Annual Report
and Consolidated
Financial Statements
For the year ended 31 December 2021
Your future, our focus.
curtisbanks.co.uk
CURTIS BANKS GROUP PLC 2021
Contents
Page
▲
Strategic Report
Operational, Financial Highlights and Key
Performance Indicators 1
Our services and history 2
Chairman’s statement 3
Chief Executive Officer’s review 5
Chief Financial Officer’s review 8
Principal risks and uncertainties 13
Environment, social and governance 17
▲
Governance
Board of Directors 21
Directors’ report 23
Statement of Directors’ responsibilities 25
Chairman’s corporate governance report 26
Corporate governance 29
Directors’ remuneration report 32
▲
Financial statements
Independent auditors’ report 36
Consolidated statement of comprehensive income 42
Consolidated statement of financial position 43
Company statement of financial position 44
Consolidated statement of changes in equity 45
Company statement of changes in equity 46
Consolidated statement of cash flows 47
Company statement of cash flows 48
Notes to the financial statements 49
Company information 86
Glossary 87
▲
Supplementary unaudited information 88
Company Registration
No. 07934492 (England and Wales)
ST R AT EG I C R E P O RT
continued
Operational, Financial Highlights and Key
Performance Indicators
Financial Highlights
REVENUE
£63.3m
+17.5% (2020: £53.9m)
ADJUSTED PROF IT BE FORE TAX 1 4
£14.0m
+4.7% (2020 restated: £13.4m)
A DJ U ST E D O P E R AT I N G M A RG I N 2 4
23.5%
(2020 restated: 26.0%)
P RO F I T B E FO R E TA X I N C R E AS E D
£9.3m
+22.2% (2020 restated: £7.6m)
A DJ U ST E D D I LU T E D E P S 4
16.9p
(2020: 17.9p3)
G ROS S O RG A N I C G ROW T H –
F U L L A N D M I D S I P P s
7.9%
(2020: 7.8%)
TOTA L S I P P S A D M I N I ST E R E D
(including third party)
79,679
(2020: 82,224)
AT T R I T I O N R AT E –
F U L L A N D M I D S I P P s
6.1%
(2020: 4.6%)
AS S E TS U N D E R
A D M I N I ST R AT I O N (AUA)
£37.4bn
+15.4% (2020: £32.4bn)
1 Profit before tax, amortisation and adjusting items
2 The ratio of operating profit before amortisation and adjusting items to revenue.
3 As further detailed in note 2, results for the year ended 31 December 2020 have been restated to account for measurement period adjustments arising under IFRS 3 Business
Combinations.
4 In addition to statutory IFRS performance measures, the Group has presented a number of non-statutory alternative performance measures (“APMs”) on page 9. The Board
believes that the APMs used give a more representative view of the underlying performance of the Group and enhance comparability of information between reporting periods.
APMs are further defined in the Glossary on page 87.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 1
ST R AT EG I C R E P O RT
continuedcontinued
Our services and history
Curtis Banks Group PLC (“Curtis Banks” or “the Group”)
has a clear vision for long-term growth. The Group
commenced trading in 2009 and has successfully
developed, through a combination of organic growth
and acquisitions, into one of the UK’s leading
independent providers of self-invested pension products.
At 31 December 2021 the Group administered circa
£37.4bn (2020: £32.4bn) of pension assets on behalf of
approximately 80,000 (2020: 82,000) active customers.
In May 2015 the shares of Curtis Banks (LON: CBP) were
admitted and listed on the London Alternative
Investment Market (“AIM”).
On 25 May 2016 the Group completed the purchase of
Suffolk Life Group Limited, a long established provider of
SIPPs operating through Suffolk Life Pensions Limited
and Suffolk Life Annuities Limited. During the year ended
31 December 2020, the Group completed the purchase of
Dunstan Thomas, and Talbot and Muir. The Group
currently trades under the names Curtis Banks, Suffolk
Life, Dunstan Thomas and Talbot and Muir. More than
800 staff are employed across its head office in Bristol
and regional offices in Ipswich, Dundee, Portsmouth,
Nottingham and Leeds.
Trading subsidiaries of the Group that are authorised by
the Financial Conduct Authority to provide trust based
SIPP products are Curtis Banks Limited, Suffolk Life
Pensions Limited, Suffolk Life Annuities Limited and
Talbot and Muir Limited. Suffolk Life Annuities Limited is
also regulated by the Prudential Regulatory Authority as
it provides SIPPs through non-participating individual
insurance contracts. As such, it is authorised as an
insurance company and the consolidated results for the
whole Group also include Suffolk Life Annuities Limited’s
insurance policyholder assets, liabilities and returns.
The Executive Directors have proven experience in the
retail savings, pensions and wealth markets and have
established a business that focuses on a service-driven
proposition for the administration of flexible SIPPs.
The Group’s core pension products are primarily
distributed by authorised and regulated financial
advisers, targeted towards pension savers who wish to
take full advantage of the features and flexibility offered
in the UK’s modern and changing pension regime.
Long standing relationships with key distributors result
in high levels of repeat business and demonstrate
satisfaction with products and services provided.
The Group is focused on continuing to deliver value to
both customers and shareholders in the years ahead.
2 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Chairman’s statement
Chris Macdonald
Chairman
Progressing towards ambitious goals
I am pleased to report the Curtis Banks Group results for
the year ended 31 December 2021. The business has
continued its growth trajectory while taking specific
actions to improve the quality of earnings and the
efficiency of operations, against a tough external
backdrop.
Despite some headwinds, 2021 witnessed the continued
delivery of our stated strategic objectives, delivering
strong organic growth in our core SIPP products and the
further integration of Talbot and Muir. The Group has
continued to broaden the range of services it offers to
its customers. We adjusted our fee model early in 2021
to improve the quality and visibility of revenue, while
also seeking to bring more standardisation of charging
structures across the various SIPP books that have been
acquired over several years. This provides us with a
strong platform for our medium-term growth ambitions.
Following the Dunstan Thomas acquisition, the Group
has improved its operations through further technical
efficiencies and can now provide incremental value-
added technology solutions and services. This puts the
Group in a strong position to capture the growth in the
advised retirement market place.
The Group has also continued to progress with its
systems strategy on time and on budget. However, the
Board is now considering/evaluating how this strategy
might be enhanced and accelerated to achieve the
benefits sooner, by maximising the growth achieved by
our core products alongside the new technology
solutions being supported by Dunstan Thomas. This
enables us to further enhance our product proposition
and service quality for our customers and
intermediaries, whilst also accelerating achievement of
our target operating model and growing the operating
margin in the medium term.
2021 Review
We have delivered a year of continued growth in both
revenue and profits. Revenue increased by 18% to
£63.3m, reflecting primarily the contribution from
a maiden full year of Talbot and Muir and Dunstan
Thomas, as well as steady underlying growth in the core
business of Full and Mid SIPPs. The Group’s adjusted
profit before tax grew by 4.7% to £14.0m, albeit
impacted by an underperformance in Dunstan Thomas
which has been more severely impacted by the
COVID-19 pandemic. The headwinds experienced by
Dunstan Thomas were not uncommon in the financial
service technology sector as the relative reluctance of
customers to invest in new technology solutions or
upgrades, as a result of the pandemic.
The scale of the business continues to grow with Assets
under Administration (“AuA”) up 15.4% to £37.4bn (2020:
£32.4bn). The Group saw a gross increase of 4,329 (7.9%)
in Full and Mid SIPPs, including 693 new SIPPs from
Talbot and Muir in the year, offset by attrition of 6.1%.
The growth in attrition from 4.6% to 6.1% during the
year can be attributed to a COVID-19 lag effect
following the lower than anticipated rate in 2020,
although there is already evidence that the attrition
rate is normalising with the return to pre-COVID levels in
Q4 2021 and into 2022. In comparison, the non-core
eSIPPs and third party administered SIPPs had
experienced higher attrition rates (14.9% and 10.5%
respectively) with minimal organic growth. Together the
total SIPPs number has reduced to 79,679 (2020:
82,224).
The Group’s revenue model in the pension
administration business is highly resilient with a high
proportion of fixed, recurring income which is adjusted
annually for inflation. As mentioned above, we made a
step change in early 2021 by applying a 20% increase
to annual SIPP administration fee paid on Full and Mid
SIPPs. At the same time, we introduced arrangements
for customers to share more fully in the interest income
generated from their cash balances. These
amendments have improved both the quality and
visibility of the Group’s revenue, while also benefiting
customers, and have had no discernible direct impact
on attrition.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 3
That aside, the Board remains confident that the Group
is well positioned to deliver on its objectives, driven by
organic growth from high-quality recurring fee revenues
which are expected to be enhanced by normalised
levels of customer attrition. In addition, we expect
greater interest returns for both the Group and our
customers. Assuming sentiment improves, we also
expect, a recovery in performance at Dunstan Thomas.
Finally, we believe that further improvements to our
operating margins are achievable as we transition to
a more diverse provider of administration, technology
and complementary services to the advised retirement
market, providing multiple complementary solutions,
including Fintech, legal and property services.
Section 172
The disclosures required under section 172 of the
Companies Act are included in the Directors’ report.
Chris Macdonald
Chairman
31 March 2022
ST R AT EG I C R E P O RT
continued
Chairman’s statement
continued
The two acquisitions of Talbot and Muir and Dunstan
Thomas have seen a full financial year within the Group.
Talbot and Muir actively contributed to the growth in
volumes achieved during the year, and also the margin
of the pension administration segment. There is clear
evidence that Dunstan Thomas has been impacted by
COVID-19 to a greater extent than the rest of the
Group’s activities as the nature of its business contracts
leads to a less predictable revenue pattern than our
pension administration business; however, it remains an
important component of the Group’s business and a
key contributor to our growth strategy. We continue to
be excited about the potential for Dunstan Thomas to
enhance and develop our product and service offering,
while creating significant new opportunities for the use
of technology in the retirement marketplace.
ESG
Curtis Banks plays an important role in the lives of our
customers, providing the platform to support them and
their families in retirement. We recognise our
responsibility in this regard, as well as the commitments
we have to our staff, customers, communities and the
wider environment. I am therefore very pleased to
present the Group’s purpose-led ESG strategy within
this report, which sets our priorities and plans,
particularly around the issue of intergenerational
fairness. The Group’s ESG performance is overseen at
Board level by Jill Lucas alongside Group CEO, Will Self.
We very much look forward to providing timely updates
as we formalise this important aspect of the business.
Dividend
We paid an interim dividend of 2.5p per share (2020:
2.5p) on 12 November 2021 and the Board proposes a
final dividend of 6.5p per share (2020: 6.5p) which, if
approved by shareholders, will be paid on 1 June 2022 to
shareholders on the register at the close of business on
6 May 2022. Total dividends for the year are therefore
9.0p per share (2020: 9.0p).
Outlook
The Board remains fully committed to implementing
the Group’s strategy and indeed to accelerate our
initiatives. This will include efforts to maximise the
recent growth in our core business, complemented by
leveraging the technology capability provided by
Dunstan Thomas.
We will look to achieve our fundamental objectives
whilst also continuing to meet the increasing financial
costs of regulatory change on our otherwise largely
controllable cost base. The expectation is that material
additional costs will be required to support the Pensions
Dashboard initiative and the FCA’s proposals around
Consumer Duty will add to the general inflationary
pressure on our expenditure.
4 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Chief Executive Officer’s review
Will Self
Chief Executive Officer
I am delighted to report on another year where we made
good progress, adding scale and diversification to the
business, strengthening our platform for the long-term
to provide sustainable growth. This is underpinned by our
on-going transition from a predominantly SIPP
administration business to a more diverse retirement
group providing multiple complementary services,
including FinTech, Legal and Property services, to the
advised pre and post retirement market.
Delivery of strategic objectives
Dunstan Thomas continues to play a critical role in
enabling the diversification of Curtis Banks into a
diverse provider of administration, technology and
complementary services to the advised retirement
market. Specific progress made in 2021 includes
the launch of Imago Administration for Small
Self–Administered Schemes (SSAS) during the first
quarter. Advanced discussions are taking place with
potential customers for the platform and clear plans
have been drawn on how the platform can be combined
with Curtis Banks Trustee Services for third party
product provision.
Dunstan Thomas continues to be the backbone of
CB Labs, our innovation hub and collaboration centre,
which is also helping to drive operational efficiency and
uncover new product opportunities. CB Labs is bringing
a clear bank of ideas and technical concepts to life.
Priority concepts that have moved to prototyping and
beyond during 2021 include:
•
•
•
a new Chatbot developed and launched using
artificial intelligence that has facilitated
customers and adviser queries;
a suite of new adviser tools including Annual
Allowance and Salary Sacrifice calculators with
others in the development pipeline;
an enhanced suite of new and fully integrated
solutions, including a low code Integro CX portal
framework that is more agile and can be adopted
and integrated in different environments.
The initiatives listed above broaden Curtis Banks
advisers’ capabilities, while expanding the suite of
products available directly via IFA platforms. These
developments are earnings enhancing and strengthen
our potential to grow market share and expand our
target market by using technology to diversify Curtis
Banks’ offering.
System transformation and acceleration of
our ambition
We remain on track to deliver on our systems strategy
which will see existing operational systems within Curtis
Banks, and all of our back-office systems, move into
Navision, one of our incumbent platforms. We anticipate
the resulting cost savings for the Group to amount to
£1.2m per annum upon completion. In 2022, we are now
beyond the half-way stage and there is an opportunity
to accelerate the process to enable a quicker roll-out of
an enhanced proposition to our customers and
intermediaries, moving closer to full implementation of
our target operating model and a consequent
improvement in operating margin.
Given our ambitions in the pre and post retirement
market, it is clear that we have an opportunity to
accelerate our existing strategic deliverables as well as
broaden our proposition. Not only could this bring
forward the existing project benefits but also ensure
that our proposition leads the sector in delivering
customer centric retirement solutions in a digital and
efficient way. We are exploring how this will impact our
investment timeline and will provide further market
updates this summer.
Operational Review
Curtis Banks revenues increased by 18% in 2021, driven
primarily by the inclusion of both Dunstan Thomas and
Talbot and Muir for the full 12 months, as well as the
underlying growth of our core business. Our predictable,
highly cash generative business model was further in
evidence when our new, fixed-fee charging structure
enabled us to increase annual SIPP admin fees by 20%
in February 2021 with negligible impact on customer
attrition. This led to a material increase in fee income by
11% compared to 2020, and by 22% when including the
contribution from Talbot and Muir. This has resulted in
62% (2020: 54%) of revenue now attributable to
predictable, fixed fees. This initiative not only improves
our quality of earnings, but is also a long-term strategic
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 5
ST R AT EG I C R E P O RT
continued
Chief Executive Officer’s review
move which leaves Curtis Banks well positioned to
benefit from a rising interest rate environment. It is
highly likely that 2021 can be seen as a floor, with net
interest margin upside now available for the Group. Not
only does this allow for more predictable earnings
growth, it also provides customers with a transparent
offering; a clear point of differentiation in the market.
Overall, the strong underlying performance of our core
Full and Mid SIPPs led to net organic growth of 1.8%
(calculated as organic growth less attrition, divided by
2020 closing number of core SIPPs) in 2021 despite
delayed customer attrition during the year due to
COVID-19. We expect attrition to normalise in 2022, as it
did during the last three months of 2021 and the
relaxation of COVID-19 restrictions will further facilitate
new business gains.
Strong growth in core SIPP administration
business
By the end of 2021, the number of SIPPs administered
saw a 7.9% gross organic increase of our core Full and
Mid SIPPs, offset by attrition of 6.1%.
The continued growth in our core product offering, Your
Future SIPP, continues to have a positive impact on the
Group’s organic growth as well as on our relationships
with advisers and introducers.
The resulting increase in the total number of properties
administered by the Group rose to 9,065 and we expect
further growth based on a record number of enquiries in
Q4 2021. The Rivergate legal business has provided
value adding services to our customers during the year
and was successful in trading as a proof of concept
driven by demand. We continue to explore options to
fast-track the evolution of Rivergate as the business is
still in its infancy.
Total Full and Third Party
Full SIPPs Mid SIPPs Mid SIPPs eSIPPs Administered Total
As at 31 December 2021 21,272 34,699 55,971 17,881 5,827 79,679
As at 31 December 2020 23,013 31,985 54,998 20,742 6,484 82,224
SIPPs added organically 914 3,415 4,329 236 24 4,589
Conversions and reclassifications (1,216) 1,216 — — — —
SIPPs lost through attrition (1,439) (1,917) (3,356) (3,097) (681) (7,134)
Gross organic growth rate 4.0% 10.7% 7.9% 1.1% 0.4% 5.6
Annualised attrition rate 6.3% 6.0% 6.1% 14.9% 10.5% 8.7%
Industry backdrop
Whilst the last two years have seen broader market
volatility, the strength of the Curtis Banks business
model has again shone through with our fixed fee model
delivering consistent revenue generation. Curtis Banks’
product proposition and breadth of service enable us to
provide superior choice and flexibility to the needs of
a retirement market that is having to deal with
increasing levels of macro-volatility.
Retail investment platforms continue to see significant
in-flows and Curtis Banks is rapidly developing a Digital
Proposition that sits alongside the classic retail
platform solutions, providing customers greater control
of their portfolios at the higher end of the market.
During 2021, our average transfer to the group included
the consolidation of 2 existing pensions totalling an
average transfer value of over £465k, further reinforcing
our strategy. In 2021, 86% of all transfers came from
retail platforms, further evidencing the migration driven
by asset values and product complexity.
The pension market continued to be the focus of
regulators during 2021. The Curtis Banks business model
adopts a very clear approach in that we only work with
regulated financial advisers and we do not provide
advice on investments held within our SIPPs. Our fee
structures also remain fair, transparent and competitive
for our target market and remains well positioned to
withstand any industry pressure on fee levels.
Integration of Talbot and Muir and Dunstan
Thomas
The acquisitions of Talbot and Muir and Dunstan
Thomas have been further integrated into the Group
and made a maiden full year contribution in 2021. As
evidenced by the strategic update provided, both
businesses underpin our transition to a more diverse
retirement group, providing multiple complementary
solutions, including FinTech, legal and property services
to the advised retirement market.
The additional scale from Talbot and Muir has
enhanced the operating margin across the pension
administration segment.
The nature of Dunstan Thomas’s FinTech business
means that the revenue stream is more volatile than
that of pension administration, with lower certainty on
the timing of revenue recognition on its customer
contracts. Dunstan Thomas has perhaps felt the impact
of COVID-19 to a greater degree than the wider business
as some customers have chosen to slow or defer some
projects. While this is disappointing, we remain
confident of the medium and long term benefits this
acquisition will bring. Dunstan Thomas has improved
the customer proposition offered by the Group and
broadened our customer base by introducing Fintech
solutions for wealth managers. This diversifies our
revenue base, helps the Group to reach a wider target
market and pursue natural cross-sell opportunities to
our existing SIPP administration offering.
6 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Chief Executive Officer’s review
continued
more normal rates of customer attrition for the core Full
and Mid SIPPs. These rates had already reduced in 2021
from a high of 8.0% in June to 4.6% in December and
into 2022 (4.9% in February 2022).
Given the opportunities arising from the core business
and the technology platform provided by Dunstan
Thomas, the Board is reviewing the scope to accelerate
our growth initiatives. This would enable us to
streamline the business and enhance our customer
proposition while continuing to meet the increasing
regulatory burden, for example supporting the Pensions
Dashboard initiative and the FCA’s proposals around
Consumer Duty.
As a result of the Group’s improved earnings quality and
visibility, coupled with its technology initiatives, the
Board is confident of meeting its stated growth
objectives. Furthermore, the combination of accelerated
strategy implementation and organic growth leaves the
Group well positioned to achieve improvements in
operating margin ahead of current expectations.
Will Self
Chief Executive Officer
31 March 2022
ESG Strategy – Promoting Fairness for
Current and Future Generations
The Group is pleased to publish its inaugural ESG Policy.
Following an independent materiality assessment of
the Group, we identified a number of opportunities to
make a real difference in addressing important issues to
society, the economy and the environment.
Key initiatives delivered in 2021 include:
•
•
•
•
Established a new partnership with The
Intergenerational Foundation to keep generations
of families out of poverty and on our platform for
generations to come;
Engaged with our deposit taking counterparties to
better understand the use of the cash which is
placed with them;
Undertook an initial analysis of our Commercial
Property holdings in pensions to understand the
future climate risk;
Accreditation as an UK Living Wage Foundation
employer. This commitment applies not only to
directly employed staff but also to our third party
contracted staff in recognition that life is hard for
working generations;
Plans for 2022:
•
•
•
•
•
Engage further with The Intergenerational
Foundation to help us review our products and
services with the aim of adapting our products
and services to enable better Intergenerational
planning.
Further discussions with deposit takers to
establish how cash funds can be deployed to
make an even bigger positive impact.
Delivery of unconscious bias in software training in
our Dunstan Thomas business – an industry first.
Pricing decisions on holding more environmentally
friendly commercial properties in SIPPS.
ESG Data centre for the Group all in one place
(i.e. adviser, customer, employee satisfaction,
carbon, financials).
We have established board level accountability for the
Group’s ESG performance, overseen jointly by Jill Lucas,
Non-executive Director, and through my position as
CEO. Progress on activities will be reported at monthly
Executive Committee meetings with regular updates
alongside the formal annual reporting cycle.
Outlook – Well positioned to execute
medium-term growth strategy
The Group is in a strong position to execute its medium-
term growth strategy and broaden its services in the
advised pre and post retirement market. We expect to
report further growth from our high-quality recurring fee
revenue, with net organic growth benefiting a return to
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 7
ST R AT EG I C R E P O RT
continued
Chief Financial Officer’s review
Dan Cowland
Chief Financial Officer
Results
A resilient financial performance for the year ended
31 December 2021 saw revenue increase by 18% to
£63.3m (2020: £53.9m) and statutory profit before tax
improved by 22% to £9.3m (2020 restated: £7.6m).
Diluted EPS on a statutory basis increased by 19% to
11.5p (2020 restated: 9.7p).
Adjusted profit before tax, which excludes items which
do not arise from our core operating activities,
increased by 5% to £14.0m (2020: £13.4m). We have
previously referred to these items as non-recurring
items, as they arise principally from acquisitions,
restructuring and other one-off events. However, to
avoid any potential confusion that some may find in
this term, we have decided to now refer to adjusting
items. Adjusted diluted EPS was 6% lower at 16.9p
(2020: 17.9p).
The robust financial performance in our core SIPP
administration activities was achieved against the
persisting economic and political challenges from both
the UK’s exit from the European Union and the constant
presence over the past 24 months of the COVID-19
pandemic. As with many firms within our sector, the
Group has not been immune from the economic impact
of these challenges, but proactive changes in February
2021 to Curtis Banks’s annual pension administration
fee model and a full year contribution from Talbot and
Muir has resulted in a 22% increase in fees to £45.1m
(2020: £36.9m).
The ongoing Russian invasion of Ukraine has led to an
unprecedented level of severe economic sanctions
against the Russian state, businesses and personnel.
These exacerbated the ongoing energy crisis grappling
Europe and have wide knock-on impacts on the global
economy. We do not expect this to have a significant
impact on the Group’s operations in the foreseeable
future because of the fixed fee nature of our SIPP
revenue and the lack of direct exposure from our
existing suppliers and customers. Management will
continue to monitor the situation in case of any new
developments that might warrant a reassessment.
It remains our strong belief that the demonstrable
growth in fees which has been achieved is underpinned
by the strength of our core business model, which
continues to generate strong levels of recurring sterling
fixed fees. Over the past 18 months the Group has seen
a marked reduction in sensitivity from interest income
which has also improved the quality of the Group’s
revenue.
The acquisition of Dunstan Thomas in 2020 introduced a
new revenue stream into the Group and was a further
step in crystallising the Group’s objective towards greater
diversification. The 2021 Group results contain a full year
contribution from Dunstan Thomas for the first time and,
despite a very challenging calendar year, it successfully
launched its Imago Administration solution for SSAS
pensions which provides encouragement for 2022
revenue opportunities. 2021 also saw the collaborative
Group initiative under CB Labs launch a number of
solutions and adviser tools to provide more extensive
support to our intermediaries and customers.
The Group reports certain Alternative Performance
Measures (“APMs”) which we believe provides more
clarity to stakeholders over the Group’s underlying
performance and better enables them to form a view on
the Group’s future prospects. The principal APMs
adopted are Adjusted Profit before Tax, Adjusted EPS
and Adjusted Operating Margin, and these will be
discussed further below.
Adjusting items are classified as such when the nature
and quantum of the income or expense is significant
and arises from a business event or activity that does
not form part of usual day to day operations. Examples
of such items include acquisitions, including any
subsequent re-measurement of contingent deferred
consideration and amortisation of intangible assets
acquired, office relocations and restructuring activities.
In addition, the Group has simplified its reported
Statement of Comprehensive Income by reverting to
a statutory format only, removing the ‘non-recurring
costs’ adjustment column and other non-statutory
changes that were previously included. Our APMs are
now only disclosed within the front half of the financial
statements and a full reconciliation between these
APMs and the statutory measures will be disclosed
within the CFO’s report going forward, with a
8 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Chief Financial Officer’s review
continued
strengthened focus and description of the key
reconciling items. The Group believe that this change is
an improvement to our financial disclosure and will
facilitate a more clear and transparent representation
of our financial performance.
The relevant reconciliation table is shown below for 2021
and prior year comparatives:
2020
2021 Restated
Adjusted operating profit 14,905 13,986
Adjusted operating margin 23.5% 26.0%
Finance income 20 83
Interest expense (921) (697)
Adjusted profit before tax 14,004 13,372
Adjusting items:
Dunstan Thomas acquisition costs (70) (769)
Talbot & Muir acquisition costs (63) (561)
Other M&A related costs (1,401) (136)*
Movement on contingent consideration relating to acquisitions 1,870 –
Discount unwind on contingent consideration (879) (357)*
Redundancy & restructuring costs (626) (1,091)
In-specie contributions 76 (402)
Centralisation of pension administration system (322) –
Treasury solution implementation (45) (286)
Data cleansing provision (288) (53)
Adjusting items (1,748) (3,655)
Impairment on customer portfolios – (344)
Intangible asset amortisation (2,934) (1,744)*
IFRS Profit before tax 9,322 7,629
Taxation (1,603) (1,732)
Profit after tax 7,719 5,897
Adjusted EPS
Basic 17.1 18.1
Diluted 16.9 17.9
*Measurement period restatements of £15k decrease in other acquisition related costs, £169k increase in discount
unwind, and £354k decrease in amortisation.
Revenue
Revenues of £63.3m in 2021 (2020: £53.9m) represent
an 18% year on year increase, driven primarily by the
full-year contributions from Dunstan Thomas and
Talbot and Muir, as well as the increased annual SIPP
administration fees applied on our core Full and Mid
SIPPs.
Fee revenue from SIPP products remains the
overwhelming source of income for the Group with 88%
of these fees being recurring fixed annual fees (2020:
86%). These annual fees are subject to annual
contractual inflationary increases referenced to
average weekly earnings. Additional fixed fees are
charged depending on the transactional services
provided for each of the products and these are also
subject to the same annual inflationary increases.
All SIPP fees levied are fixed sterling charges and are not
dependent on the value of the underlying assets held
within the SIPP. As a result, the revenues generated by
both Curtis Banks and Talbot and Muir are insulated
from the movements in financial markets and/or
commercial property values and are therefore subject to
less volatility than many of our peers who operate a
basis point charging structure which is driven by the
underlying asset value held within a SIPP. We view this
as a key differential that sets us apart from most of our
competitors and provides an attractively priced product
with better clarity and certainty, especially in respect to
higher value SIPPs. As such, where the underlying value
of a SIPP increases our product offering becomes
increasingly affordable. In the meantime, the exposure
to the volatility of financial markets is reduced
compared to our competitors.
In the year ended 31 December 2021, £8.3m of the Group
revenue was generated from interest margin (2020:
£12.2m), with the proportion of contribution to total
revenue falling to 13% from 23% in the previous year.
Interest income from client money held includes
amounts earned through the use of pooled banking
arrangements. In the year ended 31 December 2021,
a net interest margin of 0.80% (2020: 1.12%) was
generated from client money held within pooled
banking arrangements, despite the low interest
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 9
ST R AT EG I C R E P O RT
continued
Chief Financial Officer’s review
continued
environment which persisted for most of the financial
year and into 2022. However, the Group is well
positioned to benefit from a rising interest rate
environment in 2022. A combination of the transparent
interest sharing model introduced in February 2021 and
the current yield curve presents considerable upside for
the Group, particularly in 2023.
When we implemented the change to Curtis Banks’s
annual SIPP administration fees, effective from
1 February 2021, we also announced that the amount of
interest paid to customers would no longer be set on
a discretionary basis. The Group believes that its clear
commitment to sharing interest generated with our
customers is fairer, more transparent and provides
greater certainty to those customers. The way in which
we share interest with our customers can is explained at
https://www.curtisbanks.co.uk/bankinterest/. The
amount of interest generated by the Group, and the
amount shared with our customers, is monitored by the
Group Assets and Liabilities Committee under its
established Treasury Framework model.
