825)

(561,675)

1,636,000

£1.72

£2.23

169

FINANCIAL STATEMENTS

The plans outstanding at 30 November 2021 had a weighted average contractual life of 1.6 years (2020: 1.3 years). The weighted average
exercise price was £nil (2020: £nil). The weighted average market share price at date of exercise was £2.09 (2020: £2.43).

Where total shareholder return (TSR) is used as a performance condition, comparator company volatility is assessed using annualised,
daily historic TSR growth assessed over a period prior to the date of grant that corresponds to the performance period of three years.
The company correlation uses historic pairwise correlations of the companies over a three year period. The fair value of the TSR element
is based on a large number of stochastic projections of Company and comparator TSR.

Where earnings per share (EPS) is used as a performance condition, the EPS Performance Target is that EPS for the final Financial Year of
the measurement period.

In March 2003 the Company established the RM plc Employee Share Trust to hedge the future obligations of the Group in respect of share
scheme awards. These shares are used to hedge the estimated liability but until vesting represents own shares held – see Note 27.

Performance conditions

Assigning a fair value charge to share-based payments requires estimation of: the projected share price; the number of instruments
which are likely to vest; other non-market based performance conditions.

29. GUARANTEES AND CONTINGENT LIABILITIES

a) Guarantees

The Company has entered into guarantees relating to the performance and liabilities of certain major contracts of its subsidiaries.
The Directors are not aware of any circumstances that have given rise to any liability under such guarantees and consider the possibility
of any arising to be remote.

b) Contingent liabilities

The Group has provided performance guarantees and indemnities relating to performance bonds and letters of credit issued by its
banks on its behalf, in the ordinary course of business. The Directors are not aware of any circumstances that have given rise to any
liability under such guarantees and indemnities and consider the possibility of any arising to be remote.

30. LEASES AND COMMITMENTS

a) Lease commitments

The outstanding lease commitments for leases that fall within the scope of IFRS 16 are recognised in the balance sheet as lease
liabilities (see Note 22). Other leases that are of low value or less than a year (except properties) are disclosed in the table below.

Group

Within 1 year

In years 2 to 5 inclusive

The Company has no operating leases.

b) Capital commitments

2021

£000

2020

£000

At 30 November 2021 amounts contracted but not provided for total £502,000 and relate to outstanding commitments on the ERP
project cost (2020: £1,896,000). The Company had no capital commitments during the year.

31. FINANCIAL RISK MANAGEMENT

Carrying value of financial assets and financial liabilities

Financial assets

Trade and other receivables – current

Trade and other receivables – non-current

Cash and short-term deposits

Financial liabilities

Trade and other payables – current

Trade and other payables – non-current

Group

Company

Note

2021

£000

2020

£000

2021

£000

2020

£000

26,252

26,402

3,560

29,894

7,263

7,329

5,941

32,406

7,264

7,329

(47,342)

(44,853)

(49,720)

(64,273)

(17,803)

(18,147)

Bank loans and overdrafts

(21,826)

(7,259)

(19,744)

(4,779)

(86,971)

(70,259)

(69,464)

(69,052)

All receivables classified as financial assets are loans and receivables except for forward foreign exchange contracts of £164,000
(2020: £nil) which are classified as fair value through profit or loss.

All liabilities classified as financial liabilities are held at amortised cost except for forward foreign exchange contracts of £nil
(2020: £76,000) which are classified as fair value through profit or loss.

The Directors consider that the carrying amount of all financial assets and financial liabilities approximates their fair value, therefore fair
value information for financial assets and financial liabilities not shown at fair value is not disclosed.

It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken
and the Group does not hold or issue derivative financial instruments for speculative purposes.

The main risks arising from the Company’s financial assets and liabilities are market risk (foreign currency risk and interest rate risk),
credit risk and liquidity risk. The Board reviews and agrees policies on a regular basis for managing the risks associated with these
assets and liabilities.

Foreign currency risk

a) Translation

All financial assets are classified as loans and receivables.

All liabilities classified as financial liabilities are held at amortised cost except for forward foreign exchange contracts of £164,000 asset
(2020: £76,000 liability) which are classified as fair value through profit or loss.

The Group also maintains foreign currency denominated cash accounts, but only holds balances required to settle its payables.

