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Cabcharge Australia Limitedc E x p e r i a n A n n u a l R e p o r t 2 0 2 1 Transforming lives with data Experian Annual Report 2021 Year ended 31 March 2021 Experian plc Strategic report Transforming lives with data Contents Strategic report 02 Experian at a glance 04 Chairman’s statement 06 Chief Executive’s review 10 Our purpose in action – COVID-19 response 14 Our investment case 16 Key performance indicators 18 Market trends 20 Our business model 26 Our strategic focus areas 38 Our sustainable business strategy: Environmental, Social and Governance Non-financial information and s172(1) statement 57 58 North America regional review 59 Latin America regional review 60 UK and Ireland regional review 61 EMEA/Asia Pacific regional review 62 Financial review 72 Risk management 81 Viability and going concern Governance 84 Chairman’s introduction 86 Board of directors 88 Corporate governance report 99 Nomination and Corporate Governance Committee report 104 Audit Committee report 111 Report on directors’ remuneration 135 Directors’ report Financial statements 139 Financial statements contents 140 Independent auditor’s report Group financial statements 147 Group income statement 148 Group statement of comprehensive income 149 Group balance sheet 150 Group statement of changes in equity 151 Group cash flow statement 152 Notes to the Group financial statements Company financial statements 206 Company financial statements 208 Notes to the Company financial statements 220 Shareholder and corporate information 222 Glossary To download this Annual Report and our other corporate literature visit www.experianplc.com Roundings Certain financial data has been rounded in this report. As a result, the totals of data presented may vary slightly from the actual arithmetic totals of the data. Exchange rates Principal exchange rates used are given in note 10 to the Group financial statements. The average pound sterling to US dollar rate is 1.31 (2020 1.27). Our purpose To create a better tomorrow for consumers, for businesses, for our people and for our communities. What we do We create opportunities by turning data into information, and by deploying advanced technologies and analytics. Why this matters As the world’s leading information services company we play a pivotal role in the societies in which we work. We believe it is our responsibility to use our capabilities and data as a force for good. Financial highlights Statutory Revenue US$5,372m (2020: US$5,179m) Operating profit US$1,183m (2020: US$1,185m) Profit before tax US$1,077m (2020: US$942m) Basic EPS USc88.2 (2020: USc74.8) 1 From ongoing activities. Growth % at actual rates Growth % at constant rates +4% +6% 0% +4% +14% +6% +18% +5% Benchmark Revenue – ongoing activities US$5,357m (2020: US$5,161m) Benchmark EBIT¹ US$1,385m (2020: US$1,386m) Benchmark profit before tax US$1,265m (2020: US$1,255m) Benchmark EPS USc103.1 (2020: USc103.0) Growth % at actual rates Growth % at constant rates +4% +7% 0% +3% +1% +5% 0% +4% The 2020 financial highlights have been re-presented following the reclassification of our Consumer Services business in Latin America to the Consumer Services business segment. See note 9 to the Group financial statements for further detail. See note 6 to the Group financial statements on page 160 for definitions of non-GAAP measures. Experian plc Annual Report 2021 01 S t r a t e g i c r e p o r t An unprecedented year The past year was not one that we, or anyone, could have predicted. For many it has been a time of great hardship and loss. The COVID-19 pandemic is sadly not over yet and we are all working through its impact, the long-term effects of which are unknown. At Experian, we have played an essential role in helping people, businesses, governments, and society manage through the crisis. We have helped our employees adapt to remote working and we have reoriented how we engaged with tens of thousands of clients. A good performance, demonstrating the resilience of our business Experian delivered growth in FY21. Organic revenue growth was 4% and total revenue growth from ongoing activities was 7% at constant currency. North America and Brazil performed strongly, offsetting declines in UK and Ireland, and EMEA/Asia Pacific. Our ability to grow, even in a crisis, reflects the strength and diversity of our portfolio. It also reflects our commitment to innovation and to the millions of relationships we have established with consumers. Looking ahead to FY22 we are poised for strong growth. Our addressable markets are large and expanding, and we are well placed to take advantage of a number of compelling opportunities. Brian Cassin Chief Executive Officer We play a vital role for People Empowering them to better understand their financial position, to take control of their finances and manage their financial health. Businesses Helping them to make more informed and better decisions. Communities, governments and charities Using data to help the most vulnerable in society and to support economic growth. 02 Experian at a glance Global technology and innovation We are a global technology company playing a key role in making it easier for consumers and businesses to interact. We help them manage their financial health, make informed decisions and seize opportunities. We embrace innovation and harness technology to expand access to credit, support responsible lending, modernise processes and better protect against fraud and identity theft. Our talented and diverse workforce serves customers worldwide from 44 countries. We manage and organise ourselves across four geographic reporting regions and two business segments. Our business activities Business-to-Business Data Revenue - ongoing activities1 US$2,866m +2% Decisioning Revenue - ongoing activities1 US$1,184m -4% We help businesses to identify and understand their customers and to lend responsibly and appropriately, providing them with the information to help them manage the risks associated with lending. We also help them build a better understanding of consumers’ preferences. We are experts at creating and developing innovative analytical and decisioning tools. We help businesses to manage their customers, minimise the risk of fraud, comply with legal requirements and automate decisions and processes. 1 % growths shown are organic revenue growth at constant exchange rates. Revenue from ongoing activities by region and business activity (US$m) Consumer Services Revenue - ongoing activities1 US$1,307m +17% We help consumers take control of their credit, making it easier for them to manage their financial position, receive financial education, access credit offers, and protect themselves from identity fraud. A North America B Latin America C UK and Ireland D EMEA/Asia Pacific Total 17,800* employees globally 166m Business credit history records DataLab San Diego 110m Free consumer membership base Data 1,761 457 361 287 2,866 Decisioning 694 92 220 178 1,184 Business-to- Business 2,455 549 581 465 4,050 Consumer Services 1,075 76 156 n/a 1,307 Total US$m 3,530 625 737 465 5,357 % split 65 12 14 9 DataLab London DataLab São Paulo DataLab Singapore 1.3bn Consumer credit history records 44 Countries North America See page 58 Latin America See page 59 UK and Ireland See page 60 EMEA/Asia Pacific See page 61 * Figure does not include recent acquisitions in Spain and Brazil. Experian plc Strategic report 03 Our strategic focus areas Our sustainable business strategy See page 26 See page 38 1 Make credit and lending simpler, faster and safer for consumers and businesses 5 Enable businesses to find, understand and connect with audiences 2 Empower consumers to improve their financial lives Our customers 4 Help organisations in specialised vertical markets harness data and analytics to make smarter decisions 3 Help businesses verify identity and combat fraud OUR PURPOSE Creating a better tomorrow Improving financial health for all Core products THROUGH OUR Social Innovation ENABLED BY Community investment Treating data with respect Security Accuracy Privacy Transparency Inspiring and supporting our people SUPPORTED BY Working with integrity Protecting the environment Our investment case, a unique proposition See page 14 We are a leader in global information services with strong positions in growing markets Strong foundations support our growth potential We place a strong emphasis on environmental, social and governance (ESG) criteria We remain financially well positioned Experian plc Annual Report 2021Strategic report 04 Chairman’s statement Supporting our customers, clients and communities in challenging times Mike Rogers Chairman The pandemic has demonstrated the power of data as a force for good in difficult times. Data-led decision- making has been critical in helping us to take on the biggest challenge in a generation. Experian moved quickly to make our data insights available to governments, health services, communities, businesses and charities, so they could better respond to their challenges. We also worked rapidly with lenders and governments to support financial accommodation programmes, making sure financial support reached those in need. Responding to the crisis in a purpose- led way – using data for good The pandemic has demonstrated the power of data as a force for good in difficult times. Data-led decision-making has been critical in helping us to take on the biggest challenge in a generation. In the USA, we developed the COVID-19 Outlook & Response Evaluator (CORE) tool to predict future hot zones for the virus – a free application that allows health and government leaders to forecast how a specific area may be affected. In the UK, we launched Experian Safeguard, a dashboard based on anonymised data insights, to help organisations, including food banks and local authorities, to plan and allocate their resources based on those who need it most. In Brazil, the COVID Radar Panel provided information about the pandemic to partners, offering them a detailed view on COVID-19 movement by city and even by neighbourhood, to allow the adoption of quick and assertive measures in the most affected areas. Supporting global financial health Alongside these data-driven initiatives, our United for Financial Health programme has used financial education and partnerships to help the people hit hardest by the COVID-19 crisis. To date, we have worked with 11 new non-profit organisations in the USA, UK and Brazil, providing resources, funding, products and volunteers as part of our mission to improve financial health worldwide. We have reached 35 million people so far, more than doubling our programme target of reaching 15 million people this year. Our aim is to reach 100 million people in total by 2024. We have offered credit education, advice and free tools to consumers and businesses across the globe. I am proud that more than 110 million people can now access their credit reports free on our consumer platforms, helping them better understand their credit profiles, save money and navigate their personal financial needs. Furthering our efforts to help consumers, our Social Innovation programme invests in new products specifically designed to offer additional societal benefits as well as creating revenue for our business. Through Social Innovation, we have reached 61 million people in the last eight years – including 28 million this year – with a target of reaching 100 million by 2025. These are examples of the purposeful activity that helps contribute towards reaching the three United Nations Sustainable Development Goals we’ve identified as those we can influence, all of which we are addressing through our strategic focus on improving financial health. You can read more on page 38. When I wrote about COVID-19 affecting the world in our 2020 Annual Report, I never expected this 2021 statement would be a reflection on living and working amid the global pandemic for a further 12 months. It has been an extraordinary year, yet we have stayed true to our purpose and achieved a strong performance. Once again, Experian has shown it can withstand external shocks and grow even in the most challenging of circumstances. Our resilience is due to the diversity of our portfolio, the strength of our culture and the focus of our strategy on innovation-led growth. We expect to emerge from the pandemic in good shape, with an abundance of opportunities to pursue despite operating in many of the worst-hit countries. Throughout the pandemic, our people remained focused on supporting customers, governments and the communities we serve: I found the commitment of Experian colleagues across the world inspiring. For example, Experian moved quickly to make our data insights available to governments, health services, communities, businesses and charities, so they could better respond to their challenges. We also worked rapidly with lenders and governments to support financial accommodation programmes, making sure financial support reached those in need, and ensuring that economies kept moving as well as possible during lockdowns. Experian plc Strategic report 05 As part of a continued focus on improving our sustainability disclosure, this year we have started reporting to the recommendations of the Sustainability Accounting Standards Board (SASB) framework. Our commitment to the environment We acknowledge our responsibility to help protect the planet for future generations, and we have set ambitious new targets to benchmark our progress. Our aim is to be carbon neutral in our own operations by 2030. FY21 is the first year for which we’ll offset a portion of our emissions, offsetting 20% of our emissions with the goal of reaching 100% in FY25. We are also announcing science-based targets to cut our Scope 1 and 2 emissions by 50%, and our Scope 3 emissions by 15% by 2030. In addition, we are proud to be a public supporter of the Task Force on Climate-related Financial Disclosures (TCFD) and our ‘A-‘ rating from the CDP (formerly known as the Carbon Disclosure Project) places us in the leadership category for our disclosure on climate risks and opportunities. Positioned for growth with digital technology Innovation has always been a central belief of Experian’s business, and we are well positioned to take advantage of trends and opportunities we have identified in the market. The pandemic has changed the behaviour of consumers, and of how businesses operate, in many cases accelerating exciting trends towards the adoption of digital business models – I would encourage you to read more about these trends on page 18. We have adapted quickly to the changing environment and continued with our significant programme of investment. This is helping us to build fast-growing franchises in areas like Experian Consumer Services and Experian Health. We have also moved forward with the internationalisation of our ground-breaking innovations like Experian Ascend and our Open Data platform. For example, we introduced a raft of propositions to take advantage of the new era of positive data in Brazil, a market change that will greatly enhance fair access to credit for the Brazilian population. We have remained rightly ambitious, so we have not let up on geographic expansion (for example our German acquisition) or in building new franchises such as verification services. These are just a few examples of the geographic growth and innovation-led growth at the heart of our strategy. People and culture The innovative solutions we provide to customers are made possible by our people. Throughout the pandemic, we have adopted a ‘people first’ agenda. Colleagues have had to work in very different circumstances, and we have supported them by offering the flexibility they need for their changing world. As we emerge from the lockdowns, we will continue to adopt new ways of working and we will give much of our global workforce more flexibility to work to a pattern that suits them and benefits Experian. I remain incredibly proud of our growing diversity at Experian, and we continue with a strong focus on recruiting, retaining and developing colleagues who fully reflect the rich diversity of the communities we serve. We believe this achieves both better outcomes for customers and superior business performance. This year we hired our first-ever Chief Diversity Officer in our North American business, and our global leaders are serving as executive sponsors for key diversity pillars – gender, race and ethnicity, disability, LGBTQ+ and mental health. I would like to express my thanks on behalf of the Board to our 17,800 employees, who have shown remarkable resilience and commitment, and without whose talents we could not achieve success for customers or shareholders. Governance and the Board Strong corporate governance has always been at the heart of the Experian business, and we maintain the highest standards as set out in the UK Corporate Governance Code 2018. I am pleased our current Board meets the recommendations of both the Hampton- Alexander Review on gender diversity and the Parker Review on ethnic diversity. During the last financial year, we were delighted to welcome Alison Brittain as an independent non-executive director. Her impressive career of over 25 years of senior management experience at a variety of major financial institutions, and as a FTSE 100 Chief Executive, means Alison is an invaluable addition to the Board. I look forward to working closely with her over the coming years. In March 2021, we announced that Jonathan Howell would join the Board in May 2021 as an independent non-executive director. Jonathan is a highly regarded FTSE 100 Chief Financial Officer, and also brings a wealth of relevant expertise and extensive board-level experience. There were no other changes to the Board during the period. Committed to data privacy As we plan for the future, we are also acutely aware of our responsibilities when managing the information we are entrusted with. Data is critical to economic growth, but it must be managed and used appropriately. Experian holds vast amounts of data, and we have a responsibility to make sure it is kept safe and used only in the most appropriate and responsible ways. Maintaining the highest levels of security is fundamental to our business and we follow strict regulations for managing and using data in compliance with all relevant laws. We're firmly committed to doing the right thing when it comes to working with consumer data and have programmes that evaluate every product and service to ensure we strike the right balance between privacy considerations and the economic benefit to customers. Furthermore, we are continually investing in our multi-layered information security programme to prevent, detect and mitigate cyber security risks in all our markets. The future – performance with purpose Looking ahead, we have a clear strategy of innovation-led growth to capture the potential from a number of substantial and exciting addressable markets, so growing shareholder value further. Financial performance this year was resilient. We delivered 4% organic revenue growth, led by North America and Latin America, which helped to offset weaker performances elsewhere. Portfolio diversity, strong execution and our commitment to long-term strategic investments were all contributory factors, helping the Group withstand the trading challenges posed by the pandemic. It is also worth noting that Experian ended the year in a strong funding position, was able to move forward with some exciting investments to extend the franchise, while maintaining the final dividend in line with the prior year. Our people’s professional and personal responses to COVID-19 and the results achieved have been remarkable. We have helped people, organisations and government use data to make a difference and have extended our commitment to supporting financial health around the world. So we enter next year with strong foundations for further growth and the confidence that comes from knowing that, through the most challenging of times, we continue to work towards our purpose of creating a better tomorrow. Experian plc Annual Report 2021Strategic report 06 Chief Executive’s review A resilient performance spurred by innovation, teamwork and empathy businesses and consumers make better- informed decisions about their futures. Our financial performance was robust. Total revenue growth was 7% at constant currency, while organically we grew 4%. Consumer Services deserves special mention, delivering 17% underlying growth in the year and reaching 110 million members globally. We benefitted from growth in B2B platforms across many territories. Combined with continued expansion in key verticals like health, and growth in counter-cyclical revenue streams such as US mortgage, this enabled us to offset declines in some parts of our business caused by the COVID-19 economic downturn. We benefitted both from our portfolio diversity and from the strategic investments we have made over many years, and we continued to invest in our business in FY21. Full-year financial highlights Revenue growth was 7% at constant currency and organic revenue growth was 4%. At actual exchange rates revenue growth was 4%. Organic revenue growth in North America was 7% and 9% in Latin America, including very strong contributions from Consumer Services. The UK and Ireland and EMEA/Asia Pacific regions were impacted negatively, down (6)% and (14)% respectively. B2B organic revenue growth was flat. Growth in North America Data and Decisioning was offset by declines elsewhere. Growth in Consumer Services was very strong, with organic revenue up 17%, driven by North America and Brazil. Growth in Benchmark EBIT was 3% at constant exchange rates and flat at actual exchange rates after currency translation headwinds. Our Benchmark EBIT margin was 25.9%, down 80 basis points at constant currency and down 100 basis points at actual exchange rates. This was after deliberate action to support our people through the crisis, increased marketing investment and investment to support new product innovation and technology transformation. We delivered growth in Benchmark earnings per share of 4% at constant exchange rates and flat at actual exchange rates. Cash flow was very strong, with a conversion rate of Benchmark EBIT into Benchmark operating cash flow of 106%. We ended the year in the lower half of our leverage range at 2.2x (on a pre-IFRS 16 basis), compared to our target of 2.0-2.5x for Net debt to Benchmark EBITDA. Brian Cassin Chief Executive Officer Experian delivered a strong performance this year, even as the world faced the testing times posed by the COVID-19 pandemic. We have again shown Experian’s resilience in the face of external shocks, which is due to the diversity of our portfolio and our successful innovation-led investments in new opportunities. FY21 was a year when we unlocked the power of data for consumers, clients and communities across the world. Revenue – ongoing activities US$5,357m +4%1 Benchmark EBIT – ongoing activities US$1,385m +3%2 1 Organic growth at constant exchange rates. 2 At constant exchange rates. Experian delivered another successful year of growth even as the COVID-19 pandemic posed significant challenges to people, clients, and the world economy. I am proud of the accomplishments of our 17,800 people around the world who have shown incredible resilience and passion, and who have worked tirelessly to serve our various communities over this year. In recognition, we intend to make a special one-off share-based award to recognise the outstanding commitment of our people this year. The COVID-19 pandemic has demonstrated how properly managed data can be used as a significant force for good and has been used by decision-makers to navigate the immediate crisis and to direct resources to where they were most needed. Our people were instrumental in using innovative data science to predict hot zones for the spread of the virus. We stepped up to launch financial education projects aimed at supporting communities impacted by COVID-19. We supported governments, charities and food banks to help the most vulnerable during the pandemic, and we provided health and data modelling tools to assist with co-ordination of national efforts. These are just some examples of how we have placed the power of our data and innovation in service of society. As we look out to the economic recovery in the months ahead, data will be a critical driver of growth, helping Experian plc Strategic report 07 B2B organic revenue was flat overall, recovering as the year progressed, with H1 (2)% and H2 +2%: Growth in North America and Latin America offset declines in other regions. Strength in US mortgage volumes, Experian Ascend, health and fraud and identity services helped to offset weaker conditions for unsecured credit origination, decisioning software and marketing expenditure by clients. We made further headway with the roll-out and scaling of our core B2B platforms. The cumulative total contract value for Ascend is US$374m and we continue to make progress with Experian One, CrossCore and our Open Data platforms. Health delivered another year of growth, automotive was stable and we have expanded our position in employment and verification services. In Brazil, we had significant success extending our relationships with some of our largest financial services clients as we signed expanded new multi-year agreements, and we saw good growth in positive data propositions. We had an outstanding year in Consumer Services, which delivered 17% organic revenue growth, with H1 +13% and H2 +22%: We now have 110 million free consumer memberships, up by 28 million year-on-year. We have 41 million free members in the USA, 59m in Brazil and 9.5 million in the UK. North America delivered organic revenue growth of 16%. We are investing behind the success of Experian Boost, which now has 6.7m unique account connections. Our membership continued to grow and we launched a new vertical, automotive insurance, which performed strongly, and which offers significant further growth opportunities in FY22 and beyond. Our Latin America revenues more than doubled in the year at local currency, with revenue up 144% organically. Consumer Services in the UK recovered as the year progressed, returning to growth in H2. We launched Experian Boost in the UK in early November and now have 370,000 active Boost members. Operating efficiency One of our key operating principles to manage throughout the COVID-19 crisis has been to retain capacity to recover strongly and to help our people to cope with the crisis. We did not use any government furlough schemes. We deliberately balanced our approach to cost management. We cut back on discretionary spend, froze headcount, and delayed non-critical investment. We also supported our people and sustained critical growth investments. We took concerted action to increase investment in marketing Revenue and Benchmark EBIT by region, Benchmark EBIT margin 2021 US$m 20202 US$m Total growth1 % Organic growth1 % 7 9 (6) (14) 4 Revenue North America Latin America UK and Ireland EMEA/Asia Pacific Ongoing activities Exited business activities Total Benchmark EBIT North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities – central corporate costs Benchmark EBIT from ongoing activities Exited business activities Total Benchmark EBIT Benchmark EBIT margin – ongoing activities 3,530 625 737 465 5,357 15 5,372 1,201 172 122 (20) 1,475 (90) 1,385 1 1,386 25.9% 3,247 732 755 427 5,161 18 5,179 1,093 220 173 12 1,498 (112) 1,386 1 1,387 26.9% 9 9 (6) 7 7 n/a 6 10 4 (34) (232) 2 n/a 3 n/a 3 1 At constant exchange rates. 2 Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses. See the Financial review for analysis of revenue, Benchmark EBIT and Benchmark EBIT margin by business segment and note 6 to the Group financial statements for definitions of non-GAAP measures. expenditure in support of Consumer Services. We have also invested in and materially progressed our technology transformation as we migrate from mainframes into a distributed framework utilising the cloud, and we continued to invest in new product innovation. We previously announced that we have embarked on a transformation programme in the UK and Ireland to simplify our technology estate, enhance customer experience and to return to profitable growth. The programme is progressing well and to plan. As previously announced, these actions have given rise to an exceptional restructuring charge of US$50m in FY21. We are on course to deliver year-on-year run-rate savings of US$40m in the year ending 31 March 2022. The net effect was that EBIT margin for the year reduced to 25.9%. For FY22, we expect strong accretion in the EBIT margin. Funding and liquidity We further strengthened our funding position while also supporting investment activities. We continued to invest in data, technology and innovation through capital expenditure. Capital expenditure reduced by (13)% to US$422m, which represented 8% of total revenue. For FY22, we expect capital expenditure to represent circa 9% of total revenue. We took steps to expand the reach of our portfolio through a number of inorganic investments. These included: – The expansion of our bureau estate with the acquisition of a majority stake in a German credit bureau (the Risk Management division of Arvato Financial Solutions) and of the Spanish credit bureau, Axesor. – We also accelerated our entry into the verification services vertical with the acquisition of employer solutions provider Corporate Cost Control. After the year end, we acquired Tax Credit Co (TCC) and Emptech, which also add to our income verification business in North America. – Consistent with our ambitions to extend our position in fraud and identity management, we acquired Tapad, a leader in resolution of digital online identities and BrScan, a leading player in Brazil. – Total acquisition outflow in the year was cash of US$583m and 7.2m Experian plc shares. Experian plc Annual Report 2021Strategic report 08 Experian plc Strategic report Chief Executive’s review continued We have announced a second interim dividend of 32.5 US cents per share, unchanged year-on-year. This will be paid on 23 July 2021 to shareholders on the register at the close of business on 25 June 2021. We have also announced that we will commence a US$150m share repurchase programme, which will mainly offset deliveries under employee share plans. During the year we undertook two bond issues totalling US$1.1bn. Including these, our bonds total US$4bn and have an average remaining tenor of six years. At 31 March 2021, we had no drawn bank debt and held US$2.65bn of undrawn committed bank borrowing facilities which have an average remaining tenor of four years. These include our core US$1.95bn club facility which is undrawn and committed until December 2025. As at 31 March 2021, Net debt to Benchmark EBITDA was 2.2x (on a pre-IFRS 16 basis), compared to our target leverage range of 2.0- 2.5x. Other financial developments Benchmark PBT was US$1,265m, up 5% at constant currency and 1% at actual rates, after lower net interest expense of US$121m (2020: US$132m). The reduction reflects lower average global interest rates. For FY22, we expect net interest expense to be around US$115-120m. The Benchmark tax rate was 25.9% (2020: 25.8%). For FY22, we expect a rate in the range of 26% to 27%, taking into account expected profit mix for the year. Our Benchmark EPS was 103.1 US cents, an increase of 4% at constant currency and flat at actual exchange rates. The weighted average number of ordinary shares (WANOS) increased to 910m (2020: 902m), inclusive of the shares delivered in connection with the purchase of our stake in the Risk Management division of Arvato Financial Solutions. For FY22, we expect WANOS of circa 915m. Benchmark operating cash flow increased 22% at actual rates and our cash flow conversion was 106% (2020: 88%). The increase is due to the mix of growth, strong control of working capital, reduced infrastructure investment, and some phasing. Foreign exchange translation was a 4% headwind to Benchmark EPS in the year. This was predominantly due to the Brazilian real, which weakened by 31% relative to the US dollar versus the prior year. For FY22, we expect a neutral impact to Benchmark EBIT, assuming recent foreign exchange rates prevail. Environmental, Social, and Governance (ESG) A key priority for Experian is to improve the financial health of the communities we serve. This is how we can use our data and expertise to make the biggest difference to society, helping us to contribute to three United Nations Sustainable Development Goals, namely targets 1.4, 8.10 and 9.3, which relate to improving access to financial services and credit. This year we have reached 28 million people with our Social Innovation products specifically developed to deliver societal benefits and improve financial health. Examples include Social Determinants of Healthcare, which helps people in the USA to avoid major medical bills in future, and a financial online training module in Brazil to help people manage their finances. This brings the total number of people reached since 2013 to 61 million, putting us on track to meet our target of 100 million people by 2024. A year ago, we launched United for Financial Health, a financial recovery programme partnering with NGOs to help communities significantly affected by COVID-19. For example, we partnered with Operation HOPE to reach ethnic minority groups in the USA with support to raise credit scores, and the National Literacy Trust in the UK. We have reached 35 million people and small businesses across the USA, Brazil and the UK and Ireland this year. We are also expanding into EMEA and Asia Pacific. As part of our ‘people first’ agenda we will be making a special one-off share-based recognition award to our people for their commitment to Experian during the COVID-19 pandemic. We have undertaken an extensive review of our Diversity, Equity and Inclusion strategy, and aim to increase the number of women among our senior leaders from 32% to 40% by 2024, supporting the commitment we made this year to the UN Women’s Empowerment Principles. Following a recent appointment, our Board is now comprised of 36% women and 73% independent members (including the Chairman). We continue to meet the recommendations of the Hampton-Alexander Review on gender diversity and the Parker Review on ethnic diversity. Experian featured in the S&P Global Sustainability Yearbook 2021 as a leader on ESG, scoring in the top 15% of the professional services industry. Our commitment to help tackle climate change and reduce our impact on the environment is reflected in our CDP rating of ‘A-‘. This places us in the leadership category and among the top 14% of professional services companies for our disclosure on climate risks and opportunities. This year we have cut our absolute carbon emissions by a further 58% and reduced our carbon intensity by 60% (Scope 1, Scope 2 market-based and Scope 3 emissions). This reduction was mainly due to the decrease in air travel as a result of COVID-19 restrictions. As business activities resume, we’re expecting to see an increase in air travel trends and we will continue looking into carbon reduction initiatives to help decrease our footprint sustainably and in the long term. Building on last year’s commitment to be carbon neutral in our own operations by 2030, we are today announcing a science-based target to cut our Scope 1 and 2 emissions by 50% by 2030, and our Scope 3 emissions by 15% by 2030. Having committed last year to gradually carbon offset our Scope 1 and 2 emissions over the five years to 2025, we are offsetting 20% of our FY21 emissions. Outlook As the global recovery gathers pace, we believe data will be a key driver of economic growth. We are off to a strong start to FY22 which gives us every confidence of another successful year ahead. We expect organic revenue growth in the range of 7-9%, total revenue growth of 11-13% and strong EBIT margin accretion, all at constant currency. Year-on-year % change in organic revenue – for the year ended 31 March 2021 North America Latin America UK and Ireland EMEA/Asia Pacific Total Global % of Group revenue 65 12 14 9 100 Data 5 1 (5) (8) 2 Decisioning 2 2 (7) (20) (4) B2B1 4 1 (6) (14) 0 Consumer Services 16 144 (6) n/a 17 Total 7 9 (6) (14) 4 1 B2B = Business-to-Business segment consists of Data and Decisioning business sub-divisions. Transforming lives with agility and speed in the cloud Cloud-based decisioning is critical to an organisation’s ability to quickly and nimbly support their customers. The COVID-19 crisis has accelerated the need for solutions that are fast to install, secure, can easily scale to meet emerging needs and changes in demand, and upgrade seamlessly. Donna DePasquale Executive Vice President and General Manager, Decisioning, Experian Experian plc Annual Report 2021 09 S t r a t e g i c r e p o r t Experian Decision Analytics’ PowerCurve recognised as a winner of the 2021 Artificial Intelligence Excellence Award 60% of people now have higher expectations of their online experiences than before COVID-19 Consumers around the world are facing increasing financial pressures and need more support than ever from organisations. COVID-19 and natural disasters have intensified consumer need for quick and relevant support. And they’re demanding it – 60% of people now have higher expectations of their online experiences than before COVID-19. At the same time, organisations have faced significant business disruption, such as overwhelmed call centres, and older, less flexible processes that can’t adapt as rapidly to changing circumstances, impacting customer service, and causing delays. Organisations are having to navigate this complexity, to change at pace, and take decisive action. By using automated decisioning solutions, such as our enhanced cloud-based PowerCurve solutions, businesses can upgrade and accelerate their digital transformation to effectively address these challenges. Coupled with our powerful datasets they can make decisions with speed and agility, while still supporting customers and providing them with a personalised, consistent experience. Our cloud solutions help businesses simplify their IT environments, lower costs, and nimbly scale up and down to meet consumer demand as needed. Businesses have access to our continuous innovation through accessible upgrades and smaller companies can take advantage of data and analytics previously out of reach. And, because there’s no software to install, they can be ready to test in days and go live in weeks rather than months. 10 Experian plc Strategic report Our purpose in action – COVID-19 response Supporting you during the pandemic and beyond The COVID-19 pandemic has impacted millions of people and organisations around the world and, more than a year in, many are still grappling with its mental, emotional, and financial toll. Among the more pressing issues for people has been navigating the financial landscape and hardships brought on by illness and unemployment. It has also exacerbated underlying financial issues for already marginalised groups in society. For businesses it has meant navigating operational closures, changes to revenue models and increasing fraud attacks. In response we developed several solutions which provide education, advice and free tools to consumers and businesses. We have also worked with charities and governments to ensure that financial relief reaches the people and businesses that need it most. Yet there are signs of hope and resolution ahead. People’s concerns about personal finances are starting to ease and they are more comfortable with the security and convenience of online shopping and banking. Businesses are embracing new opportunities to serve the growing ranks of online customers and are preparing for the future as pent-up consumer demand is released. Our employees have risen to the challenge of providing practical assistance, innovating at speed to help those immediately affected and help them better position themselves as they recover from COVID-19 related hardships. We knew early on in the pandemic that we had an important part to play and pivoted our efforts to do just that. Looking forward, we remain committed to developing new ways to use our resources, data, technology and creativity to be part of the solution and long-term recovery. Brian Cassin Chief Executive Officer Globally Facilitating access to fair and affordable credit As people and businesses get more and more stretched during times of crisis, the ability to access credit, or have forbearance on existing credit is vital. It can be the difference between sinking or making it through. We remain committed to helping lenders and governments maintain access to the credit economy, and continue to support consumers to protect their credit standing and financial health. We stepped up financial education for consumers We stepped up financial education for consumers so they could benefit from accessing resources and educational materials to learn about credit and other important personal finance topics. Giving them the information and tools so they can make more informed decisions during difficult times. We launched United for Financial Health to empower and protect vulnerable consumers United for Financial Health is a new financial recovery programme to empower and protect vulnerable consumers hardest hit by COVID-19, helping them to improve their financial health through education and action. So far, we’ve partnered with 11 non-profit organisations in the USA, UK and Brazil, to deliver tools and resources to help those affected the most. During FY21 we’ve reached 35 million people, far above our first-year target of 15 million. See page 42 for more detail. 35 million People reached Highlighting the impact of the global pandemic Our research, such as in our Global Insights Report and Global Data Management Research Report, is helping organisations understand how the pandemic has impacted data perception and usage, as well as consumer behaviours and business strategies, and helps them understand how important it is to quickly identify and support those who are facing short-term challenges as well as the vulnerable. North America Making life easier for hospital and healthcare administrators We developed a free Payer Alerts Community COVID-19 Portal for healthcare administrators that provides a comprehensive overview of the latest policy and procedure changes from medical insurers and payers, with 8,509 alerts available to users. Allowing administrators to quickly respond to those changes, ensure smooth processing of payments and freeing up their time to deal with other issues. So far, 1,732 organisations and 2,049 users, from all 50 US states, have taken advantage of the portal during the pandemic. Experian plc Annual Report 2021 11 S t r a t e g i c r e p o r t US$130,000 has helped 21 families stay in their homes Helping families keep their homes and promoting financial inclusion We partnered with the NAACP¹ and created Home Preservation Grants to support African-American homeowners facing COVID-19 related hardship who are at risk of losing their homes. We donated US$150,000 to the NAACP for financial education and mortgage relief, of which US$130,000 has helped 21 families stay in their homes with grants of between US$2,000 and US$10,000 per recipient. Improving financial health with increased access to credit reports Free weekly credit reports from March 2020 to March 2022 for all Americans via AnnualCreditReport.com. Innovating to support informed decisions and help mitigate risk We built the Ascend Portfolio Loss Forecaster, a new tool for lenders that uses Experian’s data, along with up-to-date macroeconomic forecasts, to help them analyse risk accurately across consumer loan portfolios. Guiding healthcare and government efforts to help the at-risk We created a free interactive heatmap showing populations in the USA most susceptible to developing severe cases of COVID-19: to help inform and guide efforts around communications, outreach to high-risk populations, align healthcare, community and government programmes, and plan for the recovery. Helping lenders understand small businesses' unique circumstances We launched a free COVID-19 US Business Risk Index to assist lenders and government organisations in understanding how to make fair and responsible lending to small businesses that need it the most during this time. Our analysts built the dashboard's first iteration in one weekend to provide easily accessible, relevant insights in response to the rapidly advancing virus. Backing innovation to help solve global challenges, level the playing field and create new opportunities We've supported Massachusetts Institute of Technology's Solve programme by committing up to US$100,000 for the Good Jobs & Inclusive Entrepreneurship and Learning for Girls & Women. Each of which is working to solve financial health issues which have arisen for consumers as a result of COVID-19. 1 National Association for the Advancement of Colored People. See www.naacp.org for more information. 12 Experian plc Strategic report Our purpose in action – COVID-19 response continued Latin America Colombia and Peru Helping consumers in Colombia and Peru manage their financial health Our free credit reports and scores have enabled people to manage their financial health. In Colombia, since April 2020, more than one million people have had access to their credit history for free. From mid-April 2021, we extended this free access to SME businesses. Colombia Assisting the government to prioritise those most in need We helped the Colombian Government to segment the low-income population. Our information became an additional tool for them to use so they could deliver special subsidies to help support these households during the difficult economic situation caused by COVID-19, So far, in the first stage alone 1,162,965 subsidies were delivered by the government. UK and Ireland Supporting charities to help identify vulnerable people We offered our Affordability Passport to organisations, including debt charities and lenders, free of charge for three months to help them identify customers who could be left vulnerable due to changes in their financial circumstances. Brazil Applying data science to enable fast access to data for researchers and public health workers We built and launched a new data platform, the COVID Radar, in just three weeks, and mobilised a public-private partnership of more than 60 companies and organisations, to use data to fight the pandemic and help with Brazil’s economic recovery. It provides real-time information on COVID-19 cases in Brazil and analytical tools to help predict its progression. In addition to providing case monitoring and disease forecasting, the COVID Radar integrates and connects companies with the hospitals and communities that need donations of ventilators, personal protection equipment, or other supplies. Protecting people’s credit scores Along with Equifax and TransUnion, we helped implement a special measure called an 'emergency payment freeze' to ensure that an individual’s current credit score is protected for the duration of an agreed payment holiday with their lender. Assisting public organisations including health services in planning their response We created a new dashboard tool, called Experian Safeguard, for local authorities, NHS trusts, fire services, and major charities to help them prioritise those most in need during the pandemic. Developed in just two weeks, it enabled the identification of geographic areas where vulnerable people lived, allowing targeted community care to be delivered to them. Supporting Brazilian consumers to pay off their debts We held our debt negotiation fair (Feirao Limpa Nome) online this year, bringing on even more partners and greater discounts to support Brazilian consumers in paying off their financial debts during such challenging economic times. Overall, it was our biggest fair to date, we helped 3.6 million people, and saw a record 6.2 million agreements reached with lenders. 3.6 million Brazilians supported to renegotiate their debts during our online Limpa Nome fair Backing micro and small entrepreneurs to create innovative business solutions We’re backing small companies with our ‘SME challenge’, a nationwide contest to support entrepreneurs' innovation projects and help them overcome the pandemic challenges they were facing. 1,325 companies entered the competition, all of whom had free access to our online financial education course and their credit score. They also received mentorship from our employees who volunteered more than 500 hours to work with the companies, Overall, 20 companies won a cash prize of R$25,000 each to invest in the implementation of their ideas and contribute to the development of the entrepreneurial culture in Brazil. Helping disadvantaged school children get online We’re helping close the ‘digital divide’, between families with laptops and internet access, and those without, whose school-aged children have been struggling to keep up with online classes during the pandemic. Overall, for the UK and Ireland we donated £170,000 for student laptops, of which £100,000 was used to match donations from Mail Force's ‘Computers For Kids’ campaign via The Big Give, helping to raise £200,000 for the initiative. £170,000 for student laptops Experian plc Annual Report 2021 13 S t r a t e g i c r e p o r t South Africa Improving people’s lives through financial literacy We partnered with Rhiza Babuyile, a local NGO, to launch a programme focused on incubating entrepreneurs based in the townships of Kyamandi and Fisantekraal, Cape Town. We provided consulting assistance to ten entrepreneurs, who each have four to five dependents, in the form of a business assessment and one-on-one coaching. Plans are to continue the coaching and add masterclasses and training workshops. Malaysia Credit education and tools for consumers and businesses Since the start of the pandemic we have provided consumers with free access to credit health monitoring services and businesses with free access to credit risk management, digital customer relationship management, secure file sharing and storage, and business analysis tools. Singapore Supported small businesses We provided complimentary credit monitoring for 500 local businesses, helping them to embrace digitalisation and be ready to address business continuity challenges. Italy Guiding businesses and supporting them to react quickly By providing free feasibility studies for businesses we’ve helped them to analyse current market conditions, assess the impact of change on their portfolios and decision-making processes, and identify critical issues and suitable solutions. The Netherlands Assessing portfolio risk We wanted to help our clients quickly and accurately find and mitigate risk in their portfolios, by providing an innovative Portfolio Health Web Data Check. This helped them identify which of their SME clients may be affected by the pandemic, giving our clients a chance to proactively protect their business while still supporting their clients in the most fair and appropriate way, helping to minimise the impact of COVID-19. India Employee Relief Fund and fundraising drive to support colleagues and their families. We extended our Employee Relief Fund to help our employees and their families cope under harsh pandemic conditions. We also provided homecare support, extended health insurance, COVID-19 test cost reimbursement and business-wide well-being and mindfulness sessions for our teams in India. A 48-hour fundraising drive saw colleagues across all our regions making personal donations, which were in turn fully matched by the Company. Experian committed a further US$600,000 towards charitable efforts to provide emergency relief across India. Helping consumers manage their financial anxiety Our free credit reports enabled people to take control of their financial health. EMEA / Asia Pacific EMEA Educating businesses on urgent issues Across the EMEA region we helped businesses address urgent issues arising from the pandemic through a series of dedicated webinars on: fraud prevention, supporting small and medium-sized enterprises, debt defence and collections strategies, the ‘new normal’ for digital, and the economic reboot and impact on regulation. Asia Pacific Supporting the next level of customer experience With the surge in demand for digital services from consumers Experian has been providing businesses with extra support via cloud-based and on-premise solutions, as well as helping to protect against fraudsters, whether that is to differentiate legitimate consumers from fraudsters, or swiftly respond to emerging fraud threats. Thailand, Vietnam and Sri Lanka Keeping consumers connected during uncertain times Supported leading telecommunications companies, allowing them to rapidly provide assistance to their subscribers to minimise financial impacts and lockdown/movement controls of the COVID-19 outbreak. Staying connected during movement control restrictions has proven to be critical, allowing 3.2 million consumers to gain access to essential services like food supplies and in managing the psychological effects of isolation. 3.2 million consumers gained access to essential services like food supplies US$600,000 emergency relief across India 14 Our investment case A unique proposition We are a global technology company and a leader in data and analytics. Our data assets, both for businesses and consumers, are extensive. We have global reach and the capability to constantly innovate to fulfil new and emerging needs. The global COVID-19 pandemic has further accelerated the existing revolution in data, analytics and digitisation, and we are in a unique position to react to these trends. We take a client-first approach to product innovation, creating new products by investing in people, data and the science of data interpretation, aided by advanced technologies such as artificial intelligence, big data and machine learning. Through this, we aim to create a better tomorrow by improving the ways consumers and businesses can control their financial well-being and seize new opportunities. Experian’s roots are in providing credit information and assessing lending risks. This is still the foundation of our business but we also do much more – for lenders, individuals, telecommunications companies, governments, the automotive sector, US healthcare providers and many other industries. Our scale and diverse portfolio provide great resilience, helping us tackle unforeseen circumstances, such as a global pandemic, with confidence. We have mapped the addressable markets for Experian and they are significant, estimated at US$130bn and growing. These markets are driven by accelerating digital adoption, the shift towards automated services, the growing requirement for customer authentication and consumers needing to access and manage their credit. We target and allocate capital across our strategic focus areas to make credit and lending simpler, transform financial lives, and help businesses to combat fraud and to find customers across the segments in which we operate. We have developed detailed plans to pursue these opportunities. We are financially well positioned, with a strong balance sheet and funding liquidity, and a proven record of converting operating profit to cash. This allows us to focus on key investment areas, balancing shareholder returns with the need for constant innovation, as well as investing in organic business growth while also pursuing strategic acquisition opportunities. We are a leader in global information services with strong positions in growing markets We are a leader, holding the number one or two positions in our largest markets – the USA, Brazil and the UK. We have a diversified portfolio of businesses across different sectors and regions, operating in 44 countries. Our business model is scalable, allowing us to grow revenues quickly at low incremental cost. We achieve significant synergies across our operations, by combining data sources, integrating analytics and using technology to offer differentiated propositions. We invest continually to secure opportunities across specific addressable markets, which we have estimated at US$130bn. These five strengths combine to create a strong basis for future growth. Experian plc Strategic report Experian plc Annual Report 2021 15 S t r a t e g i c r e p o r t We place a strong emphasis on Environmental, Social and Governance criteria We transform financial lives by helping people take control of their financial status – through our core offering, Social Innovation products and community investment. We safeguard futures by protecting our customers and their families from identity theft and fraud. We are introducing innovative ways for those who lack basic financial services to gain access to credit, for example through use of alternative data sources and financial education programmes. We help to protect the environment and manage the risks of climate change. We have consistently reduced our carbon footprint year-on-year and are committed to being carbon neutral in our own operations by 2030. We are committed to being a diverse and inclusive organisation, at all levels and across all regions. We have established detailed targets to achieve this, as set out in the Environmental, Social and Governance (ESG) section of this report on page 38. Strong foundations support our growth potential We continually invest in product innovation and new sources of data, to address changing macroeconomic factors and emerging market opportunities. We have direct relationships with over 100 million consumers, a situation unique in our industry. This provides a mechanism for us to engage directly with millions of people. We have demonstrated our ability to adapt quickly to meet the changing needs of our clients in unforeseen market conditions. We have great potential to introduce and expand our services in all of our markets over the longer term. We are increasing our product offering in growing industry segments such as US healthcare and automotive, and in expanding markets such as Brazil. We remain financially well positioned We have averaged 6% annual organic revenue growth1 since we became an independent listed company in 2006, sustaining positive organic growth through all macroeconomic conditions, including both the 2007/2008 global financial crisis and the 2020/2021 COVID-19 pandemic to date. More detail is available in the Financial review section of this report on page 62. Much of our revenue is highly recurring, as many of our products and solutions are mission critical and an integral part of our clients’ operating processes. We are a highly cash-generative, low capital intensity business. Our Benchmark EBIT to Benchmark operating cash flow conversion rate1 has averaged 99% since 2006. We make the best use of the cash we generate, balancing the need for organic investment in innovation and acquisitions with returns to shareholders, through dividends and share repurchases. 1 Please refer to note 6 to the Group financial statements for definitions of organic revenue growth and Benchmark EBIT to Benchmark operating cash flow conversion. 16 Key performance indicators A resilient performance Against a challenging external backdrop, we launched many new products, supported our employees, and helped many who were financially impacted by the pandemic. The strength of our business performance is evidenced by a range of key performance indicators. Organic revenue growth 4% 2021 2020 2019 2018 2017 Why is this important? It is a measure of our ability to provide innovative propositions and services for clients and consumers, and to extend these into new industries and across many geographies. Aim To consistently achieve mid- to high single-digit organic revenue growth. Analysis Organic revenue grew 4%, with the main contributors being North America 7% and Latin America 9%, including very strong contributions from Consumer Services. % 4 8 9 5 5 See page 117 – Revenue performance is linked to directors’ remuneration For a reconciliation of revenue from ongoing activities, including disclosure of organic and acquisition revenue, from the year ended 31 March 2020 to 31 March 2021 see page 165. Benchmark EBIT and Benchmark EBIT margin1 US$1,385m 25.9% 2021 20202 2019 20183 2017 US$m % 1,385 25.9 1,386 1,306 1,241 1,197 26.9 26.9 27.1 27.6 Why is this important? It measures how well we turn our revenue into profits, allowing us to generate returns for shareholders, and to reinvest for future growth. Aim: To operate our business efficiently and cost effectively with stable EBIT margins. Analysis: We protected our people, made the conscious decision to invest in marketing for Consumer Services, and continued our innovation and technology modernisation programmes. Overall, for the Group, Benchmark See page 117 – Benchmark EBIT is a directors’ remuneration measure EBIT was US$1,385m, up 3% at constant exchange rates and flat at actual rates. Benchmark EBIT margin was 25.9%, down 80 basis points before the impact of foreign exchange rates, and down 100 basis points overall. 1 From ongoing activities. 2 Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses. 3 Restated for IFRS 15. Return on capital employed (ROCE) 15.0% 2021 2020 2019 20181 2017 1 Restated for IFRS 15. % 15.0 16.1 15.9 15.5 15.5 Why is this important? It measures how effectively we have deployed our resources and how efficiently we apply our capital. Aim: To generate good returns on the investments we make and create long-term value for shareholders. Analysis: Our decision to sustain organic investment and to pursue attractive acquisition opportunities reduced ROCE in FY21. This year, ROCE was 15.0%, down 110 basis points on the prior year. Benchmark earnings per share (EPS) USc103.1 Why is this important? EPS measures our success at generating surpluses and value for our shareholders. 2021 2020 2019 20181 2017 1 Restated for IFRS 15. USc 103.1 103.0 98.0 94.4 88.4 Aim: To achieve earnings growth for shareholders while balancing reinvestment to secure future growth opportunities. Analysis: Benchmark EBIT from ongoing activities was up 3% at constant exchange rates, driven by our organic revenue growth performance. Our Benchmark net finance costs decreased to US$121m, and Benchmark tax See page 117 – ROCE is a directors’ remuneration measure See page 117 – Adjusted Benchmark EPS is a directors’ remuneration measure rate was up 10 basis points at 25.9%. With weighted average numbers of shares at 910m, this resulted in Benchmark earnings per share of 103.1 US cents. This was flat on the prior year at actual exchange rates and up 4% at constant currency. Experian plc Strategic report 17 See page 117 – Cumulative Benchmark operating cash flow is a directors’ remuneration measure Benchmark operating cash flow and cash flow conversion 106% US$1,476m 2021 2020 2019 20181 2017 1 Restated for IFRS 15. US$m % 1,476 106 1,214 1,270 1,196 1,149 88 97 96 96 Why is this important? Cash flow gives us the capacity to operate, and reinvest. The efficiency with which we convert profits into cash flow is measured by cash flow conversion. Aim: To convert at least 90% of Benchmark EBIT into Benchmark operating cash flow. Analysis: Cash flow performance was strong this year with Benchmark operating cash flow of US$1,476m, up US$262m on last year. The increase is due to changing revenue mix, strong control and phasing of working capital, and deferred infrastructure investment. Employee engagement Why is this important? An engaged and motivated workforce helps us to develop exciting new propositions and find new opportunities while appropriately managing risks. Aim: To ensure Experian is a great place to work and that we can attract and retain the best people. Analysis: This year has been challenging for everyone, including our 17,800 employees with the majority working remotely due to COVID-19 related office closures. For many, it has been a See the Environmental, Social and Governance (ESG) section on pages 38 to 56 for further information on how we’ve been looking after and listening to employees this year period of adjustment and adaptation. We have been dealing with the uniqueness of remote working and sometimes unanticipated mental health consequences such as loneliness and anxiety, as well as other added challenges such as having to home-school children. We have therefore focused very strongly on our colleagues’ mental and physical well-being throughout the year. To stay in touch we have conducted more frequent and flexible pulse surveys, rather than our traditional single annual survey. Survey results show that: On average across all pulse surveys, 75% of employees responded favourably to ‘I am feeling physically and mentally well’ On average across all pulse surveys, 88% of employees responded favourably to ‘I am able to be productive in my current work set up’. We plan to continue this approach into FY22 as more frequent sampling and direct employee feedback helps us to ensure we fully take account of our people’s needs and enables us to make decisions in a timely manner. We will also conduct our more extensive annual survey in June 2021. Greenhouse gas emissions (000s CO2e1 tonnes) 16.8 ) e 2 O C s e n n o T ( s n o s s m e 2 O C i i 60 11.9 50 40 30 20 10 0 12.8 34.2 9.9 14.1 28.0 8.9 14.3 25.6 7.8 15.2 22.1 3.1 14.3 4.4 2017 2017 3.9 2018 2018 3.6 2019 2019 3.0 2020 2020 2.2 2021 2021 12 10 8 6 4 2 0 ) e 2 O C s e n n o T ( s n o s s m e 2 O C i i Why is this important? It measures the carbon emissions we generate, as we have a responsibility as a business to reduce our carbon footprint and respond to the climate change emergency. Aim: To reduce our carbon emissions with the goal of becoming carbon neutral in our own operations by 2030. Analysis: To become carbon neutral, we need to reduce our direct emissions and take further action by becoming more energy efficient and switching to renewables where possible. Once we have reduced our footprint as far as possible, remaining emissions should be offset. In 2020, we committed to gradually carbon For further information please refer to the Sustainable Business report at www.experianplc.com/sbreport offset our Scope 1 and 2 emissions by 2025. FY21 is the first year for which we’ll offset a portion of our emissions, offsetting 20% of our emissions with the end goal of reaching 100% in FY25. This year, as a result of lockdowns and most of our staff working from home, we have seen a decrease in our Scope 1 emissions by 27% to 2.2 thousand tonnes of CO2e and Scope 2 emissions by 35% to 14.3 thousand tonnes of CO2e. Equally we have seen a decrease in air travel emissions (Scope 3) by 98% to 0.3 thousand tonnes of CO2e. We continue to work on making effective long-term changes in our business, to reduce our carbon footprint. For more information on our approach and next steps to achieve this, see page 54. Scope 1 Scope 1 Scope 2 Scope 2 Scope 3 Scope 3 CO2e emission per US$1m of revenue (tonnes) CO2e emission per US$1m of revenue (tonnes) CO2e emission per full-time equivalent employee (tonnes) CO2e emission per full-time equivalent employee (tonnes) 1 CO2e = CO2-equivalent. 2 Scope 1 covers direct emissions such as gas consumption and diesel used in generators or company cars. Scope 2 (market-based) covers indirect emissions from the generation of purchased electricity, steam, heating and cooling calculated using supplier issued or residual emission factors. Where supplier and residual emission factors are not available, we use location-based emission factors. Scope 3 includes indirect emissions from our value chain. Our current Scope 3 reporting only includes emissions from air travel (using DEFRA conversion factors. FY21 air travel emissions were calculated using relevant RF emission factors. Prior to FY21, non-RF emission factors were used). Actual emissions from other Scope 3 emission categories are being calculated, estimated emissions are included in the People and ESG section on page 56. 3 Carbon intensity: CO2e emission per US$1m of revenue. 4 CO2e emission per full-time equivalent (FTE) employee. FTE employees as at 31 March 2021. 5 The 2017 calculation includes CCM which has been reclassified as a discontinued operation. 6 The 2018 intensity metric based on revenue was restated following the adoption of IFRS 15. Metric reported in our 2018 Annual Report: 10.8 tonnes of CO2e per US$m revenue. See note 6 to the Group financial statements for definitions of these non-GAAP measures: organic revenue growth, Benchmark EBIT, Benchmark EBIT margin, ROCE, Benchmark earnings per share, and Benchmark operating cash flow and cash flow conversion. Experian plc Annual Report 2021Strategic report 18 Market trends Understanding our key market trends The COVID-19 pandemic has catalysed many of the trends that have been shaping our markets for some time. People have rapidly adopted digital services and this in turn is transforming the way that businesses operate so that they may better serve their customers. To operate effectively in the digital sphere, organisations need to invest in smooth digital journeys and automate processes, as well as contend with higher levels of online fraud. These trends have been on our radar for a number of years. For many years we have invested in strategies to meet these needs and this positions us well. That said, the COVID-19 pandemic has required us to adapt, while also opening up new opportunities for expansion. COVID-19 and counter-cyclical response In the short term, we will continue to face macroeconomic pressures as well as lockdown uncertainty in a number of our regions. However, our business benefits from counter-cyclical drivers, segments which prosper when economic conditions are depressed. We also have businesses in the portfolio which are less susceptible to economic downturns. Consumer Services, Health and Mortgage are examples of business segments which grew this year and which contributed to our resilient performance. We also adapted some of our propositions to help our customers deal with the uncertainties created by the pandemic. In total, we launched 158 innovations during the year, many of which were directly linked to these needs. These included propositions in areas such as fraud prevention and debt collections, as well as new attributes and scores to help our customers make better lending decisions, including recovery scores, downturn triggers and loss-forecasting capabilities. Strategic focus areas 1 2 3 4 5 Make credit and lending simpler, faster and safer for consumers and businesses Empower consumers to improve their financial lives Help businesses verify identity and combat fraud Help organisations in specialised vertical markets harness data and analytics to make smarter decisions Enable businesses to find, understand and connect with audiences Changes in consumers’ digital behaviour Trend Economies have digitised at a time when personal finances have become much more stressed. Consumers want to save money. They also want to protect their data and they are often faced with bewildering levels of choice online. They expect digital interactions to be smooth, intuitive and fast, whether making purchases or applying for credit. New trends are also emerging and, with a growing awareness of the value of their data, consumers are increasingly willing to share data in exchange for discernible value. Businesses on the other hand have to work harder than ever to find, serve and retain customers in this hyper-connected digital world. Our response We have established direct relationships with more than 100 million consumers globally. We are introducing new services that meet their changing demands, helping them manage their finances more efficiently – on any device, at any time, anywhere – and placing them in control. We provide our business clients with data and analytical tools so they can understand who they are interacting with, help them make better and faster decisions about which services to offer, while also minimising the risk of fraud. Our Ascend Analytical Sandbox is an advanced analytics environment which allows our clients to access deeper insights, data visualisations, and business intelligence. It combines Experian credit data, the customer’s data, and other data sources such as industry-specific feeds. As consumers consent to data sharing to unlock value, we are adding new modules and datasets to the product, enabling more powerful insights. We constantly develop new propositions to take account of changing behaviours. In Health, increasingly healthcare is shifting out of the traditional hospital setting and into settings that are more cost effective and convenient for patients. We have introduced offers which co-ordinate digital care, while also helping to authenticate and identify patients before they embark on treatment. 1 2 3 5 Population and wealth Trend The global population is set to continue growing, with an increase of two billion people expected in the next 30 years. Emerging markets are becoming key drivers of economic growth over the medium to long term. Currently, there are around 1.7 billion adults globally who are unbanked. Huge numbers of people in the developing world have no access to formal financial services, while in more developed countries, large segments of the population may have ’thin’ or no credit profiles. This can reduce people's access to credit and to mainstream finance because they may be ‘invisible’ to the industry. Our response We are developing new technologies to help people gain access to financial services at fair and affordable rates. Many products support the millions of credit invisibles. Experian Lift, our new service in the USA, draws on extensive data sources to enhance predictions of creditworthiness. Our new Atlas platform has the potential to improve access to credit for one billion under-banked people in Asia Pacific. It combines technology with non-traditional datasets such as telecommunications, rental or ecommerce data to help lenders assess risk cost effectively. This can help more people to get fairer access to credit. In the UK, our new Credit Limits service enables consumers to check the limit they are likely to be offered before applying for a new credit card, without impacting their credit report. Experian Boost has helped over four million people in the USA instantly improve their credit scores, adding positive data about on-time payments of utility bills to their financial profiles. In November 2020, we also introduced Experian Boost to the UK to help people improve their credit scores. In Brazil, we built a positive data bureau in response to legislation in 2019 that means positive payment histories (records of bills paid) can now be used in credit assessment. We have developed a range of new positive data services which we have been launching through the year, and currently have 96 banks contributing data. We believe that of the 157 million adults in Brazil, we can assist 137 million with positive data products, either by enabling their access to credit they would not have had previously, or by allowing them to access credit at reduced interest rates. 2 4 5 Experian plc Strategic report 19 Proliferation of data Advances in automation and technology A changing regulatory environment Trend Businesses in all industries are looking to AI and machine learning to automate processes in order to operate more efficiently, and secure productivity gains. New technologies are revolutionising industries, and businesses are investing to remain competitive, with over 95% of Fortune 1000 organisations stating they are investing in big data and AI. Automation can personalise customer experiences, make online transactions simpler, automate logistics and optimise business decisions, allowing companies to generate significant efficiencies and redeploy their staff to do jobs which require a higher level of human input. Our response We are transforming our technology stack to a modern, resilient, scalable and secure cloud-based architecture to accelerate product delivery to clients. Investment in the best technology is critical to the way we ingest, store and secure data, as well as to the way we develop and deliver our products. It is one of the critical factors in how we can maintain and extend competitive advantage. Technology enables us to link Experian and third-party data assets to create innovative products. In addition, we use technology to enhance our own processes, which has improved productivity. It has allowed us to reduce our conventional cost base and release funds for investment in new opportunities, such as further innovation. For example, we continue to invest in our RPA (Robotic Process Automation) capability and have automated 377 of our key processes, equating to more than 350 years of manual activity time saved since project inception. 1 4 5 95% of Fortune 1000 organisations state they are investing in big data and AI Trend Regulators are becoming increasingly more active in protecting consumer data and privacy rights, and there are now significant financial and reputational consequences for non-compliance. Cybercrime is also increasing, and there is much greater scrutiny of data protection. As data custodians, businesses have a responsibility to safeguard consumer privacy. We believe we can help our clients and consumers meet their responsibilities in this more demanding environment. Regulators are opening up banking and other data-rich industries, encouraging consumers to ensure they get the best possible deal. Our response We work with regulators to ensure we comply fully with all new regulations, and engage in public debate to ensure policy-makers take into account our views and those of our industry. We develop new services to help our clients remain compliant with regulations that affect them. Protecting consumer privacy and information security is extremely important to us. We have programmes that evaluate every product and service to ensure we strike the right balance between consumers’ privacy expectations and the economic benefit to both consumers and clients. Furthermore, we are channelling investment into our multi-layered and extensive information security programme to manage and protect against cyber security risks, by continually upgrading our security infrastructure in an ever- changing environment. Accurate data is fundamental to our reputation and business success. We constantly strive to increase the accuracy of our data in a competitive market, to ensure customers can have confidence in the services we provide. 2 3 4 Trend As the world moves increasingly online, the amount of data available is growing at an extraordinary pace. Of all current data, 90% has been created in the last two years, and 127 new devices connect to the internet every second. As well as the increased amount available, it is becoming cheaper for businesses to store, manage and analyse data. However, these businesses need to understand the many data sources available to them in order to improve decision-making. New data sources, made available through open banking in the UK and USA, and positive data in Brazil, are giving organisations access to rich, up-to-date information. However, to optimise opportunities in these challenging times, businesses need to embrace advanced analytics tools, capable of connecting disparate datasets and making the information more usable. Our response We develop solutions to offer sophisticated platforms to help clients take advantage of data proliferation. For example, Ascend Intelligence Services uses AI and machine learning to support continuous improvement of strategic models for clients. This frees up data-scientist time from model building and monitoring activities, it means data can be integrated into models faster, and produces an endpoint that can be utilised by PowerCurve and Experian One. It can also offer real-time market insights, benchmarking and health monitoring. We are evolving our analytics portfolio in response to client demand for a shift towards cloud-based products. We are investing in a roadmap of innovation to evolve from a largely on-premise software business towards a cloud-first, digital-first, API-enabled and scalable platform business. This transformation is well underway and began with our investments to unify and standardise our product suites, easing the process of scaling these globally. For example, PowerCurve migration to the cloud provides an adaptable platform that enables decisions to be designed to client needs and combines rich data and advanced analytics to drive decisions at scale. The modular design offers agility, and our continual augmentation of machine learning into the platform can bring greater connectivity to the businesses we serve, with frictionless experiences for their consumers. 2 3 4 5 90% of all data has been created in the last two years 127 new devices connect to the internet every second Experian plc Annual Report 2021Strategic report 20 Our business model We play a vital role in connecting people and business through data and technology We believe data has the power to transform lives and create a better tomorrow. We combine our innovative technology with data to drive economic growth, supporting jobs and prosperity. What we do With our expertise in data and technology we are ideally placed to link people and organisations, helping them interact more easily. We help people better understand their financial position improve access to financial services enjoy a quick and seamless online service 17,800 employees globally Four reporting regions: – North America – Latin America – UK and Ireland – EMEA/Asia Pacific See page 21 for more information on Business-to-Business and Consumer Services. Organisations can deliver services to consumers with greater speed and efficiency make fairer, better-informed and more responsible decisions become more efficient and reduce costs USA, UK and Brazil are our largest and longest- established markets 44 countries where we have offices Two main segments: – Business-to-Business – Consumer Services Providing essential services for people and organisations We help create opportunities for people to improve their lives and for organisations to make faster, smarter decisions. We do this by transforming data into information, and by deploying advanced technologies, platforms and analytics. Big data analytics Ascend Technology Platform: data on demand and sophisticated analysis tools. DataLabs: advanced data analysis, and research and development by data scientists. Core data platforms Collect, sort and aggregate data from tens of thousands of traditional and alternative sources and transform it to provide a range of information services. Open data platforms Open Banking: facilitating consumer-permissioned sharing of data from their bank account with other parties. Consumer-contributed data Consumers adding their own data to their credit files. 6.7m consumers connected with Experian Boost in the USA and over 5m consumers with Serasa Score Turbo in Brazil. Empowering people to better understand their financial position, take control of their finances and manage their financial health Helping business to make faster, smarter and better decisions Using data to help the most vulnerable in society and supporting economic growth Decisioning Manage and automate large volumes of decisions and processes, on-premise or in the cloud. PowerCurve: customer decision management for connecting analysis and operations. CrossCore: fraud prevention. Financial education Access to credit reports and scores, identity monitoring and protection as well as comprehensive awareness and education programmes. Free consumer membership base of 110m people. Product comparison Credit Match/Credit Matcher: consumers can understand which credit card, personal loan, mortgage or automotive insurance products they will most likely qualify for and benefit from using. Online debt negotiation With Limpa Nome in Brazil consumers see all their own past-due debts in one place and negotiate more achievable repayment plans with lenders. Experian plc Strategic report 21 A detailed look at what our business segments do and how they generate revenue Business-to-Business Data What we do We provide businesses with information to help them to understand and develop relationships with their customers, to build their businesses and to manage the risks inside their organisations. We build and manage large and comprehensive databases containing the credit activity and repayment histories of millions of consumers and businesses. We collect, sort and aggregate data from tens of thousands of sources and transform it to provide a range of information services. Organisations analyse and use this information to make decisions about lending and the terms on which to lend. Link to our strategic focus areas See page 28 and 34 1 4 Key customers Banks, automotive dealers, retailers and telecommunication companies How we add value We aggregate data from many sources and turn it into information that can be used for many different purposes We help provide lenders with a comprehensive view of a consumer’s financial situation Information is used to support impartial credit decisions, broaden access to credit and promote fair and responsible lending We also provide marketing data relevant to consumer lifestyles which helps businesses understand their customers better and serve them with tailored products Revenue model Primarily transactional with some contribution from licence fees Market position Number one or number two in our key markets Main competitors: Equifax, TransUnion, Dun & Bradstreet, BoaVista, LiveRamp and Epsilon Decisioning What we do We draw on the depth and breadth of our credit information databases and on other information, including clients’ own data, to develop predictive tools, sophisticated software and platforms. These all help businesses and organisations manage and automate large volumes of decisions and processes. Our services help our clients improve the consistency and quality of their business decisions, in areas including credit risk, fraud prevention, identity management, customer service and engagement, account processing, and account management. Link to our strategic focus areas See page 28 and 32 Key customers Financial services, retail, US healthcare, telecommunications, utilities, insurance and FinTech 1 3 How we add value Assessments of creditworthiness, suitability and affordability of loans support responsible lending Faster, frictionless and better-informed decisions help improve customer experience Relevant insights into new and existing customers support more effective management and better engagement with customers Authentication of customer identity helps prevent identity fraud and other crime Revenue model Software and system sales: consultancy and implementation fees; recurring licence fees; and transactional charges Credit scores sold on a transactional, volume-tiered basis Analytics: a mix of consultancy and professional fees, as well as transactional revenues Consumer Services What we do We provide credit education and identity monitoring services directly to millions of consumers in the USA, Brazil, UK, South Africa, Peru, Colombia and India. Our services for consumers include free access to their Experian credit report and score, and useful online educational tools. In the USA and UK we enable people to contribute their own data to their file, for example utility, mobile payments and streaming services, to help them improve their credit score. We offer comparison services that show consumers a choice of relevant and available credit card, personal loan, mortgage, automotive insurance and other deals. In Brazil, our online recovery portal, Limpa Nome, lets consumers see all their own past-due debts in one place, and negotiate more achievable repayment plans with lenders. Link to our strategic focus areas See page 30 2 Key customers Consumers, lenders and insurance providers How we add value Support consumers in taking control of their credit, improving their financial well-being and achieving their financial goals Provide immediate tangible results through credit score improvement and renegotiation of debts Support eligibility for, and improved access to, credit offers and other services Improve navigation of major financial decisions, such as buying a home Improve detection of, and resilience to, identity theft and fraud Revenue model Monthly subscription and one-off transaction fees Referral fees for credit products White-label partnerships Market position Market-leading provider of business solutions in key markets except for the USA Main competitors: FICO, IBM, SAS and Change Healthcare Market position We are the market leader in Brazil and one of the market leaders in the USA and the UK Main competitors: Intuit, NerdWallet, Lending Tree, ClearScore, Equifax and TransUnion Data revenue¹ (US$m) A. North America B. Latin America C. UK and Ireland D. EMEA/Asia Pacific Total 1,761 457 361 287 2,866 1 Revenue from ongoing activities. D A C B Decisioning revenue¹ (US$m) A. North America B. Latin America C. UK and Ireland D. EMEA/Asia Pacific 694 92 220 178 A D C Total 1,184 B Consumer Services revenue¹ (US$m) A. North America B. Latin America C. UK and Ireland 1,075 76 156 B C A Total 1,307 Experian plc Annual Report 2021Strategic report 22 Our business model continued What makes us different? We invest in a number of key areas to sustain and grow our competitive lead. A culture of innovation Innovation has always been at the heart of our business and we employ some of the world’s leading data scientists and software engineers. We have a long tradition of introducing innovative new products and we invest to maintain high standards of scientific excellence. It’s an important differentiator for our business as well as being a significant growth driver. We have introduced a formal process to embed a culture and framework of innovation across Experian. We call it ‘Athena’. Athena helps us to innovate and bring new products and services to market more successfully. Our extensive data assets Data is the foundation of our business. Worldwide we hold and manage the credit history and repayment data of 1.3 billion people and 166 million businesses. We focus on ensuring we continue to have the best datasets available, alongside the best products to help our clients make sense of their data. Consumers are at the heart of what we do We aim to be the consumers’ bureau. We have built our business on clear commitments. Safeguarding data security: we operate a multi-faceted approach to ensure that data is held securely. This approach focuses on prevention, detection and mitigation. Improving data accuracy: we constantly strive to increase the accuracy of our data. We use data from reputable sources, we measure accuracy continuously, and we have improvement programmes and processes that quickly correct inaccurate data. Protecting data privacy: we have programmes to evaluate every product and service to ensure we strike the right balance between consumers’ privacy expectations and the economic benefit to both consumers and clients. Ensuring data transparency: we offer consumers the ability to review the data that we hold and, where appropriate, to opt out of further processing or sharing of data for particular uses. We have relationships with millions of consumers. We empower people to use data to support their financial well-being. We have pioneered new ways to give people greater control over their data and give them the confidence to flourish financially. The Athena process Monitor market trends Evaluate client needs Identify opportunities Invest in the most promising initiatives Traditional credit data New datasets Increase breadth and depth of data More predictive Broader applications 110m Direct relationship with consumers across the USA, Brazil and the UK 23 consumer and 12 business information bureaux globally Robust security controls based on ISO 27001 See page 43 for more detail on these four areas. Experian plc Strategic report 23 Breadth and combination of capabilities Our greatest strength comes from the combination of data with our advanced analytics and decisioning tools. This approach means we can often create highly differentiated services which are unique to Experian. We work together and we proactively seek these opportunities across our organisation. Data & Analytics Consumer engagement Decisioning Our global footprint and employees We provide our services to both multi-national and local clients. We can develop new products in one market and transfer them into others in a systematic and replicable way, helping us to export our most successful platforms and formats. Our 17,800 skilled employees work in 44 global operations across six continents. 3,300 UK and Ireland 44 countries in which we operate 7,100 North America 3,200 Latin America 4,200 EMEA/Asia Pacific Investing sustainably Robust financial performance and reinvestment We are committed to incorporating ESG factors into our investment decisions. We choose to invest in products and services with the clear purpose of generating positive social impacts, alongside financial returns. Our core products and Social Innovation products help improve access to credit to support financial inclusion, improve financial literacy, and prevent fraud and identity theft. We are also investing to lessen our environmental impact, reducing our carbon emissions through investing in more efficient technology, reducing our energy requirements, and making more use of renewable energy. This supports our commitment to be carbon neutral by 2030 in our own operations. Underlying our commitment to sustainable investing is our investment in data privacy, security, accuracy and transparency, and our commitment to working with integrity. 2030 carbon neutral commitment See page 38 for more detail We have a disciplined approach to capital allocation which balances investment in the business and returns to shareholders in support of our strategy to deliver consistent growth. Organic investment in selected projects Inorganic investment through acquisitions balanced with Shareholder returns Dividend payments Share repurchase programme when appropriate Experian plc Annual Report 2021Strategic report 24 Our business model continued Value creation for our stakeholders Our clients and consumers Why How Value Clients’ needs include: better services for customers – faster and frictionless meeting regulatory requirements Clients’ and consumers’ needs include: high-quality and accurate data data security consumer privacy access to credit and other services prevention of fraud and identity theft Our communities Why Communities need: business success, employment and job creation access to public services long-term asset creation in communities inclusion in mainstream financial services and products a healthy environment in which to live Our people Why People need: to feel valued for their contribution to feel supported, especially while working remotely to feel they make a difference to society to contribute to our engaging, positive empowering culture training and learning career progression job security We help millions of people and thousands of businesses use their data more effectively – seizing new opportunities and taking greater control. We help them by turning data from many sources into useful information they can use. We create powerful analytics and software, so they can make more-informed decisions. We work with our clients to understand their challenges and develop new products that help them solve problems. We welcome their constructive feedback about our products and services, either informally or through our yearly Net Promoter Score surveys. We engage with consumers via our free platforms, providing them with financial education, useful tools, free Experian credit reports online and various other products. Consumers can reach us through our call centres and we respond to their concerns on a range of issues, from access to credit, to amending data on their credit file, to identity theft. For inaccurate data on credit files we have processes in place for consumers to review their data, raise a query and have corrections made if needed. How Value We draw on all our resources – including our people, information and skills – to support communities worldwide in innovative and effective ways. These include the development of Social Innovation products, employee volunteering and partnerships and support for community groups and charities. We help people access credit and other financial services, that they can use to take control of their financial circumstances and improve their lives. We help businesses prosper, and to enhance their potential as local employers. How Value Our work carries great responsibility, and how we work is as important as what we do. We provide employees with opportunities for growth through training, giving them a sense of purpose – an integral part of our organisational culture that has a positive impact globally. We listen to our people’s views, support a positive empowering culture and do all we can to make Experian a great place to work. We encourage employees to use their skills to undertake interesting work. We give them the right tools to work effectively, learn new skills and develop their careers. We celebrate great performance and ensure employees feel nurtured and supported throughout their careers with Experian. 