£9.9m (2020: £4.8m) of revenue was generated from
Fintech services. The net increase year on year was
driven by the full year contribution in 2021 and partly
offset by headwind experienced by Dunstan Thomas as
a result of the COVID-19 pandemic.
Expenses
The year ended 31 December 2021 saw administrative
expenses increase by 16% to £52.2m from £44.9m,
impacted from the full year cost from Dunstan Thomas
and Talbot and Muir.
Staff costs for the year increased by 17% to £30.5m
(2020: £26.1m) and were influenced by salary inflation,
referenced to average weekly earnings, and the full year
impact from the acquisitions of Dunstan Thomas of
£7.1m (2020: £1.9m) and Talbot and Muir of £2.7m (2020:
£0.4m).
Staff costs continue to reflect the cost of share based
payment awards under the Group’s Long Term Incentive
Plans and Save As You Earn (“SAYE”) schemes, as well as
the commitment to the auto enrolment of staff pension
contributions. These measures continue to reflect the
importance of staff satisfaction to the Group and
contribute not only to improved levels of key staff
engagement and retention but also drive the provision
of desired service levels to customers which are
demanded by our introducers of business. We continue
to review the manner in which we reward staff
performance and we are delighted that since the
appointment of Jaynie Vincent, as Group People Officer,
the Group has received accreditation as a Living Wage
Employer.
Average staff numbers increased to 828 (2020: 698),
primarily as a result of the Group’s acquisition of Talbot
and Muir and Dunstan Thomas in 2020.
The other material cash outflow that the Group incurs is
in respect of IT and in 2021 this amounted to £4.7m
(2020: £3.5m). This reflects not only the cost of
supporting the core IT infrastructure across the Group’s
multiple office locations but also the amount of
investment in technological improvements to the SIPP
administration platform and the programme of these
improvements is expected to continue into 2024.
As previously announced, the Group is implementing
a strategic system change which will see the upgrade of
the existing Navision platform used by the majority of
the Group and the subsequent migration of SIPPs
administered on other platforms used within the Group
onto this upgraded Navision administration platform.
By 2024, this is anticipated to yield annual cost savings
of £1.2m.
The cost of undertaking regulated activities continues
to increase and for the year ended 31 December 2021
the Group’s cost increased to £2.1m (2020: £1.7m) from
the combination of regulatory fees, levies and
insurance. The Group considers this cost to be largely
uncontrollable in nature.
Finance costs relating to interest payable on banking
facilities increased by £0.2m year on year following the
re-negotiated credit facilities with Santander to finance
the acquisition of Dunstan Thomas. Borrowings
continue to be repaid in line with the scheduled terms
and the covenants required by the bank are well
covered. Interest on the debt during the year accrued at
a rate of 2.25% over the London Interbank Offered Rate
(“LIBOR”). LIBOR was replaced by the Sterling Overnight
Indexed Average (“SONIA”) on 1 January 2022 and our
credit facilities are now benchmarked against this rate.
The Group continues to take steps to improve its
adjusted operating margin through a combination of
revenue enhancements and operational efficiencies,
balanced with continued investment back into the
business and the provision of a high quality service to
our customers. The adjusted operating margin has
decreased during the year, impacted by the increase in
non-controllable regulatory costs and more materially
by the pressure that the low interest environment has
had on interest income. The Group has sought to
mitigate its sensitivity to interest income through an
increase in annual fees on Full and Mid SIPPs which were
effective 1 February 2021 and a full year’s benefit of
these increases will be enjoyed in 2022.
Adjusting Items
As outlined above, ‘Adjusting Items’ are classified as
such when the nature and quantum of the income or
expense is significant and arises from a business event
or activity that does not form part of usual day to day
operations. Examples of such items include acquisitions,
office relocations and restructuring activities. Adjusting
items for the year can be broadly categorised into
several core elements.
Acquisition related items
Costs of £133,000 (2020: £1,330,000) associated with
the acquisitions of Dunstan Thomas and Talbot and
Muir, were recognised during the financial year as
outside of the operating cost base of the Group. In
addition to these costs, a net credit of £991,000 (2020:
debit of £357,000) was recognised in respect of
10 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Chief Financial Officer’s review
continued
movements in the deferred consideration payable
(£1.9m reduction) and the discount unwind (£0.9m
expense) associated with the acquisitions of Dunstan
Thomas and Talbot and Muir. The considerations are
contingent of the business performance post
acquisition and the underperformances in Dunstan
Thomas in the year led to the reduction of the liability.
Further movements in both the aggregate amount of
deferred consideration payable and the unwind of
discount associated with each acquisition are expected
to recognised in the current financial year ahead of the
conclusion of earn out period provisions.
Other M&A related costs of £1,401,000 (2020: £136,000)
relate primarily to costs associated with a corporate
transaction which did not subsequently proceed during
the period. The transaction was potentially
transformational for both parties, the partner operating
in a similar market to Group, and demonstrates the
Board’s ambition for growth. The costs incurred reflect
the external advice received on the proposed
transaction and no further costs are expected to be
incurred in relation to this in the financial year ending
31 December 2022.
Redundancy and restructuring costs
During the year ended 31 December 2021, the Group
progressed its strategy to deliver its Target Operating
Model through the centralisation of its commercial
property administration within one office location.
Redundancy costs associated with this centralisation
process, as well as costs associated with duplicated
staff efforts while work was transferred between offices,
totalled £626,000 in the year ended 31 December 2021
(2020: £1,091,000). No further costs are expected to be
incurred in relation to the centralisation of commercial
property administration in the current financial year.
In-specie contributions
As has been widely reported in the wider industry press,
HMRC has challenged all SIPP providers on whether
pension contributions could be made in-specie.
The Group has been in correspondence with HMRC
regarding processes and documentation in respect of
in-specie contributions for some time. In the year ended
31 December 2020, following a favourable outcome for
HMRC in an appeal against the First-Tier Tribunal’s
ruling in favour of another SIPP operator in a similar
case, and with further legal advice, the Group
considered it more likely than not that some cost
associated with this liability would be borne by the
Group and had recognised a provision of £402,000 to
reflect this. In the year ended 31 December 2021, the
Group continued to assess the liability and has revised
the provision to £320,000.
As referenced earlier in my report, the Group is
implementing its articulated strategy to transition its
entire SIPP administration onto a single administration
platform, paving the way to deliver our Target Operating
Model and the accompanying efficiencies. The first
phase of the strategy, being the development and
construction of a new digital portal, has already been
delivered in partnership with Dunstan Thomas. The next
phase, which is currently underway, will see the current
Navision platform which supports the majority of the
Group’s SIPPs upgraded to the Navision Business
Central platform. Once this upgrade has been
completed, the Group will be in a position for all of the
SIPPs held on other administration platforms to be
migrated onto the upgraded Navision Business Central
platform. Once this has been completed the Group
anticipates annual cost savings of at least £1.2m and,
as importantly, will provide the Group with the
opportunity to implement its Target Operating Model
based on this common technology.
Treasury solution implementation
During 2020, the Group invested in a new strategic
treasury solution with a global provider of back office
operational cash management software. The
investment was designed to innovate and improve the
Group’s treasury management function through the
provision of a system that provides a multibank facility
and further enhancements to this system which
supports the virtual pooling of customer cash has
resulted in a further charge of £45,000 in the year
ended 31 December 2021 (2020: £286,000). No further
costs are currently anticipated in relation to the system
during the current financial year.
Data cleansing provision
Up until the current year ended 31 December 2021,
a contingent liability was held in relation to the data
cleansing exercise with an estimated value of
£1,400,000. Management now consider that the
contingent liability is no longer applicable but that
a probable provision of £211,000 is required to settle
remaining costs as at 31 December 2021.
Amortisation and impairment of intangible
assets
Amortisation of the Group’s intangible assets
represented a charge of £2,933,000 for the period. We
had not taken any impairment charges against the
value of any SIPP portfolios recognised within intangible
assets (2020: £344,000).
Cash flows
Shareholder cash balances at year end were £31.9m
compared to £32.5m at the end of the previous
financial year.
Net cash inflows from shareholder operating activities
for the period were £14.3m (2020: £7.7m net cash inflow),
with the increase in cash generation primarily
attributable to improvements in working capital
management.
A combination of the investment in intangible assets,
equity dividends paid and repayment of borrowings
during the year saw significant net cash outflows from
investing and financing activities.
Suffolk Life Annuities
Part of the Suffolk Life Group of Companies, Suffolk Life
Annuities Limited, is an insurance company that writes
SIPP Products as insurance contracts. These are all
non-participating investment contracts and so the
Group does not bear any insurance risk. As the
policyholder assets and liabilities are shown on the
balance sheet of Suffolk Life Annuities Limited, these
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 11
ST R AT EG I C R E P O RT
continued
Chief Financial Officer’s review
continued
Financial Position
The Group increased net assets by 1.7% to £81.6m as at
31 December 2021 (2020: £80.2m), and reduced
shareholder cash reserves slightly from £32.5m to
£31.9m over the same period.
As at 31 December 2021, the Group had net shareholder
cash (after debt) of £12.0m (2020: £8.8m).
The Group adopted the provisions of IFRS 16, accounting
for leases, for the accounting period commencing
1 January 2019. The effect of this on our financial
performance is not material although the impact on the
Group’s balance sheet has been to increase Non-current
assets and Current/Non-current liabilities. It should be
noted that our principal lenders exclude the impact of
IFRS 16 when calculating our banking covenants. We
have also received confirmation previously from the FCA
that the provisions of IFRS 16 do not need to be taken
into account in our regulatory capital calculations.
Outlook
The Group’s profitability is not directly linked to market
performance and therefore the growth in our SIPP
numbers provides more visibility and less volatility of
earnings, combined with discipline over our controllable
cost base. In 2022, we expect the combination of SIPP
revenue growth, improved performance by Dunstan
Thomas and a positive impact on the Group’s interest
revenue following recent changes, to materially improve
top line growth, and we will maintain careful cost
discipline whilst supporting investment in our stated
growth strategies.
Dan Cowland
Chief Financial Officer
31 March 2022
also show on the Group balance sheet on consolidation.
Assets in the SIPPs administered by the rest of the
Group are held in trust and not under insurance
contracts and therefore do not need to be included on
the balance sheet. As the policies are non-participating
contracts, the customer related assets and liabilities in
Suffolk Life Annuities Limited match. In addition the
revenues, expenses and investment returns of the
non-participating investment contracts are shown in
the consolidated statement of comprehensive income.
Again, these income, expense items and investment
returns due to the policyholders are completely
matched. An illustrative balance sheet as at
31 December 2021 showing the financial position of the
Group excluding the policyholder assets and liabilities is
included as supplementary unaudited information after
the notes to the financial statements. An illustrative
cash flow on the same basis has also been provided.
Employee Benefit Trust (“EBT”)
The EBT continues to be used to acquire shares in the
Group in the open market to satisfy future vesting of
options and long term incentive awards. The EBT is
funded by loans from the Group. As at 31 December
2021, the EBT held 488,296 shares in Curtis Banks Group
PLC (2020: 261,276). A number of options awarded under
the Company’s SAYE schemes vested during the year
and awards were made from the shares held by the EBT.
The financial statements of the EBT are consolidated
within the overall Group financial statements and these
shares are shown on the balance sheet of the Group as
Treasury Shares and are included within total equity.
Capital requirements
The Group’s four (2020: four) regulated subsidiary
companies submit regular returns to the FCA and the
PRA relating to their capital resources. At 31 December
2021 the total regulatory capital requirement across the
Group was £15.1m (2020: £15.2m) and the Group had an
aggregate surplus of £17.0m (2020: £17.2m) across all
regulated entities. In addition to this, it is Group internal
policy for regulated companies within the Group to hold
at least 130% of their required regulatory capital and
this has been maintained throughout the year.
Three (2020: three) of the principal trading subsidiaries
of the Group are regulated by the FCA and are subject
to the relevant capital adequacy rules. The fourth (2020:
fourth) regulated entity Suffolk Life Annuities Limited
(“SLA”), being an insurance company, is subject to
Solvency II rules and it’s capital requirement is
determined by the Standard Formula as set out in the
Solvency II directives.
Full details of SLA’s capital position are set out in the
Solvency and Financial Condition Report published
annually on the Group’s website.
12 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
STRATEGIC REPORT
continued
Principal risks and uncertainties
The risks faced by the Group have been fully assessed
and a robust governance and risk management
structure is in place. A number of Governance
Committees are in place in the Group, which provide
dedicated focus and attention on the key risks relevant
to each committee. Each Governance Committee has
responsibility to feed into the comprehensive group risk
register, which is regularly reviewed and updated. The
risk register sits alongside the dedicated risk monitoring
and management system, where appropriate controls
and mitigating actions have been agreed and are
regularly monitored for the risks identified. Further
actions are identified and tracked through to
completion where the level of residual risk remains
above the target threshold set.
The principal risk categories that would adversely affect
the activities of the Group are set out below:
1.
Strategic risks
Strategic risks are those that are affected or
created by the Group’s business strategy and
strategic objectives, including risks in relation to
acquisitions.
The material risks in relation to completed and
potential future acquisitions include:
• Unanticipated litigation or claims against the
Group, leading to increased costs to deal with
and defend the claims along with the impact
upon management time and focus.
• Unexpected integration costs and
unanticipated diversion of management
time and focus and other resources leading
to an inability to integrate businesses in a
cost–effective and timely manner.
•
•
The acquired businesses do not achieve the
levels of profitability or earnings required to
justify the investment made by the Group.
Levels of new business, transactional fees or
other income sources do not achieve the
expected levels to meet the level of revenue
expected by the Group.
Mitigation
The Group Risk, Audit & Compliance Committee
acts under a delegated authority from the Group
Board to manage the Group’s risks and ensure an
appropriate framework is in place for the
identification, assessment and management of
material risks. Relevant Group Governance
Committees monitor and track progress made
and potential impacts in relation to strategic
objectives. The Group carries out thorough due
diligence on all potential acquisitions using
internal expertise and external resources where
considered necessary. Appropriate warranties and
indemnities are obtained from the vendors and
where it is deemed commercially appropriate
consideration is partly deferred to cover any
potential issues arising from the acquisition.
Appropriate insurance cover is arranged to cover
past events in businesses being acquired.
2. Regulatory risks
The Group operates in a highly regulated and
specialist industry and therefore is susceptible to
any significant regulatory or legislative policy
changes from a variety of regulatory bodies, or
from a change in the way existing legislation or
regulation is interpreted by a regulatory body. Any
changes will influence the overall framework for
the design, marketing and distribution of
products, the acceptance and administration of
business, and the regulatory capital that is
required to be held.
The key risk here is interpretation and
implementation by the Group of regulatory
change and what the new rules entail.
Judgements and decisions must be made to
ensure change is implemented and while detailed
internal assessment and analysis will be
undertaken and further external support obtained
as required from legal professionals, trade bodies
and others in the market, there will always be
a small residual risk of misinterpretation of the
intended or existing rules. There is a risk that
a significant regulatory change may be
introduced that would have a detrimental impact
upon the business model of the Group. In addition,
if unexpected regulatory changes are introduced
at short notice, or if the implementation of
regulatory change is not managed in an effective
manner, this could impact the capital and
regulatory position of the Group in the short term.
Mitigation
An internal buffer of at least 30% over the required
capital is maintained to ensure regulatory capital
requirements can be maintained in the event of
unexpected regulatory changes. A Group
Regulatory Change Committee is in place, which is
responsible for the initial identification and review
of new regulatory publications applicable to the
Group and for undertaking horizon scanning for
potential future regulatory developments. The
Group is also able to seek external advice as
required to support the analysis and
interpretation of regulatory change. This includes
external accountancy and legal firms and the
wider financial community via membership of
trade bodies. Ongoing compliance monitoring and
internal audit activity is undertaken to review
processes, procedures and documentation to
ensure this is in line with regulatory and legislative
requirements and expectations. Significant
regulatory changes are implemented through
a formal change project management structure
to provide assurance that the requirements are
implemented correctly and within the required
timescales.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 13
ST R AT EG I C R E P O RT
continued
Principal risks and uncertainties
continued
3.
Interest on client funds
Interest received on cash balances is used to help
meet the annual running costs of SIPP plans and,
whilst previously this has been shared with
customers on a discretionary basis in line with
common industry practice, we are now committed
to how we share the interest on SIPP bank account
balances by reference to the Bank of England bank
rate. There is a risk that a change in prevailing
interest rates or rates paid to customers may
materially reduce the margins earned by the group
in respect of customer balances administered.
From time to time, the Group may lock into fixed
term rates of interest on customer balances that
offer a higher return. To the extent that the Bank of
England bank rate decreases following the
commitment to such fixed terms, the amount of
interest shared by Curtis Banks to its customers
may reduce.
Mitigation
To minimise this risk, the Group Asset and Liability
Committee continually monitors all customer
deposits and the terms of those deposits to
ensure any risks from changing interest rates are
minimised. This is partly achieved by varying the
maturity dates of term deposits. There will always
be a residual risk where the Group commits to a
quarterly interest rate to its customers and there
is a subsequent change in either the Bank of
England bank rate or the annualised rate of
interest return achieved by the Group although
this is not considered to be material, especially
given the anticipation of further Bank of England
interest rate rises following three recent increases
in December 2021, February 2022 and March 2022.
4. COVID-19
As at the date of approval of these financial
statements there remains uncertainties over how
the COVID-19 outbreak will continue to impact the
industry, recognising they have begun to reduce.
The main risks to the Group are considered to be
staff welfare and maintaining continuity of
service for our customers. All SIPP fees levied are
fixed sterling charges and are not a percentage
based charge on the value of the underlying
assets held within the SIPP, so the Group is not
directly affected by any volatility in the financial
markets arising from COVID-19.
Mitigation
The Group continually reviews guidance from the
UK government and the NHS and ensures that all
staff are kept regularly updated and fully
informed in order to reduce the risk of spreading
the virus. While the Covid-19 restrictions have been
lifted in England by the government, the group
has decided to continue being cautious and be
mindful of our colleagues. Self-isolation for
colleagues with symptoms or who have tested
positive remains the Group policy. The Group has
always maintained a comprehensive Business
Continuity Plan (“BCP”), and this was successfully
utilised during 2020 and 2021. The BCP caters for
a number of scenarios, including those where high
numbers of staff or all staff are unable to access
individual or multiple offices. Current measures to
protect staff attending office locations include.
• Clear, regular guidance to staff in respect of
their responsibilities and roles
•
•
Additional hygiene and sanitiser stations
installed in all office locations
Identifying and validating key process owners
• Widening remote access from core to all staff
•
Implementation of a Group ‘Agile Working
Policy’ to support a mixture of office based
and home based working
The Group is a financially sound business with
capital and liquidity well in excess of the minimum
regulatory requirements, which has helped to
support the development of the above measures.
5. Dependence on key executives and
personnel
The Group’s future success may be substantially
dependent on the continued services and
performance of its Executive Directors and the
Senior Management team and the Group’s ability
to continue to attract and retain highly skilled and
qualified individuals.
Mitigation
To minimise this risk the Group seeks to recruit
and maintain high quality experienced staff by
offering market competitive packages. These
packages are enhanced by the addition of share
based incentive and reward schemes for all key
staff. In addition, the Group offers structured
training for staff and works with staff to ensure
that there is a favourable work environment that
attracts and retains staff. The Group has also
been officially recognised as an accredited Living
Wage Employer in February 2022.
6. Reliance on Information Technology
systems
The Group requires complex and extensive IT
systems to run its business. Delays in any
modifications to its systems or a failure of existing
systems could lead to business disruption with a
resultant material adverse impact on the Group.
System enhancements are continually being
assessed and taking place.
14 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Principal risks and uncertainties
continued
Mitigation
To minimise this risk the Group has project teams
that continually evaluate and update current
systems, and implement new or enhanced
systems where considered necessary. A full risk
assessment is carried out before significant
changes to systems and the acquisition of our key
technology partner, Dunstan Thomas, will
strengthen this process. Business continuity is
assured by thorough full back up of data and
comprehensive data recovery procedures being in
place.
7. Operational Risk and Internal control
systems
Operational risk relates to the risk of loss resulting
from inadequate or failed internal processes,
people and systems, or from external events.
The Board believe that the Group has in place
appropriate regulatory, financial, management
and internal controls which are adequate to
ensure that the Group meets its regulatory
obligations and its contractual commitments to
customers and other third parties, as well as
appropriate protections against detrimental
activities such as fraud, theft, misuse of funds,
money laundering or other unauthorised or
criminal activities. In the event that any such
controls fail this may lead to a material adverse
effect and lead to claims against the Group.
Mitigation
The Group has a clear and robust governance
framework in place to manage and mitigate the
risk faced by the business. Within this structure,
the Group Operational Risk & Compliance
Committee has responsibility for managing the
operational risks faced by the business.
This delegation of authority, along with escalation
of key risks, provides clear oversight to the Group
Risk, Audit & Compliance Committee and Senior
Management of the key risks across the business.
The low tolerance towards operational risk is
embedded in the culture of the group, alongside
the desire to ensure fair customer outcomes are
achieved.
The Group operates a three lines of defence model
within this framework, with responsibility and
accountability for risk management assumed by
the following:
•
First line: Senior management and those
individuals in sales and operational roles are
responsible for managing risks, by developing
and maintaining effective internal controls to
mitigate risk. First line systems and controls
are in place to ensure business operations are
carried out in compliance with internal policies
and procedures.
•
•
Second line: The risk, compliance and
anti-money laundering functions overseen by
the Group Operational Risk & Compliance
Committee maintain a level of independence
from the first line. They are responsible for
providing oversight and challenge of the first
line’s day-to-day management, through
compliance monitoring and reporting of risks
to both Senior Management and the Group
Risk, Audit & Compliance Committee.
Third line: Internal Audit are responsible for
providing independent assurance to both
Senior Management and the Group Risk, Audit
& Compliance Committee as to the
effectiveness of the Group’s governance, risk
management and internal controls.
A comprehensive risk register is maintained by the
Group, which identifies a number of operational
risks faced by the business and identifies the
controls currently in place to mitigate these risks,
along with any further actions required to reduce
the level of risk to the agreed target level. Risk
events are recorded and appropriate root cause
analysis undertaken to identify and address
potential systemic issues and a range of relevant
management information is produced and
regularly analysed to support the measurement
and tracking of operational risk.
Infrastructure security
Infrastructure is considered in relation to both the
environment for staff and the assets that store
data. The business model is heavily reliant on the
security and physical robustness of IT systems
and the reliability of the chosen software
providers. The Group’s software and systems are
at risk from computer viruses, and other breaches
of cyber security. While the Group takes the
security of its computer systems very seriously,
computer viruses or breaches of cyber security
may cause the Group’s systems to suffer delays or
other service interruptions and result in claims
against the Group.
Mitigation
The Group has an extremely low appetite toward
any compromise to either the staff that utilise the
infrastructure of the Group and the actual
infrastructure itself, and as such these risks are
closely monitored. The Group carries out extensive
testing of all computer systems on a regular basis
to ensure security is maintained and it also makes
use of the latest technology and software to
ensure there is appropriate cyber security in place.
This includes the interception and rejection of a
high volume of incoming emails, monitoring and
staff training. Cyber insurance is also in place and
includes provision to support the Group in the
timely recovery of impacted systems in the event
8.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 15
ST R AT EG I C R E P O RT
continued
Principal risks and uncertainties
continued
robust action plans in place to track, report and
bring to resolution, as described in further detail
below.
Mitigation
The Group regularly considers and assesses the
key risks posed by the commercial property
portfolio, and these are monitored as part of
Group Property Oversight Committee, acting
under delegated authority. This, along with
escalation of key risks, provides clear oversight to
Senior Management of the key risks across the
commercial property portfolio. The Group has also
sought external legal expertise to ensure the
documentation, and underlying responsibilities in
relation to a commercial property, are set out and
are clearly defined between the Group and other
involved parties (tenant, customer, property
manager, etc.) to prevent future legal dispute. The
nature of physical commercial property is that all
risks that are known are considered, but the Group
are aware that each commercial property is
unique and there will exist some residual risks
(such as legal, unexpected cost or market risk)
that cannot be fully mitigated, and some will sit
outside of the control or remit of the Group
responsibilities. These have been accepted as an
inherent risk to continuing to offer commercial
property investment to customers, and are
mitigated as far as possible through a robust due
diligence process prior to accepting any property
investment. Monitoring of the commercial
property portfolio is conducted on an ongoing
basis to ensure there is minimal deterioration in
the quality of the portfolio, and to safeguard the
interests of customer’s investments.
of a cyber incident occurring. Key dependencies
are regularly monitored and assessed to ensure
mitigation procedures are in place should a major
risk crystallise. There are also controls in place to
mitigate the people risk to Group infrastructure,
including measures such as defining clear roles
and responsibilities, succession planning for
middle-level staff and ensuring competency for
roles through relevant training.
9. Non Standard Investments (“NSIs”)
Pension Schemes administered by the Group are
permitted under HMRC rules to hold certain NSIs
within them. Such investments are considered to
represent a higher level of risk than standard
investments, such as quoted equities. As high risk
investments, NSIs are potentially far more volatile
than standard investments and customers may
look to the Group, as their pension provider, for
compensation in the event that a NSIs fails or
suffers a significant decrease in value.
Mitigation
The proportion of the plans under administration
of the Group that hold NSIs is small and full due
diligence procedures are carried out on all NSI’s
before they are accepted into a pension scheme.
This will also incorporate consideration of the
circumstances of the individual looking to hold the
NSI within their pension scheme. The Group has
a clearly defined statement of allowable assets,
setting out the categories of NSIs which may be
accepted, subject to the completion of robust due
diligence, and those that will not be considered at
all. New business is primarily only accepted from
regulated financial advisers, who have a duty to
ensure that any NSIs that are recommended are
suitable for the relevant pension scheme. Once
held, NSIs are monitored annually by the Group’s
technical investments team to consider whether
the NSI remains acceptable. In addition, the Group
carries high levels of professional indemnity
insurance to protect against any claims.
10. Commercial Property
The Group acts as landlord for a large volume of
commercial properties held within Group pension
schemes. As the size of the commercial property
portfolio has increased over time, the Group has
been required to develop its systems and controls
to meet the needs of the portfolio as they arise,
including understanding the key risks posed by
becoming legal owner of the commercial property
assets on behalf of its customers.
We understand the primary risks to be the
management of common areas and
residual/vacant parts of properties, and the
incoming regulatory changes regarding Minimum
Energy Efficiency Standard (MEES), due to come
into force in April 2023. Both of these risks have
16 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Environmental, social and governance (ESG)
Our people and our communities
At Curtis Banks we are committed to investing in all our
800+ employees, making their lives fairer, encouraging
their diversity and providing them with equal
opportunities. It’s important that our employees who
provide our customers with their pensions are motivated
and supported at work and in their communities.
In 2021 we are pleased to highlight a number of
achievements.
•
•
•
•
•
We published our Gender Pay gap report. We are
transparent in our reporting and we work hard to
address any gender gaps we find.
We introduced the UK Living Wage for all our
employees and on site contractors in recognition
that a hard day’s work deserves a fair day’s pay.
We invested £80,000 in Learning & Development
of our employees.
Our employees continued to support their
communities through volunteering and charitable
donations. In total, we volunteered 280 hours,
raised £3,764.79 in 2021 for three mental health
and wellbeing charities and supported employees
with £6,378.11 of matched fundraising.
The Group actively monitors recruitment,
development and promotion to ensure that we
provide a fully inclusive culture with policies and
practices that exceed statutory requirements
wherever possible. Please see page 17 for further
details on this policy.
Staff initiatives and interaction
Management engage closely with staff to determine
their needs and initiatives are implemented where these
benefit the majority of employees. The Group Leadership
Team, which supports the Executive Committee and
Group Board, have implemented a number of initiatives
for staff of all levels and continue to interact with, and
listen to, feedback from staff to ensure Curtis Banks is
seen as a forward-thinking and flexible employer.
Newsletters containing information about both Group
developments and social events are provided to
employees on a regular basis and personal
achievements from staff are actively shared, such as
exam successes, promotions or completion of personal
challenges such as marathons or other competitive
events. The Group has an established Employee Forum
which supports staff in matters of concern and can
assist in communications and matters with senior
management. The business provides a Save As You Earn
(“SAYE”) share option scheme for the benefit of all eligible
employees to encourage active participation and vested
interest in the continued success of the Group.
Staff Training
Staff are actively encouraged to train and develop
through both structured and ‘on the job’ training. Staff
are supported in these, both financially and through a
dedicated Learning and Development department. The
Group has an approved list of professional
qualifications that staff are sponsored to study towards
and are given study leave to help and motivate them to
progress their career within the organisation.