170

171

FINANCIAL STATEMENTS

b) Transaction

c) Foreign exchange rate sensitivity

Operations are also subject to foreign exchange risk from transactions in currencies other than their functional currency and, once
recognised, the revaluation of foreign currency denominated assets and liabilities. Principally, this relates to transactions arising in
US Dollars and Indian Rupees. Specifically, the Group purchases a proportion of its inventory in US Dollars and operating costs in the
Group’s subsidiary RM Education Solutions India Pvt Limited are in Indian Rupees.

In order to manage these risks the Group enters into derivative transactions in the form of forward foreign currency contracts. To
manage the US Dollar to Sterling risk, the forward foreign currency contracts purchased are designed to cover 75-100% of forecast
currency denominated purchases and the contracts are set up to provide coverage over future fixed price periods, typically for the
following 12 months. To manage the Indian Rupee to Sterling risk, the contracts purchased are designed to cover 75-85% of forecast
Rupee costs and are renewed on a revolving basis of approximately 11 to 18 months.

The total amount of outstanding forward foreign exchange contracts to which the Group was committed was:

Forward contract value

Mark to market value

Fair value

2021

Currency

Contract type

Currency ‘000

US Dollar

Indian Rupee

Buy

3,285

432,265

£000

(2,442)

(4,084)

(6,526)

2020

£000

(2,458)

(4,232)

(6,690)

Forward contract value

Mark to market value

Currency

Contract type

Currency ‘000

US Dollar

Indian Rupee

Buy

1,680

622,227

£000

(1,288)

(6,218)

(7,506)

£000

(1,318)

(6,264)

(7,582)

£000

148

164

Fair value

£000

The fair value of the derivative financial instruments is estimated by discounting the future contracted cash flow, using readily available
market data and represents a level 2 measurement in the fair value hierarchy under IFRS 7. These fair value gains/(losses) are included
within trade and other receivables and trade and other payables respectively.

Of these, forward foreign currency exchange contracts with a contract value of £6,526,000 (2020: £7,506,000) and fair value asset of
£164,000 liability (2020: £76,000 liability) have been designated as effective hedges in accordance with IFRS 9 Financial Instruments:
Recognition and Measurement. The movement in fair value of hedged derivative financial instruments during the year was a credit of
£222,000 (2020: debit of £385,000) which has been recognised in Other Comprehensive Income and presented in the hedging reserve
in equity. In addition, the Group retains the gain or loss on realised foreign currency contracts used to hedge non-financial assets which
are realised when the asset is recognised.

No forward foreign currency exchange contracts have been designated as ineffective hedges in accordance with IFRS 9 Financial
Instruments: Recognition and Measurement at 30 November 2021 (2020: nil).

Commercially effective hedges may lead to income statement volatility in the future, particularly if the hedges do not meet the criteria
of an effective hedge in accordance with IFRS 9 Financial Instruments: Recognition and Measurement.

All Rupee forward contracts are settled on a net basis.

The following table details how the Group’s income and equity would increase/(decrease) if there were a 10% increase/(decrease)
in the amount of the respective currency which could be purchased with £Sterling (assuming all other variables remain constant),
for example from $1.32:£1 to $1.45:£1 at the balance sheet date. The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency. A 10% weakening
of Sterling against the relevant currency would be estimated to have a comparable but opposite impact on income and equity.

The total amount of outstanding forward foreign exchange contracts to which the Group was committed was:

Group

Forward foreign exchange contracts

Sensitivity

Group

10% increase in foreign exchange rates against Sterling:

US Dollar

Australian Dollar

Indian Rupee

2021

2020

Nominal value

Fair value

Nominal value

Fair value

£000

(6,526)

£000

164

£000

(7,506)

£000

2021

Income

£000

2020

Equity

£000

Income

£000

Equity

£000

(175)

(355)

(175)

(393)

397

(23)

(555)

(23)

(549)

325

All the forward exchange contracts mature within 1 year.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the analysis does not
reflect management’s proactive monitoring methods and processes for exchange risk.

Interest rate risk

The only significant interest-bearing financial assets or liabilities relate to the Group’s borrowings referred to below. During the year,
average net debt was £15,789,000 (2020: £16,309,000) and the maximum borrowings position was £29,709,000 (2020: £29,619,000).