3.5bn credit decisions supported facilitating billions of loans 3.2bn microloans enabled 11.6m conversations with consumers 390k fraud victims supported Prevented fraud of at least US$10bn 61m people reached through Social Innovation projects US$12m community investment 21,000 hours volunteering 58% reduction in carbon emissions Employee reported results from pulse surveys: 75% favourable response to ‘I am feeling physically and mentally well’ 88% positive response to ‘I am able to be productive in my current work set up’ Experian plc Strategic report 25 Our suppliers Why Suppliers want: long-term, collaborative relationships business opportunities to mitigate market and financial risks to meet regulatory requirements How Value We create close and collaborative relationships with key suppliers to ensure streamlined processes, performance, segmentation and qualification. This helps us uncover and realise new value, increase savings and reduce costs and risk of failure. These close relationships also help us ensure we meet our compliance obligations. Many of our data contributors are also our clients. They supply us with data through a give-to-get model. Our ability to combine, clean, sort and aggregate data from thousands of data contributors creates a more complete picture of consumer or business interactions across markets. 31 key suppliers in our dedicated SRM1 >11k data contributors in the USA Governments Why How Value Governments are concerned about: generating prosperity managing economic cycles supporting their stakeholders’ financial well-being compliance with regulations managing issues that affect consumers and businesses mitigating impacts and reversing climate change We develop constructive relationships with policy-makers and regulators. Our senior executives meet with legislators regularly to ensure they understand the opportunities, value and challenges associated with our business. We respond to, and engage with, government during public consultations on issues that are relevant to our business. We enable the transparent flow of data that is essential to the functioning of modern economies and the financial ecosystem. High-quality data reduces the risk to lenders of extending credit, ensures fair and responsible lending, increases confidence to lend, as well as the ability to assess affordability and meet compliance obligations. This benefits the wider economy by improving access to credit, improving market competition, increasing credit diversification and reducing the cost of credit. Our shareholders Why How Value We aim to create long-term shareholder value, by investing to grow our position in our chosen markets, while ensuring we meet our wider sustainability commitments. Shareholders want to: understand Experian’s strategic direction, financial performance, and the sustainability of the business analyse structural market trends generate sustainable investment returns through share price appreciation, dividends or share buybacks understand management and incentive structures ensure they are investing in businesses that are committed to environmental progress, societal benefit and which have strong governance. We build relationships with our shareholders through our investor relations programme. In our quarterly financial updates we inform our shareholders about Experian’s financial and strategic progress. We hold face-to-face meetings and run dedicated teach-ins to educate them about our business and ESG commitments. Regular investor surveys provide us with feedback and enable us to take corrective action if necessary. 1 Supplier Relationship Management 1.3bn consumers and 166m businesses – credit history and repayment records 4% Organic revenue growth 15.0% Return on capital employed USc103.1 Benchmark EPS 2030 carbon neutral commitment Experian plc Annual Report 2021Strategic report 26 Experian plc Strategic report Our strategic focus areas Accelerating innovation to seize new opportunities and help customers achieve their ambitions Our strategy is based on our fundamental purpose: to create a better tomorrow for consumers and organisations. It has been a year of challenge, with the COVID-19 pandemic affecting billions of people around the world. In response, our purpose has guided our approach, as we have played an essential role in helping those affected. Our employees have risen to the challenge of providing practical assistance to help consumers, businesses and communities. We have also worked with regulators, lawmakers and governments in our key markets to ensure that financial relief reaches, and will continue to reach, the people and businesses that need it most. Even during these times, we have not let up on strategic investment. We have invested in new innovations, strengthened our competitive position and seized new market opportunities. In fact, the pandemic has accelerated previously existing trends. The new product investments we have made over the last few years have positioned us well to take advantage of these trends, as have the investments we have made in organisational capacity and technology infrastructure. Combined, this has meant we can bring the right products to market quickly. At the heart of our strategy are the key market trends driving long-term changes in our customer base. Their needs and priorities are continually evolving. Our strategic focus areas define the priority customer sets that we serve, the key challenges they are grappling with, and how we can be part of the solution. We consult customers to better understand these needs so that we can develop the best propositions to address them. 27 1 Make credit and lending simpler, faster and safer for consumers and businesses See page 28 Our customers 2 Empower consumers to improve their financial lives See page 30 5 Enable businesses to find, understand and connect with audiences See page 36 4 Help organisations in specialised vertical markets harness data and analytics to make smarter decisions 3 Help businesses verify identity and combat fraud See page 34 See page 32 Experian plc Annual Report 2021Strategic report 28 Our strategic focus areas continued Market trends Changes in consumers’ digital behaviour Advancements in automation and technology 1 Make credit and lending simpler, faster and safer for consumers and businesses Customer needs Reduced friction in loan acquisition and underwriting Ability to make smarter lending decisions Optimal management of credit portfolios Who? Why? How? Financial services – Credit cards – Consumer lenders – Mortgage lenders – Auto lenders – Commercial lenders and trade credit – Online lenders Risk of high loss for our clients from poor lending decisions The primary role of these companies is lending Lending opportunities are growing across digital channels Experian is a leader in this space Through industry-leading accuracy of credit and alternative data Consumer-consented data focus Data linkage capabilities Advanced analytics Market-leading platforms Strong and long-standing relationships with clients When consumers apply for credit they have certain needs and expectations. They would like the process to be easy and increasingly they want to apply through a digital device. In other words, they seek a seamless online experience. At the same time lenders need to make decisions rapidly on who to lend to and how much. We sit in-between. Our data assets and advanced analytics mean the time taken to make decisions is greatly reduced and consumers can get responses quickly. In this way, friction in the whole lending process is reduced and everyone benefits from a better experience. What we did this year In EMEA, we have expanded our presence through strategic acquisitions. In June, we completed the acquisition of a majority stake in Arvato Financial Solutions’ Risk Management division, allowing us to rapidly expand our range of risk, fraud and identity management services across Germany, Austria and Switzerland. In Spain, we acquired Axesor, whose experience in business information complements our previously existing consumer information business in the region. This means we are now able to offer our clients the only integrated proposition for consumer information, business information and decision analysis in the Spanish market. We are at the forefront of open data technology, and have introduced new services such as affordability checking tools, personal finance management and recommendation engines. To date, we have launched open data categorisation services in eight countries. We continue to focus on consumer-contributed data and open data to augment our capabilities in both existing and new vertical markets. In Brazil, the introduction of new legislation in 2019, supported by Serasa Experian, means positive payment histories (records of bills paid) can now be used in credit assessment, as well as negative data (missed payments and defaults). We have launched a range of new positive data services, that we believe has the capability to benefit 137m people, 87% of Brazil’s adult population. To date, we have 96 banks contributing data on 97m consumers. Based on our success in North America, we have been rolling out our Big Data analytics and insights platform, Ascend, across our global markets. We are continuing to launch new products on the cloud-based platform, including Ascend Intelligence Services, which harnesses the power of AI and machine learning to support model management, development and monitoring. We initiated the implementation of our plans to improve the performance of the UK and Ireland business, enhancing customer experience, and aiming to return the business to profitable growth. This has involved establishing and starting out on the pathway to simplify our technology and application estate, as well as restructuring the organisation to focus on delivering enhanced outcomes for our clients. In addition, we have implemented growth initiatives to bring scale to some geographies, with restructuring actions to gain greater operational efficiency and focus our activity on a smaller number of end markets in EMEA and Asia Pacific. Experian plc Strategic report Experian plc Annual Report 2021 29 Transforming lives by generating new opportunities with positive data Positive data is generating new opportunities in Brazil. Previously lenders had to wait until a loan defaulted to find out if a customer was able to pay back a loan. Now with positive data they can assess a customer’s capacity to repay a loan and over time track trends that might indicate repayment distress or vulnerability to default, and take the appropriate action. S t r a t e g i c r e p o r t To help them do this, we have been launching new positive data scores, attributes and alerts, such as for estimated income, affordability and on-time payments. We’ve added machine learning into the statistical modelling techniques for the data analysis and score construction, as well as new sources of data like utility payments. And our data is refreshed frequently allowing for a rapid response to changing credit profiles. Lenders can increase credit thresholds and offer customers better fitting products based on their circumstances. It’s not just large companies that will benefit from this but small and medium-sized businesses as well. Having access to this rich base of information and analysis will help provide them with a new vision of their customer base, and help them improve results at a time when it is essential to seek new business opportunities and rapidly respond to changes in the market. So far, 105 million Brazilians have joined the positive data registry and 770 million transactions have been registered. With positive data we expect to see that 23 million people, 14% of the adult population, with thin files will gain better access to credit, that total credit : GDP will increase from 47% to 67% and more than US$240bn of new credit will become available in the Brazilian economy. Future plans We will continue to invest to develop and maintain the superiority of our data, analytics and decisioning products, as well as opening up new opportunities, for example in consumer-consented data. These investments allow us to preserve and increase our existing revenue streams, while also expanding the markets we address. We are focused on better aligning our global platforms to make it easier for clients to use our advanced capabilities. We expect strong growth as organisations further embrace analytics and automation, and will bring our capabilities together in increasingly sophisticated and integrated propositions to address key business needs. Through scaling our solutions, we can bring our products to new markets more quickly. New features of our global platforms such as Ascend, PowerCurve and Experian One, as well as our open data products, are being rolled out globally to give a wider geographical reach. We will remain market leaders for major market shifts, such as adoption of open data globally, positive data in Brazil, and identity services. For shifts such as positive data, we will continue expand our solutions to serve as wide a market as possible. 14% of the adult population in Brazil, with thin files will gain better access to credit The wealth of new information on customers' payment habits means lenders can gain deeper insights and a greater degree of accuracy in their forecasts, increasing trust and leading to wider access to credit for consumers. Rodrigo Sanchez Vice President, Credit Services, Serasa Experian 30 Our strategic focus areas continued Market trends Changes in consumers’ digital behaviour Population growth worldwide Proliferation of data Changing regulatory environment 2 Empower consumers to improve their financial lives Customer needs Gaining access to credit Safeguarding identity Saving money Negotiating debt Improving financial knowledge Who? Consumers Small business owners Consumer lenders Why? How? Consumers face significant financial and emotional costs to maintain financial wellness, protect themselves and navigate the healthcare system Urgency increases as life events occur Increasing use of technology Direct relationships are critical for consumer-consented data Consumer-consented data Comprehensive financial wellness Best-in-class website and mobile experiences Strong partnership ecosystem Accelerated marketing to grow user base Our vision is to become consumers’ first choice for managing their financial lives. Our solutions can help consumers gain access to credit at affordable rates and to manage their financial lives. We have built relationships with 110 million consumers globally, including over 33% of the adult Brazilian population. What we did this year Future plans In November, we launched Experian Boost in the UK, enabling UK consumers to add on-time payments to their credit files for the first time to instantly improve their credit scores. Boost is also stimulating activity for credit comparison services and generating referral fees as consumers often boost their score when looking to apply for credit. In the USA, we have increased the types of payment Experian Boost takes into account. Consumers can now add payments they make to streaming services such as Netflix, Hulu and others to help boost their credit scores. Similarly, in Brazil we have established an ecosystem of services which include an in-app digital wallet and debt payment tool alongside Serasa Score Turbo. The ecosystem also includes a subscription- based offer, Serasa Premium, that provides enhanced benefits. We will continue to build direct relationships with consumers and our ambition is to reach millions more. We will also continue to strengthen the propositions we have built to date in credit education, identity protection and credit comparison. We intend to expand the range of services we offer, adding new capabilities in segments such as Insurance and Health. We will evaluate the potential to introduce services for consumers in all the markets in which we operate credit bureaux. We will continue to invest in propositions which help those who are currently unbanked to gain access to affordable credit and wider financial services. Experian plc Strategic report 31 S t r a t e g i c r e p o r t Winner of the 2020 Experian Si Ramo Award for Commercial Impact In Brazil 63 million people are included on the negative data registry, with an average of three debts per person. Approximately 45 million adults have no bank account, they may be unemployed or work in low income roles. They are excluded from mainstream credit, such as for credit cards or car loans, because they are so-called ‘thin files’, meaning there is insufficient information on their credit files for traditional lenders to reliably make credit decisions. Many people also have debt obligations which are more than five years old. These are not included in the negative data registry for regulatory reasons. This leads people to think, falsely, that their debts have been expunged or forgiven, but in reality these older obligations are still taken into consideration by lenders. A dedicated team at Serasa Experian spent six months developing the free Score Turbo experience, which is designed to help people to get on top of their debt payments, improve their credit score and enhance prospects for accessing credit. People get rewarded for paying their bills. They can connect to Serasa Limpa Nome (our online debt resolution marketplace), activate their positive data registration, and we offer them the opportunity to ‘Turbo’ their score by making payments towards older debt obligations. They can also keep current credit repayments up to date before they fall overdue. The offer was launched in September 2020. So far, people have on average received a 22-point increase in their score and more than 69m points have been distributed overall. This is not all, as people can improve their eligibility for more suitable loans. For the unbanked, it helps them to establish a credit history and can be a path towards accessing mainstream credit. Transforming lives by helping Brazilians to resolve their debts We have a big social role to fulfil as very often we are the first point of contact for the unbanked or people who need help to resolve their credit obligations. With Score Turbo we wanted to find a new way to educate people, to help them keep their accounts up to date and improve financial access. Carina Herzmann Product Manager, Score Turbo, Serasa Experian Scan the QR codes for further examples Limpa Nome Supporting Brazilian consumers to repay their debts Serasa Score Turbo Speed up your credit score on the fly! 32 Our strategic focus areas continued Market trends Changes in consumers’ digital behaviour Proliferation of data Changing regulatory environment 3 Help businesses verify identity and combat fraud Customer needs Help with identity verification and detection and prevention of fraud Streamlined authentication of legitimate partners Who? Why? How? Financial services Retail Travel and leisure Public sector Social media Health – Providers – Payers – Pharmacy People and businesses are transacting more online and in the digital sphere. Fraudsters are taking advantage of this and so businesses are increasingly aware of the need to protect themselves from fraud. We provide services which help organisations to identify and authenticate the counterparties they engage with to ensure transactions are legitimate. We also help organisations to detect and prevent fraudulent activity. High proportion of credit card and loan charge-offs are from identity fraud Growing regulatory costs Increasing opportunity from growing use of digital channels Fragmented competitors beginning to consolidate Leveraging unique consumer and commercial data assets Advanced analytics and machine learning models Modern technological infrastructure Tokenised identity Extensive partner ecosystem What we did this year Future plans In May, we launched Sure Profile in the USA, aimed at combatting the growth of synthetic identity fraud which is expected to contribute to US$48 billion in annual online payment fraud losses by 2023. This type of fraud occurs when the perpetrator, instead of stealing an identity, blends information together to create fictitious identities used to obtain and build credit history. Sure Profile validates consumer identities and detects profiles that have an increased risk of synthetic identity fraud. In North America, the unemployment rate has surged as a result of COVID-19, which has in turn led to a spike in fraudulent unemployment claims. Experian’s Precise ID solution is helping prevent and detect improper and fraudulent unemployment insurance payments, through our exclusive partnership with the Unemployment Insurance Integrity Center’s centralised Identity Verification capability. In our 2020 Global Identity and Fraud Report, 95% of businesses said they felt confident they can identify their customers. Yet more than half of consumers don't feel recognised, and 88% say their perception of a business is improved when that business invests in security. This shows the progress that needs to be made in bridging the gap between business and consumer perception of customer verification. In FY22, we expect to continue our progress in helping businesses bridge this gap. We will continue to scale the adoption of CrossCore, our fraud prevention platform. CrossCore combines advanced analytics, rich data assets, identity insights and fraud-prevention capabilities. It enables businesses to connect any new or existing tools and systems in one place. These can be fraud detection applications from Experian, our partners, or the client’s own applications. We will continue to add market-leading solutions to this platform, so that businesses can adjust their fraud-prevention strategies to cope with the evolving threat landscape. Experian plc Strategic report 33 S t r a t e g i c r e p o r t Upper-right quadrant on the Juniper Research 2020 ‘Digital Identity’ leader board The COVID-19 pandemic has driven a rapid shift from face-to-face to online transactions. This has resulted in fraudsters escalating their automated targetting of online channels, with fraud attacks such as account takeover 64% higher than the year before. Account takeover (ATO) fraud is a blend of old and new-style fraud. It occurs when a fraudster gains control over an account that does not belong to them, changes information such as login credentials, passwords or personal information, and then makes unauthorised transactions in that account. The rise of ATOs has come about in part due to the increased capabilities of bots that run automated tasks, constantly barraging and testing security systems. They repetitively try to infiltrate accounts. Over 40% of online login attempts last year came from attackers. And they are proving successful. In 2020, ATOs accounted for 54% of all fraud attacks, up from 34% in 2019. We want to help businesses to respond swiftly to these threats. That’s why we updated CrossCore, our integrated digital identity and fraud risk platform. It can flexibly scale up and down, handling the large volumes and speeds of the recent upsurge in online transactions with ease. And to determine that the fraudster, not the customer, is the one logging into an account requires a layered approach, beyond passwords and two-factor authentication. Our capabilities in device recognition, behavioural biometrics, machine learning and risk-based authentication can all help businesses reduce their reliance on manual checking, usernames and passwords, and block fraudulent transactions. Businesses can respond to ATO threats quickly and automatically, and at the same time keep giving their customers a seamless online experience, one where legitimate transactions aren’t turned away. Transforming lives by protecting businesses from automated attacks Identity risk fraud has evolved. It is now more automated, more scalable and more sophisticated, with fraudsters increasing both the variety and volume of their attacks. Businesses need to respond just as swiftly with more robust security and identity checking strategies, while still ensuring a great customer experience. Eric Haller Executive Vice President and General Manager of Identity and Fraud, Experian Scan the QR codes for further examples CrossCore Brings together all the data and services you need into a single view via one platform Precise ID Evolved identity verification and fraud prevention Anti-Money Laundering (AML) and Know Your Customer (KYC) checks to protect and improve customer journey 34 Our strategic focus areas continued Market trends Changes in consumers’ digital behaviour Proliferation of data Advancements in automation and technology Changing regulatory environment 4 Help organisations in specialised vertical markets harness data and analytics to make smarter decisions Customer needs Reduced complexity and increased transparency Improved ability to leverage data and analytics within workflows Reduced operational costs Who? Why? How? Healthcare Insurance Automotive – Dealers – Lenders – Manufacturers Large or growing areas where high-cost decisions currently intersect with lack of transparency Opportunities to build new data assets in many areas Utilising Experian customer commercial and vehicle data Advanced analytics Platforms and advanced programming interface distribution methods Relationship sales forces The propositions we develop are often relevant to a wide range of clients and can be adopted across a range of market segments. Many of these vertical markets are only just starting to realise the benefits our solutions can bring and are ripe for transformation. We take a targeted approach to this by focusing on certain attractive vertical opportunities. What we did this year Future plans We continue to scale our offerings in the health sector, reacting to changing trends within the industry such as the shift towards 'value-based care' and the demand from consumers for a better patient experience. We have a comprehensive set of propositions to help healthcare providers with revenue cycle management, and an extensive and expanding client base using these solutions. Increased digitisation and expectations of the modern consumer around their healthcare experience have driven growth in our scheduling, patient engagement and payment solutions, and we have also pursued opportunities to expand in the identity management space. We started to establish a presence in the automotive segment in Brazil through Serasa Auto, our auto loans contract registration solution. We are expanding Serasa Auto’s geographical reach within Brazil, helping clients comply with vehicle financing regulations within their state. The health industry is experiencing significant change, with COVID-19 having a massive impact on how care is provided and managed, and also on patient expectations. We see our expertise in patient care co-ordination, identity, authentication, payments, and collections as a significant growth opportunity. Beyond that, we also see consumer opportunities within Health. Across verticals and regions, we are aiming to complete our transition to a fully cloud-enabled business, broadening decisioning access through Experian One. We will improve our position in key growth verticals. For example, we will build on our lead in Automotive, utilising Experian solutions in data decisioning and marketing, to help a range of industry participants make better decisions. Experian plc Strategic report 35 S t r a t e g i c r e p o r t Transforming lives by putting patients in control Online patient scheduling has been a game changer in the USA, not only recently during the height of the pandemic, but also during the vaccine roll-out. We’re very proud to have helped book 100,000 vaccine appointments across nine clients since December 2020, with an average time from booking until first appointment of just 4.7 days. Jennifer Schulz Group President, Health, Automotive, Targeting and Data Quality, Experian To help improve the patient experience we combined our data, capabilities, and competencies to create an online patient scheduling solution that seamlessly covers: More control and more convenience. That’s what people want from their healthcare experience. Nearly eight in ten people in the USA want to be able to schedule their own appointments, as well as complete their registration and pay bills, at any time of day or night. Just like ordering groceries or online banking, they want the same level of flexibility and accessibility when managing their healthcare. Not only does it put the patient in the driver’s seat, but it helps reduce no shows, it’s easier for patients to adhere to care plans, and has helped minimise face-to-face contact while COVID-19 remains a concern, keeping staff and patients safer. For health providers it means they can attract and retain more patients by quickly verifying legitimate patients, reducing fraud and denial rate for eligible patients, as well as providing simple and clear pricing information, helping to increase patient trust and payment collection efficiency. Now, as the USA pushes forward with its COVID-19 vaccination drive, the challenge for health providers has turned to administering vaccines as efficiently and safely as possible. Online patient scheduling allows providers to: Push booking links directly to patients, and designate specific day and time slots for administering vaccines Triage people for vaccinations or testing, and check eligibility using screening questionnaires Automate follow-up appointments for two-dose vaccines Scale up or down their efforts depending on when, or how many vaccines they receive. Most importantly, healthcare workers, and the aged and vulnerable, can be prioritised for vaccination, followed by the rest of the population who can conveniently, comfortably, and safely book their appointments. Engagement between provider and patient Scheduling of appointments Registration and checking of identity Estimation of costs Payment options Checking into appointment 36 Our strategic focus areas continued Market trends Changes in consumers’ digital behaviour Population growth worldwide Proliferation of data Advancements in automation and technology 5 Enable businesses to find, understand and connect with audiences Customer needs Ability to accurately connect businesses and customers Capacity to offer products to consumers across channels Compliance with regulations Who? Why? How? Financial Services Retail Media Automotive Healthcare Marketers Advertising agencies Efficiently acquired customers are highly valuable Customer acquisition is a primary focus for businesses Advertising spend moving to digital channels that can take advantage of targeted marketing Identity graphs (offline and online) Proprietary consumer data Segmentation models (such as Mosaic) Advanced analytics Platforms simplifying audience creation, digital delivery and reporting Partner ecosystem to enable identifying consumers across channels In a crowded marketplace, businesses want to understand their customers better and communicate with them more effectively. They need to be able to identify audience groups, then target them with relevant messages and offers – simultaneously managing their communication costs as effectively as possible. We provide the insights they need by combining and enriching datasets and helping our clients identify customers. What we did this year Future plans In November 2020, we completed the acquisition of Tapad in North America, to advance our position in digital identity resolution for marketers. Tapad augments our offline identity and marketing data assets in the US market with cross-device data, digital linking and distribution capabilities, to help connect brands to consumers. The marketing industry was disproportionately impacted by the COVID-19 pandemic, as businesses looked to manage their discretionary spend. Despite this, our targeting business made good strategic progress. For example, in the UK and Ireland, we successfully partnered with Infosum to launch a new digital linkage solution. Experian Match provides UK publishers with addressability at scale, without relying on third-party cookies or requiring a logged-in audience. This means advertisers are able to safely and securely match their first-party customer data against publishers’ addressable audiences in a privacy- compliant way, without any personal data being shared between companies. The explosion of digital activity during FY21 redefined how people shop, manage and spend money, and access various services. Some of that activity has returned offline and will continue to do so as vaccine availability broadens, but much will not. As more transactions and spend occur digitally, we will ensure Experian provides propositions to help clients with customer acquisition, onboarding, fraud prevention and detection, and with authentication which always complies with privacy requirements. We will look to expand the solutions we provide and the verticals we serve by maximising adjacent opportunities, including extending across the financial services value chain and targeting other verticals with attractive growth prospects. Our product pipeline continues to grow, allowing us to enable trusted sharing of data for targeted advertising, and utilising our solutions to accurately connect businesses with customers. Experian plc Strategic report 37 S t r a t e g i c r e p o r t 70+ local authorities, NHS Trusts, emergency services and charities used this free resource Marketing data isn’t used just by advertisers. It is useful to any organisation that delivers services, helping them to find the people who need support as quickly as possible. With the dramatic rise in COVID-19 cases in March 2020, people in the UK were asked to stop non-essential contact and travel, and to stay at home unless for essential reasons. Many shops and workplaces closed, with subsequent loss of work and income for many families. People vulnerable to infection, such as the aged or disabled, were advised to shield at home losing their contact with their local communities. Charities and local officials needed to quickly prioritise resources, identify the people who were struggling, and get them help fast. To do that they needed information on which to act. Our UK and Ireland marketing team knew that we had the data, analytics and expertise to help. We developed a new tool called Experian Safeguard which from concept to deployment took just two weeks. We aggregated and anonymised our ConsumerView database into a dashboard, and included visual mapping tools for accessibility and ease of use. Users could then identify, for example, population groups across the UK that were likely to include those who are 71-years plus, single pensioners or low-income households on the poverty line. This free tool was used by more than 70 local authorities, NHS Trusts, emergency services and charities. In one example it was used by a charity to identify the best locations for new food banks where they could reach the highest number of vulnerable people. At a time of great stress and crisis it has allowed organisations to more effectively plan and prioritise their services and allocate their resources, as well as create communication strategies to engage local communities, and to estimate future demand for services. Access to data and analytics brings greater insight into problems facing society and this was another example of where data drives good outcomes for people, communities and society as a whole. Transforming lives by helping local authorities and vulnerable communities We believe that data analytics helps make better, more informed decisions. It plays a fundamental role in how societies can respond to and overcome challenges, and drives positive outcomes for everyone. Sarah Robertson Product Director, Experian Marketing Services, UK and Ireland Scan the QR codes for further examples COVID Outlook & Response Evaluator A 'heat map' of geographic populations across the USA most susceptible to developing severe cases of COVID-19, which would likely result in excessive strain on healthcare resources. Mosaic Our consumer classification for consistent cross-channel marketing 38 Our sustainable business strategy: Environmental, Social and Governance Transforming lives with data We are using the power of data to transform lives and help businesses grow, by improving financial health for people around the world. Our commitment to sustainable business is stronger than ever, and we have rigorous processes in place to mitigate environmental, social and governance (ESG) risks. Our goals Improving financial health for all Reach 100m people through Social Innovation products by 2025 (from 2013) Reach 100m people through United for Financial Health by 2024 Diversity By 2024 increase the proportion of women in our executive committee and direct reports to 30%, in our senior leaders to 40%, in our mid-level leaders to 42%, and in our total workforce to 47% Environment Become carbon neutral in our own operations by 2030 Science-based target: By 2030 reduce Scope 1 and 2 emissions by 50% and Scope 3 by 15% Gradually offset our Scope 1 and 2 emissions over the five years to 20251 1 See page 55 for more detail. OUR PURPOSE Creating a better tomorrow OUR SUSTAINABLE BUSINESS STRATEGIC PRIORITY Improving financial health for all Core products See page 40 THROUGH OUR Social Innovation See page 41 Community investment See page 41 Contributing to the UN Sustainable Development Goals 1.4 8.10 9.3 ENABLED BY Treating data with respect Security See page 43 Accuracy See page 45 Privacy See page 45 Transparency See page 46 Inspiring and supporting our people See page 47 SUPPORTED BY Working with integrity See page 51 Protecting the environment See page 53 Experian plc Strategic reportw 39 Our purpose is to create a better tomorrow for consumers, our clients, our people and communities. We are doing this by unlocking the power of data to create opportunities for people and businesses. Our sustainable business strategy aligns with and supports our purpose and business model, helping us add value for our stakeholders (see page 24). It sets out our approach to our most material ESG opportunities and risks. Highlights in FY21 35 million Our United for Financial Health campaign has reached 35 million vulnerable people in communities hit hardest by COVID-19 through financial education partnerships with 11 NGOs in the USA, the UK and Ireland and Brazil. 61 million Since 2013, our Social Innovation products have reached 61 million people – putting us on track to meet our goal of 100 million by 2025 – and generated US$103m in revenue. This year, PowerScore alone enabled 1.3 million people in Indonesia to apply for credit for the first time. 4.5 million 6.7 million people in the USA have connected to Experian Boost since March 2019, enabling 4.5 million people to instantly improve their credit score by adding on-time payments to their profiles. In the UK we launched Experian Boost in November 2020 and have 370,000 active members. Diversity, equity and inclusion We have refreshed our strategy on diversity, equity and inclusion (DEI) and set public targets to improve gender diversity. In 2021, we are publishing a global DEI report for the first time. SecurityFirst We have maintained our strict information security controls and SecurityFirst culture as we adapted to new ways of working during the pandemic and responded to emerging cyber threats. Roadmap to carbon neutral We cut our carbon footprint by 58% this year and set a science-based target as part of our ambition to become carbon neutral in our own operations by 2030. We became a public supporter of the Task Force on Climate-Related Financial Disclosure and achieved an ‘A-‘ leadership rating from the CDP. Experian plc Annual Report 2021Strategic reportw Improving financial health for all 40 Our sustainable business strategy: Environment, Social and Governance continued Our priorities Improving financial health is how we can make the biggest difference to society by raising standards of living, tackling inequalities and contributing to the United Nations Sustainable Development Goals (SDGs). The economic fallout of COVID-19 has further underlined this as a priority, exacerbating underlying financial issues for already marginalised groups in society. We use our core and Social Innovation products, harness the passion and expertise of our people, and donate some of our profits to improve financial health for people around the world. Through our data and analytics, we give lenders the information they need to offer fairer access to credit that enables people to get the essentials that can transform their lives – from homes and healthcare, to education and entrepreneurship. We go further by increasing access to financial services, and empowering people to understand and manage their finances and protect themselves from fraud. Improving financial health also supports the long-term success of our business by strengthening our reputation and stakeholder relationships, driving innovation, generating new revenue streams, and creating potential new customers for us and our clients by increasing financial inclusion. How we work is as important as what we do. We are entrusted with data on 1.3 billion people and 166 million businesses worldwide. Treating that data with respect is essential to maintain trust. Keeping it secure is our first priority, and failure to do so is our biggest business and ESG risk (see page 75). We must also protect the privacy of the data we hold, keep the information we have on individuals and businesses as up-to-date and accurate as possible, and be transparent about the data we collect and how we use it. Our strategy is built on a strong culture of corporate responsibility. We aim to inspire and support our people by embracing and developing diverse talent, and creating an inclusive working environment. We are committed to working with integrity, always, and we strive to do our part to tackle climate change and protect the environment. This responsible culture also helps us recruit and retain people with the expertise and experience we need to grow our business and meet our sustainable business goals. Governance The Chief Financial Officer acts as executive sponsor of our overall ESG programme, which focuses on ESG opportunities and risks and the Company Secretary oversees the Group's Corporate Responsibility programme. They both sit on the Executive Risk Management Committee that oversees how we manage risks globally, including ESG risks (see page 72). Our innovation culture puts consumer and client needs first, and we have strict processes to ensure we build critical ESG considerations – such as data security, privacy and accuracy – into our products and services. We extend our high standards to suppliers through our third-party risk management framework. A central team and a network of regional corporate responsibility leads, specialists and steering groups across the business manage our Social Innovation, community investment, health and safety, and environmental programmes and impact. The impact framework for our sustainable business programme helps us achieve demonstrable financial health improvements through our people, products and profit. We track metrics related to our charitable and voluntary contributions in each region monthly, in line with the Business For Societal Impact framework. The Board receives regular reports on our performance, and we publish global data every year in our Annual Report and Sustainable Business Report. We are increasingly measuring and reporting on the impact of individual products and programmes, as well as their combined reach. This year, we have started using the Sustainability Accounting Standards Board (SASB) reporting framework to report on material issues (see our Sustainable Business Report). Experian has been a member of the FTSE4Good ESG index since 2012. Experian is featured in the S&P Global Sustainability Yearbook 2021 as a leader on ESG – scoring in the top 15% of the professional services industry. Promoting financial health for all Core products Across our key markets, we see significant opportunities to transform lives by tackling financial exclusion and improving access to credit. More than a billion people in Asia Pacific lack access to formal financial services, 45 million in the USA have thin or no credit profiles, 45 million in Brazil do not use bank accounts and over five million in the UK have no credit history. We focus on four key aspects of financial health: increasing access to financial services, improving financial literacy and confidence, helping people manage their financial lives, and preventing fraud and identity theft. We do this through our core business, Social Innovation products and community investment programmes. Improving financial health also supports our business. Both core and Social Innovation products that improve financial health are already generating significant revenue for our business. Enabling more people to access financial services expands our potential consumer base. Employees who volunteer their time and expertise to support our financial education and community programmes also bring new ideas and experience back to the business. Core products In the last two years, more than 4.5 million people in the USA have used Experian Boost to instantly improve their credit scores by adding positive data from on-time payments to their profiles. Following its launch in November 2020, we have 370,000 active Experian Boost members in the UK (see page 30). In Brazil, our new Serasa Score Turbo encouraged more than 6 million consumers to renegotiate 9 million debt agreements since its launch in September 2020 (see page 31). Regulations on positive data have opened up the potential to reach millions more across the country (see page 29). Around the world, 110 million consumers now use our free platforms to access products and services that can help them understand and manage their credit profiles. Our consumer services also help individuals spot potentially fraudulent transactions in their credit profiles, and we offer a range of solutions to help lenders and other clients prevent fraud. This year, our core fraud and identity theft products are estimated to have prevented at least US$10bn in fraud for our clients, and across the Group fraud and identity products generated 10% of our business revenue. Experian plc Strategic report 41 Core products Social Innovation Community investment Improving financial health for all Social Innovation Community investment Through our Social Innovation programme, we invest in developing new products that are specifically designed to offer additional societal benefits as well as creating revenue for our business. Our Social Innovation products have reached 61 million people in the last eight years – including 28 million this year – and we’re targeting 100 million by 2025. Since 2013, they have generated US$103m in revenue from a total investment of over US$8m. Well-established products such as our Limpa Nome debt recovery portal in Brazil and Prove ID-Link identity authentication in India have contributed to the significant expansion in reach this year. Several newly launched products have also achieved a big reach in their first year. PowerScore has given 180 million people in Indonesia a credit profile for the first time by using data about their mobile phone use and more than 1.3 million applications for credit products have already been made as a result. Our Social Determinants of Healthcare product has appended the records of 7.6 million people in the USA to connect them to preventative healthcare programmes to help them avoid major medical problems and bills in future. In Brazil, almost 500,000 consumers have registered for our Trilha Financeira (financial trail) online training modules to learn how to better manage their finances. The COVID-19 pandemic has further accentuated inequalities and we have stepped up to help hard-hit communities by launching our United for Financial Health programme, which has reached 35 million people in less than a year (see page 42). This year, our total contributions reached US$12m. Employees volunteered 21,000 hours of their time (in and outside working hours) to help out, despite COVID-19 restrictions limiting face-to-face opportunities. Local initiatives included support for communities and financial education programmes to help people through the pandemic. We also ran a virtual campaign to #Map1Million that saw employees volunteer more than 2,280 hours to map previously unmapped areas of the world that are home to an estimated 923,000 people. The aim is to support Humanitarian OpenStreetMap Team – an international team dedicated to humanitarian action and community development through open mapping – in its ambition to map areas home to one billion people at risk of disaster or experiencing poverty. Inclusion on the map can also be a critical step towards financial inclusion. Innovation and advocacy This year, we channelled innovation for financial health – including COVID-19 recovery efforts – through our DataLabs, our annual Future of Information Conference, our Creating a Better Tomorrow Awards and our first-ever global hackathon. We invited external ideas for overcoming financial issues arising from COVID-19 by sponsoring the Experian Financial Health prize as part of the US Massachusetts Institute of Technology’s Solve programme. We also advocate for financial health more broadly. This year, we provided expert input to the World Bank’s guidelines for lenders relating to the reporting of consumer payment data during the extended COVID-19 emergency period. Payment holidays and forbearances negotiated between lenders and consumers who suffered hardships because of COVID-19 were reported and reflected in credit reports to avoid adverse effects on credit scores as a result. We also explored barriers to small businesses accessing credit, as a member of the International Finance Corporation’s SME Finance Forum, and sponsored the Forum’s annual global conference. Our Identities of the World campaign continues to raise awareness of the impact of financial exclusion through powerful personal stories. It has reached over 36 million people over the last three years and this year highlighted challenges faced by microbusinesses in Peru. 1.4 8.10 9.3 We’ve identified three United Nations SDGs – and their specific targets – where we can make the biggest contribution through our strategic focus on improving financial health for all. These three targets are all related to improving access to credit and financial services. >2,280 hours to help our NGO partner's Missing Maps project put previously unmapped areas of the world on the map. 180 million PowerScore has given 180 million people in Indonesia a credit profile for the first time by leveraging data from their mobile phone use. Experian plc Annual Report 2021Strategic report 42 Our sustainable business strategy and Governance continued 11 We teamed up with 11 NGOs to reach 35 million people in less than a year Transforming lives through United for Financial Health Armed with opportunity and financial literacy, we believe that Experian’s commitment to unlocking the power of data to create opportunity means more people will be set up not just to survive, but to thrive in the months and years to come. Their willingness to lean in and support individuals and families through our work in a time of global crisis demonstrates their sincere commitment to community uplift and outreach. John Hope Bryant Operation HOPE Founder, Chairman, and CEO Scan me to find out how this pilot scheme is helping empower and protect vulnerable consumers COVID-19 presents a serious threat not just to physical health, but to financial health for millions of people around the world. Our United for Financial Health programme is using financial education to empower vulnerable communities that have been hit hard by COVID-19 and kickstart their road to recovery. We teamed up with 11 NGOs to reach 35 million people in less than a year – smashing our first-year target of 15 million. We are providing financial education resources, funding, products and volunteers to help our partners reach the communities they have trusted relationships with, in ways that are most meaningful and helpful to them. The partnerships this year focused on our three primary consumer markets – the USA, the UK and Ireland and Brazil. Many support women, young people and minorities to help tackle inequalities that have been exposed and deepened by COVID-19. In the USA, we kicked off the United for Financial Health programme with Operation HOPE, reaching over 4.5 million people from ethnic minority groups with support to raise their credit scores from survival to thriving. We’re also working with the National Association for the Advancement of Colored People (NAACP) to help black American families struggling to keep up with mortgage payments, with Black Girl Ventures to support black and brown women entrepreneurs, with SaverLife to encourage people from low-income backgrounds to make a habit of saving, and with 211 to tackle stress among low-income and diverse communities. In the UK, we supported National Numeracy’s Number Confidence Week, and we partnered on the launch of the National Literacy Trust’s Words that Count campaign, reaching almost 3.5 million people with the aim of tackling the link between poor reading skills and low financial competence. We’re also partnering with The Mix to reach under-25s through digital channels, with the Trussell Trust to offer access to financial education through their network of food banks, and with The Big Issue to provide guidance through their magazine, online publications and e-wallet for vendors. Some of our partners have also used our new 'Living on 4.27' YouTube channel to reach more young adults. In Brazil, we’re working with Sebrae to help small businesses recover from the economic shock of COVID-19 through an online financial education platform and mentoring from Serasa Experian volunteers. Our United for Financial Health partnerships are enabling us to reach consumers who don’t have an existing relationship with Experian, providing a model we can scale up to help more people and providing insights for our business to help us create wider social benefits. Now, we are going further with a target to reach 100 million people by 2024. 43 Treating data with respect Security Accuracy Privacy Transparency Data is the lifeblood of our business. So ensuring we collect, store and manage data safely and appropriately is fundamental to our ongoing success. It’s important our clients and customers know we take our responsibilities very seriously when it comes to managing data securely, ensuring privacy measures are managed effectively, the data we hold is accurate and we are open and transparent about the data we hold and the way it is processed. Security Safeguarding data We hold vast amounts of data on people and businesses. The loss or inappropriate use of data and systems could result in material loss of business, substantial legal liability, regulatory enforcement actions and significant harm to our reputation. Our approach We continually enhance our security infrastructure, practices and culture across the business through our SecurityFirst programme. We invest heavily in cyber security and have specialist teams, state-of-the-art technology and rigorous due diligence procedures to deal with potential threats. Our security approach has three tiers: applying tools and processes to prevent threats from entering our environment; detecting if a threat enters our environment; and mitigating any threats by minimising the potential for information to be extracted from our environment. Protecting our perimeter We have a defence-in-depth approach to protecting our critical data assets, which provides multiple layers of control and protection. Perimeter scanning Scanning the perimeter for open access and scanning applications for regulatory compliance Firewall Blocks unauthorised access while permitting outward communication Intrusion Prevention System (IPS) Examines network traffic flows to detect and prevent vulnerability exploitation Web Application Firewall (WAF) Filters, monitors, and blocks HTTP traffic to and from web applications Realtime Application Self Protection (RASP) Detects and blocks computer attacks by taking advantage of information from inside the running software Server protection Antivirus, host security, continuous reporting We have controls in place to check for compliance and constantly scan for potential threats, with several layers of protection for our data assets (see diagram below). Our perimeter deflects tens of thousands of attempts every day. Our Global Security Operations Centre works around the clock to identify suspicious or malicious activity, with teams in Malaysia, the UK and the USA, as well as automated tools and AI. If they identify a threat, our incident response team steps in to eliminate it with support from in-house forensic data specialists and external experts if required. We gather intelligence to help our security teams stay ahead of evolving cyber threats. This year, we expanded our interaction with law enforcement authorities and others in our industry to help give each other early warnings of high-potential cyber security threats. We also share our knowledge to help other businesses and consumers keep their data safe. Our annual Data Breach Industry Forecast for 2021 highlighted areas that have become increasingly vulnerable to cyber attack in the COVID-19 era. Predicted threats include vaccination misinformation and disruption, hackers holding home devices for ransom, and exploitation of ‘track and trace’ apps to gain access to personal user information. This year, COVID-19 led to almost our entire workforce moving to homeworking and we took steps to provide employees with secure remote connections to our systems. Most data breaches involve some human interaction, often something as simple as clicking a link in an email. Our email and web browsing controls protect against this kind of malware, and our security training also encourages people to think carefully about what they are clicking on. Our Development, Security and Operations (DevSecOps) teams work together to build security considerations into our products throughout their lifecycle, from start to finish. We use a range of processes, including manual penetration testing, to discover, detect and remediate any potential security risks at every stage of product development – from concept to coding, build, quality assurance and production. We conduct regular risk assessments and vulnerability checks, and our operations are subject to external cyber security audits every year. Simulated exercises and a global data breach plan prepare our cyber security teams and senior leaders to respond rapidly in the event of a breach. Experian plc Annual Report 2021Strategic report 44 Our sustainable business strategy: Environment, Social and Governance continued Security governance The Chief Information Security Officer has overall responsibility for Experian’s global security strategy and the Global Security Office (GSO) sets relevant policies and standards. The Security and Continuity Steering Committee – which includes the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Information Officer – oversees our approach to keeping data secure and protecting consumer information. It reviews key metrics on security tools, compliance and training completion rates every month. The Audit Committee also receives progress reports at each of its meetings. We have a comprehensive Global Security Policy and controls based on the internationally recognised ISO 27001 standard. Our robust information security programme builds on industry-recognised procedures, including the US National Institute of Standards and Technology (NIST) framework. We seek and receive third-party assurance through ISO 27001 certifications of key business areas and systems, as well as other recognised external accreditations of our security programmes. For example, we hold a Cyber Essentials Certification and perform risk assessments against our critical and external-facing applications annually. Security, Audit and Risk teams work together to continually improve our assurance capabilities and test the effectiveness of our controls. Our Three Lines of Defence model for risk management (see page 73) includes review by Global Internal Audit and oversight from the Board. Any potential policy breaches are thoroughly investigated and we take disciplinary action where appropriate. The GSO conducts due diligence to identify any potential risks before an acquisition, followed by an in-depth post-acquisition security assessment that is reviewed by Global Internal Audit. When it is necessary to provide third parties with access to our data and systems, the GSO ensures we provide access in line with our information security requirements. We extend stringent standards on information security to our suppliers and partners through the terms of our contracts. All third parties are risk assessed. Of our nearly 13,000 active third parties, 1,674 have been identified as significant or high risk and all of these have undergone more in-depth assurance by the GSO. Security requirements are tiered based on this risk assessment, and can include increased controls for higher-risk third parties. We monitor compliance through our third-party risk management framework and third parties identified as significant or high risk are added to the GSO's continuous monitoring programme which alerts us to any material changes to trigger follow-up action if needed. Our information security culture At Experian, information security is everyone’s responsibility. We set out clear requirements for employees and business units in our Security Risk Management and Governance Policy. We invest significant time and resources in training and awareness on information security through our SecurityFirst programme. Our strong information security culture starts from the top of the business. Senior leaders are highly engaged and continually reinforce the message that security is the personal responsibility of everyone working with us. All our employees and any contractors who have access to our systems must complete mandatory annual training on information security and data protection. We track training completion rates weekly and provide a monthly dashboard to the Security and Continuity Steering Committee. More than 250 training courses are available for people across the business to find out more about keeping information safe across various web, mobile and desktop platforms, applications and software. We provide additional in-depth training for people working in higher-risk roles, such as product and software development. We continually refresh our training to stay up to date with evolving risks and circumstances. This year, we focused on risks associated with working from home and made sure employees understood how to secure their home network, for example by using filtering software and strong passwords. We adapted our regular awareness campaigns to continue providing employees with frequent updates on important topics, such as email protection and phishing. Our Global Information Values Wherever we operate, we are committed to five core Global Information Values: 1. Balance 2. Accuracy 3. Security 4. Integrity 5. Communication 250+ training courses are available for people across the business to find out more about keeping information safe. Scan me to find out more about Experian’s commitment to its Global Information Values. Experian plc Strategic report 45 Accuracy Improving data Accurate credit reports enable lenders to give people fairer access to credit and essential services to improve their lives (see pages 28 and 30). Any inaccuracies in credit reports – and the data they are built on – can cause problems for consumers, and potentially deny them fair access to credit and services. We understand how important this issue is for consumers, and place accuracy at the heart of our Global Information Values, which guide our approach wherever we operate. We constantly strive to improve the accuracy of our data in a competitive market to ensure our clients can always rely on it to make the most appropriate decisions. We have strict processes to ensure data accuracy – all the way through from designing a new data supply and sourcing accurate data in the first place to monitoring and improving accuracy over time, and resolving any inaccuracies or queried information. Our focus is on timeliness, accuracy and completeness of the data we hold, and the reports we provide to our clients. Sourcing accurate data All our data comes from reputable sources and our quality control procedures help us identify and weed out inaccurate or out-of-date information before we add it to our databases. We work with data providers to review and continuously improve the quality of the information we receive. To do this, we regularly review and report back on quality to our data providers, and we offer a comprehensive suite of software and analytics tools to help them check data before they submit it to us. We monitor how data providers deal with queries about data and how they remediate them to improve accuracy. If data providers are unwilling to implement improvements to meet our standards, we will no longer source data from them. Monitoring and improving data accuracy Once we have acquired data, we frequently update and periodically audit the information in our databases to ensure it is as current as possible. We also apply further quality assurance techniques, including data-matching algorithms, before providing data to our clients. This ensures we provide clients with information that represents consumers and businesses as accurately and fairly as possible. In North America, the team that manages the accuracy of data from around 12,000 providers makes it a priority to rapidly resolve any conflicts or errors that are likely to have a material impact on a consumer’s credit score. Every month, we receive around 32,000 submissions from data providers, and update around 1.4 billion records – 98% within 24 hours. Through continuous improvement efforts, we have raised the accuracy rates of credit reports delivered to 99.9% in recent years (see chart). In the UK and Ireland, we have added over 20 million new records in the last year alone, constantly reviewing the market and working with new lenders and sectors to ensure their customers are represented appropriately within the bureau. Our UK and Ireland Data Office leads our efforts to achieve world-class data governance through a strong focus on data quality, acquisition, transparency and privacy. Accuracy rate for credit reports delivered in North America Accuracy rate for credit reports delivered in North America Empowering consumers to correct their data Our platforms enable us to continually monitor and measure data accuracy. We also have processes for consumers to review their own data, raise a query and have corrections made if needed. Our dispute centre in the USA and our website in the UK make it easy for people to raise a query about credit information and get it corrected quickly. Many of our products also empower consumers and businesses to protect their data and check for any inaccuracies in their financial profiles. In Brazil, we have seen a substantial increase in consumer requests for corrections to their data since new regulations enabled the inclusion of positive data in credit reports. We pass on these requests to the data provider to evaluate, resolve and supply corrected data where errors are confirmed. Privacy Protecting data Data privacy is becoming an increasingly hot topic as people are living more of their lives online, a trend that has been further accelerated by COVID-19 lockdowns and restrictions this year. Our Group Operating Committee and senior leaders receive regular briefings to keep them apprised of privacy developments around the world. We provide services based on information about millions of individuals and businesses. As a steward of the data we collect and use, we have a responsibility not only to ensure the security of that data, but to maintain the privacy of consumers through appropriate and responsible use. We believe use of data must benefit both businesses and individuals, while meeting consumer expectations related to privacy. 100% 99% 98% 97% 96% 95% 99.9% 99.9% 99.9% 99.6% 99.0% 98.3% Jan 16 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Data accuracy is mission critical for us. Because when a credit report is inaccurate, and someone is denied credit or pays a higher price for credit, then it can have a huge impact on their lives. In 2016 our data accuracy was at 98.3%. That sounds high but we knew we had to do better, so we invested in a programme to find where material and consequential errors arose and took action to fix them. We have now achieved 99.9% accuracy for our US consumer bureau, an impressive, industry-setting standard. Yet we’re not done. We are innovating to continuously improve our data integrity and focus on targeted changes that drive even better accuracy for consumers. Donna Smith, Chief Data Officer, Consumer Information Services, North America Experian plc Annual Report 2021Strategic report 46 Our sustainable business strategy: Environment, Social and Governance continued financial products in the year ahead. The aim is to give our customers more comprehensible data, to help them understand how that impacts their financial health as a whole. In the USA, we set out our privacy policies for specific products and services on the privacy section of our website. Consumers can access the information that Experian holds on them by signing up for a free or paid membership through the Reports and Scores section of our website. They will then be presented with a report showing the data Experian holds on them and how to dispute this information online if necessary. Californian residents can also manage their personal data permissions through the CP3A portal. Our newly designed credit reports in North America include a new Credit Report Insights section that features infographics, colour- coding and easy-to-interpret explanations of the factors that may be helping or hurting a consumer’s credit status and score. We also work with financial institutions to enhance transparency with consumers. In the UK, when a consumer applies for credit, the lender will direct them to an industry standard information notice which presents clear and consistent information explaining how credit reference agencies use and share personal information. In the USA, financial institutions provide adverse action notices when an applicant is denied credit or employment based on information included on their consumer credit report. This notice includes a brief description of the data used for the decision and a contact for the credit reference agencies that provided the data. Transparency Making data accessible We strive to be transparent about the information we collect from consumers and third parties, and how that data is used and shared. In the UK, the privacy section of our website provides privacy policies for different parts of the business, and our Marketing Services Consumer Information Portal (MSCIP) explains data rights and sets out the various ways we use personal and anonymised data. The content on these websites is designed to be clear and easy for non-experts, and the MSCIP includes a series of engaging videos on topics such as how we obtain data and how people can benefit from sharing their data. Individuals can use the MSCIP to find out if they are on our marketing file and understand what data we hold about them, where this data comes from and how it is used. It includes a prominent feature enabling people to opt out of targeted marketing if they choose. To add transparency around the marketing profiles we build, the MSCIP allows consumers to view our Mosaic classification for any valid UK postcode. Through this feature, consumers can get a flavour of how marketers may view them, or people like them, when using our Mosaic segmentation to improve the relevance of their marketing messages. The results use simple icons to show key attributes such as property, transport, lifestyle and holidays in a way that’s easy to understand at a glance. In Brazil, our privacy terms page has been developed to be more user-friendly, by translating the consumer contract into simple and accessible language and layout before the user logs in. We also provide consumers with illustrations of what their positive data means, based on their credit card information, with plans to extend to other Our new-look credit reports in the USA Our privacy policies vary in each country or region to comply with local regulatory requirements. Underlying these policies is our commitment to provide consumers with notice, choice and education about the use of personal information. Educated consumers are better equipped to be effective, successful participants in a world that increasingly relies on the exchange of information to deliver products and services efficiently. Lenders need access to accurate information about people’s financial profiles from Experian or other credit bureaux. Such information is integral to an efficient and competitive credit ecosystem which provides innovative products that enable consumers to get the most out of their data, contributes to economic growth and supports a stable consumer banking system. Our Marketing Services business also gathers, analyses, combines and processes data to help organisations better understand consumers so they can offer them relevant products and services, and communicate more effectively and at the right time. We evaluate every product and service to ensure we strike the right balance between consumers’ privacy expectations and the economic benefit to both consumers and clients. This commitment to balance is one of our Global Information Values that define how data must be secured, managed and used. Our comprehensive data protection programme details the steps we take to mitigate data protection risks, and what we expect from our employees. We are committed to obtaining, processing and using data compliantly and responsibly. We only ever share data with authorised and trusted organisations. When we do so, we follow strict guidelines and comply with all relevant laws. Regulations on data privacy – the way data is collected and used, and how consent is gained from consumers – are tightening around the world. We respond to government consultations and engage with regulators as privacy regulations and guidance evolve. Data offers huge potential to support jobs and prosperity. We need a regulatory framework that nurtures and supports use of data to encourage growth, while protecting consumers’ privacy. Many regional and national regulations on data privacy share common principles, and we advocate for interoperability to support global commerce. We have updated our data processes to ensure compliance with regulations, such as the EU General Data Protection Regulation (GDPR) in Europe, the California Consumer Privacy Act (CCPA) in the USA and the Brazil General Data Protection Law (LGPD). Experian plc Strategic report 47 The Experian Way The Experian Way represents our values, and the behaviours we expect from all our employees in their everyday activities. This year, our people have continued to find new ways to demonstrate these behaviours while adjusting to different ways of working. Delight customers Innovate to grow Collaborate to win Safeguard our future Value each other External recognition across the globe recommend the programme to a colleague. We introduced or improved Employee Assistance Programmes in all regions. In the UK and Ireland, and North America, we extended the time people could take for caring responsibilities, and in EMEA we refreshed the holiday leave policy to help employees cope with the additional demands placed upon them. We placed additional importance on the ability to collaborate remotely. Connect 4, for example, is an initiative to connect groups of four colleagues randomly, to replicate spontaneous ‘water-cooler’ conversations and to grow employee networks. Our people also demonstrated their capacity for creating new connections independently, an example being our Home-Aloners group – employees who live on their own coming together to create a community of support, swapping stories, pictures, hints and tips. Our strong culture has really brought out the best in our people, and we are encouraged to say we have seen pride in Experian, and employee advocacy, increase. In our pulse surveys, responses to ‘I am proud to work for Experian’ saw a 5% increase since our 2019 Annual People Survey and ‘I would recommend Experian to family or friends as a place to work’ increased by 3% over the same period. The steps taken to support our people, both practically and personally, have helped them adapt to new ways of working, with the question ‘I am able to be productive in my current work set up’ scoring well across all pulse surveys – averaging 88% positive across the five surveys. Line managers have also played a critical role, and we are proud employees have recognised this, averaging 85% favourable response to the statement ‘I am receiving the right level of support from my manager at this time’. To further the two-way conversation with our employees, and to strengthen the connection between our people and leaders while working virtually, we accelerated the launch of Horizon, our leading-edge employee communications platform. This allows users to receive important updates in one place and access it at any time, from anywhere, as well as curate their own content by subscribing to a series of optional categories. They can also publish approved content directly on social media. This has been a resounding success, with 97% of our people registered on the platform, over 900,000 post views and 20,000 comments from employees. Throughout FY22, we will continue to develop the platform, to encourage even greater employee connection and engagement. Inspiring and supporting our people At Experian, we work to create a better tomorrow for consumers, for businesses, and for our communities. This ambition underpins our plans for our people – to ensure we have the best people, working in a high-performing and inclusive environment where they feel they can do their best work in support of our vision. Last year, we set out our people priorities, focusing on: hiring and developing world-class people in ‘game-changer’ roles; ensuring a supportive, flexible and inclusive environment that attracts world-class talent; establishing a high-performance mindset throughout the organisation; and creating frictionless employee experiences. As the COVID-19 pandemic emerged at the beginning of 2020, our priorities needed to shift quickly to supporting our people where and when they needed it most. Our Board and leadership team took a 'people first' approach when making pandemic-related decisions. This philosophy has remained in place throughout the year as we have sought to look after our people, listen to their changing needs, and continue to build and celebrate our diverse and inclusive culture. Looking after our people Throughout the pandemic we have increased our focus on the health and well-being of our teams across the world. We quickly implemented regular pulse surveys so we could respond rapidly and ensure the right support was available. We emphasised mental health, reflecting the challenges people faced while working remotely. A response to the statement ‘I am feeling physically and mentally well’ was 75% favourable on average across five pulse surveys we ran during the year. We put in place a range of initiatives to support our teams, for example #ReachOut, which gave all employees access to resources to support their physical and mental health whenever they needed it. We also developed programmes to help employees adapt to working from home. For example, in Asia Pacific, Thriving Remotely provided resources such as e-booklets, podcasts, webinars, senior leadership vlogs, playlists and infographics, alongside other activities to communicate with colleagues. We ran mindfulness and resilience programmes for employees, which were received well, with Asia Pacific receiving a 95% Net Promoter Score (NPS) - the percentage of those who would Experian plc Annual Report 2021Strategic reportFev/2021 - Fev/2022AUG 2021 - AUG 2022USAAUG 2021 - AUG 2022COSTA RICABRASIL 48 Transforming lives by responding to racial inequality in Brazil Racial inequality is a very real problem in Brazil. It is a massive challenge to overcome and there is a long road to go given the systemic problems in society. Yet I’m optimistic about the future. We’re going in the right direction and we are focused on implementing real change, fast. I’m really proud about how everyone at Serasa Experian is working together to be part of the transformation. Natasha Santos HR analyst and leader of Black ERG, Serasa Experian, Brazil Many people’s image of Brazil is one of sandy beaches, carnivals, and a melting pot of cultures. However, it is grappling with a historical legacy of racial inequality stemming from the 4m black people enslaved and trafficked from Africa. While slavery in Brazil was finally abolished in 1888, policies were later put in place that continued to discriminate against black people. These included blocking them from certain jobs, preventing them from buying homes in particular areas, and forcing them to live in neglected favelas. These policies were, unfortunately, highly effective and their impact still ripples through Brazil today. The representation of black and mixed-raced people in higher education is low, and on average they earn half the income of white people. 64% of the prison population are black or mixed race compared with 54% of the general population, and black and mixed-race people suffer from racial microaggressions or worse on a daily basis. Recently, there has been a wider acknowledgement that these problems exist and that there needs to be an active response to overcome them. At Experian we want to be part of the solution, reflecting our commitment to a culture of diversity and inclusion. As part of serving the community we are focused on helping marginalised populations, specifically black and mixed-race, through our financial education volunteering programmes, as well as promoting our free financial tools that can help reduce debt, improve credit scores and help people access the credit they need. Inside our business we have identified that just 20% of our workforce in Brazil are black, compared with over half of the Brazilian population, so we are working to improve the black representation. We have launched a mentorship programme between senior employees and black employees to help support them in their careers. And our senior leaders are engaging in reverse mentoring, so they are aware of and understand the challenges that black employees face. In response to a recent employee survey in which 60% of black respondents said that not understanding English was a significant barrier to them at work, we are launching subsidised English lessons. We are also ensuring that new trainees and interns joining the company are given roles that don’t require English. We hope that we can start to make a difference and ensure a better quality of life for everyone, regardless of their race. 49 Our 5 key commitments for diversity, equity and inclusion (DEI) 1. Active sponsorship We have appointed executive sponsors for five areas of our DEI focus. They each sit on our Group Operating Committee, ensuring these topics are represented in decision-making at the highest level. Gender: Jennifer Schulz, Group President, Vertical Markets Race and Ethnicity: Craig Boundy, Chief Executive Officer, North America LGBTQ+: Jose Luiz Rossi, Managing Director, UK and Ireland Disability: Ben Elliott, Chief Executive Officer, Asia Pacific Mental Health: Lloyd Pitchford, Chief Financial Officer 2. Better understand our opportunities and challenges We believe that it is critical that we have a deep understanding of the make-up of our population and their experience of working here so we can set relevant goals and develop meaningful DEI programmes and practices. In the coming year we will focus on improving demographic data and our people will be asked to take part in a voluntary census. 3. Measure progress against specific goals We are also raising our ambition and setting three-year targets for gender diversity. Our current global gender diversity and FY24 gender targets are: Representation of women Senior Leaders Mid-Level Leaders Total workforce FY21 32% 35% 44% FY24 40% 42% 47% 4. Ensure accountability We will be holding annual strategic reviews chaired by our CEO focused on DEI. We will also have bi-annual DEI deep dives and quarterly reviews with each region to monitor our performance closely and take quick action where needed. 