Employment of staff with protected characteristics
The Group’s approach to recruitment, promotion,
training or any other benefit will be on the basis of
aptitude and ability, with all employees helped and
encouraged to develop their full potential in order to
maximise their contribution to the business.
The development of all our employees is integral to our
corporate goals and we look to maximise individual
contribution at all levels within the organisation by
providing appropriate opportunities for personal and
professional development. Curtis Banks aims to
establish and maintain a culture that values lifelong
learning and development amongst our employees.
Training functions are equipped to meet any special
needs of individuals with disabilities and consideration
is given to the modification and adaptation of facilities
and the provision of special aids or equipment.
The Group actively monitors recruitment, development
and promotion to ensure that we provide a fully
inclusive culture with policies and practices that exceed
statutory requirements wherever possible.
Sponsorships and partnerships with charities
and community organisations
Working with our employees we support a number of
initiatives in communities important to our business. In
2021 we were pleased to support the following:
•
•
•
•
Sea Change Sport – Through our corporate
sponsorship we are proud to have partnered with
Victoria Evans and her Sea Change Sport
campaign in her world record attempt to be the
fastest female to solo row across the Atlantic to
raise funds for Women in Sport providing equal
opportunities for women and girls in sport in the
UK. We are delighted to confirm that on 24 March
2022 Victoria successfully completed her
challenge and broke the world record by over
a week arriving at her destination Port St Charles,
Barbados in 40 days and 19 hours. An incredible
achievement, making a real difference for women
and girls in sport in the UK.
We continued to support three designated
charities from the Mental Health & Wellbeing
sector in 2021 being Lighthouse in Ipswich, the
Teenage Cancer Trust in Bristol and the Dundee
Wellbeing Works charity, and we will continue this
support until December 2022.
Along with raffles and other fundraising events, we
held a Mental Health & Awareness week and the
Group-wide Olympic Challenge which was a great
success. We encouraged staff to get out, to get
active and to record the miles they walked, ran,
swam or cycled each week and all staff that
participated received a Curtis Banks Olympic
Challenge Gold medal.
All offices regularly hold events for their chosen
local charities and staff are encouraged to
fundraise for other charities that may have
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 17
ST R AT EG I C R E P O RT
continued
Environmental, social and governance (ESG)
continued
•
provided them, their friends or family with support.
As well as organising and funding the events,
Curtis Banks also provides further support through
an annual matching contribution to the relevant
charity by matching employee fundraising by up
to £250 per person.
Chris Read, Chief Executive Officer of Dunstan
Thomas, spearheads the charity Singing Gorilla
Projects (“SGP”). SGP funds and manages
community-based projects in remote parts of
Uganda that improve the welfare of communities
and enriches the lives of individuals. SGP builds
and manages health facilities, builds schools and
sponsors children to continue their education,
install solar energy systems and funds water
delivery programmes with water tanks and clean
water filtration systems. In 2021, Chris was
commissioned by Retirement Planner to write
a weekly opinion piece on the thoughts of
a business leader during this time. These 42 pieces
have been authored as short essays into a book
called ‘42’. Dunstan Thomas supported the
publication of this book, and the sales proceeds
and donations will go to SGP. We look forward to
supporting SGP further in 2022 and beyond.
Curtis Banks and addressing the challenge of
Climate Change
As a SIPP Provider, we take instructions from customers
and financial advisers to hold assets in their pension
funds. We recognise that as a financial services provider
we must directly and indirectly reduce global warming
and temperature rise driven by CO2 emissions.
We are doing this in three ways:
•
•
•
Through managing down our own emissions as
a business, using renewable energy sources to run
our own business and what we can’t reduce we will
offset. Details of which are in the SECR report below.
We are starting to understand how cash assets
placed with deposit takers can have a more
positive impact on society and the climate.
Many of our customers hold commercial
properties in their SIPPS. We are seeing strong
evidence that buildings with better environmental
performance demand higher rental yields, lower
energy costs for the occupier and will mitigate
ever tightening environmental regulations in the
UK. We are currently considering how we can
encourage more of this from our customers.
Climate-related Disclosures
We recognise that our administration operations result
in emissions to air and water, and the generation of
waste. It is our aim and policy to do more than just
comply with legislation, and we continue to reduce the
environmental impacts of our business and operate in
an environmentally responsible manner.
This aim applies to all of the Group’s office locations,
including operational management, location
management and procurement. Will Self, our CEO,
manages the Board’s responsibility for ensuring that
sufficient resources are made available to enable the
business to achieve our Environmental & Sustainability
objectives, targets and policy implementation. This is
supported by the Chief Information Officer, who
Curtis Banks is delighted to have sponsored Victoria Evans of Sea Change Sport, who set a new world record to become the
fastest female to solo row the Atlantic in March 2022.
18 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
ST R AT EG I C R E P O RT
continued
Environmental, social and governance (ESG)
•
•
•
•
•
•
•
•
•
•
•
continued
assumes the regulatory responsibility for monitoring
Climate Risk exposure for Suffolk Life Annuities Limited.
The Group Management Team and location site Office
Management have the day to day responsibility for
ensuring that the requirements of this policy are
followed and that monitoring is carried out to ensure
effectiveness of the objectives. All Curtis Banks
employees are expected to support the aims and
objectives of the Curtis Banks Environmental &
Sustainability Policy.
Objectives:
The overall objectives of the policy are as follows:
Make efficient use of natural resources by
conserving energy and water, minimising waste
and implementing recycling initiatives wherever
possible
Meet our duty of care requirements in relation to
waste by ensuring the safe keeping,
transportation and disposal of waste
Use recycled products constructed of recycled
materials whenever commercially justifiable
Keep work transport use to a minimum and to
encourage car sharing where appropriate
Wherever possible, work with suppliers that
recognise and reduce the environmental impact of
their products and transportation
•
•
•
•
•
•
•
Monitor Curtis Banks’ electricity and water
consumption in our offices on a monthly basis;
look to introduce energy efficient systems and
plant and equipment such as smart sensors
where practical to further reduce on-site
electricity and water usage;
Ensure that where appropriate all contractors
taking waste from the site have the correct waste
transfer notes/waste carrier licenses and that
certification of safe destruction is issued;
Actively promote and encourage a positive recycling
ethos across the Curtis Banks Group and aim to
recycle over 55% of all location waste each year;
All plant and equipment must be inspected and
fully serviced regularly in line with
recommendations to ensure that it is safe and
working efficiently and correctly;
Ensure that our staff are engaged and given
regular Environmental initiative updates on
a quarterly basis and more frequent location
specific initiatives;
Implement carbon capture scheme to record our
paper usage and offsetting with planting of trees;
Continually review environmental innovations and
where possible introduce these to further improve
environmental management.
Include environmental considerations during the
procurement process for new services and
equipment
Monitoring & Reviewing:
Progress against these objectives will be monitored
through:
Ensure staff are engaged and aware of the Curtis
Banks Group Environmental & Sustainability
objectives and how they can support and assist in
meeting these targets
Ensure that staff are updated with Environmental
information, such as Recycling initiatives and
Recycling incentive
Where possible adhere to the “waste hierarchy”
through prevention, reduction, re-use and
recycling
Use the most environmentally friendly cleaning
products whenever possible
Curtis Banks Group will meet any legal energy
management legislation requirements and
endeavour to meet best practice guidance
Targets:
To achieve our aims, we have set ourselves the following
targets:
•
•
To weigh, monitor and record all waste that leaves
our office locations. This is to include all landfill,
recycled and confidential waste, batteries,
fluorescent tubes, light bulbs, ink cartridges and
toner, corporate clothing and IT equipment;
To ensure air conditioning engineers complete the
FGAS register and that we have access to this
information, including the record of any lost
fugitive gases;
•
•
•
•
•
Annual management review of this Environmental
& Sustainability policy and any associated
environmental procedures and processes carried
out by the location Office Management;
Continual review of the procedures and processes
carried out across the entire Curtis Banks Group,
achieving a consistent approach across all
business areas;
Staff encouraged to take an active responsibility,
to put forward ideas and to encourage colleagues
to recycle and to report any facility faults
immediately;
Staff will be given regular Environmental updates
and always have the opportunity to put forward
new ideas and innovations;
Reviewing all new legislation and best practice
guidance.
Streamlined Energy and Carbon Reporting
(“SECR”)
Curtis Banks Group has adopted SECR for the second
year in the year ended 31 December 2021. The Group has
elected 2020 as its reference year and comparative
data from 2020 is set against the current financial year.
Methodology
The Group has identified the areas relevant to its
contribution to greenhouse gases (GHGs) as being the
areas of business travel and electricity usage in office
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 19
ST R AT EG I C R E P O RT
continued
Environmental, social and governance (ESG)
continued
premises. On this basis, the Group has collated data
relating to these areas for the full year ended
31 December 2021. The Group has used average engine
size and fuel consumption in order to arrive at an
imputed annual contribution to GHGs through car
mileage related to business travel. Data on average
GHGs per kWh has been sourced from monthly invoice
records, which has then been applied against the
Group’s actual kWh usage in order to arrive at GHGs
generated through office based operations. The
imputed GHGs have then been divided by annual gross
revenue in order to arrive at an intensity ratio for the
Group. The data and calculations are presented in the
table below:
Year ended Year ended
31 December 31 December
Global greenhouse gas emissions and energy use data for the period 1 January to 31 December 2021 2020 Restated
Energy consumption used to calculate emissions (kWh):
Energy consumption related to business travel
Business travel in private vehicle (miles travelled) 46,504 13,089
Calculated total CO2 emissions related to business travel - metric tonnes 14.9 4.2
Energy consumption related to office activities
Energy consumption used to calculate emissions (kWh) 2,216,256 906,768
Average CO2 per kwh - tonnes 0.00021233 0.000203
Calculated total CO2 emissions related to office electricity usage - metric tonnes 470.6 184.1
Total GHGs generated through all activities – tonnes CO2 458.5 184.3
Percentage of CO2 from office activities vs total 96.9% 97.8%
Percentage of CO2 from business travel vs total 3.1% 2.2%
Intensity ratio: Tonnes CO2e/Annual gross revenue 0.0000077 0.0000034
Intensity ratio: Tonnes CO2e/Average FTE 0.5864 0.2640
Intensity ratio: Tonnes CO2e/Customer policy 0.0061 0.0022
The relatively low GHGs generated in the year ended
31 December 2020 was due to the significant reduction
in business travel and lower office usage as staff work
from home for extended period of time. The significant
increase of total GHGs generated in the year ended
2021 compared to the prior year is primarily driven by
business activities gradually resuming to normality
from the easing of COVID-19 pandemic restrictions, as
well as a full year inclusion of Dunstan Thomas and
Talbot and Muir figures.
Actions taken by the Group in 2021
Due to the nature of the Group’s business operations,
there is not a great burden of business travel in terms of
carbon footprint. Per the table above, the greatest
source of CO2 generation in the business relates to office
based activities, primarily electricity usage in office
premises. Travel related emissions as a percentage of the
total equate to only 3.1% whereas CO2 generated from
office based activities equates to 96.9% of the total.
As referred to in the CFD section on pages 18 to 20, the
Group has taken considerable and ongoing measures in
order to reduce CO2 outputs relating to office activities.
Further information around this is detailed on page 19.
Additional specific energy efficiency actions taken
across the Group are detailed below:
•
Across all office locations, the Group is actively
pursuing a strategy to reduce power usage of our
technology equipment. We have already made a
step change in our approach to reducing power
consumption for our desktop computers and this
remains a key part of our strategy moving
forward. This not only include the switch from
conventional desktop computers to more energy
efficient ones, but also implementing smart
processes and controls which for example turn off
idle machines overnight. These changes form part
of an on-going strategy to ensure that
environmental impacts are considered in our
technology refresh programme through
consolidation, reducing packaging waste and
moving to devices with a lower power
consumption wherever practical;
A working group was established in 2020 and
remains active in 2021 to ensure compliance with
the ESOS regulations. An external third party was
appointed to help undertake the required tracking
and reporting of energy usage. Display Energy
Certificates for the Ipswich and Bristol office a full
report for Dundee (as Display Energy Certificates
do not apply in Scotland) are included in the
submission to the Environment Agency and to
those within the business responsible for the
energy used by our buildings for consideration.
Further work is planned and remains agile on
ESOS in future as our understanding evolves;
Maintenance and monitoring of a new cooling &
heating system installed in 2020 which is 30%
more energy efficient at our Ipswich office;
Encouraging employees to adapt cycling to work
scheme by making it available to all colleagues as
well as providing secure bicycle storage at office
locations.
•
•
•
On behalf of the board
Dan Cowland
Chief Financial Officer
31 March 2022
20 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
G OV E R N A N C E
continued
Board of Directors
Will Self
Chief Executive Officer
Will joined Suffolk Life in 2003 having completed his first degree in
Oceanography at Southampton University. He completed his MBA from
Cranfield University in 2010 and was made a director of Suffolk Life in the
same year initially as Operations Director and subsequently as Product and
Operations in 2012. Will became Managing Director in 2013 and during 2015
was also CCO of Cofunds, a sister company within L&G. He led the strategic
review during 2015 which lead to the sale to Curtis Banks in January 2016. Will
joined the group board in 2016 as Deputy CEO before becoming Group CEO in
January 2019. Will was appointed to the FCA Smaller Business Practitioner
Panel in October 2020 and represents the life and Pensions sector within the
FCA. Will is also Vice Chair and a Trustee of East Anglia’s Children’s Hospice
(EACH) and lives in Suffolk with his wife and two young daughters.
Dan Cowland
Chief Financial Officer
Dan is a Fellow of the ICAEW, having qualified as a Chartered Accountant
with Ernst & Young in 1997. Having worked in EY’s Banking and Capital
Markets group, Dan moved to the WestLB owned Panmure Gordon business
where he spent seven years in various finance roles, latterly as the Head of
Finance. Dan performed senior finance roles at Lehman Brothers, Macquarie
Bank and Shore Capital Stockbrokers before being appointed to the Board of
WH Ireland plc in March 2014 as Finance Director. Dan joined Curtis Banks in
July 2019 as the Group’s Chief Financial Officer.
Jane Ridgley
Chief Operating Officer
Jane Ridgley joined the Board on 18 January 2019. Jane has many years’
experience of working for Legal & General plc, working closely with advisers
to deliver their customers’ needs in a sales and operational capacity.
15 years’ experience working directly with IFAs led her to take a role as
Investment Development Director in 2009. She then progressed to Product
Director, responsible for the design and development of workplace savings,
investment and product proposition. Jane joined Suffolk Life as Operations
Director in September 2013. Her role expanded to cover Human Resources in
March 2016 before assuming the role of Chief Operating Officer for the Curtis
Banks Group in April 2018.
Chris Macdonald
Non-Executive Chairman and Non-Executive Director
Chris was one of the founders of Brooks Macdonald Group plc where he was
CEO until 2017. He is a qualified investment manager and has worked in
investment management and financial services since the start of his career
in 1982 and has won several investment management awards. Chris is
Chairman of Catley Lakeman Ltd, a Director of Millfield and is an adviser to
a number of financial services companies and is an associate of the Institute
of Continuing Professional Development. Chris brings experience of
involvement with an AIM listed company for many years and knowledge of
the challenges and responsibilities towards all stakeholders attached to
being a listed company as well as bringing financial services industry
experience to the Group.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 21
G OV E R N A N C E
continued
Board of Directors
continued
Bill Rattray
Senior Non-Executive Director, Chairman of the Audit Committee and
Chairman of the Risk & Compliance Committee
Until 2019, Bill was Chief Financial Officer of Standard Life Aberdeen plc, one
of the world’s largest investment companies, having previously served as
Finance Director of Aberdeen Asset Management PLC since 1991. Bill is
a Chartered Accountant and brings strong financial skills and extensive
experience of the asset management industry, having spent significant time
as an Executive Director of a FTSE 100 company Bill brings a depth of
experience in dealing with shareholders and looking after their interests.
Jules Hydleman
Non-Executive Director and Chairman of the Remuneration Committee
Jules has over 16 years’ experience as a Non-Executive Director and
Chairman. Currently he holds Chairmanships of Equip Holdings Limited,
Gro-group International Limited and Cornwall Farmers Co-operative.
Previously Jules was Chairman of Innocent Drinks for 10 years from start up
until eventual exit. Jules brings to the Board a ‘non-industry’ outlook to the
activities of the Group and with a background in sales and marketing this
provides valuable input. Jules also provides experience that focuses on
remuneration policies based on performance and targets.
Jill Lucas
Non-Executive Director and Chairman of Dunstan Thomas
Jill has spent all her career in technology. She is currently undertaking a
digital transformation programme at US Healthcare system, Mass General
Brigham, prior to which she carried out a similar role at Unilever. Jill served as
Chief Information Officer at both Towergate Insurance and Belron
International and in her early career undertook many technology leadership
roles at Reuters (now Thomson Reuters), Barclays and Sainsbury’s. Jill is
currently a Non-Executive Director at National Savings & Investments (NS&I)
and joined the Board of Curtis Banks in January 2021. Jill is also the
Chairman of Dunstan Thomas.
22 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
G OV E R N A N C E
continued
Directors’ Report
The Directors present their annual report and audited
consolidated financial statements for the year ended
31 December 2021.
Business review
The principal activity of the Group continued to be that
of the provision of pension administration services
principally for Self-Invested Personal Pension schemes
(“SIPPs”) and Small Self-Administered Pension Schemes
(“SSASs”). The Group is staffed by experienced
professionals who all have proven track records in this
sector. The Company was incorporated in England &
Wales (registered no. 07934492).
An indication of likely future developments in the
business, Corporate and Social Responsibility, and risk
management of the Group is included in the Strategic
Report. Information on financial risk management is
disclosed within note 31 to the financial statements.
Results and dividends
The consolidated statement of comprehensive income
for the year is set out on page 42.
A final dividend in respect of 2020 results of 6.50p per
share totalling £4,337,571 was proposed and paid on
4 June 2021. An interim dividend in respect of 2021
results of 2.50p per share totalling £1,659,868 was paid
on 12 November 2021. A final dividend of 6.50p per share
is proposed and, if approved, will be paid to
shareholders on the register at the close of business on
6 May 2022. The shares will be marked ex-dividend on
5 May 2022 and the dividend paid on 1 June 2021.
Substantial Shareholders
At 1st March 2022 the Company had been notified of the following interests representing 3% or more of its issued
share capital:
No. of Ordinary shares Percentage Holding
Chris Banks 14,651,142 21.91%
Octopus Investments 8,081,710 12.08%
Odyssean Investment Trust 5,130,000 7.67%
Chelverton Asset Management 4,350,000 6.50%
Oryx International Growth Fund 4,225,000 6.32%
Artemis Investment Management 3,962,733 5.93%
Paul Tarran 3,408,521 5.10%
Canaccord Genuity Wealth Management 3,300,000 4.93%
Rupert Curtis 2,948,845 4.41%
Sally Curtis 2,331,413 3.49%
Unicorn Asset Management 2,030,465 3.04%
Related party transactions
Details of related party transactions are given in
note 35.
Independent Auditors
The independent auditors, PricewaterhouseCoopers LLP,
have indicated their willingness to continue in office,
and a resolution that they be re-appointed will be
proposed at the annual general meeting.
Directors
The directors of the company who were in office during
the year and up to the date of signing the financial
statements were:
Will Self
Jane Ridgley
Dan Cowland
Chris Macdonald
Bill Rattray
Jules Hydleman
Jill Lucas (appointed 19 January 2021)
Directors will seek re-election immediately following
appointment at the Company’s annual general meeting
and annually thereafter.
Directors’ indemnity
The directors had qualifying third party indemnity cover
totalling £20,000,000 during the year ended
31 December 2021 and up to the date these financial
statements have been approved.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 23
G OV E R N A N C E
continued
Directors’ Report
continued
Going concern
The Directors have prepared the financial statements
on a going concern basis, as in their opinion the Group is
able to meet its obligations as they fall due. This opinion
is based on detailed forecasting for the following
12 months based on current and expected market
conditions together with current performance levels. The
Directors have also considered the impact of a number
of severe but plausible events that could impact the
business, and the Directors believe the Group is well
placed to manage these business risks successfully. The
Group’s detailed financial forecasts show that the
Group should continue to be cash generative, maintain
a surplus over its regulatory minimum capital
requirements and be able to operate within the its
current financing arrangements. Accordingly, the
Directors continue to adopt the going concern basis for
the preparation of the Financial Statements.
Section 172 of the Companies Act 2006
A Director of a company must act in the way they
consider, in good faith, would be most likely to promote
the success of a company for the benefit of its
members as a whole, and in doing so have regard
(amongst other matters) to:
Risk Management
The Group provides important products to its customers
in a regulated environment. As the Group grows, its
business and risk environment will become more
complex. It is vital therefore that the Directors identify,
evaluate, manage and mitigate the risks the Group
faces, and that Directors continue to evolve their
approach to risk management. For details of the
Group’s principal risks and uncertainties and how the
Directors mitigate them please see pages 13 to 16.
Our People
The Group is committed to being a responsible business.
Our behaviour is aligned with the expectations of our
people, customers, community and society as a whole.
People are at the heart of our Group and, for our
business to succeed, we need to develop them and
manage their performance, while operating as
efficiently as possible. We must ensure that we share
common values that inform and guide our behaviour so
we achieve our goals in the right way.
We are an equal opportunities employer and it is our
policy to ensure that all job applicants and employees
are treated fairly and on merit regardless of ethnicity,
sex, marital/civil partnership status, age, disability,
religious belief, pregnancy, maternity, gender
reassignment or sexual orientation.
Business Relationships
The Group’s strategy includes organic growth,
acquisition and diversification. To achieve this the Group
develops and maintains strong customer and supplier
relationships. Culture, values and standards underpin
how the Group creates and sustains value over the
longer term and are key elements of how it maintains
a reputation for high standards of business conduct.
Please see the Group’s corporate governance principles
on page 26.
Community and Environment
The Group is committed to ensuring an environment
where collaboration and growth of all staff is seen as
being part of the fabric of day to day office culture. Also,
the Group encourages that any action that can be
taken to reduce its impact on the environment should
be considered. Please see more details of this on
pages 17 to 20.
Shareholders
The Board is committed to openly engaging with the
Group’s shareholders, as it recognises the importance of
a continuing effective dialogue, whether with major
institutional investors or with individual shareholders,
brokers or analysts. It is important to us that
shareholders understand the Group’s strategy and
objectives, so these must be explained clearly, feedback
heard and any issues or questions raised properly
considered. For further details on how we engage with
our shareholders please see page 28.
Regulators
The Group has an open and transparent relationship
with its regulators and engages with them both directly
and through a broad range of industry forums and
consultations. The Board encourages the engagement
with, and participation in, industry associations and it is
updated on legal and regulatory developments on an
ongoing basis.
Board oversight
The main methods by which the Directors exercise their
duties include the following:
• Board strategy days, which are held periodically,
to review the Group’s business model and strategy
to ensure the long term sustainability of the Group
and its ability to meet its stakeholder needs;
• Quarterly Board meetings are held throughout the
year and additional meetings are convened on an
ad-hoc basis to address time critical matters.
Through the course of 2021 the Board met
frequently, and as required, to manage corporate
transactions and the response to the COVID-19
pandemic;
• The Board’s risk management structure and
procedures set out in the Chairman’s Corporate
Governance report considers the potential
consequences of decision making over the
appropriate time horizons to manage any
potential risks to the Group or stakeholder groups;
• The Board carries out its direct shareholder
engagement through the annual general meeting,
communicating with investors including those
staff holding shares in the Group;
• External assurance is obtained through external
audit and the internal audits undertaken by
a specialist independent firm.
24 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
explain the group’s and company’s transactions and
disclose with reasonable accuracy at any time the
financial position of the group and company and
enable them to ensure that the financial statements
comply with the Companies Act 2006.
The directors are responsible for the maintenance and
integrity of the company’s website. Legislation in the
United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmations
In the case of each director in office at the date the
directors’ report is approved:
• so far as the director is aware, there is no relevant
audit information of which the group’s and
company’s auditors are unaware; and
• they have taken all the steps that they ought to
have taken as a director in order to make
themselves aware of any relevant audit
information and to establish that the group’s and
company’s auditors are aware of that
information.
On behalf of the board
Dan Cowland
Director
31 March 2022
G OV E R N A N C E
continued
Directors’ Report
continued
Principal decision making
The Group comprises two operating segments, being
pension administration and FinTech, each of which has
its own governance structure in place and these are
brought together by the Group’s Executive Committee
(“ExCo”). The Group’s governance framework delegates
the day-to-day operational responsibility to ExCo
which, along with the other Committees forming part of
the broader governance structure, has clearly defined
terms of reference which are reviewed and approved on
an annual basis.
The Board has a documented schedule of matters
reserved specifically for its decision. These matters
include the approval of the interim and year end
financial statements and the review and approval of the
annual budget. Other strategic matters include decision
making on corporate transactions (acquisitions and
disposals), material capital expenditure and significant
contractual commitments.
The Board also responded to the new challenges of
COVID-19 in the second year of pandemic as it evolved.
The welfare of our employees has consistently been the
top priority for the Group throughout the period, whilst
continuing to deliver a continued level of service to our
customers and introducer community.
Statement of directors’ responsibilities in
respect of the financial statements
The directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have prepared the group and the company
financial statements in accordance with UK-adopted
international accounting standards.
Under company law, 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 company and of the profit or loss of the
group for that period. In preparing the financial
statements, the directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable UK-adopted
international accounting standards have been
followed, subject to any material departures
disclosed and explained in the financial
statements;
• make judgements and accounting estimates that
are reasonable and prudent; and
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the group and company will
continue in business.
The directors are responsible for safeguarding the
assets of the group and company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors are also responsible for keeping adequate
accounting records that are sufficient to show and
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 25
G OV E R N A N C E
continued
Chairman’s corporate governance report
Introduction
The Board is committed to maintaining high standards
of corporate governance, integrity and business ethics.
On 28 August 2018, the Board of Curtis Banks Group PLC
decided to fully adopt the QCA Corporate Governance
Code (2018 edition) (“the QCA Code”). The Board believes
that the QCA Code provides the right governance
framework for a group of our size in which we can
continue to develop our governance model to support
our business.
Corporate governance principles
The corporate governance principles contained in the
QCA Code are as follows:
1. Establish a strategy and business model which
promote long-term value for shareholders
2. Seek to understand and meet shareholder needs
and expectations
3. Take into account wider stakeholder and social
responsibilities and their implications for
long-term success
4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation
5. Maintain the board as a well-functioning,
balanced team led by the chair
6. Ensure that between them the Directors have the
necessary up-to-date experience, skills and
capabilities
7. Evaluate board performance based on clear and
relevant objectives, seeking continuous
improvement
8. Promote a corporate culture that is based on
ethical values and behaviours
9. Maintain governance structures and processes
that are fit for purpose and support good
decision-making by the board
10. Communicate how the company is governed and
is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
Application of the QCA Code and required
disclosures in our annual report or on our
website
Application of the QCA Code requires us to apply the
principles set out above and also to publish certain
related disclosures; these can appear in our annual
report, be included on our website or we can adopt
a combination of the two approaches. Recommended
locations for each disclosure are specified in the
QCA Code and these have been followed.
As Chairman of Curtis Banks Group PLC, it is my
responsibility to lead the Board in ensuring that the
Group has in place good standards of corporate
governance. The Board believes that the QCA Code is
the most appropriate corporate governance code for
the Group, given the size of our business, and will ensure
the Group maintains good corporate governance
practices while allowing the business to continue its
entrepreneurial culture. The Board works together to
ensure that these corporate governance standards are
adhered to and the below sets out how they are
practically implemented.
The Board
The Board comprises three Executive Directors and four
Non-Executive Directors. Details of the Directors and
their strengths and experience are set out on pages 21
to 22 of this Report.
All the Non-Executive Directors of the Group are
considered to be independent and are as follows:
• Chris Macdonald (Chairman)
• Bill Rattray (Senior Independent Director)
• Jules Hydleman
• Jill Lucas
There are no grounds to question the independence
of any of the above Non-Executive Directors.
Non-Executive Directors are expected to devote such
time as is necessary for the proper performance of their
duties. This is anticipated to be the equivalent of a
minimum of one day a month on work for the Group
including attendance at a minimum of four Board
meetings per annum and the annual general meeting
and consideration of all relevant papers before each
meeting.
All of the Executive Directors are full time employees of
the Group. In addition, Executive Directors are required
to work such additional hours, over and above normal
working hours, that are necessary for the proper
performance of their duties.
All Directors are subject to either an Executive Service
Agreement or a letter of appointment. The Company’s
articles of association (“Articles”) require that each
Director shall retire from office at the third annual
general meeting after the annual general meeting or
general meeting (as the case may be) at which they
were previously appointed. The Articles further provide
that any Director who retires in such circumstances
shall be eligible for re-appointment by the Shareholders
at the annual general meeting at which his retirement
takes effect.