The Group has a committed revolving credit facility with HSBC Bank plc and Barclays Bank plc, which was originally signed on
5 July 2019 and which was extended on 22 September 2021. The facility expires on 4 July 2023. The facility is for £70,000,000 with an
accordion option to increase the facility by a further £30,000,000. The accordion extension does not need the permission of the existing
lenders. The current bank credit facility ends on 4 July 2023 but has an option to extend for a further 1 year. The extension remains
subject to agreement with the lenders but the Board has no reason to believe the debt would not be renewed. Of the funds available,
£5,000,000 is allocated to an on-demand working capital facility leaving the remainder unallocated. Under the facility the Company
is bound to covenants of at least 4 times interest cover/EBITDA and up to 2.5 times Net Debt/EBITDA. The £2.1m drawdown at the
year end is not contractually due for repayment until 2023. Interest is payable quarterly based on the drawdown at this date.

Separate to this, the Group has a number of performance bonds relating to potential liabilities arising in connection with
any Local Government Pension Scheme that the Company participates in as a result of its managed services contracts in the
RM Technology Division (which are included in other provisions).

The interest payable on loans under the revolving credit facility is between 2.65% and 3.25% above SONIA (the Margin), for the
remainder of the committed term subject to certain financial ratios. A commitment fee of 40% of the Margin is payable on the
unutilised balance and an arrangement fee of £175,000 was paid in 2021. The fees are recognised in the Consolidated Income
Statement on an effective interest rate basis over the duration of the facility.

172

173

FINANCIAL STATEMENTS

The interest and currency profile of cash and cash equivalents is shown below:

Credit risk

Group

Sterling (overdraft)/cash and cash equivalents

US Dollar

Euro

Indian Rupee

Singapore Dollar

Australian Dollar

New Zealand Dollar

Swedish Krona

Cash and cash equivalents

Borrowings – Sterling

2021

2020

Floating rate

Interest free

£000

(637)

402

£000

134

167

450

831

Total

£000

(503)

167

852

831

(235)

1,713

1,478

20,000

Floating rate

Interest free

£000

(8)

£000

Total

£000

133

125

5,000

1,704

158

108

355

839

3,336

158

108

355

972

3,461

5,000

The Group’s principal financial assets are bank balances and trade and other receivables. The Group’s credit risk is primarily
attributable to its trade receivables. Credit checks are performed on new customers and before credit limits are increased.
The amounts presented in the balance sheet are net of allowances for expected credit losses. Note 20 includes an analysis of
trade receivables by type of customer and of the ageing of unimpaired trade receivables.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are investment grade banks.
The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers
and a large proportion are ultimately backed by the UK Government.

The carrying amount of financial assets represents the maximum credit exposure. The Group does not hold any collateral to
cover its risks associated with financial assets.

Liquidity risk

Cash is managed to ensure that sufficient liquid funds are available with a variety of counterparties, to meet short, medium and
long-term cash flow forecasting requirements. The Group has access to overdraft and borrowing facilities (see Interest rate risk section)
which mean that the Group can continue to meet its liabilities as they fall due despite having net current liabilities of £1.0m
(2020: £0.4m). The levels of investment in the warehouse strategy and IT investment programmes have had a material impact
on the cash position of the Group and are explained further in Note 6.

The weighted average effective interest rates at the balance sheet date on interest bearing financial assets and liabilities were as follows:

Maturity profile of financial liabilities

2021

2020

Weighted average

The table below highlights the maturity profile of the financial liabilities.