5. Support our people We are developing a global Conscious Inclusion training programme to ensure that we all understand the importance DEI holds for our people, our business and our customers. Scan me To read more about our DEI journey and see our first global DEI report. Continuing to build and celebrate our diverse and inclusive culture Through a year of our people working predominantly remotely, we have been able to really bring to life our focus on inclusion. We have been welcomed into people’s homes through the medium of video calls, seen our team-mates with their children, partners and pets, we have discussed the impact of the pandemic on each of us and, as a result, have got to know each other more deeply as individuals. We have continued to work and have experienced first-hand that people who feel able to bring their whole selves to work can achieve great results. This year our Group Operating Committee announced commitments to five key focus areas for DEI, as shown on the right. Our leadership commitment is clear, and we are fortunate this is matched by our employees’ passion and drive on this topic – seen through the continued success of our Employee Resource Groups (ERGs). Globally, we now have over 30 ERGs. They continue to raise awareness, inspire involvement, and encourage action on a broad range of topics. Employees have created two more ERGs this year in the UK and Ireland. One is Black at Experian, which exists to create a safe and inclusive environment for people of black heritage to work, access opportunities and grow and fulfil their potential. The other, the Disability Network was launched to help the business think differently about disability and how we can be more inclusive. Our global commitment to recognising and celebrating international diversity events has thrived virtually, with regions hosting a range of events to mark International Women’s Day, International Men’s Day, Pride, International Day of Persons with Disabilities and World Mental Health Day, as well as celebrating additional local traditions. All regions published Diversity and Inclusion Reports to celebrate their achievements and set out areas of focus for the coming year. We have provided DEI-related UN Women’s Empowerment Principles 1. High-level corporate leadership 2. Treat all women and men fairly at work, without discrimination 3. Employee health, well-being and safety 4. Education and training for career advancement 5. Enterprise development, supply chain and marketing practices 6. Community initiatives and advocacy 7. Measurement and reporting training in all regions – with North America launching Consciously Unbiased, a new, multimedia approach to raising awareness. The topic of allyship has been central to our focus this year, with How to Ally guides launched globally to ensure all employees can play their part in making Experian an inclusive place to work. Our Accelerated Development Programme (ADP) in Global Decision Analytics, designed to support talented women at mid and lower tiers to progress in the organisation, saw great success, with 44% of the participants being promoted after the programme. The Women in Leadership DiveIn (WILD) programme in Asia Pacific, designed to give real and raw experiences of leadership development and career acceleration for women, concluded with an 88% retention rate and 71% of women experiencing development of their roles since finishing the programme. In Experian Information Technology Services (EITS), we launched Advancing Women Leaders in Tech, a nine-month leadership-development programme for high-potential employees. We have also built upon our commitment through several partnerships outside of the business. We became a global signatory of the United Nations Women’s Empowerment Principles (WEPs), which promote gender equality and women’s empowerment in the workplace, marketplace, and community. In the UK and Ireland, we signed the Business in the Community Race at Work Charter, and became a signatory supporting Stonewall’s Trans Rights Are Human Rights campaign to help reform the Gender Recognition Act (GRA) 2004. We also became an official partner of Women in Data for the very first Women in Data week in the UK. In North America, we established a partnership with Disability: IN, the leading non-profit resource for business disability inclusion worldwide. We’ve been a sponsor of events that support us in building diverse pools of future talent, including AfroTech, one of the largest multicultural technology conferences in the USA, and Grace Hopper Celebration, the world's largest gathering of women in computing. In recognition of our efforts and achievements, we are proud to have been awarded several distinctions through FY21 which reflect our culture and our commitment to a positive and inclusive environment for our people. It is impossible to discuss DEI in 2020 without referring to the tragic death of George Floyd and the resulting spotlight upon racial inequity in society. This focus created introspection on a personal and corporate level, and while we feel good about everything we have done and the progress we have made, we know there is more to do. In direct response, we announced donations to Operation HOPE, double-matching of employee donations to associated causes, and established a Product Review Team to ensure our products address the needs of black Experian plc Annual Report 2021Strategic report 50 Our sustainable business strategy: Environment, Social and Governance continued and other disadvantaged communities. Throughout the period since, we have focused on disadvantaged communities through our United for Financial Health programme, forming partnerships with groups such as the NAACP, Black Girl Ventures, the Trussell Trust and The Mix. To ensure we are clear about the gaps and opportunities in our DEI work, and to reflect our commitment to continuous improvement, we launched an independent audit through an external partner. The findings will inform our FY22 DEI strategy. Hiring and developing our world-class workforce Our ability to continue to attract world-class people is critical, and we have continued to invest in a strong presence on social media in support of this. Our Experian Creator series is live across all major social channels, highlighting innovation through product stories. We are profiling our current tech talent weekly on LinkedIn and other social media, targeting future talent tech groups (such as Girls Who Code) and early talent. Our careers site now has a page dedicated to technology and innovation, featuring product stories, Creator series highlights, technology-leader content, and open tech roles. In FY21 our social media following increased, now with over 1 million followers. Furthermore, our hires sourced via social media channels reached 53%, far surpassing our FY21 target of 29%. We are proud of how we adapted to hiring and onboarding our colleagues remotely and have assigned buddies to all new joiners to help them integrate effectively in a virtual world. Results are good, with 96% of new joiners feeling positive about their onboarding experience, a 2% increase in the last year. This strong internal sentiment is matched by external measures: we exceeded expectations by improving our Glassdoor score for the fifth year in a row, sitting 4.1 out of 5.0 in March 2021. Glassdoor trend 2016-2021 e r o c s r o o d s s a l G 4.2 4.0 3.8 3.6 3.4 3.2 3.0 2.8 2.6 1,000+ participants took part in our first global hackathon, forming almost 100 teams, with winners being selected across our five global strategic focus areas. Development of our people has remained central to our work – with the focus shifting to remote-learning opportunities. We were well placed with our on-demand, access-anywhere Elevate Learning platform, launched in 2019, and have continued to make the most of it throughout the year. Our partnership with Pluralsight supports our technology-focused employees in keeping their skills relevant, given the frequent need for new capabilities. Our employees consumed almost 15,000 learning hours on the platform this year. Our Stepping Stones tool, developed internally, enables our people to match their skills to short-term projects, or ‘gigs’, to build capability and apply new skills in ways they may not have the opportunity to do in their main roles. In addition, Stepping Stones has helped us re-distribute work and create a balance between those with reduced capacity and those who can absorb more and over 1,000 employees have now registered for opportunities. In Global Decision Analytics, we ran Be World Ready, an initiative to help employees build their personal employability. The programme also encourages employees to stay connected to the external job market, to keep their skills and experiences relevant. Finally, the pandemic has placed high demands upon our leaders to manage in new ways. We have taken the opportunity to review and revamp our global manager training programme, which we have relaunched as the New Leader Programme. It is designed to develop well-rounded leaders who can lead their teams effectively, beyond technical capability and focuses on areas such as inclusion, psychological safety, engagement, high-performing teams, and agility around change. We have kept up our commitment to providing strong support for functional skills development. This year we ran our first cohort of the Global Analytics bootcamp. These are interactive immersive workshops, delivered by our own experts, that provide intensive hands-on experience in Advanced Analytics and Artificial Intelligence. We also ran our first ever global hackathon based on ideas and collaboration for recovery after COVID-19. Over 1,000 participants took part, forming almost 100 teams, with winners being selected across our five global strategic focus areas. The winners received a large donation for the charity of their choice, and significant investment in developing their solutions. Our high-performance culture has provided critical security this year, bringing clarity for employees in an unstable and uncertain environment. We have continued evolving this Senior Leadership Senior Managers Middle Managers All Line Managers High Performance Masterclass CEO Forum Accelerate Ambition + Amplify1 Experian Business Network Ambition Programme Emerging Leaders Programme New Leader Programme Elevate Performance Modules Elevate Learning / GetAbstract / Development Guides Accelerated Development Programmes for women, e.g. ADP, WILD Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Jan 2021 1 Amplify – refresher sessions for those who have previously been through our high performance programmes (High Performance Masterclass, Accelerate Ambition, Ambition) All Levels Experian plc Strategic report 51 part of our culture, with our approach being further woven throughout our leadership development programmes. We launched Amplify - a new opportunity for leaders who have previously been through our high- performance programmes - to re-group and refresh their thinking with the high-performance principles central to our organisation and focusing on what matters most now, in this ‘new normal’. To establish high performance throughout our organisation, all employees now have access to a series of high-performance content explaining our philosophy at Experian. We are also building upon the success of the Elevate Performance platform for year-round performance management. We have run a pilot of an augmented platform which fully integrates an employee’s performance goal with development plans – linking directly to relevant learning materials. Teams can also run ‘check-ins’, a simple but frequent online interaction, helping them communicate. The platform will go live in FY22, to support more powerful discussions on performance. While we build technical skills for the future, we also plan for the future of our broader leadership roles and are proud of our healthy approach to succession. This year 89% of our top-100 leadership roles have at least one identified successor ready now or within two years; while over 50% have two or more potential successors. Looking forward The pandemic has required us to think differently about the way we work in the future, and we have embraced this opportunity to create greater flexibility for our people. We have spent considerable time listening to our employees, tracking key measures of how we work, watching how norms have shifted and analysing how to make our approach a success. The ‘new normal’ at Experian will be a flexible one, and this is not just about remote working, it's our commitment to make a difference in our people's working lives. Our people will have the opportunity to work in a way that works for them – this may be working remotely, in the office, or a mix of both, as well as flexibility over start and finish times. Our aim is to strike the right balance between what works for an individual and what works for the business – we believe both are critical. Our new approach is built on trust, flexibility and enabling success and as we undergo this shift and all the operational changes that will follow, we are placing a strong focus on reinforcing intangible anchors like values, behaviours and employee experience to ensure everyone in their own way can thrive in a more remote and flexible world. Working with integrity Working with integrity is one of our core values and central to The Experian Way of working. Our Code of Conduct, available in several languages, sets out clear guidance to help everyone at Experian make the right decisions. It is supported by detailed policies on specific topics such as anti-corruption, gifts and hospitality, fraud management, complaint management, fair treatment of vulnerable consumers, product development and marketing, whistleblowing and tax. Anti-bribery and corruption We take a zero-tolerance approach to bribery or corruption in our business and our supply chain. Our Global Anti-corruption Framework prohibits facilitation payments, kickbacks, or any form of bribery or corruption. The accompanying Global Gifts and Hospitality Policy sets out strict ethical standards relating to gifts, entertainment, hospitality, sponsorship, travel expenses and donations. We also have controls to ensure we conduct any sponsorships, charitable contributions, lobbying or political donations ethically and in compliance with all relevant laws. Our suppliers are contractually obliged to ensure their employees, agents and subcontractors refrain from paying or receiving improper bribes, facilitation payments, gratuities or kickbacks. If we identify any suppliers as high risk for bribery or corruption, we refer them to the Compliance team for further due diligence, including an assessment of corruption, regulatory and reputational risks. Effective assessment and mitigation of corruption risks are a critical component of our Compliance Management Programme for the business, and we conduct periodic assessments check for corruption risks. We also follow rigorous due diligence procedures to identify any risk of improper payments during mergers and acquisitions, or when we enter into joint ventures. Our Finance and Global Sourcing teams have training and controls to detect and stop improper payments, with support from our Global Internal Audit team. If we identify any concerns, we promptly investigate them and take appropriate action. Training and compliance All employees (including part-time employees and contractors) complete mandatory training on our Code of Conduct and on anti-bribery and corruption when they first join Experian. Thereafter, they must complete refresher training every one to two years and we make sure that they do so through our performance review process. We also expect managers to be positive role models for ethical behaviour. Any breaches of our Code of Conduct or associated policies could undermine our reputation and stakeholder trust. Our Three Lines of Defence risk management model reinforces our culture of compliance, and we encourage people to report any suspected policy breach or unethical activity without fear of reprisals. We ask employees to start by talking to their manager if they have concerns. Employees and third parties can also report any concerns, anonymously if they choose, through our 24-hour Confidential Helpline. We take any allegations of ethical breaches very seriously. All reported concerns are investigated by relevant functions, such as Human Resources, Global Security Office or Global Fraud Investigations, to identify root causes and take appropriate corrective action. This year, 37 concerns were reported. The majority of these, 78%, concerned human resources related matters. Respecting human rights We are committed to respecting human rights and upholding the United Nations Universal Declaration of Human Rights (UDHR) and the UN Guiding Principles on Business and Human Rights (UNGP) in our business and supply chain. Everyone at Experian completes training on our Global Code of Conduct, which sets out clear standards to avoid any infringement of human rights. We are committed to treating all our people fairly and with respect. Experian is an accredited Living Wage employer in the UK, going beyond the legal minimum wage to pay employees the amount the Living Wage Foundation has calculated they really need to live on. This year, we have strengthened our focus on DEI globally (see page 49) and will publish our first Global DEI Report to enhance disclosure on this important topic. We have signed up to the UN Women’s Empowerment Principles, and our North American business received a perfect score from the Human Rights Campaign Foundation’s 2021 Corporate Equality Index on policies and practices for LGBTQ+ employees. Our Supply Chain Principles set out clear standards on human rights, and we include clauses in our contracts that oblige suppliers to protect workers’ rights and freedoms. We monitor compliance through our third-party risk management framework. We also expect suppliers to set similar requirements for their own suppliers and subcontractors to extend high standards throughout the supply chain. Experian plc Annual Report 2021Strategic report 52 Transforming lives by supporting slavery survivors We are tremendously proud of our profound relationship with Experian and have been absolutely delighted to see what incredible outcomes have been achieved over the past year, as a direct result of our partnership. Our collaboration continues to build resilience within potentially vulnerable communities, assists victims to freedom and empowers survivors towards sustainable remedy and lasting independence. We are excited to see what the future holds, and – together - to reach even more people whose lives have been impacted by this abhorrent affront to freedom. Paul McAnulty UK & Europe Programme Director, Hope for Justice Victims of modern slavery often find they have also been the victims of fraud and identity theft. We worked with Hope for Justice to adapt our authentication process to help survivors, who often have little or no documentation to prove who they are, get access to their credit reports and resolve fraudulent debts through our dispute process. This year, our funding has helped Hope for Justice support nearly 500 modern slavery survivors in the UK with advocacy and advice services – from language training and job skills to financial, legal and mental health support. We also helped Hope for Justice reach over 15,000 people in vulnerable communities through Facebook Live Sessions during the COVID-19 restrictions. A data model we developed is helping Hope for Justice focus its resources in parts of the UK where they can have the greatest impact and we have provided a similar model to help the organisation choose where to locate support hubs in the USA as they grow their presence in North America. Experian plc Strategic report We conduct a risk assessment of all the third parties we work with, including suppliers and indirect clients. Overseen by our Third Party Risk Management team, we assess risks related to data security and privacy, business continuity, compliance and reputation (including bribery, corruption and modern slavery). Of the thousands of third parties we work with, most fall into the minor or moderate risk category in our initial risk assessment. Those we consider higher risk – based on factors such as the type of product or service they provide and the type of data they have access to – are subject to more in-depth assessments, oversight and controls. As our first line of defence, the business function that owns the relationship with the third party is responsible for identifying, tracking and resolving any issues. Periodic reports on key suppliers, drawn from news sources around the world, help us monitor risks in our supply chain by alerting procurement teams and supplier relationship managers to any issues. This year, we have strengthened our processes for ongoing monitoring of higher-risk suppliers and third parties to include periodic sampling and testing of controls to ensure our standards are upheld. If we identify any gaps in controls, we log these in our centralised global governance, risk and compliance system, and track issues through to resolution. We will not work with – and routinely reject – third parties that do not uphold our standards on critical issues, such as data security. We are committed to supporting diverse suppliers through our strategic sourcing process that is designed to offer a level playing field for all third parties. In the USA, we support women and minority-owned suppliers as a member of the National Minority Supplier Development Council and the Women’s Business Enterprise National Council. Diverse suppliers account for around 6% of our US base. To support our climate strategy, we are working with our most carbon-intensive suppliers to request data to help us get a better understanding of our Scope 3 carbon footprint (see page 56). Tackling modern slavery Supplier risk assessments and in-depth training help procurement teams identify risks of modern slavery in our supply chain, and take action if they have any concerns. Our Slavery and Human Trafficking Statement provides further information on our commitment, policies and actions to tackle modern slavery risks in our business and supply chain. Experian is a founding member of the Slave-Free Alliance, which brings together businesses working towards a slave-free supply chain. Following a comprehensive assessment of our approach by the Slave-Free Alliance, we are completing a three-year improvement plan to improve our processes for identifying and preventing modern slavery risks in our supply chain. A quarterly steering group, headed by our Group Chief Procurement Officer and Head of Strategic Pricing, manages implementation of the plan. We have also invited members of the Slave-Free Alliance and our charity partner Hope for Justice to provide expert guidance. First steps this year included assigning responsibility for mitigating risks and implementing improvements to the owners of relevant areas of the business. We are using our data and analytics to support wider efforts to tackle modern slavery, and contribute to the United Nations’ Sustainable Development Goal to eradicate forced labour. Our DataLabs are collaborating with the United Nations University Centre for Policy Research and the University of Nottingham’s Rights Lab to develop an ‘analytical sandbox’ that will use a combination of datasets to help pinpoint locations that may be vulnerable to modern slavery risks. We are also working with Hope for Justice to support survivors of modern slavery. Partnering with suppliers Our Supply Chain Principles and Code of Business Conduct represent the minimum ethical, labour, human rights and environmental standards that all Experian suppliers must meet. As part of their contracts with us, all suppliers must confirm that they accept our standards or have their own equivalent standards in place. We integrate risk management and compliance in our supplier selection process, alongside commercial considerations. We use our third-party risk management framework to conduct due diligence on suppliers and third parties before we work with them, and assess and monitor risks throughout our working relationship. Our Three Lines of Defence controls support compliance. 53 Protecting the environment Our Environmental Policy commits us to minimising the impacts associated with our business activities. Improving our environmental performance is managed and communicated at Board level. As an information services business, the main environmental impact we control is the carbon footprint of our offices, data centres and business travel. We are also working to better understand and manage the climate impact of our supply chain, and aim to reduce our environmental footprint further by eliminating the use of single-use plastic in our facilities as far as possible. Our TCFD statement In March 2021, Experian became an official supporter of the Task Force on Climate-related Financial Disclosures (TCFD). We are committed to aligning our corporate reporting with the TCFD recommendations and early reporting on the majority of its requirements before it becomes mandatory for us in FY22. Governance Experian has a long-established process for identifying, assessing, responding to and reporting business risks through the Global Risk Management framework that combines a bottom-up approach at a regional and business unit level, and a top-down approach at a global level. Risks are identified and assessed at project and regional level, overseen by the Strategic Project Committees and Regional Risk Management Committees that report to the Executive Risk Management Committee (ERMC), on a quarterly basis. The Board has oversight of climate- related issues along with the Audit Committee, which oversees a response for global risks and opportunities, including climate change. Our carbon neutral plan, published in June 2020, is an example of our long-term strategy to mitigate the impacts of climate change. Regular updates on our plan are presented to the Group Operating Committee. The Board also receives reports of our corporate responsibility activities and performance from the Chief Executive Officer at every Board meeting. These reports include progress made on strategic drivers to address climate-related issues (for example, our science-based target and TCFD reporting). In 2021, the ERMC endorsed both our science-based target and this TCFD statement, prior to Board approval. Regionally, our established environmental management system (EMS) demonstrates best practice in minimising the environmental and climate impacts of our business, ensuring we Experian plc Annual Report 2021Strategic report 54 Our sustainable business strategy: Environment, Social and Governance continued comply with local regulations and continuously improve our performance. Where certified, regular management reviews of the EMS are performed, involving regional leadership, to ensure the objectives of the management system are being met, the system is effective, and risks and opportunities are reviewed. Three of our sites in the UK and our site in Bulgaria are certified to ISO 14001:2015. These locations are externally audited to ensure conformity with this standard, and we align all our operations globally to this standard, which is internationally recognised as best practice. In FY21, we strategically reviewed existing and future climate change risks and opportunities with a multi-disciplinary group of stakeholders across the business, representing each geographic region we operate in. The output of this was to: Identify and assess climate-related risks and opportunities to our business arising from climate change Conduct climate scenario analysis to help understand the long-term impacts of climate change on our business model Ensure climate-related risks are fully incorporated into our established risk assessment framework Identify risk owners to develop the capability in the management team for assessing and managing the identified risks. 'A-' leadership category Strategy Experian recognises the significance of climate change to our stakeholders and we are committed to identifying, addressing and managing risks and opportunities presented by climate change both now and in the future. We have been responding to the CDP climate change questionnaire since 2007, which is aligned with the TCFD recommendations, and most recently achieved an 'A-' leadership rating. Our climate change strategy includes a commitment published in June 2020 to become carbon neutral across our own operations by 2030, an example of the long-term strategic approach we are taking to respond to the physical and transitional risks associated with climate change. Our carbon neutral plan incorporates a science-based target to reduce our global carbon emissions and purchasing certified carbon credits to offset unavoidable, residual emissions across our direct operations (Scope 1 and 2). We are gradually phasing in carbon offsetting between 2021 and 2025 (see page 56). During the last year we have engaged with our top 20 strategic global suppliers, acknowledging the indirect environmental impact of our business operations. Our supply chain plays an important role in achieving our carbon reduction target for Scope 3 and we are keen to explore opportunities that can help to accelerate our decarbonisation plan. We will expand the scope of the engagement in future years to include a greater number of suppliers and prioritise those with the most material environmental impact. We have reviewed our climate risks and opportunities that exist across our business lines, and across the regions in which we operate, by engaging with key internal stakeholders. This process has enabled us to create a comprehensive climate risk and opportunity register identifying a wide range of physical and transitional climate-related risks and opportunities across short (one to two years), medium (two to five years) and long-term (five or more years) timeframes. This climate-specific risk and opportunity register has been developed in accordance with the Global Risk Management framework to ensure this was performed as a fully integrated process. The risks included in the matrix below have been identified as part of the recent strategic review, and have been classified based on their inherent risk (before control measures have Failure to adapt products and services to changing markets Reputational impact of failing to meet climate change commitments and targets Failure to disclose ESG performance to investors and customers Failure to incorporate climate risk on investment decisions exposing Experian to financial risk (e.g. pension investment) Failure to comply with climate change policy/ regulation Chronic impact of climate change leading to climate migrants' loss of credit history and constraints to data transfer Increased energy demand for operating data centres, providing cooling as the global mean temperature increases Disruption to power supply in data centres Intermittency of grid supplied power and rising operating costs Attracting, engaging and retaining employee talent through responsible business strategy including climate change Interruption to Experian supply chain as a result of extreme weather Third-party services being disrupted by extreme weather and associated grid power disruption Increased operational cost from direct impact of climate change policy/regulation Increased operational cost from indirect impact (supply chain) of climate change policy/ regulation Lack of access to sustainability-linked finance (green investment bonds, sustainability-linked bonds) Unstable carbon market for purchasing carbon credits Extreme weather impacting customers in operating markets h g H i e t a r e d o M r o n M i Possible Probable Very likely Experian plc Strategic report 55 been considered). The standard process for risk classification is based on residual risk (once control measures have been fully considered and reviewed). This will be a priority for FY22. In FY22, we will complete our journey to report in full alignment with the TCFD recommendations and will perform climate scenario analysis using high and low carbon scenarios. This analysis will systematically review our assets across the globe against a series of region-specific climate-related hazards (for example, water stress, susceptibility to drought and increased rainfall events) based on specified increases in mean temperature. This scenario modelling will be performed using recognised climate models such as RCP 2.6 and RCP 8.51 that explore well below 2°C (low carbon scenario) and 4°C (high carbon scenario) climate change pathways respectively. This will enable us to assess our exposure and vulnerability to climate-related risks, quantify the financial impact of climate-related risks and opportunities, and demonstrate the resilience of our strategy when we consider the future impact of climate change. Metrics and targets We measure, externally assure and publicly report our carbon footprint (see table on page 56). In order to accurately reflect our renewable electricity consumption, we are shifting our emissions metrics from using location-based Scope 2 emissions to market-based Scope 2 emissions2. Our emissions in FY21 dropped by 58% compared with the previous year. This reduction was due to a combination of factors, including the intermittent closure of our offices as a result of local COVID-19 restrictions, increased use of renewable energy contracts and a reduction in business travel. Our total carbon footprint this year was 16.8 thousand tonnes of CO2e, down from 40.3 thousand tonnes the previous year. The carbon intensity of our business decreased by 60% to 3.1 tonnes per US$1m of revenue. We continue to invest in energy efficiency technologies in assets around the globe and are progressively sourcing more renewable electricity. In FY21, 34% of our electricity consumption was from renewable sources. This year, we set our science-based target: Scope 1 and 2 (1.5 degree scenario): To reduce absolute Scope 1 and 2 emissions by 50% by 20302 (from 2019) Scope 3 (2 degree scenario): To reduce Scope 3 emissions from purchased goods and services, business travel and Well-To- Tank3 by 15% by 2030 (from 2019) To enable the delivery of our Scope 1 and 2 target and carbon neutral plan we have worked with colleagues across the globe to identify carbon reduction, energy efficiency and renewable energy opportunities. To date, over 40 projects have been identified. Throughout FY22 we will continue to work towards implementing these projects to drive progress towards our 2030 commitment. To achieve our Scope 3 target, we will engage with our suppliers to minimise the indirect environmental and climate impact of the products and services we procure. We have already engaged our top 20 suppliers to understand their climate strategies including commitments to science-based targets and net zero strategies. This engagement will lead to the identification for collaborative opportunities to reduce the carbon intensity of the products and services that we purchase and also discuss strategic opportunities such as the use of renewable electricity, adoption of electric vehicles, end-of-life takeback schemes, eliminating the use of single-use plastics and minimising packaging. We will continue to monitor the levels of business travel in FY22 as travel corridors reopen however, we do not expect business travel to return to pre-pandemic levels. Reducing emissions from buildings The COVID-19 pandemic has accelerated the move to more flexible working. Almost our entire workforce moved to full-time homeworking this year, with just a small number of employees working on site to keep our facilities and data centres going. We plan to maintain a more flexible approach to working as we prepare for a post-pandemic new normal (see page 51). Further consolidation of offices, together with increased use of renewable energy, will help to reduce emissions from our buildings. This year, we switched to renewable energy at three more offices in the UK and Ireland and North Risk management Climate-related risks are identified using the established Global Risk Management framework as detailed on page 72 of this report. This framework combines a bottom-up approach of engaging with local subject matter experts (First and Second Lines of Defence), who have in-depth knowledge of business activity, with a top-down approach (Third Line of Defence) that conducts a strategic review of the risks. The following process ensures risks are appropriately identified, addressed and managed. This process is completed at least twice a year to ensure that it remains appropriate and that any new activities or changes to variables have been captured. Key risks that are identified as a result of this process are maintained in the Global Risk Inventory, reviewed by the ERMC, approved by the Audit Committee and presented to the Board. At present, climate change is classified as an emerging risk. Step 1 Risk identification Step 2 Risk assessment Step 3 Risk response Consider key business Assess controls Estimate likelihood, impact and Accept or remediate current risk and control environment Step 4 Risk reporting & monitoring Business unit and regional level velocity Determine corrective action if RRMCs and ERMC Consider legal, reputation and conduct exposure needed Audit Committee objectives Identify principal risks Identify key controls 1 Representative Carbon Pathway 2.6 (RCP 2.6) is a climate model based on a greenhouse gas projection that requires global CO2e start declining by 2020 and reach zero by 2100, representing a ‘best-case scenario’. RCP 8.5 is a climate model based on a greenhouse gas projection that projects global CO2e continue to rise, representing a ‘worst-case scenario’ of climate change. 2 This year, we have updated the way we calculate our total greenhouse gas emissions by using our Scope 2 market-based rather than the Scope 2 location-based indicator. This enables us to factor in the renewable energy we purchase and helps track our performance against targets and our carbon neutral commitment. 3 Also known as ‘Fuel-and-energy-related activities’, is an average of all the greenhouse gas emissions released into the atmosphere from the production, processing and delivery of a fuel or energy. Experian plc Annual Report 2021Strategic report 56 Our sustainable business strategy: Environment, Social and Governance continued America. We are also developing a global strategy for reducing emissions from data storage at our on-site data centres, as well as from external sites or cloud-based solutions. While the move to homeworking this year has reduced our operational emissions, we recognise there is a knock-on effect in increased energy use in employees’ homes. We are exploring how to account for this in our Scope 3 reporting in future and we have engaged colleagues to help them reduce environmental impacts at home (see below). Engaging employees to reduce environmental impacts We encourage employees to use virtual meeting alternatives to minimise travel, and this year there was a big reduction in business travel and related emissions due to COVID-19 restrictions. We also asked employees to keep thinking about the environment and reducing their footprint even when they are working from home. Our Little Green Steps campaign in Asia Pacific helped colleagues avoid an estimated 318kg of carbon emissions. Last year, we committed to eliminating as much single-use plastic in Experian-controlled facilities as possible within two years. With hardly anyone working in our facilities this year, we have postponed action on this target, but our commitment still stands. In the coming year, we will assess how the new flexible working policy and patterns impact the amount of single-use plastic usage in our facilities to establish a baseline, and from there plan to establish a quantifiable target for its maximum feasible reduction Investing in high-quality offsetting Last year, we committed to offset our Scope 1 and 2 emissions gradually over the five years to 2025. Accordingly, we will offset 20% of these emissions for FY21. We aim to invest in offsetting projects that not only reduce carbon, but bring added value to communities to enhance our contribution to the United Nations SDGs. Our carbon footprint CO2e Scope 1 Scope 2 (market-based)1 Scope 3 (air travel only)2 Total emissions 1 Scope 2 (location-based)3 Total Scope 1 and 23 Total Scope 1 and 23 normalised by revenue – per US$1m revenue Total energy consumption in the UK4 Unit 000s tonnes CO2e 000s tonnes CO2e 000s tonnes CO2e 000s tonnes CO2e 000s tonnes CO2e 000s tonnes CO2e tonnes CO2e GWh 2021 2.2 14.3 0.3 16.8 22.2 24.4 4.5 25.5 2020 3.0 22.1 15.2 40.3 25.5 28.5 5.5 27.2 2019 3.6 25.6 14.3 43.5 29.8 33.4 6.9 29.5 1 Calculated with Scope 2 market-based carbon emissions. We have calculated market-based Scope 2 emissions using electricity supplier emission factors where available. Where supplier factors are not available, we use residual emission factors where available. If residual emission factors are not available, we use location-based emission factors. 2 Scope 3 includes emissions from global air travel. In FY21 air travel emissions have been calculated using Radiative Forcing (RF) emission factors for the first time and we intend to continue to report on this basis in the future. For comparison, the non-RF reported figure would be 0.1. 3 Location-based carbon emissions. We have calculated location-based Scope 2 emissions using the International Energy Agency (IEA) 4 carbon emission factors for electricity. Includes scaled data for electricity, gas, diesel used in generators and district heating consumption in the UK. We have reported on all the emission sources within our total carbon footprint which includes Scope 1, 2 and 3 (falling within our Group financial statements) in line with the UK Companies Act 2006 (Strategic Report and Directors Reports) Regulations 2013. Full Scope 3 emissions analysis (estimated base on FY19 baseline) Sources of Scope 3 emissions Purchased goods and services Business travel Capital goods Employee commuting Upstream leased assets Fuel-and-energy-related activities3 Waste generated in operations Investments Thousand tonnes of CO2e1 357.4 49.12 31.2 24.6 17.5 6.2 5.2 4.3 Contributions to Scope 3 (%)1 72% 10% 6% 5% 4% 1% 1% 1% Total Scope 3 (FY19) = 495.34 thousand tonnes of CO2e Top 4 sources of controlled Scope 3 emissions Purchased goods and services Business travel Upstream leased assets (including cloud, outsourced servers) Fuel-and-energy-related activities (or Well-To-Tank) 1 Baseline data corresponds to FY19. 2 Business travel: For greater accuracy, air travel emissions were calculated using the individual flight and seat classes, rather than the round trip mileage. It also includes all other types of travel - rail, taxi, grey fleet, public transport, and indirect emissions from overnight accommodation. 3 Not included in Scope 2. Assessing Scope 3 emissions In previous years, we have only tracked and reported Scope 3 emissions related to air travel. In FY21, we engaged external experts to undertake a full assessment of our Scope 3 emissions, using best practice models and a combination of procurement and financial data available for FY19, the last full year before the exceptional circumstances of COVID-19. This initial analysis estimated our baseline Scope 3 emissions in FY19 as 495.3 thousand tonnes. The biggest contributor to this total is purchased goods and services (72%), followed by business travel (10%) and capital goods (6%) (see data table). To improve the accuracy of these estimates, we are requesting more detailed information from suppliers on the portion of their emissions attributable to the products they supply to Experian. We are also engaging with suppliers to understand whether they have carbon reduction programmes or science-based targets in place. Capturing climate-related opportunities Climate-related opportunities identified for our business include: Developing products and services to support customers in response to acute and chronic weather-related impacts of climate change Accelerating the transition to a low carbon future by enabling customers to access credit facilities to support the low carbon economy Providing insights about the carbon impact of products and services to inform the consumer decision-making process Accessing green investment funds by demonstrating a strong climate change strategy and effective management. We are already developing new climate-related products and services. Our UK DataLab team is building a tool to support clients in developing their climate change risk disclosures to meet guidance from the TCFD and the UK Financial Conduct Authority (FCA). As part of a leadership development programme, our Business Information Services team in North America is exploring a solution to help clients build information on environmental impact and sustainability into their evaluations of suppliers or lending applications. Through our Social Innovation programme, we are developing an agriculture index to support clients in offering affordable finance and insurance to smallholder farmers, which can help boost their productivity and protect them from climate risks. Experian plc Strategic report Non-financial information and s172(1) statement 57 We report in line with the Non- Financial Reporting requirement as detailed in Sections 414CA and 414CB of the UK Companies Act 2006. Our aims Our business model is set out on pages 20 to 25. We believe data can create a better tomorrow for everyone, transforming lives and societies, making credit lending simpler, faster and more effective, and helping businesses to become more efficient, with faster and more convenient service delivery to consumers. Non-financial risks The Risk management section of the Strategic report, starting on page 72, sets out the Group’s approach to identifying and managing our principal risks and uncertainties. Our Three Lines of Defence model provides a rigorous governance framework, and the list of principal risks starting on page 75 gives details of the policies, outcomes and due diligence processes that control and mitigate those risks. The key areas where non-financial adverse impacts could arise are: 1. Respect for human rights As data custodians, we have a responsibility to safeguard consumer privacy, and we continue to systematically educate our people on how to handle sensitive data through our SecurityFirst programme. Our Global Code of Conduct1 aligns with the United Nations Universal Declaration of Human Rights, and our commitment to ensuring an ethical supply chain1 is borne out by our membership of the Slave-Free Alliance. 2. Employees Employee engagement is a key performance indicator (see page 17), and we talk on pages 49 to 50 about our many programmes and initiatives that inspire our people to be their best, to bring their whole selves to work, our commitment to diversity, equity and inclusion, and our recruitment, retention and succession practices that help to mitigate the risk of our dependence on highly skilled personnel. 3. Environmental matters1 We take our environmental responsibilities seriously, and the reduction of greenhouse gas emissions is a key performance indicator for us (see page 17). See also page 53 for further actions and initiatives Experian is taking to help protect the environment2. 4. Anti-corruption and anti-bribery Our Anti-Corruption Framework1 sets out our zero-tolerance policy on bribery and corruption in any form, and this message is reinforced through mandatory annual training for employees. 5. Social matters Experian has many initiatives in place to deliver our purpose of creating a better tomorrow for consumers, businesses, our people and our communities. The role we play benefits everyone: businesses grow, people prosper and communities thrive. This happens in many ways, including through our core business, the development of Social Innovation products, employee volunteering and support for community groups and charities. 1 More detail is available at www.experianplc.com/responsibility/our-policies. 2 Further detail is also available at www.experianplc.com/responsibility/data-and-assurance. Section 172 Section 172 legislation, which became effective in the UK during FY20, aims to help shareholders better understand how directors have discharged their duty to promote the success of companies, while having regard to the matters set out in Section 172(1)(a) to (f) of the UK Companies Act 2006 (s172 matters). In addition, the 2018 UK Corporate Governance Code recommends that boards describe how the matters set out in Section 172 have been considered in Board discussions and decision-making. Section 172 defines the duties of company directors and concerns the duty to promote the success of companies. Throughout FY21, the directors of the Company continued to exercise these duties while having regard to the s172 matters, and also to other relevant factors as they reviewed and considered proposals from senior management, and as they governed the Company on behalf of its shareholders through the Board and its committees. Section 172 matters Specific examples Experian plc, a Jersey-incorporated company, and the Board embrace Section 172 and fully support its aims, and we are reporting in line with the UK requirement. We outline below, through use of cross reference, where we have considered the s172 matters throughout this Annual Report. (a) The likely consequences of any decision in the long term Our dividend policy, taken together with sections of our Financial review, explains how we balance returns to shareholders with capital invested organically and on acquisitions Our governance framework shows how the Board delegates its authority (b) The interests of the company’s employees Our purpose in action - COVID-19 response Employee engagement (c) The need to foster the company’s business relationships with suppliers, customers and others Partnering with suppliers We comply with the requirements of ‘The Reporting on Payment Practices and Performance Regulations (2017)’ for all of our in-scope UK companies (d) The impact of the company’s operations on the community and the environment Improving financial lives Protecting the environment (e) The desirability of the company maintaining a reputation for high standards of business Upholding high ethical standards Partnering with suppliers (f) The need to act fairly between members of the company Stakeholder engagement Investment proposition Page 62 93 10 17, 24 25, 51 30 53 51 25, 51 24 94, 95 Experian plc Annual Report 2021Strategic report 58 Regional review North America growth of 16%. This was fuelled by new memberships and product innovation. Experian Boost has proved to be an innovative new product to help consumers to manage their finances, with 6.7m connected accounts. Brand investment through our ‘purple cow’ advertising campaign has yielded considerable growth in free memberships which totalled 41m at the year-end, up from 30m free members at the end of FY20. We continue to diversify our business model. We have successfully entered into automotive insurance matching, which supplemented growth from subscription-based credit education services and credit matching referral fees. Our credit matching lending panel added more lending partners who are attracted to our platform because we are able to deliver a large audience and because of our ability to match consumers with suitable credit offers. We enhanced Experian Boost and now consumers can contribute payment history data from streaming services (including Netflix) to their credit scores as an eligible tradeline, and we continue to invest in a new breed of smart services to help consumers manage their financial health. The strength in our revenue performance contributed to strong EBIT progression, up 10% to US$1,201m. The Benchmark EBIT margin increased by 30 basis points year-on-year to 34.0%, even as we invested in customer acquisition in support of Consumer Services. Ascend, with strong demand for our data services, marketing and account management modules as well as first-time contributions from newer modules like Ascend Intelligence Services. In keeping with our ambition to make credit and lending simpler, we also made good progress towards developing our suite of verification services offers, and after the year-end secured important new client wins. Growth in these areas offset significantly reduced volumes in relation to unsecured lending, and lower software revenue, as well as lower revenues from retail clients as they reduced marketing expenditure. We made further progress in our strategy to grow in specialised verticals. Health delivered a very solid performance. We have expanded the range of services we offer to our hospital clients to help them manage their revenue cycle and we are steadily increasing our presence in new customer segments such as the payer sector and pharmacies. Our recent investments, designed to enhance the consumer experience through digital channels, have proved well timed. We saw strong traction for these services as our hospital clients sought to provide healthcare in virtual settings. This also benefitted authentication volumes as clients sought to verify patient identities. At the other end of the customer lifecycle, we saw good demand for solutions which provide revenue certainty for healthcare clients. Our automotive vertical, while volatile through the year, was also relatively resilient. Empowering financial lives is an important aspect of what we do at Experian and we delivered one of our strongest years ever for Consumer Services with organic revenue Craig Boundy CEO, North America North America was resilient despite challenging external market conditions. Our strategic investments in innovation and our pursuit of new business opportunities have been successful. We made good progress with Ascend, our strategy to grow in specialised verticals like Health, and through expansion of our Consumer Services business. Revenue in North America was US$3,530m, with total revenue growth of 9% and organic revenue growth of 7%. The difference related to the acquisitions of Tapad and Corporate Cost Control and other smaller acquisitions. North America was very resilient in the face of the marketplace challenges. While we were able to rely on some support from counter- cyclical revenue streams, we benefitted equally, if not more, from our investments in innovation, our brand and from the progress we have made in developing new business opportunities. The B2B segment delivered organic revenue growth of 4%. Mortgage volumes were robust as historically low interest rates led to higher consumer refinancing activity. We secured new and expanded client relationships for Experian Total revenue growth 2021 2020 2019 2018 2017 Organic revenue growth 2021 2020 2019 2018 2017 Benchmark EBIT and Benchmark EBIT margin 2021 2020 2019 20181 2017 Revenue split A. B2B: Data B. B2B: Decisioning C. Consumer Services US$m Margin % 1,201 34.0 1,093 940 821 779 33.7 32.3 31.4 31.8 Revenue by activity 2020 2021 US$m US$m 1,761 1,642 B2B: Data 679 B2B: Decisioning 2,455 2,321 Total B2B Consumer Services 1,075 926 Total North America 3,530 3,247 694 Total growth % 7 2 6 16 9 Organic growth % 5 2 4 16 7 1 Restated for IFRS 15. % 9 11 11 8 7 % 7 11 10 6 5 50% 20% 30% A B C Experian plc Strategic report Latin America 59 enhanced propositions in FY22, and we intend to make all new scores and attributes available through our Ascend technology platform. Across the region, we signed 12 new clients in the year for Experian Ascend and plan to introduce new modules in the coming months. We had good growth in fraud and identity management, which included new wins for our CrossCore platform, all of which contributed to a solid year for Decisioning. Nowhere perhaps better illustrates our commitment to empower consumers than the progress we have made in Brazil. Consumer Services delivered another year of outstanding performance, with organic revenue growth of 144%. We have established a model, unique in Brazil, where we can provide consumers with financial information, help people to better understand their credit scores, compare pricing and apply for credit offers, as well as offering identity monitoring subscription services. Consumers can also use our collections marketplace to pay their bills and even to see the impact of these bill payments in improved credit scores through our free Score Turbo offer. As a result, we have grown our free membership base to 59m, compared to 45m in FY20. Audiences of this size and scale have attracted new lenders to our platform, including a growing proportion of the emerging FinTech community in Brazil. Our team in Brazil is committed to innovation-led growth and we are excited by the opportunities that lie ahead. In January, we were subject to media speculation claiming that Serasa marketing data was part of data from multiple organisations illegally offered for sale on the dark web. We take our responsibilities to protect Valdemir Bertolo CEO, Brazil We continue to execute on our strategy to be the undisputed leader for negative and positive data in Brazil and to address new market needs with our innovative platforms. We signed new multi-year, multi-solution agreements with our largest clients and secured a number of new clients. Consumer Services goes from strength to strength. Revenue in Latin America was US$625m, with both total and organic revenue growth of 9% at constant exchange rates. Organic revenue growth in Brazil was 11%. B2B organic revenue grew 1%. Strength in Serasa Automotive and Decisioning in Brazil offset weakness in traditional credit bureau volumes across Brazil and other markets in Latin America. In Brazil, we made good progress despite the challenging backdrop, signing new multi-year, multi-solution agreements with our largest clients, with increased share of wallet. We are also driving widespread adoption of positive data propositions which is leading to volume growth in enquiries. We expect to sustain this trajectory with the introduction of a range of consumer data extremely seriously and we initiated an extensive and detailed review which was conducted over several months and supported by multiple third-party experts. This investigation has found no evidence that any of our systems have been compromised. We have provided our conclusions and the detailed results of our investigation to the relevant authorities, including the Federal authorities who continue to pursue a criminal investigation against the individuals involved. Performance in Spanish Latin America was weaker as parts of the region have been especially hard hit by the COVID-19 pandemic. We have placed a strong focus on operating efficiency, while sustaining new product investment and undertaking technology transformation. More recently, we have seen evidence of recovery which will help us to resume our strategic ambitions to diversify our traditional bureau offerings and focus on developing new opportunities such as services to consumers. Benchmark EBIT in Latin America was US$172m, up 4% at constant exchange rates. The Benchmark EBIT margin from ongoing activities at actual exchange rates was 27.5% (2020: 30.1%) mainly reflecting revenue mix effects. Total revenue growth2 2021 2020 2019 2018 2017 Organic revenue growth 2021 2020 2019 2018 2017 % 9 13 6 6 9 % 9 13 6 6 9 Benchmark EBIT and Benchmark EBIT margin 2021 2020 2019 20181 2017 Revenue split A. B2B: Data B. B2B: Decisioning C. Consumer Services US$m Margin % 172 220 231 259 251 27.5 30.1 32.7 33.3 34.4 73% 15% 12% A C B Revenue by activity 2021 US$m 457 92 549 76 625 20203 US$m 578 114 692 40 732 Total growth2 % 1 2 1 144 9 Organic growth2 % 1 2 1 144 9 B2B: Data B2B: Decisioning Total B2B Consumer Services Total Latin America 1 Restated for IFRS 15. 2 At constant exchange rates. 3 Revenue for FY20 has been re-presented for the reclassification of our Consumer Services business to the Consumer Services business segment. Experian plc Annual Report 2021Strategic report 60 UK and Ireland Jose Luiz Rossi Managing Director, UK and Ireland We have made good progress with our transformation programme in the UK and Ireland. Our ambition in the region is to simplify and modernise our technology estate and resume profitable growth. We returned to growth in Q4 and delivered much-improved margin performance in H2 compared to H1. We are well positioned to take advantage of the many opportunities which lie ahead. Revenue from ongoing activities in the UK and Ireland was US$737m. Total and organic revenue declined (6)% at constant exchange rates. Both B2B and Consumer Services organic revenue declined (6)%. This was a year of transformation in the UK and Ireland and we made a lot of progress. While we have more to accomplish, it was encouraging to see the region return to growth in Q4 and deliver much-improved margin performance in H2 compared to H1. Our ambition in the region is to simplify and modernise our technology Total revenue growth2 2021 2020 2019 2018 2017 Organic revenue growth 2021 2020 2019 2018 2017 % (6) (2) 4 1 1 % (6) (2) 4 0 1 the important step to launch Experian Boost in the UK and this has made a promising start. The constraints on credit supply in the early part of the year also impacted revenues in our credit comparison marketplace. However, there was an improvement in the trajectory as the year progressed and we exited the year with growth in Q4. Our free membership base grew to 9.5m consumers, compared to 7.5m last year, with 370,000 active Experian Boost memberships. Revenue reductions and the impact of our transformation programme affected our EBIT performance. Benchmark EBIT from ongoing activities was US$122m, down from US$173m the year before. The Benchmark EBIT margin from ongoing activities was 16.6% (2020: 22.9)%. With the transformation programme now well progressed, we expect a strong improvement in the UK margin in the year ahead. Revenue split A. B2B: Data B. B2B: Decisioning C. Consumer Services 49% 30% 21% C A B estate and resume profitable growth, as well as to take advantage of the many opportunities which lie ahead. We already see tangible evidence of progress in the form of much- improved client net promoter scores, higher employee engagement levels, greater network stability, and a robust new business performance. B2B revenue from ongoing activities declined (6)% at constant exchange rates. Revenues were down for much of the year due to reductions in UK bank consumer lending and reduced demand for software investment. Our marketing services segment was also affected by reduced marketing expenditure. We successfully pivoted towards COVID-19 support propositions, including government loan schemes, and as a result business credit volumes remained robust. Negative trends reversed to some extent towards the end of our financial year with strengthening transaction volumes as lenders reactivate programmes. The new business pipeline has also been encouragingly strong, setting us up well for FY22. In particular, there is good demand for our open data solutions such as affordability and categorisation, and for our identity and fraud management propositions, including CrossCore, and there have been new wins for Experian Ascend. We also added many new logos in the mid-market. While Consumer Services also had a difficult year, with organic revenue down (6)%, we took Benchmark EBIT and Benchmark EBIT margin US$m Margin % 122 173 230 235 246 16.6 22.9 28.3 29.8 30.5 Total growth2 % (5) (7) (6) (6) Organic growth2 % (5) (7) (6) (6) 20203 US$m 367 227 594 161 2021 20203 2019 20181 2017 Revenue by activity 2021 US$m 361 220 581 156 B2B: Data B2B: Decisioning Total B2B Consumer Services Total – 737 ongoing activities Exited activities 12 Total UK and Ireland 749 755 14 769 1 Restated for IFRS 15. (6) (6) 2 At constant exchange rates. 3 Revenue and Benchmark EBIT for FY20 have been re-presented for the reclassification to exited business activities of certain B2B businesses. Experian plc Strategic report EMEA/Asia Pacific 61 Ben Elliott CEO, Asia Pacific Our ambition in EMEA/Asia Pacific is to concentrate our efforts where we can establish a strong market presence and can operate at scale. We are pleased with the performance of our recent bureau acquisitions in Germany and Spain, which are opening up new opportunities for us to pursue across the region. In EMEA/Asia Pacific, revenue from ongoing activities was US$465m, with total revenue growth at constant exchange rates of 7% and an organic decline of (14)%. The difference principally relates to the contribution from our bureau acquisitions: Compuscan, the Risk Management division of Arvato Financial Solutions, and Axesor. Our ambition in EMEA/Asia Pacific is to concentrate our efforts where we can establish a strong market presence and can operate at scale. The COVID-19 pandemic has opened up some specific opportunities as many of our clients are accelerating their adoption of Total revenue growth2 2021 2020 2019 2018 2017 Organic revenue growth 2021 2020 2019 2018 2017 % 7 7 14 11 9 % (14) (3) 14 11 9 cloud-based technologies. We are rapidly introducing our global advanced B2B propositions, including Ascend, SaaS decisioning through PowerCurve, our open data solutions, and fraud and identity services. Revenue performance last year was significantly impacted by reduced bureau volumes, particularly during the initial phases of lockdown. The trajectory gradually improved as lockdowns eased in most markets but remained challenged in countries hardest hit by the pandemic, such as India. Clients were also hesitant to spend on software implementations, delaying or cancelling decisions, which particularly affected Asia Pacific. Client activity has picked up in recent months, particularly in EMEA. We have got off to a strong start in our two new bureau acquisitions in Germany and Spain, both of which have performed well in the period since acquisition. All our global platforms have already been introduced and made available in Germany. In Spain, we now have two highly complementary bureau businesses, the integration of which is proceeding well, and we are exploring ways to fully address the new opportunity we have in the small and medium enterprise (SME) market. The reduction in revenue affected our EBIT performance. Benchmark EBIT from ongoing activities was US$(20)m (2020: US$12m) and the Benchmark EBIT margin from ongoing activities was (4.3)% (2020: 2.8%). Benchmark EBIT and Benchmark EBIT margin Revenue split 2021 20203 2019 20181 2017 US$m Margin % (20) (4.3) A. B2B: Data B. B2B: Decisioning 12 3 5 2.8 0.7 1.3 (3) (0.9) 62% 38% A B Revenue by activity 2021 US$m 287 178 20203 US$m 213 214 Total growth2 % 32 (18) Organic growth2 % (8) (20) 7 (14) 465 3 427 4 468 431 B2B: Data B2B: Decisioning Total – ongoing activities Exited activities Total EMEA/ Asia Pacific 1 Restated for IFRS 15. 2 At constant exchange rates. 3 Revenue and Benchmark EBIT for FY20 have been re-presented for the reclassification to exited business activities of certain B2B businesses. Experian plc Annual Report 2021Strategic report 62 Financial review Resilience and a strong recovery Summary Our focus this year has been to protect and support our people, clients and consumers. We have supported governments, businesses and communities during the pandemic through our data insights. We quickly transitioned the majority of our employees to work from home. We introduced flexible working and increased collaboration tools and support networks, such as mindfulness programmes, to help our people navigate the challenges of home working. Webinars and senior leadership vlogs helped us connect. Our employees around the world have shown incredible resilience, commitment and flexibility during the COVID-19 pandemic and this is reflected in our results. We maintained operational capacity throughout the pandemic, and are in a strong financial position, with access to substantial funding, ready to take advantage of the global pandemic recovery as it builds. Statutory financial highlights Revenue Operating profit Profit before tax Profit after tax from continuing operations Net cash inflow from operating activities – continuing operations Full-year dividend per share Basic EPS 2021 US$m 5,372 1,183 1,077 2020 US$m 5,179 1,185 942 Growth % 4 – 14 802 679 18 1,488 1,262 USc47.0 USc47.0 USc88.2 USc74.8 18 – 18 Benchmark financial highlights1 Constant rates growth % 7 3 5 20202 US$m 5,161 1,387 1,255 2021 US$m 5,357 1,386 1,265 1,476 1,214 24 2,650 2,175 USc103.1 USc103.0 n/a 4 Revenue3 Benchmark EBIT Benchmark PBT Benchmark operating cash flow Undrawn committed bank facilities Benchmark EPS 1 See note 6 to the Group financial statements for definitions of non-GAAP measures. 2 Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses. 3 From ongoing activities. Highlights 2021 Revenue US$5.4bn Total revenue from ongoing activities growth* 7% (at constant FX) Organic revenue growth* 4% (at constant FX) Basic EPS USc 88.2 Benchmark EPS* USc103.1 Cash flow conversion* 106% Ordinary dividends US$427m Lloyd Pitchford Chief Financial Officer Against the backdrop of the global pandemic we delivered a strong performance, growing total revenue3 7% at constant exchange rates. We generated US$1.5bn of cash with Benchmark operating cash flow up 22%. We have focused on supporting our people, clients and consumers throughout the COVID-19 pandemic, using data as a force for good, helping to navigate the crisis. *Alternative Performance Measures We have identified and defined certain non-GAAP measures. These are the key measures management uses to assess the underlying performance of our ongoing businesses. There is a summary of these measures on page 71 and a fuller explanation in note 6 to the Group financial statements on pages 160 to 161. Experian plc Strategic report 63 Total Benchmark EBIT and Benchmark EBIT margin US$m 5,372 2021 5,179 20201 4,861 2019 4,584 20182 4,335 2017 US$m Margin % 1,386 25.9 1,387 1,311 1,247 1,199 26.9 26.9 27.1 27.6 USc 47.00 47.00 46.50 44.75 41.50 Benchmark EPS Dividend per share 2021 2020 2019 20182 2017 USc 103.1 2021 103.0 98.0 94.4 88.4 2020 2019 2018 2017 1 Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses. 2 Results for 2018 are restated for IFRS 15. Revenue 2021 2020 2019 20182 2017 Performance summary Commentary on revenue and Benchmark EBIT performance by region is provided earlier in the Strategic report, within the regional reviews on pages 58 to 61. We report our financial results in US dollars. The weakening of our other trading currencies during the year, primarily the Brazilian real against the US dollar, reduced total revenue by US$141m and Benchmark EBIT by US$56m. A ± 1% change in the Brazilian real or pound sterling exchange rate would impact total revenue by ± US$5m or ± US$8m respectively. Benchmark EBIT from ongoing activities was US$1,385m (2020: US$ 1,386m), growing at 3% at constant currency, flat at actual exchange rates. Benchmark EBIT margin from ongoing activities was 25.9% (2020: 26.9%), and was adversely impacted by foreign exchange movements by 20 basis points. Details of the principal exchange rates used and currency exposures are provided in note 10 to the Group financial statements on page 169. Revenue, Profit before tax and Benchmark EBIT margin by business segment Revenue Data Decisioning Business-to-Business Consumer Services Ongoing activities Exited business activities Total Benchmark EBIT Business-to-Business Consumer Services Business segments Central Activities – central corporate costs Ongoing activities Exited business activities Total Benchmark EBIT Net interest and non-benchmark items Profit before tax Benchmark EBIT margin – ongoing activities Business-to-Business Consumer Services Total Benchmark EBIT margin3 2021 US$m 2,866 1,184 4,050 1,307 5,357 15 5,372 1,192 283 1,475 (90) 1,385 1 1,386 (309) 1,077 20202 US$m Total growth1 % Organic growth1 % 2 (4) – 17 4 2,800 1,234 4,034 1,127 5,161 18 5,179 1,251 247 1,498 (112) 1,386 1 1,387 (445) 942 6 (3) 3 17 7 n/a 6 (1) 14 2 n/a 3 n/a 3 n/a 6 29.4% 21.7% 25.9% 31.0% 21.9% 26.9% 1 At constant exchange rates. 2 Revenue and Benchmark EBIT for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses and the reclassification of our Consumer Services business in Latin America to the Consumer Services business segment. Further information is provided in note 9 (b) to the Group financial statements. 3 Benchmark EBIT margin for ongoing activities is calculated by dividing Benchmark EBIT for ongoing activities by revenue from ongoing activities. Experian plc Annual Report 2021Strategic report 64 Financial review continued COVID-19 pandemic Total revenue growth1 12% 10% 8% 6% 4% 2% 0% -2% 10% 10% 9% 9% 9% 9% 11% 10% 9% 7% 7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -1% Total organic revenue growth1 12% 10% 8% 6% 4% 2% 0% -2% 10% 9% 8% 8% 10% 7% 7% 6% 7% 5% 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -2% FY19 FY20 FY21 FY19 FY20 FY21 Business-to-Business organic revenue growth1 Consumer Services organic revenue growth1 15% 10% 9% 9% 8% 11% 9% 6% 6% 7% 5% 0% -5% 2% 1% 1% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 25% 20% 15% 10% 5% 0% 22% 22% 17% 14% 10% 8% 6% 6% 11% 8% 5% 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY19 FY20 FY21 FY19 FY20 FY21 1 From ongoing activities at constant exchange rates. Business resilience Since its listing in 2006, Experian has consistently grown its organic revenue. As we reflect on our history, in the most significant financial crises of the last 15 years – the COVID-19 pandemic and the global financial crash of 2008 – we have maintained that positive trajectory. This year we experienced a downward trend in Q1 as the COVID-19 pandemic unfolded and global economic activity faltered. We saw significantly reduced volumes in relation to unsecured lending across the globe with regional volumes down in the quarter by approximately 30%. As the year progressed volumes recovered and we returned to growth in Q2, with quarterly total revenue growth thereafter near pre-COVID-19 levels and even accelerating in our Consumer Services business. We attribute this resilience to a variety of factors: our portfolio diversity, a strong innovation pipeline, our strategic investments, aspects of our business being counter-cyclical, and diversification of our markets by expanding into new verticals, such as US automotive insurance. The COVID-19 pandemic has required us to adapt. We quickly transitioned our business with the majority of our employees working from home, increasing security and collaboration tools to provide a seamless service to clients. We have continued innovation and product investment throughout the period, to sustain performance. We also acted quickly to support governments, businesses and communities during the pandemic through our data insights, helping to ensure financial support reached the people and businesses who needed it most. While the pandemic has inevitably had a detrimental impact on some aspects of our business, market trends have been catalysed by the global crisis, providing new opportunities for expansion in others. There has been accelerated growth in the fraud management market, increased reliance on data and analytics and accelerated investment in digital platforms. We are ready to take advantage of the global pandemic recovery as it builds. Experian plc Strategic report 65 Historic organic revenue growth performance1 (at constant FX) 15% 10% 5% Global Financial Crisis 8% 8% 8% 10% 4% 3% 2% 5% 5% 5% 5% 1% 9% 8% COVID-19 pandemic 4% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 1 Ongoing activities. Business-to-Business growth has been driven by ongoing strength in counter-cyclical revenue streams, such as US mortgage, less susceptible to economic downturns. We delivered expansion in key verticals and strengthened our position in employment and verification services. We have continued the roll-out of our Ascend platform across further territories. There was heightened consumer interest leading to good demand in credit education and identity monitoring services. We delivered considerable growth in Consumer Services in Latin America, with revenue up 144% at constant exchange rates, reflecting transaction growth in eCred credit matching and strength in our debt resolution service. We will continue to invest in propositions which help those who are currently unbanked gain access to affordable credit and wider financial services. We anticipate that strong growth will continue in FY22 as the global economy recovers, with projected high single-digit organic revenue growth for the year as a whole. These factors offset ongoing COVID-19 related weakness in credit reference volumes. While bureaux volumes are down year-on-year we saw improving trends as the year progressed and credit supply improved. In Decisioning, performance in health and fraud management was strong, though software delivery, particularly of on-premise solutions, has been hit by COVID-19. In Brazil we benefitted from increased contributions from positive data propositions and signed new multi-year agreements with our largest financial services clients. Strength in Consumer Services was supported by ongoing expansion of our free membership base. We now have 110m consumer free memberships. Experian Boost is helping people instantly improve their credit scores. In the USA we now have 6.7m unique account connections. We are encouraged by consumer reaction since launching Boost in the UK in November 2020. Boost is also stimulating activity for credit comparison services and generating referral fees. FY21 Revenue by customer1 J I K A H G F E D C B Software and Professional services Automotive A Financial services B Direct-to-consumer C Health D Retail E F G Insurance H Telecoms and Utilities Media and Technology I Government and Public Sector J K Other 1 Revenue from ongoing activities. % 38 17 7 5 5 4 4 4 3 3 10 Experian plc Annual Report 2021Strategic report 66 Financial review continued Free member base million New and scaling products revenue US$m 22 40 57 82 110 108 213 359 537 678 FY17 FY18 FY19 FY20 FY21 USA Brazil UK FY17 FY18 FY19 FY20 FY21 Global cost profile % Benchmark operating cash flow US$m and cash flow conversion % 51 8 17 10 12 2 1,149 1,196 1,270 1,214 96% 96% 97% 88% B2C products – Lead generation – ID Works – Brazil consumer B2B products – PowerCurve suite – Ascend – Health new products – Auto new products – CrossCore 1,476 106% Labour IT Data Marketing Other Central Activities FY17 FY181 FY19 FY20 FY21 1 Restated for IFRS 15. Capital summary US$m Capital expenditure (capex) as % of total revenue FY17 9 399 20% 32% FY18 9 431 24% 31% FY19 9 439 28% 34% FY20 9 487 33% 31% 48% 45% 38% 36% FY21 8 422 40% 25% 35% Capex % Capex US$m % n w o d k a e r b t n e m t s e v n i l a t i p a C Development Infrastructure FY17 FY18 FY19 FY20 FY21 Data 1,600 1,200 Funds from Operations* 800 400 Reduction in Net debt and other Acquisitions and minority investments Dividends Organic capital investment 0 Cash generated Uses of cash * Funds from Operations is defined as Benchmark free cash flow plus organic capital investment (capital expenditure). Experian plc Strategic report 67 2020 US$m 1,387 413 1,800 – (483) (112) (55) (2) (17) 83 1,214 (152) (286) (2) 774 (700) (95) – (18) (424) (463) (3,262) (188) (6) 21 (3,898) 2020 US$m 487 (5) 1 483 Cash flow and Net debt summary1 Year ended 31 March Benchmark EBIT Amortisation and depreciation charged to Benchmark EBIT Benchmark EBITDA Impairment of non-current assets charged to Benchmark EBIT Net capital expenditure Increase in working capital Principal lease payments Benchmark loss/(profit) retained in associates Fair value gain on revaluation of step acquisition Charge for share incentive plans Benchmark operating cash flow Net interest paid Tax paid – continuing operations Dividends paid to non-controlling interests Benchmark free cash flow Acquisitions Purchase of investments Disposal of investments Movement in Exceptional and other non-benchmark items Ordinary dividends paid Net cash inflow/(outflow) – continuing operations Net debt at 1 April Net share purchases Discontinued operations Foreign exchange and other movements Net debt at 31 March 1 For Group cash flow statement see page 151. Reconciliation of net capital expenditure Year ended 31 March Capital expenditure as reported in the Group cash flow statement Disposal of property, plant and equipment (Loss)/profit on disposals of fixed assets Net capital expenditure as reported in the cash flow and Net debt summary 2021 US$m 1,386 453 1,839 6 (418) (13) (56) 12 – 106 1,476 (115) (236) (1) 1,124 (583) (31) 151 (67) (427) 167 (3,898) 19 – (114) (3,826) 2021 US$m 422 (1) (3) 418 and did not breach this covenant given on borrowings during the year under review or the prior year. Disciplined capital management Our capital allocation framework is based on balancing a number of competing priorities – notably operating and capital investment, dividends, acquisitions and share repurchases – while targeting Net debt within the range of 2.0 to 2.5 times Benchmark EBITDA. The mix between these categories will vary over time, and in FY21 we suspended our share repurchase programme due to uncertainties surrounding COVID-19. We assess acquisition opportunities against a range of metrics, including economic valuations and the earnings enhancement we expect them to bring relative to share repurchases. Total investment of US$881m (2020: US$1,278m) comprised cash flows for net capital expenditure, acquisitions and net investments. The acquisition of our majority stake in the Risk Management division of Arvato Financial Solutions was satisfied by 7.2m Experian plc shares. The chart opposite shows our capital summary as executed this year. Capital expenditure Our capital expenditure of US$422m (2020: US$487m) was 8% (2020: 9%) of revenue. The reduction was due to exchange and where we took a disciplined approach to prioritising investments. Digitisation and customer expectations of how we deliver data are increasing. We continue to invest to drive innovation and bring the latest technologies to our clients, with emphasis on automation and tools to improve efficiency, speed and effectiveness. Operating efficiency Throughout the COVID-19 pandemic we have maintained operational capacity while taking a balanced approach to cost management. We have not availed ourselves of any government furlough schemes. While there has been increased amortisation and depreciation reflecting previous investment in technology infrastructure, we have made reductions in discretionary spend to combat this, freezing headcount and delaying non-critical investment. We are rationalising our office footprint. Our Future of Work programme is a global initiative to create more modern, flexible and collaborative ways of working while simultaneously reducing costs. Employees will have more choice in the way they work and be able to work flexibly, remotely or from office hubs. We continue to invest in growth, increasing marketing and customer acquisition expenditure, as we position ourselves to emerge strongly from the pandemic. Cash and liquidity management This year, we continued to generate cash strongly, with a 106% (2020: 88%) conversion of Benchmark EBIT to Benchmark operating cash flow, and Benchmark free cash flow of US$1,124m (2020: US$774m). The continued strength of our Benchmark operating cash flow performance reflects the nature of our business and financial model, and our focus on working capital management. We have successfully improved collections, recovering receivables that had increased towards the end of FY20 due to the impact of COVID-19. Funding During the year we issued two bonds of £400m each which mature in 2025 and 2032, extending the life of our longest debt by 25 months. We took advantage of prevailing markets to secure additional long-term funding for the Group and the latest issue was at a coupon rate of 0.739%. At 31 March 2021, 56% (2020: 43%) of our total borrowings falls due in over five years, and our undrawn committed bank borrowing facilities were US$2.7 bn (2020: US$2.2bn). We keep our debt levels stable at a low multiple of our profits. Net debt at 31 March 2021 was US$3,826m (2020: US$3,898m), 2.1 times Benchmark EBITDA and 2.2 times Benchmark EBITDA when measured on the frozen GAAP basis we use for our debt covenant. Our target range is 2.0 to 2.5 times. The covenant on our banking facilities requires that Benchmark EBIT should cover net interest expense before financing fair value remeasurements by three times. At 31 March 2021, this coverage ratio was 11 times (2020:11 times). We have no undue concentration of repayment obligations in respect of borrowings Experian plc Annual Report 2021Strategic report 68 Financial review continued Acquisitions Our acquisition cash outflow was US$583m (2020: US$700m). We completed a number of acquisitions in the year, including a 60% stake in the Risk Management division of Arvato Financial Solutions for 7.2m Experian plc shares, which were valued at US$253m on completion. We acquired the whole of the issued share capital of Tapad, Inc. a leader in resolution of digital online identities, for US$290m. We also acquired the whole of the issued share capital of BrScan Processamento de Dados e Tecnologia Ltda (BrScan) for US$132m. Acquisitions were in the Business-to-Business segment and contributed US$117m to revenue and US$28m to Benchmark EBIT in the year, with annualised pro-forma revenue of US$246m. We have recognised a non-current financial liability of US$208m for put options in respect of acquisitions made this year. In April 2021, we completed two further acquisitions in the USA to bolster our income verification business: Tax Credit Co., LLC and Employment Tax Servicing, LLC. Arvato Risk Management This investment expands our bureau presence in EMEA and extends our range of risk, anti-fraud and identity management services across Germany, Austria and Switzerland. Tapad A leading provider in digital identity resolution for marketers helping to connect brands to consumers, primarily in the USA. BrScan A market leader in fraud and identity solutions in Brazil. Corporate Cost Control A leading provider of workforce solutions in the USA expanding our verification services offering. Axesor businesses One of the largest independent business information bureaux in Spain, complementing our existing consumer information business. Brain Soluções de Tecnologia Digital The 55% investment enables us to expand our share of the Brazilian Agri credit market. Associates and venture investments Associates Venture Total US$128m US$176m US$304m 9 – 25 10 34 10 Current invested capital Number of portfolio companies New deals closed this year We continue to invest in smaller start-ups and FinTech companies, to boost innovation and advance our intellectual property. We completed ten investments in our venture programme in FY21, bringing our total venture programme financing to US$176m. During the year we disposed of our interest in Finicity Corporation, recognising a gain on disposal of US$120m, and in the year ahead we expect to realise further gains. Following a favourable trading performance we reversed the associate impairment charge of US$23m booked in FY20. Experian plc Strategic report 69 20201 US$m 1,386 1 1,387 (132) 1,255 (35) (278) 942 2020 % 25.8 (3.1) (1.3) 1.4 22.8 2021 US$m 1,385 1 1,386 (121) 1,265 35 (223) 1,077 2021 % 25.9 (2.6) (2.0) (2.6) 18.7 Reconciliation of Benchmark EBIT to statutory profit before tax Year ended 31 March Benchmark EBIT from ongoing activities Exited business activities Benchmark EBIT Net interest expense Benchmark PBT Exceptional items Other adjustments made to derive Benchmark PBT (note 14(a)) Profit before tax 1. Results for FY20 are re-presented for the reclassification to exited business activities of certain B2B businesses. Cash tax reconciliation Year ended 31 March Tax charge on Benchmark PBT Tax relief on goodwill amortisation Benefit of brought forward tax losses Other Tax paid as a percentage of Benchmark PBT Dividend history (USc) Payout ratio (%)1 ) s t n e c S U ( e r a h s r e p d n e d i v i D 47% 46% 46% 46% 41% 45% 47% 41% 41% 41% 40% 50 40 30 34% 32% 31% 20 28% 10 0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Second interim dividend First interim dividend 1 Payout ratio is dividend per share as a proportion of Benchmark EPS. Dividends and distributable reserves Our dividend policy aims to increase dividends, broadly in line with the underlying growth in Benchmark EPS over time. This aligns shareholder returns with our underlying profitability. In the past five years we have returned over US$2bn to shareholders by dividend and over US$1.3bn via net share purchases. We expect to execute share purchases of up to US$150m in the coming year, which will mainly offset deliveries under employee share plans. The Board has announced a second interim dividend of 32.5 (2020: 32.5) US cents per share, giving a total dividend for the year of 47.0 (2020: 47.0) US cents per share. The dividend in FY21 has been held level with the prior year in line with our policy. The total dividend per share for the year is covered 2.2 times (2020: 2.2 times) by Benchmark EPS. Ordinary dividends paid in the year amounted to US$427m (2020: US$424m). Experian plc and the UK entity responsible for distributing dividends under the Group’s Income Access Share arrangements have significant distributable reserves, which at 31 March 2021 were US$18.2bn and US$12.0bn respectively. See note K to the Company financial statements for further detail. Interest Benchmark net finance costs decreased by US$11m reflecting a reduction in market interest rates and average borrowing levels. A reduction in foreign exchange losses on Brazilian real intra-Group funding of US$38m, and other fair value remeasurements, contributed to the decrease in statutory net finance costs of US$130m. At 31 March 2021, interest on 91% of our net funding was at fixed rates (2020: 67%). Taxation Our total tax charge was US$275m (2020: US$263m) and our effective tax rate on Benchmark PBT was 25.9% (2020: 25.8%), reflecting the mix of profits and prevailing tax rates by territory. We expect that our effective tax rate on Benchmark PBT in FY22 will be in the range of 26% to 27%. The equivalent cash tax rate remains below our Benchmark tax rate and we provide a reconciliation in the table opposite. Other differences include an acceleration of tax deductions as a result of US legislative changes in the year. We anticipate that our cash tax rate will increase and move closer to our Benchmark tax rate over the course of the next three years, as tax amortisation of goodwill on earlier acquisitions and prior tax losses are utilised. Earnings per share Basic EPS was 88.2 US cents (2020: 74.8 US cents). Basic EPS was reduced by 14.9 US cents per share (2020: 28.2 US cents per share) in respect of discontinued operations, Exceptional items and other adjustments made to derive Benchmark PBT. Benchmark EPS was 103.1 US cents (2020: 103.0 US cents), an increase of 4% at constant exchange rates and flat at actual rates. A ± 10% change in the Brazilian real exchange rate would impact Benchmark EPS by ± 1 US cents. There would be no impact on Benchmark EPS from a similar change in the pound sterling exchange rate. We provide further information in note 18 to the Group financial statements on page 175. Share capital In FY21 we suspended our share repurchase programme due to uncertainties surrounding COVID-19. During the year, the average number of shares in circulation was 910m (2020: 902m) and the closing number of shares at 31 March 2021 was 914m (2020: 901m). The increase in the year is attributable to shares delivered as acquisition consideration and shares issued on vesting of employee share incentive plans. Experian plc Annual Report 2021Strategic report 70 Financial review continued Net assets and ROCE summary Year ended 31 March Goodwill Other segment assets Total segment assets Segment liabilities Operating segments – net assets Central Activities – net assets Deduct: non-controlling interests Capital employed Net debt Tax Add: non-controlling interests Net assets Average capital employed ROCE1 2021 US$m 5,261 3,756 9,017 (2,043) 6,974 388 (38) 7,324 (3,826) (417) 38 3,119 6,849 15.0% 2020 US$m 4,543 3,344 7,887 (1,723) 6,164 307 (6) 6,465 (3,898) (292) 6 2,281 6,383 16.1% 2019 US$m 4,324 2,957 7,281 (1,541) 5,740 300 (14) 6,026 (3,275) (271) 14 2,494 6,094 15.9% Net assets and ROCE Operating segment net assets increased by US$810m in the year as a result of acquisitions. ROCE for the year ended 31 March 2021 reduced to 15.0% (2020: 16.1%) largely due to the effect of acquisitions completed part way through the year. ROCE is a post-tax measure and we use our Benchmark tax rate for ease of calculation. Financial risk management The key financial risks specific to our business are set out in the Risk management section on pages 72 – 80. We continue to monitor closely the impact of COVID-19 on our business and the global economy. Our priority remains the health, safety and well-being of our employees, clients and consumers. While the UK’s departure from the EU has not had a significant impact on our business, there is ongoing uncertainty related to Brexit and the longer-term effect on trade, cross-border data regulations and legislative arrangements. We continue to monitor this risk. We have identified unpredictable financial markets or fiscal developments as a principal risk, including evolving tax laws and the resolution of uncertainties relating to prior-year tax liabilities. Detailed narrative disclosures are contained in note 7 to the Group financial statements on pages 161 – 162, with further numeric disclosures for foreign exchange, interest rate and credit risk in notes 10, 15, 24 and 30 respectively. Critical estimates and judgments The Group is subject to a number of risks and uncertainties which require us to make estimates and judgments. Areas involving significant uncertainty are: Goodwill Goodwill represents 52% of total assets. We test for impairment of goodwill at least annually by performing a value-in-use calculation for each cash-generating unit (CGU), which is based on cash flow projections with assumptions updated for the impacts of COVID-19. Following our evaluation this year the carrying value of the Asia Pacific CGU has been reduced to its recoverable amount through recognition of a US$53m impairment charge. These estimates are, by nature, subject to uncertainty and the key assumptions used by each CGU, and sensitivities, are set out in note 20 to the Group financial statements. Useful life of intangible assets Our business is subject to technological change and competition. We currently amortise non-acquisition intangibles over a period from three to ten years, with the average life being five years. If the useful life of our databases and internal use/internally generated software either increased or decreased by one year, the impact on the annual amortisation charge would be a decrease of US$53m or an increase of US$76m respectively. We have recognised an impairment charge in the year of US$33m which largely relates to an internally generated software asset identified as requiring impairment due to the planned upgrade of our technology estate. Taxation We are subject to tax in numerous jurisdictions and have a number of open tax returns with various tax authorities. It can take many years to agree an outcome with a tax authority, as there are transactions in the ordinary course of business for which the ultimate tax determination is uncertain. Our key uncertainties relate to the deductibility of purchased goodwill, inter-company trading and financing. US$350m (2020: US$327m) is ROCE 2021 2020 2019 20182 2017 % 15.0 16.1 15.9 15.5 15.5 1 For definition of ROCE see ‘Non-GAAP measures’ on page 161. For FY21 the return used in the calculation of ROCE is based on Benchmark EBIT of US$1,386m and a Benchmark tax rate of 25.9%. 