The Board meets formally every three months and on
other occasions where specific transactions or events
dictate the need. In addition, the Board has established
a number of committees in order to provide corporate
governance and these also meet formally on a
quarterly basis. These committees are an Audit
Committee, a Risk and Compliance Committee and a
Remuneration Committee and comprise only the four
Non-Executive Directors with Executive Directors in
attendance as required. Each of the committees are
governed by terms of reference that have been
approved by the Board.
26 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
G OV E R N A N C E
continued
Chairman’s corporate governance report
continued
Both Chris Macdonald and Bill Rattray have been
Executive Directors of UK publicly listed companies and
maintain their skill sets through those connections. In
addition, Non-Executive Directors receive external
training where appropriate.
Audit Committee is chaired by Bill Rattray with
Chris Macdonald, Jules Hydleman and Jill Lucas as the
other members. Further details on the committee’s
responsibilities and activities are on page 29 of the
annual report.
Since listing on the AIM market the Company has used
the service of external consultants for guidance on
executive remuneration levels and share incentive
packages. Consultants have also been engaged to
assist in the design and documentation required for the
introduction of share incentive plans for other senior
managers.
The Board regularly consult and meet with both internal
and external auditors to the Company at quarterly
Audit Committee meetings.
Executive Directors maintain their skill set though day
to day interaction with the industry and periodic
training, both internal and external.
All Directors are required to undertake and record
continual professional development training.
The internal advisory responsibilities of the Company
Secretary are currently performed by the Chief Financial
Officer for the Group.
The Chief Executive Officer currently conducts annual
performance appraisals of the other Executive Directors
that report to him. This is also supported by regular
1:1 meetings between the Executives. In turn, the
Non-Executive Directors conduct the annual appraisal
review of the Chief Executive Officer.
The Board promotes and monitors a healthy corporate
culture through ensuring that the Company has proper
processes and written procedures in place to achieve
this. Monitoring is carried out by the Executive Board
members by day to day interaction with staff at all the
offices and review of all relevant minutes to identify any
areas of weakness. An ‘open door’ policy exists for all
members of staff. In normal times, Non-Executive
Directors visit the offices on a regular basis, albeit this
has been restricted by the COVID-19 pandemic, and
have sight of management committee minutes and
papers to keep fully briefed of the corporate culture and
any issues that may arise.
The Board receives regular updates on matters of
corporate culture in the Board packs prepared for each
Board meeting and through the Executive Committee
minutes, compliance and risk updates and regular
presentations from the Group Heads of Departments.
Board meetings are, restrictions permitting, rotated to
include both the Bristol and Ipswich office locations,
providing the opportunity for Non-Executive Directors to
experience the working and corporate culture and to
gain greater understanding of all areas of the Group’s
business.
Audit Committee
The primary focus of the Audit Committee is on
corporate reporting, from an external perspective, and
on monitoring the Group’s internal control and risk
management systems from an internal perspective. The
Remuneration Committee:
The primary function of the Remuneration Committee is
to determine, on behalf of the Board, the remuneration
packages of the Executive Directors and the bonus and
share option schemes to be offered to employees. The
Remuneration Committee is chaired by Jules Hydleman
with Bill Rattray, Chris Macdonald and Jill Lucas as the
other members. Further details on the committee are on
pages 30 to 31 of the annual report.
Risk & Compliance Committee:
The primary function of the Risk & Compliance
Committee is to consider the Group’s appetite for risk,
to review and monitor the risk process undertaken by
the Group and adherence to the risk profile and monitor
procedures for identifying and controlling risk. The Risk
and Compliance Committee is chaired by Bill Rattray
with Chris Macdonald, Jill Lucas and Jules Hydleman as
the other members. Further details on the committee’s
responsibilities and activities are on pages 29 to 30 of
the annual report.
The terms of reference for the Audit, Remuneration and
Risk & Compliance Committees can be found in the
“Investors” section of the Group website at
www.curtisbanks.co.uk.
During the year ended 31 December 2021 there were
4 scheduled Board and committee meetings,
4 additional ad hoc board meetings and 1 additional ad
hoc audit committee meeting. The attendance from the
directors is set out in the table below:
Board Risk &
Director Meeting Audit Remuneration Compliance
Executive
Will Self 8 5 4 4
Jane Ridgley 8 5 4 4
Dan Cowland 8 5 4 4
Non-Executive
Chris Macdonald 6 5 4 4
Bill Rattray 6 5 4 4
Jules Hydleman 6 5 4 4
Jill Lucas (appointed
19 January 2021) 5 5 4 4
Board Evaluation
The latest formal evaluation of Board effectiveness was
undertaken in the second half of 2020 whereby a
questionnaire was completed by each Director, followed
by collective discussions of the results. No formal
recommendations were made following this exercise,
albeit a process to add a further independent
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 27
G OV E R N A N C E
continued
Chairman’s corporate governance report
continued
Other information for shareholders (and other interested
parties) is also provided on the Investors section of our
website, including all RNS Announcements, interim and
full year results presentations to shareholders and other
matters relevant to shareholders.
Compliance with legislation
The Group has documented internal policies to ensure
compliance with legislation including those relating to
the Bribery Act, the Modern Slavery Act, and the General
Data Protection Regulations and anti-tax evasion
procedures. There are also internal policies on dealing in
shares of the Company to ensure compliance with
Market Abuse Regulation of the AIM market.
Approved on behalf of the Board
Chris Macdonald
Chairman
31 March 2022
non-executive director was in process, with Jill Lucas
subsequently being appointed to the Board. It is the
Board’s intention to conduct a similar evaluation during
2022.
Relationships with shareholders
The Group has a programme of meetings each year
with institutional shareholders, potential shareholders,
brokers and analysts following the release of interim
and annual results. These include formal written
presentations that are available on our website. These
meetings allow the Executive Directors to update
existing and potential shareholders on strategy and the
Group’s performance. Additional meetings with
institutional investors and analysts are arranged from
time to time during the year as requested by our
brokers and investor relations representatives.
Following the formal interim and annual results
presentations, the Board receive copies of feedback
reports keeping them in touch with shareholder views.
Instinctif Partners provide investor public relations to
the Group with Peel Hunt LLP and Singers Capital
Markets acting as joint brokers.
Chris Macdonald, as Non-Executive Chairman, and the
other Non-Executive Directors are all willing to engage
with shareholders should they have a concern that is
not resolved through the normal channels. The
Company Secretary can also be contacted by
shareholders on matters of governance and investor
relations.
The Board also uses the annual general meeting to
communicate with investors, including those staff
holding shares or options in the Company. The meeting
is ordinarily held in Bristol and attended by
shareholders and professional advisers. All shareholders
are given the opportunity to ask questions and raise
issues; this can be done formally during the meeting or
informally with the Directors after it. Computershare plc
are registrars to the Company and attend the annual
general meeting.
Copies of our annual report, the annual general meeting
notice and the interim report are sent to all
shareholders and copies can be downloaded from the
Investors section of our website. They are also available
on request by writing to the Company Secretary at
3 Temple Quay, Bristol, BS1 6DZ.
28 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
G OV E R N A N C E
continued
Corporate governance
Audit Committee Report
The Audit Committee is chaired by Bill Rattray with
Chris Macdonald, Jules Hydleman and Jill Lucas as the
other members.
The key duties of the Committee are:
a) To monitor the integrity of the financial
statements of the Group, including its annual and
half yearly reports, preliminary results’
announcements and any other formal
announcement relating to its financial
performance, reviewing significant financial
reporting issues and judgements which they
contain;
b) To keep under review the adequacy and
effectiveness of the Group’s internal financial
controls and internal control and risk
management systems;
c) To review the adequacy and security of the
Group’s arrangements for its employees and
contractors to raise concerns, in confidence, about
possible wrongdoing in financial reporting or other
matters;
d) Meet regularly with the external auditors,
including once at the planning stage before the
audit and once after the audit at the reporting
stage to discuss their remit and any issues arising
from the audit. In addition, the Committee will
review and approve the annual audit plan and
ensure that it is consistent with the scope of the
audit engagement, having regard to the seniority,
expertise and experience of the audit team. The
Committee will also agree the level of audit fee;
e) Evaluation of the external auditor’s qualifications,
performance, objectivity and independence,
including consideration of the where other audit
services are provided, and recommendation of
appointment of the external auditor to the annual
general meeting of shareholders.
The Audit Committee has met five times during the year
under review with the external auditors and internal
auditors being in attendance at all of those meetings.
Specific matters discussed at those meetings included:
a) a) Review of financial statements for the Group
for the year ended 31 December 2021 and
receiving the external auditors audit report
thereon and considering the key accounting
considerations and judgments attaching to those
financial statements;
b) Consideration and approval of the plan for the
interim review by the external auditor on the
interim financial statements for the six month
period to 30 June 2021;
c) Review of financial statements for the Group for
the six month period ended 30 June 2021 and
receiving the external auditors review report
thereon and considering the key accounting
considerations and judgments attaching to those
financial statements;
d) Consideration and approval of the audit plan for
the year ended 31 December 2021 and
confirmation of key audit matters and areas of
judgement, which include Dunstan Thomas
revenue accounting policy and CGUs impairment
assessments for the Group, along with accounting
and disclosure requirements in relation to the
acquisitions;
e) Consideration of the effect of the acquisition and
consolidation of Dunstan Thomas and Talbot and
Muir, including the revised valuation of assets
acquired;
f) Review of reports produced by Mazars in their role
as internal auditors to the Group and
consideration of actions to be taken on matters
arising from those reports.
Risk and Compliance Committee Report
The Risk and Compliance committee is chaired by
Bill Rattray with Chris Macdonald, Jules Hydleman and
Jill Lucas as the other members.
The key duties of the Committee are:
a) To consider the Group’s appetite for risk, in
particular review and monitor the process
undertaken by the Group to set and adhere to the
Group’s current risk profile;
b) To ensure that the Group has in place procedures
and mechanisms for the identification and control
of all fundamental risks including financial, legal,
regulatory and operational risks;
c) In relation to proposed strategic transactions
including acquisitions, disposals or joint ventures
and significant new business streams, products or
business partners, ensure that due diligence of the
proposition has been carried out, in particular on
the risk aspects and implications for the Group’s
risk appetite alongside the commercial and legal
aspects;
d) To ensure that the Group has in place sufficient
regulatory capital.
Internal control and risk management is monitored by
the Committee by the review of key risk and control
documentation, review of internal compliance reports
and discussions with Executive Directors and
Compliance staff.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 29
G OV E R N A N C E
continued
Corporate governance
continued
The Risk and Compliance Committee has met four
times during the year under review and received formal
presentations from the Compliance Officer of the Group
at two of the meetings.
Specific matters discussed at those meetings included:
a) Review and consideration of Compliance Reviews
and Compliance Strategy reports for the Group;
b) Consideration of Risk appetite throughout the
Group;
c) Consideration of the risks posed by the COVID-19
pandemic on the business;
d) Review of the Group Risk Register and individual
risks within each area of the business. This register
summarises the key risks for the business, their
likely impact and relevant mitigation actions;
e) Consideration of the appointment of an additional
Non-Executive Director with a technology
background;
f) Review and acceptance of Own Risk and Solvency
Assessments for Suffolk Life Annuities Limited.
Remuneration Committee Report
The Remuneration Committee is chaired by
Jules Hydleman with Bill Rattray, Chris Macdonald
and Jill Lucas as the other members. The key duties of
the Committee are:
a) To determine and agree with the Board the
framework or broad policy for the remuneration of
the Group’s Chairman and the Executive Directors
including pension rights and compensation
payments;
b) In determining such policy, to take into account all
factors which it deems necessary including
relevant legal and regulatory requirements and
the provisions and recommendations of the
Corporate Governance Guidelines for Small and
Mid-Size Quoted Companies published by the
Quoted Companies Alliance (QCA Code) and other
relevant guidance;
c) To review the on-going appropriateness and
relevance of the overall remuneration policies in
the Group. To approve the design of, and
determine targets for, any performance related
pay schemes operated by the Group and approve
the total annual payments made under such
schemes;
d) To review the design of all share incentive plans for
approval by the Board and shareholders. For any
such plans, determine each year whether awards
will be made, and if so, the overall amount of such
awards, the individual awards to Executive
Directors, Company Secretary and other senior
executives and the performance targets to be
used;
e) Within the terms of the agreed policy and in
consultation with the Chairman and/or Chief
Executive Officer as appropriate, to determine the
total individual remuneration package of the
Chairman, each Executive Director, the Company
Secretary and other senior executives including
bonuses, incentive payments and share options or
other share awards;
f) To obtain reliable, up-to-date information about
remuneration in other companies of comparable
scale and complexity;
g) It is the policy of the Committee that all
appointments in the Group with a remuneration
package of in excess of £100,000 be reviewed and
approved by the Committee. Any changes to
existing employees with such packages are also
reviewed and approved by the Committee.
The Remuneration Committee has met four times
during the year under review.
Specific matters discussed at those meetings included:
a) Annual salary reviews for all Executive Directors
and senior management and approval of
parameters for overall annual staff salary annual
reviews;
b) Agreement of Bonus awards in respect of the year
ended 31 December 2021;
c) Proposals and agreement to a further offering in
2021 to all staff of the “Save As You Earn” Share
Scheme;
d) Consideration and agreement of a remuneration
package for the new Non-Executive joining the
Group during the year;
e) Consideration of the funding of the Employee
Benefit Trust and the use of the Trust for satisfying
options exercised;
f) Consideration and agreement of the Executive
bonus schemes with performance targets for 2021
for Executive Directors and senior staff and
approval of the parameters for the 2021 staff
bonus scheme;
g) Consideration and agreement of bonus scheme
for the sales and distribution team.
The Committee continues to evaluate other incentive
based share option schemes for all employees and
Directors and additional grants under the existing
schemes.
30 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
G OV E R N A N C E
continued
Corporate governance
continued
Remuneration Policy
It is the policy of the Remuneration Committee to
reward Executive Directors with packages that will
retain, incentivise and motivate them. The packages are
designed to be market competitive and are reviewed
annually.
Current remuneration packages for Executive Directors
comprise:
a) Basic salary
b) Pension contributions
c) Benefits in kind comprising principally life
assurance and travel allowance
d) Performance based annual bonus
e) Award of shares under share incentive plans
The performance based annual bonus scheme provides
for an Executive Director to earn a maximum annual
bonus equivalent to 100% of their basic annual salary.
A percentage of the annual bonus entitlement is based
on the financial performance of the Group against
budgets approved by the Board and a percentage
based on individual performance.
The Remuneration Committee has previously granted
awards based under the Long Term Incentive Plan and
the Company Share Option Plan. Awards are limited to
a maximum of 100% of the Executive Directors salary in
any one year and calculated using the market value of
the shares in the Company at the date of grant.
For awards made under the Long Term Incentive Plan in
2017 and 2018, the percentage vesting of the shares
depends on the performance of the fully diluted
Earnings per Share (“EPS”) of the Group, based on the
adjusted operating profit of the Group. To fully vest the
average increase of the adjusted EPS over a three year
period has to average more than 8% per annum plus
the annual increase in the Retail Price Index in the
respective year. There is partial vesting for increases of
more than 2% plus the annual increase in the Retail
Price Index. After the shares vest the Executive Director
is required to hold these for a minimum of two years
before sale. In the event of the Director ceasing
employment with the Company during the vesting
period, except under such conditions as retirement or
illness, the grant of shares will lapse.
Awards were made to each of the Executive Directors in
September 2020 under a LTIP. No LTIP was set up in
2021. Vesting of these awards is dependent on the
extent to which a basket of performance criteria are
satisfied, measured over a three year period. To the
extent that the performance criteria are met, 50% of
the awards will vest following publication of the
company’s interim results to 30 June 2023, and 50%
one year later. The performance criteria encompass the
following categories:
• Financial – measured by reference to adjusted EPS
and operating margin;
• Customer – measured by reference to organic net
growth of the SIPP book;
• Internal process – by reference to appropriate
quantitative operational efficiency measures; and
• Innovation and delivery of strategy – review by
Remuneration Committee, with the intention that
this may be supported by quantitative metrics in
due course.
For reasons of commercial sensitivity, the precise
performance measures will only be disclosed at the end
of the performance period.
The Remuneration Committee continually reviews these
elements of the Executive Remuneration packages to
ensure that appropriate annual and long term
incentives are in place and that management’s
interests are aligned with those of shareholders.
Service Agreements and Notice periods for
Executive Directors.
Service Agreements for Executive Directors are
terminable by either party on 12 months written notice,
with the Group having the option to place the Executive
on garden leave or to make a payment in lieu of notice.
The Service Agreements include restrictive covenants
following the termination of employment for the period
of six months as regards non-competition and
solicitation of staff and customers.
Date of Notice Notice
Service Period by Period by
Director Agreements Company Director
Executive:
Will Self 30 August 2016 12 months 12 months
Jane Ridgley 18 January 2019 12 months 12 months
Dan Cowland 8 July 2019 12 months 12 months
Non-Executive:
Chris Macdonald 2 April 2015 3 months 3 months
Bill Rattray 2 April 2015 3 months 3 months
Jules Hydleman 2 April 2015 3 months 3 months
Jill Lucas 18 January 2021 3 months 3 months
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 31
G OV E R N A N C E
continued
Directors’ remuneration report
Directors’ remuneration
Total emoluments
Basic salary Pension 2021 2020
Director and fees Bonus contributions Benefits £ £
Will Self 310,488 118,394 5,800 7,054 441,737 513,256
Jane Ridgley* 218,577 83,760 4,000 6,843 313,181 362,817
Dan Cowland** 244,639 93,579 3,995 13,254 355,467 420,356
Chris Macdonald 104,000 — — — 104,000 104,000
Bill Rattray 52,000 — — — 52,000 52,000
Jules Hydleman 52,000 — — — 52,000 52,000
Jill Lucas*** 49,467 — — — 49,467 —
Total 1,031,171 295,733 13,795 27,151 1,367,852 1,504,429
* appointed 18 January 2019.
** appointed 5 September 2019.
*** appointed 19 January 2021.
Directors’ shareholdings
As at 31 December 2021, the interest of the Directors in the issued shares of the Company, as shown in its register
maintained under section 809 (2) and (3) of the Companies Act 2006 were:
2021 2020
Director No. % No. %
Will Self 56,661 0.08 56,661 0.08
Jane Ridgley 27,166 0.04 27,166 0.04
Dan Cowland 9,523 0.01 9,523 0.01
Chris Macdonald 22,179 0.03 22,179 0.03
Bill Rattray 47,894 0.07 47,894 0.07
Jules Hydleman 15,270 0.02 40,270 0.06
32 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
G OV E R N A N C E
continued
Directors’ remuneration report
continued
The following share options are currently held by Directors under the Long Term Incentive Plan (“LTIP”):
Number of Number of
shares under Granted/ shares under
option at (Exercised) Lapsed option at
Date of 31 December during during 31 December Exercise Vesting
Director grant 2020 the year the year 2021 price date
Will Self 05/10/2018 55,559 — (41,669) 13,890 0p 05/10/2021
Will Self 14/09/2020 250,000 — — 250,000 217p 14/09/2023
Will Self 14/09/2020 250,000 — — 250,000 217p 14/09/2024
Jane Ridgley 18/09/2018 21,951 — (16,463) 5,488 0p 18/09/2021
Jane Ridgley 14/09/2020 250,000 — — 250,000 217p 14/09/2023
Jane Ridgley 14/09/2020 250,000 — — 250,000 217p 14/09/2024
Dan Cowland 14/09/2020 250,000 — — 250,000 217p 14/09/2023
Dan Cowland 14/09/2020 250,000 — — 250,000 217p 14/09/2024
1,577,510 — (58,132) 1,519,378
The following share options are currently held by Directors under the Company Share Option Plan (“CSOP”):
Number of Number of
shares under Granted/ shares under
option at (Exercised) Lapsed option at
Date of 31 December during during 31 December Exercise Vesting
Director grant 2020 the year the year 2021 price date
Will Self 14/09/2016 53,745 — — 53,745 267p 14/03/2018
Will Self 15/12/2016 535,996 — — 535,996 201p 15/12/2019
Will Self 26/06/2017 535,996 — — 535,996 260p 25/03/2020
Will Self 08/04/2020 93,548 — — 93,548 217p 08/04/2023
Will Self 27/04/2021 — 67,037 — 67,037 283p 27/04/2024
Jane Ridgley 14/09/2016 27,388 — — 27,388 267p 14/03/2018
Jane Ridgley 08/04/2020 66,129 — — 66,129 217p 08/04/2023
Jane Ridgley 27/04/2021 — 47,388 — 47,388 283p 27/04/2024
Dan Cowland 08/04/2020 74,193 — — 74,193 217p 08/04/2023
Dan Cowland 27/04/2021 — 53,167 — 53,167 283p 27/04/2024
1,386,995 167,592 — 1,554,587
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 33
G OV E R N A N C E
continued
Directors’ remuneration report
continued
The following share options are currently held by Directors under the Executive Bonus Scheme (“EBS”):
Number of Number of
shares under Granted/ shares under
option at (Exercised) Lapsed option at
Date of 31 December during during 31 December Exercise Exercise
Director grant 2020 the year the year 2021 price date
Will Self 08/04/2020 13,271 — — 13,271 0p 08/04/2022
Jane Ridgley 08/04/2020 8,479 — — 8,479 0p 08/04/2022
Dan Cowland 08/04/2020 3,686 — — 3,686 0p 08/04/2022
25,436 — — 25,436
Further information about the CSOP, LTIP and EBS share option schemes are contained within note 26.
Group Remuneration
Remuneration paid to employees of the Group, including salary and benefits, are set in line with prevailing market
rates and at levels to attract the speciality skills required by the Group. In addition to salary and benefits wider share
ownership of the Group by staff is encouraged through share option and sharesave schemes.
Jules Hydleman
Chairman of the Remuneration Committee
31 March 2022
34 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
C O N S O L I DAT E D F I N A N C I A L STAT E M E N TS
Contents
Page
▲
Financial statements 35
Independent auditors’ report 36
Consolidated statement of comprehensive income 42
Consolidated statement of financial position 43
Company statement of financial position 44
Consolidated statement of changes in equity 45
Company statement of changes in equity 46
Consolidated statement of cash flows 47
Company statement of cash flows 48
Notes to the financial statements 49
Company information 86
Supplementary unaudited information 88
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 35
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Report on the audit of the financial statements
Opinion
In our opinion, Curtis Banks Group PLC’s group financial statements and company financial statements (the
“financial statements”):
•
•
•
give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2021 and of the
group’s profit and the group’s and company’s cash flows for the year then ended;
have been properly prepared in accordance with UK-adopted international accounting standards; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Consolidated Financial Statements
(the “Annual Report”), which comprise: the Consolidated and Company statements of financial position as at
31 December 2021; the Consolidated statement of comprehensive income, the Consolidated and Company
statements of cash flows and the Consolidated and Company statements of changes in equity for the year then
ended; and the notes to the financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of
the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to other entities of public
interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in note 5 (Total comprehensive income for the year), we have provided no non-audit
services to the company or its controlled undertakings in the period under audit.
Our audit approach
Context
Curtis Banks Group PLC is primarily an administrator of self-invested pension products in the United Kingdom. In
2020 the group acquired the Talbot and Muir Group, another administrator of self-invested pension products and the
Dunstan Thomas Group who is a provider of technology and complementary services in the financial services
market.
Overview
Audit scope
• We have scoped the audit based on the financially significant components as set out below in the section “How we
tailored the audit scope”.
Key audit matters
• Revenue recognition for Dunstan Thomas (group)
• Carrying value of the Dunstan Thomas cash-generating unit (group), and investment in Dunstan Thomas Group
Limited (company)
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Materiality
• Overall group materiality: £610,000 (2020: £670,000) based on 5% of profit before tax and amortisation.
• Overall company materiality: £857,000 (2020: £798,000) based on 1% of net assets.
• Performance materiality: £458,000 (2020: £503,000) (group) and £642,000 (2020: £598,000) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and
any comments we make on the results of our procedures thereon, 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.
This is not a complete list of all risks identified by our audit.
‘Revenue recognition for Dunstan Thomas (group)’, and ‘Carrying value of the Dunstan Thomas cash-generating unit
(group), and Investment in Dunstan Thomas Group Limited (company)’ are new key audit matters this year. ‘Impact of
COVID-19’, ‘Accounting for the 2020 acquisitions in the consolidated Group accounts’, and ‘Carrying value of goodwill and
client portfolios’, which were key audit matters last year, are no longer included because of a reassessment of cash-
generating units within the group, resulting in a reduction in the estimation uncertainty associated with the carrying values
of intangible assets except for Dunstan Thomas. The 2020 acquisition accounting no longer requires significant judgement
in the consolidated Group accounts for the year ended 31 December 2021. The impact of COVID-19 has been less
significant in 2021 and the financial position of the group has not been significantly affected. Otherwise, the key audit
matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
The audit procedures we have performed to address this key
audit matter include target testing of significant sales entered
into by Dunstan Thomas in the period. This has also been
supplemented by further sampling on lower value transactions
considered to have a lower level of inherent risk. As part of this
testing we have:
• Considered the requirements of IFRS 15 ‘Revenue from
Contracts with Customers’;
• Inspected supporting evidence including: contracts, cash
receipts, internal sales guidance, and statements of work
issued to customers in order to understand the
obligations and services provided; and
• Made enquiries of sales and operations staff to inform our
understanding of the sales recognised and to assist with
appropriate challenge of judgments made by finance.
Based on the work performed, we concluded that revenue
recognised as Fintech services was not materially misstated.
Revenue recognition for Dunstan Thomas (group)
Dunstan Thomas represents a separate Fintech
services segment in the Group whose revenues of
£10.2m differ in nature to the previous core
offering of Pension administration services.
A feature of the sales strategy is securing
significant contracts with individual customers
that can be more complex in nature and include
the provision of licences, maintenance and
support, and implementation services.
We consider there to be an increased risk of fraud
or error in the accounting for sales transactions
owing to the following factors:
• the greater complexity of sales
arrangements with Dunstan Thomas where
there is often more than one performance
obligation;
• the potential magnitude of individual
customer arrangements; and
• the pressure on results stemming from
underperformance in the period.
Refer to note 4 for an analysis of revenue by
segment and note 2 for accounting policy on
revenue recognition.
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continued
Key audit matter
How our audit addressed the key audit matter
Carrying value of the Dunstan Thomas
cash–generating unit (group), and investment in
Dunstan Thomas Group Limited (company) (group
and parent)
The consolidated Group financial statements
include intangible assets arising from the
business acquisition of Dunstan Thomas (“DT”) in
2020. The £17.1m of goodwill, and £10.0m of other
intangible assets are material to the
consolidated Group financial statements. These
intangible assets are allocated to one cash-
generating unit, referred to below as ‘DT’.
The Company financial statements include an
investment in subsidiary of £26.5m recognised at
historical cost arising from the business
acquisition of DT in 2020.
Due to the underperformance of DT in 2021, we
consider there to be a significant risk arising from
the assumptions and judgements involved in
performing the impairment assessment over the
associated intangible assets as required by
International Accounting Standard (‘IAS’) 36
“Impairment of assets”.
We consider the primary risk to be the
assumptions adopted by management as part of
their impairment test and determination of the
value in use; most notably the growth rates
assumed, and the discount rate applied to derive
a net present value in relation to future cash
flows.
Refer to note 12 for intangible assets disclosures
(Group), note 15 for investments in subsidiary
disclosures (Company), and note 2 for accounting
policy on intangibles and investments.
How we tailored the audit scope
The audit procedures we have performed to address this key
audit matter are as follows:
• We assessed and challenged the key assumptions which
Management has adopted in their impairment
assessment. This included:
• the relevant future expected cash flows;
• the revenue growth included in the Board approved plan
for 2022 to 2024;
• the long-term growth rate used into perpetuity;
• the discount rate assumption applied to future cash flows
(assessed with support from auditor’s experts); and
• the working capital assumptions incorporated into the
value in use calculations.
• We performed sensitivity analysis over the assumptions
used;
• We considered management’s forecasting ability by
comparing previous forecasts to actual past
performance, inquired of the head of sales, and inspected
the current sales pipeline; and
• We considered the adequacy of the disclosures
surrounding the degrees of uncertainty present in
Management’s estimate of value in use.
From our work performed we consider it reasonable not to
record an impairment in either the DT CGU in the consolidated
financial statements, or the investment in subsidiary in the
Company financial statements as at 31 December 2021, and
that the disclosures appropriately reflect the requirements of
IAS 36.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the structure of the group and the company, the accounting
processes and controls, and the industry in which they operate.
The scope of our audit and the nature, timing and extent of audit procedures performed were determined by our risk
assessment, the financial significance of components, and other qualitative factors including history of
misstatement through fraud or error.