3 months

Floating rate

interest rate

Floating rate

interest rate

As at 30 November 2021

<3 months

to 1 year

1–2 years

2–5 years

over 5 years

Group

Financial assets:

Cash and short-term deposits

Trade and other receivables (non-current)

Financial liabilities:

Overdrafts

Loans

£000

3,560

(2,082)

(20,000)

0.77

1.59

1.74

5,941

(2,480)

(5,000)

0.41

1.67

1.54

Interest rate risk sensitivity (assuming all other variables remain constant):

2021

2020

Financial liabilities

Trade payables

Lease liabilities

Other taxation and social security

Other payables
Accruals

Lease liabilities due after 1 year
Borrowings

£000

21,277

982

4,603

-
13,408

40,270

-
155

40,424

2,783

2,893
2,035

7,711

-
464

8,175

3 months

-
-

2,300
20,412

22,712

5,610
-

5,610

11,634
-

11,634

Income sensitivity

Equity sensitivity

Income sensitivity

Equity sensitivity

As at 30 November 2020

<3 months

to 1 year

1–2 years

2–5 years

over 5 years

Group

1% increase in interest rates

1% decrease in interest rates

£000

(185)

185

£000

(185)

185

£000

(15)

£000

(15)

Financial liabilities

Trade payables

Lease liabilities

Other taxation and social security

Other payables

Derivative financial instruments
Accruals

Lease liabilities due after 1 year
Borrowings

£000

20,620

982

6,847

62
8,974

37,485

-
22

2,783

2,503

14
1,766

7,066

-
65

37,507

7,131

-
-

2,654
5,058

7,712

5,359
-

5,359

12,592
-

12,592

Total

£000

21,277

3,765

4,603

2,893
15,443

47,981

19,544
21,030

88,555

Total

£000

20,620

3,765

6,847

2,503

76
10,740

44,551

20,605
5,145

70,301

174

175

FINANCIAL STATEMENTS
Capital management

c) Other related party transactions

Independent Search Partnership

The Group’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence as to sustain
future development of the business. Management monitors the return on capital, as well as the level of dividends to ordinary
shareholders and contributions to the defined benefit pension schemes.

32. RELATED PARTY TRANSACTIONS

a) Key management personnel

The remuneration of the Directors and other key management personnel of the Group during the year, in aggregate, was:

Group

Short-term employee benefits

Post-employment benefits

Termination payments

Share-based payments

Year ended
30 November 2021

Year ended
30 November 2020

£000

3,102

(5)

3,167

£000

1,574

129

427

2,216

Share-based payments above include a fair value charge for executive Directors of £220,917 credit (2020: £40,054) in respect of
awards to David Brooks, £87,864 (2020: £199,686) in respect of Neil Martin and £9,045 (2020: £nil) in respect of Mark Berry.

Further information about the remuneration of individual Directors is provided in the audited section of the Remuneration Report.

b) Transactions between the Company and its subsidiary undertakings

During the year, the Company entered into the following transactions with its subsidiary undertakings:

Company

(Payments)/receipts:

Management recharges

Net intercompany interest payable

Dividends received

Year ended
30 November 2021

Year ended
30 November 2020

£000

(940)

(888)

6,000

(891)

(1,153)

5,000

Total amounts owed between the Company and its subsidiary undertakings are disclosed in Notes 20 and 22 respectively.

The Group encourages its Directors and employees to
be Governors, Trustees or equivalent of educational
establishments. The Group trades with these
establishments in the normal course of its business.

Spinfield School

Neil Martin, Executive Director, is a governor of
Spinfield School. RM Resources made sales of £nil
(2020: £800) to this school. At the year end there is a
balance of £nil (2020: £nil) outstanding.

Informa plc

Patrick Neil Martell, Non-Executive Director of RM plc, is
Chief Executive Officer of Informa plc. In the year a payment
of £4,251 was made to Informa Markets (UK) Ltd, an indirect
subsidiary of Informa plc, relating to an online subscription
for legal guidance (2020: £3,900). At the year end there is a
balance of £nil (2020: £nil) outstanding.

Bellevue Place Education Trust

Vicky Griffiths, a Non-Executive Director is a trustee of
Bellevue Place Education Trust. RM Resources made sales
of £234 (2020:£112) to this Trust. At the year end there is a
balance of £nil outstanding (2020: £nil).

Vicky Griffiths, a Non-Executive Director is a partner of
Independent Search Partnership. In the year a payment
of £42,683 was made to Independent Search Partnership
(ISP) relating to search fees for recruitment (2020: £nil).
Vicky Griffiths did not participate in the decision to use
ISP, she did not benefit financially in any way from the
arrangement, and she was not involved in the provision of the
recruitment services from ISP to RM. At the year end there is a
balance of £nil outstanding (2020: £nil).