2 Restated for IFRS 15. included in current tax liabilities in relation to these judgmental areas. If the resolution of all these uncertainties was ultimately adverse, we may be required to pay an amount of up to US$166m (2020: US$163m) in addition to that currently provided. Future tax charges and our effective tax rate may be affected by tax regime reforms in our key markets as well as resolution of open matters as we continue to bring our tax affairs up to date. Deciding whether to recognise deferred tax assets is a financial judgment. Assets are only recognised when we consider it probable that they can be recovered based on forecasts of future profits, against which those assets may be utilised. The Group is subject to challenge by the Brazilian and Colombian tax authorities on the deduction for tax purposes of goodwill amortisation. Further information on the contingency is provided in note 43 to the Group financial statements. Pensions The Group is exposed to a number of risks inherent in defined benefit pension plans, as outlined in note 34(d) to the Group financial statements. The principal financial assumption used in determining the carrying value of pension assets/obligations is the real discount rate. If this rate increased/decreased by 0.1%, defined benefit obligations at 31 March 2021 would change by approximately ± US$21m offset by a change in the fair value of plan assets of approximately ± US$20m. Litigation There continue to be a number of litigation and other claims across all our major regions. We do not consider that the outcome of any such claims will have a materially adverse effect on our financial position. Experian plc Strategic report 71 Exceptional items and other adjustments made to derive Benchmark PBT We make certain adjustments to derive Benchmark PBT. These are summarised in the table below. Note 6 to the Group financial statements explains the reasons for the exclusion from our definition of Benchmark PBT of Exceptional items and other adjustments made to derive Benchmark PBT. Year ended 31 March Exceptional items: Profit on disposal of associate Restructuring costs Impairment of intangible asset Legal provisions movements Net (credit)/charge for Exceptional items Other adjustments made to derive Benchmark PBT: Amortisation of acquisition intangibles Impairment of goodwill Acquisition and disposal expenses Adjustment to the fair value of contingent consideration Non-benchmark share of post-tax profit of associates Interest on uncertain tax provisions Financing fair value remeasurements Net charge for other adjustments made to derive Benchmark PBT Net charge for Exceptional items and other adjustments made to derive Benchmark PBT 2021 US$m 2020 US$m (120) 50 27 8 (35) 138 53 41 1 (16) 11 (5) 223 188 – – – 35 35 124 – 39 (4) (6) 14 111 278 313 Further information on Exceptional items is provided in note 14 to the Group financial statements on page 171. Non-GAAP measures We have identified and defined certain non-GAAP measures as the key measures used by management to assess the underlying performance of the Group’s ongoing businesses. The table below summarises these measures and there is a fuller explanation in note 6 to the Group financial statements on pages 160 to 161. Benchmark PBT Profit before amortisation and impairment charges, acquisition expenses, Exceptional items, financing fair value remeasurements, tax (and interest thereon) and discontinued operations. It includes the Group’s share of continuing associates’ Benchmark post-tax results. Benchmark EBIT Benchmark EBITDA Benchmark PBT before net interest expense. Benchmark EBIT before depreciation and amortisation. Exited business activities The results of businesses sold, closed or identified for closure during a financial year. Ongoing activities The results of businesses which are not disclosed as exited business activities. Constant exchange rates Results and growth calculated after translating both years’ performance at the prior year’s average exchange rates. Total growth This is the year-on-year change in the performance of Experian’s activities at actual exchange rates. Organic revenue growth This is the year-on-year change in the revenue of ongoing activities, translated at constant exchange rates, excluding acquisitions until the first anniversary of their consolidation. Benchmark earnings Benchmark PBT less attributable tax and non-controlling interests. Total Benchmark earnings Benchmark PBT less attributable tax. Benchmark EPS Benchmark earnings divided by the weighted average number of ordinary shares. Benchmark operating cash flow Benchmark EBIT plus amortisation, depreciation and charges for share-based incentive plans, less net capital expenditure and adjusted for changes in working capital, principal lease payments and the Group’s share of the Benchmark profit or loss retained in continuing associates. Cash flow conversion Benchmark operating cash flow expressed as a percentage of Benchmark EBIT. Return on capital employed (ROCE) Benchmark EBIT less tax at the Benchmark rate divided by average capital employed, in continuing operations, over the year. Capital employed is net assets less non-controlling interests, plus/minus the net tax liability or asset and plus Net debt. Experian plc Annual Report 2021Strategic report 72 Risk management Identifying and managing risk Identifying and managing risk is key to our business. Doing so helps us deliver long-term shareholder value and protect our business, people, assets, capital and reputation. Our risk management governance structure Board Sets our overarching risk appetite and ensures that we manage risks appropriately across the Group. The Board delegates oversight of risk management activities to the Audit Committee. Audit Committee Regularly monitors the principal risks and uncertainties identified by our risk assessment processes, with the strategies we have developed and the actions we have taken to mitigate them. Management also continually reviews the effectiveness of our risk management system and internal control systems, which support our risk identification, assessment and reporting. Executive Risk Management Committee (ERMC) Comprises senior Group executives, including the executive directors and the Company Secretary. It oversees how we manage global risks. Risk Management Committees Security and Continuity Steering Committee (SCSC) is a sub-committee of the ERMC. Its primary responsibility is to oversee management of global information security, physical security, and business continuity risks. Assurance Steering Committee (ASC) Tax and Treasury Committee Global and Regional Strategic Project Committees Regional Risk Management Committees (RRMC) is a sub-committee of the ERMC and oversees the development and implementation of the Group’s assurance framework. oversees management of financial risks, including tax, credit, liquidity, funding, market and currency risks. oversee management of regional risks and feed up to the ERMC. ensure that we appropriately resource our strategic projects, and that they are risk-assessed, and commercially and technically appraised. The committees’ conclusions are then considered by the Board or relevant Group Principal Operating Subsidiary for approval. Group Operating Committee (OpCo) The Group Operating Committee comprises our most senior executives. Its remit includes identifying, debating and achieving consensus on issues involving strategy, risk, growth, people and culture, and operational efficiency. Its meetings generally focus on the key issues facing our Group. Executive management Our executive management takes day-to-day responsibility for implementing the Board’s policies on risk management and internal control. It designates who is responsible and accountable through the design and implementation of all necessary internal control systems, including policies, standards and guidance. Experian plc Strategic report 73 The Board is responsible for maintaining and reviewing the effectiveness of our risk management activities from a strategic, financial, and operational perspective. These activities are designed to identify and manage, rather than eliminate, the risk of failure to achieve business objectives or to successfully deliver our business strategy. The risk management process is designed to identify, assess, respond to, report on and monitor the risks that threaten our ability to achieve our business strategy and objectives, within our risk appetite. Our risk management process We follow the Three Lines of Defence approach to risk management. Risks are owned and managed within the business and reviewed by our businesses at least quarterly. Global governance teams review risks and controls, including those relating to information security, compliance and business continuity. Global Internal Audit assesses our risks and controls independently and objectively. The results of these reviews feed into our reporting cycle, including through the risk management governance structure outlined opposite. Risk categories Strategic risk – Country/Political/ Economic – Acquisition – Competitor – Business strategy – Publicity Financial risk – Accounting – Credit – Liquidity – Market – Currency Regulatory/ Compliance risk – Regulated activities – Privacy – Financial crime Operational risk – Technology – Information security – Physical security – Continuity – Third party – People – Process Step 1 Risk identification Consider key business objectives Identify principal risks Identify key controls Step 2 Risk assessment Assess controls Estimate likelihood, impact and velocity Consider legal, reputation and conduct exposure Step 3 Risk response Step 4 Risk reporting & monitoring Accept or remediate current risk and control environment Determine corrective action if needed Business unit and regional level RRMCs and ERMC Audit Committee Three Lines of Defence Audit Committee Executive management / Risk Management Committees First Line of Defence Second Line of Defence Third Line of Defence Lines of business (regional and global) Experian IT Services (EITS) Corporate functions Global Risk Management Global Security Office Compliance Business Continuity Physical Security Legal Global Internal Audit All employees have First Line responsibilities Governance teams have Second Line responsibilities Global Internal Audit has Third Line responsibilities Experian plc Annual Report 2021Strategic report 74 Risk management continued Our risk profile Our risk identification processes follow a dual approach: A bottom-up approach at a business unit or country level. This identifies the risks that threaten an individual business unit activity. To provide visibility of issues across the business, we consolidate these risks at a regional and global level, then escalate to the Risk Management Committees. A top-down approach at the global level. This identifies the principal risks that threaten the delivery of our strategy (see below). The diagram on this page summarises our principal risk profile and trends in the threat levels (on a net/residual risk basis) since the last reporting period. Compared to last year, the principal risks remain the same (we have removed ‘data ownership, access and integrity’ as a standalone risk due to overlap with other risks, and the associated risk information is covered in other risk descriptions). Our strategic focus areas 1 Make credit and lending simpler, faster and safer for consumers and businesses 2 Empower consumers to improve their financial lives 3 Help businesses verify identity and combat fraud 4 Help organisations in specialised vertical markets harness data and analytics to make smarter decisions 5 Enable businesses to find, understand and connect with audiences Risk appetite We assess the level of risk and our associated risk appetite to ensure we focus appropriately on those risks we face. We target risks for assessment based on gross risk and measure them based on net risk using a risk and control assessment methodology. We then prioritise them for mitigation. The Board and Audit Committee review the principal risks, of which there are currently nine, on an ongoing basis, as does the ERMC. The Board has defined risk appetites for certain principal risks that we face during the normal course of business. We use a variety of information sources to show if we are working within our tolerance for these risks and whether or not any of them require additional executive attention. Our risk culture The Board is committed to maintaining a culture that emphasises the importance of managing risk and encourages transparent and timely risk reporting. We work to align employees’ behaviours, attitudes and incentives with our risk appetite and other governance and risk management policies. Our risk Principal risk profile Business conduct risk Failure to comply with laws and regulations Non-resilient IT/business environment Undesirable investment outcomes Dependence on highly skilled personnel T C A P M I Adverse and unpredictable financial markets or fiscal developments Loss or inappropriate use of data and systems New legislation or changes in regulatory enforcement Increasing competition L I K E L I H O O D Risk movement: Increasing Decreasing Stable governance process reinforces and facilitates appropriate ownership, accountability, escalation and management of our principal risks. This process includes: well-defined roles and responsibilities across our Three Lines of Defence model; assigning accountability for risk-taking when making key business decisions; documenting clear boundaries and behavioural expectations in policies and standards; and creating an environment that reinforces adherence and accountability. Current areas of focus Our risk landscape continues to change as both business and regulatory environments evolve. While COVID-19 has not led us to change our risk management framework or processes, we have ensured that the impacts of the pandemic are considered across all our principal risks. We make references to COVID-19 in future sections. Our focus in the current year was to continue getting more proactive in the identification and management of our principal risks through a combination of best-in-class risk practices, greater engagement across the Three Lines of Defence and increased use of data and analytics. While we have made good progress in all these focus areas, we would expect similar areas of focus to continue in the upcoming fiscal year. We are currently undertaking an external review of our operational risk management programme to ensure it is keeping pace with our evolving risk profile. In addition to known principal risks, we continue to identify and analyse emerging ones, and discuss these, as appropriate, in different forums, including the ERMC and Audit Committee. Some of the emerging risks we are currently considering include: ESG matters: we continue to develop our ESG programme to address different aspects. The Group has committed to becoming carbon neutral in its own operations by 2030 and has also developed its alignment to the Task Force on Climate-Related Financial Disclosures (TCFD) reporting framework. Experian will be required to report its environmental disclosure aligned to the TCFD framework from FY22 (Annual Report 2022) onwards, however our TCFD statement in this year’s annual report (see page 53) already covers most of the required TCFD disclosure. The Group has an Environmental Policy in place to address related matters, and an Environmental Management System (EMS) designed to ISO 14001 standards that allows us to measure and monitor our direct environmental impact. We continue to focus on People and Diversity matters, including setting gender targets (see page 49). We also continue to engage with investors and clients to address their expectations. Accelerating privacy regulation: regulators are becoming more active in interpreting and enforcing privacy regulations across existing regulations, and proposing new and more stringent privacy regulations in others. We closely monitor these developments and interact with regulators, legislators and other stakeholders to provide input. Experian plc Strategic report 75 An example of increased fraudulent activity is the incident we experienced in South Africa this year where we concluded an agreement for services with an individual fraudulently impersonating a representative of a legitimate company seeking access to marketing data. While no personal consumer credit, financial or banking information was shared by Experian and none of our infrastructure, systems or databases were compromised, this highlights the increased risks related to unauthorised access to data. In response to this incident, we provided support to affected consumers and businesses, engaged third parties to assist in our analysis and response, and have strengthened our organisational protocols and business processes to prevent this sort of fraud, including new client onboarding controls, new data transfer protocols, and organisational changes to increase our privacy compliance activities. In response to cyber risks, we continue to enhance our protection, detection and response capabilities by strengthening our security policies, practices and training and continue to ensure that we apply them consistently across our regions and business units. We will continue investing in the tools, people, resources and initiatives necessary to maintain and improve our global information security programme. With COVID-19 and while we consider our longer-term strategy for the future of work location, we continue to monitor the impact of most of our employees and third parties working remotely, including any potential exposure to vulnerabilities. We have taken technical measures to restrict, secure and monitor devices, and added compliance requirements for employees and third parties, especially those handling sensitive information. Principal risks The following pages summarise our principal risks and uncertainties with mitigating actions for each and related trends in the risk environment, as identified by the Board for the year ended 31 March 2021. The list is not exhaustive and may change during the next financial year, as the risk landscape evolves. COVID-19 continues to be a consideration in several of our principal risks. We continue to seek to mitigate the impact of COVID-19 and remain focused on the health, safety and well-being of our employees, clients and consumers. In order to assess our Group’s viability, the directors focused on three principal risks that are critical to our success. These are summarised below and discussed in more detail in the Viability assessment section following the description of our principal risks. Loss or inappropriate use of data or systems leading to serious reputational and brand damage, legal penalties and class action litigation. Adverse and unpredictable financial markets or fiscal developments in one of our major countries of operation, resulting in significant economic deterioration, currency weakness or restriction. New legislation or changes in regulatory enforcement, changing how we operate our business. Loss or inappropriate use of data and systems We hold and manage sensitive consumer information that increases our exposure and susceptibility to cyber-attacks or other unauthorised access to data, either directly through our online systems or indirectly through our partners or third-party contractors. Part of the viability assessment Risk type – Operational Risk movement Stable Potential impact Unauthorised access to consumer data could cause problems for consumers and result in material loss of business, substantial legal liability, regulatory enforcement actions and/or significant harm to our reputation. The impact of this risk, if it materialises, will typically be felt in the near term. Examples of control mitigation We deploy physical and technological security measures, combined with monitoring and alerting for suspicious activities. We maintain an information security programme with strong governance for identifying, protecting against, detecting and responding to cyber security risks and recovering from cyber security incidents. We impose contractual security requirements on our partners and other third parties that use our data, complemented by periodic reviews of third-party controls. We maintain insurance coverage, where feasible and appropriate. Responsibility Our Global Security Office sets policies and standards related to the information security programme. Every employee is ultimately responsible for following security policies and protocols. Changes this year External cyber security threats to businesses continue to increase in number and scale. We have also seen an increase in fraudulent activity seeking access to data. In addition, the inherent risk level of data exposure has also increased, particularly with respect to data that has not traditionally been considered sensitive or ‘personally identifiable’. Experian plc Annual Report 2021Strategic report 76 Principal risks continued Adverse and unpredictable financial markets or fiscal developments We operate globally and our results could be affected by global, regional or national changes in fiscal or monetary policies. A substantial change in credit markets in the USA, Brazil or the UK could reduce our financial performance and growth potential in those countries. We present our Group financial statements in US dollars. However, we transact business in a number of currencies. Changes in other currencies relative to the US dollar affect our financial results. A substantial rise in US, EU or UK interest rates could increase our future cost of borrowings. We are subject to complex and evolving tax laws and interpretations, which may change significantly. These changes may increase our effective tax rates in the future. Uncertainty about the application of these laws may also result in different outcomes from the amounts we provide for. We have a number of outstanding tax matters and resolving them could have a substantial impact on our financial statements, cash and reputation. Part of the viability assessment Risk type – Financial Risk movement Increasing Potential impact The US, Brazilian and UK markets are significant contributors to our revenue. A reduction in one or more of these consumer and business credit services markets could reduce our revenue and profit. We benefit from the strengthening of currencies relative to the US dollar and are adversely affected by currencies weakening relative to it. We have outstanding debt denominated principally in euros, pounds sterling and US dollars. As this debt matures, we may need to replace it with borrowings at higher interest rates. Our earnings could be reduced and tax payments increased as a result of settling historical tax positions or increases in tax rates. Adverse publicity around tax could damage our reputation. 1 World Bank, 5 January 2021. The impact of this risk, if it materialises, will typically be felt in the short to long term. Examples of control mitigation We have a diverse portfolio by geography, product, sector and client. We provide counter-cyclical products and services. We convert cash balances in foreign currencies into US dollars. We fix the interest rates on a proportion of our borrowings. We retain internal and external tax professionals, who regularly monitor developments in international tax and assess the impact of changes and differing outcomes. We review contingency plans in our key markets as to specific potential responses to evolving financial conditions. Responsibility Our corporate and business unit finance functions monitor our external landscape, and interface with business units to develop and implement appropriate actions. Changes this year We continue to analyse the impact of potential economic downturn and associated actions, particularly in our key markets. Some of the underlying risk vectors are improving, while others have future uncertainty associated with them, as detailed below and so this will continue to remain an area of focus. The global economy is expected to expand in the mid-single digits during 2021, following a contraction of 4.3% in 20201. This will likely positively impact areas of the business which experienced difficult trading conditions during the previous year. We continue to perform analyses to understand the impact of changes in economic conditions on Group revenues and have considered different economic scenarios in our viability assessment. Serasa S.A. has been successful in its challenges against the Brazilian tax authorities for the deduction of the initial goodwill amortisation arising from its acquisition by Experian in 2007, however there are some remaining matters that are yet to be resolved. The Colombian Tax Authority has raised a similar challenge on the deductibility of goodwill in respect of the 2014 and 2016 tax years. Historic UK tax disputes continue to be discussed with Her Majesty’s Revenue & Customs. Any changes to the US, UK and Brazil corporate tax rates would result in a change to our effective tax rate and cash tax payments. In the USA, the new administration may consider tax reform proposals which could involve changes to the Tax Cuts and Jobs Act or the corporate federal income tax rate. In the UK, it has been announced that the corporation tax rate will increase from 19% to 25% from 1 April 2023. Experian continues to monitor these developments closely. New legislation or changes in regulatory enforcement We operate in an increasingly complex environment and many of our activities and services are subject to legal and regulatory influences. New laws, new interpretations of existing laws, changes to existing regulations and heightened regulatory scrutiny could affect how we operate. For example, regulatory interpretation of complex, principles-based privacy regulations could affect how we collect and process information for marketing, risk management and fraud detection. Part of the viability assessment Risk movement Increasing Risk type – Strategic – Regulatory/ Compliance – Operational Potential impact We may suffer increased costs or reduced revenue resulting from modified business practices, adopting new procedures, self-regulation and litigation or regulatory actions resulting in liability, fines and/or changes in our business practices. The impact of this risk, if it materialises, will typically be felt in the short term. Examples of control mitigation We use internal and external resources to monitor planned and realised changes in legislation. We educate lawmakers, regulators, consumer and privacy advocates, industry trade groups, our clients and other stakeholders in the public policy debate. Our global Compliance team has region-specific regulatory expertise and works with our businesses to identify and adopt balanced compliance strategies. We execute our Compliance Management Programme, which directs the structure, documentation, tools and training requirements to support compliance on an ongoing basis. Experian plc Strategic report 77 The proposed India Personal Data Privacy (PDP) Bill is still being analysed by a Joint Parliamentary Committee (JPC). At this point it is unclear whether the bill will be taken up or tabled, so there is no clarity on implementation dates. Related to COVID-19, we continue to monitor for additional rules and regulations related to the reporting of data. Failure to comply with laws and regulations We hold and manage sensitive consumer information and we must comply with many complex privacy and consumer protection laws, regulations and contractual obligations. Risk type – Regulatory/ Compliance – Operational Risk movement Increasing Potential impact Non-compliance may result in material litigation, including class actions, as well as regulatory actions. These could result in civil or criminal liability or penalties, damage to our reputation or significant changes to parts of our business. The impact of this risk, if it materialises, will typically be felt in the near term. Examples of control mitigation We maintain a compliance management framework that includes defined policies, procedures and controls for Experian employees, business processes, and third parties such as our data resellers. We assess the appropriateness of using data in new and changing products and services. We vigorously defend all pending and threatened claims, employing internal and external counsel to effectively manage and conclude such proceedings. We analyse the causes of claims, to identify any potential changes we need to make to our business processes and policies. We maintain insurance coverage, where feasible and appropriate. Responsibility Our Legal and Compliance functions work with our business units to understand the impact of relevant laws and regulations, including any regulatory interpretations and associated implications. Our business units put into place appropriate procedures and controls designed to ensure compliance. Changes this year We have faced increased regulatory scrutiny, and regulatory and government enquiries and investigations in several jurisdictions. The laws and regulations to which we are subject are complex, and in many cases principles-based. Compliance with these laws and regulations continues to get more challenging as interpretations may differ among regulators, and as changes in the regulatory environment evolve. In the UK, the UK Information Commissioner’s Office (ICO) issued its final Enforcement Notice (EN) on 12 October 2020. We disagree with the ICO’s interpretation of the EU General Data Protection Regulation (GDPR) and have filed our appeal, which will be heard at the end of November 2021. We have also seen closer contact by the Financial Conduct Authority (FCA) during the COVID-19 pandemic. In the USA, we are subject to ongoing regulatory supervision by the Consumer Financial Protection Bureau (CFPB), and for some matters by other regulators such as the New York Department of Financial Services (DFS). Over the past year, the number of US class action lawsuits have decreased slightly, however individual consumer cases are trending up. While we are managing the effects associated with these investigations and lawsuits, the cost of defending litigation is rising and consequently the risk of potential liability and impact on some parts of our business still remains significant. Related to COVID-19, we continue to closely monitor call centre volumes and other indicators to ensure that we continue to adhere to statutory and regulatory deadlines. There is a potential for increased regulatory investigations and/or litigation if any capacity constraints on our side or at data providers result in missing statutory deadlines, such as for disputes. Responsibility Our Legal, Government Affairs and Compliance functions work with our business units to understand the impact of relevant laws and regulations, including any regulatory interpretations and associated implications. The business units put into place appropriate procedures and controls designed to ensure compliance. Changes this year New laws, new interpretations of existing laws, changes to existing regulations and regulatory scrutiny continue to be considered and introduced, with a global focus on privacy and a general trend towards more consumer control over data. Many of these laws and regulations are complex and principles-based, leading to actual and potential differences in how regulations are interpreted and enforced after they become effective in many of the jurisdictions we operate in. In some cases these differences in interpretations may have to be decided in the courts. We highlight some significant updates below: In the USA, California voters recently approved a ballot initiative to enact the California Privacy Rights Act (CPRA). The CPRA will become effective on 1 January 2023, with the California Consumer Privacy Act (CCPA) remaining in effect through that date. The CPRA further enhances the CCPA by creating a new privacy regulatory agency with expanded enforcement and rulemaking authority, new consumer rights of data correction, expansion of opt-out rights, and increased disclosures and opt-out rights regarding sensitive information, among other requirements. We are compliant with the CCPA. Several other states are progressing privacy legislation, with Virginia passing the Consumer Data Protection Act (VDPA) in March 2021. More states are expected to enact privacy laws before a national privacy standard may be established. In the meantime, divergence in state laws may have an impact on products and services. In Brazil, the general data protection law (LGPD) has been effective since September 2020. While we have implemented our rigorous compliance programme based on the principles outlined in the law, we have already seen some different regulatory interpretations of these principles and how they relate to our Marketing Services business under LGPD. Open banking is under implementation in Brazil and the Central Bank is progressing discussions internally and with authorised private sector entities to define legal and technical aspects. In South Africa, Experian remains on track in implementing its readiness programme for full compliance with the Protection of Personal Information Act (POPIA) ahead of the 12-month implementation grace period, which ends on 1 July 2021. Experian plc Annual Report 2021Strategic report 78 Principal risks continued Non-resilient IT/business environment Delivery of our products and services depends on a number of key IT systems and processes that expose our clients, consumers and businesses to serious disruption in the event of systems or operational failures. Risk type – Operational Risk movement Stable Potential impact A significant failure or interruption could have a materially adverse effect on our business, financial performance, financial condition and reputation. The impact of this risk, if it materialises, will typically be felt in the near term. Examples of control mitigation We maintain a significant level of resilience in our operations, designed to avoid material and sustained disruption to our businesses, clients and consumers. We design applications to be resilient and with a balance between longevity, sustainability and speed. We maintain a global integrated business continuity framework that includes industry-appropriate policies, procedures and controls for all our systems and related processes, as well as ongoing review, monitoring and escalation activities. We duplicate information in our databases and maintain back-up data centres. Responsibility Our corporate and business technology teams, assisted by the Business Continuity function, are responsible for maintaining appropriate primary and back-up infrastructure to minimise disruption. Changes this year Throughout this year we experienced isolated events that tested our plans and processes. From an operational resiliency standpoint, including related to the impact of COVID-19, we continue to closely monitor our infrastructure and processes to manage our commitments to clients, consumers and regulators. In addition, we provide training to our key responders and carry out periodic exercises to validate that our procedures are fit for purpose. We have designed our applications using a ‘build anywhere, deploy anywhere’ strategy, to support portability and maximum resilience. Our approach to asset lifecycle management helps ensure that we retire and replace our technology in a timely fashion. A global initiative continues progress to maximise business value and maintain leadership through accelerated technology transformation. Business conduct risk Our business model is designed to create long-term value for people, businesses and society, through our data assets and innovative analytics and software solutions. Inappropriate execution of our business strategies or activities could adversely affect our clients, consumers or counterparties. Risk type – Strategic – Operational Risk movement Stable Potential impact Consumers or clients could receive inappropriate products or not have access to appropriate products, resulting in material loss of business, substantial legal liability, regulatory enforcement actions or significant harm to our reputation. The impact of this risk, if it materialises, will typically be felt in the short term. Examples of control mitigation We maintain appropriate governance and oversight through policies, procedures and controls designed to safeguard personal data, avoid detriment to consumers, provide consumer-centric product design and delivery, and effectively respond to enquiries and complaints. The above activities also support a robust conduct risk management framework. We enforce our Global Code of Conduct, Anti-Corruption Policy and Gifts and Hospitality Policy. If we believe employees or suppliers are not following our conduct standards, we will investigate thoroughly and take disciplinary action where appropriate. Responsibility Our Compliance function sets policies and standards, including the Code of Conduct. All employees are accountable for understanding and following our conduct standards. Changes this year Regulators have continued to put public trust and consumer and investor protection at the centre of their mission statements and have promoted prudent conduct risk management. We periodically evaluate our policies and other protocols to ensure that we stay up to speed with external and internal expectations. Related to COVID-19, we continue to take industry-leading positions designed to protect and educate consumers, as well as to promote the responsible reporting of data, with appropriate safeguards, in order to help the economic recovery from the crisis. Dependence on highly skilled personnel Our success depends on our ability to attract, motivate and retain key talent while also building future leadership. Risk type – Operational Risk movement Stable Potential impact Not having the right people could materially affect our ability to service our clients and grow our business. The impact of this risk, if it materialises, will typically be felt in the long term. Examples of control mitigation In every region, we have ongoing programmes for recruitment, personal and career development, and talent identification and development. As part of our employee engagement strategy, we conduct periodic employee surveys. We track progress against our action plans. We offer competitive compensation and benefits and review them regularly. We actively monitor attrition rates, with a focus on individuals designated as high talent or in strategically important roles. Experian plc Strategic report 79 Responsibility Our business units work with the Human Resources function to set and implement talent management strategies. Changes this year We continue to take steps to effectively manage our ability to attract, develop and retain employee talent and believe our mitigation efforts have stabilised the overall risk to Experian. We continue to transform our Talent Acquisition proposition to better attract talent to Experian. We have embedded mobile-enabled technology, introduced candidate experience surveys at different stages of the hiring and onboarding process, significantly enhanced our presence on social media, implemented key performance indicators for recruiters and continue to upskill our capability within the Talent Acquisition team. We monitor employee engagement through a variety of channels and have been implementing the action plans from our periodic surveys. In addition to high response rates, our latest surveys continue to show strong engagement and enablement scores. Voluntary attrition rates are stable but continue to be a focus. Significant activity in the DEI space prevails with senior executives taking up Sponsor roles for key areas of our DEI strategy, including setting gender and ethnicity targets. With COVID-19, we have kept the health and safety of our employees as the primary consideration of our pandemic response. Most of our employees are still working remotely. An effort is underway to determine our strategy for work arrangements in the future. We expect this to be guided by a consistent global framework and principles, with local flexibility around the approach to account for legal and cultural nuances. Increasing competition We operate in dynamic markets such as business and consumer credit information, decisioning software, fraud, marketing, and consumer services. Our competitive landscape is still evolving, with traditional players reinventing themselves, emerging players investing heavily and new entrants making commitments in new technologies or approaches to our markets. There is a risk that we will not respond adequately to such disruptions or that our products and services will fail to meet changing client and consumer preferences. Risk type – Strategic Risk movement Stable Potential impact Price reductions may reduce our margins and financial results. Increased competition may reduce our market share, harm our ability to obtain new clients or retain existing ones, affect our ability to recruit talent and influence our investment decisions. We might also be unable to support changes in the way our businesses and clients use and purchase information, affecting our operating results. The impact of this risk, if it materialises, will typically be felt in the long term. Examples of control mitigation We continue to research and invest in new data sources, analytics, technology, capabilities and talent to deliver our strategic priorities. We continue to develop innovative new products that leverage our scale and expertise and allow us to deploy capabilities in new and existing markets and geographies. We use rigorous processes to identify and select our development investments, so we can efficiently and effectively introduce new products and solutions to the market. Where appropriate, and available, we make acquisitions, take minority investments and enter into strategic alliances to acquire new capabilities and enter into new markets. Responsibility Our Corporate Development and Experian Ventures teams, as well as our business units, monitor the competitive landscape in order to develop and implement appropriate actions. Changes this year We are proactive in our efforts to evaluate competitors and markets, and pursue investments and enhancements to our data, analytics, technology and capabilities where appropriate, available and feasible. Traditional competitors continue to pursue differentiated data assets, adjacent vertical expansion, and new geographic markets. In the Consumer Services space, other firms have become bigger competitors in recent years as we have expanded in areas such as digital marketplaces and identity protection. We feel confident in Experian’s relative position and competitive advantages, but the broader landscape continues to evolve. There is a long-term competitive risk to consider related to newer entrants building information networks based on consumer data. While some of them may not be trying to build a credit bureau or fraud business per se, this is not many degrees away from our core business and is being closely monitored. Certain governments and central banks in countries where we have credit bureaux are collecting loan data from banks, principally for systemic risk analysis, though some may share individual loan data with lenders, which has the potential to compete with some of our credit reference data services. The timing and whether any government agencies choose to go this route is uncertain. In India, the Reserve Bank of India (RBI) had announced plans to establish a Public Credit Registry (PCR) in 2018. The full extent of competition with private credit bureaux in India is uncertain at this point. In the USA, there have been references to the potential formation of a government-owned credit bureau, though there have been no actual proposals to establish such a bureau. With COVID-19, we continue to engage with our clients to help them navigate risk decisions, such as lending, in the current environment of economic uncertainty. Experian plc Annual Report 2021Strategic report Responsibility Our Corporate Development and Experian Ventures teams, as well as our business units, monitor the investments we make to ensure outcomes are in line with expectations. Changes this year We have refreshed policies and standards that apply minimum requirements to our acquisition and integration processes, including enhanced information security requirements. We are analysing competitive threats to our business model and will take advantage of acquisitions, investments and strategic partnerships, and invest in new technologies where appropriate. Related to COVID-19, we continue to closely monitor our acquisition pipeline. We are closely engaged with each of our minority investments to offer guidance and advice and, where appropriate, are providing commercial offerings that may be helpful to these companies. In addition, we continue to research any available opportunities for investment. 80 Principal risks continued Undesirable investment outcomes We critically evaluate, and may invest in, equity investments and other growth opportunities, including internal performance improvement programmes. To the extent invested, any of these may not produce the desired financial or operating results. Risk type – Strategic – Operational Risk movement Stable Potential impact Failure to successfully implement our key business strategies could have a materially adverse effect on our ability to achieve our growth targets. Poorly executed business acquisitions or partnerships could result in material loss of business, increased costs, reduced revenue, substantial legal liability, regulatory enforcement actions and significant harm to our reputation. The impact of this risk, if it materialises, will typically be felt in the long term. Examples of control mitigation We analyse competitive threats to our business model and markets. We carry out comprehensive business reviews. We perform comprehensive due diligence and post-investment reviews on acquisitions and investments. We employ a rigorous capital allocation framework. We design our incentive programmes to optimise shareholder value through delivery of balanced, sustainable returns and a sound risk profile over the long term. Experian plc Strategic report Viability and going concern 81 Going concern Our going concern assessment focuses mainly on immediately available sources of liquidity to fund our anticipated trading pattern, plus anticipated acquisition spend, returns to shareholders and capital investment, ensuring we always maintain a comfortable margin of headroom in case of the unexpected. As is now best practice, we also perform a review of factors that might indicate the beginnings of going concern issues, and have found none. Viability Our viability assessment focuses mainly on the expected future solvency of the Group in the face of more severe, but plausible, unexpected events. We use the going concern modelling as a base, and layer on the effects of downside scenarios to assess the magnitude and practicality of measures we could take to continue to trade in the face of such events. We are not expecting the current economic environment, under any plausible scenario, to develop into a scenario that could threaten our viability. In the last year, the Group has demonstrated its resilient business model and diverse strategy, both of which are described within the Strategic report. They exemplify our underlying purpose to create a better tomorrow, how we create value for our stakeholders and communities, and how our data and analytics are helping address the changing needs of consumers and businesses. Our strategy has enabled our business to grow and achieve good financial results consistently over the last decade, despite changes both in the economic cycle and in our senior leadership team. We consider current-year business performance and our future prospects by conducting a regular cycle of strategic planning, budgeting and forecasting. These processes appraise revenue, Benchmark EBIT, cash flows, dividend cover, committed and forecast funding, liquidity positions and other key financial ratios, including those relevant to maintaining our investment-grade credit ratings. This year, despite our resilient and better-than- expected performance in the face of the pandemic and its associated global economic downturn, in addition to our usual modelling, we have performed a stress test to anticipate the impacts of a prudent assumption of a 5% decline in Benchmark EBIT year-on-year. Assessment period There are a wide variety of time horizons relevant to managing our business and some of these are highlighted in the chart below. In conducting our viability assessment we have focused on a three-year timeline because we believe our three-year financial planning process provides the strongest basis for reviewing the outlook for our business beyond the current financial year. Time horizons affecting prospects 1 year 2 years 3 years 5 years 10 years + Detailed budgets Financial plan including cash flow forecasts Medium-term financing – revolving credit Long-term financing – bonds Typical service life of data assets Investment appraisal – acquisitions and organic Share incentive plans IT systems development Management succession planning Pensions The assessment process and key assumptions While we assess our prospects through various parts of our planning cycle, we specifically review our three-year growth expectations and the external environment as part of the annual strategic planning process. The Board participates in this review, using the January Strategy meeting as a focal point. We then develop our detailed annual budget, together with an update to the financial plan for the two subsequent years. Current economic outlook COVID-19 presents a challenging context for accurate forecasting. We have again supplemented our normal corporate plan process with a number of scenarios reflecting the impact of the pandemic in our key business territories across a range of severities. Some countries and businesses may be more heavily affected by the pandemic than others, in longevity and scale. In many of the markets for our services, demand is related to employment levels and other economic factors. We used the most severe of these scenarios, which equates to a 5% decline in Benchmark EBIT year-on-year, to stress test the base year of our model, with our strategic plan growth rates thereafter. Additionally, we assume the Group continues to achieve strong cash flow conversion, and maintains its investment-grade credit rating such that funding in the form of capital markets debt, committed bank borrowing facilities or alternatives is available in all plausible market conditions. We assume effective tax rates to be broadly stable (before the impact of any changes of legislation) over the medium term. Assessment of viability The Group continues to be subject to its principal risks, which we have reassessed in the light of COVID-19 (see the principal risks section in the Strategic report). To assess the Group’s resilience to adverse outcomes, its forecast performance over the three-year period – including capital expenditure, costs of acquisitions and returns to shareholders – was sensitised to reflect a series of scenarios based on the Group’s principal risks. This assessment included a reasonable worst-case scenario in which the Group’s principal risks manifest to a ‘severe but plausible’ level. The assessed risks for which the impacts were applied in aggregate, are shown overleaf. Experian plc Annual Report 2021Strategic report 82 Viability and going concern continued Principal risk Impact modelled The loss or inappropriate use of data or systems, leading to serious reputational and brand damage, legal penalties and class action litigation. Adverse and unpredictable financial markets or fiscal developments in one or more of our major countries of operation, resulting in significant economic deterioration, currency weakness or restriction. New legislation or changes in regulatory enforcement, changing how we operate our business. Expected future solvency The Group had: undrawn committed bank borrowing facilities of US$2.7bn at 31 March 2021 only one borrowing facility covenant, requiring Benchmark EBIT to exceed three times net interest expense before financing fair value remeasurements (as at 31 March 2021 our cover is 11 times) Benchmark operating cash inflows of US$1.5bn and interest expense of US$0.1bn for FY21. For this, we assessed the maximum credible extent of a data breach and modelled the likely financial impacts through loss of revenue, dispute and regulatory actions, and the costs of remediation. For this, we assessed the possible range of outcomes, beyond our base case, due to the COVID-19 pandemic. For this, we assessed the maximum credible extent of simultaneous legal actions in two of our core markets and modelled the likely financial impacts after potential insurance recoveries. Our modelling shows that: under our continued COVID-19 stress test scenario, which assumes a 5% decline in Benchmark EBIT year-on-year, with associated reductions in cash flow, we would be able to maintain the significant majority of our undrawn committed bank borrowing facilities under our harshest ‘severe but plausible’ scenario we would comfortably maintain sufficient undrawn borrowing capacity and satisfy all borrowing facility covenants further significant headroom could be made available by scaling back capital investment or operating expenditure in all scenarios our debt covenants would be comfortably satisfied. The results of the stress-testing show that, due to our diversified nature – which includes significant counter-cyclical protection, the resilience of the core business, its substantial free cash flows and its strong investment- grade credit rating – we would withstand the considered scenarios were these to occur during the forecast period, despite the impacts of COVID-19. Viability statement Based on their assessment of prospects and viability, the directors confirm that they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period ending 31 March 2024. Looking further forward, the directors have considered whether they are aware of any specific relevant factors beyond the three-year horizon that would threaten the long-term financial stability of the Group over a ten-year period and have confirmed that, other than any residual uncertainty surrounding COVID-19, the effects of which have been considered in the analysis, they are not aware of any. Strategic report This Strategic report was approved by a duly authorised committee of the Board of directors on 18 May 2021 and signed on its behalf by: Charles Brown Company Secretary 18 May 2021 Experian plc Strategic report Experian plc Annual Report 2021 83 Governance In this section 84 Chairman’s introduction 86 Board of directors 88 Corporate governance report 99 Nomination and Corporate Governance Committee report 104 Audit Committee report 111 Report on directors’ remuneration 135 Directors’ report Governance 84 Chairman’s introduction Good corporate governance is at the heart of our business Mike Rogers Chairman On behalf of the Experian Board, I am delighted to present the Corporate governance report for the year ended 31 March 2021. The aim of the report is to provide an overview of the Group’s governance framework and the Board’s approach to maintaining good corporate governance during this challenging year, as well as summarising the work of the Board and its committees in discharging their duties and responsibilities. During the year, the Board: considered the payment of dividends; balanced business performance and shareholder interests; approved the issue of debt securities and a funding plan for the financial year; considered an update on workforce pay and policies from George Rose, our Remuneration Committee Chairman, following his meeting with the UK and Ireland People Forum; consulted with shareholders on our new Remuneration Policy (which received a 95.34% favourable vote at the Annual General Meeting in July 2020), and considered a number of important strategic acquisitions in North America, Latin America and EMEA. The Chief Executive Officer, Company Secretary and I regularly evaluated possibilities for the Board to meet in person during the year. However, as in many areas of all our business and personal lives, the Board embraced technology and all Board and committee meetings were held using video. Although not ideal, there was no deterioration in the engagement of the Board, nor in the quality of debate, challenge and discussions as we worked (and continue to work) to ensure good corporate governance, oversight and monitoring during the continuing pandemic. Equally, the pandemic has not impacted the commitment that our directors have to the Experian Board – our directors had 100% attendance at Board and committee meetings held during the year. As discussed at the January 2021 strategy presentations, Experian and the Board can be proud of the resilience of the business and the ingenuity shown by our employees, in a situation where the work environment and expectations underwent a rapid change, and where the way we engage with employees, clients, suppliers, regulators and other stakeholders had to be reoriented practically overnight. Experian was proud to put its people first in its response to the pandemic and, from a cultural perspective, our people have been pleased with the ability to be productive in their roles, the communications regarding COVID-19 and the support from managers. One of the positive things from the pandemic was how Experian demonstrates the critical role it plays in society, helping people, governments and businesses. As the pandemic continues, and as we think about new ways of working, the Board will continue to partner closely with management to safeguard our employees, customers, communities and our business to ensure Experian is in the best possible place to move forward once the pandemic has passed. As Chairman, one of my key roles is to ensure that the Board and Experian continue to have high standards of corporate governance while, at the same time, establishing and continually developing the right controls to provide the Board with the appropriate level of oversight and assurance. By having a sound corporate governance framework, we can ensure effective and efficient decision-making, and the right balance of knowledge, diversity, skills, experience and challenge to monitor and manage the risks we face. COVID-19 pandemic In the 2020 Annual Report, published in June 2020, I observed that the last time the Experian Board had all physically met was January 2020, and that none of us could have imagined how the world would change in the months following the start of the pandemic. Sadly, similar conditions apply one year on and, while the roll-out of vaccines provides some hope, the pandemic is not over yet. In what has been a challenging global environment, the Board had a busy year, including COVID-19 focused meetings at the height of the crisis and increased review of financial and operational performance. Experian plc Governance 85 Provision 38 – the Company is largely compliant with this provision. The area of partial compliance relates to alignment of pension contribution rates of the executive directors with the wider workforce. The rate for our US-based executive director is already aligned with the wider US workforce, and the rates for our two UK-based executive directors are already aligned with those available to other senior UK employees. The rates for any new UK-based director would immediately be aligned with the wider workforce, and the rates for our two existing UK-based executive directors will be aligned with the wider UK workforce by the end of 2022, following the required amendments to contractual arrangements. Experian corporate website The website www.experianplc.com contains additional information about our corporate governance: Terms of reference of the principal Board committees The schedule of matters reserved to the Board The Chairman’s and the CEO’s split of duties, and the duties of the Senior Independent Director The Company’s memorandum and articles of association Details of AGM proxy voting by shareholders, including votes withheld. Board composition and succession The Nomination and Corporate Governance Committee continues to lead the process for Board appointments, and ensures that plans are in place for orderly Board and senior management succession. During the year, on the recommendation of the Committee, Alison Brittain was appointed as a non- executive director. We were delighted to welcome Alison to the Board, albeit virtually, and she brings over 25 years' senior management experience in major financial institutions, alongside five years as the Chief Executive of a FTSE 100 leisure business with UK and growing international operations. The Company Secretary and I ensured that a tailored induction programme was put together for Alison. This was again provided virtually by global executives, and was well received. The Committee also recommended the appointment of Jonathan Howell to the Board on 1 May 2021. Key attributes that Jonathan brings to the Board include a wealth of financial, strategic, technology and regulatory expertise, encompassing both Business-to-Business (B2B) and Business-to-Consumer (B2C), which is of significant benefit to Experian. The Committee’s work during the year also included agreement on certain key Board composition and succession considerations, including areas of focus for future non- executive director recruitment, continued focus on diversity and the recruitment of non-executive directors who are serving executives, and the preferred timing of non-executive recruitment including of potential successors to the Audit and Remuneration Committee Chairmen. There is more detail on Board composition and succession beginning on page 100. Board evaluation A key element of good governance is an annual evaluation to ensure that the Board, its committees and Board members are continuing to operate and perform effectively. The UK Corporate Governance Code (the Code) recommends (and the Board supports) an external evaluation every three years. A comprehensive and externally facilitated Board evaluation took place last year. This year, our Board evaluation was an internal one which (in line with our agreed three-year cycle) concentrated on progress on last year’s areas of focus and the resulting actions, as well as agreeing new areas of focus for the coming year. The evaluation provided the Board with the assurance that actions from the external evaluation, including around Board succession, were progressing well, and the Board concluded that it was operating effectively. The evaluation process also allowed the Board to identify opportunities for it to further improve its effectiveness. You will read later about the results of the evaluation and the areas of focus that we have agreed. Conclusion I hope you find this Corporate governance report helpful in understanding the arrangements and processes we have in place at Experian, and what we have done in terms of the recommendations of the Code. Even though it has been a challenging year, and the COVID-19 pandemic continues to impact our business, I believe that the Board is well placed to provide the strategic oversight and stewardship required to ensure that Experian continues to deliver long-term sustainable success. The 2021 Annual General Meeting will be held on 21 July 2021. Further details will be published in the Notice of Annual General Meeting, which has been sent or made available to shareholders, and is also available on the Company’s website, www.experianplc.com. Statement of compliance The Board is committed to the highest standards of corporate governance and, for the year ended 31 March 2021, other than one element of Provision 38 in relation to alignment of pension contribution rates (as explained below), the Company complied with all the provisions of the UK Financial Reporting Council’s (FRC’s) UK Corporate Governance Code (as published in July 2018), the UK Financial Conduct Authority’s (FCA’s) Disclosure Guidance and Transparency Rules sourcebook sections 7.1 and 7.2 (which set out certain mandatory disclosure requirements), the FCA’s Listing Rules 9.8.6R, 9.8.7R and 9.8.7AR which include the ‘comply or explain’ requirement and, on a voluntary basis, the UK Department for Business, Energy and Industrial Strategy (BEIS) Directors’ Remuneration Reporting Regulations and Narrative Reporting Regulations. These documents are publicly available as follows: The Code can be found at www.frc.org.uk The FCA’s Disclosure Guidance and Transparency Rules sourcebook as well as Listing Rules can be found at www. handbook.fca.org.uk The BEIS Directors’ Remuneration Reporting Regulations and Narrative Reporting Regulations can be found at www.gov.uk. In addition, the FRC Guidance on Risk Management, Internal Control and Related Financial and Business Reporting can be found at www.frc.org.uk. Experian plc Annual Report 2021Governance 86 Board of directors Code principle Board Leadership Nm Re Mike Rogers (56) Chairman Brian Cassin (53) Chief Executive Officer Lloyd Pitchford (49) Chief Financial Officer Appointed to the Board as Chief Financial Officer on 30 April 2012, and as Chief Executive Officer on 16 July 2014. Other current roles: Brian is a non-executive director of J Sainsbury plc and sits on its Audit and Nomination Committees. Skills and contribution: Brian brings strong leadership, a clear view of strategic objectives and decisive management skills to this role. He has strong financial and commercial acumen and a broad range of operational competencies. His non-executive role augments his strong board-level experience. Experience: Brian was previously the Chief Financial Officer of Experian and, before that, Managing Director at Greenhill & Co. He has also held various senior roles at Baring Brothers International and the London Stock Exchange. Appointed to the Board on 1 October 2014. Other current roles: Lloyd is a non-executive director (and chairs the Audit Committee) of Bunzl plc. Skills and contribution: Lloyd is a qualified accountant. He holds an MBA and has deep financial and strategic experience, built up through a career working in complex, growth-oriented, global organisations, across a range of industries and responsibilities. He brings additional perspectives to Experian from his non-executive role with Bunzl plc. Experience: Before joining Experian, Lloyd held a wide portfolio of finance and operational responsibilities: as Chief Financial Officer of Intertek Group plc; in senior finance positions (including Group Financial Controller) at BG Group plc; and in financial and commercial roles at Mobil Oil. Appointed to the Board on 1 July 2017, and as Chairman (and Chairman of the Nomination and Corporate Governance Committee) on 24 July 2019. Other current roles: Mike is a non-executive director of NatWest Group plc (he chairs its Group Sustainable Banking Committee, and sits on the Group Performance and Remuneration Committee) and is the non-executive Chairman of Aegon UK (and certain of its regulated subsidiaries). Skills and contribution: Mike brings over 30 years of banking and financial services experience, with a reputation for strategic insight and focused execution. His current and previous board-level experience, both executive and non-executive, is of huge value to the Experian Board. Experience: Mike was Group Chief Executive Officer of LV= Group from 2006 until 2016, during which time he grew the organisation into a significant player in the life and general insurance market. Before that, Mike was with Barclays plc for more than 20 years, holding a number of senior roles, most recently as Managing Director, UK Retail Banking. He was previously a non-executive director of the Association of British Insurers. Au Nm Re Au Nm Re Au Nm Re * Caroline Donahue (60) Non-executive director Appointed to the Board on 1 January 2017. Other current roles: Caroline is on the Board of GoDaddy Inc., Emerge America, and the Computer History Museum. She is also on the Executive Committee of Northwestern C100, and is a mentor for She-Can. Skills and contribution: Caroline brings extensive experience of international markets and technology as well as knowledge of consumer sales and marketing, innovation and consumer-centricity. The Board also benefits from her insight and extensive experience in mass-market, digital, multi-channel and Business-to-Consumer (B2C) distribution, marketing, and brand and sales management. Experience: Caroline previously held roles at Intuit where she was Executive Vice President, Chief Marketing and Sales Officer; Senior Vice President, Sales and Channel Marketing; and Vice President and Director of Sales. She also held sales and channel management roles at Knowledge Adventure, NeXT Computer and Apple, Inc. Luiz Fleury (64) Non-executive director Jonathan Howell (58) Non-executive director Appointed to the Board on 8 September 2015. Appointed to the Board on 1 May 2021. Other current roles: Luiz is a Board member of Carrefour Brazil (the trading name of Atacadão S.A.), Magnopus, Inc. and DOTZ S.A. Skills and contribution: Luiz has spent most of his career in financial services and has extensive insight and deep local knowledge of the Brazilian financial market. His considerable boardroom experience adds to the strength, depth and effectiveness of our Board. Experience: Luiz has held Chief Executive roles at Cetip S.A., Banco Ibi and Redecard, together with senior finance and investment positions at Banco Citibank S.A., Banco Marka S.A. and C&A Brenninkmeyer Brasil. Luiz was President and a member of the Executive Board at Cetip S.A., and a Board member of Grupo Sequóia de Logística, Eneva S.A., Discount Malls do Brasil, Banco Ibi and FHV Holdings Ltda. Other current roles: Jonathan is the Chief Financial Officer of The Sage Group plc. Skills and contribution: Jonathan has a wealth of financial, strategic, technology and regulatory expertise, encompassing both Business-to-Business (B2B) and Business-to- Consumer (B2C), which is of huge benefit to Experian. He is a highly regarded FTSE 100 Chief Financial Officer, and also brings considerable executive and non-executive UK-listed boardroom experience. Experience: Jonathan was previously an independent non-executive director and Chairman of the Audit and Risk Committee of The Sage Group plc., for five years while serving as Group Finance Director of Close Brothers Group plc for ten years until November 2018. Before that he was Group Finance Director at the London Stock Exchange Group plc for nine years and has also been a non-executive director of EMAP plc and Chairman of FTSE International. The early part of Jonathan's career was at Price Waterhouse where he qualified as a chartered accountant. Experian plc Governance Code principle Board Leadership 87 Kerry Williams (59) Chief Operating Officer Dr Ruba Borno (40) Non-executive director Alison Brittain (56) Non-executive director Appointed to the Board on 16 July 2014. Appointed to the Board on 1 April 2018. Appointed to the Board on 1 September 2020. Au Nm Re Au Nm Re Other current roles: Alison is the Chief Executive of Whitbread PLC, and Deputy Chair and a Trustee of the Prince’s Trust. Skills and contribution: Alison is a highly versatile business leader and general manager, who holds an MBA and brings considerable experience of operating in consumer-facing service environments. She has over 25 years' senior management experience in major financial institutions, and the Board also benefits from her board-level experience with Whitbread PLC and, previously, Marks & Spencer Group PLC. Experience: Alison was previously with Lloyds Banking Group (Group Director, Retail Division) and Santander UK PLC (Executive Director, Retail Distribution), where she was also a board director. She previously held senior roles at Barclays Bank, has been a member of the UK Prime Minister’s Advisory Council, was named ‘Business Woman of the Year 2017’ in the Veuve Clicquot awards and was awarded a CBE in the 2019 UK New Year Honours list. Alison has been a non-executive director of Marks & Spencer Group PLC. Company Secretary: Charles Brown FCG Independent Auditor: KPMG LLP, Chartered Accountants and Recognized Auditor Au Member of the Audit Committee Nm Member of the Nomination and Corporate Governance Committee Re Member of the Remuneration Committee Committee Chairman * Jonathan Howell’s committee memberships commenced on appointment on 1 May 2021. Other current roles: Kerry is a Board member of Pacific Mutual Holding Company, and the US Institute for Intergovernmental Research. Skills and contribution: Kerry holds an MBA and has built up a significant and deep knowledge of Experian’s global business and operations, through the leadership roles he has held. He brings to Experian and the Board a wide range of skills from his background in the financial services industry and his non-executive roles. Experience: Kerry’s roles at Experian have included Group Deputy Chief Operating Officer, President of Credit Services, President of Experian Latin America, and Group President of Credit Services and Decision Analytics, Experian North America. Previously, he was President at ERisk Holdings Incorporated, Senior Vice President/General Manager at Bank of America and held senior management positions at Wells Fargo Bank. Other current roles: Ruba is a Senior Vice President and General Manager at Cisco. Skills and contribution: Ruba holds a Ph.D., a Master of Science in Electrical Engineering, and a Bachelor of Science in Computer Engineering. She was an Intel Ph.D. fellow at the National Science Foundation’s Engineering Research Center for Wireless Integrated MicroSystems. She brings advanced technologies expertise to Experian. We benefit greatly from her focus on supporting businesses in strategically adapting to the threats and opportunities created by technology, as well as pushing disruptive technology to create new opportunities. Experience: Ruba sat on the Board of The Tech Museum of Innovation in Silicon Valley. She was previously at The Boston Consulting Group (BCG), where she specialised in helping enterprises through complex technology transformations, and was also a leader in BCG’s Technology, Media & Telecommunications, and People & Organization practice groups. Au Nm Re Au Nm Re Deirdre Mahlan (58) Non-executive director Appointed to the Board on 1 September 2012, and as Chairman of the Audit Committee on 21 January 2015. Other current roles: Deirdre chairs our Audit Committee. She is a non-executive director (and chairs the Audit Committee) of The Duckhorn Portfolio, Inc. Skills and contribution: Deirdre is a qualified accountant with an MBA and has many years’ experience in senior finance and general management roles. Her financial expertise and experience ensure effective leadership of our Audit Committee. Deirdre also brings us the benefits of her previous board-level experience with Diageo plc. Experience: Deirdre has held senior finance and general management roles, including most recently as President of Diageo North America, as well as Chief Financial Officer, Deputy Chief Financial Officer, Head of Tax and Treasury at Diageo plc, Senior Vice President, Chief Financial Officer at Diageo North America, and Vice President of Finance at Diageo Guinness USA, as well as various senior finance roles in Joseph Seagram and Sons, Inc. and PwC. George Rose (69) Deputy Chairman and Senior Independent Director Appointed to the Board on 1 September 2012, as Deputy Chairman and Senior Independent Director on 16 July 2014 and as Chairman of the Remuneration Committee on 24 July 2019. Other current roles: George chairs our Remuneration Committee and is a non-executive director of EXPO 2020 LLC. Skills and contribution: George is a qualified accountant, whose career has included several high-level finance positions. As well as this financial expertise, he adds to the collective strength of the Board thanks to the numerous non-executive positions he has held with leading companies. Experience: George was Group Finance Director and Director of Finance and Treasury at BAE Systems plc (where he was a Board member), and held senior finance positions at Leyland DAF plc and Rover Group. He was a non-executive director of National Grid plc, SAAB AB, Orange plc, and also (where he chaired the Audit Committees) Laing O’Rourke plc and Genel Energy plc. He has also been a member of the UK Industrial Development Advisory Board. Experian plc Annual Report 2021Governance 88 Corporate governance report Code principle Board Leadership and Company Purpose Board Role of the directors The Board is responsible for setting the Company’s purpose, values and strategy, and ensuring that the necessary resources are available for long-term sustainable success, to generate value for shareholders and contribute to wider society. The Board sets the Group's strategy. In January 2021, senior management presented the proposed strategic plan to the Board, which had been developed to deliver strong financial performance and build on Experian’s competitive advantages, with fundamental components around building relationships with consumers, maximising adjacent opportunities, building a high- performing and inclusive culture and achieving operational excellence. As usual, the presentations took place over two days. However, due to COVID-19 travel restrictions, the presentations were completed using video technology. Board members were pleased with the revised format, the quality of the pre-reading material and the more focused presentations. This year’s presentations included regional and business line updates (Health, Consumer Information Services, Consumer Services and Decision Analytics). The Board also discussed with management plans to scale regions outside the Group’s largest (North America, Strategic and budget planning process Latin America and UK and Ireland), and technology activity to support Experian’s growth ambitions. The Board observed, in particular, the continued increase in strategic options for the Group, the opportunities for the Health business, the plan for margin growth in smaller regions and the skillsets and culture required to continue to drive the business forward. The Board monitors strategy and major initiatives throughout the year (as indicated on the Strategic and budget planning process chart, below). The budget discussions in March are focused on ensuring that we have the right resources to deliver the agreed strategy. These discussions include detailed focus on both regional and global business budgets. This year, the Board noted that the backdrop for the FY22 budget remained uncertain, with COVID-19 and the related health and economic crises continuing to disrupt global markets. The Board continually monitors management and financial performance against the Group’s objectives. To enable it to do this the Board receives updates, at and between every scheduled Board meeting, on operational and financial matters as well as any major initiatives underway. Given the challenges of COVID-19, the Board received an increased number of ‘between meeting’ updates this year, January Board strategy review* October to November Financial planning and prioritisation March Board budget review September Internal review March to May Preliminary steps July to August Strategic planning June Group Operating Committee review meeting July Board strategy mid-year review * Including two days of strategy presentations. to allow for appropriate oversight and monitoring. For example, as well as the usual monthly Board Finance Report, the Chief Executive Officer provided additional updates to the Board on latest financial performance, forecasts and trends, and certain other operational matters. The Board also conducts post-investment reviews on an agreed timeline, for any acquisitions it has previously approved. You can read about the Board’s procedures to manage risk, oversee the internal control framework, and determine the nature and extent of the principal risks the Company is willing to take to achieve its strategic objectives, under Risk management and internal control systems review on page 110. The Board delegates management of the Group’s day-to-day activities but is accountable to shareholders for delivering financial performance and long-term shareholder value. To achieve this, the Board has put in place a framework of controls, including clear and robust procedures and delegated authorities, which enables the Group to appraise and manage risk effectively. This framework is illustrated in the Governance framework diagram on page 93. In addition, the Board has reserved decisions about certain key activities to itself, including: A. Strategy and management – approval and oversight of Experian’s long-term objectives and commercial strategy, approval of annual operating and capital expenditure budgets, and oversight and monitoring of operations. B. Structure and capital/Financial reporting and controls – changes in the Group capital or corporate structure. Approval of the Group’s results, dividends, dividend policy, significant changes in accounting policy, tax policy and treasury policy. C. Contracts – approval of major or strategic capital projects, and of major acquisitions and disposals. D. Communication – approval of key stakeholder documents, circulars, prospectuses, and reviewing investor sentiment. E. Board membership/Delegation of authority/Corporate governance/Policies – approval of changes to Board composition, ensuring adequate succession planning, reviewing reports from Board committees, reviewing governance arrangements, and approval of various policies. Details of the activities of the Board during the year under these headings are on page 90. A high-level statement of the types of decisions that have been delegated by the Board is shown in the ‘Governance framework’ diagram on page 93. Experian plc Governance Code principle Board Leadership and Company Purpose 89 Board meetings The Board meets sufficiently frequently to discharge its duties, and holds additional meetings when required. This year, for example, the Board met to specifically discuss the impact of the COVID-19 global pandemic from a number of perspectives, including liquidity and funding, operational resilience, governmental and societal support, and people. Nine Board meetings were held during the year, three of which were ad-hoc meetings. Scheduled meetings are normally held over two to three days, with Board committee meetings also taking place during this time. The Board continued to operate effectively during the year utilising video technology and the Board retained its cohesive and collegiate culture. There is no doubt that the pandemic has changed ways of working for many people and organisations across the world, and the Chairman, Chief Executive Officer and Company Secretary will continue to review optimal ways to operate the Board on an ongoing basis, as circumstances dictate. 2020 2021 April Board meeting May Board and committee meetings June Board meeting July Board and committee meetings September Board and committee meetings November Board and committee meetings January Board and committee meetings February Board meeting March Board and committee meetings Ad-hoc Board meetings Attendance at Board and principal committee meetings Directors as at 31 March 2021 Mike Rogers Brian Cassin Lloyd Pitchford Kerry Williams Dr Ruba Borno Alison Brittain (appointed 1 September 2020) Caroline Donahue Luiz Fleury Deirdre Mahlan George Rose * Includes three ad-hoc Board meetings held during the year Board* 9/9 – 100% 9/9 – 100% 9/9 – 100% 9/9 – 100% 9/9 – 100% 5/5 – 100% 9/9 – 100% 9/9 – 100% 9/9 – 100% 9/9 – 100% Nomination and Corporate Governance Committee 4/4 – 100% n/a n/a n/a 4/4 – 100% 3/3 – 100% 4/4 – 100% 4/4 – 100% 4/4 – 100% 4/4 – 100% Remuneration Committee Audit Committee 6/6 – 100% n/a n/a n/a 6/6 – 100% 4/4 – 100% 6/6 – 100% 6/6 – 100% 6/6 – 100% 6/6 – 100% n/a n/a n/a n/a 4/4 – 100% 3/3 – 100% 4/4 – 100% 4/4 – 100% 4/4 – 100% 4/4 – 100% Experian plc Annual Report 2021Governance 90 Corporate governance report continued Code principle Board Leadership and Company Purpose What did the Board do this year? The Board’s key activities during the year F D E A B C A. Strategy and management B. Structure and capital/Financial reporting and controls C. Contracts D. Communication E. Board membership/Delegation of authority/ Corporate governance/Policies F. Other A. Strategy and management Evaluated and debated presentations from management during the two-day strategy presentations, and approved the Group’s strategy update. Received and considered the key initiatives and strategy update as part of the ongoing strategic planning cycle. Reviewed operational and financial updates from the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer at each scheduled Board meeting – this year, particularly in the first half, the Board was provided with significant detail on the Group’s continuing response to COVID-19. Reviewed monthly reports, including details of performance against budget and the Group’s financial position and stakeholder updates, plus additional out-of-cycle reporting and updates due to COVID-19. Reviewed and discussed regulatory and compliance matters with the Group General Counsel at Board and Audit Committee meetings, including updates on ongoing engagement, current issues, potential impacts and plans. Reviewed the ongoing investigation into a potential non-sensitive data incident in Brazil. Reviewed and approved risk appetite statements for the Group. B. Structure and capital/Financial reporting and controls Approved the Group’s Annual Report and full-year and half-year financial results and carefully considered dividend payments. Approved the refinancing of existing borrowing facilities, the issue of bonds, and delegated authority that would ensure flexibility regarding financing between Board meetings while markets remained volatile. Discussed and approved the Group’s budget presentation for FY22 and received updates on Group insurance and pension arrangements. Considered and approved the Viability statement for inclusion in the Annual Report. Reviewed risk reports, the appropriateness of preparing the financial statements on the going concern basis and the Audit Committee’s advice on making a ‘fair, balanced and understandable’ (FBU) statement in the Annual Report. C. Contracts Reviewed and approved several strategic acquisitions, including: – Tapad, Inc., a leading provider of digital identity services. – Axesor businesses, one of Spain’s Business Information leaders. – BrScan, a leading player in the identity and fraud market in Brazil. – Corporate Cost Control, a leading provider of workforce solutions in the USA, as the Group looks to broaden its employer and verification solutions offering. – Employment Tax Servicing, LLC, a leader in verification of employment and income in the USA which provides enterprise-level workforce management solutions complementing human resources and payroll administration. – Tax Credit Co., LLC a leading provider of verification of employment and of income and hiring and research tax credit technology and administration. Approved the disposal of Experian’s investment in Finicity to MasterCard. Reviewed and discussed the corporate development pipeline at each Board meeting. D. Communication Reviewed investor relations, external communications and media updates at each scheduled Board meeting, and discussed the positive brand impact of the North America Consumer Services business. Reviewed and discussed draft full-year and half-year financial results presentations for analysts and institutional shareholders, and noted investor sentiment regarding the Board and senior management. Through the Remuneration Committee, engaged extensively with shareholders on proposed remuneration arrangements. E. Board membership/Delegation of authority/Corporate governance/ Policies Reviewed the Group’s Gifts and Hospitality Policy, and considered the annual environmental, and health and safety, updates and approved associated policy statements. Reviewed Board evaluation findings and agreed areas of focus, authorised Board members’ potential conflicts of interest and approved the annual election and re-election of Board members. Considered and approved the Notice of Annual General Meeting (AGM) for issue to shareholders, and the arrangements for the 2020 AGM due to COVID-19. Reviewed and approved the appointments of Alison Brittain and Jonathan Howell as independent non-executive directors of the Company. Reviewed and discussed the annual corporate responsibility update from the Global Head of Corporate Responsibility. Received details of Board members’ external appointments and share dealings. Reviewed and approved the Group’s tax and treasury policies, and approved the Group’s Code of Conduct. Experian plc Governance Code principle Board Leadership and Company Purpose 91 In addition, during the year, all of our female Board members (Dr Ruba Borno, Alison Brittain, Caroline Donahue and Deirdre Mahlan) participated in a panel session as part of our global celebration of International Women’s Day in March 2021. The Women in Experian group organised a series of events, with activities including a Women in Experian mentoring programme, leadership panels with featured keynote speakers, personal and professional development sessions, and community outreach. As well as this, the Board did continue to interact with employees as much as possible during the year: for example, all of the Group Operating Committee attended the strategy presentations with the Board in January 2021, and the Board met with members of our global and Consumer Services communications teams in November 2020 to discuss the integration and support of the Experian brand by the Consumer Services business. Culture The UK Corporate Governance Code emphasises the importance of the role of the Board regarding culture, with specific recommendations that the Board assesses and monitors culture, and ensures that workforce policies, practices and behaviours are aligned with the Company’s purpose, values and strategy. The Experian Way, which lays out a globally consistent set of expectations within the business across five strategically important areas, is underpinned by the following Principles – Integrity, Fairness, Data Security and Value. These Principles help us to create a vibrant ethical performance culture. We continue to believe that culture is embedded throughout an organisation, rather than, for example, in isolation within a set of Board metrics. We are confident that the information the Board and its committees review, the activities that Board members engage in, and Experian’s existing structures and processes, mean that Experian and the Board are meeting the recommendations of the Code. Last year’s external Board effectiveness evaluation noted that there was an excellent focus on Board culture, employee engagement and developing talent, with opportunities (in normal times) for the Board to meet Experian’s people, assess potential and see culture in action. The evaluation report also noted that the Board recognises the importance of values and culture in what Experian has delivered to date and is leading by example in the way it acts and engages. One of the primary ways we believe the Board can experience, assess and evaluate culture is through meeting with colleagues throughout the business, as it does in normal years. A notable example of this was 2019 when the Board attended a number of engagement events at our North America operational headquarters in Costa Mesa, California, including a ‘Power of You’ lunch event focused on culture, diversity and inclusion, attended by a large number of employees and representatives from many of Experian North America’s Employee Resource Groups (ERGs). With COVID-19, it has not been possible for the Board to engage with our people in the same way this year. Prior to the pandemic, the Board had planned to hold meetings during the year at our operational headquarters in Brazil and North America, and engagement events would have been planned around those Board visits. The Board also planned to spend time at the Group’s Customer Innovation Experience in London, which aims to bring our business propositions and innovation to life, and provide an insight into customer and consumer interactions with the business. Given the constraints this year, the Board has regularly been kept apprised on people-related and cultural matters. The pandemic took hold in March 2020 and, as reported last year, the Board agreed COVID-19 priorities and goals, which included the safety of employees and the use of the Group’s capabilities to help communities survive and recover rapidly. The April 2020 ad-hoc Board meeting was COVID-19 focused and, from a cultural perspective, the Board heard that morale was good across the business and that employees were coping well working from home. The level of employee communication and support provided by the business was very high, and the Board was updated on the small number of confirmed COVID-19 cases among employees. The Board was also reminded of the 'people first' approach being taken by the business, with the priority being to protect Experian’s people and their jobs as far as possible through the crisis. This was well received by employees, and reflected the Group’s long-term investment in its people and its talent agenda. The People updates from the Chief Executive Officer to the Board at each scheduled meeting were a core focus of his reporting to the Board, particularly in the early stages of the pandemic. For example, in May 2020, the Board considered the results of a sentiment survey, which indicated the concern and uncertainty of employees, but that there was optimism also and employees were pleased with the Experian response. Employee concerns were acknowledged and acted upon, including around technology, tools and the variety of challenges facing them (such as isolation, competing demands, working environments, and physical and mental well-being). As the pandemic continued, and mindful of a people and culture perspective, the Group Operating Committee considered the return of employees to our offices (it was explained to employees that they would have the choice to return when they felt comfortable) and longer-term future ways of working, where employees would have increased flexibility and choice in their work arrangements such as location and hours. Experian plc Annual Report 2021Governance 92 Corporate governance report continued Code principle Board Leadership and Company Purpose Examples of ways that the Board monitors and assesses culture Who The Board Board members Audit Committee Remuneration Committee What The Chief Executive Officer’s report, circulated before every scheduled Board meeting, contains a specific People update, which includes culture. The Board regularly considers the results of employee sentiment surveys. Annually reviews the Group’s Code of Conduct. This explains our approach to professional and ethical standards, and ensures that Experian’s employees know exactly what’s expected from them in helping Experian live up to those standards. All employees must undertake annual training. Visiting Group business locations enables the Board to spend time with employees of varying seniority and assess culture in a local context. Although this has not been possible due to COVID-19 travel restrictions, it remains a key consideration that the Board has the ability to engage in this way with the business. Overviews of interactions with government, regulators and the perspective provided by Global Internal Audit can give an indication of culture. The Committee and the Board receive relevant updates at every meeting. Management is transparent and responsive to challenge. Twice a year, the Committee reviews calls made to the Confidential Helpline. Reviews an ‘Overview of employee pay’ paper, designed to provide an overview of pay structures at Experian and their alignment with our purpose, values and strategy. This allows the Committee to ensure that relevant policies and practices are consistent with Experian’s values. The Committee Chairman met virtually with the UK and Ireland Experian People Forum in the UK and Ireland in March 2021, and feedback was provided to the Board. Reviews our UK gender pay gap disclosures every year, on behalf of the Board. Nomination and Corporate Governance Committee In January, the Committee discussed a People Strategy, Talent and Culture update with the Chief People Officer, which included details of strategic pillars and key risks, people implications, global people strategic focus areas and the positive progress of talent and culture initiatives. The Experian Way The Experian Way is a unique and consistent way of working globally. It informs how our people act and behave, which shapes our culture. It is defined across five key areas of strategic importance: Delight customers Innovate to grow Collaborate to win Safeguard our future Value each other At Experian, whether your role brings you into contact with customers directly or not, all of us contribute to meeting customer needs. At the heart of what we do are the relationships we invest in and nurture. At Experian, it’s the responsibility of each one of us to find opportunities and improve the way we do things to help our business and our customers grow. One Experian mindset – we work as one united team and use the combined strengths and capabilities of our people, products and services across teams, functions and regions. This translates into seamless experiences for our customers. At Experian, each of us acts as a guardian for the protection of data, information, assets and our people to safeguard our future. We make Experian a great place to work. We treat each other with respect, trust and integrity. Experian plc Governance Code principle Board Leadership and Company Purpose 93 Governance framework Global Delegated Authorities Matrix This key Group governance document comprises the schedule of matters reserved to the Board, the Board committees’ terms of reference and the authority levels for the Group’s principal subsidiaries, directors and senior executives. For matters not reserved to the Board, the matrix prescribes the cascade of authorities delegated throughout the Group by respective Group companies, together with their monetary limits. The Board monitors the exercise of delegations to the Group’s principal subsidiaries, which are reported to it at each Board meeting. Regional matrices are also in place. Delegated authority flow Board See Board of directors on pages 86 to 87 Principal subsidiaries These are Group companies to which the Board has delegated certain decision-making powers, for example implementing decisions agreed in principle by the Board; executive management of the operations of the Group within the strategy and budget approved by the Board; acquisitions and disposals with a value up to US$20m, and capital expenditure projects. Executive management team Operating businesses Board committees Executive committees/functions Nomination and Corporate Governance Committee See report on page 99 Audit Committee See report on page 104 Remuneration Committee See report on page 111 Group Operating Committee (OpCo) The OpCo comprises the most senior executives from the Group. Its remit includes identifying, debating and achieving consensus on issues involving strategy, growth, people and culture, and operational efficiency. It also focuses on ensuring strong communication and co-operative working relationships among the top team. Its meetings tend to be issues oriented and focus on selected Group issues worthy of debate. Risk management committees (executive and regional) Executive Risk Management Committee (ERMC) comprises senior Group executives, including the executive directors and the Company Secretary. Its primary responsibility is to oversee the management of global risks. The regional risk management committees oversee the management of regional risks, consistent with Experian’s risk appetite, strategies and objectives, and are comprised of senior regional leaders. Security and Continuity Steering Committee (SCSC) is a sub-committee of the ERMC. The SCSC’s primary responsibility is to oversee management of global information security, physical security, and business continuity risks, consistent with Experian’s risk appetite, strategies and objectives. Assurance Steering Committee (ASC) is also a sub-committee of the ERMC and oversees the development and implementation of the Group's assurance framework. Strategic project committees (global and regional) These committees comprise the most senior global and regional executives. Their remit is to oversee a process to ensure that all strategic projects are appropriately resourced, risk assessed and commercially, financially and technically appraised. A similar body, the Investment Committee, performs the same function in respect of proposals regarding minority investments. Depending on the outcome of the discussions, the committees’ conclusions are then considered by the board of the relevant Group company for approval. Global Internal Audit Global Internal Audit (GIA) conducts a range of independent audit reviews throughout the Group during the year and is represented at each Audit Committee meeting. GIA’s plans, results and key findings are presented to, and discussed with, the Audit Committee. The internal audit programme and methodology are aligned to the risk categories and risk assessment parameters established by Global Risk Management. GIA also makes use of risk assessment information at a business level, in planning and conducting its audits. Experian plc Annual Report 2021Governance 94 Corporate governance report continued Code principle Board Leadership and Company Purpose Timeline of shareholder engagement April 21, 22, 26, 27 & 28 May 1, 2, & 3 June Dublin 22 Jul 18, 19, 20, 23, 24 & 25 Nov Nov 1 April 2020 31 March 2021 12 May 21 Jul 16 Sep 11 Nov 28 Jan 23 Mar Investor virtual conferences and meetings Remuneration engagement AGM Investor and media relations reports provided to the Board Shareholder and stakeholder engagement The Code encourages companies and boards, including committee chairs, to seek regular engagement with major shareholders in order to understand their views. Boards are also encouraged to have a clear understanding of the views of shareholders. In addition, the Code states that the Board should understand the views of the Company’s other key stakeholders and describe how their interests have been considered in discussions and decision-making. Details regarding key stakeholders are on page 95. Shareholders We are committed to open and regular communication and engagement with shareholders at any time of the year, and our communications with them will always offer invitations to meet with the Chairman or any of the Board’s committee chairs. Board – Investor relations and external communications and media reports are circulated before every Board meeting. The investor relations report contains a commentary on recent market events, share price performance, investor feedback, analyst recommendations and investor relations activities. The external communication and media report was a new report this year, with existing media reporting expanded to provide detail of upcoming communications campaigns, key issues, media coverage and spotlights on various issues (for example, the naming of Experian North America as #1 Top Workplace by the Orange County Register for dedication to culture). The Chief Communications Officer provides regular updates at Board meetings. Engagement with investors – The Chairman of the Remuneration Committee wrote to our major shareholders and the main UK and US proxy advisory bodies twice this year. In April 2020, he provided an update on the Group’s proposed approach to remuneration, ahead of the AGM, specifically in relation to proposed enhancements to the Directors’ remuneration policy. In November 2020, he provided an update on the 2020 long-term incentive plan (LTIP) targets, which the Committee had delayed setting and disclosing until there was more clarity on the business impact of COVID-19, and which were disclosed to the market in November 2020. He also provided a further update to investors on the impact of COVID-19 on our business and key stakeholders, and shared further insights on how we have supported our people during the pandemic. As always, the Chairman is available to meet with investors and did so virtually during the year (while complying with COVID-19 restrictions), as did the Audit Committee Chairman, to discuss a wide range of issues, including how Experian was handling the pandemic, sustainability, information security, risk matters and external audit. Investors and analysts – The executive team runs an ongoing programme of dialogue with institutional investors and analysts, through which they discuss a wide range of issues including strategy, performance, management and governance. Experian also engages with investors through industry conferences and by hosting events with members of the senior management team. The announcements of