Anti-Money Laundering Policy

KRCS Group Ltd ("KRCS") is committed to preventing money laundering, terrorist financing, fraud, sanctions breaches and other financial crime.

KRCS conducts its business in an ethical, transparent and responsible manner and will take reasonable and proportionate steps to identify and mitigate financial crime risks within its operations.

All employees, directors, contractors and agents are required to comply with this policy and report any concerns relating to suspected financial crime.

Failure to comply with this policy may result in disciplinary action and may be reported to relevant authorities where appropriate.

This policy applies to:

• KRCS Group Ltd and all trading divisions.
• Directors, employees and temporary workers.
• Contractors and consultants acting on behalf of KRCS.
• Business transactions undertaken with customers, suppliers and partners.

This policy applies to all sales channels including:

• Online sales
• Business-to-business sales
• Education sales
• Managed Services
• Finance referral activities
• In-store transactions

The Board of Directors has overall responsibility for:

• Ensuring appropriate AML controls exist.
• Reviewing financial crime risks.
• Approving this policy.
• Ensuring adequate training and resources are provided.

The Board shall appoint a Money Laundering Reporting Officer (MLRO). The MLRO is responsible for:

• Receiving internal reports of suspicious activity.
• Assessing potential AML concerns.
• Maintaining AML records.
• Liaising with external advisers, financial partners and authorities where required.
• Reviewing the policy annually.

Current MLRO

Name: Russell Dickerson

Position: Group Finance Manager

KRCS adopts a risk-based approach to AML compliance.

The following factors may increase financial crime risk:

Customer Risk

• New customers with no trading history.
• Customers unwilling to provide standard business information.
• Complex ownership structures.
• Requests involving unusual payment arrangements.

Transaction Risk

• High-value transactions.
• Requests to split payments unnaturally.
• Refund requests to alternative accounts.
• Third-party payments.

Geographic Risk

• Transactions involving jurisdictions subject to sanctions.
• Transactions connected to countries identified as presenting elevated financial crime risks

KRCS will undertake reasonable customer due diligence where appropriate to the nature of the transaction.

For individual customers (KYC), where required, KRCS may request:

• Full name
• Address
• Contact details
• Proof of identity
• Proof of address

For business customers (KYB), where appropriate, KRCS may verify:

• Company name
• Registered address
• Company registration number
• Trading status
• Ultimate beneficial ownership where concerns arise

Verification may be obtained through:

• Companies House
• Credit reference agencies
• Finance providers
• Other reputable commercial data sources

1. Ongoing Monitoring

KRCS recognises that customer risk profiles may change over time and therefore applies a proportionate ongoing monitoring process throughout the customer relationship. This monitoring is intended to identify unusual activity, changes in customer circumstances and indicators of potential financial crime.

Ongoing monitoring may include:

• Reviewing significant or unusual transactions.
• Reviewing transactions that are inconsistent with a customer's known business activities.
• Monitoring requests for unusual payment methods or third-party payments.
• Reviewing credit applications and finance referrals for changes in ownership, management or trading status.
• Assessing newly identified sanctions, adverse media results or regulatory concerns.
• Reviewing existing customers where concerns arise or where material changes to the relationship are identified.

Where unusual or suspicious activity is identified:

• The transaction or activity may be paused pending review.
• The matter must be escalated to the MLRO.
• Additional customer due diligence may be requested.
• The MLRO will assess the risk and determine whether any further action is required, including referral to external partners, advisers or relevant authorities where appropriate.

Records of monitoring activities and any resulting decisions shall be retained in accordance with this policy.

KRCS will not knowingly conduct business with:

• Sanctioned individuals.
• Sanctioned organisations.
• Parties subject to UK financial sanctions.

Where a concern is identified:

• The transaction must be paused.
• The matter must be escalated to the MLRO.
• No further activity shall be undertaken until approval is granted.

1. Screening and Adverse Media Checks

As part of its risk-based approach, KRCS may screen customers, directors, beneficial owners and associated parties using both public and commercial data sources. Verification and screening activities may utilise Companies House, Experian and information provided by regulated finance partners, and may include sanctions, Politically Exposed Person (PEP) and adverse media checks.

Screening may include:

• UK financial sanctions lists.
• Politically Exposed Person (PEP) checks.
• Adverse media and negative news screening.
• Insolvency and regulatory enforcement information.
• Companies House records.
• Credit reference agency information.
• Information provided by finance providers and regulated lending partners.

Checks may be undertaken:

• During customer onboarding.
• Prior to finance introductions or regulated credit activity.
• Where concerns arise during a customer relationship.
• As part of ongoing monitoring activities.

Where adverse media, sanctions concerns, potential fraud indicators or other significant risk factors are identified:

• The matter must be referred to the MLRO.
• Enhanced due diligence may be undertaken.
• The customer relationship or transaction may be paused pending review.
• The MLRO will determine whether the relationship may continue and whether further escalation is required.

Where KRCS becomes aware that a customer, beneficial owner or associated party may be a Politically Exposed Person, the matter should be referred to the MLRO for assessment.

Enhanced scrutiny may be applied where appropriate.

Where a transaction gives rise to concern, KRCS may request additional information regarding:

• The source of funds.
• The purpose of the transaction.
• The relationship between involved parties.

Examples include:

• Unusually large transactions.
• Significant cash payments.
• Payments made on behalf of another party.

Employees must immediately report any concerns to the MLRO where they suspect:

• Money laundering.
• Terrorist financing.
• Sanctions breaches.
• Fraudulent activity.
• Criminal property involvement.

Examples include:

• Reluctance to provide information.
• Unusual payment methods.
• Requests to bypass normal procedures.
• Transactions inconsistent with the customer's business activities.

The employee must not alert the customer that a report has been made.

Where suspicious activity is identified:

• The employee must document their concerns.
• The concern must be reported to the MLRO immediately.
• The MLRO will assess the information.
• Appropriate action will be determined.
• Records will be retained in accordance with this policy.

KRCS will maintain records relating to:

• Customer due diligence checks.
• Financial crime investigations.
• Internal reports and escalations.
• Compliance reviews.

Records shall normally be retained for a minimum of six years unless a longer period is required by law, regulation, contractual obligations or an ongoing investigation.

KRCS will:

• Provide AML awareness training to relevant employees.
• Provide enhanced training where employees are involved in finance introductions, credit applications or customer onboarding.
• Ensure employees understand how to identify and report suspicious activity.

Training records will be maintained.

The MLRO will oversee the effectiveness of KRCS's financial crime controls and monitoring programme.

This will include:

• Periodic reviews of customer due diligence processes.
• Reviews of suspicious activity reports and escalation records.
• Assessment of unusual transaction trends and emerging financial crime risks.
• Review of sanctions, PEP and adverse media screening processes.
• Review of relationships identified as higher risk.
• Recommendation of control improvements where necessary.
• Reporting significant AML matters to the Board.

This policy shall be reviewed at least annually or earlier where required by changes in legislation, regulation, business activities or identified risk.

This policy should be read alongside:

• Anti-Corruption and Bribery Policy
• Anti-Facilitation of Tax Evasion Policy
• Whistleblowing Policy
• Data Protection Policy
• Complaints Policy
• Information Security Policies

These related policies already exist within the KRCS Staff Handbook and provide additional financial crime and reporting controls.