Dulwich College Junior School

The husband of Vicky Griffiths, a Non-Executive Director,
is Head Teacher of Dulwich College Junior School.
RM Resources made sales of £792 (2020: £3,996) to this
school. At year end there is a balance of £2 outstanding
(2020: £891).

Restore Now

Charles Bligh, Non-Executive Director of RM plc, is the CEO
of Restore plc, which is a supplier to RM of scanning and
associated services. Since his appointment on 2 July 2021,
the Group has purchased €217,500 and £1,204,279 services
from Restore Digital Ltd (part of the Restore plc group).
At the year end there is an unpaid balance of £nil outstanding.
Charles was not involved in any discussions relating to the
use of Restore plc group.

176

177

FINANCIAL STATEMENTS

33. RESTATEMENT FOR CHANGE IN ACCOUNTING POLICY

In April 2021, an IFRIC agenda decision was issued in relation to the accounting treatment for configuration and customisation
costs in a cloud computing arrangement. This guidance clarified that in order for an intangible asset to be capitalised in relation
to customisation and configuration costs in a software-as-a service (SaaS) arrangement, it is necessary for there to be control of
the underlying software asset or for there to be a separate intangible asset which meets the definition in IAS 38 Intangible Assets.
The Group’s previous policy was to capitalise such customisation and configuration costs.

Our major investment IT systems programme, known as Evolution, is predominately using SaaS arrangements and third-party
implementation partners to improve our systems and processes. Configuration and associated activity costs which had been
previously capitalised during 2019 (£2.0m) and 2020 (£2.3m) will now be expensed following the IFRIC interpretation. The impairment
charge expensed in 2020 of £0.7m relating to 2019 costs (now expensed), will be reversed. As the costs are material and do not relate to
underlying trading, all Evolution Programme costs expensed through the Income Statement in both 2020 and 2021 will be disclosed as
“Adjustments” in the Financial Statements and therefore not included within the Group's adjusted profit figures. These adjustments will
include certain dual run costs such as the SaaS licenses themselves (prior to operational use of the system to which the licenses relate),
training relating to the Evolution programme, data migration activities and other operating costs that were not previously capitalised
(2020: £611,000 reclassified to adjusting expenses (see Note 6)).

In addition, as part of the strategy review currently underway the Directors consider that certain activities previously classified as
Research and Development administration expenses and certain selling and distribution administration activities are more appropriately
classified as Cost of Sales. Therefore for the year ended 30 November 2020, we have reclassified £0.1m from administration activities
(£5.1m from R&D and £1.7m from selling & distribution) to cost of sales. This has had no impact on the operating profit reported.

These adjustments have the following impact on the primary statements for the year ended 30 November 2020:

Consolidated Income Statement

Revenue

Cost of sales

Gross profit

Operating expenses

Impairment losses

Profit from operations

Investment income

Finance costs

Profit before tax

Tax

Profit for the year

Consolidated Statement of
Comprehensive Income

Profit for the year

Other comprehensive expense

Total comprehensive expense

178

Year ended 30 November 2020

As reported

Restatement impact

£000

188,999

(115,034)

73,965

(61,489)

(953)

11,523

(1,055)

10,489

(2,075)

8,414

£000

(6,882)

6,882

5,216

705

(961)

182

(779)

Year ended 30 November 2020

As reported

Restatement impact

£000

8,414

(13,310)

(4,896)

£000

(779)

Restated

£000

188,999

(121,916)

67,083

(56,273)

(248)

10,562

(1,055)

9,528

(1,893)

7,635

Restated

£000

7,635

(13,310)

(5,675)

Consolidated Balance Sheet

Non-current assets

Goodwill

Intangible assets

Property, plant and equipment

Right-of-Use asset

Defined benefit pension scheme surplus

Other receivables

Contract fulfilment assets

Deferred tax assets

Current assets

Inventories

Trade and other receivables

Contract fulfilment assets

Held-for-sale asset

Tax assets

Cash at bank

Total assets

Current liabilities

Trade and other payables

Tax liabilities

Provisions

Overdraft

Net current (liabilities)/assets

Non-current liabilities

Other payables

Provisions

Deferred tax liability

Defined benefit pension scheme obligation

Borrowings

Total liabilities

Net assets

Equity attributable to shareholders

Share capital

Share premium account

Own shares

Capital redemption reserve

Hedging reserve

Translation reserve

Retained earnings

Total equity

Year ended 30 November 2020

Year ended 30 November 2019

Restatement

As reported

£000

impact

£000

Restated

As reported

£000

impact

£000

Restated

£000

49,322

22,354

8,423

19,391

665

3,420

5,333

(3,338)