For the purposes of our group scoping we have considered each separate trading entity within the group to be a
separate component. We concluded that the principal trading entities, Curtis Banks Limited, Suffolk Life Pensions
Limited, Suffolk Life Annuities Limited, Dunstan Thomas Holdings Limited and Talbot and Muir Limited as well as the
group holding company, Curtis Banks Group PLC to be financially significant components for the group audit and as
such we have performed a full scope audit of these components.
Other trading and dormant entities within the group, listed in note 14 are considered to be non-significant
components. Together with additional procedures performed at a Group level on the consolidation, the result of the
above scoping was that we achieved greater than 95% coverage of revenue, expenses and profit before tax.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
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continued
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and
in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group Financial statements – company
Overall materiality £610,000 (2020: £670,000). £857,000 (2020: £798,000).
How we determined it 5% of profit before tax and amortisation 1% of net assets
Rationale for
benchmark applied
We have selected this benchmark, in a We consider the net assets of the Company
change to previous years, for which the to be an appropriate benchmark as the
benchmark selected was adjusted profit entity is principally a holding company and
before tax, defined as profit before tax, does not itself trade. Profit measures are
non-recurring costs, and amortisation, therefore less relevant to the financial
because the alternative performance reporting for this entity.
measure has been removed from the
audited financial statements, and included
within the strategic report instead for year
ended 31 December 2021. Profit before tax
and amortisation is considered by the
engagement team to be an appropriate
reflection of the performance of the Group
upon which to determine what is
considered material.
We have applied a higher materiality of £39m (2020: £37m), based on 1% of total policyholder assets solely for the
purpose of identifying and evaluating the effect of misstatements that are likely only to lead to a reclassification
between line items within assets and liabilities.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was between £250,000 and £553,000. Certain
components were audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality
in determining the scope of our audit and the nature and extent of our testing of account balances, classes of
transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2020:
75%) of overall materiality, amounting to £458,000 (2020: £503,000) for the group financial statements and
£642,000 (2020: £598,000) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount in the middle of
our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our
audit above £27,700 (group audit) (2020: £31,000) and £27,700 (company audit) (2020: £31,000) as well as
misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s and the company’s ability to
continue as a going concern for a period of at least 12 months from when the financial statements are authorised for
issue.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
group’s and the company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
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Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and
our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial
statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent
material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is
a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report
and Directors’ Report for the year ended 31 December 2021 is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the
course of the audit, we did not identify any material misstatements in the Strategic report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The directors are also 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.
In preparing the financial statements, the directors are responsible for assessing the group’s and the 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 company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ 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 auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of UK regulatory principles, such as those governed by the Financial
Conduct Authority and the Prudential Regulation Authority, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered those laws and regulations that have
a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s
incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue or
costs, and management bias in accounting estimates specifically the carrying value of intangible assets, and
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continued
carrying value of investment in subsidiary in relation to Dunstan Thomas. Audit procedures performed by the
engagement team included:
• Enquiring of the Risk and Compliance functions, including consideration of known or suspected instances of
non-compliance with laws and regulation and fraud;
• Reading key correspondence with the Prudential Regulation Authority and the Financial Conduct Authority in
relation to compliance with laws and regulations;
• Reviewing data regarding customer complaints, the company’s register of litigation and claims and the
professional indemnity notification log, in so far as they related to non-compliance with laws and regulations
and fraud;
• Reviewing relevant meeting minutes including those of the Board and Risk Committee;
• Identifying and testing journal entries, in particular any journal entries posted with unusual account
combinations;
• Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
and
• Testing those estimates most susceptible to risk of fraud, namely, impairment assessments of intangible
assets, and carrying value of investment in subsidiary in relation to Dunstan Thomas as set out in more detail in
the key audit matters section above.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that are not closely related to events and transactions
reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using
data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than
testing complete populations. We will often seek to target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
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 auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown
or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not
been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Mark Bolton (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Bristol
31 March 2022
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 41
C O N S O L I DAT E D STAT E M E N T O F
C O M P R E H E N S I V E I N C O M E
Year ended 31 December 2021
Year ended
31 December 2021
As restated*
Year ended
31 December 2020
Notes
Total
£’000
Total
£’000
Revenue
Administrative expenses
Impairment on customer portfolios
Policyholder investment returns
Non-participating investment contract expenses
Changes in provisions: Non-participating investment
contract liabilities
Policyholder total
Operating profit
Finance income
Finance costs
Profit before tax
Taxation
Total comprehensive
income for the year
Attributable to:
Equity holders of the company
Non-controlling interests
Earnings per ordinary share
on net profit
Basic (pence)
Diluted (pence)
4
21
21
9
8
10
11
11
63,307
(52,205)
—
53,871
(44,942)
(344)
466,811
(33,850)
(432,961)
125,231
(35,343)
(89,888)
—
11,102
20
(1,800)
9,322
(1,603)
7,719
7,723
(4)
7,719
11.6
11.5
—
8,585
83
(1,039)
7,629
(1,732)
5,897
5,897
—
5,897
9.9
9.7
The consolidated statement of comprehensive income has been prepared on the basis that all operations
are continuing operations.
**The audited results for year ended 31 December 2020 have been restated to account for measurement
period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the
Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The changes impact
administrative expenses and tax only. The adjustments made to restate the 31 December 2020
comparatives, as further detailed in note 2.
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P O S I T I O N
As at 31 December 2021
Group
As restated*
As at As at
31 Dec 21 31 Dec 20
Group Notes £’000 £’000
ASSETS
Non-current assets
Intangible assets 12 89,814 91,078
Investment property 13 1,316,468 1,208,605
Property, plant and equipment 14 8,636 7,658
Investments 15 2,224,965 2,072,317
3,639,883 3,379,658
Current assets
Trade and other receivables 17 27,981 26,649
Cash and cash equivalents 18 410,133 430,578
Current tax asset 957 581
439,071 457,808
Total assets 4,078,954 3,837,466
LIABILITIES
Current liabilities
Trade and other payables 19 20,853 18,895
Deferred income 29,960 26,995
Borrowings 20 46,832 53,533
Lease liabilities 964 672
Provisions 23 453 501
Contingent consideration 33 2,467 2,375
101,529 102,971
Non-current liabilities
Borrowings 20 43,957 53,370
Lease liabilities 6,774 5,201
Provisions 23 178 7
Contingent consideration 33 5,199 6,537
Non-participating investment contract liabilities 21 3,836,211 3,585,307
Deferred tax liability 22 3,464 3,790
3,895,783 3,654,212
Total liabilities 3,997,312 3,757,183
Net assets 81,642 80,283
Equity attributable to owners of the parent
Issued capital 24 332 330
Share premium 25 58,087 57,799
Equity share based payments 25 2,840 2,747
Treasury shares 25 (1,382) (741)
Retained earnings 25 21,755 20,134
81,632 80,269
Non-controlling interest 10 14
Total equity 81,642 80,283
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The changes impact intangible assets, trade and other receivables, contingent consideration, and deferred
tax liability. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.
The financial statements on pages 42 to 85 were approved by the Board of Directors and authorised for issue on
31 March 2022.
Dan Cowland
Chief Financial Officer
Company Registration No. 07934492
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 43
C O M PA N Y STAT E M E N T O F F I N A N C I A L P O S I T I O N
As at 31 December 2021
Company
As restated*
As at As at
31 Dec 21 31 Dec 20
Company Notes £’000 £’000
ASSETS
Non-current assets
Investments 15 109,317 109,222
109,317 109,222
Current assets
Trade and other receivables 17 377 32
Cash and cash equivalents 18 4,458 4,411
Current tax asset 519 244
5,354 4,687
Total assets 114,671 113,909
LIABILITIES
Current liabilities
Trade and other payables 19 1,383 1,567
Borrowings 20 4,507 3,852
Contingent consideration 33 2,467 2,375
8,357 7,794
Non-current liabilities
Borrowings 20 15,399 19,904
Contingent consideration 33 5,199 6,537
20,598 26,441
Total liabilities 28,955 34,235
Net assets 85,716 79,674
Equity attributable to owners of the parent
Issued capital 24 332 330
Share premium 25 58,087 57,799
Equity share based payments 25 2,840 2,747
Retained earnings 25 24,457 18,798
Total equity 85,716 79,674
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The changes impact intangible assets, trade and other receivables, contingent consideration, and deferred
tax liability. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.
As permitted by section 408 Companies Act 2006, the holding company’s profit and loss account has not been
included in these financial statements. The Company’s profit after tax for the year was £11,656,000 (Restated 2020:
£10,895,000).
The financial statements on pages 42 to 85 were approved by the Board of Directors and authorised for issue on
31 March 2022.
Dan Cowland
Chief Financial Officer
Company Registration No. 07934492
44 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
C O N S O L I DAT E D STAT E M E N T O F C H A N G E S I N
EQ U I T Y
Year ended 31 December 2021
Equity share Non-
Issued Share based Treasury Retained controlling Total
capital premium payments shares earnings* Total* interest equity*
Group £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2020 271 33,659 2,313 (534) 19,730 55,439 14 55,453
Total comprehensive
income for the year* — — — — 5,898 5,898 — 5,898
Share based payments — — 434 — — 434 — 434
Ordinary shares bought
and sold by EBT — — — (207) — (207) — (207)
Ordinary shares issued 59 24,140 — — — 24,199 — 24,199
Deferred tax on share
based payments — — — — (345) (345) — (345)
Ordinary dividends
declared and paid — — — — (5,149) (5,149) — (5,149)
At 31 December 2020
– As restated* 330 57,799 2,747 (741) 20,134 80,269 14 80,283
Total comprehensive
income for the year — — — — 7,723 7,723 (4) 7,719
Share based payments — — 93 — — 93 — 93
Ordinary shares bought
and sold by EBT — — — (641) — (641) — (641)
Ordinary shares issued 2 288 — — — 290 — 290
Deferred tax on share
based payments — — — — (105) (105) — (105)
Ordinary dividends
declared and paid — — — — (5,997) (5,997) — (5,997)
At 31 December 2021 332 58,087 2,840 (1,382) 21,755 81,632 10 81,642
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives are further detailed in note 2.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 45
C O M PA N Y STAT E M E N T O F C H A N G E S I N EQ U I T Y
Year ended 31 December 2021
Equity share
Issued Share based Retained
capital premium payments earnings* Total
Company £’000 £’000 £’000 £’000 £’000
At 1 January 2020 271 33,659 2,313 13,052 49,295
Total comprehensive income for the year (restated) — — — 11,049 10,895
Share based payments — — 434 — 434
Ordinary shares issued 59 24,140 — — 24,199
Ordinary dividends declared and paid — — — (5,149) (5,149)
Measurement period adjustment* — — — (154) (154)
At 31 December 2020 (restated) 330 57,799 2,747 18,798 79,674
Total comprehensive income for the year — — — 11,656 11,656
Share based payments — — 93 — 93
Ordinary shares issued 2 288 — — 290
Ordinary dividends declared and paid — — — (5,997) (5,997)
At 31 December 2021 332 58,087 2,840 24,457 85,716
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives are further detailed in note 2.
46 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
C O N S O L I DAT E D STAT E M E N T O F C A S H F LO WS
Year ended 31 December 2021
Year ended 31 December
As restated*
2021 2020
Group £’000 £’000
Cash flows from operating activities
Profit before tax 9,322 7,629
Adjustments for:
Depreciation 1,806 1,499
Amortisation and impairments 2,934 2,088
Finance costs 1,800 697
Share based payment expense 93 434
Fair value gains on movement in contingent consideration (1,870) —
Fair value gains on financial investments (213,701) (119,957)
Additions of financial investments (647,479) (631,200)
Disposals of financial investments 708,532 673,037
Fair value (gains)/losses on investment properties (120,416) 60,751
Increase in liability for investment contracts 250,904 13,403
Changes in working capital:
Increase in trade and other receivables (1,330) (2,737)
Increase/(decrease) in trade and other payables 5,017 (1,105)
Taxes paid (2,410) (2,996)
Net cash flows (used in)/from operating activities (6,798) 1,543
Cash flows from investing activities
Payments for intangible assets (1,670) (986)
Purchase of property, plant and equipment (270) (591)
Purchase of investment property (92,456) (122,449)
Purchase and sale of shares in the Group by the EBT (641) (207)
Receipts from sale of investment property 105,009 118,877
Net cash flows from acquisitions (255) (34,484)
Net cash flows received from/(used in) in investing activities 9,717 (39,840)
Cash flows from financing activities
Equity dividends paid (5,997) (5,149)
Net proceeds from issue of ordinary shares 290 24,199
Net (decrease)/increase in borrowings (16,114) 29,595
Principal elements of lease payments (762) (934)
Interest paid (781) (383)
Net cash (used in)/received from financing activities (23,364) 47,328
Net (decrease)/increase in cash and cash equivalents (20,445) 9,031
Cash and cash equivalents at the beginning of the year 430,578 421,547
Cash and cash equivalents at the end of the year 410,133 430,578
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 47
C O M PA N Y STAT E M E N T O F C A S H F LO WS
Year ended 31 December 2021
Year ended 31 December
2021 2020
Company £’000 £’000
Cash flows from operating activities
Profit before tax 11,656 11,049
Adjustments for:
Interest expense 712 514
Changes in working capital:
Increase in trade and other receivables (345) (288)
Increase in trade and other payables (1,177) 1,269
Taxes paid (275) —
Net cash flows received from operating activities 10,571 12,544
Cash flows from investing activities
Investment in employee benefit trust — (850)
Net cash flows from acquisitions (255) (39,522)
Net cash flows used in investing activities (255) (40,372)
Cash flows from financing activities
Equity dividends paid (5,997) (5,149)
Net proceeds from issue of ordinary shares 290 24,199
Net increase/(decrease) in borrowings (3,850) 12,242
Interest paid (712) (383)
Net cash received from/(used in) financing activities (10,269) 30,909
Net increase/(decrease) in cash and cash equivalents 47 3,081
Cash and cash equivalents at the beginning of the year 4,411 1,330
Cash and cash equivalents at the end of the year 4,458 4,411
48 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
Corporate information
1
Curtis Banks Group PLC (“the Company”) is a public limited company incorporated in the United Kingdom and
domiciled and registered in England and Wales whose shares are publicly traded on the AIM market of the London
Stock Exchange PLC. The financial statements were authorised for issue in accordance with a resolution of the
Directors on 31 March 2022.
Significant accounting policies
2
Basis of preparation
The financial statements comprise the financial statements of the Company and its subsidiaries (“the Group”) as at
31 December each year. The nature of the Group’s operations and its principal activities are set out in the Chief
Executive’s review.
The financial statements have been prepared on a going concern basis under the historical cost convention, modified
by the revaluation of financial assets and financial liabilities through profit and loss where held at fair value, and are
presented in pounds sterling, with all values rounded to the nearest thousand pounds except when otherwise
indicated.
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became
UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK
Endorsement Board. The financial statements have been prepared in accordance with UK-adopted International
Accounting Standards in conformity with the requirements of the Companies Act 2006 as applicable top companies
reporting under those standards.
New standards adopted by the Group
The Group has not applied any new accounting standards for the first time for the financial year commencing
1 January 2021.
Standards, amendments and interpretations to existing standards that are not yet effective and have not been
early adopted by the Group
The following standards, interpretations and amendments to existing standards have been published by the IASB but
are yet to be endorsed by the EU or are not effective for the period presented in the financial statements and the
Group has decided not to early adopt them.
Standard Effective date, annual period beginning on or after
IFRS 17 Insurance Contracts 1 January 2023
Amendments to IAS 1 – Presentation of Financial Statements 1 January 2023
The directors anticipate that the adoption of these standards and interpretations and amendments in future years
will have no material impact on the financial statements of the Group. Specifically, insurance contracts issued by the
Group are not within the scope of IFRS 17.
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and its subsidiary
undertakings up to 31 December 2021.
The profits and losses of the Company and its subsidiaries are consolidated from the date of acquisition using the
acquisition method of accounting.
The trading subsidiaries of Curtis Banks Group PLC as at 31 December 2021 were Curtis Banks Limited, Suffolk Life
Pensions Limited, Suffolk Life Annuities Limited, Rivergate Legal Limited, Dunstan Thomas Group Limited, Digital
Keystone Limited, Dunstan Thomas Holdings Limited, Dunstan Thomas Consulting Limited, Platform Action Limited,
and Talbot and Muir Limited.
Suffolk Life Annuities Limited provides SIPPs through non-participating individual insurance contracts. As such, it is
authorised as an insurance company and the consolidated results for the whole Group also include Suffolk Life
Annuities Limited’s insurance policyholder assets, liabilities and returns.
Certain trading subsidiaries of Curtis Banks Group PLC hold the entire issued share capital of several non-trading
trustee companies. The financial statements of these companies have not been consolidated as they would be
immaterial to the Group’s position. All of these companies are bare trustee companies for the pension products
administered by the trading subsidiaries of Curtis Banks Group PLC and have been dormant throughout the year and
are expected to remain dormant.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 49
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies - continued
2
Going concern
The Group and Company are required to assess whether they have sufficient resources to continue their operations
and to meet their commitments for the foreseeable future. The directors have prepared the financial statements on
a going concern basis, as in their opinion the Group and Company are both able to meet their obligations as they fall
due. This opinion is based on detailed forecasting for the following 12 months from the date these financial
statements have been signed based on current and expected market conditions together with current performance
levels. The Company is supported by dividend income from its subsidiaries. The Directors have also considered the
impact of a number of severe but plausible scenarios that could impact the business, such as the COVID –19
pandemic, and are satisfied that this opinion remains unchanged in the event of these scenarios.
In respect of shareholder reserves, excluding policyholder assets and liabilities, the Group has net current assets of
£14,206k (2020 restated: £16,986k).
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group is exposed, 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, potential voting rights currently exercisable are taken into account. The financial
statements of trading subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases. The accounting policies of the subsidiaries have been changed when
necessary to align them with the policies adopted by the Group.
Business Combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The cost of the business
combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities
incurred or assumed, and equity instruments issued by the Group in exchange of control of the acquiree, plus any
costs directly attributable to the business combination. Any deferred consideration is included as part of the initial
fair value, with a corresponding liability being recognised. The acquiree’s identifiable assets, liabilities and contingent
liabilities that meet conditions for recognition under IFRS 3 Business Combinations are recognised at their fair value
at the acquisition date. If the initial accounting for a business combination is incomplete by the end of the reporting
period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting
is incomplete. Once all information is obtained about facts and circumstances that existed as of the acquisition date,
or following a maximum period of 12 months after the acquisition takes place, the Group may update these
provisional amounts to reflect new information obtained about facts and circumstances that existed as of the
acquisition date.
Segment Reporting
IFRS 8 Operating Segments requires segments to be identified on the basis of internal reports that are regularly
reviewed by the Chief Operating Decision Maker (“CODM”).
The Group considers it has two operating segments. Dunstan Thomas provides IT software development, licences and
consultancy services and, collectively, these services are described in the Group’s financial statements as FinTech. The
remaining operations are described as pension administration, because all of these operations are conducted within
the UK and all material operations are of the same nature and share the same economic characteristics including
a similar customer base and nature of product and services.
Foreign Currencies
The consolidated financial statements are presented in Pounds Sterling which is the Group’s functional and
presentational currency. All foreign currency transactions and foreign currency balances relate to policyholder assets
and liabilities.
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at
the Statement of Financial Position date and the gains or losses on translation are included in the Statement of
Comprehensive income.
All foreign exchange gains or losses arising on policyholder transactions and balances have a net impact of £nil on
the consolidated statement of comprehensive income due to the legal structure of policyholder assets and liabilities
as further described in the accounting policy for non-participating investment contracts.
Pensions
The Group contributes to defined contribution schemes for the benefit of its employees. Contributions are charged to
the consolidated statement of comprehensive income in the year they are payable.
Research and development
Research expenditure is written off to the consolidated statement of comprehensive income in the year in which it is
incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical,
commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised
over a four year period during which the Group is expected to benefit.
50 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies - continued
2
Non-participating investment contracts
The Group’s long term business includes unit linked Self-Invested Personal Pension policies, also referred to as the
‘Policyholder Business’, wholly administered by Suffolk Life Annuities Limited, a subsidiary company. The liability of
the Group towards its policyholders is exactly equal to the value of policyholder assets held at all times.
Non-participating investment contract liabilities are measured at fair value by reference to the value of the
underlying net asset values of the assets held to cover investment contracts at the Statement of Financial Position
date.
For non-participating investment contracts, premiums are not included in the consolidated statement of
comprehensive income but are reported as contributions to non-participating investment contract liabilities in the
consolidated statement of financial position. Investment income in respect of non-participating investment
contracts are accounted for in ‘Investment return’. Investment income and investment return includes dividends,
rental and interest income.
Expenses and charges in respect of non-participating investment contracts are accounted for in ‘non-participating
investment contract expenses’. These expenses include investment management fees and interest payable.
Claims are not included in the consolidated statement of comprehensive income but are deducted from
non-participating investment contract liabilities.
Transfers out, annuity purchases and drawdowns are accounted for when the associated assets have been
transferred out of the Company. Acquisition costs comprising direct and indirect costs arising from the conclusion of
non-participating investment contracts are expensed on receipt of the inwards premium. There are no deferred
acquisition costs.
Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to
purchase or sell the assets, at their fair value less transaction costs. Investments carried at fair value are measured
using a fair value hierarchy, with values based on quoted bid prices where available.
Investment property held within non-participating investment contracts comprises land and buildings which are held
for long term rental yields and capital growth. It is carried at fair value with movements recognised in the
consolidated statement of comprehensive income.
Unquoted investments in property vehicles and direct holdings in investment property are valued by independent
valuers on the basis of open market value as defined in the appraisal and valuation manual of the Royal Institute of
Chartered Surveyors or by reference to the movement in a property index from the last purchase or valuation date.
Valuation techniques may include discounted cash flow calculations using net current rent, and estimated and
terminal values; they may also include yield methodology calculations using market rental values capitalised with
a market capitalisation rate. Both of these are then further validated against market transactions to produce a final
valuation.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of services in the ordinary
course of the Group’s activities. Revenue is shown net of value added tax (“VAT”), returns, rebates and discounts and
after eliminating sales within the Group. The Group applies the 5 step model under IFRS 15 Revenue from Contracts
with Customers to recognition of revenue as follows:
–
Step 1: Identify the contract(s) with a customer
The Group’s customers are deemed to be the underlying SIPP & SSAS members regardless of whether the Group is
providing services under a third party administration agreement or direct to its own customers.
The Group also provides IT software licences, implementation, maintenance & updates, development and post
contract support services predominantly to businesses within the financial services sector, collectively referred to as
FinTech revenue. The customer is deemed to be the named recipient of services as per the contract, rather than any
subsequent downstream user of the product.
–
Step 2: Identify the performance obligations in the contract
Performance obligations are understood to be the individual components of SIPP & SSAS administration as detailed
on the Group’s products’ terms and conditions and fee schedules or any contractual obligations laid out in contracts
for provision of FinTech services. Annual renewal fees are deemed to comprise multiple individual obligations. However,
each of these obligations represents a continuous service over the same annual period and can therefore be viewed
collectively as one obligation for the purpose of revenue recognition. Obligations under set up fees and transaction
fees are deemed to be short term in nature (three months or less).
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 51
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies - continued
2
Revenue recognition – continued
Contracts for the provision of FinTech services individually detail the performance obligations and trigger events for
progress and any other payments. These vary according to the contract as FinTech solutions are bespoke to the
customer. Typically, a software licence contract is made up of three performance obligations: licence and
maintenance, implementation and post contract support. A fourth obligation then exists when an Application
Programming Interface (‘API’) is acquired.
–
Step 3: Determine the transaction price
The transaction price is deemed to be that shown in the Group’s products’ terms and conditions and fee schedules
against each individual fee item which includes interest turn on customer funds. Transaction prices for individual
components of the annual renewal fee are not separable as the combined set of obligations represents a continuous
service over the same annual period.
Contracted fees relating to provision of FinTech services are as per each individual contract. This is normally made up
of implementation fee billed on time and expense incurred, and a combined licence fee that covers licence,
maintenance, support and API (if applicable).
–
Step 4: Allocate the transaction price to the performance obligations in the contract
The result of judgements made in Step 2 and Step 3 mean that transaction prices are allocated in substance to fee
items included in the Group’s product’s terms and conditions and fee schedules, as these also wholly reflect the
individual performance obligations.
The same applies in relation to FinTech contracts, the price and performance obligations being detailed in the
individual contract along with timing of both service delivery and payments. When API is acquired as part of the
contract, 50% of contract revenue (excl. implementation) is allocated to the performance obligation.
–
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Set up and initial transaction fees, as well as ad hoc transaction fees are recognised as the work is completed and
performance obligations satisfied, net of VAT.
Annual renewal fees are invoiced in advance and recognised, net of VAT, evenly over the year to which they relate, and
held as deferred income at the year end where the annual fee period spans multiple accounting periods.
Fees which are received in arrears, including certain property annual fees and property acquisition fees, are accrued
over the period in which services are provided and performance obligations are satisfied.
Any interest received in excess of that payable to customers is retained by the Group and is included within revenue.
Interest income receivable by the Group is recognised as it accrues.
The timing of satisfaction of performance obligations under contracts with SIPP & SSAS members does not bear any
relevance to the typical timing of payment for such services. The typical timing of payment is on or after the related
fee invoice is issued.
Policyholder revenue comprises investment income and investment gains and losses on non-participating
investment contracts. Investment income includes dividends, rental and interest income. Dividends and distributions
from collective investment schemes are recognised on the date on which shares are quoted ex-dividend. Interest and
rental income is recognised on an accruals basis.
Investment gains and losses in the consolidated statement of comprehensive income comprise realised and
unrealised gains and losses. Realised gains and losses are calculated as the difference between the net sale proceeds
and the original cost or, if previously re-valued, the valuation at the last statement of financial position date.
Unrealised gains and losses on investments are calculated as the difference between the current valuation and the
original cost or, if previously re-valued, the valuation at the last statement of financial position date.
All brought forward deferred income in relation to the pension administration operating segment is recognised in the
current year as there are no performance obligations spanning a period of more than 12 months.
Revenue relating to FinTech is recognised in line with satisfaction of contractual performance obligations over time
(for the provision of software licence, maintenance and post contract support) on a straight-line basis throughout the
contract period and at a point in time for revenue associated with the API performance obligation. Revenue relating
to implementation and IT consultancy services are billed according to standard rate cards on a time and expense
basis. Therefore, they are recognised as and when measurable progress is made and at full when the specific
engagement is completed.
The Group generates certain revenue from the arrangement of property insurance for properties held within SIPPs
and SSASs administered by the Group. Revenue earned this way is recognised using an input method such that 80%
is recognised at arrangement and renewal of the insurance policy, and 20% is spread over the insurance policy term.
52 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies - continued
2
Intangible assets – Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree and the acquisition and the acquisition date fair value of any
previous equity interest in the acquiree over the fair value of the identifiable net assets acquired. Goodwill impairment
reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential
impairment. Any impairment is recognised immediately as an expense and is not subsequently reversed.
Intangible assets – Customer Portfolios
Customer portfolios are included in the statement of financial position at cost to the Group less accumulated
amortisation and provisions for impairment and wholly comprise SIPPs acquired.
Customer portfolios are amortised on a straight line basis over their estimated useful life of 20 years based upon long
term historic average customer attrition rates experienced by the Group and other factors that indicate this longevity
such as the SIPPs themselves being utilised throughout retirement, and often passed down to dependents in the
event of a death.
The carrying value of customer portfolios is reviewed for impairment if events or circumstances change and indicate
that the carrying values may not be recoverable. In this event the values are written down to the recoverable amount.
The carrying value of customer portfolios is also reviewed for impairment annually at each reporting date.
Intangible assets – Computer Software
Computer software is included in the statement of financial position at cost to the Group less accumulated
amortisation and provisions for impairment. The carrying value of computer software is reviewed for impairment if
events or circumstances change and indicate that the carrying values may not be recoverable. In this event the
values are written down to the recoverable amount. The carrying value of computer software is also reviewed for
impairment annually at each reporting date. Computer software is amortised on a straight line basis over its
estimated useful life of between 4 and 5 years.
Intangible assets – Internally generated software
Internally generated software represents the principal software products owned and licensed by Dunstan Thomas
and is being amortised over a period of 10 years.
Intangible assets – Brand
Brand comprises the value of the Dunstan Thomas brand form the acquisition of Dunstan Thomas during the year
ended 31 December 2020 and is being amortised over 10 years.
Administrative expenses
Administrative expenses represent those arising as a result of the Group’s operations and include depreciation. All
amounts are recognised on an accruals basis.
Property, plant and equipment
Property, plant and equipment are included in the statement of financial position at cost to the Group less
accumulated depreciation and provisions for impairment.
The carrying value of property, plant and equipment is reviewed for impairment if events or circumstances change
and indicate that the carrying values may not be recoverable. In this event the values are written down to the
recoverable amount.