the annual and half-year results and trading updates provide opportunities for us to answer questions from analysts, covering a wide range of topics. This year, executive management attended virtual conferences and investor meetings in May and November 2020. Annual General Meeting – The AGM provides a valuable opportunity for the Board to communicate with shareholders and, in normal years, to meet them informally before the main business of the meeting. In response to COVID-19, restrictions had been introduced by the Irish Government in relation to travel and public gatherings at the time of the 2020 AGM. To comply with these restrictions and public health advice, and in order to ensure the safety of the Company’s shareholders, employees and directors, shareholders were not permitted to attend the Company’s 2020 AGM. However, we invited shareholders to submit questions, and we also engaged with investors in relation to AGM voting. After the AGM, we updated the Experian website with a document summarising the themes of the questions that had been received from shareholders. Voting levels at the AGM were 76.24% of the Company’s issued share capital. The 2021 AGM will take place on Wednesday 21 July 2021 in Dublin, Ireland, and the specific arrangements for this year’s meeting (in the context of COVID-19) are outlined in the Notice of AGM which has been sent to shareholders or appears on the Experian website, www.experianplc.com. We encourage shareholders to use proxy voting on the resolutions put forward, all of which (except for procedural resolutions) will be taken by a poll. Private shareholders – The Company Secretary, Charles Brown, oversees communication with private shareholders, and ensures direct responses as appropriate in respect of any matters raised by shareholders. The Company issues a ‘Shareholder Questions’ card each year, together with the AGM documentation. As well as placing the themes on our website this year, Charles Brown responded to shareholders directly, as appropriate, following the meeting. Investor relations app – This contains information about our financial performance, together with reports, presentations and news of upcoming events. Website – Our website is an important channel for communicating with all stakeholders, including shareholders. All material information reported to the regulatory news services is published at www.experianplc.com/investors/ regulatory-news together with copies of annual and half-year results announcements and trading updates. Experian plc Governance Code principle Board Leadership and Company Purpose 95 Other stakeholders Further information concerning Group-wide engagement with key stakeholders is on pages 24 and 25 in the Strategic report. Board activities regarding key stakeholders, including engagement, are summarised in the table below. Shareholder engagement has been considered earlier. Stakeholder Responsibility Relevant activities during FY21 Summary of stakeholder views/actions Board Our clients and consumers Board Our communities Our people Board, Nomination and Corporate Governance Committee, Remuneration Committee Board Our suppliers Board, Audit Committee Governments The Board report in March includes an update on clients and consumers, including (for client) Net Promoter Score (NPS) metrics, top-performing NPS attributes and areas that require improvement. On consumers, the reporting includes brand awareness, trust in the Experian brand and the level of complaints. The Chief Executive Officer reports on corporate responsibility at each scheduled Board meeting. At least once a year, the Global Head of Corporate Responsibility presents to the Board. Highlights this year included our response to COVID-19, supporting vulnerable communities, our impact in FY20 and our commitments. Pulse survey updates to the Board. Board reporting at every scheduled Board meeting (COVID-19 and Human Resources sections of Board report). People Strategy, Talent and Culture update to the Nomination and Corporate Governance Committee. Direct feedback to the Board from George Rose, Remuneration Committee Chairman, who met virtually with the UK and Ireland Experian People Forum in the UK and Ireland in March 2021. Confidential Helpline updates to the Audit Committee. Annual update to the Board on suppliers, which includes details of engagement, the Group’s Supplier Relationship Management programme (SRM) and supplier views. Annual Board review of the Group’s Modern Slavery Statement. Board members receive regular Board and Audit Committee updates from the Group General Counsel regarding regulatory engagement, and any ongoing regulatory matters. There is ongoing Compliance reporting to the Audit Committee, including Compliance training. Audit Committee Risk Management reporting includes legislative/regulatory matters. Any relevant government affairs matters are also considered by the Audit Committee and the Board. There had been a significant increase in Experian’s NPS, and Experian’s reputation as a trusted company continued as the highest scoring brand attribute, for the fifth year in a row. Client satisfaction had increased for every journey touchpoint with high ratings in account relationship management. In response to the COVID-19 pandemic, clients felt that Experian partnered well with them and provided the vital support and solutions they needed to adapt to their new challenges. There had been improvements in brand trustworthiness, and a decrease in complaints in the USA and Brazil. The Board noted and supported the actions being taken in response to COVID-19, including: – Helping vulnerable communities with charitable donations, donations of personal protective equipment, over 3,500 hours of volunteering in March 2020, provision of products, tools and education resources, and work with regulators to ensure that credit scores remained unaffected by payment holidays. – Scaling of global efforts to drive our financial education recovery programme, United for Financial Health. – The Board was updated on the work completed during FY20 to amplify the Group’s societal impact, which included 13.8 million more people reached through the Group’s Social Innovation products, 54,500 hours of volunteering, and an 8% reduction in the Group’s carbon footprint. The Board supported the Group’s commitment to becoming a carbon neutral business in our own operations by 2030. The Board was updated and considered the actions taken in response to our various COVID-19 sentiment surveys: – Clear communication around business outlook, approach to job protection and financial impact. – The approach to equipment access and reimbursement for critical work items. – Well-being and resilience support. – Continued focus on Experian’s role as a socially responsible employer. The Nomination and Corporate Governance Committee was updated on the five global people strategic focus areas in response to insights from employees. These focus areas included preparing Experian for further growth, putting people first in order to create a compelling employee experience, and growing world-beating technology leaders. Views of Experian colleagues and suppliers are surveyed on a regular basis to give a full picture of key relationships. The results are used to highlight areas of focus for relationship development. Experian runs a collaborative global SRM programme with its suppliers, which includes: – Executive sponsorship to ensure two-way communication at a strategic level. – Regular forums for dialogue in quarterly business reviews. – Periodic 360-degree surveys to understand suppliers' views. – Maturity model to gauge the maturity of each relationship and identify next steps to progress. During the year, a Group subsidiary, Experian Limited, received an enforcement notice from the UK Information Commissioner's Office (ICO) in relation to the marketing services Experian provides in the UK. The contents of the notice and views of the ICO were considered, and a decision was made to appeal on the basis that the Group considers the ICO’s view to have gone beyond the relevant legal requirements. The Board and Audit Committee have been regularly apprised on this matter during the year. There were ongoing regulatory inquiries in respect of other matters during the year, and the Board and Audit Committee receive regular updates on the matters being considered by regulators. Our response to these inquiries will also take into consideration the regulatory position on the relevant inquiry. Experian plc Annual Report 2021Governance 96 Corporate governance report continued Workforce engagement The Code requires companies to select one or a combination of prescribed methods for the Board to engage with the workforce. If a particular method is not appropriate for a company, it may explain the alternative arrangements in place and why these are considered effective. The Experian Board has always felt well informed about workforce views and matters, including in relation to pay and related policy arrangements for the broader employee population. As a result, no single approach recommended in the Code was considered appropriate for our business. The Board instead adopted a combination of methods to comply with the Code’s requirements. These are summarised below, and include: There are regular people and sentiment survey updates to the Board (including COVID-19 specific surveys this year), and reporting at every scheduled Board meeting on people matters. People, talent and culture updates are also provided to the Nomination and Corporate Governance Committee, offering a valuable insight into workforce matters. Any relevant business cases reviewed by the Board include an evaluation of potential impacts of the transaction on the Group’s stakeholders, including employees. The Remuneration Committee annually considers an extensive paper setting out details of all-employee pay and workforce policies across Experian. The discussions on this topic provide helpful insights for framing pay considerations. The Remuneration Committee Chairman annually attends a meeting of the UK and Ireland Experian People Forum (see Our people, in the table on page 95), providing the opportunity to gain first-hand feedback in two-way discussions with the workforce, which is invaluable. The employee insights and views gathered are shared with the full Board, allowing the Board to hear directly from the wider workforce. In normal years, the Board would meet with employees physically outside the Boardroom environment. Clearly, COVID-19 has impacted on the Board’s ability to engage in this way during this year. In coming to this approach, the Board debated updates from management on the implementation of the UK Corporate Governance Code, and the information it already received and reviewed regarding the Experian workforce, and was satisfied that the approach was appropriate for Experian and that the Board keeps workforce considerations to the fore in its deliberations. Code principle Board Leadership and Company Purpose Considering our stakeholders in our decision-making The Code also recommends that the Board should describe how stakeholder interests have been considered in Board discussions and decision-making. We have processes in place to capture and consider stakeholders’ views (including the matters contained in Section 172 of the UK Companies Act 2006, on a voluntary basis) and feed them into Board decision- making. All material business cases considered in the Group (for example, mergers, acquisitions and major capital investments) include an analysis of the stakeholder considerations, anticipated impact and mitigations. This process, which has been reinforced, helps the Board to perform the duties outlined in section 172 of the UK Companies Act 2006 and provides assurance to the Board that potential impacts on stakeholders have been considered in the development of the proposal. An example of how this process works in practice is outlined below, where Board consideration of a strategic acquisition included a review of the standing stakeholder impact analysis. Acquisition of Axesor in Spain In November 2020, the Board reviewed, considered and approved the acquisition of Axesor, one of the largest independent business information (BI) providers in Spain. The acquisition of Axesor’s well-established BI data assets allows the enlarged business to offer a highly differentiated consumer information 'one-stop' proposition to new and existing customers in Spain. Spain is a core and strategic market for Experian EMEA, and the transaction provides Experian with a more diverse, scaled and resilient business, benefitting from enhanced and highly complementary customer coverage. There is also the opportunity to realise substantial cost synergies. A briefing paper was circulated to the Board ahead of its November 2020 meeting, outlining the strategic rationale for the transaction, as well as the financial evaluation and deal structure. The Group’s Chief Investment Officer attended the meeting and presented the business case to the Board. The Board noted that Axesor aligned with Experian global BI strategic priorities and that Experian would integrate administrative, financial, and HR functions. In considering the acquisition, the Board reviewed the stakeholder impact analysis which had been prepared (and which is prepared for all acquisition business cases). The analysis identified the following stakeholder impacts and actions/mitigations: Evaluation of the acquisition indicated that the combination of the two businesses would enhance the innovation, quality and completeness of product offerings in Spain. The transaction provides exciting growth opportunities for both the Axesor employee base and the Experian Madrid employees. Initiatives would be implemented across the combined organisation to optimise efficiencies and protect our Benchmark EBIT. Employees of the combined organisation as well as the Workers Council will be engaged to ensure a smooth and optimal cultural integration. The integration plan for the business considered the alignment of suppliers. There was some customer crossover, for which combined management plans were made. The acquisition was expected to have a meaningfully positive long-term impact on all relevant stakeholders, and no material community or environmental impacts were anticipated. Workforce policies and practices The Board is expected to ensure that: workforce policies and practices are consistent with the Company’s values; that they support its long-term sustainable success; and that the workforce can raise any matters of concern. An example of the alignment of policies and practices is how the Group manages anti-bribery and anti-corruption. Experian has a strong compliance culture, which is at the heart of our strategy for ensuring we comply both with the laws that apply to our business and with our Global Code of Conduct. The Board sets the tone and leads by example and is one of the most important influences on the Company’s commitment to preventing bribery and corruption. Our Anti-Corruption Framework sets out our zero-tolerance policy on bribery and corruption in any form, and this message is reinforced through mandatory annual training for employees. We also extend this framework to our third-party network and business partners, which helps to instil our values in every aspect of our business. We apply due diligence and careful screening to intermediaries such as agents, representatives, resellers and service providers and train them in our policies. Experian plc Governance Code principle Division of Responsibilities 97 Division of responsibilities The Code principles regarding the role of the Chairman, the desired characteristics of the Chairman and his duty regarding Board relations and contributions are outlined in the Chairman’s letter of appointment. A summary appears in the table below. The table also summarises how there is a clear division of responsibilities between the leadership of the Board and the executive leadership of the business. Chairman Running the Board effectively and ensuring that the Board plays a full and constructive part in developing and determining the Group’s strategy and overall commercial objectives Promoting the highest standards of integrity, probity and corporate governance throughout the Group and particularly at Board level Ensuring that the Board receives accurate, timely and clear information on the Group’s performance and its issues, challenges and opportunities Ensuring effective communication with the Company’s shareholders by the CEO, the CFO and other executive management; and ensuring that the Board develops an understanding of the views of the Company’s major shareholders Facilitates the non-executive directors’ effective contribution to the Board, and ensures constructive relationships between the executive and non-executive directors Primarily responsible for the Board’s leadership and governance, ensuring its effectiveness Chief Executive Officer Responsible for the Group’s day-to-day business, in line with the strategy, risk profile, objectives and policies set by the Board and its committees Accountable to the Board for the Group’s development and its operations Running the Group’s business and developing the Group’s strategy and overall commercial objectives Implementing, with the executive team, the decisions of the Board, its committees and the principal subsidiaries Maintaining a dialogue with the Chairman on the important and strategic issues facing the Group, and alerting the Chairman to forthcoming complex, contentious or sensitive issues Leading the communication programme with shareholders Chairing the Group Operating Committee Chief Financial Officer Responsible for managing the financial affairs of the Group, including tax, corporate finance and treasury Works closely with the CEO and COO to manage the Group’s operations Member of the Group Operating Committee Chief Operating Officer Oversees the Company’s business operations, including information security Ensures the Group has effective operational procedures and controls Responsible for driving the evolution of the Group’s technology and innovation strategy Member of the Group Operating Committee Senior Independent Director Provides support and guidance, acts as a sounding board for the Chairman, and serves as an intermediary for other directors Acts as a contact point for shareholders if they have concerns which are not resolved through discussion with the Chairman, CEO or CFO Evaluates the performance of the Chairman Non-executive directors Constructively challenge and help develop Group strategy Scrutinise management performance against agreed goals and objectives Uphold the highest standards of integrity and probity and support the Chairman in instilling the appropriate culture, values and behaviours in the Group Ensure the integrity of financial information and that there are robust financial controls and systems of risk management; determine executive remuneration and succession planning Group Company Secretary Secretary to the Board and its committees Provides support and guidance to the Board and the Chairman, and acts as an intermediary for non-executive directors Responsible for: corporate governance; listing rules, prospectus rules, and disclosure guidance and transparency rules compliance; statutory compliance and reporting; shareholder services; and corporate responsibility Member (and secretary) of the Group Operating Committee Group General Counsel Responsible for overseeing Experian’s global legal, risk management, regulatory compliance and government affairs functions Provides the Board and Audit Committee with legal advice, leads on legal, risk and regulatory reporting, and active in public policy advocacy Member of the Group Operating Committee Experian plc Annual Report 2021Governance Code principle Division of Responsibilities Independence As required by the UK Corporate Governance Code, the Board considers each of the non-executive directors to be independent in character and judgment and believes there are no relationships or circumstances that are likely to affect (or could appear to affect) each director’s judgment. Conflicts of interest, and external appointments The Company’s articles of association allow the Board to authorise actual or potential conflicts of interest. The authorisation procedure involves Group Corporate Secretariat issuing guidance and a questionnaire each August, asking directors to identify any conflicts or potential conflicts, which the Board then considers at its September meeting. In addition, directors are expected to advise the Company Secretary of any actual or potential conflicts as soon as they arise so the Board can consider them at the next available opportunity. In the Board’s view, this procedure operated effectively during the year under review. The Board has also agreed a process whereby directors’ proposed external or additional appointments are reviewed and considered for approval by the Board. 98 Corporate governance report continued Workforce policies and practices (continued) In terms of the ability to raise matters of concern, Experian is committed to achieving the highest possible standards of quality, honesty, openness and accountability, and there is an expectation that employees maintain high standards in accordance with the Global Code of Conduct. There is also a culture of openness and accountability, and all employees are encouraged to raise any concerns about the way in which the business is run at an early stage so that any concerns can be dealt with effectively. A confidential helpline, facilitated by an external provider, has been set up for employees who wish to raise any concerns. Calls to the Confidential Helpline, and any actions required, are reviewed by the Audit Committee at least every six months. Non-executive director appointment Non-executive directors are initially appointed for three years. This may, subject to satisfactory performance and election or re-election by the shareholders, be extended by mutual agreement. They normally serve for a maximum of nine years, through three terms, each of three years’ duration. Meetings of non-executive directors In addition to attending Board and committee meetings, the non-executive directors normally meet separately with the Chairman, and sometimes also with the Chief Executive Officer, at the end of each scheduled Board meeting. The non-executive directors also meet privately at least once a year with the Deputy Chairman, without the Chairman present, and did so once during the year to discuss matters including the Chairman’s performance. Board information All directors receive financial and operational information each month to help them discharge their duties, and there were increased financial and operational updates this year due to the COVID-19 pandemic. Board papers are circulated digitally at least one week before each Board meeting, to ensure directors have time to review them. Directors have access to independent professional advice at the Company’s expense, if they consider it appropriate. No director obtained any such advice during the year ended 31 March 2021. Experian plc Governance Code principle Composition, Succession and Evaluation Nomination and Corporate Governance Committee report 99 As Chairman of the Nomination and Corporate Governance Committee, I am very pleased to report on the work done by the Committee during the year, and provide some detail of the Committee’s principal roles and responsibilities. There are updates also on Board composition, diversity and inclusion, and this year’s Board evaluation. A key responsibility of the Committee is to ensure plans are in place for orderly Board succession, and the Committee regularly receives and reviews updates on the structure, size and composition of the Board and its committees, to ensure critical skills and experience are appropriately refreshed. During the year, on the recommendation of the Committee members, Alison Brittain was appointed to the Board, providing significant financial services, consumer-facing, and retail product experience, as well as UK-listed company expertise. In addition, the Committee recommended the appointment of Jonathan Howell to the Board. Jonathan is a highly regarded FTSE 100 Chief Financial Officer, and has considerable executive and non-executive UK-listed boardroom experience, which will further enhance the strength, depth and effectiveness of the Board. The Committee reviews any skills gaps and the current Board composition (and Board members’ expertise, diversity and tenure) to allow for smooth succession planning. A key current focus of the Committee relates to Audit and Remuneration Committee Chairman succession, given the anticipated departures of Deirdre Mahlan and George Rose from the Board in the medium term, following completion of nine years' Board tenure. The Committee has also maintained its focus on the executive talent pipeline and senior management succession plans, reflecting the Board’s responsibility to ensure appropriate plans are in place. A detailed succession planning update was provided at the January 2021 Committee meeting. Included in the update was an analysis of executive management succession coverage. The impacts of COVID-19 on attrition (which had reduced) were also discussed by the Committee. Diversity, equity and inclusion are essential to Experian’s purpose, and the Committee received and discussed a detailed update from our Chief People Officer, Jacky Simmonds, in January 2021. Experian is focused on several dimensions of workforce diversity (including race/ethnicity, gender, age/generation, working parents/families and LGBTQ+), and the Committee noted that the business was strong in terms of employee commitment, having an inclusive culture and diversity and inclusion initiatives, and that actions were being taken regarding representation, data and harnessing regional efforts to maximise impact. At our March 2021 meeting, as well as recommending the appointment of Jonathan Howell to the Board, the Committee considered the proposed election/re-election of directors at the AGM, recommended Dr Ruba Borno’s re-appointment for a further three-year term, reviewed the draft corporate governance section of the Annual Report, and reviewed various company law and governance changes. As noted earlier in the Corporate governance report, the Committee also reviewed a people strategy, talent and culture update during the year. The Committee was in place throughout the year ended 31 March 2021. Committee’s key roles and responsibilities The Board strongly believes that good governance and strong, responsible, balanced leadership are critical to business success and to creating both long-term shareholder value and a strong, sustainable culture. As a Committee, our responsibilities include: Ensuring we have appropriate procedures for nominating, selecting, training and evaluating directors, and that adequate succession plans are in place. Reviewing the Board’s structure, size, composition and succession needs; considering the balance of membership and the Board’s required balance of skills, experience, independence, knowledge and diversity. Identifying and nominating, for the Board’s approval, suitable candidates to fill vacancies for non-executive directors and, with the Chief Executive Officer’s assistance, executive directors. Board appointments are made on merit and against objective criteria, to ensure the Board maintains its balance of skills, experience, independence, knowledge and diversity. Reviewing legislative, regulatory and corporate governance developments and making recommendations to the Board; and ensuring that the Company observes the standards and disclosures recommended by the UK Corporate Governance Code. Mike Rogers Chairman of the Nomination and Corporate Governance Committee As Chairman of the Nomination and Corporate Governance Committee, it is my pleasure to present this year's report on the Committee's activities during the year. Members Mike Rogers (Chairman) Dr Ruba Borno Alison Brittain Caroline Donahue Luiz Fleury Jonathan Howell* Deirdre Mahlan George Rose * From 1 May 2021 Quick facts Mike Rogers was appointed Chairman of the Committee in July 2019, when he was appointed as Chairman of the Company. The Board considers the Committee members to be independent non-executive directors, in line with the UK Corporate Governance Code. The Committee met four times during the year ended 31 March 2021. The Chief People Officer and the Chief Communications Officer are invited to attend certain meetings. The Chief Executive Officer is also invited to attend meetings and provides valuable contributions. Quick link experianplc.com/ about-us/ corporate-governance/ board-committees/ Experian plc Annual Report 2021Governance 100 Nomination and Corporate Governance Committee report continued Code principle Composition, Succession and Evaluation Committee activities during FY21 April — July November January March Recommended the appointment of Alison Brittain as an independent non-executive director of the Company. Discussed a detailed AGM briefing from the Company Secretary and the Chief Communications Officer, including voting results, shareholder feedback and engagement that had taken place in the lead-up to the AGM. Discussed an update on the agreed focus areas from the FY20 Board evaluation. Discussed Board composition and, in particular, approved role specifications for new non-executive directors. Continued important discussions regarding Board succession, with a focus on plans regarding Audit Committee Chairman succession. Reviewed the Committee’s performance during the year against its terms of reference, and concluded that it was operating effectively. Agreed the structure of the FY21 Board, committee and director evaluation. Reviewed and discussed a people, talent and culture update, including the identified strategic pillars, key risks, people implications and insights gained from business leaders. Reviewed an update on executive succession, including specific plans for key operational and functional roles. Reviewed an update on diversity, equity and inclusion, outlining the Experian philosophy and approach, where the business was strong, and where further efforts are needed. Received and considered a Board succession update. Recommended to the Board the directors due to be considered for election/re-election at the 2021 AGM. Considered the annual company law and governance update. Recommended the re- appointment of Dr Ruba Borno as a director of the Company for a further three-year appointment term. Recommended the appointment of Jonathan Howell as an independent non-executive director of the Company. Board, and executive committee (and direct reports), composition As at 1 May 2021 Balance of executive and non-executive directors Ethnicity of the Board Independent Chairman Executive Independent non-executive Total number of directors Tenure of the Board <1 year 1 to <3 years 3 to <6 years 6 to <9 years 9+ years Total number of directors Average Board tenure 1 3 7 11 White – European White – North American Non-white ethnic group – Arabic Non-white ethnic group – South American Total number of directors 2 2 4 2 1 11 5 years, 9 months Non-executive director skills* Financial services Serving listed company executive Consumer/Digital Financial expertise Technology/Information Consumer packaged goods Manufacturing/Large projects 6 3 1 1 11 4 4 4 3 3 1 1 Gender diversity of the Board Gender diversity of executive committee and direct reports Men Women Total number of directors 7 (64%) 4 (36%) 11 Men Women 74% 26% * Table signifies the number of non-executive directors, as at 1 May 2021, considered to have that particular expertise. Individual non-executive directors may have more than one area of expertise. Experian plc Governance Code principle Composition, Succession and Evaluation 101 Board composition As at the date of approval of the Annual Report, the Board comprises the independent Chairman, Mike Rogers, three executive directors and seven independent non-executive directors, including the Deputy Chairman, George Rose. George is also the Chairman of the Remuneration Committee. Deirdre Mahlan is the Chairman of the Audit Committee and Mike Rogers is the Chairman of the Nomination and Corporate Governance Committee. The Nomination and Corporate Governance Committee regularly evaluates Board composition from a number of perspectives, including diversity and orderly succession. The Committee’s discussions during the year concluded that there should continue to be a focus on diversity, including gender and ethnicity, and there was a preference where possible for recruiting non-executive directors who are serving executives at other organisations, and who have recent and relevant financial experience. Audit and Remuneration Committee chairmanship has also been a recent focus of the Committee. In terms of near- and medium-term skill requirements, the Committee’s focus will include non-executives who provide good geographic representation in terms of Experian’s markets, and technology, decisioning, advanced data and analytics will be considerations also. As with all Board appointments, the Committee recognises the continued importance of culture, fit and international experience when assessing potential candidates for the Board. Process for Board appointments When making Board appointments, the Committee reviews and approves an outline brief and role specification, and appoints a search agent for the assignment. We disclose the name of the search agent and any other connection they have with Experian in our next Annual Report. The specification and the search are discussed with the search agent, who then prepares an initial longlist of candidates. The Committee defines a shortlist and holds interviews. Ultimately, the Committee makes a recommendation to the Board for its consideration. Following Board approval, the appointment is announced in line with the requirements of the UK Financial Conduct Authority's (FCA’s) Listing Rules. In due course, a tailored induction programme is developed for the new director. We engaged Russell Reynolds as the specialist search firm involved with the recruitment of Alison Brittain and Jonathan Howell, our most recently appointed non-executive directors. They also provide other executive search services to the Group. Step 1 Committee reviews and approves an outline brief and role specification and appoints a search agent for the assignment Step 2 The agent prepares an initial longlist of candidates Step 3 The Committee then considers a shortlist and we hold interviews Step 4 The Committee makes a recommendation to the Board for its consideration Step 5 Following Board approval, the appointment is announced in line with the requirements of the FCA’s Listing Rules Induction and training The Company has procedures to ensure newly appointed directors receive a formal induction, involving meetings with senior executives and functional leaders. A tailored induction programme is designed for each new non-executive director who joins the Board, to ensure they are equipped with a foundation of knowledge and materials necessary to add value. Individual induction programmes are usually completed within the first six months of a director’s appointment and the Company Secretary provides assistance and support throughout the induction process. The programmes are reviewed regularly to consider directors’ feedback and are continually updated and improved. During the year, the Board appointed Alison Brittain as an independent non-executive director, and Alison’s induction took place via video technology in late 2020. A similar induction has been arranged for Jonathan Howell, to take place in June/July 2021. Alison's induction included: Business/Operations – briefings, regional and global business overviews and product demonstrations in respect of a number of business areas, including: Technology and Information Security, Consumer Information Services, Decision Analytics, Vertical Markets, as well as business market and financial overviews. Corporate/Governance – focused briefings on corporate governance, audit and investor relations and communications. Other areas covered include remuneration, talent, people and reward; a financial overview, budget and capital strategy; strategic planning, corporate development and competition overview; legal compliance, regulation, government affairs, risk management; and corporate responsibility. Diversity We believe that diversity and inclusion are essential to our purpose of creating a better tomorrow – making positive change in the world by actively working to open up access to financial systems to marginalised communities. Our core philosophy is that our employees are people first, and we welcome people of all backgrounds to bring their whole selves to our team. The Board’s diversity policy is unchanged. We strongly believe that diversity throughout the Group and at Board level is a driver of business success. We respect, value and welcome all forms of diversity, and seek to reflect the diversity of our clients, investors and employees in our Board. We recruit talented Board members, who have the appropriate mix of skills, capabilities and market knowledge to ensure the Board is effective. When recruiting, we look across all sectors and non-traditional talent pools, and we require diversity on our candidate shortlists. Experian plc Annual Report 2021Governance 102 Nomination and Corporate Governance Committee report continued Code principle Composition, Succession and Evaluation Diversity (continued) Although we do not publish specific Board diversity targets, the female representation of the Board is 36%, which exceeds the current Hampton-Alexander Review recommendation of 33%. We also continue to monitor closely the numbers submitted as part of our Hampton- Alexander commitment around our executive committee and their direct reports. The proportion of women in this population stands at 26%. As part of our commitment to continue to improve upon our gender diversity, we are putting in place a three-year target of 30% for this group. This, alongside the targets set for senior and mid-level leaders within Experian, will ensure a strong pipeline of women for our most senior positions over time. In addition, the February 2021 Parker Review Committee update confirmed that we met their Board ethnic diversity recommendations. We recognise the significant benefits of a diverse Board and, when recruiting, will continue to seek to address any diversity gaps on our Board, including gender and ethnicity. As well as the Board policy outlined above, the Group’s Code of Conduct further outlines our approach and how we think about diversity. We understand the fundamental value that diversity, equity and inclusion bring to our business, and there are many ongoing initiatives to support a work environment in which everyone is treated with fairness and respect, has equal access to opportunities and resources, and can contribute fully to our success. At Experian, we embrace diversity and appreciate different perspectives and the unique value each employee brings. Fundamentally, we do not discriminate against anyone based on race, colour, religion, gender, sexual orientation, gender identity or expression, national origin, disability, age, covered veteran status, or any other characteristic protected by law. The Code of Conduct applies to everyone at Experian, including contractors, suppliers and others who do business with us. Contractors and suppliers performing work on behalf of Experian are expected to comply with the law and the portions of the Group’s Code of Conduct that apply to them. Board evaluation The UK Corporate Governance Code specifies that the Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors, and that the Board should also have an externally facilitated evaluation at least once every three years. FY21 was Year 2 of our Board’s three-year review cycle. Last year (FY20), an independent external evaluation was conducted by Manchester Square Partners to provide the Board with greater insights into its performance and to identify opportunities to further increase and improve its overall effectiveness. The conclusion of the external evaluation was that the Board was functioning extremely well and in line with first-class governance. Board dynamics were considered to be excellent, with specific characteristics including inclusivity, supportiveness, constructively challenging and responsible. The Board was noted as being unified and aligned, with the Experian agenda as the priority. Year 1 – FY20 Evaluation by external facilitator Year 2 – FY21 Internal review against detailed Year 1 review Year 3 – FY22 Questionnaire-based internal evaluation Following that external evaluation, the Board agreed areas of focus for FY21. This year, the second year of our cycle, involved the Board performing an internal evaluation of progress against the FY21 areas of focus and the resulting actions, as well as agreeing new areas of focus for the coming year. The third year of the cycle, to be undertaken in FY22, will be a questionnaire- based internal evaluation. This year’s internal evaluation was structured as follows: Board Group Corporate Secretariat reviewed progress against the agreed FY21 areas of focus and an update was presented at the Board meeting in March 2021. That update, and the Board review and discussion of its actions, and the actions of management, against the FY21 areas of focus formed the basis of this year’s review from a Board perspective, and new FY22 areas of focus were agreed. Committees A performance evaluation discussion was included on the agendas of the Board committees, supported by an analysis of how each committee was performing against the key areas in its terms of reference. Individual directors Meetings were held between each director and the Chairman in March 2021, in relation to each director’s performance. The Deputy Chairman and Senior Independent Director evaluated the Chairman, taking account of input from other directors. Experian plc Governance Code principle Composition, Succession and Evaluation 103 Progress against the focus areas highlighted in the FY20 review Area Focus Progress COVID-19 pandemic Board succession and talent As the pandemic evolved, the Board took decisive action to agree a set of priorities and goals for the Group, the purpose of which was to establish measures of success for the Board’s role in navigating the emergency. These covered: maintenance of operations while keeping our people, clients and suppliers safe and healthy; preserving the health of the business (including its financial health); recovering strongly as the emergency subsides; and using the Group’s capabilities to help communities survive and recover rapidly. It is expected that a significant Board focus for the coming year will be how the Group adapts, adjusts and recovers from the situation and lessons learned that could have relevance for the evaluation and mitigation of emerging risks. The Board will play a key part in this process, guided by the agreed priorities and goals. The Board’s FY21 priority will be on non-executive succession, particularly chairmanship of the Remuneration and the Audit Committees, as the current role holders approach the natural end of their Board terms of appointment. The focus for the Chairman and the Board will be on replacing the significant breadth and depth of experience, insight, advice and challenge that will leave the Board, ensuring the right seniority, experience (including financial) and cultural fit of any successors, and that there is a smooth transition (and comprehensive induction) for any new appointments. As part of its regular meetings and visits, the Board spends time with the senior leadership team and has opportunities to meet up-and-coming talent within the organisation. There is also an annual formal review of talent, discussion of specific appointments as needed and updates on talent development programmes. The development, attraction, retention and diversity of talent is also an area of increasing focus for the Board, as the Group evolves into new and highly competitive business areas, balancing internal development with key external hires. Additional Board meetings and updates were initiated at an early stage, and took place in April 2020 and June 2020, in addition to the scheduled meetings in March, May and July 2020. This allowed the Board to regularly oversee the actions being taken by the Group in response to the pandemic and to receive regular updates on trading. Early action was taken to ensure an appropriately focused Board agenda, principally through the inclusion of a 'COVID-19 Board Report' covering People, Operations, Consumer/Regulatory, Funding, Societal Support, Return to business-as-usual, and the Group’s global response. Reporting on many of these matters was also enhanced in the regular updates to the Board between meetings. The Audit Committee requested, and discussed, a management report specifically related to the potential impacts on the Group’s risk environment arising from COVID-19, including the impact of the Group’s principal risks and key activities undertaken within the Group’s pandemic response plans. Alison Brittain was appointed as an independent non-executive director on 1 September 2020. Jonathan Howell was appointed as an independent non-executive director on 1 May 2021. The Nomination and Corporate Governance Committee continued to regularly discuss Board composition and succession (including Committee chairmanship succession) and reviewed the role specifications for the new non-executive director appointments and potential future appointments. The Nomination and Corporate Governance Committee continued to receive in-depth updates on senior leadership succession, diversity and inclusion, and people strategy, talent and culture, including updates on the Group’s people development programmes. The Board continued to spend time with senior management and high-potential talent within the business. This was undertaken via video technology during the year, and it remains the intention that the Board will re-commence visits to the Group’s key business locations when it is safe to do so in line with COVID-19 travel restrictions and public health guidance. FY22 focus areas agreed in the FY21 review Area Focus Culture and Social capital As the Board concluded in this year’s internal evaluation, the Board has continued to operate effectively despite not meeting together physically since January 2020. Since that time, two new independent non-executive directors have joined the Board. Although there may be some changes to the way the Board operates in the future, the Board recognises the importance of remaining closely connected with the business and fellow directors, in order to lead by example and continue to promote and monitor the desired culture throughout the Group. The Board intends to focus on ways to further strengthen the culture and rebuild social capital to ensure that the strong culture of the Board is not impacted by the COVID-19 pandemic, and that it continues to operate as a high-performing collegiate team. Environmental, Social, and Governance (ESG) The Group continues to progress a number of ambitious programmes of ESG-centred activities, which include considerations around climate change, gender and ethnicity, diversity, pay, monitoring of suppliers, reporting frameworks, and the positive role of the Group and data in society. The Board, through its oversight of the Group’s strategy and its responsibilities, will continue to evaluate how ESG issues affect key aspects of the business and what Experian’s ambitions and goals should be as a long-term sustainable business. Experian plc Annual Report 2021Governance 104 Audit Committee report Code principle Audit, Risk and Internal Control I am pleased, as Chairman of the Audit Committee, to report on how the Committee carried out its responsibilities during the year, in particular with the ongoing COVID-19 global pandemic, and how we discharged our duties. The Committee’s remit is to: review and monitor the integrity of the Group’s financial reporting, ensuring that any judgments made are appropriate; ensure the external auditor is independent and effective in its role, and recommend the appointment of the external auditor; and ensure that the Group has an effective internal control framework, including the risk management system. The Committee members’ collective international and financial experience enables them to act effectively in these areas, and the work of the Committee during the year covered all elements of its remit. This report contains details of the significant issues we considered in relation to the financial statements and how these were addressed, and our process for concluding that this Annual Report is fair, balanced and understandable. Deirdre Mahlan Chairman of the Audit Committee I am pleased to report on the Committee’s activities during the year, especially with 2020 being a particularly difficult year given the ongoing COVID-19 global pandemic. Members Deirdre Mahlan (Chairman) Dr Ruba Borno Alison Brittain Caroline Donahue Luiz Fleury Jonathan Howell* George Rose * From 1 May 2021 Quick facts Deirdre Mahlan has chaired the Committee since January 2015. Deirdre is a qualified accountant with an MBA and has many years’ experience in senior finance roles, most recently as Chief Financial Officer of Diageo plc. All members of the Committee are independent non-executive directors and the Board considers them to have an appropriate level of experience. Deirdre Mahlan, George Rose and Jonathan Howell are considered to have recent and relevant financial experience, in line with the UK Corporate Governance Code. The Committee met four times during the year, with each scheduled meeting timed to coincide with key dates in the Group’s financial reporting and audit cycle. Regular attendees at meetings include the Chairman, the executive directors, the Group General Counsel, the Head of Global Internal Audit, the Global Financial Controller, the Chief Information Officer, the Chief Information Security Officer and representatives from KPMG LLP (the external auditor). Other invitees include the Global Head of Risk Management and the Global Head of Compliance. At the end of each scheduled meeting, the external auditor and the Head of Global Internal Audit meet with the Committee to discuss any matters without management being present. The Committee is authorised to seek outside legal or other independent professional advice as it sees fit. Quick link experianplc.com/ about-us/ corporate-governance/ board-committees/ The Committee responded quickly to the impact of COVID-19 on its areas of responsibility. Soon after the start of the pandemic, the Committee requested a COVID-19 specific risk update from management, which was presented to the Committee early in FY21. The initial view of the Committee was that COVID-19 had impacted some of the Group’s principal risks – for example, risk considerations related to employees working from home. For each risk area impacted, the Committee was advised of the mitigating actions that had been put in place. These included, for the risks associated with working from home, enhanced technical measures to restrict, secure and monitor devices, increased phishing testing, robust compliance requirements for employees with access to sensitive data and implementation of critical security updates. A similar analysis was discussed by the Committee in respect of each of the impacted Group principal risks. The Committee was in place throughout the year ended 31 March 2021. Committee’s key roles and responsibilities Monitoring the integrity of the financial statements and reviewing significant financial reporting judgments contained in them. Reviewing internal financial controls and the Group’s internal control and risk management systems, with special attention this year on COVID-19 specific risks. Reviewing the effectiveness and quality of the audit process and the independence and objectivity of the external auditor. Monitoring and reviewing the effectiveness of the internal audit function. Developing and implementing policy on engaging the external auditor to supply non-audit services, taking into account relevant guidance. Approving the external auditor’s remuneration and terms of engagement, and making recommendations about its re-appointment. Experian plc Governance Code principle Audit, Risk and Internal Control 105 Committee activities during FY21 May September November March Reviewed the principal accounting policies, pre-year-end accounting matters and updates on the year-end financial statements and financial review. Reviewed the external auditor’s pre-year-end report, including scope, status and controls findings. Reviewed fraud and Confidential Helpline update. Reviewed the Group’s Tax Policy. Reviewed the Group’s non-audit fee policy and the Group audit fee. Reviewed the Global Internal Audit strategy and annual plan. Considered the re-appointment of the external auditor. Reviewed the preliminary results announcement and the Annual Report, and papers in relation to: – year-end accounting matters – the preparation of financial statements on the going concern basis (see also note 2 to the Group financial statements) – the making of a viability statement recommendation to the Board – the fair, balanced and understandable assessment – and the making of management representations. Reviewed the 2020 Annual Report to ensure it was fair, balanced and understandable and provided information enabling an assessment of Experian’s position and performance, business model and strategy. Reviewed and discussed with management the draft Enforcement Notice received from the UK Information Commissioner's Office (ICO), and the associated accounting impact. Reviewed the Risk Management Framework and Summary of Assurance, including a COVID-19 specific risk update. Reviewed the external auditor’s year-end report, including independence considerations. Reviewed non-audit fees. Considered the FY21 external audit plan with the external auditor, including its scope, materiality and the expected impact of COVID-19. The plan included the external auditor’s response to developments in the business during the year, developments in the audit process, the Group’s risk assessment and the coverage of the audit. Reviewed the effectiveness of the external auditor (see page 107 ‘External auditor’). Evaluated the performance of the Global Internal Audit function (see page 107 ‘Internal audit’). Received and discussed with management an update in relation to a South Africa fraudulent data access matter. Continued to assess with management the impact of COVID-19 from a risk perspective (including information security), noting the COVID-19 risk assurance that had been undertaken. Reviewed the Compliance Management Programme overview from the Global Head of Compliance; assessed the Compliance terms of reference and received annual compliance training. Reviewed fraud and Confidential Helpline updates. Reviewed the Group’s Treasury Policy. Approved the Committee’s annual meeting schedule and reviewed the Committee’s performance against its terms of reference. Reviewed the half-yearly financial report announcement, and papers in relation to: – half-year accounting matters – the preparation of the half-yearly report on the going concern basis – a fair, balanced and understandable assessment – and the making of management representations. Although not required for the half-year, reviewed the viability modelling assessment that had taken place, given the situation with COVID-19. Reviewed the external auditor’s half-year report, including independence considerations. Reviewed and discussed with management the final Enforcement Notice received from the ICO, the appeal made by the Group, potential business impacts of the notice, and the associated accounting considerations. Debated extensively with management the restructuring charge for the transformation programme in the UK and Ireland and other restructuring initiatives. Received an update and Committee training from the external auditor in respect of forthcoming audit industry changes (including strengthening of internal controls frameworks, known as ‘UK SOX’), new or impending accounting standard changes, and the likely impacts and considerations for Experian. All meetings Reviewed full or summary risk management updates at each meeting, including status of and changes to the Group’s principal risks, material litigation, regulatory developments and details of any emerging risks, with particular focus on COVID-19 specific risks. An Internal Audit update was presented by the Head of Global Internal Audit at each meeting, and discussed by the Committee, including the status of the audit plan, audit findings and themes in the reporting period, and progress on any overdue audit actions. Reviewed an information security update from the Chief Information Security Officer at each scheduled meeting. This is a standing item on the Committee agenda, given its importance to the Group. Included this year were updates on the impact of COVID-19 on information security, for example in relation to any increased risk from employees working from home and the resultant changing threat landscape. Experian plc Annual Report 2021Governance 106 Audit Committee report continued Code principle Audit, Risk and Internal Control Significant issues The table below summarises the significant matters considered by the Committee in relation to the Group and Company financial statements and the way they were concluded. These matters, together with any other significant considerations of the Committee, are reported to the Board. The minutes of each Audit Committee meeting are also circulated to all members of the Board. Matter considered Challenge and conclusion Impairment review – goodwill and other intangible assets A summary of the annual impairment analysis and underlying process was provided to the Committee. The Committee scrutinised the methodology and assumptions applied by management. The analysis indicated that, following a challenging year impacted by the effects of the COVID-19 pandemic, growth in Asia Pacific was adversely affected and the estimated recoverable amounts of the assets were below their carrying value. Accordingly, an impairment of goodwill in the region was proposed. In respect of Asia Pacific, the Committee challenged management on the longer-term strategy of the region and the extent to which this could be captured in the forecasts used. The Committee debated with management the best approach to including forecasting adjustments. The recoverable amounts of the assets of all other segments continued to sufficiently exceed their carrying amounts. The Committee concurred with management’s conclusions that an impairment of goodwill was required in Asia Pacific. The Committee noted the headroom and the sensitivity to changes in assumptions and concurred with the proposed disclosure of these in note 20 to the Group financial statements. Impairment review – other assets A summary of the review process for other assets was provided to the Committee. The Committee scrutinised the methodology and assumptions applied by management. The review indicated that an impairment was required in one of the Group’s intangible assets, and that an impairment reversal was required in one of the Group’s associates. The Committee noted the changes in trading performance against the forecast of the associate and debated with management the future strategy for this investment. Going concern and viability The Committee reviewed the assessment of going concern and viability. The Committee concurred with management’s conclusion that a write-down of intangibles was required, an impairment reversal in associates was required and that the proposed accounting was appropriate. The Committee scrutinised the key risks and viability scenarios, the assumptions used and the methodology. The Committee concurred with management’s assessment that the Group is a going concern and is expected to remain viable. Acquisitions The Committee received an update on the acquisitions made during the year notably the acquisitions of Arvato’s Risk Management division in Germany, Tapad, Inc. in North America and BrScan in Brazil. The Committee noted these deals included elements of contingent consideration and put options, and that an independent external valuer had assisted with these valuations along with the acquired assets and liabilities. Tax The Committee received a regular update from management on the adequacy of provisions in respect of significant open tax matters. The review included details of ongoing correspondence with tax authorities in the UK, the USA and Brazil and the principal areas of tax challenge. Litigation and regulatory matters The Committee received an update and analysis of open litigation and regulatory matters affecting the Group, including the enforcement notice from the UK Information Commissioner’s Office. Restructuring A summary of potential restructuring opportunities was presented to the Committee in the first half. The Committee discussed with management a refinement to the non-controlling interest policy, in light of these acquisitions. The Committee approved the valuation of the acquisition intangibles and accounting for non-controlling interests. The Committee agreed that the assessment of the uncertain tax positions was appropriate and that the judgment taken in respect of the year-end provision in the Group financial statements was reasonable. The Committee also noted the evolving and complex tax laws that applied to the Group and the uncertainty that these might bring. It concluded that the Group tax risk disclosures were appropriate. The Committee concluded that these matters had been appropriately provided for at 31 March 2021. The Committee considered and concurred with the proposed contingent liability disclosures included in the notes to the Group financial statements. The Committee discussed the proposals with management. As the performance of the Group strengthened the Committee challenged management to keep the overall programme limited and focused on certain specific areas. The Committee approved the proposed accounting for the programme as a non-benchmark item. Experian plc Governance Code principle Audit, Risk and Internal Control 107 Fair, balanced and understandable – what did we do? Each year, in line with the UK Corporate Governance Code and the Committee’s terms of reference, the Committee is asked to consider whether or not, in its opinion, the Annual Report is fair, balanced and understandable (FBU) and whether or not it provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy. There is an established process to support the Audit Committee in making this assessment, and we use a similar process for the Group’s half-yearly financial report. The key areas to focus on included ensuring that: The overall message of the narrative reporting is consistent with the primary financial statements. The overall message of the narrative reporting is appropriate, in the context of the industry and the wider economic environment. The Annual Report is consistent with messages already communicated to investors, analysts and other stakeholders. The Annual Report, taken as a whole, is fair, balanced and understandable. The Chairman and Chief Executive Officer’s statements include a balanced view of the Group’s performance and prospects, and of the industry and market as a whole. Any summaries or highlights capture the big picture of the Group appropriately. Case studies or examples are of strategic importance and do not over-emphasise immaterial matters. The main elements of the process are: A list of ‘key areas to focus on’ was previously shared with the Annual Report team. The team is reminded of the requirement annually, and asked to reflect this in their drafting. An internal FBU committee considered the Annual Report in May 2021, ahead of the Audit Committee meeting. A wide range of functions are represented on this committee, including executives from finance, communications, investor relations, legal and corporate secretariat. The external auditor also supports the committee. In advance of its May 2021 meeting, the Audit Committee received a near-final draft of the Annual Report, together with a reminder of the areas to focus on. The FBU committee’s observations and conclusions were also relayed to the Audit Committee. Following its review this year, the Audit Committee concluded that it was appropriate to confirm to the Board that the 2021 Annual Report was fair, balanced and understandable, and provided the information necessary for shareholders to assess the Group’s position and performance, business model and strategy. The FBU statement appears in the Directors’ report. Internal audit An internal evaluation of Internal Audit was reviewed by the Committee at its September 2019 meeting, as part of the agreed four-year evaluation cycle (a full external quality assessment every four years, and follow-up interim external quality assessments and internal reviews in the intervening period). In September 2020, the Committee reviewed the conclusions of a further internal evaluation of Internal Audit, which comprised: internal quality assurance results; post-audit stakeholder feedback; key internal metrics; self-assessment against the International Standards for the Professional Practice of Internal Auditing and the Code of Ethics by the Head of Global Internal Audit; and a survey of principal stakeholders for areas requiring improvement. All audits that had been assessed using Internal Audit’s quality assurance process were rated positively, with strong adherence to standards and processes. Feedback from stakeholders was also positive, and there was good progress in relation to the quality of the assurance process and the insights provided by Internal Audit. The assessment against key internal metrics indicated that a continued focus area should be the time taken to issue reports. There was conformance with the International Standards for the Professional Practice of Internal Auditing, and stakeholder feedback on the function was strong, with the team viewed as highly effective, professional and independent. External auditor Tenure and tendering KPMG LLP (KPMG) has been the Company’s auditor since July 2016, following the conclusion of the audit tender process in September 2015. There are currently no contractual obligations restricting our choice of external auditor and we confirm that we have complied on a voluntary basis (as a non-UK-incorporated company) with the provisions of the UK Competition and Markets Authority (Mandatory Use of Competitive Tender Processes and Audit Committee responsibilities) Order 2014 for the financial year under review. Effectiveness, audit quality, independence and appointment At its September 2020 meeting, the Audit Committee reviewed and discussed KPMG’s audit strategy for the year ended 31 March 2021. In November 2020, and March and May 2021, the Committee received detailed updates on the audit’s progress, which included details of the external auditor’s actions, such as the audit procedures undertaken, the audit’s coverage, the impact of COVID-19 on the audit, the segregation of duties and the status of any significant findings, as well as details of key matters arising from the audit and assessments of management’s judgments on them; and reviewed the content of the independence letter and the management representation letter, as well as engagement terms. The Committee formally reviews the effectiveness of the external auditor at its September meeting. This year, questionnaires were provided to Board members, senior operational and functional management and senior regional, finance and treasury leadership. As part of the evaluation, the FRC’s Guidance on Audit Committees was reviewed to ensure that best practice was being followed. The evaluation focused on the four key areas used in the FRC’s May 2015 ‘Practice aid for audit committees’: mind-set and culture; skills, character and knowledge; quality control, and judgment. The Committee also reflected on the assurance on financial statements, the audit teams and communication, as well as considering external regulatory updates on the external auditor received during the year. The overall results of the evaluation were favourable, particularly with regard to quality and value of the service. There were no concerns regarding the independence of the audit team, the technical knowledge of KPMG or the way in which judgments were explained. The Committee concluded, based on feedback and information obtained during its other work, that the external auditor had performed effectively, and that the Group and the auditor had complied with relevant guidance. The Committee also assesses the quality of the audit (along with the effectiveness review described above) in the following ways: Evaluation of external auditor (process described above) – the large majority of internal respondents agreed that the audit had been completed efficiently and as planned; where this was not the case, it was felt that Experian plc Annual Report 2021Governance 108 Audit Committee report continued Code principle Audit, Risk and Internal Control deviations from the plan were communicated and appropriate. It was additionally noted that any COVID-19 related changes were handled efficiently and effectively. No necessary improvements were noted with regard to the external auditor's judgment and communication, particularly as to technical issues, estimates, discussing potential issues and management letter content. Meeting attendance by the external auditor – KPMG attend all scheduled Committee meetings and, during the year, reported to the Committee on the components of the audit plan, additional or forthcoming requirements or regulatory changes, audit findings and interim audit findings. These reports, the private sessions held with the Committee, and the level of challenge applied by the external auditor to management, are opportunities for KPMG to demonstrate and articulate (and for the Committee to assess and challenge, as required) the quality of the audit work. FRC Audit Quality Inspection Report (AQR) – in June 2020, the FRC published its AQR for KPMG, which was focused on the key areas requiring action by KPMG to safeguard and enhance audit quality. This provided the Committee with an external perspective on the quality of audits by KPMG, and the Committee noted the FRC’s comments that there had been considerable Provision of non-audit services Background The Audit Committee annually reviews the policy on the provision of non-audit services and the recruitment of former auditor employees, and the latest review took place in March 2021. The policy, which is set out below, recognises the importance of the external auditor’s independence and objectivity. Policy The external auditor is prohibited from providing any services other than those directly associated with the audit or required by legislation. These are limited to: Reporting required by a competent authority or regulator under UK law or regulation, for example: – Reporting to a regulator on client assets; – In relation to entities regulated under the UK Financial Services and Markets Act 2000 (FSMA), reports under s166 and s340 of FSMA; – Reporting to a regulator on regulatory financial statements; – Reporting on a Solvency and Financial Condition Report under EU Solvency II Directive 2009 Reporting on internal financial controls focus on audit quality at the top of the firm and a number of improvements to the audit practice as a result. However, the report also observed that further increased consistency of high- quality audits was required. In response to the findings, KPMG subsequently updated the Committee on the investment being made in audit quality, talent retention, diversity, and the ongoing monitoring that was in place. Technology and processes – KPMG employ a ‘hub’ approach in order to perform standardised testing for each local market. This approach includes the use of data analytics techniques, which supplies audit evidence over significant quantities of data, and this provides a perspective on audit quality to the Committee. Independence is an important element of the external audit. To ensure auditor objectivity and independence, the Committee reviews potential threats to independence and the associated safeguards during the year. The safeguards that KPMG had in place during the year to maintain independence included annual confirmation by KPMG staff of compliance with ethics and independence policies and procedures. KPMG also had in place underlying safeguards to maintain independence by: instilling professional values; communications; international accountability; risk management, and independent reviews. They also ensured that there was appropriate pre-approval for non-audit services, which are provided only if permissible under relevant ethical standards. The Committee concluded that the external auditor had maintained its independence throughout the year. Non-audit services KPMG provides other services to Experian. To ensure auditor objectivity and independence, we have a policy relating to providing such services. The policy includes financial limits above which any proposed non-audit services must be pre-approved, depending on the expenditure proposed. The Committee receives half-yearly reports providing details of non-audit assignments carried out by the external auditor, together with the related fees. Under the policy, non-audit fees paid to KPMG are capped at 30% of the fees for audit services, except in exceptional circumstances. Pre-approval by the Audit Committee or Audit Committee Chairman is required in that situation. An analysis of fees paid to the external auditor for the year ended 31 March 2021 is set out in note 13 to the Group financial statements. Reports required by or supplied to competent authorities/regulators supervising the audited entity, where the authority/regulator has either specified the auditor to provide the service or identified to the entity that the auditor would be an appropriate choice for service provider Audit and other services provided as auditor of the entity, or as reporting accountant, where the services are required by law or regulation Reviews of interim financial information; and providing verification of interim profits Extended audit or assurance work where the work is integrated with the audit work and is performed on the same principal terms and conditions Services which support the entity in fulfilling an obligation required by law or regulation, where the provision of such services is time critical and the subject matter of the engagement is price sensitive Reporting on government grants Reporting on covenant or loan agreements which require independent verification Additional assurance work on material included within the Annual Report Services which have been the subject of an application to a competent authority. The appointment of the external auditor for any non-audit work up to US$50,000 must be approved by the Global Financial Controller. The appointment of the external auditor for any non-audit work where the expected fees are over US$50,000 and up to US$100,000 requires the approval, in advance, of the Group Chief Financial Officer. Where the expected fees are over US$100,000, the approval of the Chairman of the Audit Committee is required in advance. Where cumulative annual fees exceed the 30% annual limit, all expenditure must be approved by the Chairman of the Audit Committee (via the Global Financial Controller), up to 35%. Where cumulative annual fees exceed the 35% annual limit, all expenditure must be approved by the Audit Committee. All expenditure is subject to a tender process, unless express permission is provided by the Chairman of the Audit Committee, the Chief Financial Officer or the Global Financial Controller based on the above approval limits. Any expenditure below US$100,000 not subject to a tender will be notified to the Chairman of the Audit Committee. Continued opposite Experian plc Governance Code principle Audit, Risk and Internal Control 109 Commercial agreements where Experian provides services to the auditor must be approved by the Global Financial Controller and not exceed the lower of 5% of the local Experian entity’s total revenue and US$250,000, and all transactions should be undertaken on an arm’s length basis. Transactions in excess of this limit require approval of the Chairman of the Audit Committee in advance. The Committee will receive half-yearly reports providing details of assignments and related fees carried out by the external auditor in addition to their normal work. worked on the audit of Experian plc or its subsidiaries. Following the year-end audit, neither Experian nor any of its subsidiary companies will employ any audit partner or audit team member in a position which could have a significant influence on the Group’s accounting policies or the content of its financial statements until a cooling-off period has elapsed. The cooling-off period is two years in respect of an audit partner, and one year in respect of a director, where they have The KPMG Engagement Letter further prohibits Experian from soliciting the employment of any audit team member for three months following completion of the audit, without KPMG consent. The Committee will receive an update if any senior audit team members are recruited by Experian, and an annual update in March providing numbers of former auditor employees currently employed by Experian. Risk management and internal control The Board is responsible for maintaining and monitoring sound risk management and internal control systems, and for determining the nature and extent of the principal risks Experian is willing to take to achieve its strategic objectives. There is an ongoing process for identifying, evaluating and managing the principal and emerging risks we face. This process was in place for the financial year and up to the date of approval of this Annual Report. Full details of our risk management and internal control systems and processes can be found in the Risk management section of the Strategic report on page 73. The Audit Committee considers emerging risks with management as part of the standing risk management update it receives. During the year, as well as management-identified emerging risks, the Committee asked management to evaluate certain risks as potential emerging risks. The specific processes underlying the elements of our risk framework are set out below. Identify Identify and escalate new, emerging or changing risks, significant incidents, significant control gaps and risk acceptance Assess Assess the potential impact of each strategic, operational and financial risk on the achievement of our business objectives, and the Group’s corresponding risk appetite Produce Board-level and Group-level finance reports, including financial summaries, results, forecasts and revenue trends, investor relations analysis and detailed business trading summaries Follow formal review and approval procedures for major transactions, capital expenditure and revenue expenditure Evaluate compliance with policies and standards that address risk management, compliance, accounting, treasury management, fraud, information security and business continuity Monitor budgetary and performance reviews tied to KPIs and achievement of objectives Consider external factors arising from our operating environment and internal risks arising from the nature of our business, our controls and processes, and our management decisions Conduct detailed performance reviews at a regional level Report to Regional Risk Committees, the Security and Continuity Steering Committee, the Executive Risk Management Committee, and the Audit Committee on the status of principal and emerging risks, the progress of strategic projects and acquisitions, and escalation of significant accepted risks Global Internal Audit reports to the Audit Committee on assurance testing and Confidential Helpline investigation results Group Compliance reports to the Audit Committee on fraud management Apply a risk scoring system, based on our assessment of the probability of a risk materialising, and its impact if it does Require executive management confirmations of compliance with our corporate governance processes and control environment Respond Apply active risk remediation strategies, including internal controls, formal exception processes, insurance and specialised treasury instruments Accept or remediate current risk and control environment Determine corrective action if required Use formal review and approval procedures for significant accepted risks Monitor Maintain comprehensive risk registers representing the current risk and control environment, using a software solution to provide enhanced monitoring Review of controls and follow-ups by management, second line functions such as Compliance, Global Internal Audit and third parties Use Global Internal Audit to independently assess the adequacy and effectiveness of the system of internal controls Report on risk to the Audit Committee, addressing material and emerging risks, material litigation, information security, business continuity, and regulatory compliance Use the Audit Committee to monitor the Group’s risk management and internal control systems Review by the Audit Committee of the effectiveness of our systems of risk management and internal control Receive an annual report on the controls over relevant risks Ongoing review of principal risks identified by the Group’s risk assessment processes Experian plc Annual Report 2021Governance 110 Audit Committee report continued Code principle Audit, Risk and Internal Control Through a combination of ongoing and annual reviews, the Board is able to review the effectiveness of the Group’s risk management and internal control systems Risk management and internal control systems review Risk management is essential in a global, innovation-driven business such as Experian. It helps to create long-term shareholder value and protects our business, people, assets, capital and reputation. It operates at all levels throughout the organisation, across regions, business activities and operational support functions. Our approach to risk management encourages clear decisions about which risks we take and how we manage them, based on an understanding of their potential strategic, commercial, financial, compliance, legal and reputational impact. As risk management and internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, they can provide reasonable but not absolute assurance against material financial misstatement or loss. In line with the Code, the Audit Committee monitors our risk management and internal control systems, robustly assesses the principal risks identified by our risk assessment processes (including those that would threaten our business model, future performance, solvency or liquidity), and monitors actions taken to mitigate them. For certain joint arrangements, the Board relies on the systems of internal control operating within Experian partners’ infrastructure and the obligations of partners’ boards, relating to the effectiveness of their own systems. The Code requires companies to review the effectiveness of their risk management and internal control systems, at least annually. The Audit Committee performs this review under delegated authority from the Board. Following this year’s review, the Board considers that the information it received enabled it to review the effectiveness of the Group’s system of internal control in accordance with the FRC’s ‘Guidance on Risk Management, Internal Control and Related Financial and Business Reporting’ and confirm that the system has no significant failings or weaknesses. For more on our approach to risk management see pages 72 to 80. Independent assessment Global Internal Audit reports Global Internal Audit Confidential Helpline reports External auditor’s report Sustainable business independent assurance report Review by relevant regulatory bodies (e.g. US Consumer Financial Protection Bureau) Evaluation of external auditor Evaluation of Global Internal Audit Management assurance Annual executive certification of compliance with UK FRC guidance and control adequacy Risk management reports, including material litigation Compliance reports Information security reports Impairment, going concern and viability reviews Annual Report, full-year and half-yearly financial report review Management representation letters Board/Audit Committee approved Annual Global Internal Audit plan External auditor’s engagement letter External auditor’s annual audit plan Treasury policy Tax policy Compliance policy Global Delegated Authorities Matrix, which defines internal approval procedures Additional financial reporting internal controls We have detailed policies and procedures in place to ensure the accuracy and reliability of our financial reporting and the preparation of Group financial statements. This includes our comprehensive Global Accounting Policy and Standards, which contains the detailed requirements of International Financial Reporting Standards (IFRS). The Group’s Financial Reporting team owns the Global Accounting Policy and Standards and we have rolled it out across the Group, obliging all Group companies to follow its requirements. The main objectives of the Policy and Standards are to: provide standards for accounting issues and to act as a reference document for both Experian employees and external auditors; allow for preparation of consistent and well-defined information for financial reporting requirements under IFRS; provide a set of measures to be used for both quantitative and qualitative assessments of Group performance; increase the efficiency of the reporting process; and provide a guide for educating Group personnel in approved standardised finance and accounting procedures. Experian plc Governance Code principle Remuneration Report on directors’ remuneration 111 George Rose Chairman of the Remuneration Committee I am pleased to present, on behalf of the Remuneration Committee, the Report on directors’ remuneration, following a challenging year, but one of resilient performance for the Company. Members George Rose (Chairman) Dr Ruba Borno Alison Brittain Caroline Donahue Luiz Fleury Jonathan Howell* Deirdre Mahlan Mike Rogers * From 1 May 2021 Quick link experianplc.com/ about-us/ corporate-governance/ board-committees/ FY21 was undoubtedly an unprecedented year for our business, our employees, and the societies in which we operate. The emergence of the global COVID-19 pandemic, and the subsequent national lockdowns in all our major markets, created a drastically different operating environment than the one that we had planned for. We had to adapt quickly to the many unique and unforeseen challenges that faced our business and our employees. I would therefore like to start by thanking all our 17,800 employees whose resilience and commitment enabled us to deliver another year of growth. I am proud of how the Company approached this year. From the very beginning of the pandemic we were clear that our priority was to protect our people and our business. By doing this, we established a platform from which to emerge stronger from the pandemic and help all our stakeholders and national governments along the way. Protecting our people Protecting our people, not just their mental and physical well-being but their jobs too, has been one of our key priorities throughout the pandemic. Driven by the backdrop of COVID-19, we took a prudent decision to apply a global pay freeze to all employees, including executive directors, for FY21 in order to enhance our ability to preserve the jobs of all our workforce. It is pleasing to report that our prudence paid off, and that in FY21: We did not furlough any of our employees, or avail of any similar government support in any of the countries in which we operate. We did not reduce any employees’ salaries or working hours We have maintained our global level of employment at c.17,800 throughout COVID-19 For FY22 we will once again be operating our normal merit review process, for which all employees will be eligible. The vast majority of employees continue to work from home in a safe and efficient way, supported by a number of 'people first' policies designed to help employees and their families to navigate the current environment. We reviewed and enhanced a number of our people policies in FY21, to ensure that we could support our employees as they dealt with the challenges, both personal and professional, of the pandemic. We expanded some of our existing well-being programmes to include stress management, mindfulness and meditation as well as broader mental health support. We also enhanced some of our leave policies, for example in the UK&I we doubled our carer’s leave to ten days and provided enhanced sick pay for employees with COVID-19, irrespective of their tenure. Like a lot of society, our employees had to deal with personal and professional challenges for the whole of FY21. With both admiration and sincere gratitude we witnessed the incredible efforts shown by all our employees as they supported each other through the pandemic. As a way of saying thank you for this exceptional effort, we will be making a special one-off recognition award to all our employees below senior management, approximately 17,000 employees, for helping Experian to thrive during the pandemic. The initial award will be a share award of US$700 and we will match the award on a 2:1 basis (i.e. a further US$1,400) for any employee who retains their initial share award for a period of three years. Once again this year I had the opportunity to meet – albeit necessarily virtually – with our UK and Ireland Experian People Forum. These meetings are always an informative engagement opportunity to discuss a variety of topics that are close to the hearts of our employees. I was very pleased to hear very positive feedback on the actions that had been taken to help support our employees through the pandemic. There was a sense that virtual working gave a greater insight into everyone’s personal circumstances, which has actually further ‘humanised’ our leaders and enhanced the strong collaboration aspect of the Experian culture. Protecting our business and respecting our investors Our strategy continues to be focused on maximising our long-term growth potential. The emergence of the pandemic in March 2020 came as the previous financial year was closing out. Despite the uncertainty brought about by COVID-19 our ambition remained unchanged. Therefore, we decided to push forward with a number of planned critical strategic investments in FY21. Those investments in areas such as business portfolio and technology infrastructure are designed to further fuel the sustainability of the business to meet our longer-term aspirations. We were pleased to be in a position to pay, in the normal way, both our FY20 second interim dividend in July 2020 and our FY21 first interim dividend in February 2021. Our share price, which has remained resilient over FY21, continues to reflect the positive investor sentiment in how our Board, management team and employees have responded to the challenges of delivering business performance and growth during the pandemic. Experian plc Annual Report 2021Governance 112 Report on directors’ remuneration continued Code principle Remuneration Supporting governments and society As a Company we believe that we should help and contribute to the societies in which we work, and while this social responsibility is central to many of our annual activities, it was brought into focus even more in FY21. We mobilised our business quickly to provide governments and non-profit organisations with our tools and resources to help deal with the crisis. We are proud to say that this enabled national governments to direct financial support to the businesses and individuals who needed it most. On the subject of government support, I want to confirm that Experian did not look to secure any government support, in any of the countries in which we operate. We did not avail of any furloughing programmes or any other national support programmes. Executive directors Our Remuneration Policy (Policy) is built on the principles that (i) executives are only rewarded for delivering strong financial results and (ii) executive pay is aligned with stakeholder experience. True to these principles, the Committee determined that for FY21: executive directors did not receive any salary increases; no adjustments would be made to outstanding long-term incentive (LTI) awards. All outstanding LTI awards will be assessed against the already disclosed performance conditions, with no adjustments to account for the impact of COVID-19; and 2020 LTI performance targets were set to balance the known impact of the pandemic at the time of grant with our longer-term unchanged growth ambitions. Additionally, in recognition of the prevailing uncertainty and to acknowledge the difficult economic circumstances created by COVID-19 on the wider economy, our executive directors voluntarily waived 25% of their contractual base salary for six months in FY21. The Committee supported this decision and determined it would be appropriate to donate an amount equal to the value of salary waived by the executive directors to the Experian Hardship Funds across the Group. These Employee Hardship Funds are used to provide financial support to Experian employees in cases of extreme difficulty, such as when their homes were damaged or destroyed by flooding or wildfires. Most recently, the Experian Hardship funds have been utilised to provide our employees in India with additional financial hardship support, enabling them to access funds quickly for medical expenses, temporary housing and any other urgent needs. Experian’s executive remuneration policy Since the 2017 Remuneration Policy (Policy) vote, we have engaged proactively with our shareholders. Based on the valuable feedback received, we have made a series of changes and additional refinements over the last four years to further improve our executive remuneration structure. It was pleasing to see the strong level of shareholder support we received, for both our Policy and Remuneration Report, at the 2020 AGM. As we disclosed in last year's Report on Directors' Remuneration (RDR), the Committee considered it was appropriate to delay setting and disclosing 2020 LTI plan targets until later in 2020, when there was more clarity on the business impact of the global pandemic. The decision to delay setting 2020 LTI targets was driven by the Committee’s strong preference to set meaningful targets that were stretching but attainable even in the prevailing uncertain economic environment, rather than Stakeholder experience in FY21 Employees Investors Executives Experian Group No furloughing of staff Global employment maintained at 17,800 Pay freeze but no reductions to employee salary in FY21 No forced annual leave or reduced working hours Normal bonus entitlement for FY20 and FY21 Enhanced flexible working from home, to better support personal circumstances 97% employees globally working from home in FY21 3.2% global pay increase budget for FY22 US$700 Thank You Share Award with a further 2-for-1 matching opportunity Dividends of USc32.5 and USc14.5per share paid in July 2020 and February 2021, respectively Share price stability, 11% increase1 in FY21 No shareholder capital raising Pay freeze applied for FY21 Executive directors voluntarily waived 25% of their base salaries for six months in FY21 No adjustments to in-flight LTI awards No financial government support taken in any of our operating regions Protected strategic investments and executed all planned acquisitions to support future growth Experian is proud to have been in a position to provide pro bono support to national governments to enable COVID-19 relief to be directed to those most in need 1 Share price is the 12-month average to 1 April 2021 compared to 12-month average to 1 April 2020. Experian plc Governance Code principle Remuneration 113 relying on the Committee’s discretion to determine how much, if any, of the 2020 LTI awards would vest. We felt that this was a more transparent approach and we were pleased to receive investors' support for taking the additional time to set LTI targets that would be more motivational from the outset. The Committee first discussed a set of preliminary 2020 LTI targets at an ad-hoc meeting in September 2020. After further discussion, the finalised targets were agreed at the November 2020 meeting, and shortly afterwards we released a RNS announcement to confirm the full performance range that would apply to the 2020 LTI awards. At that time, we also issued a letter, to our major shareholders and the proxy advisory bodies, that provided them with some of the additional context outlined above. We were pleased with both the engagement and the support we received from investors in response to this letter. We continue to value the open and constructive nature of our shareholder engagement over recent years. It has been encouraging to receive feedback about the frequency and proactive spirit in which we engage. For full transparency we have provided the additional context we shared with investors in November 2020, and also some details on the key questions from shareholder discussions since then. Q&A Q: Can you provide some insight on any additional factors that shaped the Committee’s thinking in setting FY21 incentive plan targets? From the beginning of the pandemic, the Committee’s strong preference was to allow the Remuneration Policy to apply unadjusted, and not to apply discretion to any outstanding LTI awards. When 2020 LTI plan targets were set the vesting levels of the outstanding (2018 and 2019) LTI awards were – understandably – not anticipated to hit the projected pre-COVID-19 levels. While the Committee were not intending to apply any discretion to those outstanding awards – in that their formulaic vesting levels would simply prevail – it was felt inappropriate not to reflect the known impact of the global pandemic when setting targets for the awards granted in 2020. Therefore, the agreed 2020 LTI targets reflect the uncertainty and challenges of FY21 but, importantly, also our unchanged ambitions for the remainder of the three-year performance period. The strength of our conviction is demonstrated by the decision to retain our existing performance target ranges for three of the four metrics (Operating Cash Flow, Return on Capital Employed and Total Shareholder Return (TSR)) for the 2020 LTI plan awards. In order to set a motivational but stretching target range for the Benchmark Earnings Per Share (EPS) metric, we blended the anticipated impact on earnings in FY21 with a return to previous target ranges for the remaining two years of the three-year performance period. This resulted in an EPS performance range of 3% – 7% per year, over the three-year performance period, which is lower than our more recent performance ranges, but is still very stretching over the three-year period of the awards. We remain committed to our principle that executives are only rewarded for delivering strong financial results and outturns that are in our shareholders' best interests. We believe that the 2020 LTI performance range, which was set on a one-off basis, reflects this approach. It is also worth noting that a significant number of the plan participants are US-based. Therefore the ability to set credible, motivational targets plays an important role in the retention of key talent in the very dynamic US external market of data information and technology companies. Q: Have you made any redundancies as a result of COVID-19? No. In line with our normal practice we made changes to our business portfolio during the year and continued with organisation and technology transformation activities planned or announced in advance of FY21, and the onset of COVID-19. Overall we maintained the same total number of employees for this financial year as the previous one. As part of the implementation of any transformational activities, and as is our normal practice, we sought opportunities to redeploy employees wherever possible, and where this wasn’t feasible employees were provided with additional support, including enhanced severance terms, adjustment periods recognising local pandemic-related restrictions and outplacement resources. Q: Has Experian considered incorporating Environmental, Social and Governance (ESG) metrics into the executive incentive plans? In recent months a clear ‘direction of travel’ has emerged, with more investors raising this particular query. To date, we have felt that we have always taken our ESG agenda seriously and with appropriate focus such that there has not been a perceived necessity to include an ESG metric in our incentive framework. In recent years, we have consulted quite extensively on our performance metrics and the feedback from those engagements has shaped our current framework. As with any metric to be considered for inclusion in our incentive framework, we look for a strong strategic alignment and something that resonates with the Company's purpose. We will begin to discuss this topic in more depth in the coming year and consider how the important aspects of ESG should shape our remuneration arrangements. Q: What is Experian’s plan for aligning UK-based executive director pension provisions with the majority of the UK workforce? In line with our 2020 Remuneration Policy, any new UK-based executive director appointments would receive a cash pension allowance or pension contribution that is aligned with the majority of the wider UK employee workforce (currently an employer contribution of 10% of base salary). From 1 January 2023, the cash pension allowance of our incumbent UK-based executive directors (currently 20% of base salary) will be reduced to a cash pension allowance of 10% of base salary to align to the employer pension contribution of the majority of the wider UK employee workforce. Experian plc Annual Report 2021Governance 114 Report on directors’ remuneration continued FY21 performance FY21 at a glance Annual performance 7% revenue growth* 3% Benchmark EBIT growth* Stable 17,800 headcount1 Three-year performance 22% cumulative PBT per share growth 61% share price growth2 US$4.2bn cumulative benchmark operating cash flow over three years 7% average increase per annum in adjusted Benchmark EPS *At constant currency rates 1 Headcount as at 31 March 2021 (31 March 2020: 17,800). 