49,322

19,016

8,423

19,391

665

3,420

5,333

108,971

(3,338)

105,633

49,107

23,274

9,183

976

939

2,193

3,457

89,129

22,151

31,238

844

1,428

382

5,534

61,577

150,706

(2,220)

422

49,107

21,054

9,183

976

939

2,193

3,457

86,909

22,151

31,238

844

1,428

804

5,534

61,999

(1,798)

148,908

18,594

31,475

728

4,793

2,633

5,941

64,164

169,797

(61,491)

(51,231)

(163)

(435)

(2,480)

(64,569)

(405)

(20,987)

(3,998)

(3,339)

(19,318)

(4,779)

(52,421)

(116,990)

52,807

1,917

27,080

(841)

(65)

(702)

25,324

52,807

(117)

(1,585)

(4,006)

(56,939)

4,638

(3,483)

(3,868)

(3,356)

(6,951)

(16,534)

(34,192)

(91,131)

59,575

1,917

27,080

(1,007)

(411)

(497)

32,399

59,575

422

(1,798)

(51,231)

(117)

(1,585)

(4,006)

(56,939)

5,060

(3,483)

(3,868)

(3,356)

(6,951)

(16,534)

(34,192)

(91,131)

57,777

1,917

27,080

(1,007)

(411)

(497)

30,601

57,777

179

18,594

31,317

728

4,793

2,030

5,941

63,403

172,374

(61,491)

(163)

(435)

(2,480)

(64,569)

(1,166)

(20,987)

(3,998)

(3,339)

(19,318)

(4,779)

(52,421)

(116,990)

55,384

1,917

27,080

(841)

(65)

(702)

27,901

55,384

158

603

761

(2,577)

761

(2,577)

FINANCIAL STATEMENTS
Consolidated Cash Flow Statement

Profit before tax

Investment income

Finance costs

Profit from operations

Adjustments for:

Pension GMP

Amortisation and impairment of intangible assets

Depreciation and impairment of property, plant and equipment

Gain on disposal of other asset

Gain on disposal of property, plant and equipment

Gain on foreign exchange derivatives

Share-based payment charge

Increase in provisions

Defined benefit pension scheme administration cost

Operating cash flows before movements in working capital

Decrease in inventories

Decrease in receivables

Increase in contract fulfilment assets

Movement in payables:

Increase in trade and other payables

Utilisation of provisions

Cash generated from operations

Defined benefit pension scheme cash contributions

Tax paid

Net cash inflow from operating activities

Investing activities

Interest received

Proceeds on disposal of investment asset

Proceeds on disposal of property, plant and equipment

Purchases of property, plant and equipment

Purchases of other intangible assets

Net cash used in investing activities

Financing activities

Repayment of borrowings

Borrowing facilities arrangement and commitment fees

Interest paid

Payment of leasing liabilities

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Effect of foreign exchange rate changes

Cash and cash equivalents at the end of the year

180

Year ended 30 November 2020

Restatement

As reported

£000

10,489

(21)

1,055

11,523

170

3,778

3,718

(713)

(949)

(625)

705

1,443

19,087

3,557

2,520

(1,111)

6,012

(2,284)

27,781

(4,094)

(2,589)

21,098

1,560

2,900

(5,801)

(2,660)

(3,980)

(12,000)

(226)

(501)

(2,523)

(15,250)

1,868

1,528

3,461

impact

£000

(960)

(740)

(1,700)

(158)

(1,858)

1,858

Restated

£000

9,529

(21)

1,055

10,563

170

3,038

3,718

(713)

(949)

(625)

705

1,443

17,387

3,557

2,362

(1,111)

6,012

(2,284)

25,923

(4,094)

(2,589)

19,240

1,560

2,900

(5,801)

(802)

(2,122)

(12,000)

(226)

(501)

(2,523)

(15,250)

1,868

1,528

3,461

FINANCIAL STATEMENTSSHAREHOLDER INFORMATION

FINANCIAL CALENDAR

Ex-dividend date for 2021 final dividend

Record date for 2021 final dividend

Last date for DRIP election

Annual General Meeting

Payment of 2021 final dividend

Announcement of 2022 interim results

17 March 2022

18 March 2022

5 April 2022

7 April 2022

29 April 2022

July 2022

Preliminary announcement of 2022 results

February 2023

GLOSSARY

The use of Company refers to RM plc.