Property, plant and equipment is depreciated on a straight line basis at rates sufficient to write off the cost less
estimated residual values of individual assets over their estimated useful lives. The depreciation rates for the principal
categories of assets are as follows:
Computer equipment
Office equipment, fixtures & fittings
Right of use assets
25%
25%
Expected underlying office lease length of between 1 and 12 years
straight line
straight line
On initial recognition, right of use assets are measured at cost comprising the following:
–
–
–
–
The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received
Any initial direct costs
Any restoration costs expected
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 53
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies - continued
2
Impairment of non-financial assets
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment 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 the impairment
loss, if any. 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. An intangible asset with
an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be
impaired.
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 been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation
decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset 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 in prior years.
A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Investments
Non-current asset investments excluding those held under non-participating investment contracts are stated at cost
less provision for diminution in value.
Financial assets
Financial assets held under non-participating investment contracts are categorised either as fair value through profit
and loss, or recorded and subsequently measured at amortised cost. The classification depends on the purposes for
which these assets were acquired. Management takes decisions concerning the classification of its financial assets
at initial recognition and reviews such classification for reliability at each reporting date.
The Group classifies its financial assets at amortised cost where the asset is held within a business model whose
objective is to collect the contractual cash flows and the contractual terms give rise to cash flows that are solely
payments of principal and interest. Other financial assets are classified as fair value through profit or loss. The Group
has no financial assets at fair value through other comprehensive income.
Amounts recorded and measured at amortised cost include non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. These are included in current assets, except for
maturities greater than 12 months after the statement of financial position date. These are classified as non-current
assets. The Group’s financial assets comprise “non-current asset investments”, “investment property”, “trade and
other receivables” and “cash and cash equivalents” in the statement of financial position.
Trade receivables
Trade receivables are recorded and subsequently measured at amortised cost in accordance with IFRS 9 Financial
Instruments.
Trade receivables are amounts due from customers for services performed in the ordinary course of business. If
collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified
as current assets. If not, they are presented as non-current assets.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped
based on shared characteristics and overall credit quality. A provision for impairment of trade receivables is
established when there is evidence that the Group might not be able to collect all amounts due according to the
original terms of the receivables. The movement in the provision is recognised in the consolidated statement of
comprehensive income.
The expected loss rates for each grouping are based on historic actual recovery rates achieved for such groupings
over the last 12 months, modified for factors such as existing market conditions, days past due or forward looking
estimates, where supported by existing reliable evidence.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand, short term deposits with credit institutions, cash
equivalents and bank overdrafts.
Cash at bank and in hand, and deposits with credit institutions, are classified and measured at amortised cost. Cash
equivalents are classified as fair value through profit loss.
54 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies – continued
2
Financial liabilities – Trade and other payables
Trade and other payables are recognised and initially measured at cost, due to their short term nature, and
subsequently measured at amortised cost. All of the Group’s trade payables are non-interest bearing.
Financial liabilities – Borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less attributable
transaction costs. After initial recognition interest bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
Current and deferred income tax
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in
the consolidated statement of comprehensive income, because it excludes items of income or expense that are
taxable or tax deductible in other years and it further excludes items that are never taxable or tax deductible. The
Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the
reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the statement of financial position liability method. Deferred tax liabilities are recognised
for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects
neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except 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.
Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised or the
liability is settled. Deferred tax is charged or credited in the profit or loss, except when it relates to items credited or
charged in other comprehensive income directly to equity, in which case the deferred tax is also dealt with in other
comprehensive income.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount
can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at an
appropriate pre-tax discount rate.
Leases
Leases of property, plant and equipment are assessed as to whether a right-of-use relationship exists and are
classified as property, plant and equipment when this criteria is satisfied. The resulting lease obligations are included
in liabilities. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining balance of the liability. Interest and finance costs associated
with lease liabilities on right-of-use assets are expensed to the consolidated statement of comprehensive income
within total finance costs.
Assets and liabilities arising from a lease where a right-of-use relation exists are initially measured on a present value
basis. Lease liabilities include the net present value of fixed payments, less any lease incentive payments receivable,
and include amounts following lease extension options where there is reasonable certainty of extension. There are no
other types of payments or variable amounts included. Lease payments are allocated between principal and finance
cost. The finance cost is charge to the consolidated statement of income over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each year.
Lease payments are discounted using the interest rate implicit in the lease where possible. However, this cannot
currently be readily determined for any of the leases that the Group holds in respect of right-of-use assets. The Group
therefore uses an incremental borrowing rate similar to what it would have to pay to borrow the funds necessary to
obtain an asset of similar value in a similar economic environment with similar terms, security and conditions.
The Group has no short-term leases or low value assets that may be considered as short term leases. All of the
Group’s leases where a right-of-use relationship exists relate to commercial property assets. The Group has no other
classes of right-of-use assets such as equipment or vehicles.
All other leases are classified as operating leases. Rentals payable under operating leases, net of lease incentives, are
charged to the consolidated statement of comprehensive income on a straight-line basis over the year of the lease.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 55
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies – continued
2
Leases – continued
A right-of-use asset exists and a corresponding lease liability exists in respect of non-participating investment
contract assets which relate entirely to ground rent on policyholder leasehold investment property. Consequently the
Group has opted not to recognise right-of-use assets and lease liabilities in relation to these leases as the impact
from recognition in the consolidated financial statements is minimal.
Contingent consideration
Where the Group has entered into certain acquisition agreements that provide for contingent consideration to be
paid management estimates the net present value of contingent consideration payable by utilising a future
discounted cash flow model. Management then continue to review the agreement and monitor the financial and
other targets to be met to maintain an accurate estimate of the fair value of any amounts payable. Subsequent
changes to the fair value of contingent consideration are recognised in accordance with IFRS 9 in the Statement of
Comprehensive Income.
Share based payments
Curtis Banks Group PLC operates several share schemes under which certain employees of the Group receive part of
their remuneration for the financial year in the form of options to purchase shares in Curtis Banks Group PLC.
These schemes are accounted for as equity-settled share-based payment transactions in accordance with IFRS 2.
The share options granted become exercisable at varying future dates. If certain conditions are met, following the
vesting period, employees and third parties will be eligible to exercise their option at an exercise price determined on
the date the share options are granted.
The fair value of share options is determined at the date of grant. This fair value is calculated by applying the Black
Scholes model. The model utilises inputs for the risk free rate, expected volatility in share price, dividend yield and the
current share price at fair value, which are factors determined on the date the share options are granted.
The share based payment charge to the consolidated statement of comprehensive income is calculated based on
the Group’s estimate of the number of options that will eventually vest.
The resulting staff costs under the share schemes are recognised pro rata in the consolidated statement of
comprehensive income to reflect the services rendered as consideration during the vesting period.
Prior year restatements
IFRS 3 measurement period adjustment
The audited results for year ended 31 December 2020 have been restated to account for measurement period
adjustments arising under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group
and the Talbot and Muir Group that took place in H2 2020.
In order to finalise the fair values attributed to assets and liabilities acquired from the Dunstan Thomas acquisition
an independent expert valuation was undertaken, the results of which were pending when the 2020 annual report
was approved. The valuation helped to better identify and reflect the different components of intangible assets
acquired, as principally reflected in the change of cost allocated to each intangible asset category within note 12 to
these financial statements as a measurement period adjustment, compared to that reported in the original financial
statements for the year ended 31 December 2020.
The results of the independent valuation also helped to inform a more accurate estimate of the relevant discount
factor that ought to be applied to future expectations of cash flows arising on intangible assets and contingent
consideration payable. Consequently, the fair value attributed to assets and liabilities acquired from the Talbot and
Muir acquisition has also been restated as a measurement period adjustment.
The impact of these adjustments on previously reported figures is summarised in the two tables below:
Originally reported As restated as at
as at 31 December 2020 31 December 2020 Movement
Consolidated statement of financial position £’000 £’000 £’000
Intangible assets 91,166 91,078 (88)
Trade and other receivables 26,913 26,649 (264)
Contingent consideration due <1 year (2,516) (2,375) 141
Contingent consideration due >1 year (5,657) (6,537) (880)
Deferred tax liability (5,013) (3,790) 1,223
Retained earnings (20,002) (20,134) (132)
—
56 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Significant accounting policies – continued
2
IFRS 3 measurement period adjustment – continued
Originally reported As restated as at
as at 31 December 2020 31 December 2020 Movement
Company statement of financial position £’000 £’000 £’000
Investments 108,373 109,222 849
Trade and other receivables 296 32 (264)
Contingent consideration due <1 year (2,516) (2,375) 141
Contingent consideration due >1 year (5,657) (6,537) (880)
Retained earnings (18,952) (18,798) 154
—
Originally reported As restated
for the year ended for the year ended
31 December 2020 31 December 2020 Movement
Consolidated statement of comprehensive income £’000 £’000 £’000
Amortisation (2,098) (1,744) 354
Finance costs (188) (342) (154)
Tax (1,664) (1,732) (68)
Total comprehensive income for the year 132
Critical accounting judgements and key sources of estimation uncertainty
3
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
In preparing the financial statements the Group has selected and applied various accounting policies which are
described in the notes to the financial statements. In order to apply these accounting policies the Group has made
estimates and judgements concerning the future. There are no critical judgements in the application of accounting
policies. The key sources of estimation uncertainty are disclosed below:
Impairment assessment on the Cash Generating Units
The Group has historically reviewed and tested customer portfolios and goodwill for impairment on an individual
basis twice a year. This has allowed the Group to closely monitor the performance of different respective books of
business acquired, including product by product attrition rates and fees, and had provided additional information to
feed into price per SIPP considerations for potential acquisitions.
During the year ended 31 December 2021, the Group has progressed significantly towards its desired Target Operating
Model. This includes (but is not limited to) centralisation of commercial property administration and the alignment of
product fees and T&Cs of substantially all products. Consequently, products and customers are increasingly
administered collectively by the operational functions, cash inflows are no longer distinct from each other and cash
outflows cannot be segregated by customer portfolios on a portfolio by portfolio basis as was the case previously.
Management has determined during the year ended 31 December 2021 that new cash generating units (‘CGUs’) are
defined such that they are closely aligned to the Groups of subsidiaries and their distinct cash flows, namely Curtis
Banks (‘CB’), Suffolk Life (‘SL’), Dunstan Thomas (‘DT’) and Talbot & Muir (‘T&M’). There is goodwill associated with the
latter three CGUs that is not amortised, and therefore these amounts are subject to annual impairment assessment.
The Curtis Banks CGU will be assessed for impairment if indicators of impairment are identified. The definition of the
CGUs is the judgement applied.
Impairment assessments are performed by comparing the carrying amount of the goodwill and intangible assets or
investment associated with the CGU, with the recoverable amount. Recoverable amount is assessed through value in
use which comprises an estimation of future cash flows expected to arise from each CGU, discounted to their present
value using a pre-tax discount rate. The following key assumptions are applied:
•
•
•
•
FY22 budget and FY23 & FY24 forecast by CGU approved by the Board;
Pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to that asset (12.95% for CB, SL and T&M; 12.75% for DT);
Terminal growth rate of 2.2%, being the long term inflation expectation in the UK;
Movement in net working capital, forecasted as a Group and allocated to each CGU by weighted operating
profit excluding adjusting items and amortisation.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 57
NOTES TO THE FINANCIAL STATEMENTS
continued
Critical accounting judgements and key sources of estimation uncertainty – continued
3
The goodwill impairment assessment performed resulted in headroom in each of the relevant CGU:
£’m Suffolk Life Talbot & Muir Dunstan Thomas
Value in use 93.7 27.8 29.7
Goodwill 28.9 9.8 17.1
Non-current asset 8.2 9.4 10.0
Headroom 56.6 8.6 2.6
No impairment of goodwill associated with the CGUs has been identified as at 31 December 2021.
Sensitivity analysis was performed on the following stress scenarios and the negative impact on headroom is
calculated as follows:
£’m Suffolk Life Talbot & Muir Dunstan Thomas
1% increase in discount rate (8.0) (2.4) (2.5)
1% decrease in terminal growth rate (6.6) (2.0) (2.1)
10% reduction in operating profit budgeted and forecasted (8.3) (2.5) (3.1)
Amongst the CGUs, Dunstan Thomas is most susceptible to the stress scenarios. In the context of assessing the CGUs
for impairment purposes, 9% growth in adjusted operating profit over the next 3 years is assumed for Dunstan
Thomas. This CGU is also sensitive to changes in net working capital. For example, if the forecasted improvement in
working capital attached to the main growth scenario does not materialise, the headroom reduces to nil in Dunstan
Thomas.
In addition, we have also performed impairment assessments on investment in subsidiaries by leveraging the same
discounted cash flow model which are summarised below:
£’m Curtis Banks Suffolk Life Talbot & Muir Dunstan Thomas
Value in use 58.9 93.7 27.8 29.7
Investment by Curtis Banks Group Plc 12.3 46.8 22.1 26.5
Headroom 46.6 46.9 5.7 3.2
No impairment of investment in subsidiaries was identified.
IFRS 9 impairment
Trade and other receivables are impaired based on the IFRS 9 simplified approach to measure expected credit losses
using a lifetime expected loss allowance for all trade receivables. The loss allowances for trade and other receivables
are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these
assumptions and selecting the inputs to the impairment calculation, based on the group’s past history of shared
credit risk characteristics, days past due, existing market conditions as well as forward looking estimates at the end
of each reporting period. The loss rates are considered the key source of estimation uncertainty because the impact
of a change in these could result in a material change in the expected credit loss. Details of the key assumptions and
estimates are disclosed in note 31 to the financial statements.
Contingent consideration payable on acquisitions
The Group has entered into certain acquisition agreements that provide for contingent consideration to be paid.
A financial instrument is recognised for all amounts management anticipates will be paid under the relevant
acquisition agreement. This requires management to make an estimate of the expected future cash flows from the
acquired business using forecasts that cover the contingent consideration period, and determine a suitable discount
rate for the calculation of the present value of any contingent consideration payments.
A material change to the carrying value might occur if the acquired businesses achieve significantly more or less than
their target earnings. The key assumption used in determining the value of these provisions is the forecast financial
performance as applied in the terms of the contingent consideration arrangement. A 10% increase or reduction in
achievement of forecast contingent consideration targets would increase or reduce the value of contingent
consideration payable required by £0.8m (2020: £0.8m), which in turn would reduce or increase profit before tax.
58 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Revenue
4
Revenue is wholly derived from activities undertaken within the United Kingdom and comprises the following
categories:
Year ended 31 December
2021 2020
£’000 £’000
Pension administration fees 45,091 36,856
FinTech services 9,900 4,793
Pension administration interest income 8,316 12,222
63,307 53,871
Total comprehensive income for the year
5
Total comprehensive income for the year is arrived at after charging:
Year ended 31 December
2021 2020
£’000 £’000
Amortisation and impairment of intangible assets 2,933 2,442
Depreciation of property, plant and equipment 1,806 1,499
Auditors’ remuneration:
– audit of the company and consolidated financial statements 227 177
– audit of the financial statements of the subsidiaries 397 314
– audit related assurance services 40 37
Operating segment reporting
6
The following tables present revenue and profit information regarding the Group’s operating segments for the
two years ended 31 December 2021 and 31 December 2020 respectively.
Pension Consolidation
Administration FinTech adjustments Consolidated
Year ended 31 December 2021 £’000 £’000 £’000 £’000
Revenue
External customers 53,407 9,900 — 63,307
Internal customers — 1,349 (1,349) —
53,407 11,249 (1,349) 63,307
Administrative expenses
External customers 43,866 8,339 — 52,205
Internal customers 813 390 (1,203) —
44,679 8,729 (1,203) 52,205
Operating profit 8,728 2,520 (146) 11,102
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 59
NOTES TO THE FINANCIAL STATEMENTS
continued
Operating segment reporting – continued
6
Pension Consolidation
Administration FinTech adjustments Consolidated
Year ended 31 December 2020 £’000 £’000 £’000 £’000
Revenue
External customers 49,078 4,793 — 53,871
Internal customers — 485 (485) —
49,078 5,278 (485) 53,871
Administrative expenses
External customers 42,231 3,055 — 45,286
Internal customers — 485 (485) —
42,231 3,540 (485) 45,286
Operating profit 6,847 1,738 — 8,585
Corporate costs
The Group’s operating segments are managed together as one business. Accordingly, certain corporate costs such as
finance income and expenses, gains and losses on the disposal of assets, taxes, intangible assets and certain other
assets and liabilities are not allocated to individual segments as they are managed on a group basis. Segment
operating profit or loss reflects the measure of segment performance reviewed by the Board of Directors (the Chief
Operating Decision Maker).
The following table presents a split of assets and liabilities of the Group’s operating segments for the year ended
31 December 2021.
Corporate assets and liabilities are not allocated to individual operating segments as they are managed on a group
basis. Policyholder assets and liabilities are not allocated to individual operating segments as all investment returns
associated with these are due back to policyholders under non-participating investment contracts, alongside non-
participating investment contract expenses and changes in provisions for non-participating investment contract
liabilities, such that the impact on shareholder assets and liabilities, and profit or loss, is nil.
Pension
Administration FinTech Corporate Policyholder Consolidated
Year ended 31 December 2021 £’000 £’000 £’000 £’000 £’000
Total assets 65,960 9,508 70,853 3,932,633 4,078,954
Total liabilities 32,793 3,113 28,773 3,932,633 3,997,312
Directors and employees
7
Year ended 31 December
2021 2020
£’000 £’000
Wages and salaries 25,189 21,317
Social security costs 2,644 2,301
Other pension costs 2,327 2,015
Share-based incentive awards 364 434
30,524 26,067
The monthly average number of employees during the year was:
2021 2020
Number Number
Directors 7 6
Administration 821 692
828 698
60 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Directors and employees – continued
7
Details of emoluments paid to the directors and key management personnel of the Group are as follows:
Year ended 31 December
2021 2020
£’000 £’000
Total emoluments paid to:
Directors
Wages and salaries 1,354 1,487
Social security costs 162 220
Post-employment costs 14 20
Share-based incentive awards 80 202
Other key management personnel
Wages and salaries 1,005 908
Compensation for loss of office 62 —
Social security costs 129 136
Post-employment costs 69 60
Share-based incentive awards 2 80
2,877 3,113
Emoluments of highest paid director:
Wages and salaries 429 508
Pension contribution 6 7
435 515
Short term employee benefits include wages and salaries. Long term employee benefits include share-based
incentive awards.
Finance costs
8
Year ended 31 December
2021 2020
£’000 £’000
Interest payable on bank loans 702 523
Interest and finance costs on lease liabilities 209 174
Other interest expense 10 —
Total interest expense 921 697
Unwind of discount on contingent consideration relating to:
Acquisition of Dunstan Thomas 364 131
Acquisition of Talbot and Muir 515 57
Total finance costs 1,800 885
Finance income
9
Year ended 31 December
2021 2020
£’000 £’000
Interest income 20 83
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 61
NOTES TO THE FINANCIAL STATEMENTS
continued
10 Taxation
Year ended 31 December
2021 2020
£’000 £’000
Domestic current year tax
UK Corporation tax 1,996 1,542
Deferred tax
Origination and reversal of temporary differences (393) 122
1,603 1,664
Factors affecting the tax charge for the year
Profit before tax 9,322 7,429
Profit before tax multiplied by standard rate of UK Corporation tax
of 19% (2020: 19%) 1,771 1,412
Effects of:
Adjustment to prior year 121 117
Non-deductible expenses 93 177
Other tax adjustments (382) (42)
(168) 252
Total tax charge 1,603 1,664
Earnings per share
11
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to equity holders of
the Company by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of
the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted
average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares
into ordinary shares.
Changes in income or expense that would result from the conversion of the dilutive potential ordinary shares are
deemed to be trivial, and therefore no separate diluted net profit is presented.
62 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Earnings per share - continued
11
The following reflects the income and share data used in the basic and diluted earnings per share computations:
As restated*
2021 2020
£’000 £’000
Net profit available to equity holders of the Company 7,723 5,897
Number Number
Weighted average number of ordinary shares:
Issued ordinary shares at start of the year 66,414,312 54,142,346
Effect of shares issued during the year 333,781 5,859,094
Effect of shares held by employee benefit trust (316,688) (296,835)
Effect of dilutive options 510,602 886,707
Diluted weighted average number of shares 66,942,007 60,591,312
Pence Pence
Earnings per share:
Basic 11.6 9.9
Diluted 11.5 9.7
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 63
NOTES TO THE FINANCIAL STATEMENTS
continued
12 Intangible assets
Group
Internally
Customer Computer Generated
Goodwill Brand Portfolios Software Software Total
£’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 January 2020 28,903 — 18,866 2,177 — 49,946
Arising on acquisitions* 26,829 1,595 14,939 — 5,390 48,753
Additions — — — 606 380 986
At 31 December 2020 55,732 1,595 33,805 2,783 5,770 99,685
Arising on acquisitions — — — — — —
Additions — — — 492 1,178 1,670
At 31 December 2021 55,732 1,595 33,805 3,275 6,948 101,355
Amortisation and Impairment
At 1 January 2020 — — 5,320 1,199 — 6,519
Charge for the year* — 66 1,190 248 240 1,744
Impairment — — 344 — — 344
At 31 December 2020 — 66 6,854 1,447 240 8,607
Charge for the year — 160 1,878 264 632 2,934
At 31 December 2021 — 226 8,732 1,711 872 11,541
Net book value
At 1 January 2020 28,903 — 13,546 978 — 43,427
At 31 December 2020 – As restated* 55,732 1,529 26,951 1,336 5,530 91,078
At 31 December 2021 55,732 1,369 25,073 1,564 6,076 89,814
*As restated to account for measurement period adjustments arising under IFRS 3 Business Combinations relating to the acquisitions
of the Dunstan Thomas Group and the Talbot and Muir Group that took place in H2 2020. The adjustments made to restate the
31 December 2020 comparatives are further detailed in note 2.
Goodwill
Goodwill totalling £28,903,000 arose on the acquisition of Suffolk Life Group Limited and its subsidiaries on 25 May
2016. Goodwill totalling £17,075,000 arose on the acquisition of Dunstan Thomas Group Limited and its subsidiaries
on 3 August 2020. Goodwill totalling £9,754,000 arose on the acquisition of Talbot and Muir Limited and its
subsidiaries on 30 October 2020.
The Group tests goodwill for impairment annually or more frequently if there are indications that goodwill might be
impaired. The recoverable amount of goodwill has been determined based on value-in-use calculations using a
discount rate appropriate to the risk profile of the asset. These calculations use operating cash flow projections
based on financial budget & forecast approved by management covering a three year period, assuming business
then continues onwards after this period at a steady rate for the purpose of the analysis. No impairment was
identified and sensitivity analysis was performed as disclosed in note 3.
Customer Portfolios
Represent individual customer portfolios acquired through business combinations and accounted for under the
acquisition method. The directors consider that there is no impairment to assets as at the year-end (2020: £344,000).
The customer portfolios are being amortised over a period of 20 years.
The brought forward balance relates to the purchase by Curtis Banks Limited, a subsidiary company, of the trade
and assets of Montpelier Pension Administration Services Limited on 13 May 2011, the full SIPP business of Alliance
Trust Savings Limited on 18 January 2013, the full SIPP business and certain assets of Pointon York SIPP Solutions
Limited on 31 October 2014, the full SIPP business of Rathbones Pension & Advisory Services Limited on 31 December
2014, a book of full SIPPs from Friends Life PLC (now Aviva PLC) on 13 March 2015 and a book of SIPPs from Hargreave
Hale Limited on 10 December 2018.
64 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
12 Intangible assets – continued
Customer Portfolios – continued
The brought forward balance also includes the purchase by Suffolk Life Pensions Limited, a subsidiary company, of
the trade and assets of European Pensions Management Limited on 14 July 2016, and books of SIPPs purchased from
Pointon York SIPP Solutions Limited on 9 November 2012, Pearson Jones PLC on 30 April 2013, and Origen Investment
Services Limited on 22 May 2013.
Lastly, the brought forward balance includes customer portfolios fair valued at £11,229,000 which arose on
acquisition of Talbot and Muir Limited and its subsidiaries on 30 October 2020.
Computer Software
Computer software comprises costs that meet the recognition criteria under IAS 38 as Intangible Assets. General
small computer software costs are amortised over their useful economic life of four years on a straight-line basis.
Computer software costs for significant projects are amortised over an estimated UEL on a project by project basis.
Internally Generated Software
Internally generated software represents the value of principal software products owned and licensed by Dunstan
Thomas. The asset includes both value arising on acquisition of Dunstan Thomas during the year ended 31 December
2020, and further development of the asset since. Internally generated software is being amortised over a period of
10 years.
Brand
Brand comprises the value of the Dunstan Thomas brand, which was obtained following acquisition of Dunstan
Thomas during the year ended 31 December 2020. Dunstan Thomas has been established in the UK for over 30 years
and has a strong market presence. The Group operates Dunstan Thomas as an independent brand. The value of the
brand was assessed at acquisition and is being amortised over 10 years.
Research and development
The amount of research and development expenditure recognised as an expense is nil (2020: nil).
13 Investment Property
Assets held at fair value
Group
Year ended 31 December
2021 2020
£’000 £’000
Fair value
At 1 January 1,208,605 1,265,784
Additions 92,456 122,449
Disposals (105,009) (118,877)
Fair value gains/(losses) 120,416 (60,751)
At 31 December 1,316,468 1,208,605
All investment properties have been valued at the year-end by reference to most recent professional valuations and
this is further adjusted by applying the corresponding property index available. Investment properties held to cover
the linked policyholder business are included in non-participating investment contract liabilities.
Rental income from investment property is disclosed in note 21(b) to the financial statements.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 65
NOTES TO THE FINANCIAL STATEMENTS
continued
14 Property, plant and equipment
Assets held at cost
Group
Office
Right of Computer equipment,
use assets equipment fixtures & fittings Total
£’000 £’000 £’000 £’000
Cost
At 1 January 2020 5,285 5,083 1,626 11,994
Arising from acquisitions 1,904 292 468 2,664
Additions — 570 21 591
At 31 December 2020 7,189 5,945 2,115 15,249
Additions 2,627 265 5 2,897
Disposals (579) — (81) (660)
At 31 December 2021 9,237 6,210 2,039 17,486
Depreciation
At 1 January 2020 695 3,842 1,262 5,799
Arising from acquisitions — 180 113 293
Charge for the year 763 547 189 1,499
At 31 December 2020 1,458 4,569 1,564 7,591
Arising from acquisitions — (14) 14 —
Charge for the year 944 611 251 1,806
Disposals (469) — (78) (547)
At 31 December 2021 1,933 5,166 1,751 8,850
Carrying value
At 1 January 2020 4,590 1,241 364 6,195
At 31 December 2020 5,731 1,376 551 7,658
At 31 December 2021 7,304 1,044 288 8,636
The total cash outflow for leases was £0.9m (2020: £0.9m).
66 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
15 Investments
Financial assets at fair value through profit or loss
Total fair value as at 31 December 2021
Group
2021 2020
£’000 £’000
Fair value
Equity and other variable-yield securities 2,184,067 2,015,190
Debt securities and other fixed-income securities 40,898 57,127
Total shares and securities 2,224,965 2,072,317
At cost 1,693,768 1,641,683
Movement in the year on total shares and securities
Group
2021 2020
£’000 £’000
At beginning of the year 2,072,317 1,994,197
Additions 647,479 631,200
Disposals (708,532) (673,037)
Unrealised gains 213,701 119,957
At end of the year 2,224,965 2,072,317
The Group values all investments in line with its accounting policy.
Assets held at cost
Company
£’000
Cost
At 1 January 2020 59,396
Additions – equity share based payment costs 434
Additions – acquisition of Dunstan Thomas 25,848
Additions – acquisition of Talbot and Muir 21,845
Additions – investment in employee benefit trust 850
At 31 December 2020 108,373
Additions – equity share based payment costs 93
Additions – investment in employee benefit trust 851
At 31 December 2021 109,317
Net book value
At 1 January 2020 59,396
At 31 December 2020 108,373
At 31 December 2021 109,317
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 67
NOTES TO THE FINANCIAL STATEMENTS
continued
15 Investments – continued
Details of the investments are as follows:
% of Ordinary
Registered Shares held % of Ordinary
Office Address Principal Country of by parent Shares held
Name of entity Indicator activity Incorporation Company by Group
Curtis Banks Limited (A) Provision of pension England and Wales 100.00 100.00
administration services
Suffolk Life Group Limited (B) Holding company England and Wales 100.00 100.00
Suffolk Life Pensions Limited (B) Provision of pension England and Wales – 100.00
administration services
Suffolk Life Annuities Limited (B) Provision of pension England and Wales – 100.00
administration services
CB 2019 Limited (A) Non-trading England and Wales – 90.00
Rivergate Legal Limited (A) Provision of legal England and Wales 100.00 100.00
services
Templemead Property Solutions Limited (A) Provision of property England and Wales 100.00 100.00
valuation services
Dunstan Thomas Group Limited (D) Holding company England and Wales 100.00 100.00
Digital Keystone Limited (D) Provision of IT products England and Wales – 100.00
and services
Dunstan Thomas Holdings Limited (D) Provision of IT product England and Wales – 100.00
development and
services
Dunstan Thomas Consulting Limited (D) Provision of IT product England and Wales – 100.00
development and
services
Platform Action Limited (D) Provision of IT product England and Wales – 100.00
development and
services
Talbot and Muir Limited (E) Provision of pension England and Wales 100.00 100.00
administration services
The Pension Partnership Limited (E) Non-trading England and Wales – 100.00
MYSIPP Trustees Limited (E) Dormant England and Wales – 100.00
The Ward Mitchell Trustees Limited (E) Dormant England and Wales – 100.00
Oval Trustees Limited (E) Dormant England and Wales – 100.00
SAM Trustees Limited (E) Dormant England and Wales – 100.00
T M Trustees Limited (E) Dormant England and Wales – 100.00
MYSIPP Trustees (Property) Limited (E) Dormant England and Wales – 100.00
TPP Nominees Limited (E) Dormant England and Wales – 100.00
MYSSAS Trustees Limited (E) Dormant England and Wales – 100.00
Colston Trustees Limited (A) Dormant England and Wales – 100.00
Montpelier Pension Trustees Limited (A) Dormant England and Wales – 100.00
Tower Pension Trustees Limited (A) Dormant England and Wales – 100.00
SPS Trustees Limited (A) Dormant England and Wales – 100.00
Crescent Trustees Limited
(A) Dormant England and Wales – 100.00
Tower Pension (S-B) Trustees Limited (C) Dormant Scotland – 100.00
Bridgewater Pension Trustees Limited (A) Non-trading England and Wales – 100.00
Temple Quay Pension Trustees Limited (A) Dormant England and Wales – 100.00
Suffolk Life Trustees Limited (B) Non-trading England and Wales – 100.00
Suffolk Life (Spartan Estate) Limited (B) Dormant England and Wales – 100.00
SLA Property Company Limited (B) Dormant England and Wales – 100.00
EPPL P1056 Limited (B) Dormant England and Wales – 100.00
Tower Pension (S-B) Trustees Limited (C) Dormant Scotland – 100.00
68 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
15 Investments – continued
The following entities are all dormant, registered at (F), incorporated in England and Wales and 100% of ordinary
shares held by the group:
Pensions Partnership SIPP Trustees
Limited
Pensions Partnership SSAS Trustees
Limited
C H Property Trustee CORISANDE Ltd
C H Property Trustee Salter Ltd
CH Property Trustee A Lyons Ltd
CH Property Trustee AHMED Ltd
CH Property Trustee AIZLEWOOD &
CASSON LTD
CH Property Trustee AK TRUST Ltd
CH Property Trustee AKENSIDE Ltd
CH Property Trustee AYERS HODGES
Ltd
CH Property Trustee BAKER Ltd
CH Property Trustee BANDS CAPITAL
Ltd
CH Property Trustee BAYLISS Ltd
CH Property Trustee BINNS & LA
TROBE Ltd
CH Property Trustee BROOKES Ltd
CH Property Trustee BROOKES NO2
LTD
CH Property Trustee BURRAGE Ltd
CH Property Trustee BURT Ltd
CH Property Trustee BUTT Ltd
CH Property Trustee C WHEWELL Ltd
CH Property Trustee CAM Ltd
CH Property Trustee CATE HARVEY Ltd
CH Property Trustee CAULFIELD Ltd
CH Property Trustee CHARLES NIXON
Ltd
CH Property Trustee COMBER Ltd
CH Property Trustee COX Ltd
CH Property Trustee CRONIN Ltd
CH Property Trustee DANIELS Ltd
CH Property Trustee DAVMAC Ltd
CH Property Trustee DEENS &
HEGARTY Ltd
CH Property Trustee DEIBEL Ltd
CH Property Trustee DICKINSON Ltd
CH Property Trustee DIXO0002 Ltd
CH Property Trustee DIXON 2 Ltd
CH Property Trustee DREAMCRAFT Ltd
CH Property Trustee DUXBURY Ltd
CH Property Trustee EDMONDSON-
HANNON Ltd
CH Property Trustee ELLIOTT Ltd
CH Property Trustee ELLIOTT No 2 Ltd
CH Property Trustee ENA SHAW Ltd
CH Property Trustee ENRIGHT&
CUNNINGHAM Ltd
CH Property Trustee EVANS & WALTON
Ltd
CH Property Trustee FORSTER Ltd
CH Property Trustee FALCON LTD
CH Property Trustee FASTSOURCE LTD
CH Property Trustee FERROUS HOUSE
Ltd
CH Property Trustee MOXON & TAYLOR
Ltd
CH Property Trustee MULLARKEY (2)
Ltd
CH Property Trustee MULLARKEY Ltd
CH Property Trustee MURRAY Ltd
CH Property Trustee O’ROURKE Ltd
CH Property Trustee PADDEY Ltd
CH Property Trustee PATRICK
McCUTCHEON Ltd
CH Property Trustee PDL Ltd
CH Property Trustee PEAKER Ltd
CH Property Trustee PERKINS Ltd
CH Property Trustee PICKFORD Ltd
CH Property Trustee PIDDINGTON Ltd
CH Property Trustee PREMIER Ltd
CH Property Trustee PRICE Limited
CH Property Trustee PURNELL Ltd
CH Property Trustee QUALITYCOURSE
Ltd
CH Property Trustee QUINN Ltd
CH Property Trustee RAYSON &
WALTON Ltd
CH Property Trustee REEVES Ltd
CH Property Trustee REID Ltd
CH Property Trustee RHODES Ltd
CH Property Trustee RIDDELL Limited
CH Property Trustee ROBINSON Ltd
CH Property Trustee RODDICK LTD
CH Property Trustee ROGERSON Ltd
CH Property Trustee SAFTRONICS LTD
CH Property Trustee SELLARS Ltd
CH Property Trustee SHEPHERD Ltd
CH Property Trustee SHORT Ltd
CH Property Trustee SOUTHILL Ltd
CH Property Trustee SPENCE Ltd
CH Property Trustee SPRINGFIELD
(NO.2) Ltd
CH Property Trustee SPRINGFIELD Ltd
CH Property Trustee STEPHENSON Ltd
CH Property Trustee SUCHET Ltd
CH Property Trustee SWIFT Ltd
CH Property Trustee T DAVIES Ltd
CH Property Trustee TEESSIDE Ltd
CH Property Trustee WESTWOOD Ltd
CH Property Trustee WHARTON Ltd
CH Property Trustee WHITEHEAD Ltd
CH Property Trustee WOOD FAMILY
LTD
CH Property Trustee THORNE LTD
PDJD LTD
Pensions Partnership EFRBS Trustees
Limited
Pensions Partnership SIPP Trustees No
2 Ltd
CH Property Trustee FIN Ltd
CH Property Trustee FOX Ltd
CH Property Trustee GARETH
BROOKES LTD
CH Property Trustee GARY GARDNER
Ltd
CH Property Trustee GERALDINE
BROOKES LTD
CH Property Trustee GLOVER Ltd
CH Property Trustee GREAVES Ltd
CH Property Trustee GRIFFITHS Ltd
CH Property Trustee HAGUE Ltd
CH Property Trustee HAGUE No2 Ltd
CH Property Trustee HAMER Ltd
CH Property Trustee HANSFORD Ltd
CH Property Trustee HAWTHORNE Ltd
CH Property Trustee HEASMAN Ltd
CH Property Trustee HENDERSON Ltd
CH Property Trustee HORNIMAN Ltd
CH Property Trustee HOWE Ltd
CH Property Trustee HURLEY Ltd
CH Property Trustee HUTCHINSON Ltd
CH Property Trustee HUTTON Ltd
CH Property Trustee IFA Ltd
CH Property Trustee JARVIS LTD
CH Property Trustee JOHN PARNELL
Ltd
CH Property Trustee JOHNSEN Ltd
CH Property Trustee KABIR Ltd
CH Property Trustee KEARNEY LTD
CH Property Trustee KEITH EDWARD
LTD
CH Property Trustee KENNEDY
&WILLIAMS LTD
CH Property Trustee KENNY Ltd
CH Property Trustee KERR Ltd
CH Property Trustee KERRIGAN Ltd
CH Property Trustee KNAGGS Ltd
CH Property Trustee LAWRENCE Ltd
CH Property Trustee LEE Ltd
CH Property Trustee MACBEAN &
PALMER Ltd
CH Property Trustee MACEY &
ROBERTS LTD
CH Property Trustee MACEY LIMITED
CH Property Trustee MANSION HOUSE
(NO.2) Ltd
CH Property Trustee MANSION HOUSE
Ltd
CH Property Trustee MANTEL Ltd
CH Property Trustee MCCARTHY Ltd
CH Property Trustee MCNEIL Ltd
CH Property Trustee MEWES Ltd
CH Property Trustee MNS Limited
CH Property Trustee MNS No 2 Limited
CH Property Trustee MOVE Ltd
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 69
NOTES TO THE FINANCIAL STATEMENTS
continued
15 Investments – continued
The registered office address indicator included in the table above reflects the following current registered offices for
each company:
(A)
(B)
(C)
(D)
(E)
(F)
3 Temple Quay, Temple Back East, Bristol, BS1 6DZ
153 Princes Street, Ipswich, Suffolk, IP1 1QJ
Suite 3, West Port House, 144 West Marketgait, Dundee, DD1 1NJ
Building 3000 Lakeside North Harbour, Portsmouth, PO6 3EN
55 Maid Marian Way Nottingham NG1 6GE
33 Park Square West, Leeds, LS1 2PF
In the opinion of the directors, the aggregate value of the Group’s investment in subsidiary undertakings is not less
than the amount included in the statement of financial position. All subsidiaries, other than Curtis Banks Limited,
Suffolk Life Pensions Limited, Suffolk Life Annuities Limited and Talbot and Muir Limited are exempt from audit under
the requirements of s479A of the Companies Act 2006.
16 Fair value hierarchy
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Fair value measurements are based on observable and unobservable inputs. Observable inputs reflect market data
obtained from independent sources, while unobservable inputs reflects the Group’s view of market assumptions in the
absence of observable market information. The Group utilises techniques that maximise the use of observable inputs
and minimise the use of unobservable inputs.
The levels of fair value measurement bases are defined as follows:
Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: fair values measured using valuation techniques for all inputs significant to the measurement other than
quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Level 3: fair values measured using valuation techniques for any input for the asset or liability significant to the
measurement that is not based on observable market data (unobservable inputs).
The following table presents the Group’s financial investments and investment property by IFRS 13 hierarchy levels:
Total Level 1 Level 2 Level 3
£’000 £’000 £’000 £’000
As at 31 December 2021
Equity and other variable-yield securities 2,184,067 2,152,883 24,726 6,458
Debt securities and other fixed-income securities 40,898 23,026 16,483 1,389
Cash equivalents 1,386 — 1,386 —
Investment property 1,316,468 — — 1,316,468
Total financial investments and investment
property 3,542,819 2,175,909 42,595 1,324,315
Total Level 1 Level 2 Level 3
£’000 £’000 £’000 £’000
As at 31 December 2020
Equity and other variable-yield securities 2,015,190 1,975,187 27,655 12,348
Debt securities and other fixed-income securities 57,127 34,034 21,348 1,745
Cash equivalents 551 — 551 —
Investment property 1,208,605 — — 1,208,605
Total financial investments and investment
property 3,281,473 2,009,221 49,554 1,222,698
There have been no significant transfers between level 1, level 2 and level 3 in 2021 or 2020.
70 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
16 Fair value hierarchy – continued
Level 3 assets where internal models are used comprise property and unquoted investments, the latter including
investments in private equity, property vehicles and suspended securities.
In many situations, inputs used to measure the fair value of an asset or liability may fall into different levels of the fair
value hierarchy. In these situations, the Group determines the level in which the fair value falls based upon the lowest
level input that is significant to the determination of the fair value. As a result, both observable and unobservable
inputs may be used in the determination of fair values that the Group has classified within level 3.
The Group determines the fair values of certain financial assets and liabilities based on quoted market prices, where
available. The Group also determines fair value based on estimated future cash flows discounted at the appropriate
current market rate. As appropriate, fair values reflect adjustments for counterparty credit quality, the Group’s credit
standing, liquidity and risk margins on unobservable inputs.
Where quoted market prices are not available, fair value estimates are made at a point in time, based on relevant
market data, as well as the best information about the individual financial instrument. Illiquid market conditions have
resulted in inactive markets for certain of the Group’s financial instruments. As a result, there is generally no or limited
observable market data for these assets and liabilities. Fair value estimates for financial instruments deemed to be in
an illiquid market are based on judgements regarding current economic conditions, liquidity discounts, currency,
credit and interest rate risks, loss experience and other factors. These fair values are estimates and involve
considerable uncertainty and variability as a result of the inputs selected and may differ significantly from the values
that would have been used had a ready market existed, and the differences could be material. As a result, such
calculated fair value estimates may not be realisable in an immediate sale or settlement of the instrument. In
addition, changes in the underlying assumptions used in the fair value measurement technique could significantly
affect these fair value estimates.
All level 3 investments relate to policyholder assets and movements in the value of such assets do not impact on
shareholder reserves.
Equity and Debt securities and
other variable-yield other fixed income Investment
securities securities Property
2020 2020 2020
Level 3 Investments £’000 £’000 £’000
Fair value
At 1 January 2021 12,348 1,745 1,208,605
Net (losses)/gains for the year recognised in
profit and loss (7,593) (1,079) 120,416
Purchases/Additions — — 92,456
Disposals — — (105,009)
Transfers into level 3 4,230 941 —
Transfers out of level 3 (2,527) (218) —
At 31 December 2021 6,458 1,389 1,316,468
Equity and Debt securities and
other variable-yield other fixed income Investment
securities securities Property
2020 2020 2020
Level 3 Investments £’000 £’000 £’000
Fair value
At 1 January 2020 10,486 7,497 1,265,784
Net (losses)/gains for the year recognised in
profit and loss (6,702) (7,486) (60,751)
Purchases/Additions — — 122,449
Disposals — — (118,877)
Transfers into level 3 9,268 1,734 —
Transfers out of level 3 (704) — —
At 31 December 2020 12,348 1,745 1,208,605
Transfers out of level 3 relate to assets held for which observable inputs subsequently became available. Transfers into
level 3 relate to assets formerly categorised as level 1 or level 2 assets where observable inputs are no longer available.
This is principally due to assets becoming illiquid meaning that observable inputs are no longer available.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 71
NOTES TO THE FINANCIAL STATEMENTS
continued
16 Fair value hierarchy – continued
Fair values of financial instruments are, in certain circumstances, measured using valuation techniques that
incorporate inputs and assumptions that are not evidenced by prices from observable current market transactions in
the same instrument and are not based on observable market data. The following table shows the level 3 financial
instruments carried at fair value as at the balance sheet date, the valuation basis, main assumptions used in the
valuation of these instruments and reasonably possible increases or decreases in fair value based on reasonably
possible alternative assumptions. A factor of 5% has been used as the reasonably possible alternative assumption.
Reasonably possible
As at 31 December 2021 alternative assumptions
Current Increase in Decrease in
fair value fair value fair value
Valuation Main inputs 2021 2021 2021
Assets Basis/Technique and assumptions £’000 £’000 £’000
Suspended securities Note 1 Estimated
recoverable
amount 6,315 316 (316)
Unquoted securities Note 1 Price earning
Investment property Note 2 Third party
property index 1,316,468 65,823 (65,823)
multiple 1,532 77 (77)
1,324,315 66,216 (66,216)
Reasonably possible
As at 31 December 2020 alternative assumptions
Current Increase in Decrease in
fair value fair value fair value
Valuation Main inputs 2020 2020 2020
Assets Basis/Technique and assumptions £’000 £’000 £’000
Suspended securities Note 1 Estimated
recoverable
amount 10,665 533 (533)
Unquoted securities Note 1 Price earning
Investment property Note 2 Third party
property index 1,208,605 60,430 (60,430)
multiple 3,428 170 (170)
1,222,698 61,133 (61,133)
1. Values are based on estimate of market price. Sources used in deriving these estimates include the last traded price between a
buyer and a seller, brokers providing a matched bargain facility or a company’s audited financial statements, if available.
2. Valued using professional specialist property third party indexation data and indexation from the last valuation.
Any changes in value of assets held within non-participating investment contracts are offset by an equal and
opposite change in investment contract liabilities.
The fair value of cash equivalents, trade receivables and trade payables approximate to their carrying values due to
their short-term nature.
The fair value of contingent consideration payable is split between creditors due within one year and creditors due in
more than one year. The total amount payable relates to acquisitions by the Group of Dunstan Thomas and Talbot
and Muir during the year ended 31 December 2020. Contingent consideration payable is wholly classified as Level 3
for fair value measurement under IFRS 13.
72 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
Trade and other receivables
17
Group Company
As at 31 December As at 31 December
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Trade receivables 16,830 17,496 — —
Prepayments and accrued income 9,116 7,150 29 17
Amounts owed by group undertakings — — 305 —
Other receivables 2,035 2,003 43 279
27,981 26,649 377 264
All trade receivables were non-interest bearing and receivable under normal commercial terms. The directors consider
that the carrying value of trade and other receivables approximates to their fair value. All trade receivables from
pension administration segment are fees due from SIPPs and SSASs or due from policyholders in relation to their
investments. These fees are collected from the assets of the respective schemes of which the Group has control. If
there are no assets in the scheme, payment of the fees is the responsibility of the member who set the scheme up. As
such, all debts should be recoverable over time. Trade receivables from the Fintech segment are primarily made up of
licence and IT consultancy fees which are collected from the customers directly. The Group holds the trade
receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at
amortised cost using the effective interest method.
Details about the Group’s impairment policies and the calculation of loss allowance are provided in note 31 to the
financial statements.
18 Cash and cash equivalents
As at 31 December 2021 and 2020 cash and cash equivalents were as follows:
Group Company
As at 31 December As at 31 December
2021 20120 2021 2020
£’000 £’000 £’000 £’000
Cash at bank and in hand 31,891 32,509 4,458 4,411
Deposits with credit institutions 376,856 397,518 — —
Cash equivalents 1,386 551 — —
Cash and cash equivalents 410,133 430,578 4,458 4,411
The Group considers potential expected credit losses on cash and cash equivalents to be insignificant.
19 Trade and other payables
Group Company
As at 31 December As at 31 December
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Trade payables 8,880 8,172 57 29
Taxes and social security costs 2,775 2,880 5 51
Amounts owed to group undertakings — — — 1,347
Other payables 983 246 — —
Accruals 8,215 7,597 1,321 140
20,853 18,895 1,383 1,567
Trade payables are non-interest bearing and are normally settled on 30 day terms.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 73
NOTES TO THE FINANCIAL STATEMENTS
continued
20 Borrowings
Group Company
As at 31 December As at 31 December
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Current
Bank loans 46,832 53,533 4,507 3,852
46,832 53,533 4,507 3,852
Non-current
Bank loans 43,957 53,370 15,399 19,904
43,957 53,370 15,399 19,904
Total borrowings 90,789 106,903 19,906 23,756
Bank borrowings
The bank borrowings are repayable as follows:
Group Company
As at 31 December As at 31 December
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Within 1 year 46,832 53,533 4,507 3,852
Between 1 year and 5 years 34,928 42,531 15,399 19,904
After more than 5 years 9,029 10,839 — —
90,789 106,903 19,906 23,756
Bank borrowings of the Company are repayable between January 2021 and July 2025 and bear average coupons of
2.25% plus LIBOR per annum. After 31 December 2021, LIBOR will generally not be available, the reference rate used to
calculate interest will be replaced by the Sterling Overnight Index Average (SONIA) compounded in arrear plus a credit
adjustment spread. The changes are not intended to increase the interest rate compared to that under LIBOR, and
the frequency, number and timing of interest payments remain the same.
Total borrowings of the Group include liabilities of £70,883,000 (2020: £83,147,000) secured by legal charge over
certain properties held within non-participating investment contracts, and liabilities of £19,906,000 (2020:
£23,756,000) secured on the shares of Curtis Banks Limited, Suffolk Life Pensions Limited, Suffolk Life Annuities
Limited, and Dunstan Thomas Group Limited.
The company’s undiscounted borrowing repayable is £4,477k within one year and £16,836k over one year.
21 Non-participating investment contract liabilities
All amounts within this note relate to the Group only. There are no non-participating investment contract liabilities
within the Company.
(a)
Analysis of investment contract liabilities
Investment contract liability provisions for linked liabilities arising in connection with the above policies are
detailed below. There is no reinsurance amount (2020: £nil). For each linked SIPP the Group provides, there is
a separate internal fund. Where the Group provides a Trustee Investment Plan or Group Managed Fund, there
are a number of separate internal funds.
2021 2020
Movement in non-participating investment contract liabilities £’000 £’000
As at 1 January 3,585,307 3,571,904
Reserves in respect of new business 226,312 180,513
Amounts paid on surrenders and maturities during the year (408,369) (256,998)
Investment income 466,811 125,231
Expenses (33,850) (35,343)
As at 31 December 3,836,211 3,585,307
74 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
21 Non-participating investment contract liabilities – continued
(a)
Analysis of investment contract liabilities (continued)
These relate to:
2021 2020
£’000 £’000
Self-Invested Personal Pensions 2,683,775 2,554,264
Group Managed Funds – Trustee Investment Plans 45,557 55,583
Group Managed Funds 43,761 55,306
Trustee Investment Plans 1,063,118 920,154
As at 31 December 3,836,211 3,585,307
Assets held to cover non-participating investment contracts are detailed under separate notes to the financial
statements.
(b)
Investment contract liabilities – investment income
2021 2020
£’000 £’000
Rents receivable 69,365 75,931
Interest receivable 2,440 2,715
Investment and other income 29,252 27,526
Realised gains/(losses) on investments 30,802 (40,093)
Unrealised gains on investments 334,952 59,152
466,811 125,231
(c)
Investment contract liabilities – expenses
2021 2020
£’000 £’000
Investment management fees 11,482 10,010
Adviser fees 633 610
Management charges – administration 7,231 6,859
Bank fees and charges 73 300
Professional fees and sundries 11,602 11,150
Bad debts 1,299 4,104
Interest payable on bank loans and overdrafts 1,530 2,310
33,850 35,343
(d)
Reserves in respect of new business
2020 2019
£’000 £’000
Gross premiums
Periodic premiums relating to Self-Invested Personal Pensions 1,600 1,700
Single premiums relating to Self-Invested Personal Pensions 157,012 120,837
Single premiums relating to Group Managed Funds – TIPs 4,049 3,851
Single premiums relating to Group Managed Funds 848 1,212
Single premiums relating to Trustee Investment Plans 62,803 52,913
226,312 180,513
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 75
NOTES TO THE FINANCIAL STATEMENTS
continued
21 Non-participating investment contract liabilities – continued
(e)
Amounts paid on surrenders and maturities during the year
2021 2020
£’000 £’000
Gross claims paid
Lump sums on death 12,906 16,910
Lump sums on pensions vesting 19,462 12,010
Income withdrawals 33,266 31,090
Annuities purchased 314 122
Transfers out 327,238 183,705
Surrenders of managed funds – Trustee Investment Plans 15,183 13,161
408,369 256,998
22 Deferred tax liability
As a result of the taxation position set out in note 11, a deferred tax liability has arisen as follows:
Group
As restated*
2020 2019
£’000 £’000
Brought forward liability/(asset) 3,790 (911)
Net change in temporary differences on equity share based payments 100 568
Net change in temporary differences on plant and equipment (113) 77
Net change in temporary differences on intangible assets (313) 4,056
Carried forward liability 3,464 3,790
The deferred tax liability with respect to temporary differences is analysed as follows:
Group
As at 31 December
As restated*
2021 2020
£’000 £’000
Temporary differences on equity share based payments (169) (269)
Temporary differences on plant and equipment (110) 3
Temporary differences on intangible assets 3,743 4,056
3,464 3,790
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives are further detailed in note 2.
The deferred tax liability assumes a future corporation tax rate of 19% will be applicable to the Group.
76 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
23 Provisions
As at 31 December
In-specie
Other Restructuring contributions Group
provision provision provision Total
Provisions £’000 £’000 £’000 £’000
Balance as at 1 January 2020 246 307 — 553
Amounts provided 53 — 402 455
Amounts arising on acquisitions 7 — — 7
Amounts utilised (292) (170) — (462)
Amounts released as unutilised (7) (38) — (45)
Balance as at 31 December 2020 7 99 402 508
Amounts provided 211 93 11 315
Amounts utilised — (99) — (99)
Amounts released as unutilised — — (93) (93)
Balance as at 31 December 2021 218 93 320 631
Other provision
As part of the consolidation and integration exercise undertaken during the year ended 31 December 2018
management initiated a review of data records relating to commercial properties held within SIPPs administered by
the Group. A provision of £500,000 was made for the estimated costs of completing this exercise.
By 31 December 2019, the Group had completed its review enabling identification of the total number of cases
potentially requiring remediation, and as of 31 December 2020, the vast majority of cases had been settled. There
were no material variances to the original estimate of future remaining direct costs the Group expected to potentially
bear.
A contingent liability was also recorded in respect of possible remediation that might be required depending on the
outcome of the review. The estimate of these possible costs at 31 December 2019 was £1,400,000. Having largely
completed the review during 2021, management have been able to quantify the expected remediation costs and
provision of £211,000 has been made to the remaining costs as at 31 December 2021.
Restructuring provision
During the year ended 31 December 2019, the Group progressed its strategy to deliver its Target Operating Model by
deciding to centralise commercial property administration within one office location. Redundancy costs associated
with this decision, relating to the year ended 31 December 2019, are included as amounts introduced to the
restructuring provision for that year. A further £93,000 provision in 2021 has been made to reflect the updated
estimate of the impact from the restructuring activities.
In-specie contributions provision
As previously reported, the Group has been in correspondence with HMRC regarding processes and documentation in
respect of in specie contributions. HMRC have alleged that incorrect procedures were followed and is seeking to
reclaim tax reliefs granted and interest thereon. This is an industry wide issue affecting other SIPP operators and has
been challenged by the sector as a whole. Following a favourable ruling for HMRC in a case affecting another SIPP
operator, and having taken further legal advice, the Directors now consider it more likely than not that some cost
associated with this issue will be incurred by the Group.
The total exposure for affected customers is estimated at £1.1m inclusive of interest. However, in recognition of the
possibility that some customers may have insufficient assets to settle their share of the cost, the Group has
recognised a provision of £0.4m as at 31 December 2020. In 2021, this has been revised to £0.3m based on updated
information.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 77
NOTES TO THE FINANCIAL STATEMENTS
continued
24 Issued capital
Group and Company
2021 2020
£’000 £’000
Allotted, called up and fully paid
Ordinary shares of 0.5p each 332 330
332 330
Number Number
Number of Ordinary shares
Brought forward 66,414,312 54,142,346
Issued during the year 465,000 12,271,966
Carried forward 66,879,312 66,414,312
Ordinary shares are classified as equity. Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs.
The ordinary shares rank equally for voting purposes. On a show of hands each member shall have one vote and on
a poll each member shall have one vote per share held. Each ordinary share ranks equally for any dividend declared
and rank equally for any distribution made on a winding up.
25 Reserves
Share premium
This reserve was created on admission to trading on the Alternative Investment Market (“AIM”) and arises on the
difference between the placing price and the par value of Ordinary shares issued. Expenses directly relating to the
issue of new shares in the Company onto the AIM market have been deducted from the share premium account.
Equity share based payments
This reserve arises from share options granted by the Group to certain employees of the Group. Further details are
disclosed in note 26.
Retained earnings
Retained earnings comprise the cumulative realised gains and losses of the Group from each of the individual
combined entities.
As permitted by section 408 Companies Act 2006, the holding company’s profit and loss account has not been
included in these financial statements. The Company’s profit after tax for the year was £9,162,000 (20: £11,049,000).
Treasury shares
The Group has established an employee benefit trust (“EBT”) in order to acquire ordinary shares in the Company to
satisfy awards under the Group’s share based payment schemes. At 31 December 2021, the EBT held 448,296 ordinary
shares in the Company, acquired for a total consideration of £1,209,091 with a market value of £1,192,467 (2020:
261,276 ordinary shares acquired for a total consideration of £681,490 with a market value of £600,935). They are
classified as treasury shares in the Consolidated Statement of Financial Position, their cost being deducted from
equity.
26 Equity share based payments
The weighted average exercise price for all options outstanding at 31 December 2021 was 227.29p (2020: 197.08p).
The weighted average exercise price for all options exercised during the year ended 31 December 2021 was 90.18p
(2020: 79.04p).
The weighted average remaining contractual life of all unexercised share options as at 31 December 2021 was 6 years
and 5 months (2020: 6 years and 7 months).