The use of Group refers to RM plc and its subsidiary
undertakings covered by the consolidated accounts.

CORPORATE WEBSITE

Information about the Group’s activities is available
at www.rmplc.com.

INVESTOR INFORMATION

Information for investors is available at www.rmplc.com.
Enquiries can be directed to Mark Lágler,
Company Secretary, at the Group head office
address or at companysecretary@rm.com.

REGISTRARS AND SHAREHOLDING INFORMATION

Shareholders can access the details of their holdings in
RM plc via the Shareholder Services option within the
investor section of the corporate website at www.rmplc.com.
Shareholders can also make changes to their address
details and dividend mandates online. All enquiries about
individual shareholder matters should be made to the
Company’s registrar, Link Asset Services, either via email at
shareholderenquiries@linkgroup.co.uk or by telephone to
0371 664 0300. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international
rate. Lines are open between 09:00 - 17:30, Monday to Friday
excluding public holidays in England and Wales.

To help shareholders, the Link Asset Services’ Share Portal at
www.signalshares.com contains a frequently asked questions
section for shareholders.

ELECTRONIC COMMUNICATION

Shareholders are able to receive Company communication
via email. By registering your email address, you will receive
emails with a web link to information posted on our website.
This can include our report and accounts, notice of meetings
and other information we communicate to our shareholders.

Electronic communication brings numerous benefits, which
include helping us reduce our impact on the environment,
increased security (your documents cannot be lost in the
post or read by others) and faster notification of information
and updates. To sign up to receive e-communications go to
Link Asset Services’ Share Portal at www.signalshares.com.
All you need to register is your investor code, which can be
found on your share certificate or your dividend tax voucher.
The Share Portal is a secure online site where you can manage
your shareholding quickly and easily. You can check your
shareholding and account transactions, change your name,
address or dividend mandate details online at any time and
vote online via the Share Portal.

BENEFICIAL SHAREHOLDERS WITH
‘INFORMATION RIGHTS’

Please note that beneficial owners of shares who have
been nominated by the registered holders of those
shares to receive information rights under section 146
of the Companies Act 2006 are required to direct all
communications to the registered holder of their shares
rather than to Link Asset Services, or to the Company directly.

MULTIPLE ACCOUNTS ON
THE SHAREHOLDER REGISTER

If you have received two or more copies of this document,
it may be because there is more than one account in your
name on the shareholder register. This may be due to either
your name or address appearing on each account in a
slightly different way.

For security reasons, Link Asset Services will not amalgamate
the accounts without your written consent. If you would like
to amalgamate your multiple accounts into one account,
please write to Link Asset Services.

AUDITOR

Deloitte LLP
Four Brindley Place
Birmingham
B1 2HZ

FINANCIAL ADVISERS
AND STOCKBROKERS

Peel Hunt LLP
120 London Wall
London EC2Y 5ET

COMPANY SECRETARY

Mark Lágler

GROUP HEAD OFFICE
AND REGISTERED OFFICE

142B Park Drive
Milton Park
Abingdon
Oxfordshire OX14 4SE
United Kingdom

Telephone: +44 (0)8450 700 300

REGISTERED NUMBER

RM plc’s registered number is 01749877

FINANCIAL PUBLIC RELATIONS

Headland PR Consultancy LLP
1 Suffolk Lane
London EC4R 0AX

REGISTRAR

Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU

LEGAL ADVISER

Osborne Clarke
One London Wall
London EC2Y 5EB

182

183

FINANCIAL STATEMENTS142B Park Drive

Milton Park

Milton

Abingdon

Oxfordshire

OX14 4SE

Telephone: +44 (0)8450 700 300

Stock code: RM.