The total charge to the Consolidated Statement of Comprehensive Income arising from equity-settled share-based
payment transactions for the year ended 31 December 2021 was £93,000 (year ended 31 December 2020: £434,000).
The total increase in equity arising from equity-settled share-based payment transactions for the year ended
31 December 2021 was £93,000 (year ended 31 December 2020: £434,000).
78 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
26 Equity share based payments – continued
The following table sets out each of the Group’s equity share based payments in operation during the year ended
31 December 2021:
Number of Number of
shares under shares under
option at option at Latest
Date of 1 January 31 December Exercise Exercise
Scheme grant 2021 Granted Exercised Lapsed 2021 price Date
EMI15 08/04/15 465,000 — (465,000) — — 62.54p 08/04/25
SS17 30/05/17 250,662 — (122,257) (128,405) — 213.60p 01/02/21
SS18 21/05/18 69,363 — (5,168) (53,554) 10,641 268.80p 01/02/22
SS19 21/05/19 138,217 — — (25,581) 112,636 244.80p 01/02/23
SS20 19/05/20 567,341 — (234) (84,333) 482,774 212.80p 01/02/24
SS21 15/06/21 — 331,468 — (12,162) 319,306 226.40p 01/02/25
CSOP16A 14/09/16 171,616 — — — 171,616 267.00p 14/09/26
CSOP16B 15/12/16 535,996 — — — 535,996 201.00p 15/12/26
CSOP17 26/06/17 535,996 — — — 535,996 260.00p 25/06/27
CSOP20 08/04/20 391,757 — — (46,432) 345,325 217.00p 08/04/30
CSOP21 27/04/21 — 427,125 — — 427,125 283.00p 27/04/31
LTIP17 26/10/17 5,869 — (5,869) — — 0p 26/10/27
LTIP18A 18/09/18 154,603 — (29,451) (119,664) 5,488 0p 18/09/28
LTIP18B 05/10/18 55,559 — — (41,669) 13,890 0p 05/10/28
LTIP20A 14/09/20 750,000 — — — 750,000 217.00p 14/09/30
LTIP20B 14/09/20 750,000 — — — 750,000 217.00p 14/09/30
EBS20 08/04/20 25,436 — — — 25,436 0p 08/04/30
4,867,415 758,593 (627,979) (511,800) 4,486,229
Of the total 4,486,229 shares under option as at 31 December 2021, 1,280,214 were exercisable.
EMI15
The Group set up an EMI scheme during the year ended 31 December 2014 by which certain employees and key
management personnel of Curtis Banks Limited were able to subscribe to ordinary shares in the Company. As at the
year end 31 December 2020, one member of key management personnel of the Group held options under the EMI.
SS16, SS17, SS18, SS19, SS20 & SS21
The Group operates a Save As You Earn (“SAYE”) share option scheme under which almost all employees of the Group
are eligible to subscribe to ordinary shares in the Company following a 3 year contribution and vesting period. Grants
under the SAYE are expected to be provided to eligible employees annually.
CSOP16A, CSOP16B, CSOP17, CSOP20 & CSOP21
During the year ended 31 December 2016, the Group set up a Company Share Option Plan (“CSOP”) share option
scheme under which certain key management of the Group are able to subscribe to ordinary shares in the Company.
As at the year ended 31 December 2021, five key management personnel of the Group held options under the CSOP.
The CSOP is a performance based option grant.
LTIP17, LTIP18A, LTIP18B, LTIP20A & LTIP20B
The Group operates a performance based Long Term Incentive Plan (“LTIP”) under which executive directors and
certain key management of the Group are able to subscribe to ordinary shares in the Company. As at the year ended
31 December 2021, five key management personnel of the Group held options granted under the LTIP in 2017 and
2018.
Vesting of LTIP awards is subject to satisfaction of performance criteria as described in the Corporate Governance
Report on page 31.
EBS20
The Group operates an executive bonus scheme through which a proportion of annual bonus amounts over a certain
threshold for certain executives are provided as share options providing those individuals with the ability to subscribe
to ordinary shares in the Company. As at the year ended 31 December 2021, only certain executive directors of the
Group held options under the EBS, as disclosed in the Directors’ Remuneration Report.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 79
NOTES TO THE FINANCIAL STATEMENTS
continued
26 Equity share based payments (continued)
Share based payment expenses – all schemes
The fair values of all options at the date of grant were determined by using the Black Scholes model. Expected
volatility was based upon historical information about the Group’s share price, measured using the standard
deviation of its monthly share prices over the last three years (where data is available) and comparisons against
similar entities at the date of grant. The Company first listed on the Alternative Investment Market (“AIM”) in May
2015 and consequently less than three years of data has been available for use in measuring the expected volatility
of certain grants shown below. The model includes separate vesting periods for each proportion of options based on
their exercise dates. The fair values derived and model inputs for each grant are reflected in the table below:
Option Fair value Share price Risk free
vesting per option on grant rate of Expected Dividend
Scheme Date of grant period granted date interest volatility yield
EMI15 08/04/15 3 years 5.64p 62.54p 0.50% 24.00% 0.00%
SS17 30/05/17 3 years 99.77p 282.50p 0.25% 44.29% 1.50%
SS18 21/05/18 3 years 84.09p 316.00p 0.50% 37.39% 1.98%
SS19 21/05/19 3 years 79.37p 308.00p 0.75% 33.05% 2.60%
SS20 19/05/20 3 years 60.43p 271.00p 0.10% 29.60% 3.32%
SS21 15/06/21 3 years 63.57p 275.00p 0.10% 34.10% 3.27%
CSOP16A 14/09/16 1.5 years 45.58p 267.00p 0.25% 39.01% 1.00%
CSOP16B 15/12/16 3 years 52.42p 201.00p 0.25% 42.95% 1.00%
CSOP17 26/06/17 3 years 63.54p 260.00p 0.25% 43.41% 1.50%
CSOP20 08/04/20 3 years 31.82p 217.00p 0.10% 32.82% 4.15%
CSOP21 27/04/21 3 years 48.80p 283.00p 0.10% 34.89% 3.18%
LTIP17 26/10/17 3 years 289.25p 310.00p 0.25% 46.66% 1.50%
LTIP18A 18/09/18 3 years 262.35p 287.00p 0.75% 36.05% 2.18%
LTIP18B 05/10/18 3 years 265.09p 290.00p 0.75% 35.98% 2.18%
LTIP20A 14/09/20 3 years 31.17p 215.00p 0.10% 33.09% 4.19%
LTIP20B 14/09/20 4 years 33.78p 215.00p 0.10% 33.09% 4.19%
EBS20 08/04/20 2 years 194.80p 217.00p 0.10% 32.82% 4.15%
27 Non-controlling interests
The non-controlling interests reflect the relevant amounts of the trading results and net assets attributable to the
non-controlling shareholders in CB 2019 Limited (see note 15).
As at 31 December
2020 2019
£’000 £’000
Share of net assets brought forward and carried forward 10 14
28 Financial commitments
The Group holds investment properties on behalf of non-participating investment contracts which generate income
by leasing these to tenants under operating leases.
At the statement of financial position date, the Group had contracted with vendors to purchase investment
properties or develop existing investment properties to pay the following future payments:
As at 31 December
2021 2020
Attributable to non-participating investment contracts £’000 £’000
Authorised and contracted commitments not provided for in respect of
investment property acquisition and development, payable after 31 December: 2,192 2,041
80 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
28 Financial commitments (continued)
At the statement of financial position date, the Group had contracted with tenants to receive the following future
minimum lease payments on behalf of non-participating investment contracts:
As at 31 December
2021 2020
Attributable to non-participating investment contracts £’000 £’000
Future aggregate minimum lease receivables under non-cancellable
operating leases:
Within 1 year 71,719 70,324
Within 2 – 5 years 133,337 128,114
After more than 5 years 82,306 82,941
287,362 281,379
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as
follows:
As at 31 December
2021 2020
Attributable to shareholder reserves £’000 £’000
Intangible assets — —
29 Pension costs – defined contribution
As at 31 December
2021 2020
£’000 £’000
Contributions payable by the Group for the year 2,327 2,015
30 Dividends
As at 31 December
2021 2020
£’000 £’000
Ordinary dividend declared and paid 5,997 5,149
5,997 5,149
A final dividend in respect of the year ended 31 December 2020 of 6.5p per share was proposed by reference to
audited distributable reserves as at 31 December 2020 and was paid on 4 June 2021.
An interim dividend in respect of the year ended 31 December 2021 of 2.5p per share was declared by reference to
audited distributable reserves as at 31 December 2020 and paid on 12 November 2021.
Financial risk management
31
The main risks arising from financial instruments are interest rate risk, credit risk, and liquidity risk. Each of these risks
is discussed in detail below. There is deemed to be minimal concentration risk present due to revenue generation
being spread over a high volume of individual customers. All risk management included in this note is in relation to
shareholder assets and liabilities, as there is no credit risk, interest risk or liquidity risk on the policyholder assets and
liabilities attributable to shareholder reserves.
The Group monitors financial risks on a consolidated basis, with its financial risk management based upon sound
economic objectives and good corporate practice. No hedging transactions have taken place during the years
presented. Financial assets principally comprise trade and other receivables, cash and short-term deposits, which
arise directly from its operations. Financial liabilities principally comprise trade and other payables, deferred
consideration and borrowings.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 81
NOTES TO THE FINANCIAL STATEMENTS
continued
Financial risk management – continued
31
Interest rate risk
Interest rate risk is the risk that the Group will sustain losses from adverse movements in interest bearing assets.
There is an exposure to interest rates on shareholder owned banking deposits held in the ordinary course of business.
The value of financial instruments on the Group’s consolidated statement of financial position exposed to interest
rate risk was £31,891k (2020: £32,126k) comprising cash and short-term deposits. This exposure is monitored to ensure
that the Group is maximising its interest earning potential within accepted liquidity and credit constraints. Cash at
bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are also made for
varying periods of between one day and 30 days depending on the immediate cash requirements of the Group and
earn interest at the respective term deposit rates.
The Group had external borrowings attributable to shareholders at the year-end of £19,906k (2020: £23,756k). The
interest rates attached to borrowings held include a floating rate based on the London Interbank Offered Rate
(“LIBOR”). There is an exposure on external borrowings therefore to interest rate risk.
The following table demonstrates the sensitivity to a 100bps (1%) change in interest rates on actual borrowings, with
all other variables held constant, on the Group’s profit before tax.
Effect on profit
Increase/decrease before tax
in basis points £’000
2021
£ Sterling +100 (282)
£ Sterling –100 282
2020
£ Sterling +100 (238)
£ Sterling –100 238
In addition, a source of revenue is based on the value of customer cash under administration. The Group has an
indirect exposure to interest rate risk on these cash balances held for customers. The Group manages this risk through
a central treasury function which monitors customer cash and interest rate movement on a monthly basis.
Credit risk
The Group trades only with third parties it recognises as being creditworthy. In addition, receivable balances are
monitored continually.
The maximum credit risk exposure of the Group’s financial instruments in the event of other parties failing to perform
their obligations is considered to be equal to the carrying amount of such financial instruments, excluding
policyholder assets and liabilities within non-participating investment contracts included within the consolidated
statement of financial position. Given the nature of the Group’s operations, it does not have significant concentration
of credit risk in respect of shareholder trade receivables, with exposure spread over a large number of customers.
All of the banks currently used by the Group have long-term credit ratings of at least BBB+ (Fitch). This results in the
Group retaining the ability to further mitigate the counterparty risk on its own behalf and that of its customers. The
directors continue to monitor the strength of the banks used by the Group.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables. The loss rate is determined by reference to the underlying level of liquidity in
each of the Group’s customers’ SIPPs because customers’ fees are normally settled directly from their SIPP cash
holdings. A lower level of liquidity in the SIPP, or indeed illiquidity, indicates reduced credit quality in the related trade
receivable balance.
82 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
32 Financial risk management – continued
Credit risk (continued)
The Group’s credit quality ratings as at 31 December 2021 in respect of shareholder trade receivables are set out
below:
Trade receivables
IFRS 9 loss gross carrying Net trade
rate amount Loss allowance receivables
% £’000 £’000 £’000
Good quality 0.00 – 10.00 5,326 (125) 5,201
Satisfactory quality 10.01 – 30.00 1,903 (518) 1,384
Low quality 30.01 – 99.99 1,675 (1,174) 502
No expected recovery 100.00 — — —
8,904 (1,817) 7,087
The Group’s credit quality ratings as at 31 December 2020 in respect of shareholder trade receivables are set out
below:
Trade receivables
IFRS 9 loss gross carrying Net trade
rate amount Loss allowance receivables
% £’000 £’000 £’000
Good quality 0.00 – 10.00 5,422 (144) 5,278
Satisfactory quality 10.01 – 30.00 1,855 (339) 1,516
Low quality 30.01 – 99.99 1,535 (1,111) 424
No expected recovery 100.00 30 (30) —
8,842 (1,624) 7,218
The Group’s approach to managing credit risk is based on its credit quality ratings, where a set of policies and
procedures are in place to recover fee debt based on individual SIPP liquidity. This underlying level of liquidity in each
of the Group’s customers’ SIPPs is mostly driven by the customers’ use of the SIPP and what they choose to invest in.
The terms and conditions attached to the Group’s SIPP products include a requirement to maintain a minimum cash
balance from which the Group normally draws fees when due. Where cash is not immediately available, assets from
the SIPP are disinvested in order to settle fees. We also request fees direct from customers where necessary.
Trade receivables of £16,830,000 at 31 December 2021 (2020: £17,496,000) includes £10,573,000 (2020: £10,278,000)
of policyholder receivables under non-participating investment contracts. Since there is a direct link between the
investments and obligations for non-participating investment contracts, these policyholder receivables have not
been included in the credit quality rating analysis since the Group is not directly exposed to the risks from these
contracts.
The Group continually assesses historical recovery data to help determine how the underlying level of liquidity in the
SIPPs fits into each of the credit quality ratings. Future historical data available may lead to changes in the
estimated categorisation of trade receivables gross carrying amounts and associated loss allowance.
The Group regularly categorises its trade receivables to help determine underlying changes in the level of liquidity of
the SIPP which then drives changes in the estimated loss allowance associated with the trade receivables balance.
Where trade and other receivables have been outstanding for more than six years, amounts are deemed to have no
reasonable expectation of recovery and are written off.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 83
NOTES TO THE FINANCIAL STATEMENTS
continued
Financial risk management – continued
31
Credit risk – continued
Changes in macroeconomic factors may impact the Group’s customers’ use of the SIPP and cause the level of
liquidity in the SIPP to increase or decrease. A 10% increase or decrease in loss rates estimated at the year-end would
have the following impact:
Effect on profit
Increase/(decrease) before tax
Year ended 31 December 2021 in loss rates £’000
Loss rate 10% (731)
Loss rate (10%) 489
Effect on profit
Increase/(decrease) before tax
Year ended 31 December 2020 in loss rates £’000
Loss rate 10% (726)
Loss rate (10%) 402
The Group charges fixed fees for its services reducing its exposure to changes in macroeconomic factors which may
otherwise impact a percentage basis point fee charging model.
Liquidity risk
This is the risk that the Group may be unable to meet its liabilities as and when they fall due. The Group monitors its
risk to a shortage of funds by considering the maturity of its financial assets (e.g. trade receivables, other financial
assets) and projected cash flows from operations. As part of these projections, the Group also monitors anticipated
capital expenditure and the expected timing of settlement of financial liabilities. The Group is a highly cash
generative business and maintains sufficient cash to fund its foreseeable trading requirements.
Details on the maturity of the Group’s borrowings are disclosed in note 20 and details on the maturity of the Group’s
lease liabilities are as reflected in the consolidated statement of financial position. The undiscounted value of lease
liabilities due <1 year is £1,122k. The undiscounted value of lease liabilities due >1 year is £7,446k. Maturity analysis
relating to other financial liabilities including trade and other payables and deferred consideration is as disclosed in
the consolidated statement of financial position.
32 Capital management
Certain subsidiaries of the Group are supervised in the UK by the Financial Conduct Authority (“FCA”) and, following
the acquisition of Suffolk Life Annuities Limited during the year ended 31 December 2016, the Prudential Regulation
Authority (“PRA”). The Group manages its capital through continuous review of the capital requirements of its
regulated subsidiaries, which are monitored by the Group’s management and reported monthly to the Board. The
Group’s objectives when managing capital are:
–
-
-
To comply with the regulatory capital requirements set by the FCA and the PRA;
To safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and
To maintain a strong capital base to support the development of its business.
Capital is defined as the total of share capital, share premium, retained earnings and other reserves. Total capital of
the Group as at 31 December 2021 was £81.6m (2020 restated: £80.3m). The Group manages the capital structure
and makes adjustments to it in light of changes in economic conditions. The Group’s regulated subsidiary companies
submit regular returns to the FCA and the PRA relating to their capital resources. The regulated subsidiaries are limited
in the distributions that can be paid up to the Group by each of their individual capital resource requirements. Group
internal policy is for regulated companies within the Group to hold at least 130% of their required regulatory capital.
Under the terms of the major shareholder borrowing facilities, the Group is required to comply with the following
financial covenants:
-
-
-
Cash flow cover – a measure of the Group’s liquidity;
Interest cover – a measure of the Group’s ability to meet interest repayments;
Leverage – a measure of the Group’s overall net cash position.
The Group has complied with these covenants throughout the current and prior reporting period.
84 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
NOTES TO THE FINANCIAL STATEMENTS
continued
33 Contingent consideration
The Group and Company has entered into certain acquisition agreements that provide for contingent consideration
to be paid. These agreements and the basis of calculation of the net present value of the contingent consideration
are summarised below. While it is not possible to determine the exact amount of contingent consideration (as this will
depend on the performance of the acquired businesses during the period), the Group estimates the fair value of the
remaining contingent consideration payable is £7.7m (2020: £8.2m).
On 3 August 2020 the Group acquired Dunstan Thomas for total maximum consideration of up to £27.5m, comprising
initial consideration of £21.9m in cash plus contingent consideration of up to £5.6m payable in cash after three years
post completion date if certain financial targets based on growth in earnings before interest, tax, depreciation and
amortisation are met. The Group estimates the fair value of the remaining contingent consideration at 31 December
2021 to be £3.2m (2020: £4.1m) using forecasts approved by the Board covering the contingent consideration period.
On 30 October 2020 the Group acquired Talbot and Muir for total maximum consideration of up to £25.25m,
comprising initial consideration of £18.0m in cash plus contingent consideration of up to £7.25m payable in cash over
a two year period post completion if certain financial targets based on growth in earnings before interest, tax,
depreciation and amortisation are met. The Group estimates the fair value of the remaining contingent consideration
at 31 December 2021 to be £4.5m (2020: £4.1m) using forecasts approved by the Board covering the contingent
consideration period.
34 Off Balance Sheet Cash
The Group administers cash held in SIPP bank accounts on behalf of its SIPP customers. Given the nature of these
customer balances, neither the funds nor an offsetting liability are included in the financial statements. Off balance
sheet cash held in SIPP bank accounts as at 31 December 2021 totalled £899m (2020: £992m).
35 Related parties
At the year end, Curtis Banks Group PLC was due £304,593 from Curtis Banks Limited (2020: owed £344,340 to
Curtis Banks Limited). The movement in the current year relates to share issue proceeds Curtis Banks Limited received
on behalf of Curtis Banks Group PLC of £290,811 (2020: £nil) and payments to settle intercompany amounts owed of
£601,584 (2020: £nil), offset by expenses paid by Curtis Banks Limited on behalf of Curtis Banks Group PLC
amounting to £243,462 (2020: £176,747).
During the year ended 31 December 2021, Suffolk Life Group Limited paid dividends totalling £6,550,000 to
Curtis Banks Group PLC (2020: £7,800,000). During the year ended 31 December 2021, Curtis Banks Limited paid
dividends totalling £3,700,000 to Curtis Banks Group PLC (2020: £6,000,000).
During the year ended 31 December 2021, Dunstan Thomas Group paid dividends totalling £1,668,071 to Curtis Banks
Group PLC (2020: nil). During the year ended 31 December 2021, Talbot & Muir Limited paid dividends totalling
£1,750,000 to Curtis Banks Group PLC (2020: nil).
During the year ended 31 December 2019, Curtis Banks Group PLC provided an unsecured loan of £20,000 to
Rivergate Legal Limited, a subsidiary of the Group, to assist with set up costs. The loan was repaid during the year
ended 31 December 2020.
During the year ended 31 December 2021, the Group paid £nil (2020: £45,833) gross emoluments to Chris Banks, a
significant shareholder of Curtis Banks Group PLC.
During the year ended 31 December 2018 Curtis Banks Group PLC provided an unsecured loan of £50,000 to
Templemead Property Solutions Limited, a subsidiary of the Group, to assist with set up costs. The loan was written
off as irrecoverable during the year ended 31 December 2020.
During the year ended 31 December 2020, as agreed and arranged under the sale and purchase agreement of
Dunstan Thomas, Dunstan Thomas Group Limited settled demerger amounts totalling £1,002,648 to the vendors for
the sale on behalf of Curtis Banks Group PLC. This amount was settled in the year to 31 December 2021 and
consequently, at the year end Curtis Banks Group PLC owed £nil to Dunstan Thomas Group Limited (2020:
£1,002,648).
36 Control
There is no one ultimate controlling party.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 85
COMPANY INFORMATION
Directors
Will Self – Chief Executive Officer
Dan Cowland – Chief Financial Officer
Jane Ridgley – Chief Operating Officer
Chris Macdonald – Non-Executive Chairman
Bill Rattray – Non-Executive Director
Jules Hydleman – Non-Executive Director
Jill Lucas – Non-Executive Director
Registered Office
3 Temple Quay
Temple Back East
Bristol
BS1 6DZ
Registered Number
07934492
Nominated Advisor and Broker
Peel Hunt LLP
Moor House
120 London Wall
London
EC2Y 5ET
Independent Auditors
PricewaterhouseCoopers LLP
2 Glass Wharf
Temple Quay
Bristol
BS2 0FR
Solicitors
Roxburgh Milkins Limited
Merchants House North
Wapping Road
Bristol
BS1 4RW
Registrars
Computershare PLC
The Pavilions
Bridgewater Road
Bristol
BS13 8AE
Joint Broker
Singers Capital Markets
1 Bartholomew Lane
London
EC2N 2AX
86 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
GLOSSARY
Adjusted diluted EPS
This is calculated by taking adjusted profit before tax for the financial period, deducting an effective tax rate of 19%
(2020: 19%), and dividing the total by the diluted weighted average number of shares in issue.
Adjusted operating margin
This is calculated by taking operating profit for the financial period and adding back amortisation and adjusting
items, then dividing this total by revenue for the financial period.
Adjusted profit before tax
This is calculated by taking profit before tax for the financial period and adding back amortisation and adjusting
items.
AUA
Assets Under Administration
Brexit
The exit of the United Kingdom from the European Union
Full SIPP
A pension that facilitates the full range of investment solutions. This can encompass anything that is permitted
within a Mid SIPP, plus others such as commercial property, directly-held investments, specialist investments such as
unlisted shares and unregulated collectives, multiple cash deposit accounts, physical gold, National Savings &
Investments, or structured products.
Mid SIPP
A pension that facilitates the use of one (or more) streamlined investment solution. For example, a discretionary fund
manager, or a fund platform/supermarket, or a stockbroker account, and a cash deposit account if required.
Net shareholder cash (after debt)
This is calculated by taking shareholder only amounts as split within the illustrative condensed consolidated
statement of financial position provided in the supplementary unaudited information for cash and cash equivalents,
and deducting borrowings.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 87
SUPPLEMENTARY UNAUDITED INFORMATION
Unaudited IFRS Consolidated Statement of Financial Position as at 31 December 2021 split
between insurance policy holders and the Group’s shareholders
As restated*
2021 2021 2021 2020
£’000 £’000 £’000 £’000
ASSETS Group Total Policyholder Shareholder Shareholder
Non-current assets
Intangible assets 89,814 — 89,814 91,078
Investment property 1,316,468 1,316,468 — —
Property, plant and equipment 8,636 — 8,636 7,658
Investments 2,224,965 2,224,965 — —
3,639,883 3,541,433 98,450 98,736
Current assets
Trade and other receivables 27,981 12,837 15,144 14,406
Cash and cash equivalents 410,133 378,241 31,892 32,509
Current tax asset 957 122 835 359
439,071 391,200 47,871 47,274
Total assets 4,078,954 3,932,633 146,321 146,010
LIABILITIES
Current liabilities
Trade and other payables 20,853 11,398 9,455 8,269
Deferred income 29,960 14,141 15,819 14,619
Borrowings 46,832 42,325 4,507 3,852
Lease liabilities 964 — 964 672
Provisions 453 — 453 501
Contingent consideration 2,467 — 2,467 2,375
101,529 67,864 33,665 30,288
Non-current liabilities
Borrowings 43,957 28,558 15,399 19,904
Lease liabilities 6,774 — 6,774 5,201
Provisions 178 — 178 7
Contingent consideration 5,199 — 5,199 6,537
Non-participating investment contract
liabilities 3,836,211 3,836,211 — —
Deferred tax liability 3,464 — 3,464 3,790
3,895,783 3,864,769 31,014 35,439
Total liabilities 3,997,312 3,932,633 64,679 65,727
Net assets 81,642 — 81,642 80,283
Equity attributable to owners of
the parent
Issued capital 332 — 332 330
Share premium 58,087 — 58,087 57,799
Equity share based payments 2,840 — 2,840 2,747
Treasury shares (1,382) — (1,382) (741)
Retained earnings 21,755 — 21,755 20,134
81,632 — 81,632 80,269
Non-controlling interest 10 — 10 14
Total equity 81,642 — 81,642 80,283
88 | Curtis Banks Group PLC Annual Report and Consolidated Financial Statements for the year ended 31 December 2021
SUPPLEMENTARY UNAUDITED INFORMATION
continued
Unaudited IFRS Consolidated Statement of Cash Flows as at 31 December 2021 split between
insurance policy holders and the Group’s shareholders
As restated*
2021 2021 2021 2020
£’000 £’000 £’000 £’000
Group Total Policyholder Shareholder Shareholder
Cash flows from operating activities
Profit before tax 9,322 — 9,322 7,429
Adjustments for:
Depreciation 1,806 — 1,806 1,499
Amortisation and impairments 2,934 — 2,934 2,088
Finance costs 1,800 — 1,800 885
Share based payment expense 93 — 93 434
Fair value gains on movement in
contingent consideration (1,870) — (1,870) —
Fair value gains on financial investments (213,701) (213,701) — —
Additions of financial investments (647,479) (647,479) — —
Disposals of financial investments 708,532 708,532 — —
Fair value losses on investment properties (120,416) (120,416) — —
Increase in liability for investment contracts 250,904 250,904 — —
Changes in working capital:
Increase in trade and other receivables (1,330) (593) (737) (1,523)
Increase/(Decrease) in trade and other
payables 5,017 2,386 2,631 (477)
Taxes (paid)/refunded (2,410) 100 (2,510) (2,996)
Net cash flows from operating activities (6,798) (20,267) 13,469 7,539
Cash flows from investing activities
Payments for intangible assets (1,670) — (1,670) (986)
Purchase of property, plant & equipment (270) — (270) (591)
Purchase of investment property (92,456) (92,456) — —
Purchase and sale of shares in the Group
by the EBT (641) — (641) (207)
Receipts from sale of investment property 105,009 105,009 — 42
Net cash flows from acquisitions (255) — (255) (34,484)
Net cash flows from investing activities 9,717 12,553 (2,836) (36,226)
Cash flows from financing activities
Equity dividends paid (5,997) — (5,997) (5,149)
Net proceeds from issue of ordinary shares 290 — 290 24,199
Net increase/(decrease) in borrowings (16,114) (12,114) (4,000) 12,235
Principal element of lease payments (762) — (762) (934)
Interest paid (781) — (781) (383)
Net cash flows from financing activities (23,364) (12,114) (11,250) 29,968
Net increase in cash and cash equivalents (20,445) (19,828) (617) 1,281
Cash and cash equivalents at the beginning
of the year 430,578 398,069 32,509 31,228
Cash and cash equivalents at the end
of the year 410,133 378,241 31,892 32,509
*The audited results for year ended 31 December 2020 have been restated to account for measurement period adjustments arising
under IFRS 3 Business Combinations relating to the acquisitions of the Dunstan Thomas Group and the Talbot and Muir Group that
took place in H2 2020. The adjustments made to restate the 31 December 2020 comparatives, as further detailed in note 2.
Annual Report and Consolidated Financial Statements for the year ended 31 December 2021 Curtis Banks Group PLC | 89
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CURTIS BANKS GROUP PLC
3 Temple Quay
Temple Back East
Bristol
BS1 6DZ
Registered Number
07934492
Your future, our focus.
curtisbanks.co.uk