2 Three-month average to 31 March 2021 of £25.58 compared to the three-month average to 31 March 2018 of £15.90. I am pleased to report that FY21 was a year of resilient and strong performance for Experian. The emergence of COVID-19 at the beginning of the financial year had a significant impact on our global operating environment, as national lockdowns were introduced in all our major markets. Despite the unprecedented challenges of FY21, the Group delivered growth across all our key financial metrics. Continuing to achieve growth in such economic circumstances reflects the robustness of our business strategy and importantly the ability to execute that strategy. In FY21, the Group achieved 7% total revenue growth, as well as strong levels of growth in Benchmark PBT per share 4% and Benchmark EPS 4%. Furthermore, these results are supported by a strong operating cash flow. It was undoubtedly a very different year for many businesses, and we took very conscious steps to ensure that we protected our people and our key strategic investments. With that backdrop, still being able to deliver positive Benchmark EBIT growth of 3% for FY21 is a reflection of both the resilience of our business and the commitment of our people. Our share price demonstrated a similar degree of resilience, as it remained stable over FY21. Whilst the delivery of financial results is undoubtedly very important, the Committee actively undertakes a holistic approach to the assessment of the Company’s performance by reviewing a broad range of metrics. These include – but not exclusively – employee engagement, diversity and inclusion, impact on the environment and consumer satisfaction. For FY21, there was even greater emphasis on the stakeholder experience of our employees and our investors during this pandemic year. Code principle Remuneration The Committee’s broader review of performance is always important to ensure that the financial outturns are a fair and true reflection of the Group’s overall performance over the period. Having considered a number of additional non-financial measures and the stakeholder experience at its May 2021 meeting, the Committee was satisfied that the Company’s financial performance was aligned with its holistic assessment of performance over the period. How is our performance reflected in executive pay? Salary: the Committee applied a pay freeze to executive director salaries for FY21. However, in recognition of the prevailing uncertainty and to acknowledge the difficult economic circumstances created by COVID-19 in the wider economy, each of the executive directors voluntarily waived 25% of their salary for six months in FY21. The Company determined it would be appropriate to donate a value equal to the salary waived by the executive directors to the Experian Employee Hardship Funds. Annual Bonus: the Committee always seeks to set stretching but attainable annual bonus performance targets that reflect our strong pay-for-performance philosophy. Incentivising the delivery of both EBIT and Revenue growth remained core to our ambitions, however being able to maintain the 'attainable', and hence motivational, aspect of the targets was more challenging given the level of prevailing uncertainty. Admittedly, those ambitions were rightly tempered by the need to protect jobs and maintain strategic investments, both of which were critical objectives for the Board as part of navigating this pandemic year. In FY21 both North America and Latin America once again delivered outstanding, high single-digit organic revenue growth, which built upon the resilient revenue performance in our other regions to deliver Group revenue performance growth, for annual bonus purposes of 5.8% (further information on page 120). This strong revenue performance, combined with returns on strategic investments and prudent financial management of expenses, ensured that this top-line growth flowed through to the Benchmark EBIT outturn for the year which, for annual bonus purposes, grew by 2.7%. Following a review of the Group’s financial performance and consideration of all business priorities, including those non-financial in nature, and having reflected on the assumptions underpinning the performance targets, the executive directors proposed an adjustment to the performance range. This resulted in a degree of downward discretion against the formulaic outturn. As a result of the combined revenue performance and Benchmark EBIT growth the overall bonus for FY21 will be paid out at 91.3% of maximum for each of the executive directors. Actual 91.3% Threshold 25% Target 50% Maximum 100% The Committee was satisfied that the revised level of bonus payout aligned fairly and accurately to the year’s achievements. Therefore, no further discretion (upward or downward) was deemed necessary. Full details of the annual bonus outcomes are set out in the Annual report on directors’ remuneration. Long-term Incentives: The Performance Share Plan (PSP) and Co-investment Plan (CIP) awards granted in 2018 will vest on 7 June 2021. The resilient financial performance in FY21 follows the strong performance of both FY19 and FY20. Over the last three years, Experian has achieved: 7% average increase per annum in adjusted Benchmark EPS US$4.2bn cumulative Benchmark operating cash flow over three years 22% cumulative Benchmark PBT growth 61% share price growth over three years These strong growth figures underpin the Experian 3-year TSR relative to FTSE 100 Index Experian FTSE 100 Index £200 £180 £160 £140 £120 £100 £80 March 2018 September 2018 March 2019 September 2019 March 2020 September 2020 March 2021 Experian plc Governance Code principle Remuneration 115 overall vesting levels of the PSP and of the CIP, which were 80% and 87% respectively. Whilst the impact of the pandemic in the final year of the performance period undoubtedly affected the potential performance outcomes that may have otherwise been achieved in FY21, no adjustments were made in assessing the performance outturns for the 2018 LTI plans. As with the annual bonus plan, the Committee considered the LTI vesting levels in the context of the current economic environment, and determined the formulaic vesting levels to be an appropriate reflection of the strong business growth achieved over the three-year performance period. In line with our remuneration principles, a substantial portion of the CEO’s single figure value is determined by long-term performance. For FY21 62% of the CEO’s single figure value is driven by the vesting levels of the LTI plans. Importantly, despite the prevailing economic uncertainty 18% of the total FY21 single figure value for the executive directors is directly attributable to share price growth and dividends. All shareholders, including shareholder employees, will also have benefitted from this same share price growth and dividend return over the same three-year period. Pay in the wider workforce Employee engagement As I mentioned in my 2020 statement, we have always felt well informed about the pay and related policy arrangements for the broader employee population at Experian. As the Committee had existing processes in place to gain an extensive understanding of employee pay, prior to the introduction of the 2018 UK Corporate Governance Code (the Code) requirements, no single approach recommended in the Code was considered appropriate for our business. We have therefore adopted a combination of the suggested methods to comply with the Code’s requirements. Each year, as part of the Committee’s standing agenda, we are provided with an extensive paper setting out details of all-employee pay and workforce policies across Experian. The discussions on this topic have enabled us to proactively incorporate wider employee pay as important context for framing executive pay considerations. This year, at the Committee’s request, we reviewed an additional paper providing greater insights into the remuneration and benefit arrangements, including gender pay positioning, in our major regions. The Committee were also provided with an update on a number of the policy enhancements and additional programmes introduced to support employees' well-being over the course of the COVID-19 pandemic. Understandably some of these policies varied by jurisdiction, however – as an example – some of the policies introduced to support our UK employees during the pandemic include: UK COVID-19 steps 99% UK employees working from home US$700 Thank You Share Award with a further 2-for-1 matching opportunity Normal bonus entitlement for FY20 and FY21 Extended carer's leave (doubled from five days to ten days) Full sick pay for all employees with COVID-19, regardless of tenure Flu vaccination vouchers available to all employees Enhanced access to Bupa medical care from home Virtual well-being and mindfulness sessions As I mentioned previously, I had the opportunity to further supplement the Committee’s understanding of the pay and related policies for the broader workforce by attending our virtual UK and Ireland Experian People Forum. I was very pleased that the virtual nature of the Forum this year didn’t hinder the level of engagement from employees and I found the two-way nature of the discussions to be very insightful. In the course of my discussions with the Forum it was clear that employees appreciated the open and honest communications received from senior leaders over the year. The feedback was that this transparency provided further comfort to employees that Experian would continue to protect both their jobs and their well-being, over the course of the pandemic. It was equally clear that employees continue to value our current reward offering, and that the additional benefits, such as critical illness cover and access to personalised financial well-being advice, which were introduced on the back of the UK Total Rewards Optimisation project were very well received. People and culture Creating an agile, innovative, high-performance culture has been, and continues to be, a huge focus for Experian as we look to maintain and further develop an environment that enables our employees to thrive and be successful. The Experian Way, our unique and consistent way of working globally, informs how our people act and behave, thus shaping our culture. Experian’s culture is a key enabler of our success and this was clear to see in FY21. The resilient performance delivered this year is a true testament to the strong collaborative culture at Experian, and the vibrancy of The Experian Way. The vibrancy plays out in many ways, one of which is our focus on innovation, which fuels the exploration of new opportunities and rapidly pivots our business to meet our clients' evolving needs. The collegiate nature of The Experian Way generated via our connected global network enabled us to deliver better results and leverage solutions across the Group – even though globally 97% of our employees understandably worked from home for the full financial year. The Committee takes a keen interest in the health of the Company’s culture and is regularly updated on the KPIs used to track and monitor Experian’s culture, including its People Survey results, Employee Engagement Score and our Net Promoter Score. For FY21, driven in part by the uncertainty of the global pandemic we replaced the annual People Survey with monthly, and then quarterly, pulse surveys. The ability to quickly identify and respond to some of the new and emerging challenges facing our employees proved invaluable in the development and provision of appropriate support for all our workforce. We appreciate that measuring culture is difficult but we have disclosed on the following page some quantitative culture-related data that we use to inform our own assessment on our culture, which can also help inform our investors and other stakeholders. Experian plc Annual Report 2021Governance Code principle Remuneration Experian diversity 2019 Senior leaders - women 32% 30% 31% 2021 2020 Total workforce - women 44% 44% 44% We strongly believe that diversity throughout the Group is a driver of business success and are working hard to reflect in our workforce the diversity of our customers, clients and the societies in which we operate. In the coming year we will be undertaking our first global employee census. This census is the first, very important, step to enable us to better understand and develop our diversity. One of our priorities is to nurture our talent pipeline and while we’re making strides in the right direction, we know we need to do more to increase the level of representation of women at senior levels. We are working very proactively to address this, including setting a target of women representing 40% of our senior leaders by 2024. For detailed information on diversity at Experian please see page 49. 116 Report on directors’ remuneration continued Experian attrition 2021 2020 2019 Voluntary turnover 10.1% 11.6% 12.3% Involuntary turnover 6.3% 7.2% 8.5% Total turnover 16.4% 18.8% 20.8% Partly as a result of our strong, collaborative working culture, which came to the fore in this pandemic year, employee turnover was comparatively low across the regions in which we operate. Our 2021 involuntary turnover was at its lowest level in recent years reflecting our focus on protecting jobs throughout the pandemic. As disclosed above, we have not made any redundancies as a result of COVID-19. The involuntary turnover for 2021 is driven by a combination of an employee's performance or cultural fit not aligning with Experian’s expectations together with a small proportion of agreed transformational activities being actioned later than originally planned due to the emergence of the global pandemic. Looking forward As we begin to emerge from an unprecedented year, we do so with a lot of positive momentum. Whilst the impact of the global pandemic is not yet behind us, we have a greater degree of certainty in the economic outlook compared with this time last year. The resilience, shown by both our business and our employees in FY21, stands us in great stead for future years. Our business strategy and our ambition to continue to deliver future growth remains unchanged. At the onset of the pandemic we made the decision to stay the course and did not make any changes to our Remuneration Policy or the metrics we use to assess performance. As I mentioned in last year's Report on directors’ remuneration, we believed then and we continue to believe now that this Policy is the best fit for our business and is a key contributor to the achievement of our strong financial results. In FY21, despite 97% of our global workforce working remotely, our employees maintained their productivity, creativity and collaboration to deliver a strong resilient financial performance. It is encouraging to hear positive employee feedback on the steps taken to support our workforce through the pandemic. I look forward to seeing how the experiences and learnings from this year will enable us to emerge strongly and take greater advantage of the return to a more normal operating environment. Experian employee composition headcount by employee type Full-time Part-time Temporary employees 4% Contractors 0% 2021 2020 2019 93% 94% 93% 3% 2% 4% 0% 3% 4% 0% Calculations based on the total number of permanent employees, fixed-term employees, contingent workers and independent contractors in FY21. The vast majority of our workforce is employed on a full-time basis by the Company, which fuels and amplifies our collaborative culture that employees continue to give very positive feedback on. Our employees receive a comprehensive benefits package, tailored to the region in which the individual is employed. We augment our permanent employees with a small number of temporary employees to enable us to respond quickly to specific client needs or broader business requirements. As I have said previously, we will continue to listen to and act on feedback from our shareholders, including how the important aspects of ESG should shape the metrics included in our remuneration approach. The inclusion of any metrics in our incentive framework is driven by their alignment to our strategic business objectives and our purpose of creating a better tomorrow for our customers, our clients, our employees and our shareholders. As always, we will engage with and seek feedback from our shareholders and the proxy advisory bodies as we consider any potential changes. In closing, I hope that I have provided some helpful insight and broader context on Experian's FY21 performance, that enables shareholders to support our Annual report on directors’ remuneration at the 2021 AGM. Experian plc Governance Code principle Remuneration Annual report on directors’ remuneration 117 Our executive remuneration at a glance Performance snapshot 7% 3% USc103.1 15% 83% Revenue performance* Benchmark EBIT growth* Benchmark EPS Return on capital employed Employee well-being** Performance measure Benchmark EBIT growth* Revenue performance growth Three-year Benchmark PBT per share growth* Three-year cumulative Benchmark operating cash flow* Three-year TSR relative to FTSE 100 Index Incentive plan Outturn Achievement (% of max) Annual bonus Annual bonus CIP/PSP CIP PSP 2.7%1 5.8%1 7.4% US$4.2bn 65% 1 For annual bonus purposes, see further information on page 120. * At constant exchange rates. ** Positive employee response to a global people survey question on the level of support provided by Experian during the pandemic. As a result of the performance shown above, the 2018 PSP vested at 80%, and the 2018 CIP vested at 87%. 90% 97% 73% 100% 100% Executive director single figure of pay Incentive awards timelines ’000 0 2,000 4,000 6,000 8,000 10,000 Grant Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Brian Cassin £7.6m Lloyd Pitchford £4.7m Kerry Williams US$8.0m Fixed elements of pay: Variable elements of pay: Base salary Annual bonus Pension and benefits Share-based incentives: value at grant Share-based incentives: value attributable to share price growth and dividend equivalent payments Annual bonus CIP PSP Performance period Holding period Share ownership Guideline Additional holding Brian Cassin Actual holding 13.5 x salary Lloyd Pitchford Actual holding 11.6 x salary Kerry Williams Actual holding 4.9 x salary 3 3 10.5 10.5 2 2 9.6 9.6 2 2 2.9 2.9 As at 31 March 2021 and calculated as outlined on page 127. Executive director remuneration arrangements for FY21 Our executive pay framework No salary increases awarded to executive directors for FY21. Pension contributions for new UK executive director appointments aligned with workforce immediately and incumbent executive directors will be aligned by the end of 2022. Annual bonus based on Benchmark EBIT (80%) and revenue performance (20%). The opportunity is 200% of base salary. Half of any payout must be deferred into the CIP for three years. CIP awards will be based on cumulative Benchmark operating cash flow (50%) and adjusted Benchmark EPS (50%). The maximum award remains a 2:1 match. PSP awards will be based on TSR (25%), ROCE (25%) and adjusted Benchmark EPS (50%) performance. The opportunity of 200% of base salary is unchanged. CIP and PSP awards will be subject to an additional two-year holding period. All incentive awards are subject to malus and clawback provisions. Existing in-employment shareholding guidelines will apply for two years post-employment. Annual bonus 80% Benchmark EBIT 20% Revenue CIP PSP 50% Adjusted Benchmark EPS 50% Adjusted Benchmark EPS 50% Cumulative Benchmark operating cash flow 25% ROCE 25% TSR Revenue growth is a key metric for us and will provide a quality of earnings balance to the important profit focus of Benchmark EBIT. The CIP is designed to incentivise cash discipline while the PSP is designed to incentivise shareholder returns. However, growth is the single most important aspect of our business strategy and therefore adjusted Benchmark EPS runs across both plans. Experian plc Annual Report 2021Governance 118 Annual report on directors’ remuneration continued Code principle Remuneration This Annual report on directors’ remuneration will be put to shareholders for an advisory vote at the AGM on 21 July 2021. The Remuneration Committee has prepared it on behalf of the Board in line with the UK Companies Act 2006, Schedule 8 to the UK Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended) and the Listing Rules of the UK Financial Conduct Authority. All of the sections which have been audited by the Company’s external auditor, KPMG, have been noted. What did we pay our executive directors in the year? (audited) The table below shows the single total figure of remuneration for the executive directors, for the years ended 31 March 2021 and 31 March 2020. Further explanatory information is set out below the table. Fixed pay Gross salary1,2 Salary waived 1,2 Post-waiver salary Post-waiver salary Benefits Pension Total fixed pay Performance-related pay Annual bonus3 Share-based incentives4 Value delivered through performance5 Value delivered through share price growth and dividends6 Total variable pay Total single figure of remuneration Brian Cassin 2021 £’000 973 (122) 851 851 24 194 1,069 1,776 3,351 1,364 6,491 7,560 2020 £’000 968 – 968 968 24 194 1,186 1,549 4,545 3,556 9,650 10,836 Lloyd Pitchford Kerry Williams 2021 £’000 600 (75) 525 525 23 120 668 1,096 2,067 841 4,004 4,672 2020 £’000 2021 US$’000 2020 US$’000 597 – 597 597 23 119 739 956 2,803 2,192 5,951 6,690 1,028 (128) 900 900 42 10 952 1,872 3,638 1,467 6,977 7,929 1,026 – 1,026 1,026 41 11 1,078 1,632 4,709 3,691 10,032 11,110 1 In FY21 our executive directors voluntarily waived 25% of their contractual base salary for six months. Gross salary is the base salary the executives would have received if they had not waived entitlement to a portion of their salary in FY21. The amounts of salary waived by Brian Cassin, Lloyd Pitchford and Kerry Williams in FY21 were £121,562, £75,000, and US$128,125 respectively. 2 For Kerry Williams, the salary also reflects the timing of US payroll payments. 3 The FY21 annual bonus opportunity is calculated as a percentage of the executive director’s contractual annual base salary. Brian Cassin, Lloyd Pitchford and Kerry Williams’ FY21 annual bonus entitlements were calculated on their contractual base salary amounts for the year of £972,500, £600,000 and US$1,025,000 respectively. 4 None of the executive directors exercised share options in the years ended 31 March 2021 or 31 March 2020. 5 Value delivered through performance is calculated as the number of vested performance shares multiplied by the share price on the date of grant. 6 For FY21, the value delivered through share price growth and dividends is calculated as (i) the difference between the average share price in the last three months of the financial year and the share price on the date of grant multiplied by the number of vested performance shares, plus (ii) dividend equivalent payments for the number of vested performance shares. For 2020, this is calculated based on (i) the difference between the share price on date of vest and the share price on the date of grant multiplied by the number of vested performance shares, plus (ii) dividend equivalent payments for the number of vested performance shares. How has the single figure been calculated? (audited) Salary Salary increases typically take effect from 1 June. However due to the economic uncertainty with the emergence of the global pandemic, the Committee determined it would be prudent to apply a pay freeze for executive directors in FY21. That same prudence meant that a pay freeze was applied to all employees across the Group and the financial benefit of that prudence enabled us to protect our employees and provide important support to them during this challenging year. In FY21, it is important to note that we did not apply any salary reductions to any of our employees. We did not furlough any employees, nor did we reduce anyone's working hours, or force any taking of annual leave. In recognition of the prevailing economic uncertainty and to acknowledge the difficult operating circumstances created by COVID-19, our executive directors voluntarily waived 25% of their contractual base salary for six months in FY21. The single figure represents the salary we paid to executive directors during the year, and as a result of the voluntary salary waivers their FY21 salary levels were lower than for FY20, as outlined below. Brian Cassin Lloyd Pitchford Kerry Williams 1 June 2020 ‘000 £973 £600 US$1,028 1 July – 31 December 2020 salary waiver ‘000 £122 £75 US$128 FY21 post-waiver salary ‘000 £851 £525 US$900 1 June 2019 ‘000 £973 £600 US$1,025 % increase 0% 0% 0% Experian plc Governance Code principle Remuneration 119 The value of salary voluntarily waived by Brian Cassin, Lloyd Pitchford and Kerry Williams was £121,562, £75,000, and US$128,125 respectively. It was decided that an amount equivalent to the value of salary waived by the executive directors should be donated to the Experian Employee Hardship Funds. These Funds are registered charitable organisations that support Experian employees globally by providing, for example, financial assistance to those employees whose homes were damaged or destroyed by flooding or wildfires. Benefits and pension Taxable benefits include life insurance, private healthcare and a company car, or car allowance. Brian Cassin and Lloyd Pitchford are eligible to participate in a defined contribution pension plan but elected not to do so during the year ended 31 March 2021. In 2021, Brian Cassin received a cash supplement of £194,500 (2020: £193,667), and Lloyd Pitchford received a cash supplement of £120,000 (2020: £119,500), in lieu of their pension contributions. Kerry Williams participates in a defined contribution plan (401k). The company contribution to this during the year was US$9,644 (2020: US$11,192). No executive director has a prospective right to a defined benefit pension. Annual bonus Overview All Experian employees participate in an annual bonus plan. We have one annual bonus plan in operation across Experian and the majority of our workforce participate in this plan. The remainder of employees participate in a sales commission plan. How the annual bonus plan works varies slightly depending on region and grade. For the vast majority of employees annual bonus awards are based on the performance of their particular business line or region. Executive directors are required to defer half of any bonus earned for three years through the CIP, although they may choose to defer more. This year, as in previous years, all three executive directors chose to voluntarily defer their full bonus payments into the CIP. Our annual bonus plan is based upon two performance metrics, which are Benchmark EBIT growth (80% weighting) and revenue performance (20% weighting). Benchmark EBIT is an important earnings metric and focuses on items directly within management’s control. To balance the important profit focus of Benchmark EBIT, revenue performance growth was added to the bonus plan in FY20 to provide an important quality of earnings element. How do we set the bonus targets? Performance-related pay is a key component of our reward structure for all employees and, as such, setting stretching targets is a critical focus area for the Committee. Every year we undertake a rigorous exercise to ensure that our targets are sufficiently stretching, taking into consideration the external marketplace and our own performance aspirations. The Committee is able to take a holistic approach to target setting as all our non-executive directors sit on the Remuneration Committee, as well as on all of our other principal Board Committees. This ensures Committee members are fully apprised of the wider business context and the Group’s business prospects over the coming years. As with many FTSE companies, our usual operating rhythm was significantly impacted by the onset of the global COVID-19 pandemic. When the Remuneration Committee considered the potential annual bonus targets for FY21, the coronavirus outbreak was in its early stages but dominating the landscape. It was incredibly difficult to predict the extent or duration of the pandemic and therefore the setting of the annual bonus targets was done in the hope that clarity on the impact of the pandemic on the global economy would quickly emerge. However, the scale of the impact of COVID-19 was not quickly apparent so the annual bonus targets were set with a backdrop of significant uncertainty. The Committee stuck to its principle of setting stretching but attainable performance targets that reflect our strong pay-for-performance philosophy. The challenge was to preserve the required motivational aspect of the targets in an unpredictable economic environment. It appeared to be very unlikely that we could – with credibility – set targets that took no account of the economic conditions and also give us the ability to deliver on the critical objectives of protecting jobs, supporting employees and maintaining strategic investments during the pandemic. The outlook was very uncertain as national lockdowns continued and vaccine development was in its infancy, but we made no changes to the annual bonus performance metrics in order to maintain our strategic focus on both revenue performance and EBIT growth. The targets reflected our philosophy of not rewarding negative growth – even during a global pandemic – and continuing to incentivise positive growth. Experian plc Annual Report 2021Governance 120 Annual report on directors’ remuneration continued Code principle Remuneration Outlined below are some of the additional factors the Committee considered in setting specific FY21 annual bonus targets: Revenue performance (20%): As a growth company, revenue is a key indicator of business vitality and was added to our annual bonus plan in FY20. This additional metric added a quality of earnings aspect to the important focus of EBIT growth. The culture of Experian has a strong performance-driven ethic and even in a contracting market we continued to focus on sustaining top-line growth, which was reflected in the performance target range for FY21. A maximum payout on the revenue element of the bonus would be earned for 6% revenue performance and target was set at 3% revenue performance growth. Benchmark EBIT (80%) The key FY21 priorities were preserving employment, supporting employees and protecting investment in key strategic and transformation areas that would enable us to emerge stronger from the pandemic and deliver continued future growth. We took a number of actions in FY21 to protect the business and support our employees, clients and other stakeholders through the pandemic. These actions included discretionary spend reductions, hiring and merit freeze and reprioritisation of capital expenditure and inorganic investments. The Committee fully supported the decision to prioritise employees and maintain strategic investment in FY21. The Committee recognised this would inevitably restrict our ability to fully optimise EBIT and this was reflected in the agreed targets. Target was set at maintaining flat full-year EBIT, over the course of the pandemic, increasing to maximum payout for 3% EBIT growth over the year. Given our commitment to growth, and our stance that no bonus should be paid for negative growth, the Committee agreed there was no threshold for FY21 EBIT. Annual bonus outcome Revenue performance is calculated as the Group total revenue growth after the removal of intra-Group sales, and Benchmark EBIT is based on ongoing activities. Performance is measured on a constant currency basis to strip out the effects of exchange rate fluctuations, which are outside of management’s control. The Committee also exclude the impact of any material acquisitions or disposals made in the year, to ensure both metrics are measured consistently, which is in line with our approach to long-term incentive plan measures. Whilst the headline numbers of revenue performance and Benchmark EBIT growth for FY21 were 7% and 3% respectively, the level of qualifying growth included for the purpose of calculating the annual bonus outturns was 5.8% and 2.7%, as shown in the table below. The table below shows our growth in Benchmark EBIT and revenue performance for bonus purposes relative to the FY21 agreed targets. Metric Benchmark EBIT growth Revenue performance growth Total annual bonus achievement as % target % growth required for threshold payout 0% 0% % growth required for target payout 1.5% 3% % growth required for maximum payout 3% 6% Weighting 80% 20% FY21 actual growth 2.7% 5.8% Annual bonus achievement 144% 39% 183% Before approving the annual bonus outcomes, the Committee discussed whether or not the proposed payout was appropriate in the context of both the current external environment and the Group’s wider business performance during the year. The original performance range for Benchmark EBIT growth was 0% – 3% between target and maximum payout. This performance range was set to be stretching at a time of great uncertainty regarding the impact of the global COVID-19 pandemic recognising that, given the challenging environment for target setting, it may be appropriate to apply a degree of discretion to better reflect a holistic view of performance over the year. As part of that holistic review of performance following the end of the year, it was agreed that the 0% – 3% performance parameters for Benchmark EBIT growth was appropriate for the challenging FY21 operating environment. However, reflecting on the assumptions underlying the setting of the performance target range in the context of actual performance in the financial year, it was agreed that it would be more appropriate to assess the outcome of this element against a 0% – 3% range from threshold to maximum (as shown in the table above), rather than from target to maximum. This meant that Benchmark EBIT growth of 0% would result in 0% payout under this element, with growth of 1.5% required to earn a target payout (50% of maximum). This discretionary adjustment to the effective performance range resulted in a reduction to the FY21 annual bonus outcome. As set out earlier in the Report, the Group’s performance in the year was extremely resilient in the context of the challenging external economic environment. The Committee agreed that the Company’s financial performance was aligned with their holistic assessment of performance over the period, which included non-financial factors such as our Net Promoter Score, employee experience, employee engagement results, direct employee feedback to the Committee Chairman at the People Forum, and the broader shareholder experience over the financial year. The Committee was also satisfied that it did not need to exercise any further discretion, and that the reduced level of bonus payout was appropriate for the performance delivered. The resulting annual bonus outcomes for each executive director (up to a maximum of 200% of contractual annual salary), for the year ended 31 March 2021 are set out in the table below. Brian Cassin Lloyd Pitchford Kerry Williams FY21 Bonus payout ‘000 £1,776 £1,096 US$1,872 Bonus payout % salary 183% 183% 183% % bonus deferred under the CIP 100% 100% 100% While the executive directors waived an entitlement to 25% of their contractual salaries for six months in FY21, their annual bonus entitlement was calculated – as is the case with all employees – based on their contractual annual salary entitlements, which are £972,500, £600,000 and US$1,025,000 respectively for Brian Cassin, Lloyd Pitchford and Kerry Williams. The bonus payout as a percentage of salary amounts above are based on these contractual salary entitlements, not the post-waiver salary amount the individual received in the year. Experian plc Governance Code principle Remuneration 121 Each of the executive directors has elected to defer their full bonus into Experian shares under the CIP for a three-year period. Deferred bonus shares are not subject to any further conditions but may be matched, subject to the conditions set out in the CIP awards section below. Share-based incentives The share-based incentive amount included in the single total figure of remuneration is the combined value of the CIP and PSP awards vesting in respect of the relevant financial year. For FY21 these relate to the awards granted on 7 June 2018 and for FY20 they relate to the awards granted on 7 June 2017. Vesting in 2021 for both the CIP and PSP awards is determined based on performance over the three years ended 31 March 2021 as well as continued service. The Committee has not exercised any discretion, or made any adjustments, in determining the vesting outcomes for the 2018 LTI awards. The 2018 LTI targets were set in May 2018, when our growth ambitions were to achieve sustainable high single-digit growth. Our strong performance in the first two years of the performance period, combined with our resilient financial performance in FY21, where we continued to grow despite the challenges presented by the global pandemic, resulted in the formulaic vesting results outlined in the table below. The Committee reflected not just on the financial performance delivered, but also on the experience of our investors and employees over the three-year performance period, and considered the formulaic results to be a fair and balanced outturn and, as such, did not make any adjustments to the vesting results. The tables below show the performance achieved against the targets for the CIP and PSP awards granted in June 2018: CIP awards Performance measure Benchmark PBT per share (annual growth) Cumulative Benchmark operating cash flow3 Total PSP awards Performance measure Benchmark PBT per share (annual growth) TSR of Experian vs TSR of FTSE 100 Index Total 1 Straight-line vesting between the points shown. No match Weighting 50% Below 5% 50% Below US$3.7bn Vesting1 1:2 match 5% US$3.7bn 1:1 match 6% US$3.8bn 2:1 match 9% US$4.1bn Actual 7.4% US$4.2bn Vesting1 Weighting 75% 25% 0% Below 5% Below Index 25% 5% Actual 7.4% Equal to Index 8.3% above Index 25% above Index 65% above Index 100% 9% 50% 6% Percentage vesting2 73% 100% 87% Percentage vesting4 73% 100% 80% 2 The maximum opportunity, which requires 100% vesting, results in a two-for-one match on the bonus deferred. 3 In line with the approach taken in previous years, the cumulative Benchmark operating cash flow targets shown above have been adjusted compared to those originally set to take into account the impact of acquisitions and disposals made over the performance period. The actual cumulative Benchmark operating cash flow over the performance period, of US$4.2bn, is determined on a constant currency basis. This is in line with our approach for all performance metrics, to ensure that awards are measured on a consistent basis. 4 The maximum opportunity was the original award with a face value of 200% of salary. Vesting of these awards was also subject to the Committee agreeing that the return on capital employed (ROCE) performance over the period was satisfactory. FY21 ROCE was 15%, and so the Committee was comfortable that the payout determined by applying the performance criteria was appropriate in the context of this level of performance. No discretion was applied in determining the share-based payments that vested in FY21. These awards had not vested at the date this report was finalised, and so the reported value of the awards has been based on the average share price in the last three months of the financial year, which was £25.58. The value of the awards included in the single total figure of remuneration is as follows: Brian Cassin Lloyd Pitchford Kerry Williams CIP Shares awarded 111,130 68,488 87,480 Shares vesting 96,294 59,344 75,801 PSP Shares awarded 100,699 62,173 79,354 Shares vesting 80,534 49,722 63,463 Value of shares vesting ‘000 £4,523 £2,790 US$4,911 Value of dividend equivalent payments ‘000 £192 £118 US$194 Total value of shares vesting and dividend payments ‘000 £4,715 £2,908 US$5,105 The value of Kerry Williams’ shares has been converted into US dollars at a rate of £1:US$1.379, which is the average rate during the last three months of FY21. Dividend equivalents of 139.25 US cents per share will be paid on vested shares. These represent the value of the dividends that would have been paid to the owner of one share between the date of grant and the date of vesting. Experian plc Annual Report 2021Governance 122 Annual report on directors’ remuneration continued Code principle Remuneration The chart below shows the make-up of the CEO’s FY21 single figure value, including £4.7m relating to the LTI. Of the £4.7m LTI value disclosed for the CEO, 71% is the value at grant, 4% is the value of dividend equivalent payments and 25% is a result of share price growth between the grant date and the average price over the last three months of the financial year – which grew by over 35%. The same proportions are true for the other executive directors. Breakdown of FY21 CEO Single Figure % Experian 3-year TSR relative to FTSE 100 Index Experian FTSE 100 Index 100% 80% 60% 40% 20% 0% 18% 18% 44% 44% 24% 24% 14% 14% FY21 Fixed Annual bonus Long-term incentives (LTI) vesting £200 £180 £160 £140 £120 £100 LTI – share price and dividends £80 March 2018 September 2018 March 2019 September 2019 March 2020 September 2020 March 2021 Update to 2020 disclosure We originally calculated the value of the share awards realised by our executive directors in 2020 using the average share price from 1 January 2020 to 31 March 2020, in line with the prescribed single figure methodology. This has now been revised to reflect the actual share price and exchange rate on vesting, as follows: Brian Cassin Lloyd Pitchford Kerry Williams Three-month average share price to 31 March 2020 £25.63 Estimated value of long-term incentive awards ‘000 £7,563 £4,663 US$7,934 Share price on vesting £27.53 Actual value of long-term incentive awards ‘000 £8,101 £4,995 US$8,400 What share-based incentive awards did we make in the year? (audited) On 11 June 2020, awards were granted to the executive directors under the CIP and PSP. The face value of awards made to Brian Cassin and Lloyd Pitchford is shown in pounds sterling; the face value of awards made to Kerry Williams is shown in US dollars. The number of shares awarded to Kerry Williams was calculated using the average exchange rate for the three days prior to grant of £1:US$1.27. All awards have been calculated using a three-day average share price. In line with the CIP rules, invested shares for Brian Cassin and Lloyd Pitchford were purchased with their bonuses net of tax. In line with the rules of The Experian North America Co-investment Plan, invested shares for Kerry Williams were calculated with reference to his gross bonus. Matching awards are based on the gross value of the bonus deferred. Details of these awards are set out in the following table: Type of interest in shares Basis of award Face value ‘000 Number of shares Vesting at threshold performance Vesting date Brian Cassin CIP invested shares CIP matching shares1 PSP2 Lloyd Pitchford CIP invested shares CIP matching shares1 PSP2 Kerry Williams CIP invested shares CIP matching shares1 PSP2 Deferred shares Nil-cost options Conditional shares 100% of net bonus 200% of value of gross bonus deferral 200% of salary Deferred shares Nil-cost options Conditional shares 100% of net bonus 200% of value of gross bonus deferral 200% of salary £821 £3,099 £1,945 £507 £1,912 £1,200 Deferred shares Conditional shares Conditional shares 100% of gross bonus 200% of value of gross bonus deferral 200% of salary US$1,631 US$3,262 US$2,050 30,202 113,971 70,335 18,636 70,325 43,394 47,285 94,570 58,426 n/a 25% 25% n/a 25% 25% n/a 25% 25% 11 June 2023 11 June 2023 11 June 2023 11 June 2023 11 June 2023 11 June 2023 11 June 2023 11 June 2023 11 June 2023 1 The number of shares awarded to executive directors under the CIP was based on the share price at which invested shares were purchased in the market and the face value shown above is based on this. This price was £27.19. 2 The number of shares awarded to executive directors under the PSP was based on the average share price for the three days prior to grant, which was £27.65, and the face value shown above is based on this. Experian plc Governance Code principle Remuneration 123 As disclosed in our 2020 Annual report on directors' remuneration, given the prevailing uncertainty in May 2020, when LTI targets would ordinarily be finalised, regarding the short- and longer-term impact of COVID-19, the Committee determined it appropriate to delay setting and disclosing 2020 LTI targets until later in the year. The chart below outlines the timeline and some of the factors the Committee considered when determining appropriate targets for the 2020 LTI plans. March 2020 May 2020 September 2020 November 2020 At its March meeting the Committee ordinarily has a preliminary discussion about possible targets for the forthcoming year. However, as a result of the timing of the global pandemic these discussions were delayed in anticipation of increasing clarity emerging about the likely global economic impact of COVID-19. The Committee discussed the emerging impact of COVID-19 on our operating environment in the context of a number of key factors including: The ambition to set stretching but attainable targets, that reflect the emerging operating and economic realities, which would therefore reduce the prospect of relying on discretion at vest and therefore providing clarity and transparency for investors. The population of our top talent (below Board level) that participate in the PSP/CIP plans with the same performance targets as the executive directors, and the need to attract, motivate and retain that talent in an increasingly competitive external market, particularly in North America. The Committee’s strong preference was to apply performance targets which reflect both (i) the current economic realities and (ii) our desire to rapidly return to the level of growth achieved in recent years. The Committee decided that, having considered our investor experience and our resilient share price performance to grant LTI awards in June 2020 but subject to performance conditions that would be determined later in the year. At the time of the June 2020 grant the share price had returned to pre-pandemic levels and the Committee was satisfied there would not be any windfall gains. At an additional meeting held in September the Committee began its initial discussion on potential 2020 LTI targets taking into account: Anticipated half-year financial performance, which provided a realistic view of the early impact of COVID-19 on our operating environment; Brokers' earnings estimates, which reflected the general economic uncertainty at the time and which were therefore across a wider range than normal; and Views on the longer-term economic outlook coloured by potential second waves of COVID-19 and by vaccine development. The Committee met again in November when the emergence of a second wave was clear and at this time there were no emerging breakthroughs on vaccinations or expectations for near-term resumption of normal economic environment. Based on the information available at that time and incorporating analysts' expectations the Committee set stretching but attainable targets. The targets set reflected the anticipated impact of COVID-19 on FY21 – while maintaining our unchanged ambitions for FY22 and FY23. Targets were disclosed via RNS announcement on 26 November 2020. Letters issued on 26 November to our top 20 shareholders, to provide additional context on the factors the Committee considered in setting the 2020 LTI targets. In determining 2020 LTI plan targets, the Committee sought to maintain our ongoing commitment to setting stretching targets while balancing this with the need to (i) take account of the realities of COVID-19 for FY21, (ii) reflect our ambition to return to high single-digit growth in FY22 and FY23, while also (iii) ensuring targets are motivational, particularly for critical talent below Board level who participate in the CIP and PSP. The Committee determined the best approach to balancing these needs was to set the EPS targets to reflect the impact of COVID-19 in FY21 while challenging management to return to high single-digit growth in FY22 and FY23 and retain the existing stretching three-year targets for all other metrics. We consider this approach achieves the appropriate balance of setting targets that are challenging but attainable, and our expectation is that this approach will enable the Committee to apply the Policy without the need to rely on discretion for in-flight awards, or to adjust the performance outcomes of this award going forward. PSP awards and CIP matching shares granted in June 2020 will vest subject to the achievement of the following performance conditions: Performance measure CIP matching shares Benchmark Earnings per share (average annual growth)2 Cumulative Benchmark operating cash flow PSP awards Benchmark Earnings per share (average annual growth)2 TSR of Experian vs TSR of FTSE 100 Index Weighting 0% Vesting1 25% 50% 100% 50% Below 3% 50% Below US$3.7bn 3% US$3.7bn 4% US$3.8bn 7% US$4.1bn 50% 25% Below 3% Below Index 3% Equal to Index 4% 8.3% above Index 15.4% 7% 25% above Index 16% Return on capital employed (average over three years) 25% Below 14.5% 14.5% 1 Straight-line vesting between the points shown. 2 Measured on an ongoing activities and constant currency basis. The Committee retains the right to vary the level of vesting if it believes that the level of vesting determined by measuring performance is inconsistent with the Group’s underlying financial and operational performance over the performance period. These awards will also only vest if the Committee is satisfied the vesting is not based on materially misstated financial results. Experian plc Annual Report 2021Governance 124 Annual report on directors’ remuneration continued Code principle Remuneration How is the CEO’s pay linked to Experian’s performance? The chart below shows Experian’s annual TSR performance compared to the FTSE 100 Index over the last ten years. The FTSE 100 Index is the most appropriate index as it is widely used and understood, and Experian is a constituent of the index. The chart also includes the CEO’s single figure value received in each of the years, to demonstrate the alignment between executive pay and shareholder experience. Value of £100 invested in Experian and the FTSE 100 on 31 March 2011 Experian FTSE 100 Index £450 £400 £350 £300 £250 £200 £150 £100 £50 £0 31 March 2011 31 March 2012 31 March 2013 31 March 2014 31 March 2015 31 March 2016 31 March 2017 31 March 2018 31 March 2019 31 March 2020 31 March 2021 The table below sets out our CEO’s pay for the last ten financial years: 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 CEO total single figure of remuneration (‘000)1 Don Robert Brian Cassin Annual bonus paid against maximum opportunity (%) Don Robert Brian Cassin LTIP vesting against maximum opportunity (%)2 Don Robert Brian Cassin US$23,206 US$22,974 US$16,290 — — — US$620 £1,976 — £3,678 — £3,647 — £6,387 — £11,882 — £10,836 — £7,560 100% — 100% — 75% — 100% — 50% — 94% — — 38% 69% 40% — 100% — 33% — 89% — 32% — 58% — 95% — 85% — 90% — 80% — 90% — 91% — 84% 1 Prior year numbers have been updated to reflect actual long-term incentive plan outcomes. 2 The maximum LTIP opportunity varies as the CIP opportunity is based upon the actual bonus earned. CEO pay ratio Experian is committed to good corporate governance and transparency in the reporting of remuneration for our executive directors and employees. We have presented below the CEO pay ratio for the year ended 31 March 2021, in line with the UK regulatory requirements. The pay ratios have been calculated using Option A of the three methodologies provided under the new regulations, which we believe is the most statistically accurate approach. Year 2020 2021 Method Option A Total pay and benefits Salary Option A Total pay and benefits Salary 25th percentile pay ratio 267:1 Median pay ratio 178:1 75th percentile pay ratio 112:1 £38,630 £33,362 185:1 £40,969 £32,569 £57,803 £47,869 124:1 £61,115 £49,983 £91,736 £77,000 81:1 £93,574 £75,000 The CEO value used is the total single figure remuneration data for FY21 of £7.6m, as outlined on page 118 of this Report. For UK employees, total pay and benefits are based on actual earnings for the year to 31 March 2021. Annual incentive payments for employees have been calculated using the Experian Group financial performance outcome for FY21, rather than any regional or market business performance results, to ensure a like-for-like comparison across remuneration structures. Selected employee grades below senior management level are also eligible for annual awards of restricted stock, rather than the performance share awards provided to senior management. Where applicable, the LTI value for employees has been calculated by applying the average share price for the three months prior to 31 March 2021 to the number of restricted stock awards granted to the employee in June 2018. We adopted this approach to provide a like-for-like comparison and ensure the share-price growth over the previous three years is reflected Experian plc Governance Code principle Remuneration 125 equally in both the CEO and employee LTI values. Employees on inbound and outbound international assignments to and from the UK have been excluded from the analysis as their remuneration structures understandably deviate from the standard approach for UK employees. In line with the guidance, only individuals employed for the full year have been included in the analysis. Observations on change in CEO pay ratio The FY21 CEO single figure has reduced by c.30% compared to FY20. By comparison the total pay and benefits provided to UK employees in FY21 increased slightly over the previous year and as a result the FY21 CEO pay ratios for all percentiles are lower than for FY20. As mentioned previously, the CEO voluntarily waived 25% of his salary for six months in FY21, resulting in a significantly lower salary for the CEO than the previous year. Conversely, the salary amounts received by employees in FY21 remained broadly consistent with FY20 as we did not reduce any employee salaries, make any COVID-19 related redundancies or furlough any employees. In the interest of transparency, and to provide a true comparison with FY20, if the CEO had not waived any of his salary in FY21 the CEO pay ratio percentiles would have been 188:1, 126:1 and 82:1. The primary driver behind the lower FY21 CEO pay ratio is the value of the LTI received by the CEO in FY21. While the value of LTI awards that vested in FY21 was very strong, particularly given the external operating environment during the final year of the performance period, no adjustments were made to the vesting outturns to account for the impact of the global pandemic. Therefore, the LTI value that the CEO received in FY21 was considerably lower than in the previous year. By way of comparison, the total pay and benefit amounts received by UK employees in FY21 is slightly higher than FY20 due to a combination of the US$700 Thank You Share Award and the introduction of additional benefit policies in FY21 as a response to employee feedback gathered as part of the UK Total Reward Optimisation project. The Committee believe it is appropriate that a significant proportion of total remuneration for executive directors is ‘at risk’ and driven entirely by Group performance, which is within their power to influence. In line with our remuneration principles the proportion of total compensation that is ‘at risk’ increases with employee seniority within the Group. The remuneration framework is designed to deliver market-competitive total compensation. All UK employees are also eligible to participate in the annual bonus plan, providing them with the opportunity to benefit from the financial performance that they help to deliver. Understandably more (71%) of the CEO’s total target remuneration is ‘at risk’ compared to c.8% on average for UK-based employees. As evidenced in FY21, the CEO pay ratio is therefore likely to vary, potentially significantly, over time based on the Group’s performance outcomes. Observations on FY21 pay ratio The median pay ratio for FY21 of 124:1 reflects not only the strong resilient performance achieved in this pandemic year, but also the exceptional performance achieved in the preceding two financial years, which are reflected in the CEO’s LTI vesting values. As LTI values can be highly variable, driven in part by fluctuations in share price, a supplemental pay ratio has been provided below, where the value of LTIs has been excluded. The CEO single figure value excluding LTI compensation was £2.9m for FY21. Year FY20 FY21 Method Option A excluding long-term incentives Option A excluding long-term incentives 25th percentile pay ratio 71:1 69:1 Median pay ratio 47:1 47:1 75th percentile pay ratio 30:1 30:1 Some important additional context regarding our FY21 CEO pay ratio includes: As mentioned in the Chairman's statement, we will be making a special one-off share recognition award to c.17,000 employees below senior management. Employees will be granted an initial share award of US$700, which will be matched on a 2:1 basis if employees continue to hold their shares for three further years. While the US$700 shares will not be granted until August 2021, the commitment to provide the award was communicated to all eligible employees in March 2021. As the award is a 'Thank You' for the commitment and dedication shown throughout FY21 and is not forfeitable, the US$700 initial share award has been included in the above analysis. Experian has been a Living Wage employer in the United Kingdom since 2015, and the median salary for UK employees (as reflected in the table on the previous page) is more than 50% above the UK average. The Committee always has the context of the all-employee pay review budget when determining salary increases for the CEO and ensures that any percentage increase for the CEO does not exceed that provided to employees. In FY21, the CEO’s salary reduced as he voluntarily waived 25% of his contractual salary for six months of the year, while UK employees’ base salary broadly remained the same as FY20. A global pay freeze was applied to all employees in FY21 but the average UK employee base pay did increase by 2.6% as a result of promotions etc. For FY22, the UK salary review budget is 2.5%, while the CEO’s salary will increase by 2.3%. An ‘individual performance modifier’ is applied in calculating the annual bonus payments for employees to ensure that the outstanding contributions of high-performing individuals is reflected through higher bonus payments. To ensure a like-for-like comparison with the CEO single figure, the employee calculations as outlined on the previous page do not reflect the impact of individual performance modifiers as they do not apply to senior management, including the CEO, which would have considerably increased the annual bonus payments for employees, as individual performance modifiers do not apply to senior management, including the CEO. We have also not included the value of our Sharesave scheme in the all-employee values on the previous page. We firmly believe in the value of employee share ownership and encourage employees to participate in our Sharesave offering, which is a tax-efficient plan in the UK and allows employees to share in Experian’s growth and success. Around 67% of UK employees participate in Sharesave and the average profit received by UK employees at maturity in FY21 was £5,125, but this value which has not been included in the all-employee values on the previous page. Experian plc Annual Report 2021Governance 126 Annual report on directors’ remuneration continued Code principle Remuneration How has our Board of directors' pay changed compared to the wider workforce? The table below sets out the percentage change in the Board of directors' salary/fees, benefits and annual bonus between FY20 and FY21, and how this compares to the average percentage change for our UK employees. While the Regulations require the employee comparison against employees of Experian plc, the proportion of our workforce employed by Experian plc is comparatively very small. We have therefore elected to provide the comparison against our UK employees which we believe will provide a more representative analysis. We have selected this group of employees because Experian operates in 44 countries and, as such, has widely varying approaches to pay across different regions. This approach also avoids the complexities involved in collating and comparing remuneration data across different geographic populations, including the impact of foreign exchange rate movements. The figures for UK employees are consistent with the information used to prepare the CEO pay ratio analysis, but reflect average salaries and average employee numbers each year, rather than percentile data. For the CEO, the annual bonus is based on Group performance. For UK employees, the annual bonus is based on the part of the business the individual works in. As outlined previously, the executive directors each waived 25% of their salaries for six months in FY21 and this is behind the year-on-year base salary change for Brian Cassin, Lloyd Pitchford and Kerry Williams. FY21 Base salary change Taxable benefits Annual bonus Year-on-year change in pay for directors compared to the average UK employee Executive directors Average employee 2.6% 7.1% 27.5% Brian Cassin -12% 1% 15% Lloyd Pitchford -12% 3% 15% Kerry Williams -12% 3% 15% Independent Chairman Mike Rogers1 21% n/a n/a Dr Ruba Borno -11% n/a n/a Non-executive directors Deirdre Mahlan -11% n/a n/a Caroline Donahue -14% n/a n/a Alison Brittain2 n/a n/a n/a Luiz Fleury -11% n/a n/a George Rose 0% n/a n/a 1 FY21 was Mike Rogers' first full year as Chairman and the change to his base salary is a result of his receiving a full year's fees. 2 Alison Brittain joined the Board on 1 September 2020 and did not receive any fees in FY20. How do we intend to implement the remuneration policy next year? Salary The table below outlines the salary increases that will take effect from 1 June 2021 for each Executive Director. The global employee salary review budget for FY22 is 3.2%, and for our employees in the UK and the USA the FY22 salary review budget will be 2.5%. Brian Cassin Lloyd Pitchford Kerry Williams 1 June 2021 ‘000 £995 £615 US$1,050 1 June 2020 ‘000 £973 £600 US$1,025 % increase 2.3% 2.5% 2.4% Annual bonus For the year ending 31 March 2022, the measures the executive directors are assessed on will remain unchanged from FY21. In line with our policy, we will disclose the targets for the annual bonus in next year’s Annual report on directors’ remuneration. While the FY22 annual bonus targets cannot be disclosed due to their commercial sensitivity they reflect our confidence in the outlook for the year ahead. Annual bonus will be subject to clawback provisions, allowing the Group to recover all or part of any payment for a period of three years from payment. In addition, the Committee can vary the level of payout if it considers that the formulaic payout determined by measuring performance is inconsistent with the Group’s actual underlying financial and operational performance. Performance is measured on a constant currency basis to strip out the effects of exchange rate fluctuations, which are outside of management’s control. The Committee also excludes the impact of any material acquisitions or disposals made in the year to ensure both metrics are measured consistently, which is in line with our approach to long-term incentive plan measures. Share-based incentives While deferral of 50% is compulsory, the executive directors have each elected to defer the full 100% of their FY21 bonuses into the CIP. We expect to grant matching shares in the first quarter of the year ending 31 March 2022, on a two-for-one basis. We also expect to grant PSP awards equivalent to 200% of salary at the same time. The CIP and PSP awards will vest subject to meeting the following targets, which will be measured over three years, with a further two-year holding period applying: Performance measure CIP awards Benchmark Earnings per share (average annual growth)2 Cumulative Benchmark operating cash flow PSP awards Benchmark Earnings per share (average annual growth)2 Return on capital employed Weighting 0% Vesting1 25% 50% 100% 50% Below 5% 50% Below US$4.0bn 5% US$4.0bn 7% US$4.2bn 10% US$4.4bn 50% 25% Below 5% Below 14.5% 5% 14.5% 7% 15.4% 8.3% above Index 10% 16% 25% above Index TSR of Experian vs TSR of FTSE 100 Index 25% Below Index Equal to Index 1 Straight-line vesting between the points shown. 2 Measured on an ongoing activities and constant currency basis. Experian plc Governance Code principle Remuneration 127 The Committee selected adjusted Benchmark EPS, cumulative Benchmark operating cash flow and ROCE as performance metrics for our long-term incentive plans, as they reflect three of our key performance indicators. As such, using these measures directly links Experian’s long-term incentive arrangements to our strategic aims and business objectives. In addition, using relative TSR recognises the importance of creating value for shareholders. We believe these measures to be the most appropriate measures of the Group’s success and, together with our annual bonus measures, they ensure that executive directors are incentivised to deliver on a wide range of business and financial measures over both the short and long term. The structure differentiates the role of each of our long-term incentive plans: the PSP incentivises returns and the CIP incentivises cash discipline. However, given that growth is so fundamental to our business strategy, Benchmark EPS runs across both of the long-term incentive plans. Vesting of CIP and PSP awards will be subject to the Committee being satisfied that the vesting is not based on materially misstated financial results. The Committee also retains the discretion to vary the level of vesting if it considers that the level of vesting determined by measuring performance is inconsistent with the Group’s underlying financial and operational performance. These awards will all be subject to clawback provisions, allowing the Company to recover all or part of any vested award during the holding period. TSR performance We measure our TSR performance relative to the FTSE 100 Index, rather than against a bespoke comparator group. Our usual comparator companies are Alliance Data Systems, CoreLogic, Dun & Bradstreet, Equifax, FICO, LiveRamp, Moody’s, RELX, Thomson Reuters and TransUnion, however we believe that it would be difficult to measure our TSR performance against them on a consistent basis, since many of them are listed in different markets and, as such, may be subject to different market forces. However, the Committee uses them as a reference point when reviewing other aspects of executive director pay. Additional disclosures Directors’ shareholdings and share interests (audited) We believe it is important that executive directors build up a significant holding in Experian shares, to align their interests with those of shareholders. Under our guidelines, the CEO should hold the equivalent of three times his or her base salary in Experian shares and other executive directors should hold the equivalent of two times their base salary. These guidelines include invested or deferred shares held under the CIP, but not matching shares. Shares that have vested but are subject to the two-year holding period will also count towards the guideline. Until the shareholding guideline is met, we expect executive directors to retain at least 50% of any shares vesting (net of tax) under a share award. Unvested shares do not count towards the guideline. We also have guidelines for non-executive directors to build up a holding in Experian’s shares equal to their annual fee. Each financial year, the net fee for the first quarter is used to purchase Experian shares until the non-executive director reaches this holding. As set out in the table below, our executive directors already significantly exceed their personal shareholding guidelines, demonstrating their personal alignment to shareholder interests as well as their commitment to Experian. To further strengthen this alignment post-employment, the Remuneration Committee introduced a two-year post-employment shareholding guideline as part of the 2020 Policy review. All executive directors that served during the year hold shares in excess of the relevant shareholding guidelines. The interests of the directors (at 31 March 2021) and their connected persons in the Company’s ordinary shares (as at 31 March 2021) are shown below and, for those individuals in the table below, there have been no changes between 31 March 2021 and the date of this report: Brian Cassin5 Lloyd Pitchford5 Kerry Williams6 Mike Rogers7 Dr Ruba Borno8 Alison Brittain9 Caroline Donahue Luiz Fleury Deirdre Mahlan George Rose Shares held in Experian plc at 31 March 2021 526,185 278,947 146,930 15,287 2,685 5,250 10,000 9,650 15,000 20,000 Shareholding guidelines Share awards subject to performance conditions Guideline 1 (% of salary/fee) 300% 200% 200% 100% 100% 100% 100% 100% 100% 100% Shareholding (% of salary)2 1,351% 1,161% 493% 96% 50% 97% 185% 179% 214% 231% Guideline met? Yes Yes Yes No No No Yes Yes Yes Yes CIP matching awards3 359,717 221,906 293,860 — — — — — — — PSP awards 252,154 155,615 205,118 — — — — — — — Share options4 — 1,470 — — — — — — — — 1 Executive director shareholding guideline will apply for two years post-employment. 2 Shareholding guidelines have been calculated using the closing share price on 31 March 2021, which was £24.97 and exchange rates at 31 March 2021 of £1:US$1.378 and £1:€1.1746. 3 Matching shares granted to Brian Cassin and Lloyd Pitchford are in the form of nil-cost options, which are unvested at 31 March 2021. Those granted to Kerry Williams are conditional share awards. 4 Share options granted under the all-employee Sharesave plan. 5 The number of Experian shares held by Brian Cassin and Lloyd Pitchford at 31 March 2021 includes 95,326 and 58,804 invested shares in the CIP respectively. 6 The number of Experian shares held by Kerry Williams at 31 March 2021 includes 146,930 shares awarded to him under The Experian North America Co-investment Plan as a result of his annual bonus deferral elections, in addition to his personal beneficial shareholding. Kerry Williams has an unconditional right to receive these Experian shares at the end of the relevant three-year deferral period. These shares do not carry dividend or voting rights prior to receipt. 7 Mike Rogers was appointed Chairman on 24 July 2019 and is continuing to build his shareholding. 8 Dr Ruba Borno joined the Board in 2018 and is still building up her shareholding. 9 Alison Brittain joined the Board on 1 September 2020 and is still building up her shareholding. Payments made to former directors (audited) Four former directors of Experian Finance plc (formerly GUS plc) received unfunded pensions from the Group. Two of the former directors are now paid under the Secured Unfunded Retirement Benefit Scheme, which provides security for the unfunded pensions of executives affected by the Her Majesty’s Experian plc Annual Report 2021Governance 128 Annual report on directors’ remuneration continued Code principle Remuneration Revenue & Customs (HMRC) earnings cap. The total unfunded pensions paid to the former directors was £833,581 in the year ended 31 March 2021. Payments for loss of office (audited) No payments for loss of office were made in the year (2020: nil). Relative importance of spend on pay The table below illustrates the relative importance of spend on pay for all employees, compared to the financial distributions to shareholders, through dividends and earnings-enhancing share repurchases: Employee remuneration costs Dividends paid on ordinary shares Estimated value of earnings-enhancing share repurchases 2021 US$m 1,995 427 — 2020 US$m 1,872 424 16 % change 6.6% 0.5% -100% The Remuneration Committee All our non-executive directors are members of the Committee, which met six times during the year ended 31 March 2021. Each member is considered to be independent in accordance with the UK Corporate Governance Code. The Committee’s terms of reference can be found at www.experianplc.com/about-us/corporate-governance/board-committees/. The Committee’s role and responsibilities The Committee is responsible for: 1 Recommending to the Board senior executive remuneration policy and the Chairman’s remuneration. 2 Determining individual remuneration packages for executive directors and certain senior executives. Committee activities During the year, the Committee: 3 Communicating with shareholders on remuneration policy. 4 Making recommendations to the Board on the design of the Group’s short- and long-term incentive plans. 5 Overseeing the Group’s executive pension arrangements. 6 Overseeing broader employee workforce policies. Reviewed and approved the 2020 Report on directors’ remuneration, and reviewed a draft of the 2021 Report on directors’ remuneration. Finalised the Remuneration Policy, which was put to shareholder vote at the 2020 AGM. Has continuously monitored the impact of COVID-19 on our business, and remuneration decisions taken across the Group, such as the decision to apply global pay freezes. Reviewed salaries of certain Group Operating Committee members and approved annual pay freezes for all Group Operating Committee members in FY21. Agreed the FY20 incentive plan outcomes, the FY21 bonus targets, and the long-term incentive plan participants. Received updates on the Company’s long-term incentive plans, including the impact of COVID-19 on these in-flight awards. Held an additional meeting in September 2020 to consider the impact of COVID-19 on our operating environment, its impact on our in-flight long-term incentive plan awards and to discuss performance targets for the 2020 long-term incentive awards. Discussed at length executive pay in the context of the wider workforce and the broader impact on society, the Group, and our shareholders. Was updated on all-employee pay and workforce policies across Experian. Following this update the Committee requested, and was provided with, detailed additional insights on all-employee pay, workforce policies and gender pay gap analysis in North America and Brazil, two of our key regions. Was updated on current trends in the executive remuneration environment, focusing on our key regions. Was updated on the Company’s FY21 gender pay gap disclosure requirement. The Committee had a robust discussion regarding the results and was provided with additional detailed analysis on Experian’s gender pay position. Was updated on the Company’s response to the UK CEO pay ratio disclosure requirement and reviewed the relevant disclosures. Initiated the invitation to employees to participate in the 2020 Sharesave plan, and was updated on take-up and outcomes of previous grants. Considered remuneration matters in respect of senior hires and departures and, where appropriate, approved remuneration packages for senior new hire awards below Board level. Reviewed the Committee’s performance during the year against its terms of reference; and Received feedback from the Chairman on the key topics discussed at the UK&I Experian People Forum. The Chairman of the Committee attended the Forum which was held virtually in March 2021, to engage with employees, discuss how Experian’s executive remuneration aligns with the wider Group pay policy, and understand employees’ views on pay-related issues. Experian plc Governance Code principle Remuneration 129 Advice provided to the Committee In making its decisions, the Committee consults the Chairman, the Chief Executive Officer and the Group Chief People Officer where required. We also invite members of the Global Reward team to attend Committee meetings as appropriate. We normally consult the Chief Financial Officer about performance conditions applying to short- and long-term incentive arrangements to ensure they are appropriately financially stretching. However, we do not consider it appropriate that executives are present when their own remuneration arrangements are being discussed. The Committee has access to independent consultants to ensure that it receives objective advice. We reviewed our external advisers in 2013 and appointed Towers Watson Ltd (Willis Towers Watson), who remained our external advisers throughout the year ended 31 March 2021. Willis Towers Watson provides other services to Experian globally, including advice on benefits and provision of market data. Additionally, both Mercer Kepler (from 1 April 2020 to 31 December 2020) and Ellason LLP (from 1 January 2021) provided incentive-plan award valuations and remuneration data, as well as supporting data for the target calibration process. Kepler does not provide any other services to the Group, although Mercer, Kepler’s parent company, does provide unrelated services to the Group. Ellason does not provide any other services to the Group. Willis Towers Watson, Mercer Kepler and Ellason are members of the Remuneration Consultants Group and voluntarily operate under the Code of Conduct in relation to executive remuneration consulting in the UK. The Committee was satisfied that their advice was objective and independent. The fees paid to these advisers for services to the Committee in the year ended 31 March 2021, based on hours spent, were as follows: Adviser Willis Towers Watson Mercer Kepler Ellason Fees paid in the year £44,900 £3,600 £9,750 What did we pay our non-executive directors during the year? (audited) The table below shows a single total figure of remuneration for the Chairman and non-executive directors for the years ended 31 March 2021 and 31 March 2020: Mike Rogers1 Dr Ruba Borno Alison Brittain (appointed 1 September 2020) Caroline Donahue Luiz Fleury2 Deirdre Mahlan George Rose Fees ‘000 2021 €465 €158 €92 €158 €210 €206 €254 2020 €385 €179 — €185 €256 €231 €254 Benefits ‘000 2021 — — — — — — — 2020 — — — — — — — Share-based incentives ‘000 2020 — — — — — — — 2021 — — — — — — — Total ‘000 2021 €465 €158 £92 €158 €210 €206 €254 2020 €385 €179 — €185 €256 €231 €254 1 Mike Rogers was appointed Chairman of the Board on 24 July 2019 and receives an annual fee for this role of €465,000. 2 Luiz Fleury acted as an independent adviser to Serasa S.A., our Brazilian business. His remuneration includes a fee for this role, paid in Brazilian reais, along with the annual non-executive director’s fee. Non-executive director fees are reviewed every two years and were last reviewed in 2019. The current fee levels are as follows: Base fee Audit Committee Chairman fee Remuneration Committee Chairman fee Deputy Chairman/Senior Independent Director fee Annual fee from 1 October 2019 €158,250 €47,750 €38,250 €95,500 Annual fee prior to 1 October 2019 €150,750 €45,500 €36,500 €91,000 Other than the Chairman, non-executive directors required to undertake intercontinental travel to attend Board meetings receive a supplementary payment of €6,000 per trip, in addition to any travel expenses. This amount has not changed since October 2009. No such payments were made in FY21 due to COVID-19 travel restrictions. George Rose holds the role of Chairman of the Remuneration Committee, in addition to his role as Senior Independent Director. George Rose does not receive an additional fee for his role as Chairman of the Remuneration Committee. Experian plc Annual Report 2021Governance 130 Annual report on directors’ remuneration continued Code principle Remuneration Statement of voting at the 2020 AGM The voting to approve the Annual report on directors' remuneration and the Directors’ remuneration policy at the AGM held on 22 July 2020 is set out in the following table: Annual report on directors’ remuneration Directors’ remuneration policy Votes for (including discretionary votes) % Number 93.5% 653,070,165 95.3% 651,717,394 Votes against % Number 6.5% 45,388,636 4.7% 31,847,208 Total number of votes cast Number of votes withheld 698,458,801 274,374 683,564,602 15,168,573 Service contracts Non-executive directors have letters of appointment that set out their duties and time commitment expected. They are appointed for an initial three-year term, subject to election and annual re-election by shareholders at the AGM. Appointments are renewed by mutual agreement. Details of current non-executive director arrangements as at 31 March 2021 are set out below: Name Mike Rogers (appointed Chairman on 24 July 2019) Dr Ruba Borno Alison Brittain Caroline Donahue Luiz Fleury Deirdre Mahlan George Rose Date of appointment 1 July 2017 1 April 2018 1 September 2020 1 January 2017 8 September 2015 1 September 2012 1 September 2012 Length of service at 31 March 2021 Years 3 3 0 4 5 8 8 Months 9 0 7 3 7 7 7 Executive directors’ service contracts contain a 12-month notice period, as set out in the Directors’ remuneration policy. Brian Cassin was appointed to the Board on 30 April 2012 as Chief Financial Officer, and 16 July 2014 as Chief Executive Officer. The date of appointment to the Board for Lloyd Pitchford was 1 October 2014 and for Kerry Williams was 16 July 2014. Experian plc Governance Code principle Remuneration Directors’ remuneration policy 131 The Directors’ remuneration policy was last approved by shareholders at the AGM on 22 July 2020. We have included below the Policy table and the ‘Which clawback provisions apply?’ section, which we consider to be the most helpful sections of the Policy for investors. The full and original version of the Policy, as approved by shareholders, is available on the Experian corporate website at www.experianplc.com/investors/reports. Element and link to strategy Base salary To help with attracting and retaining executive directors of the right calibre. Provides a base level of pay and reflects the competitive market salary for the role. Base salary level takes account of personal contribution and performance against Group strategy. Benefits Benefits are provided as part of a competitive and cost-effective overall remuneration package. Certain benefits may also be provided to support expatriates, where they have relocated. Pension Provides a market-aligned retirement provision. Operation Maximum potential value and payment at target Performance metrics and weightings Base salary is paid in equal instalments during the year. Salaries are reviewed annually, with any increases generally taking effect from 1 June. Salary levels and increases take into account a number of factors, including the approach to employee remuneration throughout the Group, prevailing economic conditions, best practice and positioning against the market. Annual executive director salary increases will, in normal circumstances, be limited to the increases awarded across the Group as a whole. Higher increases may be made in exceptional circumstances including, but not limited to, a change in role or responsibility, and will take account of market practice in relation to the new role. When the Committee considers salary increases, it takes into account individual performance over the preceding financial year. The Group provides a range of market-competitive benefits that include, but are not limited to, healthcare, financial and tax advice, death-in-service provision and company car or allowance. Executive directors can also participate in any of the Group’s all-employee share plans, for example the Sharesave plan, on the same basis as other eligible employees. In the USA, eligible executive directors may participate in a deferred compensation plan, which is standard market practice in the USA. For expatriate assignments, we retain the flexibility to tailor benefits to the circumstances of the assignment. Additional benefits may include relocation expenses at the beginning and end of each assignment, housing allowance and school fees. Pension arrangements are in line with local market practice. In the UK, the Group operates a defined contribution plan, with company contributions set as a percentage of base salary. If impacted by HMRC pension limits, an individual may elect to receive a cash allowance instead. In the USA, executive directors are eligible to join a defined contribution plan. None. The cost of providing such benefits may vary from year to year, reflecting the cost to the Group. The Committee sets benefits at a level it considers appropriate against relevant market practice, the role and particular circumstances (for example, in the case of expatriate benefits, where the individual is required to relocate). None. In the UK, the cash payment or pension contribution for current executive directors is normally equal to 20% of annual gross base salary. Future UK-based executive directors will receive a cash payment or pension contribution aligned to the wider UK employee workforce (to apply to all incumbents by the end of 2022). In the USA, the contribution rate is up to 4% of earnings, up to an annual compensation limit set by the Internal Revenue Service. If required, pension arrangements in other jurisdictions would be in line with local market practice. Experian plc Annual Report 2021Governance 132 Directors’ remuneration policy continued Code principle Remuneration Element and link to strategy Annual bonus Motivates and rewards the achievement of specific annual objectives, linked to Experian’s business strategy. Co-investment Plans Aligns with shareholder interests through voluntary investment of personal capital, delivery of Experian shares and the long-term time horizons. Use of stretching financial metrics incentivises performance. Encourages participants’ long-term commitment to the Group through personal investment. Performance Share Plan Use of stretching financial metrics incentivises performance. Aligns with shareholder interests through delivery of shares and the long-term time horizons. Operation Maximum potential value and payment at target Performance metrics and weightings The Committee sets appropriate performance targets at the start of each financial year. At the end of the financial year, the Committee determines the extent to which these have been satisfied, based on audited results, and agrees the level of bonus to be paid. Half of any bonus must be deferred for a period of three years. However, the executive director may elect to defer up to 100% of their bonus into the CIP. Where they elect not to do so, payment is made as soon as practicable after the financial year end. Malus and clawback provisions apply, under which annual bonus payments may be reduced or recovered in certain circumstances. Further details about our clawback and malus policy are set out in the Which clawback provisions apply? section of the report. Threshold performance results in a bonus payout equivalent to 25% of the maximum. No bonus is payable for below-threshold performance. Achieving target performance results in a bonus payout equivalent to 50% of the maximum. Achieving maximum performance results in full bonus payout of 200% of salary. Participants are invited to invest between 50% and 100% of their annual bonus into Experian shares. A conditional award of matching shares or nil-cost options is granted on a two-for-one basis on the gross bonus deferred, and vests after three years subject to achieving performance targets over the three-year period. Any vested awards are subject to a further two- year holding period. Dividend equivalents accrue on all awards of shares. Malus and clawback provisions apply, under which CIP awards may be reduced or recovered in certain circumstances. Further details about our clawback and malus policy are set out in the Which clawback provisions apply? section of the report. Maximum award levels depend on the bonus deferred, which will be matched on up to a two-for-one basis. There is no vesting for below- threshold performance. Achieving threshold performance results in 25% vesting of the matching shares. Achieving target performance results in 50% vesting of the matching shares. Achieving maximum performance results in full vesting of the matching shares. Participants receive an annual award of conditional shares or nil-cost options, which vest after three years, subject to achieving performance targets over the three-year period. Any vested awards are subject to a further two-year holding period. Normal maximum award levels are 200% of salary. Awards of up to 400% of salary may be made in exceptional circumstances such as recruitment. Dividend equivalents accrue on all awards of shares. Malus and clawback provisions apply, under which PSP awards may be reduced or recovered in certain circumstances. Further details about our clawback and malus policy are set out in the Which clawback provisions apply? section of the report. There is no vesting for below- threshold performance. Achieving threshold performance results in 25% of the shares vesting. Achieving maximum performance results in full vesting of the shares. The annual bonus may be based entirely on financial performance or on a combination of financial, strategic and/or operational objectives. However, the financial element will comprise at least 70% of the bonus. The Committee retains the ability to exercise its judgment to vary the level of payout if it considers that the formulaic payout determined by measuring performance is inconsistent with the Group’s actual underlying financial and operational performance. Awards vest based on financial performance and subject to the Committee being satisfied that the vesting is not based on materially misstated financial results. The Committee retains the discretion to exercise its judgment to vary the level of vesting if it considers the formulaic vesting level determined by measuring performance to be inconsistent with the Group’s actual underlying financial and operational performance. Vesting of up to 25% of the awards is based on a share-based metric, with the balance based on financial performance. The Committee retains the ability to vary the level of vesting if it considers the formulaic vesting level determined by measuring performance to be inconsistent with the Group’s actual underlying financial and operational performance. Experian plc Governance Code principle Remuneration 133 Element and link to strategy Shareholding guideline To preserve and enhance the long-term alignment of the interests of executive directors with shareholders and promote a long-term approach to performance and risk management. Operation Maximum potential value and payment at target Performance metrics and weightings During employment: N/A N/A Executive directors are required to establish and maintain a minimum personal shareholding equal to 3x base salary for the CEO and 2x base salary for other executive directors. Executive directors are required to retain at least 50% of any shares vesting under the CIP and PSP (net of tax) until their during-employment shareholding guideline has been met. Shares held beneficially, shares subject to a post-vesting holding period and invested or deferred CIP shares will count when assessing the guideline. Share awards that are still subject to performance conditions and matching shares under the CIP are not included. Post-employment: For two years following cessation, (former) executive directors will be required to retain the lower of: their actual shareholding immediately prior to cessation; and their shareholding guideline immediately prior to cessation. In determining the actual shareholding at cessation, shares acquired from own purchases will not be counted. Independent Chairman and non-executive director (NED) fees To attract individuals with a broad range of experience and skills, to oversee the implementation of our strategy. The Chairman is paid an annual fee in equal monthly instalments. The Group may provide the Chairman with a limited range of benefits such as healthcare, tax advice or use of a car. The NEDs are paid a basic fee plus additional fees for chairing a Board Committee and for the role of Deputy Chairman or Senior Independent Director. NED fees are paid in equal quarterly instalments during the year. The net fee for the first quarter of the financial year is used to purchase Experian shares for NEDs and/or the Chairman (as applicable), until the individual has met their shareholding guideline of 1x their estimated annual fee (excluding travel fees). The Committee sets the Chairman’s fees, while NED fees are set by the Board. Both are set based on a number of factors, including the time commitment required and positioning against the market. Fees are normally reviewed every two years. No performance-related arrangements are in place for the Chairman or the NEDs. NEDs receive an additional fee where attendance at Board meetings involves intercontinental travel from their home location. The Company may settle any tax due on travel expenses incurred by the Chairman and NEDs. Share Option Plan (SOP) Provides focus on increasing Experian’s share price over the medium to longer term. The vesting of options is based on financial performance targets. Options are granted with an exercise price equivalent to the market value of an Experian share at the date of grant. These vest subject to achieving performance targets that are tested over a three-year period and are exercisable for seven years thereafter. No option grants have been made since 2009 and the Committee has agreed that no further awards will be made, unless warranted by exceptional circumstances such as recruitment. Malus and clawback provisions apply, under which SOP awards may be reduced or recovered in certain circumstances. Further details about our clawback and malus policy are set out in the Which clawback provisions apply? section of the report. Normal maximum award levels are 200% of salary. Grants of up to 400% of salary may be made in exceptional circumstances such as on recruitment. There is no vesting for below- threshold performance. Achieving threshold performance results in 25% of the options vesting. Achieving maximum performance results in full vesting of the options. Experian plc Annual Report 2021Governance 134 Directors’ remuneration policy continued Code principle Remuneration Which clawback provisions apply? Clawback and/or malus applies to the Company’s incentive plans for five years from grant. Under these provisions, the Committee may apply clawback or malus in circumstances which have: resulted in a level of vesting or payment which is higher than would otherwise have been, because of a material misstatement of the Group’s financial results; or led to a material financial or reputational loss for the Group, due to serious individual misconduct. Under our malus and clawback policy, should a trigger event be identified, a Clawback Committee would be appointed by the Remuneration Committee to investigate the issue. The Clawback Committee would report back with recommendations on whether malus and/or clawback should be applied, which individuals this should affect, which remuneration should be subject to malus and/or clawback and the value that should be impacted. The Remuneration Committee would then have final sign-off on any decision to operate clawback or malus. Legacy arrangements The Committee reserves the right to make any remuneration payments and payments for loss of office (including exercising any discretions available to it in connection with such payments) notwithstanding that they are not in line with the policy set out in this report where the entitlement to the payment arose (i) before the 2020 AGM; (ii) at a time when the relevant individual was not a director of the Company and, in the opinion of the Committee, the payment was not in consideration for the individual becoming a director of the Company; or (iii) under a remuneration policy previously approved by the Company’s shareholders. For these purposes entitlements arising under the Company’s current remuneration policy (as approved by shareholders at the 2017 AGM) will be incorporated into this policy and ‘payments’ includes the Committee satisfying awards of variable remuneration, and an entitlement under an award over shares arises at the time the award is granted. On behalf of the Remuneration Committee Charles Brown Company Secretary 18 May 2021 Experian plc Governance Directors' report 135 The directors present their report and the audited financial statements for the year ended 31 March 2021. The report has been prepared in line with the UK Companies Act 2006, and the Corporate governance report and the Shareholder and corporate information section form part of this Directors’ report. The Strategic report contains certain information equivalent to that required in a report of the directors. Financial and operational information Results and dividend The Group income statement shows a profit for the financial year ended 31 March 2021 of US$802m (2020: US$677m). The directors have announced the payment of a second interim dividend, in lieu of a final dividend, of 32.5 US cents per ordinary share (2020: 32.5 US cents) to be paid on 23 July 2021 to shareholders on the register of members on 25 June 2021. A first interim dividend of 14.5 US cents per ordinary share was paid on 5 February 2021, giving a total dividend for the year of 47.0 US cents per ordinary share (2020: 47.0 US cents). Innovation Innovation, supported by our talented people, and by research and development, plays a key role in supporting Experian’s business performance. Details of such activities are given in the Strategic report. Acquisitions Information in respect of acquisitions made during the year is contained in note 41 to the Group financial statements. Registered branch The Company has a branch registered in Ireland under branch number 905565. Post balance sheet events Details of events occurring after the end of the reporting period are contained in note 45 to the Group financial statements. Share capital Details of the Company’s share capital and changes during the year ended 31 March 2021 are set out in note P to the Company financial statements. Financial risk management, objectives and policies Descriptions of the use of financial instruments and Experian’s treasury and risk management objectives and policies are set out in the Financial review within the Strategic report and also in note 7 to the Group financial statements. Political donations Experian did not make any political donations during the year ended 31 March 2021. Going concern Details of the adoption of the going concern basis in preparing the Group financial statements are set out in note 2 to the Group financial statements and are incorporated into this report by reference. Directors Information on directors holding office in the year The directors’ names, biographical details, and skills and experience are shown in the Board of directors section. Alison Brittain was appointed as an independent non-executive director on 1 September 2020 and Jonathan Howell was appointed as an independent non-executive director with effect from 1 May 2021. Particulars of directors’ remuneration, service contracts and interests in the Company’s ordinary shares are shown in the Report on directors’ remuneration. There were no changes in the directors’ (as at 31 March 2021) interests in the ordinary shares between the end of the financial year and 18 May 2021. In line with the UK Corporate Governance Code, as at the date of this report, all directors, being eligible, will offer themselves for election or re-election at the 2021 AGM. An evaluation of the performance of the Board, its committees and individual directors was carried out during the financial year. The Board is satisfied that all directors seeking election or re-election contribute effectively and demonstrate commitment to their roles. The Corporate governance report contains further details of the evaluation process. Insurance and third-party indemnification During the year and up to the date of approval of this Annual Report, the Company maintained liability insurance and third-party indemnification provisions for its directors and officers. Appointment and removal of directors Both the Company, by ordinary resolution, and the directors may elect any person to be a director. The number of directors shall not exceed the maximum number fixed by the Company’s articles of association. Any person appointed by the directors shall only hold office until the next AGM and shall then be eligible for election. The office of a director shall be vacated on the occurrence of any of the events listed in article 92 of the Company’s articles of association. The Company may, in accordance with its articles of association, remove any director from office and elect another person in their place. Experian plc Annual Report 2021Governance 136 Directors' report continued Annual General Meeting The Company’s 2021 AGM will be held in Dublin, Ireland, on Wednesday 21 July 2021. Shareholders may submit questions beforehand via email to agmquestions@experianplc.com or on the prepaid card sent to shareholders with the notice of meeting. The questions will be addressed at the meeting, via the Company’s website at www.experianplc.com or individually as appropriate. The notice of meeting has been circulated to shareholders and can also be viewed on the Company’s website. Share capital information Rights and obligations The rights and obligations attaching to the ordinary and deferred shares are set out in note P to the Company financial statements and in the Company’s articles of association, a copy of which can be obtained from the Experian website, www.experianplc.com. The Company’s articles of association may be amended by passing a special resolution. ADR programme The Company has a Level 1 American Depositary Receipt (ADR) programme in the USA, for which The Bank of New York Mellon acts as depositary. The ADRs are traded on the highest tier of the US over-the-counter market, OTCQX, with each ADR representing one Experian plc ordinary share. Further details are given in the Shareholder and corporate information section. Substantial shareholdings The Company’s articles of association oblige shareholders to comply with the notification obligations contained in the UK Disclosure Guidance and Transparency Rules sourcebook. As at 18 May 2021, the Company had been notified of the indirect interest below in its issued ordinary share capital or voting rights in respect of the year. Restrictions on transfers of shares and/or voting rights The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities and/or voting rights and, apart from the matters described below, there are no restrictions on the transfer of the Company’s ordinary shares and/or voting rights: Certain restrictions on transfers of shares may from time to time be imposed by, for example, share dealing regulations. In certain situations, directors and certain employees are required to seek the Company’s approval to deal in its shares. Some of Experian’s share-based employee incentive plans include restrictions on the transfer of shares, while the shares are subject to the plan concerned. As described in the Report on directors’ remuneration, non-executive directors must hold a proportion of their fees in shares, equal to their annual fee. These shares may not normally be transferred during their period of office. Where participants in a share-based employee incentive plan operated by Experian are the beneficial owners of the shares but not the registered owner, the voting rights are normally exercised by the registered owner at the direction of the participants. Shares carry no voting rights while they are held in treasury. The deferred shares in the Company carry no voting rights. Unless the directors determine otherwise, members are not entitled to vote personally or by proxy at a shareholders’ meeting, or to exercise any other member’s right in relation to shareholders’ meetings, in respect of any share for which any call or other sum payable to the Company remains unpaid. Unless the directors determine otherwise, members are not entitled to vote personally or by proxy at a shareholders’ meeting, or to exercise any other member’s right in relation to shareholders’ meetings, if the member fails to provide the Company with the required information concerning interests in those shares, within the prescribed period after being served with a notice under the Company’s articles of association. The Company’s articles of association state that, except for certain limited circumstances, if the number of shares in the Company beneficially owned by residents of the USA exceeds a defined permitted maximum and the directors give notice to the holder(s) of such shares, the shares do not give their holder(s) the right to receive notice of, attend or vote at the Company’s general meetings. Details of deadlines in respect of voting for the 2021 AGM are contained in the notice of meeting that has been circulated to shareholders and which can also be viewed at the Company’s website. Purchase, cancellation and holdings of own shares The existing authority for the Company to purchase its own shares was given at the AGM held on 22 July 2020. It permits the Company to purchase 90,830,113 of its own shares in the market. On 8 June 2020, the Company transferred 944,435 ordinary shares from treasury to Computershare Investor Services plc and Computershare Trustees (Jersey) Limited, the administrator and trustee respectively of Experian’s share plans, for nil consideration, to be used to meet obligations under employee share plans. On 29 June 2020, the Company transferred 7,202,137 ordinary shares from treasury as consideration for a majority stake in a German credit bureau, the Risk Management division of Arvato Financial Solutions (AFS). As at the date of approval of this Annual Report, the Company holds 52,278,013 (2020: 60,424,585) of its own shares as treasury shares, and had an unexpired authority to purchase up to 90,830,113 of its own shares. Details of the new authority being requested at the 2021 AGM are contained in the circular to shareholders, which either accompanies this Annual Report and/or is available on the Company’s website at www. experianplc.com. Details of the shares in the Company purchased by and held under The Experian plc Employee Share Trust and the Experian UK Approved All Employee Share Plan are set out in note Q to the Company financial statements. Substantial shareholdings Date of notification 24 September 2020 Shareholder Massachusetts Financial Services Company Number of ordinary shares/ voting rights 45,727,422 Percentage of issued share capital/voting rights 4.99% Experian plc Governance 137 Significant agreements – change of control The Group is party to a number of agreements that take effect, alter, terminate, or have the potential to do so, upon a change of control of the Company following a takeover bid. These agreements are as follows: The Group’s banking facilities contain provisions which, in the event of a change of control, could result in their renegotiation or withdrawal. The Group’s Euronotes allow holders to require repayment of the notes, if a rating agency re-rates the notes to below investment grade, following a change of control. All of Experian’s share-based employee incentive plans contain provisions relating to a change of control. Outstanding awards and options would normally vest and become exercisable, subject to satisfaction of any performance conditions at that time. The Group is party to a limited number of operational arrangements which can be terminated or altered upon a change of control of the Company, but these are not considered to be individually significant to the Group’s business as a whole. In certain cases, it is considered that their disclosure would be seriously prejudicial to the Company. Employment information Employment of people with disabilities People with disabilities have equal opportunities when applying for vacancies. In addition to complying with legislative requirements, the Group has procedures to ensure that it treats disabled employees fairly and carefully manages their training and career development needs. The policies are considered to operate effectively. The Group supports employees who become disabled during the course of their employment, by offering re-training or re-deployment, to enable them to remain with the Group whenever possible. Employee involvement Experian is committed to employee involvement throughout the business. The Group is intent on motivating staff, keeping them informed on matters that concern them in the context of their employment, and involving them through local consultative procedures. Where there are recognition agreements with trade unions, the consultation process is established through national and local trade union representatives and through joint consultation committees. Employees are kept well informed on matters of interest and the financial and economic factors affecting the Group’s performance. This is done through management channels, conferences, meetings, publications and intranet sites. More detail on employee engagement, together with information on corporate responsibility, diversity, succession planning and talent development, can be found in the Our sustainable business strategy: Environmental, Social and Governance section of the Strategic report. Experian supports employee share ownership by providing, whenever possible, employee share plan arrangements which are intended to align employees’ interests with those of shareholders. Auditor information Relevant audit information As at 18 May 2021, so far as each director is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing the audit report, of which the auditor is unaware, and each director has taken all steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the auditor is aware of that information. Independent auditor The auditor, KPMG LLP, has indicated its willingness to continue in office and a resolution that it be re-appointed as the Company’s auditor will be proposed at the AGM. Statement of directors’ responsibilities The directors are responsible for: Preparing the Annual Report, the Group and Company financial statements in accordance with applicable law and regulations. The directors have decided to prepare voluntarily a directors’ remuneration report in accordance with Schedule 8 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 made under the UK Companies Act 2006, as if those requirements applied to the Company. Preparing financial statements which give a true and fair view of the state of affairs at the balance sheet date, and the profit or loss for the period then ended of (a) the Group (in accordance with IFRSs as adopted for use in the European Union), and (b) the Company (in accordance with UK Accounting Standards including FRS 101 ‘Reduced Disclosure Framework’). Keeping sufficient accounting records which disclose, with reasonable accuracy, at any time the financial position of the Group and the Company and enable them to ensure that the Group financial statements comply with applicable laws. Maintaining such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and the Company and to prevent and detect fraud and other irregularities. The maintenance and integrity of the statutory and audited information on the Company’s website. Jersey legislation and UK regulation governing the preparation and dissemination of financial statements may differ from requirements in other jurisdictions. In addition, the directors consider that, in preparing the financial statements: suitable accounting policies have been selected and applied consistently; judgments and estimates made have been reasonable, relevant and reliable; the Group financial statements comply with IFRSs as adopted for use in the European Union, subject to any material departures disclosed and explained in the financial statements; Experian plc Annual Report 2021Governance 138 Directors' report continued the Group’s and Company’s ability to continue as a going concern has been assessed and, as applicable, matters related to going concern have been disclosed; the Company financial statements comply with UK Accounting Standards including FRS 101 ‘Reduced Disclosure Framework’; and it is appropriate that the Group and Company financial statements have been prepared on the going concern basis, unless it is intended to liquidate the Company or any Group company, or to cease operations or there is no realistic alternative to do so. The directors also confirm that, to the best of their knowledge, the financial statements are prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation taken as a whole; and the Strategic report contains a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. In addition, each of the directors considers that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy. By order of the Board Charles Brown Company Secretary 18 May 2021 Corporate headquarters: Newenham House Northern Cross Malahide Road Dublin 17 D17 AY61 Ireland Registered office: 22 Grenville Street St Helier Jersey JE4 8PX Channel Islands Experian plc Governance 139 i F n a n c i a l s t a t e m e n t s Financial statements 140 Independent auditor’s report Group financial statements 147 Group income statement 148 Group statement of comprehensive income 149 Group balance sheet 150 Group statement of changes in equity 151 Group cash flow statement Notes to the Group financial statements 152 1. Corporate information 152 2. Basis of preparation 152 3. Recent accounting developments 180 25. Cash and cash equivalents - excluding bank overdrafts 181 26. Trade and other payables 181 27. Borrowings 182 28. Net debt (non-GAAP measure) 184 29. Leases 185 30. Financial assets and liabilities 190 31. Fair value methodology 190 32. Contractual undiscounted future cash flows for financial liabilities 191 33. Share incentive plans 193 34. Post-employment benefit plans and related risks 194 35. Post-employment benefits – IAS 19 information 152 4. Significant accounting policies 197 36. Deferred and current tax 159 5. Critical accounting estimates, assumptions and judgments 160 6. Use of non-GAAP measures in the Group financial statements 161 7. Financial risk management 163 8. Revenue 164 9. Segment information 169 10. Foreign currency 169 11. Labour costs and employee numbers – continuing operations 199 37. Provisions 199 38. Called-up share capital and share premium account 199 39. Retained earnings and other reserves 200 40. Notes to the Group cash flow statement 202 41. Acquisitions 203 42. Capital commitments 204 43. Contingencies 170 12. Amortisation and depreciation 204 44. Related party transactions charges 170 13. Fees payable to the Company’s auditor 205 45. Events occurring after the end of the reporting period 171 14. Exceptional items and Company financial statements 206 Company profit and loss account 206 Company statement of comprehensive income 206 Company balance sheet 207 Company statement of changes in equity 208 Notes to the Company financial statements other adjustments made to derive Benchmark PBT – continuing operations 172 15. Net finance costs 173 16. Tax charge 174 17. Discontinued operations 175 18. Earnings per share disclosures 175 19. Dividends 176 20. Goodwill 177 21. Other intangible assets 178 22. Property, plant and equipment 179 23. Investments in associates 179 24. Trade and other receivables Experian plc Annual Report 2021 140 Independent auditor’s report To the members of Experian plc 1 Our opinion is unmodified We have audited the Financial Statements of Experian plc (the Company or the Parent Company) for the year ended 31 March 2021, which comprise the Group income statement, Group statement of comprehensive income, Group balance sheet, Group statement of changes in equity, Group cash flow statement, Company profit and loss account, company statement of comprehensive income, Company balance sheet, Company statement of changes in equity , and the related notes, including the accounting policies in note 4 to the Group Financial Statements and note D to the Company Financial Statements. In our opinion: the Group Financial Statements give a true and fair view, in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union, of the state of the Group’s affairs as at 31 March 2021, and of its profit for the year then ended; the Parent Company Financial Statements give a true and fair view, in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework, of the state of the Parent Company’s affairs as at 31 March 2021 and of its profit for the year then ended; and the financial statements have been prepared in accordance with Companies (Jersey) Law 1991. Additional opinion in relation to IFRS as adopted by the International Accounting Standards Board (IASB) As explained in note 2 to the Group Financial Statements, the Group, in addition to applying IFRS as adopted by the European Union, has also applied IFRS as issued by the IASB. In our opinion, the Group Financial Statements have been properly prepared in accordance with IFRS as issued by the IASB. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the Audit Committee. We were first appointed as auditor by the shareholders on 20 July 2016. The period of total uninterrupted engagement is for the five financial years ended 31 March 2021. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard were provided. Overview Materiality: Group Financial Statements as a whole Coverage US$48m (2020: US$47m) 4.5% (2020: 5.0%) of Group profit before tax (continuing operations) 89% (2020: 89%) of Group revenue 93% (2020: 81%) of Group profit before tax (continuing operations) 89% (2020: 89%) of Group total assets Key audit matters vs 2020 Uncertain tax positions Provisions for litigation and contingent liabilities Impairment of goodwill Recoverability of Parent Company’s investment in and amounts due from subsidiaries 2 Key audit matters: our assessment of risks of material misstatement Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the Financial Statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, 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. We summarise below the key audit matters, in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the Financial Statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters. Tax – uncertain tax positions (US$350m; 2020: US$327m) Refer to the Audit Committee Report within the Corporate Governance Report and the Group Financial Statements notes 4,5,16, 36 and 43(a). The risk Dispute outcome Experian operates in a number of territories worldwide with complex local and international tax legislation. Significant uncertainties arise over ongoing tax matters in the UK, the USA, Brazil and Colombia. Tax provisioning for uncertain tax positions is judgmental and requires estimates to be made in relation to existing and potential tax matters. The effect of these matters is that, as part of our risk assessment, we determined that uncertain tax provisions have a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the Financial Statements as a whole, and possibly many times that amount. Our response We performed the tests below rather than seeking to rely on any of the Group's controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described. Our audit procedures included: Our tax expertise: Using our own tax specialists to perform an assessment of the Group’s tax positions through the inspection of correspondence with the relevant tax authorities and critically assessed the advice that the Group has received from external advisors. We challenged the assumptions applied using our own expectations based on our knowledge of the Group and considered relevant judgments passed by authorities; and Assessing transparency: Assessing the adequacy of the Group’s disclosures in respect of uncertain tax positions. Our results We found the level of tax provisioning and disclosures to be acceptable (2020 result: acceptable). Experian plc Financial statements 141 2 Key audit matters: our assessment of risks of material misstatement continued Provisions for litigation and contingent liabilities (US$10m; 2020: US$30m) Refer to the Audit Committee Report within the Corporate Governance Report and the Group Financial Statements notes 5, 37 and 43. Goodwill impairment in respect of the EMEA and Asia Pacific cash generating units (CGUs) Goodwill: (US$799; 2020: US$414m) Impairment: (US$53m; 2020: US$nil) Refer to the Audit Committee report within the Corporate Governance Report and the Group Financial Statements notes 4, 5 and 20. The risk Dispute outcome The Group operates in an industry with continuously increasing levels of regulation, including both the EU and UK General Data Protection Regulations, Consumer Finance Protection Bureau in the USA and various federal and state legislative developments in Brazil, which increase the potential for regulatory breaches and penalties. High levels of consumer litigation continue in the USA and Brazil. The outcome of such litigation is uncertain and any position taken by the Group involves significant judgment and estimation. The effect of these matters is that, as part of our risk assessment, we determined that the litigation liability has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the Financial Statements as a whole, and possibly many times that amount. In conducting our final audit procedures, based on the status of ongoing matters at the year end date, we reassessed the degree of estimation uncertainty to be less significant. The risk at that date was principally over the judgment of whether to record certain provisions and /or disclose contingent liabilities. Forecast-based valuation Following the impairment recognised in the Asia Pacific CGU, the audit risk has reduced compared to the prior year. The total carrying value of goodwill as at 31 March 2021 is US$5,261m. Of this, US$4,462m relates to CGUs where there is significant headroom between the value-in-use and the carrying value of net assets. The remaining balance of US$799m relates to the EMEA and Asia Pacific CGUs. The estimated recoverable amount of the EMEA CGU shows relatively low headroom and an impairment to goodwill of $53m in the Asia Pacific CGU has been recognised in the year. The carrying values of both CGUs are sensitive to changes in key assumptions, principally relating to short and long-term revenue growth, future profitability and discount rates, which could have a material impact on the carrying value of the associated goodwill. The effect of these matters is that, as part of our risk assessment, we determined that the value in use of the EMEA and Asia Pacific goodwill has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the Financial Statements as a whole. The Financial Statements (note 20) disclose the sensitivity estimated by the Group. Our response We performed the tests below rather than seeking to rely on any of the Group's controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described. Our audit procedures included: Enquiry of lawyers: On all significant legal cases, where necessary, assessment of correspondence with the Group’s external lawyers was performed to corroborate our understanding of these matters, accompanied by discussions with internal counsel, as well as challenging the Group’s assumptions on the likelihood and quantum of potential cash outflows; and Historical comparisons: Comparing the outcomes of historical legal cases to current cases with similar fact patterns; and Assessing transparency: Assessing whether the Group’s disclosures detailing significant legal proceedings adequately disclose the potential liabilities of the Group. Our results We consider the provisions for litigation recognised and contingent liability disclosures made to be acceptable (2020 result: acceptable). We performed the tests below rather than seeking to rely on any of the Group's controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described. Our audit procedures included: Assessing methodology: Assessing whether the principles and integrity of the cash flow model is in accordance with the relevant accounting standards; Challenging growth assumptions: Challenging the Group’s assumptions and obtaining support, such as board-approved strategy plans, as well as corroborating long term growth rates to external sources; Our sector experience: Critically assessing the appropriateness of the discount rate applied through the use of our valuations specialists; Sensitivity analysis: Performing both breakeven and plausible scenario sensitivity analysis on the key assumptions noted above to identify sensitivity to potential impairments; Historical comparisons: Evaluating the track record of historical assumptions used against actual results achieved; and Assessing transparency: Assessing whether the Group’s disclosures about the sensitivity of the outcome of the impairment assessment to a reasonably possible change in key assumptions reflected the risks inherent in the valuation of goodwill. Our results As a result of our work, we found the carrying value of goodwill for the EMEA and Asia Pacific CGUs to be acceptable (2020 result: acceptable). Experian plc Annual Report 2021Financial statements 142 Independent auditor’s report Continued 2 Key audit matters: our assessment of risks of material misstatement continued Recoverability of Parent Company’s investment in and amounts due from subsidiaries (Investment in subsidiaries – US$17,919.5m, (2020: US$17,413.2m) Amounts owed by subsidiary undertakings – US$1,759.5m, (2020: US$1,728.0m) Refer to the Parent Company Financial Statements notes L and N. The risk Low risk, high value The carrying amount of the Parent Company’s investments in, and amounts due from, subsidiaries represents 91% (2020: 91%) and 9% (2020: 9%) of the Parent Company’s total assets respectively. Their recoverability is not at a high risk of significant misstatement or subject to significant judgment. However, due to their materiality in the context of the Parent Company Financial Statements, this is considered to be the area that had the greatest effect on our overall Parent Company audit. Our response We performed the tests below rather than seeking to rely on any of the Group's controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described. Our audit procedures included: Tests of detail: Comparing the carrying amount of 100% of investments and amounts due from subsidiaries, with the relevant subsidiaries’ draft balance sheet to identify whether their net assets, being an approximation of the minimum recoverable amount of the related investments and amounts owed by subsidiary undertakings, were in excess of their carrying amount, and assessing whether those subsidiaries have historically been profit-making; Our results We found the conclusion that there is no impairment of the carrying amounts of the Parent company’s investments in and amounts due from subsidiaries to be acceptable (2020: acceptable). 3 Our application of materiality and an overview of the scope of our audit The three reporting components and work performed by the Group audit team accounted for the percentages illustrated opposite. Materiality Materiality for the Group Financial Statements as a whole was set at US$48m (2020: US$47m), determined with reference to a benchmark of consolidated Group profit before tax on continuing operations, of which it represents 4.5% (2020: 5.0%). Materiality for the Parent Company Financial Statements as a whole was set at US$25m (2020: US$25m), determined with reference to a benchmark of company total assets, of which it represents 0.1% (2020: 0.1%). In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the Financial Statements as a whole. Performance materiality was set at 75% (2020: 75%) of materiality for the Financial Statements as a whole, which equates to US$36m (2020: US$35m) for the Group and US$19m (2020: US$19m) for the Parent Company. We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of risk. We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding US$2.4m (2020: US$2.3m), in addition to other identified misstatements that warranted reporting on qualitative grounds. Our audit of the Group and Parent Company was undertaken to the materiality level specified above, which has informed our identification of significant risks of material misstatement and the associated audit procedures performed in those areas as detailed above. Scoping Of the Group’s 196 (2020: 189) reporting components, we subjected three (2020: three) to full scope audits for Group purposes, performed by component auditors (KPMG member firms). Additionally, two reporting components were audited by the Group audit team, one of which was the Parent Company. The remaining 11% (2020:11%) of total Group revenue, 7% (2020:19%) of total profits and losses that make up Group profit before tax (continuing operations) and 11% (2020:11%) of total Group assets is represented by 191 (2020:184 ) reporting components, none of which individually represented more than 2% (2020:3% ) of any of total Group revenue, Group profit before tax (continuing operations) or total Group assets. For these residual components, we performed analysis at an aggregated Group level to re-examine our assessment that there were no significant risks of material misstatement within these. The Group audit team instructed component auditors as to the significant areas to be covered, including the relevant risks detailed above and the information to be reported back. The Group audit team approved the component materialities, which ranged from US$9m to US$36m (2020: US$12m to US$42m) having regard to the mix of size and risk profile of the Group across the components. The Group operates five shared service centres in the UK, the USA, Malaysia, Costa Rica and Bulgaria, the outputs of which are included in the financial information of the reporting components they service and therefore they are not separate reporting components. Each of the service centres is subject to specified risk-focused audit procedures, predominantly the testing of transaction processing and review controls. Additional procedures are performed at certain reporting components to address the audit risks not covered by the work performed over the shared service centres. Site visits to the USA, UK and Brazil components by the Group audit team were unable to take place as a result of the COVID-19 pandemic. Telephone and video conference meetings were held with these component audit teams. At these meetings, the findings reported to the Group audit team were discussed in more detail, and any further work required by the Group audit team was then performed by the component auditors. Experian plc Financial statements 143 3 Our application of materiality and an overview of the scope of our audit continued Group profit before tax (continuing operations) US$1,077m (2020: US$942m) Profit before tax (continuing operations) Group materiality Group materiality US$48m (2020: US$47m) US$48m Whole Financial Statements materiality (2020: US$47m) US$36m Range of materiality at three reporting components US$9m to US$36m (2020: US$12m to US$42m) US$2.4m Misstatements reported to the Audit Committee (2020: US$2.3m) Group revenue 11 11 89% (2020: 89%) 89 89 Total profits and losses that make up Group profit before tax (continuing operations) 7 19 93% (2020: 81%) 81 93 Group total assets 11 11 89% (2020: 89%) 89 89 Full scope for Group audit purposes 2021 Full scope for Group audit purposes 2020 Residual components 4 Going concern The Directors have prepared the Financial Statements on the going concern basis as they do not intend to liquidate the Group or the Company or to cease their operations, and as they have concluded that the Group’s and the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the Financial Statements (the going concern period). We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Group’s and Company’s financial resources or ability to continue operations over the going concern period. The risk that we considered most likely to adversely affect the Group’s and Company’s available financial resources and metrics relevant to debt covenants over this period is the loss or inappropriate use of data or systems, leading to serious reputational and brand damage, legal penalties and class action litigation. We considered whether these risks could plausibly affect the liquidity or covenant compliance in the going concern period by assessing the degree of downside assumption that, individually and collectively, could result in a liquidity issue, taking into account the Group’s current and projected cash and facilities (a reverse stress test). We also assessed the completeness of the going concern disclosure. Our conclusions based on this work: we consider that the Directors’ use of the going concern basis of accounting in the preparation of the Financial Statements is appropriate; we have not identified, and concur with the Directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or Company's ability to continue as a going concern for the going concern period; and we have nothing material to add or draw attention to in relation to the Directors’ statement in note 2 to the Financial Statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 2 to be acceptable. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgments that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Company will continue in operation. Experian plc Annual Report 2021Financial statements 144 Independent auditor’s report Continued 5 Fraud and breaches of laws and regulations – ability to detect Identifying and responding to risks of material misstatement due to fraud To identify risks of material misstatement due to fraud (fraud risks) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: Enquiring of Directors, the Audit Committee, Internal Audit and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud. Reading Board, Audit Committee, Remuneration Committee, Nomination and Corporate Governance Committee minutes. Considering remuneration incentive schemes and performance targets for management and Directors including the targets for management remuneration linked to the Co-investment Plans and Performance Share Plan share incentive plans. Using analytical procedures to identify any unusual or unexpected relationships. We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Group audit team to full scope component audit teams of relevant fraud risks identified at the Group level and request to full scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement in the Group Financial statements. As required by auditing standards, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular non-transactional revenue recorded in the wrong period, and the risk that Group and component management may make inappropriate accounting entries. We did not identify any additional fraud risks. We also performed procedures including: Identifying journal entries to test for all full scope components and central entities based on risk criteria and comparing the identified entries to supporting documentation. These included those posted with key descriptive words and those posted to seldom used accounts. Assessing when non-transactional revenue was recognised in all full scope components, particularly focusing on revenue recognised in the days before the year end date, and whether it was recognised in the correct year. Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations We identified areas of laws and regulations that could reasonably be expected to have a material effect on the Financial Statements from our general commercial and sector experience, and through discussion with the Directors (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the Directors the policies and procedures regarding compliance with laws and regulations. As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. This included communication from the Group audit team to full-scope component audit teams of relevant laws and regulations identified at the Group level and a request for full scope component auditors to report to the Group audit team any instances of non- compliance with laws and regulations that could give rise to a material misstatement in the Group Financial Statements. The potential effect of these laws and regulations on the Financial Statements varies considerably. First, the Group is subject to laws and regulations that directly affect the Financial Statements including financial reporting legislation (including related companies legislation), distributable profits legislation as set out by Companies (Jersey) Law 1991, taxation legislation and pension legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the Financial Statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: data protection legislation, health and safety, anti-bribery, employment law and certain aspects of company legislation recognising the financial and regulated nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach. Further detail in respect of the provisions for litigations, contingent liabilities and uncertain tax positions is set out in the key audit matter disclosures in section 2 of this report. Context of the ability of the audit to detect fraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the Financial Statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the Financial Statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non- detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. 6 We have nothing to report on the other information in the Annual Report The Directors are responsible for the other information presented in the Annual Report together with the Financial Statements. Our opinion on the Financial Statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our Financial Statements audit work, the information therein is materially misstated or inconsistent with the Financial Statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information. Experian plc Financial statements 145 6 We have nothing to report on the other information in the Annual Report continued Report on Directors’ Remuneration In addition to our audit of the Financial Statements, the Directors have engaged us to audit the information in the Report on Directors’ Remuneration that is described as having been audited, which the Directors have decided to prepare as if the Company were required to comply with the requirements of Schedule 8 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (S.I. 2008 No. 410) made under the UK Companies Act 2006. In our opinion, the part of the Report on Directors’ Remuneration to be audited has been properly prepared in accordance with the UK Companies Act 2006, as if it applied to the Company. Disclosures of emerging and principal risks and longer-term viability We are required to perform procedures to identify whether there is a material inconsistency between the Directors’ disclosures in respect of emerging and principal risks and the Viability Statement, and the Financial Statements and our audit knowledge. Based on those procedures, we have nothing material to add or draw attention to in relation to: the Directors’ confirmation within the Viability Statement on page 82 that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; the Principal Risks disclosures describing these risks and how emerging risks are identified, and explaining how they are being managed and mitigated; and the Directors’ explanation in the viability assessment of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. We are also required to review the Viability Statement set out on page 82 under the Listing Rules. Based on the above procedures, we have concluded that the above disclosures are materially consistent with the Financial Statements and our audit knowledge. Our work is limited to assessing these matters in the context of only the knowledge acquired during our Financial Statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgments that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and Company’s longer-term viability. Corporate governance disclosures We are required to perform procedures to identify whether there is a material inconsistency between the Directors’ corporate governance disclosures and the Financial Statements and our audit knowledge. Based on those procedures, we have concluded that each of the following is materially consistent with the Financial Statements and our audit knowledge: the Directors’ statement that they consider that the Annual Report and Financial Statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; the section of the Annual Report describing the work of the Audit Committee, including the significant issues that the Audit Committee considered in relation to the Financial Statements, and how these issues were addressed; and the section of the Annual Report that describes the review of the effectiveness of the Group’s risk management and internal control systems. We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect. 7 We have nothing to report on the other matters on which we are required to report by exception Under the Companies (Jersey) Law, 1991 and the terms of our engagement, we are required to report to you if, in our opinion: proper accounting records have not been kept by the Company; or proper returns adequate for our audit have not been received from branches not visited by us; or the Company’s Financial Statements and the part of the Report on Directors’ Remuneration which we were engaged to audit are not in agreement with the accounting records and returns; or we have not received all the information and explanations we require for our audit. We have nothing to report in these respects. 8 Respective responsibilities Directors’ responsibilities As explained more fully in their statement set out on page 137, the Directors are responsible for: the preparation of Financial Statements which give a true and fair view; 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; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. Experian plc Annual Report 2021Financial statements 146 Independent auditor’s report Continued 8 Respective responsibilities continued Auditor’s responsibilities 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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. 9 The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the Company’s members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991 and the terms of our engagement by the Company. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report, and the further matters we are required to state to them in accordance with the terms agreed with the Company, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed. Andrew Bradshaw for and on behalf of KPMG LLP Chartered Accountants and Recognized Auditor 15 Canada Square, London E14 5GL United Kingdom 18 May 2021 Experian plc Financial statements Group income statement for the year ended 31 March 2021 Revenue Labour costs Data and information technology costs Amortisation and depreciation charges Marketing and customer acquisition costs Other operating charges Total operating expenses Profit on disposal of associate Operating profit/(loss) Interest income Finance expense Net finance costs Share of post-tax profit of associates Profit/(loss) before tax Tax (charge)/credit Profit/(loss) for the financial year from continuing operations Loss for the financial year from discontinued operations Profit/(loss) for the financial year Attributable to: Owners of Experian plc Non-controlling interests Profit/(loss) for the financial year Notes 8,9 11(a) 12 14(b) 15 9 16 17 Benchmark1 US$m 5,372 (1,965) (861) (453) (417) (295) (3,991) — 1,381 12 (133) (121) 5 1,265 (328) 937 — 937 2021 Non- benchmark2 US$m — (30) — (138) — (150) (318) 120 (198) — (6) (6) 16 (188) 53 (135) — (135) Total US$m 5,372 (1,995) (861) (591) (417) (445) (4,309) 120 1,183 12 (139) (127) 21 1,077 (275) 802 — 802 938 (1) 937 (135) — (135) 803 (1) 802 Total Benchmark EBIT1 9(a)(i) 1,386 147 Total US$m 5,179 (1,872) (753) (537) (378) (454) (3,994) — 1,185 13 (270) (257) 14 942 (263) 679 (2) 677 2020 Non- benchmark2 US$m — (8) — (124) — (62) (194) — (194) — (125) (125) 6 (313) 61 (252) (2) (254) (254) — (254) 675 2 677 Benchmark1 US$m 5,179 (1,864) (753) (413) (378) (392) (3,800) — 1,379 13 (145) (132) 8 1,255 (324) 931 — 931 929 2 931 1,387 Earnings/(loss) per share Basic Diluted Earnings/(loss) per share from continuing operations Basic Diluted Benchmark PBT per share1,3 Full-year dividend per share1 Notes US cents US cents US cents US cents US cents US cents 103.1 102.3 (14.9) (14.7) 103.1 102.3 (14.9) (14.7) 139.0 18(a) 18(a) 18(a) 18(a) 19 88.2 87.6 88.2 87.6 47.0 103.0 102.1 (28.2) (27.9) 103.0 102.1 (28.0) (27.7) 139.1 74.8 74.2 75.0 74.4 47.0 1 Total Benchmark EBIT, Benchmark PBT per share and Full-year dividend per share are non-GAAP measures, defined in note 6. 2 The loss before tax for non-benchmark items of US$188m (2020: US$313m) comprises a net credit for Exceptional items of US$35m (2020: charge of US$35m) and net charges for other adjustments made to derive Benchmark PBT of US$223m (2020: US$278m). Further information is given in note 14. 3 Benchmark PBT per share is calculated by dividing Benchmark PBT of US$1,265m (2020: US$1,255m) by the weighted average number of ordinary shares of 910 million (2020: 902 million). The amount is stated in US cents per share. Experian plc Annual Report 2021Financial statements 148 Group statement of comprehensive income for the year ended 31 March 2021 Profit for the financial year Other comprehensive income Items that will not be reclassified to profit or loss: Remeasurement of post-employment benefit assets and obligations (note 35(b)) Changes in the fair value of investments revalued through OCI Deferred tax charge Items that will not be reclassified to profit or loss Items that are or may be reclassified subsequently to profit or loss: Currency translation gains/(losses) Fair value gain on cash flow hedge Hedging gain reclassified to profit or loss Items that are or may be reclassified subsequently to profit or loss Other comprehensive income for the financial year1 Total comprehensive income for the financial year Attributable to: Owners of Experian plc Non-controlling interests Total comprehensive income for the financial year 2021 US$m 802 2020 US$m 677 2 11 (1) 12 70 35 (33) 72 84 886 881 5 886 26 (6) (5) 15 (313) — — (313) (298) 379 378 1 379 1 Amounts reported within Other comprehensive income (OCI) are in respect of continuing operations and, except as reported for post-employment benefit assets and obligations, there is no associated tax. Currency translation items, not reclassified to profit or loss, are recognised in the translation reserve within other reserves and in non-controlling interests. Other items within Other comprehensive income are recognised in retained earnings. Experian plc Financial statements Group balance sheet at 31 March 2021 Non-current assets Goodwill Other intangible assets Property, plant and equipment Investments in associates Deferred tax assets Post-employment benefit assets Trade and other receivables Financial assets revalued through OCI Other financial assets Current assets Trade and other receivables Current tax assets Other financial assets Cash and cash equivalents - excluding bank overdrafts Current liabilities Trade and other payables Borrowings Current tax liabilities Provisions Other financial liabilities Net current liabilities Total assets less current liabilities Non-current liabilities Trade and other payables Borrowings Deferred tax liabilities Post-employment benefit obligations Other financial liabilities Net assets Equity Called-up share capital Share premium account Retained earnings Other reserves Attributable to owners of Experian plc Non-controlling interests Total equity These financial statements were approved by the Board on 18 May 2021 and were signed on its behalf by: Kerry Williams Director 149 2020 US$m 4,543 1,583 502 123 107 83 164 171 223 7,499 1,078 28 17 277 1,400 (1,430) (498) (225) (48) (23) (2,224) (824) 6,675 (121) (3,916) (202) (48) (107) (4,394) 2,281 2021 US$m 5,261 1,966 469 128 86 102 160 245 223 8,640 1,197 34 20 180 1,431 (1,543) (655) (176) (27) (15) (2,416) (985) 7,655 (159) (3,682) (361) (55) (279) (4,536) 3,119 96 1,756 19,207 (17,978) 3,081 38 3,119 96 1,574 18,826 (18,221) 2,275 6 2,281 Notes 20 21 22 23 36(a) 35(a) 24(a) 30(a) 30(b) 24(a) 36(b) 30(b) 25(a) 26(a) 27(a) 36(b) 37 30(b) 26(a) 27(a) 36(a) 35(a) 30(b) 38 38 39(a) 39(b) Experian plc Annual Report 2021Financial statements 150 Group statement of changes in equity for the year ended 31 March 2021 At 1 April 2020 Comprehensive income: Profit for the financial year Other comprehensive income for the financial year Total comprehensive income for the financial year Transactions with owners: Employee share incentive plans: – value of employee services – shares issued on vesting – other vesting of awards and exercises of share options – related tax credit – other payments Shares delivered as consideration for acquisition Non-controlling interests arising on business combinations Recognition of non-controlling interests on acquisition Dividends paid Transactions with owners At 31 March 2021 At 1 April 2019 Comprehensive income: Profit for the financial year Other comprehensive income for the financial year Total comprehensive income for the financial year Transactions with owners: Employee share incentive plans: – value of employee services – shares issued on vesting – purchase of shares by employee trusts – other vesting of awards and exercises of share options – related tax credit – other payments Purchase and cancellation of own shares Transactions in respect of non-controlling interests Dividends paid Transactions with owners At 31 March 2020 Called-up share capital (Note 38) US$m 96 Share premium account (Note 38) US$m 1,574 Retained earnings (Note 39) US$m 18,826 Other reserves (Note 39) US$m (18,221) Attributable to owners of Experian plc US$m 2,275 Non- controlling interests US$m 6 — — — — — — — — — — — — — 96 — — — 803 12 815 — 66 66 — 19 — — — 163 — — — 182 1,756 106 — (75) 2 (6) — (34) — (427) (434) 19,207 — — 87 — — 90 — — — 177 (17,978) 803 78 881 106 19 12 2 (6) 253 (34) — (427) (75) 3,081 (1) 6 5 — — — — — — 24 4 (1) 27 38 Called-up share capital (Note 38) US$m 96 Share premium account (Note 38) US$m 1,559 Retained earnings (Note 39) US$m 18,718 Other reserves (Note 39) US$m (17,893) Attributable to owners of Experian plc US$m 2,480 Non- controlling interests US$m 14 — — — — — — — — — — — — — 96 — — — 675 15 690 — (312) (312) — 15 — — — — — — — 15 1,574 83 — — (64) 5 (5) (112) (65) (424) (582) 18,826 — — (92) 76 — — — — — (16) (18,221) 675 (297) 378 83 15 (92) 12 5 (5) (112) (65) (424) (583) 2,275 2 (1) 1 — — — — — — — (7) (2) (9) 6 Total equity US$m 2,281 802 84 886 106 19 12 2 (6) 253 (10) 4 (428) (48) 3,119 Total equity US$m 2,494 677 (298) 379 83 15 (92) 12 5 (5) (112) (72) (426) (592) 2,281 Experian plc Financial statements Group cash flow statement for the year ended 31 March 2021 Cash flows from operating activities Cash generated from operations Interest paid Interest received Dividends received from associates Tax paid Net cash inflow from operating activities – continuing operations Net cash outflow from operating activities – discontinued operations Net cash inflow from operating activities Cash flows from investing activities Purchase of other intangible assets Purchase of property, plant and equipment Sale of property, plant and equipment Purchase of other financial assets Sale of other financial assets Acquisition of subsidiaries, net of cash acquired Disposal of investment in associate Net cash flows used in investing activities Cash flows from financing activities Cash inflow in respect of shares issued Cash outflow in respect of share purchases Other payments on vesting of share awards Transactions in respect of non-controlling interests New borrowings Repayment of borrowings Payment of lease liabilities Net receipts/(payments) for cross-currency swaps and foreign exchange contracts Net receipts from equity swaps Dividends paid Net cash flows (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at 1 April Exchange movements on cash and cash equivalents Cash and cash equivalents at 31 March 151 2020 US$m 1,694 (157) 5 6 (286) 1,262 (6) 1,256 (403) (84) 5 (95) — (600) — (1,177) 15 (203) (5) (67) 1,519 (553) (55) (169) 5 (426) 61 140 146 (14) 272 Notes 40(a) 17 40(c) 40(d) 14(b), 23 40(e) 40(e) 40(d) 40(f) 2021 US$m 1,822 (119) 4 17 (236) 1,488 — 1,488 (374) (48) 1 (31) 24 (526) 127 (827) 19 — (6) (10) 1,011 (1,337) (56) 54 6 (428) (747) (86) 272 (16) 170 Experian plc Annual Report 2021Financial statements 152 Notes to the Group financial statements for the year ended 31 March 2021 1. Corporate information Experian plc (the Company) is the ultimate parent company of the Experian group of companies (Experian or the Group). Experian is a leading global information services group. 3. Recent accounting developments There have been no accounting standards, amendments or interpretations effective for the first time in these financial statements which have had a material impact on the financial statements. The Company is incorporated and registered in Jersey as a public company limited by shares and is resident in Ireland. The Company’s registered office is at 22 Grenville Street, St Helier, Jersey, JE4 8PX, Channel Islands. The Company’s ordinary shares are traded on the London Stock Exchange’s Regulated Market and have a Premium Listing. Interest Rate Benchmark Reform - Phase 1, Amendments to IFRS 9 ‘Financial Instruments’, IAS 39 ‘Financial Instruments: Recognition and Measurement’ and IFRS 7 ‘Financial Instruments: Disclosures’ provide relief from the discontinuation of hedge accounting as a result of interbank offered rate (IBOR) reform. There has been no change in this information since the Annual Report for the year ended 31 March 2020. 2. Basis of preparation The Group financial statements are: prepared in accordance with the Companies (Jersey) Law 1991 and International Financial Reporting Standards (IFRS or IFRSs) as adopted for use in the European Union (the EU) and IFRS Interpretations Committee interpretations (together EU-IFRS). The financial statements also comply with IFRS as issued by the International Accounting Standards Board (IASB). EU-IFRS differs in certain respects from IFRS as issued by the IASB, however, the differences have no material impact for the periods presented; prepared on the going concern basis and under the historical cost convention, as modified for the revaluation of certain financial assets and financial liabilities; presented in US dollars, the most representative currency of the Group’s operations, and generally rounded to the nearest million; prepared using the principal exchange rates set out in note 10; and designed to voluntarily include disclosures in line with those parts of the UK Companies Act 2006 applicable to companies reporting under IFRS. The Company’s own financial statements are prepared under UK accounting standards in accordance with FRS 101 ‘Reduced Disclosure Framework’. Interest Rate Benchmark Reform - Phase 2, Amendments to IFRS 9, IAS 39 and IFRS 7 is effective for Experian from FY22. By applying the practical expedient in IFRS 9, the Group does not expect to be required to discontinue its hedging relationships as a result of changes in reference rates due to IBOR reform. There are no other new standards, amendments to existing standards, or interpretations that are not yet effective, that are expected to have a material impact on the Group’s financial results. Accounting developments are routinely reviewed by the Group and its financial reporting systems are adapted as appropriate. 4. Significant accounting policies The significant accounting policies applied are summarised below. They have been applied consistently to both years presented. The explanations of these policies focus on areas where judgment is applied or which are particularly important in the financial statements. For ease of reference, the content within this note is arranged as follows: sections (a) to (d) – content that applies generally to the preparation of these financial statements; sections (e) to (p) – balance sheet policies, to be read in conjunction with specific notes as indicated; sections (q) to (x) – income statement policies, to be read in conjunction with specific notes as indicated; and section (y) – the policy and presentation principles adopted for disclosing segment information, in accordance with IFRS 8 ‘Operating Segments’. There has been no change in the basis of preparation of the Group financial statements since the Annual Report for the year ended 31 March 2020. (a) Basis of consolidation The Group financial statements incorporate the financial statements of the Company and its subsidiary undertakings. The use of critical accounting estimates and management judgment is required in applying the accounting policies. Areas involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the Group financial statements, are highlighted in note 5. Going concern In adopting the going concern basis for preparing these financial statements, the directors have considered the business activities, the principal risks and uncertainties and the other matters discussed in connection with the Viability statement. At 31 March 2021, the Group had undrawn committed bank borrowing facilities of US$2.7bn which have an average remaining tenor of four years. The directors believe that the Group is well placed to manage its financing and other business risks satisfactorily, and have a reasonable expectation that the Group will have adequate resources to continue in operational existence for at least 12 months from the date of signing these financial statements. The directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements. In reaching this conclusion, the directors noted the Group’s strong cash performance in the year. Subsidiaries Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date that the Group no longer has control. All business combinations are accounted for using the acquisition method. Intra-Group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries and segments are consistent with the policies adopted by the Group for the purposes of the Group’s consolidation. The Group financial statements incorporate the financial statements of the Company and its subsidiary undertakings for the year ended 31 March 2021. A full list of subsidiary undertakings is given in note S to the Company financial statements. Associates Interests in associates are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the Group financial statements include the Group’s share of the profit or loss and other comprehensive income of equity-accounted investees, until the date on which significant influence ceases. Gains or losses on disposal are recognised within operating profit. Experian plc Financial statements 153 4. Significant accounting policies continued Non-controlling interests The non-controlling interests in the Group balance sheet represent the share of net assets of subsidiary undertakings held outside the Group. The movement in the year comprises the profit attributable to such interests together with any dividends paid, movements in respect of corporate transactions and related exchange differences. The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of the net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. Where put option agreements are in place in respect of shares held by non-controlling shareholders, the liability is stated at the present value of the expected future payments. Such liabilities are shown as financial liabilities in the Group balance sheet. The change in the value of such options in the year is recognised in the Group income statement within net finance costs, while any change in that value attributable to exchange rate movements is recognised directly in Other comprehensive income (OCI). Where put option agreements are in place the Group adopts the ‘anticipated acquisition’ approach, recording the other side of the put liability against goodwill, with no subsequent profits attributed to non-controlling interests. (b) Foreign currency translation Transactions and balances Transactions in foreign currencies are recorded in the functional currency of the relevant Group undertaking at the exchange rate prevailing on the date of the transaction. At each balance sheet date, monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate prevailing at the balance sheet date. Translation differences on monetary items are taken to the Group income statement except when recognised in OCI, as qualifying net investment hedges or cash flow hedges. Translation differences on non-monetary financial assets revalued through OCI are reported as part of the fair value gains or losses in OCI. Group undertakings The results and financial position of Group undertakings whose functional currencies are not the US dollar are translated into US dollars as follows: Income and expenses are generally translated at the average exchange rate for the year. Where this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, income and expenses are translated at the rates on the dates of the transactions. Assets and liabilities are translated at the closing exchange rate on the balance sheet date. All resulting exchange differences are recognised in OCI and as a separate component of equity. On consolidation, exchange differences arising from the translation of the net investment in Group undertakings whose functional currencies are not the US dollar, and of borrowings and other currency instruments designated as hedges of such investments, are recognised in OCI to the extent that such hedges are effective. Tax attributable to those exchange differences is taken directly to OCI. When such undertakings are sold, these exchange differences are recognised in the Group income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of such undertakings are treated as assets and liabilities of the entities and are translated into US dollars at the closing exchange rate. (c) Fair value estimation The fair values of derivative financial instruments and other financial assets and liabilities are determined by using market data and established estimation techniques such as discounted cash flow and option valuation models. The fair value of foreign exchange contracts is based on a comparison of the contractual and year-end exchange rates. The fair values of other derivative financial instruments are estimated by discounting the future cash flows to net present values, using appropriate market rates prevailing at the year-end. (d) Impairment of non-financial assets Assets that are not subject to amortisation or depreciation are tested annually for impairment. Assets that are subject to amortisation or depreciation are reviewed for impairment when there is an indication that the carrying amount may not be recoverable. An impairment charge is recognised for the amount by which an asset’s carrying amount exceeds its recoverable amount, which is the higher of an asset’s fair value less costs of disposal, and value-in-use. For the purposes of assessing impairment, assets are grouped into cash generating units (CGUs), determined by the lowest levels for which there are separately identifiable cash flows. (e) Goodwill (note 20) Goodwill is stated at cost less any accumulated impairment, where cost is the excess of the fair value of the consideration payable for an acquisition over the fair value at the date of acquisition of the Group’s share of identifiable net assets of a subsidiary or associate acquired. Fair values are attributed to the identifiable assets, liabilities and contingent liabilities that existed at the date of acquisition, reflecting their condition at that date. Adjustments are made where necessary to align the accounting policies of acquired businesses with those of the Group. Goodwill is not amortised but is tested annually for impairment, or more frequently if there is an indication that it may be impaired. An impairment charge is recognised in the Group income statement for any amount by which the carrying value of the goodwill exceeds the recoverable amount. Goodwill is allocated to CGUs and monitored for internal management purposes by operating segment. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. Gains and losses on the disposal of an undertaking take account of the carrying amount of goodwill relating to the undertaking sold, allocated where necessary on the basis of relative fair value. (f) Other intangible assets (note 21) Acquisition intangibles Intangible assets acquired as part of a business combination are capitalised on acquisition at fair value and separately from goodwill, if those assets are identifiable (separable or arising from legal rights). Such assets are referred to as acquisition intangibles in these financial statements. Amortisation is charged on a straight-line basis as follows: Customer and other relationships – over three to 18 years, based on management’s estimates of the average lives of such relationships, and reflecting their long-term nature. Acquired software development – over three to eight years, based on the asset’s expected life. Marketing-related assets (trademarks and licences) – over their contractual lives, up to a maximum of 20 years. Marketing-related assets (trade names) – over three to 14 years, based on management’s expected retention of trade names within the business. Experian plc Annual Report 2021Financial statements 154 4. Significant accounting policies continued Other intangibles Other intangibles are capitalised at cost. Certain costs incurred in the developmental phase of an internal project are capitalised provided that a number of criteria are satisfied. These include the technical feasibility of completing the asset so that it is available for use or sale, the availability of adequate resources to complete the development and to use or sell the asset, and how the asset will generate probable future economic benefit. The cost of such assets with finite useful economic or contractual lives is amortised on a straight-line basis over those lives. The carrying values are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable. If impaired, the carrying values are written down to the higher of fair value less costs of disposal, and value-in-use which is determined by reference to projected future income streams using assumptions in respect of profitability and growth. Further details on the capitalisation and amortisation policy for the key asset classifications within other intangibles are: Databases – capitalised databases, which comprise the data purchase and capture costs of internally developed databases, are amortised over three to seven years. Computer software (internal use) – computer software licences purchased for internal use are capitalised on the basis of the costs incurred to purchase and bring into use the specific software. These costs are amortised over three to ten years. Computer software (internally generated) – costs directly associated with producing identifiable and unique software products controlled by the Group, and that will generate economic benefits beyond one year, are recognised as intangible assets. These costs are amortised over three to ten years. Research expenditure, together with other costs associated with developing or maintaining computer software programs or databases, is recognised in the Group income statement as incurred. (g) Property, plant and equipment (note 22) Purchased items of property, plant and equipment are held at cost less accumulated depreciation and any impairment in value. Cost includes the original purchase price of the asset and amounts attributable to bringing the asset to its working condition for its intended use. Depreciation is charged on a straight-line basis as follows: Freehold properties – over 50 years. Leasehold improvements to short leasehold properties – over the remaining period of the lease. Plant and equipment – over three to ten years, according to the asset’s estimated useful life. Technology-based assets are typically depreciated over three to five years, with other infrastructure assets depreciated over five to ten years. (h) Trade and other receivables (note 24) Trade receivables and contract assets are initially recognised at fair value and subsequently measured at this value less loss allowances. Where the time value of money is material, receivables are then carried at amortised cost using the effective interest method, less loss allowances. We apply the IFRS 9 simplified lifetime expected credit loss approach. Expected credit losses are determined using a combination of historical experience and forward-looking information. Impairment losses or credits in respect of trade receivables and contract assets are recognised in the Group income statement, within other operating charges. (i) Cash and cash equivalents (note 25) Cash and cash equivalents include cash in hand, term and call deposits held with banks and other short-term, highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities in the Group balance sheet. For the purposes of the Group cash flow statement, cash and cash equivalents are reported net of bank overdrafts. (j) Financial assets and liabilities (note 30) Financial assets We classify our financial assets into the following measurement categories, with the classification determined on initial recognition and dependent on the purpose for which such assets are acquired: those subsequently measured at fair value (either through OCI or through profit or loss), and those measured at amortised cost. Directly attributable transaction costs are expensed where an asset is carried at ‘fair value through profit or loss’ (FVPL) and added to the fair value of the asset otherwise. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely a payment of principal and interest. Debt instruments Measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies debt instruments: Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows are solely repayments of principal and interest are measured at amortised cost. Interest income from these financial assets is recognised using the effective interest method. Any impairment or gain or loss on derecognition is recognised directly in the Group income statement. Fair value through Other comprehensive income (FVOCI): Assets that are held both for the collection of contractual cash flows and for their sale, where the asset’s cash flows solely represent payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, however recognition of impairment gains or losses, interest income and foreign exchange gains or losses are recognised in the Group income statement. FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt instrument that is subsequently measured at FVPL is recognised in the Group income statement and presented net within other gains or losses in the period in which it arises. Notes to the Group financial statements continuedExperian plc Financial statements 155 4. Significant accounting policies continued Equity instruments We measure all equity instruments at fair value. Where we have elected to present fair value gains or losses on equity investments in OCI, there is no subsequent reclassification of fair value gains or losses to the Group income statement following the derecognition of the investment. Dividends from such investments are normally recognised as other income when the Group’s right to receive payments is established. Changes in the fair value of financial assets at FVPL are recognised in other gains or losses in the Group income statement. Impairment losses, and reversals of impairment losses, on equity investments measured at FVOCI are not reported separately from other changes in fair value. Impairment The loss allowances for financial assets are based on assumptions about significant increases in credit risk and subsequent risk of default. We use judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s history, existing market conditions as well as forward-looking estimates at the end of each reporting period. Financial liabilities Financial liabilities are measured subsequently at amortised cost using the effective interest method or at FVPL. Financial liabilities are classified at FVPL when the financial liability is held for trading, it is a derivative or it is designated at FVPL on initial recognition. Financial liabilities at FVPL are measured at fair value, with any net gains or losses arising on changes in fair value, including any interest expense, recognised in the Group income statement. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense, foreign exchange gains and losses and any gain or loss on derecognition are recognised in the Group income statement. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments, including all fees that form an integral part of the effective interest rate, transaction costs and other premiums or discounts, through the expected life of the financial liability. Derivatives used for hedging The Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange rates, interest rates and certain obligations relating to share incentive plans, including social security obligations. Instruments used include interest rate swaps, cross-currency swaps, foreign exchange contracts and equity swaps. These are recognised as assets or liabilities as appropriate and are classified as non-current, unless they mature within one year of the balance sheet date. Derivatives are initially recognised at their fair value on the date the contract is entered into, and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the hedge relationship. The Group designates certain derivatives as either fair value hedges or cash flow hedges. Fair value hedges are hedges of the fair value of a recognised asset or liability. Cash flow hedges are hedges of highly probable future foreign currency cash flows. The Group does not currently enter into net investment hedges. We document the relationship between hedging instruments and hedged items, and our risk management objective and strategy for undertaking hedge transactions, at the hedge inception. We also document our assessment of whether the derivatives used in hedging meet the hedge effectiveness criteria set out in IFRS 9. This assessment is performed at every reporting date throughout the life of the hedge to confirm that the hedge continues to meet the hedge effectiveness criteria. Hedge accounting is discontinued when the hedging instrument expires, is sold, terminated or exercised, or no longer qualifies for hedge accounting. Amounts payable or receivable in respect of interest rate swaps, together with the interest differentials reflected in foreign exchange contracts, are recognised in net finance costs over the period of the contract. Changes in the fair value of derivatives that are designated and qualify as fair value hedging instruments are recognised in the Group income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The ineffective portion of a fair value hedge is recognised in net finance costs in the Group income statement. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedging instruments is recognised in OCI, while any ineffective part is recognised in the Group income statement. Amounts recorded in OCI are recycled to the Group income statement in the same period in which the underlying foreign currency exposure affects the Group income statement. Non-hedging derivatives Changes in the fair value of derivative instruments used to manage exposures, that are not part of a documented hedge relationship under IFRS 9, are recognised immediately in the Group income statement. Cost and income amounts in respect of derivatives entered into in connection with social security obligations on employee share incentive plans, other than amounts of a financing nature, are charged or credited within labour costs. Other costs and changes in the fair value of such derivatives are charged or credited within financing fair value remeasurements in the Group income statement. (k) Trade and other payables (note 26) Trade payables and contract liabilities are recognised initially at fair value. Where the time value of money is material, payables and contract liabilities are then carried at amortised cost using the effective interest method. (l) Borrowings (note 27) Borrowings are recognised initially at fair value, net of any transaction costs incurred. Borrowings are subsequently stated at amortised cost, except where they are hedged by an effective fair value hedge, in which case the carrying value is adjusted to reflect the fair value movements associated with the hedged risk. Borrowings are classified as non-current to the extent that the Group has an unconditional right to defer settlement of the liability for at least one year after the balance sheet date. Experian plc Annual Report 2021Financial statements 156 4. Significant accounting policies continued (m) Leases (note 29) The Group undertakes an assessment of whether a contract is or contains a lease at its inception. The assessment establishes whether the Group obtains substantially all the economic benefits from the use of an asset and whether we have the right to direct its use. Low-value lease payments are recognised as an expense, on a straight-line basis over the lease term. For other leases we recognise both a right-of-use asset and a lease liability at the commencement date of a lease contract. The right-of-use asset is initially measured at cost, comprising the initial amount of the lease liability adjusted for payments made at or before the commencement date, plus initial direct costs and an estimate of the cost of any obligation to refurbish the asset or site, less lease incentives. Subsequently, right-of-use assets are measured at cost less accumulated depreciation and impairment losses and are adjusted for any remeasurement of the lease liability. Depreciation is calculated on a straight-line basis over the shorter of the lease period or the estimated useful life of the right-of-use asset, which is determined on a basis consistent with purchased assets (note 4(g)). The lease term comprises the non-cancellable period of a lease, plus periods covered by an extension option, if it is reasonably certain to be exercised, and periods covered by a termination option if it is reasonably certain not to be exercised. The lease liability is initially measured at the present value of lease payments that are outstanding at the commencement date, discounted at the interest rate implicit in the lease or if that rate cannot be easily determined the Group’s incremental borrowing rate. Lease payments comprise payments of fixed principal, less any lease incentives, variable elements linked to an index, guaranteed residuals or buy-out options that are reasonably certain to be exercised. They include payments in respect of optional renewal periods where these are reasonably certain to be exercised or early termination payments where the lease term reflects such an option. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. When a lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recognised in the Group income statement if the asset is fully depreciated. The Group presents right-of-use assets within property, plant and equipment and lease obligations within the Group balance sheet. (n) Post-employment benefit assets and obligations (note 35) Defined benefit pension arrangements – funded plans The post-employment benefit assets and obligations recognised in the Group balance sheet in respect of funded plans comprise the fair value of plan assets of funded plans less the present value of the related defined benefit obligation at that date. The defined benefit obligation is calculated annually by independent qualified actuaries, using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using market yields on high-quality corporate pound sterling bonds with maturity terms consistent with the estimated average term of the related pension liability. Actuarial gains and losses arising from experience adjustments, and changes in actuarial assumptions, are recognised immediately in the Group statement of comprehensive income. The pension cost recognised in the Group income statement comprises the cost of benefits accrued plus interest on the opening net defined benefit obligation. Service costs and financing income and expenses are recognised separately in the Group income statement. Plan expenses are deducted from the expected return on the plan assets over the year. Defined benefit pension arrangements – unfunded plans Unfunded pension obligations are determined and accounted for in accordance with the principles used in respect of the funded arrangements. Defined contribution pension arrangements The assets of defined contribution plans are held separately in independently administered funds. The pension cost recognised in the Group income statement represents the contributions payable by the Group to these funds, in respect of the year. Post-retirement healthcare obligations Obligations in respect of post-retirement healthcare plans are calculated annually by independent qualified actuaries, using an actuarial methodology similar to that for the funded defined benefit pension arrangements. Actuarial gains and losses arising from experience adjustments, and changes in actuarial assumptions, are recognised in the Group statement of comprehensive income. The cost recognised in the Group income statement comprises only interest on the obligations. (o) Own shares (note 39) The Group has a number of equity-settled, share-based employee incentive plans. In connection with these, shares in the Company are held by The Experian plc Employee Share Trust and the Experian UK Approved All-Employee Share Plan. The assets of these entities mainly comprise Experian plc shares, which are shown as a deduction from equity at cost. Shares in the Company purchased and held as treasury shares, in connection with the above plans and any share purchase programme, are also shown as a deduction from equity at cost. The par value of shares in the Company that are purchased and cancelled, in connection with any share purchase programme, is accounted for as a reduction in called-up share capital with any cost in excess of that amount being deducted from retained earnings. (p) Assets and liabilities classified as held-for-sale Assets and liabilities are classified as held-for-sale when their carrying amounts are to be recovered or settled principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of the carrying amount and fair value less costs to sell. No depreciation or amortisation is charged in respect of non-current assets classified as held-for-sale. (q) Revenue recognition (note 8) Revenue is stated net of any sales taxes, rebates and discounts and reflects the amount of consideration we expect to receive in exchange for the transfer of promised goods and services. Total consideration from contracts with customers is allocated to the performance obligations identified based on their standalone selling price, and is recognised when those performance obligations are satisfied and the control of goods or services is transferred to the customer, either over time or at a point in time. Notes to the Group financial statements continuedExperian plc Financial statements 157 4. Significant accounting policies continued The provision and processing of transactional data is distinguished between contracts that: – provide a service on a per unit basis; where the transfer to the customer of each completed unit is considered satisfaction of a single performance obligation. Revenue is recognised on the transfer of each unit; – provide a service to the customer over the contractual term, normally between one and five years, where revenue is recognised on the transfer of this service to customers. For the majority of contracts this means revenue is spread evenly over the contract term, as customers simultaneously receive and consume the benefits of the service; – require an enhanced service at the start, where revenue is recognised to reflect the upfront benefit the customer receives and consumes. Revenue for such contracts is recognised proportionally in line with the costs of providing the service. Revenue from referral fees for credit products and white-label partnerships is recognised as transactional revenue. Revenue from transactional batch data arrangements that include an ongoing update service is apportioned across each delivery to the customer and is recognised when the delivery is complete, and control of the batch data passes to the customer. Performance obligations are determined based on the frequency of data refresh: one-off, quarterly, monthly, or real-time. Subscription and membership fees for continuous access to a service are recognised over the period to which they relate, usually 1, 12 or 24 months. Customers simultaneously receive and consume the benefits of the service; therefore, revenue is recognised evenly over the subscription or membership term. Revenue for one-off credit reports is recognised when the report is delivered to the consumer. Software licence and implementation services are primarily accounted for as a single performance obligation, with revenue recognised when the combined offering is delivered to the customer. Contract terms normally vary between one and five years. These services are distinguished between: – Experian-hosted solutions, where the customer has the right to access a software solution over a specified time period. Customers simultaneously receive and consume the benefits of the service and revenue is spread evenly over the period that the service is available; and – On-premise software licence arrangements, where the software solution is installed in an environment controlled by the customer. The arrangement represents a right to use licence and so the performance obligation is considered to be fulfilled on delivery completion, when control of the configured solution is passed to the customer. Revenue is recognised at that point in time. The delivery of support and maintenance agreements is generally considered to be a separate performance obligation to provide a technical support service including minor updates. Contract terms are often aligned with licence terms. Customers simultaneously receive and consume the benefits of the service therefore revenue is spread evenly over the term of the maintenance period. The provision of distinct standalone consultancy and professional services is distinguished between: – Professional consultancy services where the performance obligation is the provision of personnel. Customers simultaneously receive and consume the benefits of the service, and revenue is recognised over time, in line with hours provided; and – The provision of analytical models and analyses, where the performance obligation is a deliverable, or a series of deliverables, and revenue is recognised on delivery when control is passed to the customer. Sales are typically invoiced in the geographic area in which the customer is located. As a result, the geographic location of the invoicing undertaking is used to attribute revenue to individual countries. Accrued income balances, which represent the right to consideration in exchange for goods or services that we have transferred to a customer, are assessed as to whether they meet the definition of a contract asset: When the right to consideration is conditional on something other than the passage of time, a balance is classified as a contract asset. This arises where there are further performance obligations to be satisfied as part of the contract with the customer and typically includes balances relating to software licensing contracts. When the right to consideration is conditional only on the passage of time, the balance does not meet the definition of a contract asset and is classified as an unbilled receivable. This typically arises where the timing of the related billing cycle occurs in a period after the performance obligation is satisfied. Costs incurred prior to the satisfaction or partial satisfaction of a performance obligation are first assessed to see if they are within the scope of other standards. Where they are not, certain costs are recognised as an asset providing they relate directly to a contract (or an anticipated contract), generate or enhance resources that will be used in satisfying (or to continue to satisfy) performance obligations in the future and are expected to be recovered from the customer. Costs which meet this criteria are deferred as contract costs and these are amortised on a systematic basis consistent with the pattern of transfer of the related goods or services. Costs to obtain a contract predominantly comprise sales commissions costs. Costs to fulfil a contract predominantly comprise labour costs directly relating to the implementation services provided. Contract liabilities arise when we have an obligation to transfer future goods or services to a customer for which we have received consideration, or the amount is due, from the customer, and include both deferred income balances and specific reserves. (r) Operating charges Operating charges are reported by nature in the Group income statement, reflecting the Group’s cost-management control structure. Details of the types of charges within labour costs in respect of share incentive plans are set out in note 4(u). Those for post-employment benefits are set out in note 4(n). Details of the Group’s amortisation and depreciation policy are given in notes 4(f), 4(g) and 4(m). The principles upon which impairment charges of tangible and intangible assets are recognised are set out in notes 4(d), 4(e) and 4(f). Experian plc Annual Report 2021Financial statements 158 4. Significant accounting policies continued (s) Net finance costs (note 15) Incremental transaction costs which are directly attributable to the issue of debt are capitalised and amortised over the expected life of the borrowing, using the effective interest method. All other borrowing costs are charged in the Group income statement in the year in which they are incurred. Amounts payable or receivable in respect of interest rate swaps are taken to net finance costs over the periods of the contracts, together with the interest differentials reflected in foreign exchange contracts. Details of the nature of movements in the fair value of derivatives which are reported as financial fair value remeasurements are included in note 4(j). The change in the year in the present value of put option agreements, in respect of shares held by non-controlling shareholders, is recognised as a financing fair value remeasurement within net finance costs. (t) Tax (note 16) The tax charge or credit for the year is recognised in the Group income statement, except for tax on items recognised in OCI or directly in equity. Current tax is calculated on the basis of the tax laws substantively enacted at the balance sheet date in the countries where the Group operates. Current tax assets and liabilities are offset where there is a legally enforceable right of offset. Uncertain tax positions are considered on an individual basis. Where management considers it probable that an additional outflow will result from any given position, a provision is made. Such provisions are measured using management’s best estimate of the most likely outcome. Further details are given in note 5. Deferred tax is provided in full on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Group financial statements. Deferred tax is not recognised on taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is not accounted for when it arises from the initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply when the asset is realised or the liability settled, based on the tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Group operates. Deferred tax assets are recognised in respect of tax losses carried forward and other temporary differences, to the extent that it is probable that the related tax benefit will be realised through future taxable profits. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the Group controls the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where they relate to the same tax authority. (u) Share incentive plans (note 33) The fair value of share incentives granted in connection with the Group’s equity-settled, share-based employee incentive plans is recognised as an expense on a straight-line basis over the vesting period. Fair value is measured using whichever of the Black-Scholes model, Monte Carlo model or closing market price is most appropriate. The Group takes into account the best estimate of the number of awards and options expected to vest and revises such estimates at each balance sheet date. Non-market performance conditions are included in the vesting estimates. Market-based performance conditions are included in the fair value measurement but are not revised for actual performance. (v) Contingent consideration The initially recorded cost of any acquisition includes a reasonable estimate of the fair value of any contingent amounts expected to be payable in the future. Any cost or benefit arising when such estimates are revised is recognised in the Group income statement (note 14). Where part or all of the amount of disposal consideration is contingent on future events, the disposal proceeds initially recorded include a reasonable estimate of the value of the contingent amounts expected to be receivable and payable in the future. The proceeds and profit or loss on disposal are adjusted when revised estimates are made, with corresponding adjustments made to receivables and payables as appropriate, until the ultimate outcome is known and the related consideration received. (w) Discontinued operations (note 17) A discontinued operation is a component of the Group’s business that represents a separate geographic area of operation or a separate major line of business. Classification as a discontinued operation occurs upon disposal or earlier, if the operation meets the criteria to be classified as held-for-sale. Discontinued operations are presented in the Group income statement as a separate line and are shown net of tax. When an operation is classified as a discontinued operation, comparatives in the Group income statement and the Group statement of comprehensive income are re-presented as if the operation had been discontinued from the start of the comparator year. (x) Earnings per share (EPS) (note 18) Earnings per share are reported in accordance with IAS 33. (y) Segment information policy and presentation principles (note 9) We are organised into, and managed on a worldwide basis through, the following five operating segments, which are based on geographic areas and supported by central functions: North America Latin America UK and Ireland Europe, Middle East and Africa (EMEA) and Asia Pacific. The chief operating decision maker assesses the performance of these operating segments on the basis of Benchmark EBIT, as defined in note 6. The ‘All other segments’ category required to be disclosed has been captioned as EMEA/Asia Pacific in these financial statements. This combines information in respect of the EMEA and Asia Pacific segments, as neither of these operating segments is individually reportable, on the basis of their share of the Group’s revenue, reported profit or loss, and assets. We separately present information equivalent to segment disclosures in respect of the costs of our central functions, under the caption ‘Central Activities’, as management believes that this information is helpful to users of the financial statements. Costs reported for Central Activities include costs arising from finance, treasury and other global functions. Notes to the Group financial statements continuedExperian plc Financial statements 159 4. Significant accounting policies continued Inter-segment transactions are entered into under the normal commercial terms and conditions that would be available to third parties. Such transactions do not have a material impact on the Group’s results. Segment assets consist primarily of property, plant and equipment, intangible assets including goodwill, derivatives designated as hedges of future commercial transactions, contract assets and receivables. They exclude tax assets, cash and cash equivalents, and derivatives designated as hedges of borrowings. Segment liabilities comprise operating and contract liabilities, including derivatives designated as hedges of future commercial transactions. They exclude tax liabilities, borrowings and related hedging derivatives. Net assets reported for Central Activities comprise corporate head office assets and liabilities, including certain post-employment benefit assets and obligations, and derivative assets and liabilities. Capital expenditure comprises additions to property, plant and equipment and intangible assets, other than additions through business combinations or to right-of-use assets. Information required to be presented also includes analysis of the Group’s revenues by groups of service lines. This is supplemented by voluntary disclosure of the profitability of those groups of service lines. For ease of reference, we use the term ‘business segments’ when discussing the results of groups of service lines. Our two business segments, details of which are given in the Strategic report section of this Annual Report, are: Business-to-Business Consumer Services. The North America, Latin America and the UK and Ireland operating segments derive revenues from both of the Group’s business segments. The EMEA and Asia Pacific segments currently do not derive revenue from the Consumer Services business segment. Reportable segment information for the full year provided to the chief operating decision maker is set out in note 9(a). 5. Critical accounting estimates, assumptions and judgments (a) Critical accounting estimates and assumptions In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amount of revenues, expenses, assets, liabilities and the disclosure of contingent liabilities. The resulting accounting estimates, which are based on management’s best judgment at the date of these financial statements, will seldom equal the subsequent actual amounts. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are summarised below. Revenue recognition is excluded from this summary on the grounds that the policy adopted in this area is sufficiently objective. Tax (notes 16, 36 and 43(a)) The Group is subject to tax in numerous jurisdictions. The Group has a number of open tax returns with various tax authorities with whom it is in active dialogue. Liabilities relating to these open and judgmental matters are based on an assessment as to whether additional taxes will be due, after taking into account external advice where appropriate. Significant judgment is required in determining the related assets or provisions, as there are transactions in the ordinary course of business and calculations for which the ultimate tax determination is uncertain. The Group recognises liabilities based on estimates of whether additional tax will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, the differences will affect the results for the year and the respective income tax and deferred tax assets or provisions in the year in which such determination is made. The Group recognises deferred tax assets based on forecasts of future profits against which those assets may be utilised. Goodwill (note 20) The Group tests goodwill for impairment annually, or more frequently if there is an indication that it may be impaired. The recoverable amount of each CGU is generally determined on the basis of value-in-use calculations, which require the use of cash flow projections based on financial budgets, looking forward up to five years. Management determines budgeted profit margin based on past performance and its expectations for the market’s development. Cash flows are extrapolated using estimated growth rates beyond a five-year period. The growth rates used do not exceed the long-term average growth rate for the CGU’s markets. The discount rates used reflect the Group’s pre-tax weighted average cost of capital (WACC), as adjusted for region specific risks and other factors. (b) Critical judgments In applying the Group’s accounting policies, management has made judgments that have a significant effect on the amounts recognised in the Group financial statements and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. The most significant of these judgments are in respect of intangible assets and contingencies: Intangible assets Certain costs incurred in the developmental phase of an internal project, which include the development of databases, internal use software and internally generated software, are capitalised as intangible assets if a number of criteria are met. Management has made judgments and assumptions when assessing whether a project meets these criteria, and on measuring the costs and the economic life attributed to such projects. On acquisition, specific intangible assets are identified and recognised separately from goodwill and then amortised over their estimated useful lives. These include items such as brand names and customer lists, to which value is first attributed at the time of acquisition. The capitalisation of these assets and the related amortisation charges are based on judgments about the value and economic life of such items. The economic lives of intangible assets are estimated at between three and ten years for internal projects and between two and 20 years for acquisition intangibles. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Further details of the amounts of, and movements in, such assets are given in note 21. Contingencies In the case of pending and threatened litigation claims, management has formed a judgment as to the likelihood of ultimate liability. No liability has been recognised where the likelihood of any loss arising is possible rather than probable. Experian plc Annual Report 2021Financial statements 160 6. Use of non-GAAP measures in the Group financial statements As detailed below, the Group has identified and defined certain measures that it uses to understand and manage its performance. The measures are not defined under IFRS and they may not be directly comparable with other companies’ adjusted performance measures. These non-GAAP measures are not intended to be a substitute for any IFRS measures of performance but management has included them as they consider them to be key measures used within the business for assessing the underlying performance of the Group’s ongoing businesses. (a) Benchmark profit before tax (Benchmark PBT) (note 9(a)(i)) Benchmark PBT is disclosed to indicate the Group’s underlying profitability. It is defined as profit before amortisation and impairment of acquisition intangibles, impairment of goodwill, acquisition expenses, adjustments to contingent consideration, Exceptional items, financing fair value remeasurements, tax (and interest thereon) and discontinued operations. It includes the Group’s share of continuing associates’ Benchmark post-tax results. An explanation of the basis on which we report Exceptional items is provided below. Other adjustments made to derive Benchmark PBT are explained as follows: Charges for the amortisation and impairment of acquisition intangibles are excluded from the calculation of Benchmark PBT because these charges are based on judgments about their value and economic life and bear no relation to the Group’s underlying ongoing performance. Impairment of goodwill is similarly excluded from the calculation of Benchmark PBT. Acquisition and disposal expenses (representing the incidental costs of acquisitions and disposals, one-time integration costs and other corporate transaction expenses) relating to successful, active or aborted acquisitions and disposals are excluded from the definition of Benchmark PBT as they bear no relation to the Group’s underlying ongoing performance or to the performance of any acquired businesses. Adjustments to contingent consideration are similarly excluded from the definition of Benchmark PBT. Charges and credits for financing fair value remeasurements within finance expense in the Group income statement are excluded from the definition of Benchmark PBT. These include retranslation of intra-Group funding, and that element of the Group’s derivatives that is ineligible for hedge accounting, together with gains and losses on put options in respect of acquisitions. Amounts recognised generally arise from market movements and accordingly bear no direct relation to the Group’s underlying performance. (b) Benchmark earnings before interest and tax (Benchmark EBIT) and margin (Benchmark EBIT margin) (note 9(a)(i)) Benchmark EBIT is defined as Benchmark PBT before the net interest expense charged therein and accordingly excludes Exceptional items as defined below. Benchmark EBIT margin is Benchmark EBIT from ongoing activities expressed as a percentage of revenue from ongoing activities. (c) Benchmark earnings before interest, tax, depreciation and amortisation (Benchmark EBITDA) Benchmark EBITDA is defined as Benchmark EBIT before the depreciation and amortisation charged therein (note 12). (d) Exited business activities Exited business activities are businesses sold, closed or identified for closure during a financial year. These are treated as exited business activities for both revenue and Benchmark EBIT purposes. The results of exited business activities are disclosed separately with the results of the prior period re-presented in the segmental analyses as appropriate. This measure differs from the definition of discontinued operations in IFRS 5. (e) Ongoing activities The results of businesses trading at 31 March 2021, which are not disclosed as exited business activities, are reported as ongoing activities. (f) Constant exchange rates To highlight our organic performance, we discuss our results in terms of growth at constant exchange rates, unless otherwise stated. This represents growth calculated after translating both years’ performance at the prior year’s average exchange rates. (g) Total growth (note 9(a)(ii)) This is the year-on-year change in the performance of our activities at actual exchange rates. Total growth at constant exchange rates removes the translational foreign exchange effects arising on the consolidation of our activities and comprises one of our measures of performance at constant exchange rates. (h) Organic revenue growth (note 9(a)(ii)) This is the year-on-year change in the revenue of ongoing activities, translated at constant exchange rates, excluding acquisitions until the first anniversary of their consolidation. (i) Benchmark earnings and Total Benchmark earnings (note 18) Benchmark earnings comprises Benchmark PBT less attributable tax and non-controlling interests. The attributable tax for this purpose excludes significant tax credits and charges arising in the year which, in view of their size or nature, are not comparable with previous years, together with tax arising on Exceptional items and on other adjustments made to derive Benchmark PBT. Benchmark PBT less attributable tax is designated as Total Benchmark earnings. (j) Benchmark earnings per share (Benchmark EPS) (note 18) Benchmark EPS comprises Benchmark earnings divided by the weighted average number of issued ordinary shares, as adjusted for own shares held. (k) Benchmark PBT per share Benchmark PBT per share comprises Benchmark PBT divided by the weighted average number of issued ordinary shares, as adjusted for own shares held. (l) Benchmark tax charge and rate (note 16(b)(ii)) The Benchmark tax charge is the tax charge applicable to Benchmark PBT. It differs from the tax charge by tax attributable to Exceptional items and other adjustments made to derive Benchmark PBT, and exceptional tax charges. A reconciliation is provided in note 16(b)(ii) to these financial statements. The Benchmark effective rate of tax is calculated by dividing the Benchmark tax charge by Benchmark PBT. Notes to the Group financial statements continuedExperian plc Financial statements 161 6. Use of non-GAAP measures in the Group financial statements continued (m) Exceptional items (note 14(a)) The separate reporting of Exceptional items gives an indication of the Group’s underlying performance. Exceptional items include those arising from the profit or loss on disposal of businesses, closure costs of major business units, costs of significant restructuring programmes and other financially significant one-off items. All other restructuring costs are charged against Benchmark EBIT, in the segments in which they are incurred. (n) Full-year dividend per share (note 19) Full-year dividend per share comprises the total of dividends per share announced in respect of the financial year. (o) Benchmark operating and Benchmark free cash flow Benchmark operating cash flow is Benchmark EBIT plus amortisation, depreciation and charges in respect of share-based incentive plans, less capital expenditure net of disposal proceeds and adjusted for changes in working capital, principal lease payments and the Group’s share of the Benchmark profit or loss retained in continuing associates. Benchmark free cash flow is derived from Benchmark operating cash flow by excluding net interest, tax paid in respect of continuing operations and dividends paid to non-controlling interests. (p) Cash flow conversion Cash flow conversion is Benchmark operating cash flow expressed as a percentage of Benchmark EBIT. (q) Net debt and Net funding (note 28) Net debt is borrowings (and the fair value of derivatives hedging borrowings) excluding lease obligations and accrued interest, less cash and cash equivalents and other highly liquid bank deposits with original maturities greater than three months. Net funding is borrowings (and the fair value of the effective portion of derivatives hedging borrowings) excluding lease obligations and accrued interest, less cash held in Group Treasury. (r) Return on capital employed (ROCE) (note 9(a)(iii)) ROCE is defined as Benchmark EBIT less tax at the Benchmark rate divided by a three-point average of capital employed, in continuing operations, over the year. Capital employed is net assets less non-controlling interests, further adjusted to add or deduct the net tax liability or asset and to add Net debt. 7. Financial risk management (a) Financial risk factors The Group’s activities expose it to a variety of financial risks. These are market risk, including foreign exchange risk and interest rate risk, credit risk, and liquidity risk. These risks are unchanged from those reported in the 2020 Annual Report. The numeric disclosures in respect of financial risks are included within later notes to the financial statements, to provide a more transparent link between financial risks and results. Financial risks represent part of the Group’s risks in relation to its strategy and business objectives. There is a full discussion of the most significant risks in the Risk management section of this Annual Report. The Group’s financial risk management focuses on the unpredictability of financial markets and seeks to minimise potentially adverse effects on the Group’s financial performance. The Group seeks to reduce its exposure to financial risks and uses derivative financial instruments to hedge certain risk exposures. Such derivative financial instruments are also used to manage the Group’s borrowings so that amounts are held in currencies broadly in the same proportion as the Group’s main earnings. However, the Group does not, nor does it currently intend to, borrow in the Brazilian real or the Colombian peso. The Group also ensures surplus funds are prudently managed and controlled. Foreign exchange risk The Group is exposed to foreign exchange risk from future commercial transactions, recognised assets and liabilities and investments in, and loans between, Group undertakings with different functional currencies. The Group manages such risk, primarily within undertakings whose functional currencies are the US dollar, by: entering into forward foreign exchange contracts in the relevant currencies in respect of investments in entities with functional currencies other than the US dollar, whose net assets are exposed to foreign exchange translation risk; swapping the proceeds of certain bonds issued in pounds sterling and euros into US dollars; managing the liquidity of Group undertakings in the functional currency of those undertakings by using an in-house banking structure and hedging any remaining foreign currency exposures with forward foreign exchange contracts; denominating internal loans in relevant currencies, to match the currencies of assets and liabilities in entities with different functional currencies; and using forward foreign exchange contracts to hedge certain future commercial transactions. The principal transaction exposures are to the pound sterling and the euro. An indication of the sensitivity to foreign exchange risk is given in note 10. Interest rate risk The Group’s interest rate risk arises principally from components of its Net debt that are at variable rates. The Group has a policy of normally maintaining between 50% and 100% of Net funding at rates that are fixed for more than six months. The Group manages its interest rate exposure by: using fixed and floating rate borrowings, interest rate swaps and cross-currency interest rate swaps to adjust the balance between the two; and mixing the duration of borrowings and interest rate swaps to smooth the impact of interest rate fluctuations. Further information in respect of the Group’s net finance costs for the year and an indication of the sensitivity to interest rate risk is given in note 15. Experian plc Annual Report 2021Financial statements 162 7. Financial risk management continued Credit risk In the case of derivative financial instruments, deposits, contract assets and trade receivables, the Group is exposed to credit risk from the non-performance of contractual agreements by the contracted party. Credit risk is managed by: only entering into contracts for derivative financial instruments and deposits with banks and financial institutions with strong credit ratings, within limits set for each organisation; and closely controlling dealing activity and regularly monitoring counterparty positions. The credit risk on derivative financial instruments utilised and deposits held by the Group is therefore not considered to be significant. The Group does not anticipate that any losses will arise from non-performance by its chosen counterparties. Further information on the Group’s derivative financial instruments at the balance sheet dates is given in note 30 and that in respect of amounts recognised in the Group income statement is given in note 15. Further information on the Group’s cash and cash equivalents at the balance sheet dates is given in note 25. To minimise credit risk for trade receivables, the Group has implemented policies that require appropriate credit checks on potential clients before granting credit. The maximum credit risk in respect of such financial assets is their carrying value. Further information in respect of the Group’s trade receivables is given in note 24. Debt investments All of the Group’s debt investments at amortised cost and FVOCI are considered to have low credit risk; the loss allowance is therefore limited to 12 months’ expected losses. Management considers ‘low credit risk’ for listed bonds to be an investment-grade credit rating with at least one major rating agency. Other instruments are considered to be low credit risk when they have a low risk of default and the issuer has a high capacity to meet its contractual cash flow obligations in the near term. Financial assets at FVPL The Group is also exposed to credit risk in relation to debt investments that are measured at FVPL. The maximum exposure at the balance sheet date is the carrying amount of these investments. Liquidity risk The Group manages liquidity risk by: issuing long-maturity bonds and notes; entering into long-term committed bank borrowing facilities, to ensure the Group has sufficient funds available for operations and planned growth; spreading the maturity dates of its debt; and monitoring rolling cash flow forecasts, to ensure the Group has adequate, unutilised committed bank borrowing facilities. Details of such facilities are given in note 27. A maturity analysis of contractual undiscounted future cash flows for financial liabilities is provided in note 32. (b) Capital risk management The Group’s definition and management of capital focuses on capital employed: The Group’s capital employed is reported in the net assets summary table set out in the Financial review and analysed by segment in note 9(a)(iii). As part of its internal reporting processes, the Group monitors capital employed by operating segment. The Group’s objectives in managing capital are to: safeguard its ability to continue as a going concern, in order to provide returns for shareholders and benefits for other stakeholders; and maintain an optimal capital structure and cost of capital. The Group’s policy is to have: a prudent but efficient balance sheet; and a target leverage ratio of 2.0 to 2.5 times Benchmark EBITDA, consistent with the intention to retain strong investment-grade credit ratings. To maintain or adjust its capital structure, the Group may: adjust the amount of dividends paid to shareholders; return capital to shareholders; issue or purchase our own shares; or sell assets to reduce Net debt. Dividend policy The Group has a progressive dividend policy which aims to increase the dividend over time broadly in line with the underlying growth in Benchmark EPS. This aligns shareholder returns with the underlying profitability of the Group. In determining the level of dividend in any one year, in accordance with the policy, the Board also considers a number of other factors, including the outlook for the Group, the opportunities for organic investment, the opportunities to make acquisitions and disposals, the cash flow generated by the Group, and the level of dividend cover. Further detail on the distributable reserves of the Company can be found in note K to the Company financial statements. Notes to the Group financial statements continuedExperian plc Financial statements 8. Revenue (a) Disaggregation of revenue from contracts with customers Year ended 31 March 2021 Revenue from external customers Data Decisioning Business-to-Business Consumer Services Total ongoing activities Year ended 31 March 20201 Revenue from external customers Data Decisioning Business-to-Business Consumer Services Total ongoing activities North America US$m 1,761 694 2,455 1,075 3,530 North America US$m 1,642 679 2,321 926 3,247 Latin America US$m UK and Ireland US$m EMEA/ Asia Pacific US$m 457 92 549 76 625 361 220 581 156 737 287 178 465 — 465 Latin America US$m UK and Ireland US$m EMEA/ Asia Pacific US$m 578 114 692 40 732 367 227 594 161 755 213 214 427 — 427 163 Total operating segments US$m 2,866 1,184 4,050 1,307 5,357 Total operating segments US$m 2,800 1,234 4,034 1,127 5,161 1 Revenue for the year ended 31 March 2020 has been re-presented for the reclassification to exited business activities of certain B2B businesses and the reclassification of our Consumer Services business in Latin America to the Consumer Services business segment; previously our Consumer Services business in this region was not sufficiently material to be disclosed separately. Total revenue comprises revenue from ongoing activities as well as revenue from exited business activities and is reconciled in note 9. Revenue in respect of exited business activities of US$15m (2020: US$18m) comprised UK and Ireland Data revenue of US$12m (2020: US$14m) and EMEA/Asia Pacific Decisioning revenue of US$3m (2020: US$4m). Data is predominantly transactional revenue with a portion from licence fees. Decisioning revenue is derived from: software and system sales, and includes recurring licence fees, consultancy and implementation fees, and transactional charges; credit score fees which are primarily transactional; and analytics income comprising a mix of consultancy and professional fees as well as transactional revenue. Consumer Services revenue primarily comprises monthly subscription and one-off fees, and referral fees for credit products and white-label partnerships. The timing of recognition of these revenue streams is discussed in note 4(q). (b) Significant changes in contract balances Contract assets predominantly relate to software licence services, where revenue recognition for on-premise arrangements occurs as the solution is transferred to the customer, whereas the invoicing pattern is often annually over the contract period. Contract assets recognised during the year totalled US$62m (2020: US$107m). The contract asset balance for work completed but not invoiced on satisfaction of a performance obligation unwinds over the contract term. Contract assets are transferred to receivables when the right to consideration becomes unconditional, or conditional only on the passage of time. Contract assets reclassified to receivables during the year totalled US$79m (2020: US$58m). An impairment charge of US$4m (2020: US$nil) has been recognised against contract assets during the year. The majority of software licences are invoiced annually in advance. Where these licences relate to Experian-hosted solutions, revenue is recognised over the period that the service is available to the customer, creating a contract liability. Delivery services are generally invoiced during the delivery period, creating a contract liability for the consideration received in advance, until the delivery is complete. Where the delivery relates to Experian-hosted solutions, revenue is recognised over the period that the service is available to the customer, reducing the contract liability over time. Where the delivery relates to an on-premise solution, the contract liability is released on delivery completion. Support and maintenance agreements are often invoiced annually in advance, creating a contract liability, which is released over the term of the maintenance period as revenue is recognised. Revenue recognised in the year of US$352m (2020: US$370m) was included in the opening contract liability. Cash received in advance not recognised as revenue in the year was US$380m (2020: US$377m). The increase in contract liabilities resulting from business combinations during the year was US$8m (2020: US$7m). Foreign exchange accounts for US$8m and US$21m of the increase in contract asset and contract liability balances in the year respectively (2020: decrease of US$8m and US$23m). Experian plc Annual Report 2021Financial statements 164 8. Revenue continued (c) Contract costs The carrying amount of assets recognised from costs to obtain and costs to fulfil contracts with customers at 31 March 2021 is US$25m and US$74m respectively (2020: US$28m and US$68m). Amortisation of contract costs in the year is US$66m (2020: US$74m) and recognised impairment losses totalled US$2m (2020: US$5m). Contract costs are amortised on a systematic basis consistent with the pattern of transfer of the related goods or services. A portfolio approach has been applied to calculate contract costs for contracts with similar characteristics, where the Group reasonably expects that the effects of applying a portfolio approach does not differ materially from calculating the amounts at an individual contract level. (d) Transaction price allocated to remaining performance obligations The aggregate amount of the transaction price from non-cancellable contracts with customers with expected durations of 12 months or more, allocated to the performance obligations that are unsatisfied, or partially satisfied, at 31 March 2021 is US$5.0bn (2020: US$4.6bn). We expect to recognise approximately 42% (2020: 43%) of this value within one year, 28% (2020: 25%) within one to two years, 17% (2020: 15%) within two to three years and 13% (2020: 17%) thereafter. The aggregate amount of the transaction price allocated to unsatisfied, or partially satisfied, performance obligations which are transactional in nature includes estimates of variable consideration. These estimates are based on forecast transactional volumes and do not take into account all external market factors which may have an impact on the future revenue recognised from such contracts. A portfolio approach has been applied to calculate the aggregate amount of the transaction price allocated to the unsatisfied, or partially satisfied, performance obligations for contracts with similar characteristics, where the Group reasonably expects that the effects of applying a portfolio approach does not differ materially from calculating the amounts at an individual contract level. We apply the practical expedient in paragraph 121(a) of IFRS 15 and do not disclose information about remaining performance obligations that have original expected durations of one year or less. This excludes contracts across a number of business units which have revenue due to be recognised in the financial year ending 31 March 2022; it also excludes the majority of our direct-to-consumer arrangements. 9. Segment information (a) IFRS 8 disclosures (i) Income statement Year ended 31 March 2021 Revenue from external customers Ongoing activities Exited business activities Total Reconciliation from Benchmark EBIT to profit/(loss) before tax Benchmark EBIT Ongoing activities Exited business activities Total Net interest expense included in Benchmark PBT (note 15(b)) Benchmark PBT Exceptional items (note 14(a)) Impairment of goodwill (note 20) Amortisation of acquisition intangibles (note 21) Acquisition and disposal expenses Adjustment to the fair value of contingent consideration Non-benchmark share of post-tax (loss)/profit of associates Interest on uncertain tax provisions Financing fair value remeasurements (note 15(c)) Profit/(loss) before tax North America US$m Latin America US$m UK and Ireland US$m EMEA/ Asia Pacific US$m Total operating segments US$m Central Activities US$m Total continuing operations US$m 3,530 — 3,530 1,201 — 1,201 (5) 1,196 112 — (90) (16) — — — — 1,202 625 — 625 172 — 172 (2) 170 (1) — (14) (4) — — — — 151 737 12 749 122 (1) 121 (1) 120 (63) — (7) (1) — (3) — — 46 465 3 468 5,357 15 5,372 — — — 5,357 15 5,372 (20) 2 (18) (2) (20) (13) (53) (27) (20) (1) — — — (134) 1,475 1 1,476 (10) 1,466 35 (53) (138) (41) (1) (3) — — 1,265 (90) — (90) (111) (201) — — — — — 19 (11) 5 (188) 1,385 1 1,386 (121) 1,265 35 (53) (138) (41) (1) 16 (11) 5 1,077 Notes to the Group financial statements continuedExperian plc Financial statements 165 9. Segment information continued (i) Income statement continued Year ended 31 March 20201 Revenue from external customers Ongoing activities Exited business activities Total Reconciliation from Benchmark EBIT to profit/(loss) before tax Benchmark EBIT Ongoing activities Exited business activities Total Net interest expense included in Benchmark PBT (note 15(b)) Benchmark PBT Exceptional items (note 14(a)) Amortisation of acquisition intangibles (note 21) Acquisition and disposal expenses Adjustment to the fair value of contingent consideration Non-benchmark share of post-tax profit of associates Interest on uncertain tax provisions Financing fair value remeasurements (note 15(c)) Profit/(loss) before tax North America US$m Latin America US$m UK and Ireland US$m EMEA/ Asia Pacific US$m Total operating segments US$m Central Activities US$m Total continuing operations US$m 3,247 — 3,247 1,093 — 1,093 (5) 1,088 (35) (85) (9) (1) — — — 958 732 — 732 220 — 220 (2) 218 — (17) (2) — — — — 199 755 14 769 173 (2) 171 (1) 170 — (8) (8) 5 — — — 159 427 4 431 5,161 18 5,179 — — — 5,161 18 5,179 12 3 15 (2) 13 — (14) (20) — — — — (21) 1,498 1 1,499 (10) 1,489 (35) (124) (39) 4 — — — 1,295 (112) — (112) (122) (234) — — — — 6 (14) (111) (353) 1,386 1 1,387 (132) 1,255 (35) (124) (39) 4 6 (14) (111) 942 1 Revenue and Benchmark EBIT for the year ended 31 March 2020 have been re-presented for the reclassification to exited business activities of certain B2B businesses. Additional information by operating segment, including that on total and organic growth at constant exchange rates, is provided in the Strategic report. (ii) Reconciliation of revenue from ongoing activities Revenue for the year ended 31 March 20201 Adjustment to constant exchange rates Revenue at constant exchange rates for the year ended 31 March 2020 Organic revenue growth Revenue from acquisitions Revenue at constant exchange rates for the year ended 31 March 2021 Adjustment to actual exchange rates Revenue for the year ended 31 March 2021 Organic revenue growth at constant exchange rates Revenue growth at constant exchange rates North America US$m 3,247 — 3,247 241 42 3,530 — 3,530 7% 9% Latin America US$m 732 1 733 65 4 802 (177) 625 9% 9% UK and Ireland US$m 755 (2) 753 (43) — 710 27 737 (6)% (6)% EMEA/ Asia Pacific US$m 427 1 428 (60) 89 457 8 465 (14)% 7% Total ongoing activities US$m 5,161 — 5,161 203 135 5,499 (142) 5,357 4% 7% 1 Revenue for the year ended 31 March 2020 has been re-presented for the reclassification to exited business activities of certain B2B businesses. The table above demonstrates the application of the methodology set out in note 6 in determining organic and total revenue growth at constant exchange rates. Revenue at constant exchange rates is reported for both years using the average exchange rates applicable for the year ended 31 March 2020. Experian plc Annual Report 2021Financial statements 166 9. Segment information continued (iii) Balance sheet Net assets/(liabilities) At 31 March 2021 Goodwill Investments in associates Other assets Total assets Total liabilities Net assets/(liabilities) At 31 March 2020 Goodwill Investments in associates Other assets Total assets Total liabilities Net assets/(liabilities) Central Activities and other comprises: Central Activities Investments in associates Net debt Tax Capital employed North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities Non-controlling interests Capital employed attributable to owners North America US$m 3,133 4 1,969 5,106 (994) 4,112 North America US$m 2,943 22 1,816 4,781 (1,010) 3,771 Latin America US$m 611 — 495 1,106 (210) 896 Latin America US$m 530 — 446 976 (165) 811 UK and Ireland US$m 718 61 503 1,282 (345) 937 EMEA/ Asia Pacific US$m 799 9 715 1,523 (494) 1,029 UK and Ireland US$m 656 58 519 1,233 (320) 913 EMEA/ Asia Pacific US$m 414 7 476 897 (228) 669 Total operating segments US$m 5,261 74 3,682 9,017 (2,043) 6,974 Total operating segments US$m 4,543 87 3,257 7,887 (1,723) 6,164 Central Activities and other US$m — 54 1,000 1,054 (4,909) (3,855) Central Activities and other US$m — 36 976 1,012 (4,895) (3,883) 2021 Liabilities US$m (249) — (4,123) (537) (4,909) Net assets/ (liabilities) US$m 334 54 (3,826) (417) (3,855) Assets US$m 583 54 297 120 1,054 Assets US$m 512 36 329 135 1,012 2020 Liabilities US$m (241) — (4,227) (427) (4,895) 2021 US$m 4,112 896 937 1,029 6,974 388 (38) 7,324 Total Group US$m 5,261 128 4,682 10,071 (6,952) 3,119 Total Group US$m 4,543 123 4,233 8,899 (6,618) 2,281 Net assets/ (liabilities) US$m 271 36 (3,898) (292) (3,883) 2020 US$m 3,771 811 913 669 6,164 307 (6) 6,465 The three-point average capital employed figure of US$6,849m, used in our calculation of ROCE, is determined by calculating the mathematical average of capital employed at 31 March 2021, 30 September 2020 and 31 March 2020. Notes to the Group financial statements continuedExperian plc Financial statements 167 9. Segment information continued (iv) Capital expenditure, amortisation and depreciation North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities Total Group Capital expenditure Right-of-use asset additions 2021 US$m 211 81 41 28 361 61 422 2020 US$m 222 107 60 34 423 64 487 2021 US$m 26 3 14 14 57 — 57 2020 US$m 15 17 9 9 50 — 50 Amortisation 2021 US$m 160 61 50 27 298 28 326 2020 US$m 134 70 42 22 268 19 287 Depreciation 2021 US$m 59 17 28 22 126 1 127 2020 US$m 60 19 25 21 125 1 126 Amortisation and depreciation above only include amounts charged to Benchmark PBT. (v) Revenue by country – continuing operations USA UK Brazil Germany Colombia South Africa Other 2021 US$m 3,529 744 546 81 60 55 357 5,372 2020 (Re-presented) US$m 3,245 762 647 8 66 62 389 5,179 Revenue is primarily attributable to countries other than Ireland. No single client accounted for 10% or more of revenue in the current or prior year. Revenue from the USA, the UK and Brazil in aggregate comprises 90% (2020: 90%) of Group revenue. Revenue attributable to Germany was previously reported within Other; following the acquisition in the year of the Risk Management division of Arvato Financial Solutions (AFS) (see note 41) this is now analysed separately, and consequently comparative information has been re-presented. (vi) Non-current assets by country USA UK Brazil Germany South Africa Colombia Other Segment non-current assets by country Central Activities Deferred tax 2021 US$m 4,437 1,079 731 477 268 164 703 7,859 695 86 8,640 2020 (Re-presented) US$m 4,159 1,042 627 5 249 155 603 6,840 552 107 7,499 To add clarity to the presentation of this information, non-current assets for Central Activities and deferred tax have been excluded from the analysis by country. The Group has no significant non-current assets located in Ireland. Non-current assets in Germany were previously reported within Other; following the acquisition of the Risk Management division of Arvato Financial Solutions (AFS) in the year (note 41) they are now analysed separately, and consequently comparative information has been re-presented. Experian plc Annual Report 2021Financial statements 168 9. Segment information continued (b) Information on business segments (including non-GAAP disclosures) Year ended 31 March 2021 Revenue from external customers Ongoing activities Exited business activities Total Reconciliation from Benchmark EBIT to profit/(loss) before tax Benchmark EBIT Ongoing activities Exited business activities Total Net interest expense included in Benchmark PBT (note 15(b)) Benchmark PBT Exceptional items (note 14(a)) Impairment of goodwill (note 20) Amortisation of acquisition intangibles (note 21) Acquisition and disposal expenses Adjustment to the fair value of contingent consideration Non-benchmark share of post-tax (loss)/profit of associates Interest on uncertain tax provisions Financing fair value remeasurements (note 15(c)) Profit/(loss) before tax Year ended 31 March 20201 Revenue from external customers Ongoing activities Exited business activities Total Reconciliation from Benchmark EBIT to profit/(loss) before tax Benchmark EBIT Ongoing activities Exited business activities Total Net interest expense included in Benchmark PBT (note 15(b)) Benchmark PBT Exceptional items (note 14(a)) Amortisation of acquisition intangibles (note 21) Acquisition and disposal expenses Adjustment to the fair value of contingent consideration Non-benchmark share of post-tax profit of associates Interest on uncertain tax provisions Financing fair value remeasurements (note 15(c)) Profit/(loss) before tax Business-to- Business US$m Consumer Services US$m 4,050 15 4,065 1,192 1 1,193 (8) 1,185 35 (53) (118) (40) (1) — — — 1,008 1,307 — 1,307 283 — 283 (2) 281 — — (20) (1) — (3) — — 257 Total business segments US$m 5,357 15 5,372 1,475 1 1,476 (10) 1,466 35 (53) (138) (41) (1) (3) — — 1,265 Central Activities US$m Total continuing operations US$m — — — (90) — (90) (111) (201) — — — — — 19 (11) 5 (188) 5,357 15 5,372 1,385 1 1,386 (121) 1,265 35 (53) (138) (41) (1) 16 (11) 5 1,077 Business-to- Business US$m Consumer Services US$m Total business segments US$m Central Activities US$m Total continuing operations US$m 4,034 18 4,052 1,251 1 1,252 (8) 1,244 (35) (103) (37) 4 — — — 1,073 1,127 — 1,127 247 — 247 (2) 245 — (21) (2) — — — — 222 5,161 18 5,179 1,498 1 1,499 (10) 1,489 (35) (124) (39) 4 — — — 1,295 — — — (112) — (112) (122) (234) — — — — 6 (14) (111) (353) 5,161 18 5,179 1,386 1 1,387 (132) 1,255 (35) (124) (39) 4 6 (14) (111) 942 1 Revenue of US$40m and Benchmark EBIT of US$(10)m for the year ended 31 March 2020 have been re-presented for the reclassification of our Consumer Services business in Latin America to the Consumer Services business segment; previously our Consumer Services business in this region was not sufficiently material to be disclosed separately. In addition, revenue and Benchmark EBIT have been re-presented for the reclassification to exited business activities of certain B2B businesses. Additional information by business segment, including that on total and organic growth at constant exchange rates, is provided in the Strategic report. Notes to the Group financial statements continuedExperian plc Financial statements 169 10. Foreign currency (a) Principal exchange rates used US dollar : Brazilian real Pound sterling : US dollar Euro : US dollar US dollar : Colombian peso US dollar : South African rand Average Closing 2021 5.41 1.31 1.17 3,699 16.36 2020 4.12 1.27 1.11 3,382 14.79 2021 5.74 1.38 1.17 3,720 14.76 2020 5.20 1.24 1.09 4,052 17.81 2019 3.89 1.31 1.12 3,163 14.47 (b) Foreign exchange risk (i) Brazilian real intra-Group funding Brazilian real intra-Group funding provided to Serasa S.A., from a Group company whose functional currency is not the Brazilian real, is not considered permanent and foreign exchange gains or losses on this funding are recognised in the Group income statement. As a result of the weakening of 10% in the Brazilian real against the US dollar in the year ended 31 March 2021, a charge of US$16m has been recognised within financing fair value remeasurements (2020: US$54m charge due to 34% weakening) (note 15(c)). The Group is similarly exposed to the impact of the Brazilian real strengthening or weakening against the US dollar in the future. A movement of 20% would result in a US$37m impact on profit before tax. There is no effect on total equity as a result of this exposure, since it arises on intra-Group funding and there would be a related equal but opposite foreign exchange movement recognised in the translation reserve within equity. (ii) Other exposures On the basis of the profile of foreign exchange exposures, and an assessment of reasonably possible changes in such exposures, there are no other material sensitivities to foreign exchange risk at the balance sheet dates. In making these assessments, actual data on movements in the principal currencies over the most recent three-year period has been considered together with exposures at the balance sheet dates. This methodology has been applied consistently. 11. Labour costs and employee numbers – continuing operations (a) Labour costs (including executive directors) Wages and salaries Social security costs Share incentive plans Pension costs – defined benefit plans Pension costs – defined contribution plans Employee benefit costs Other labour costs Notes 33(a) 35(a) 2021 US$m 1,446 217 111 6 58 1,838 157 1,995 2020 US$m 1,353 218 88 8 56 1,723 149 1,872 Wages and salaries include redundancy costs of US$28m (note 14(c)). Other labour costs includes those in respect of external contractors, outsourcing and the recruitment, development and training of employees. The definition of key management personnel, and an analysis of their remuneration, is given in note 44(d). (b) Average monthly number of employees (including executive directors) North America Latin America UK and Ireland EMEA/Asia Pacific Total operating segments Central Activities 2021 Part-time 49 77 243 69 438 16 454 Full-time 6,992 3,289 3,191 3,955 17,427 181 17,608 Full-time- equivalent 7,016 3,328 3,313 3,989 17,646 189 17,835 2020 Part-time 49 73 253 72 447 25 472 Full-time 6,620 3,240 3,371 3,671 16,902 186 17,088 Full-time- equivalent 6,645 3,276 3,497 3,707 17,125 199 17,324 Experian plc Annual Report 2021Financial statements 170 12. Amortisation and depreciation charges Benchmark: Amortisation of other intangible assets Depreciation of property, plant and equipment Non-benchmark: Amortisation of acquisition intangibles 2021 US$m 2020 US$m 326 127 453 138 591 287 126 413 124 537 An analysis by segment of amounts charged within Benchmark PBT is given in note 9(a)(iv). Analyses by asset type are given in notes 21 and 22. The depreciation charge for the year includes US$55m (2020: US$54m) in respect of right-of-use assets. 13. Fees payable to the Company’s auditor Audit of the Company and Group financial statements Audit of the financial statements of the Company’s subsidiaries Audit-related assurance services Other assurance services Total fees payable to the Company’s auditor and its associates Summary of fees by nature: Fees for audit services Fees for audit-related assurance services Fees for other assurance services 2021 US$m 0.7 4.5 0.6 0.1 5.9 5.2 0.6 0.1 5.9 2020 US$m 0.6 4.2 0.4 0.5 5.7 4.8 0.4 0.5 5.7 The guidelines covering the use of the Company’s auditor for non-audit services are set out in the Audit Committee report. Fees for other assurance services were capped at 30% (2020: 20%) of the fees for audit services. The cap was increased in light of the Revised Ethical Standard issued by the UK Financial Reporting Council in December 2019, but also includes audit-related assurance services. In the year ended 31 March 2021, fees payable for non-audit services, were 13% (2020: 20%) of fees payable for audit services. The fees for the year ended 31 March 2020 for non-audit services, excluding audit-related assurance services were 11% of fees payable for audit services. Such fees are reported within Other operating charges. The fees for audit-related assurance services relate to the Group’s half-yearly financial report and US$0.1m (2020: US$0.4m) of the fees for other assurance services was for bond issuance related reports. Notes to the Group financial statements continuedExperian plc Financial statements 14. Exceptional items and other adjustments made to derive Benchmark PBT – continuing operations (a) Net charge for Exceptional items and other adjustments made to derive Benchmark PBT Exceptional items: Profit on disposal of associate Restructuring costs Impairment of intangible asset1 Legal provisions movements1 Net (credit)/charge for Exceptional items Other adjustments made to derive Benchmark PBT: Amortisation of acquisition intangibles Impairment of goodwill1 Acquisition and disposal expenses Adjustment to the fair value of contingent consideration1 Non-benchmark share of post-tax profit of associates Interest on uncertain tax provisions Financing fair value remeasurements Net charge for other adjustments made to derive Benchmark PBT Net charge for Exceptional items and other adjustments made to derive Benchmark PBT By income statement caption: Labour costs Amortisation and depreciation charges Other operating charges Profit on disposal of associate Within operating profit Within share of post-tax profit of associates Within finance expense Net charge for Exceptional items and other adjustments made to derive Benchmark PBT 1 Included in other operating charges. Notes 14(b) 14(c) 14(d) 14(e) 12,21 20 23 15(c) 15(a) 2021 US$m (120) 50 27 8 (35) 138 53 41 1 (16) 11 (5) 223 188 30 138 150 (120) 198 (16) 6 188 171 2020 US$m — — — 35 35 124 — 39 (4) (6) 14 111 278 313 8 124 62 — 194 (6) 125 313 Acquisition and disposal expenses represent professional fees and expenses associated with completed, ongoing and terminated acquisition and disposal processes, as well as the integration and separation costs associated with completed deals. Of the total, US$2m (2020: US$8m) is recorded within labour costs in the Group income statement, and US$39m (2020: US$31m) is included within other operating charges. (b) Profit on disposal of investment in associate On 18 November 2020, the Group disposed of its 18.6% interest in Finicity Corporation for US$127m, recognising a gain on disposal of US$120m. (c) Restructuring costs During the year the Group commenced a transformation programme in the UK and Ireland. The objectives of this programme are to simplify our technology estate, enhance customer experience and to return to profitable growth. In addition, we have launched a programme of restructuring initiatives in other regions. Costs of US$50m have been recognised, principally in the UK and Ireland, in connection with these actions with a related cash outflow of US$39m. Of this charge, US$28m related to redundancy costs, and US$22m related to other restructuring and consultancy costs included within other operating charges in the Group income statement. No further costs are expected to be incurred in relation to these initiatives. (d) Impairment of intangible asset During the year an internally generated software asset in the UK and Ireland with a net book value of US$27m was identified as requiring impairment due to planned upgrade of our technology estate. (e) Legal provisions movements During the current and prior year there has been a movement in provisions and related receivables in respect of a number of historic legal claims. Experian plc Annual Report 2021Financial statements 172 15. Net finance costs (a) Net finance costs included in profit before tax Interest income: Bank deposits, short-term investments and loan notes Interest on pension plan assets Interest income Finance expense: Eurobonds and notes Bank loans, commercial paper, overdrafts and other Commitment and facility fees Interest on leases Interest differentials on derivatives Interest expense (Credit)/charge in respect of financing fair value remeasurements (note 15(c)) Interest on uncertain tax provisions Finance expense Net finance costs included in profit before tax (b) Net interest expense included in Benchmark PBT Interest income Interest expense Net interest expense included in Benchmark PBT (c) Analysis of charge for financing fair value remeasurements Fair value (gains)/losses on borrowings – attributable to interest rate risk Fair value losses/(gains) on borrowings – attributable to currency risk Losses/(gains) on interest rate swaps – fair value hedges (Gains)/losses on cross-currency swaps – fair value hedges Foreign currency gain on cross-currency swaps designated as a cashflow hedge – transfer from OCI Gains/(losses) on items in hedging relationships – hedge ineffectiveness Fair value (gains)/losses on non-hedging derivatives Foreign exchange losses on Brazilian real intra-Group funding Other foreign exchange losses/(gains) on financing activities Decrease in present value of put options Movement in Other financial assets at FVPL Movement in connection with commitments to purchase own shares 2021 US$m 2020 US$m (11) (1) (12) 102 8 6 10 7 133 (5) 11 139 127 2021 US$m (12) 133 121 2021 US$m (35) 114 31 (75) (33) 2 (16) 16 9 (13) (3) — (5) (13) — (13) 89 35 5 10 6 145 111 14 270 257 2020 US$m (13) 145 132 2020 US$m 12 (28) (26) 33 — (9) 70 54 (1) (2) — (1) 111 Notes to the Group financial statements continuedExperian plc Financial statements 173 15. Net finance costs continued (d) Interest rate risk The following table shows the sensitivity to interest rate risk, on the basis of the profile of Net debt at the balance sheet dates and an assessment of reasonably possible changes in the principal interest rates, with all other variables held constant. In making this assessment, actual movements in relevant interest rates over the most recent three-year period have been considered and a consistent methodology applied. An indication of the primary cause of the reported sensitivity is included. Gain/(loss) Impact on profit for the financial year: Effect of an increase of 1.1% (2020: 0.7%) on US dollar-denominated Net debt: Due to fair value gains on interest rate swaps offset by higher interest on floating rate borrowings Effect of an increase of 0.3% (2020: 0.2%) on pound sterling-denominated Net debt: Due to the revaluation of borrowings and related derivatives Effect of an increase of 2.1% (2020: 2.8%) on Brazilian real-denominated Net debt: Due to higher interest income on cash and cash equivalents Effect of an increase of 0.1% (2020: 0.1%) on euro-denominated Net debt: Due to fair value gains on interest rate swaps offset by higher interest on floating rate borrowings Impact on other components of equity: Effect of an increase of 1.1% (2020: 0.7%) on US dollar-denominated Net debt: Due to fair value gains on cross-currency swaps treated as a cash flow hedge Effect of an increase of 0.3% (2020: 0.2%) on pound sterling-denominated Net debt: Due to fair value gains on cross-currency swaps treated as a cash flow hedge 16. Tax charge (a) Analysis of tax charge in the Group income statement Current tax: Tax on income for the year Adjustments in respect of prior years Total current tax charge Deferred tax: Origination and reversal of temporary differences Adjustments in respect of prior years Total deferred tax charge Tax charge The tax charge comprises: UK tax Non-UK tax 2021 US$m 2020 US$m 19 11 2 1 — 20 (6) 1 1 — — — 2021 US$m 2020 US$m 193 2 195 79 1 80 275 9 266 275 206 6 212 58 (7) 51 263 10 253 263 Experian plc Annual Report 2021Financial statements 174 16. Tax charge continued (b) Tax reconciliations (i) Reconciliation of the tax charge As the Group is subject to the tax rates of more than one country, it has chosen to present its reconciliation of the tax charge using the main rate of corporation tax in the UK. The effective rate of tax for each year based on profit before tax is higher (2020: higher) than the main rate of corporation tax in the UK, with the differences explained in note 16(c). Profit before tax Profit before tax multiplied by the main rate of UK corporation tax of 19% (2020: 19%) Effects of: Adjustments in respect of prior years Tax on Exceptional items Income not taxable Losses not recognised Expenses not deductible Different effective tax rates in non-UK businesses Local taxes Recognition/utilisation of previously unrecognised tax losses Tax charge 2021 US$m 1,077 205 3 (16) (5) 20 15 31 33 (11) 275 2020 US$m 942 179 (1) 3 (15) 18 9 31 40 (1) 263 Effective rate of tax based on profit before tax 25.5% 27.9% Expenses not deductible include movements in uncertain tax provisions and the impairment of goodwill. Local taxes primarily comprise US state taxes. (ii) Reconciliation of the tax charge to the Benchmark tax charge Tax charge Tax relief on Exceptional items and other adjustments made to derive Benchmark PBT Benchmark tax charge Benchmark PBT Benchmark tax rate 2021 US$m 275 53 328 1,265 25.9% 2020 US$m 263 61 324 1,255 25.8% (c) Factors that affect the tax charge Prior year adjustments reflect the net movement on historical tax positions, including adjustments for matters that have been substantively agreed with local tax authorities, and adjustments to deferred tax assets based on latest estimates and assumptions. Expenses not deductible include charges in respect of uncertain tax positions, financing fair value remeasurements not allowable for tax purposes, and losses on the disposal of businesses which are not subject to tax relief. The Group’s tax rate reflects its internal financing arrangements in place to fund non-UK businesses. In addition, in the normal course of business, the Group has a number of open tax returns with various tax authorities with whom it is in active dialogue. At 31 March 2021 the Group held current provisions of US$350m (2020: US$327m) in respect of uncertain tax positions. Liabilities relating to these open and judgmental matters are based on an assessment as to whether additional taxes will be due, after taking into account external advice where appropriate. The resolution of these tax matters may take many years. While the timing of developments in resolving these matters is inherently uncertain, the Group does not expect to materially increase its uncertain tax provisions in the next 12 months, however if an opportunity arose to resolve the matters for less than the amounts provided, a settlement may be made with a corresponding reduction in the provision. (d) Other factors that affect the future tax charge The Group’s tax charge will continue to be influenced by the profile of profits earned in the different countries in which the Group’s subsidiaries operate. The Group could be affected by changes in tax law in the future, as we expect countries to amend legislation in respect of international tax. The main rate of UK corporation tax is 19% and it has been announced that the rate will increase to 25% from 1 April 2023. This will have a consequential effect on the Group’s future tax charge. If this rate change had been substantively enacted at the current balance sheet date the deferred tax asset would have increased by US$13m. 17. Discontinued operations There have been no material divestments of subsidiaries during the year ended 31 March 2021. On 31 May 2017, the Group completed the divestment of CCM, and the results and cash flows of that business were accordingly classified as discontinued. Residual disposal costs of US$2m were incurred during the year ended 31 March 2020 and cash outflows from operating activities were US$6m in that year. Notes to the Group financial statements continuedExperian plc Financial statements 175 18. Earnings per share disclosures (a) Earnings per share Continuing and discontinued operations Add: loss from discontinued operations Continuing operations Add: Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax Benchmark EPS (non-GAAP measure) (b) Analysis of earnings (i) Attributable to owners of Experian plc Basic Diluted 2021 US cents 88.2 — 88.2 14.9 103.1 2020 US cents 74.8 0.2 75.0 28.0 103.0 2021 US cents 87.6 — 87.6 14.7 102.3 2020 US cents 74.2 0.2 74.4 27.7 102.1 Continuing and discontinued operations Add: loss from discontinued operations Continuing operations Add: Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax Benchmark earnings attributable to owners of Experian plc (non-GAAP measure) (ii) Attributable to non-controlling interests (Loss)/profit for the financial year attributable to non-controlling interests Add: amortisation of acquisition intangibles attributable to non-controlling interests, net of related tax Benchmark earnings attributable to non-controlling interests (non-GAAP measure) (c) Reconciliation of Total Benchmark earnings to profit for the financial year Total Benchmark earnings (non-GAAP measure) Loss from discontinued operations Loss from Exceptional items and other adjustments made to derive Benchmark PBT, net of related tax Profit for the financial year (d) Weighted average number of ordinary shares Weighted average number of ordinary shares Add: dilutive effect of share incentive awards, options and share purchases Diluted weighted average number of ordinary shares 19. Dividends Amounts recognised and paid during the financial year: First interim – paid in February 2021 (2020: January 2020) Second interim – paid in July 2020 (2020: July 2019) Dividends paid on ordinary shares Full-year dividend for the financial year1 2021 US cents per share 14.5 32.5 47.0 47.0 US$m 133 294 427 430 2020 US cents per share 14.5 32.5 47.0 47.0 1 The cost of the second interim dividend for the year ended 31 March 2020 paid in July 2020, increased by US$1m due to foreign exchange rate movements. A second interim dividend in respect of the year ended 31 March 2021 of 32.5 US cents per ordinary share will be paid on 23 July 2021, to shareholders on the register at the close of business on 25 June 2021. This dividend is not included as a liability in these financial statements. This second interim dividend and the first interim dividend paid in February 2021 comprise the full-year dividend for the financial year of 47.0 US cents per ordinary share. Further administrative information on dividends is given in the Shareholder and corporate information section. Dividend amounts are quoted gross. In the year ended 31 March 2021, the employee trusts waived their entitlements to dividends of US$2m (2020: US$4m). There is no entitlement to dividend in respect of own shares held as treasury shares. 2021 US$m 803 — 803 135 938 2021 US$m (1) — (1) 2021 US$m 937 — (135) 802 2021 million 910 7 917 2020 US$m 675 2 677 252 929 2020 US$m 2 — 2 2020 US$m 931 (2) (252) 677 2020 million 902 8 910 US$m 130 294 424 423 Experian plc Annual Report 2021Financial statements 2020 US$m 4,324 (252) 471 — 4,543 2020 US$m 2,943 530 656 286 128 4,543 2021 US$m 3,133 611 718 711 88 5,261 176 20. Goodwill (a) Movements in goodwill Net book amount At 1 April Differences on exchange Additions through business combinations (note 41(a)) Impairment charge At 31 March 2021 US$m 4,543 114 657 (53) 5,261 The gross carrying amount of goodwill was US$5,314m at 31 March 2021, US$4,543m at 31 March 2020 and US$4,324m at 31 March 2019. The accumulated impairment loss was US$53m at 31 March 2021 and US$nil at 31 March 2020 and 31 March 2019. (b) Goodwill by CGU North America Latin America UK and Ireland EMEA Asia Pacific At 31 March (c) Key assumptions for value-in-use calculations by CGU North America Latin America UK and Ireland EMEA Asia Pacific 2021 2020 Discount rate % pa 9.1 12.8 8.9 10.4 9.4 Long-term growth rate % pa 2.3 4.7 2.3 3.9 5.3 Discount rate % pa 12.5 16.8 10.7 14.7 10.8 Long-term growth rate % pa 2.3 4.7 2.3 3.9 5.3 As indicated in note 5(a), value-in-use calculations are underpinned by financial budgets, looking forward up to five years. Management’s key assumptions in setting the financial budgets for the initial five-year period were as follows: forecast revenue growth rates were based on past experience, adjusted for the strategic opportunities within each CGU; the forecasts typically used average nominal growth rates of up to 11%, with Asia Pacific having rates of up to 17%; Benchmark EBIT was forecast based on historic margins. These were expected to be stable throughout the period in the mature CGUs, and improve annually by a low-single-digit amount in EMEA and Asia Pacific; and forecast Benchmark operating cash flow conversion rates were based on historic experience and performance expectations with rates in a range from 65% to 90% unless a Benchmark EBIT loss was forecast. In these circumstances cash outflows were forecast to exceed the Benchmark EBIT loss. Further details of the principles used in determining the basis of allocation by CGU and annual impairment testing are given in note 5(a). (d) Results of annual impairment review as at 31 March 2021 The review for the EMEA CGU indicated that the recoverable amount exceeded the carrying value by US$348m and that any decline in estimated value-in-use in excess of that amount would result in the recognition of an impairment charge. The sensitivities, which result in the recoverable amount being equal to the carrying value, can be summarised as follows: an absolute increase of 2.0 percentage points in the discount rate, from 10.4% to 12.4%; or an absolute reduction of 2.7 percentage points in the long-term growth rate, from growth of 3.9% to a growth of 1.2%; or a reduction of 6.8 percentage points in the forecast terminal profit margin, from 23.6% to 16.8%. A reduction in the annual margin improvement of approximately 1.4 percentage points per year over the five-year forecast period would also reduce the recoverable amount to the carrying value. Following a challenging year impacted by the effects of the COVID-19 pandemic, growth In Asia Pacific was adversely affected. Accordingly, the carrying value of the Asia Pacific CGU has been reduced to its recoverable amount of US$138m through recognition of an impairment charge of US$53m. This charge is recognised within Other operating charges in the Group income statement. Any additional movement in the key assumptions at the balance sheet date would lead to a further impairment of goodwill. An absolute increase of 1.0 percentage points in the discount rate would lead to a further impairment of US$42m or an absolute reduction in the long-term growth rate of 1.0 percentage points would lead to a further impairment of US$38m. The recoverable amount of all other CGUs exceeded their carrying value, on the basis of the assumptions set out in the table in note 20(c) and any reasonably possible changes thereof. Notes to the Group financial statements continuedExperian plc Financial statements 177 Total US$m 4,069 51 481 374 (255) 4,720 2,486 26 464 33 (255) 2,754 Acquisition intangibles Customer and other relationships US$m Acquired software development US$m Marketing- related assets US$m Databases US$m Internal use software US$m Internally generated software US$m 1,094 25 386 — — 1,505 617 10 94 — — 721 784 337 8 57 — (1) 401 224 5 38 — (1) 266 135 91 (2) 11 — — 100 81 (2) 6 — — 85 15 1,311 (13) 8 147 (108) 1,345 882 (8) 157 — (108) 923 422 376 (2) 1 30 (78) 327 300 1 28 — (78) 251 860 35 18 197 (68) 1,042 382 20 141 33 (68) 508 76 534 1,966 Acquisition intangibles Customer and other relationships US$m Acquired software development US$m Marketing- related assets US$m Databases US$m Internal use software US$m Internally generated software US$m 1,023 (73) 144 — — 1,094 586 (47) 78 — 617 437 477 295 (20) 62 — — 337 205 (17) 36 — 224 90 113 98 (11) 4 — — 91 83 (12) 10 — 81 15 10 1,394 (170) 1 175 (89) 1,311 932 (124) 163 (89) 882 462 429 362 (23) 1 39 (3) 376 290 (16) 28 (2) 300 72 76 709 (29) 3 189 (12) 860 311 (13) 96 (12) 382 398 478 Total US$m 3,881 (326) 215 403 (104) 4,069 2,407 (229) 411 (103) 2,486 1,474 1,583 21. Other intangible assets Cost At 1 April 2020 Differences on exchange Additions through business combinations Other additions Other disposals At 31 March 2021 Accumulated amortisation and impairment At 1 April 2020 Differences on exchange Charge for the year Impairment charge Other disposals At 31 March 2021 Net book amount at 31 March 2021 Cost At 1 April 2019 Differences on exchange Additions through business combinations Other additions Other disposals At 31 March 2020 Accumulated amortisation and impairment At 1 April 2019 Differences on exchange Charge for the year Other disposals At 31 March 2020 Net book amount at 1 April 2019 Net book amount at 31 March 2020 Within the above are the following individually material assets at 31 March 2021: North America Healthcare customer relationships have a net book value of US$188m, with a remaining amortisation period of seven years. North America Tapad, Inc. customer relationships with a net book value of US$152m and a remaining amortisation period of 13 years. Arvato Risk Management customer relationships with a net book value of US$146m, and a remaining amortisation period of 12 years. In addition to the development capitalised above we charged US$138m (2020: US$153m) of research and development costs in the Group income statement. The impairment charge in the year largely relates to an internally generated software asset in the UK and Ireland identified as requiring impairment due to planned upgrade of our technology estate. Experian plc Annual Report 2021Financial statements 178 22. Property, plant and equipment Cost At 1 April 2020 Differences on exchange Additions through business combinations Other additions Disposals At 31 March 2021 Accumulated amortisation and impairment At 1 April 2020 Differences on exchange Charge for the year Impairment charge Disposals At 31 March 2021 Net book amount at 31 March 2021 Cost At 1 April 2019 Differences on exchange Additions through business combinations Other additions Disposals At 31 March 2020 Accumulated depreciation At 1 April 2019 Differences on exchange Charge for the year Disposals At 31 March 2020 Net book amount at 1 April 2019 Net book amount at 31 March 2020 Freehold properties US$m Leasehold improvements US$m Plant and equipment US$m Land and buildings US$m Motor vehicles US$m Plant and equipment US$m Right-of-use assets 127 10 — — (1) 136 42 3 3 — — 48 88 154 — — 4 (4) 154 77 — 5 — (4) 78 76 589 23 2 44 (30) 628 438 17 64 3 (27) 495 133 197 4 3 26 (35) 195 36 2 40 1 (17) 62 133 15 1 — 8 (4) 20 5 — 6 — (3) 8 12 29 — — 23 (11) 41 11 — 9 — (6) 14 27 Freehold properties US$m Leasehold improvements US$m Plant and equipment US$m Land and buildings US$m Motor vehicles US$m Plant and equipment US$m Right-of-use assets 139 (17) 2 3 — 127 43 (4) 3 — 42 96 85 142 — — 12 — 154 72 — 5 — 77 70 77 556 (26) 2 69 (12) 589 401 (18) 64 (9) 438 155 151 176 (10) — 34 (3) 197 — (2) 40 (2) 36 176 161 11 — — 6 (2) 15 — — 6 (1) 5 11 10 20 (1) — 10 — 29 3 — 8 — 11 17 18 Total US$m 1,111 38 5 105 (85) 1,174 609 22 127 4 (57) 705 469 Total US$m 1,044 (54) 4 134 (17) 1,111 519 (24) 126 (12) 609 525 502 The disposal of right-of-use assets in the year ended 31 March 2021 largely relates to sublease arrangements, leading to the derecognition of right-of-use assets and the recognition of sublease receivables in North America. Notes to the Group financial statements continuedExperian plc Financial statements 23. Investments in associates At 1 April Differences on exchange Fair value gain on step acquisition Acquisition of controlling stake in associate Share of (loss)/profit after tax Dividends received Impairment charge Reversal of previous impairment charge Disposals At 31 March 179 2020 US$m 122 (5) 17 (19) 37 (6) (23) — — 123 2021 US$m 123 6 — — (2) (17) — 23 (5) 128 On 18 November 2020, the Group disposed of its 18.6% interest in Finicity Corporation for US$127m. A gain on disposal of US$120m was recognised in the Group income statement, after additional costs of US$2m in relation to the transaction. In the year ended 31 March 2020 the share of profit after tax of associates included a gain of US$36m relating to a significant business disposal by an associate, together with an impairment charge of US$23m in respect of the investment in that associate. The recoverable amount of the investment in the associate has been assessed during the year and in light of a favourable trading performance a reversal of the impairment charge of US$23m has been recognised. The gain on disposal, impairment charge and its reversal are reported within non-benchmark items in the Group income statement. 24. Trade and other receivables (a) Analysis by type and maturity Trade and unbilled receivables Credit note provision Trade receivables – after credit note provision Contract assets Trade receivables and contract assets Loss allowance Net impaired trade receivables and contract assets VAT and equivalent taxes recoverable Prepayments Contract costs As reported in the Group balance sheet: Current trade and other receivables Non-current trade and other receivables 2021 US$m 923 (19) 904 151 1,055 (23) 1,032 5 220 100 1,357 1,197 160 1,357 2020 US$m 853 (13) 840 167 1,007 (25) 982 4 160 96 1,242 1,078 164 1,242 There is no material difference between the fair value and the book value stated above. Non-current trade and other receivables comprise prepayments, contract assets, unbilled receivables and contract costs. At 31 March 2019, the value of trade and unbilled receivables was US$796m and contract assets was US$129m. Experian plc Annual Report 2021Financial statements 180 24. Trade and other receivables continued (b) Loss allowance matrix Not past-due Up to three months past-due Three to six months past-due Over six months past-due Trade receivables and contract assets Loss allowance (note 24(c)) Net trade receivables and contract assets (c) Movements in the loss allowance 2021 2020 Loss allowance US$m (3) (2) (2) (16) (23) Gross carrying amount US$m 840 157 26 32 1,055 (23) 1,032 Loss allowance US$m (8) (3) (2) (12) (25) Gross carrying amount US$m 795 158 24 30 1,007 (25) 982 At 1 April (Decrease)/increase in the loss allowance recognised in the Group income statement Receivables written off in the year as uncollectable Differences on exchange At 31 March (d) Analysis by denomination of currency 2021 US$m 25 (1) (2) 1 23 Contract assets Trade receivables US dollar Pound sterling Brazilian real Euro Colombian peso South African rand Other 25. Cash and cash equivalents - excluding bank overdrafts (a) Analysis by nature Cash at bank and in hand Short-term investments 2021 US$m 50 9 3 32 — 10 47 151 2020 US$m 73 9 4 35 4 5 37 167 2021 US$m 499 142 117 55 13 7 48 881 2021 US$m 113 67 180 2020 US$m 18 12 (2) (3) 25 2020 US$m 478 138 96 32 12 10 49 815 2020 US$m 84 193 277 The effective interest rate for cash and cash equivalents held at 31 March 2021 is 0.8% (2020: 1.6%). There is no material difference between the fair value and the book value stated above. (b) Analysis by external credit rating Counterparty holding of more than US$2m: A rated B rated Counterparty holding of more than US$2m Counterparty holding of less than US$2m 2021 US$m 83 79 162 18 180 2020 US$m 221 37 258 19 277 Notes to the Group financial statements continuedExperian plc Financial statements 181 2021 2020 Current US$m 187 30 110 583 389 244 1,543 Non-current US$m — — — 4 114 41 159 Current US$m 275 23 106 480 363 183 1,430 Non-current US$m — — — 6 87 28 121 26. Trade and other payables (a) Analysis by type and maturity Trade payables VAT and other equivalent taxes payable Social security costs Accruals Contract liabilities Other payables There is no material difference between the fair value and the book value stated above. Other payables include employee benefits of US$97m (2020: US$83m) and deferred and contingent consideration of US$73m (2020: US$34m). At 31 March 2019, the value of contract liabilities was US$463m. (b) Analysis by nature Financial instruments VAT and other equivalent taxes payable Social security costs Amounts within accruals and contract liabilities Items other than financial instruments Contractual undiscounted future cash flows in respect of financial instruments are shown in note 32. 27. Borrowings (a) Analysis by carrying amounts and fair value 2021 US$m 607 30 110 955 1,095 1,702 2020 US$m 572 23 106 850 979 1,551 Current: Bonds: £400m 3.50% Euronotes 2021 Commercial paper Bank overdrafts Lease obligations (note 29) Non-current: Bonds: £400m 3.50% Euronotes 2021 £400m 2.125% Euronotes 2024 £400m 0.739% Euronotes 2025 €500m 1.375% Euronotes 2026 US$500m 4.25% Notes 2029 US$750m 2.75% Notes 2030 £400m 3.25% Euronotes 2032 Bank loans Lease obligations (note 29) Total borrowings Carrying amount 2021 US$m 2020 US$m Fair value 2021 US$m 2020 US$m 562 25 10 58 655 — 567 551 618 500 738 562 2 144 3,682 4,337 — 447 5 46 498 509 512 — 577 500 763 — 900 155 3,916 4,414 556 25 10 58 649 — 573 543 624 563 760 618 2 144 3,827 4,476 — 447 5 46 498 507 500 — 556 574 718 — 900 155 3,910 4,408 The effective interest rates for bonds approximate to the coupon rates indicated above. Other than lease obligations, borrowings are unsecured. Further information on the methodology used in determining fair values is given in note 31. Experian plc Annual Report 2021Financial statements 182 27. Borrowings continued (b) Analysis by maturity Less than one year One to two years Two to three years Three to four years Four to five years Over five years (c) Analysis by currency US dollar Pound sterling Euro Other 2021 US$m 655 49 35 589 564 2,445 4,337 2021 US$m 3,599 545 95 98 4,337 2020 US$m 498 1,300 185 25 527 1,879 4,414 2020 US$m 3,545 722 75 72 4,414 The above analysis takes account of the effect of cross-currency swaps and forward foreign exchange contracts and reflects the way in which the Group manages its exposures. (d) Undrawn committed bank borrowing facilities Facilities expiring in: Less than one year One to two years Two to three years Three to four years Four to five years 2021 US$m — 400 300 — 1,950 2,650 2020 US$m 75 — 150 — 1,950 2,175 These facilities are at variable interest rates and are in place for general corporate purposes, including the financing of acquisitions and the refinancing of other borrowings. (e) Covenants and leverage ratio There is one financial covenant in connection with the borrowing facilities. Benchmark EBIT must exceed three times net interest expense before financing fair value remeasurements. The calculation of the financial covenant excludes the effects of IFRS 16. The Group monitors this, and the Net debt to Benchmark EBITDA leverage ratio, and has complied with this covenant throughout the year. 28. Net debt (non-GAAP measure) (a) Analysis by nature Cash and cash equivalents (net of overdrafts) Debt due within one year – commercial paper Debt due within one year – bonds and notes Debt due after more than one year – bonds and notes Debt due after more than one year – bank loans Derivatives hedging loans and borrowings 2021 US$m 170 (25) (554) (3,526) (2) 111 (3,826) 2020 US$m 272 (447) — (2,858) (900) 35 (3,898) Notes to the Group financial statements continuedExperian plc Financial statements 28. Net debt (non-GAAP measure) continued (b) Analysis by balance sheet caption Cash and cash equivalents Current borrowings Non-current borrowings Borrowings Total of Group balance sheet line items Lease obligations reported within borrowings excluded from Net debt Accrued interest reported within borrowings excluded from Net debt Derivatives reported within Other financial assets Derivatives reported within Other financial liabilities (c) Analysis of movements in Net debt At 1 April 2020 Cash flow Borrowings cash flow Reclassification of borrowings Net interest paid Movement on accrued interest Net cash flow Non-cash lease obligation additions Net share purchases Additions through business combinations Fair value gains Exchange and other movements1 At 31 March 2021 Derivatives hedging loans and borrowings US$m 35 (54) — — — — (54) — — — 10 120 111 Current borrowings US$m (498) 66 424 (558) — (1) (69) (19) — (3) 3 (69) (655) Non-current borrowings US$m (3,916) — (98) 558 — (14) 446 (38) — (16) 31 (189) (3,682) 1 Exchange and other movements include US$8m in respect of lease obligation disposals. At 1 April 2019 Cash flow Borrowings cash flow Reclassification of borrowings Net interest paid Movement on accrued interest Net cash flow Non-cash lease obligation additions Net share purchases Fair value gains/(losses) Exchange and other movements At 31 March 2020 Derivatives hedging loans and borrowings US$m (119) 169 — — — — 169 — — 14 (29) 35 Current borrowings US$m (910) 30 284 100 — 4 418 (20) — 31 (17) (498) Non-current borrowings US$m (2,618) 33 (1,250) (100) — 13 (1,304) (26) — (44) 76 (3,916) 2021 US$m 180 (655) (3,682) (4,337) (4,157) 202 18 117 (6) (3,826) Liabilities from financing activities US$m (4,379) 12 326 — — (15) 323 (57) — (19) 44 (138) (4,226) Liabilities from financing activities US$m (3,647) 232 (966) — — 17 (717) (46) — 1 30 (4,379) Lease obligations US$m 201 (66) — — — — (66) 57 — 4 — 6 202 Lease obligations US$m 217 (63) — — — — (63) 46 — — 1 201 Accrued interest US$m 3 — — — — 15 15 — — — — — 18 Cash and cash equivalents US$m 277 (220) — — 115 — (105) — 19 — — (11) 180 Accrued interest US$m 19 — — — — (17) (17) — — — 1 3 Cash and cash equivalents US$m 149 480 — — (152) — 328 — (188) — (12) 277 183 2020 US$m 277 (498) (3,916) (4,414) (4,137) 201 3 52 (17) (3,898) Net debt US$m (3,898) (274) 326 — 115 — 167 — 19 (15) 44 (143) (3,826) Net debt US$m (3,262) 649 (966) — (152) — (469) — (188) 1 20 (3,898) Experian plc Annual Report 2021Financial statements 184 29. Leases The Group’s lease portfolio consists of 35 (2020: 33) significant property leases across the countries in which we operate. In addition, we lease approximately 121 (2020: 190) smaller properties, 700 (2020: 800) motor vehicles, and a small number of hardware assets. The average remaining lease term is 4.5 years (2020: 5.5 years) for significant property leases, 1.3 years (2020: 1.3 years) for other minor property leases and 2.0 years (2020: 1.7 years) for motor vehicles and plant and equipment. Extension and termination options are included within a number of property and equipment leases across the Group. These are used to maximise operational flexibility in terms of managing assets and lease exposures. The majority of extension and termination options are exercisable only by the Group and not by the respective lessor. (a) Amounts recognised in the Group balance sheet Right-of-use assets: Land and buildings Motor vehicles Plant and equipment At 31 March Lease obligations: Current Non-current At 31 March Notes 2021 US$m 2020 US$m 22 22 22 27 27 133 12 27 172 58 144 202 161 10 18 189 46 155 201 During the year the Group derecognised right-of-use assets of US$13m due to sublease arrangements in North America. The lease receivable held in relation to subleases at 31 March 2021 was US$13m (2020: US$nil), of which US$11m falls due after more than one year. Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the incremental borrowing rate is used. The incremental borrowing rate is unique to each country and class of assets therein and is based on the Group’s cost of debt, adjusted for factors specific to individual lessees and their borrowing capacity. The Group is exposed to potential future increases in variable lease payments based on an index or a rate, which are not included in the lease obligation until they take effect. (b) Maturity of lease obligations – contractual undiscounted cash flows Less than one year One to two years Two to three years Three to four years Four to five years Over five years Total undiscounted lease obligations at 31 March (c) Amounts recognised in the Group income statement Depreciation charge for right-of-use assets: Land and buildings Motor vehicles Plant and equipment Total depreciation charge for right-of-use assets Interest expense Expense relating to the lease of low-value assets Total We had no material sublease income in the current or prior year. 2021 US$m 58 54 40 25 16 37 230 2021 US$m 40 6 9 55 10 8 73 2020 US$m 54 49 39 28 17 46 233 2020 US$m 40 6 8 54 10 9 73 Notes 22 22 22 15 (d) Amounts recognised in the Group cash flow statement During the year lease payments of US$66m (2020: US$63m) comprised US$56m (2020: US$55m) for repayments of principal and US$10m (2020: US$8m) for payments of interest. Notes to the Group financial statements continuedExperian plc Financial statements 185 29. Leases continued (e) Lease commitments The Group’s commitments for lease agreements where the term has not yet commenced total US$1m (2020: US$7m); such amounts are not recognised as lease obligations or right-of-use assets. 30. Financial assets and liabilities (a) Financial assets revalued through OCI Cash flow hedge of borrowings (cross-currency swaps) Listed investments Trade investments 2021 Non-current US$m 37 44 164 245 Current US$m — — — — Total US$m 37 44 164 245 2020 Non-current US$m — 32 139 171 Current US$m — — — — Total US$m — 32 139 171 Listed investments are held in the UK to secure certain unfunded pension arrangements (note 34(b)). (b) Other financial assets and liabilities (i) Summary Assets Financial assets held at amortised cost Derivative financial instruments: Fair value hedge of borrowings (cross-currency swaps) Fair value hedge of borrowings (interest rate swaps) Derivatives used for hedging Non-hedging derivatives (equity swaps) Non-hedging derivatives (foreign exchange contracts) Non-hedging derivatives (interest rate swaps) Other financial assets at fair value through profit or loss Assets at fair value through profit or loss Total other financial assets Total other financial assets comprise: Loans and receivables Derivative financial instruments Convertible loan notes Liabilities Derivative financial instruments: Fair value hedge of borrowings (cross-currency swaps) Derivatives used for hedging Non-hedging derivatives (equity swaps) Non-hedging derivatives (foreign exchange contracts) Non-hedging derivatives (interest rate swaps) Derivative financial instruments1 Options in respect of non-controlling interests Total other financial liabilities 1 Derivative financial liabilities are valued at FVPL. 2021 Non-current US$m 103 Current US$m — Total US$m 103 2020 Non-current US$m 94 Current US$m — Total US$m 94 — 5 5 — 6 9 — 20 20 — 20 — 20 81 — 81 — — 27 12 120 223 103 108 12 223 81 5 86 — 6 36 12 140 243 103 128 12 243 — — — 2 15 — — 17 17 — 17 — 17 10 35 45 — — 58 26 129 223 94 103 26 223 2021 Non-current US$m Current US$m Total US$m Current US$m 2020 Non-current US$m — — — 6 2 8 7 15 — — 2 — 64 66 213 279 — — 2 6 66 74 220 294 — — — 8 2 10 13 23 6 6 1 — 100 107 — 107 10 35 45 2 15 58 26 146 240 94 120 26 240 Total US$m 6 6 1 8 102 117 13 130 Amounts recognised in the Group income statement in connection with the Group’s hedging instruments are disclosed in note 15. There is no material difference between the fair values and the book values stated above. Financial assets held at amortised cost principally comprise amounts due following the disposal of businesses and include accrued interest. Other financial assets at fair value through profit or loss comprise convertible loan notes purchased when acquiring interests in associates and trade investments. Experian plc Annual Report 2021Financial statements 186 30. Financial assets and liabilities continued (ii) Fair value and notional principal amounts of derivative financial instruments Cross-currency swaps Interest rate swaps Equity swaps Foreign exchange contracts 2021 2020 Assets Liabilities Assets Liabilities Fair value US$m 118 41 — 6 165 Notional US$m 1,413 1,201 — 508 3,122 Fair value US$m — 66 2 6 74 Notional US$m — 1,563 22 545 2,130 Fair value US$m 10 93 2 15 120 Notional US$m 504 1,046 12 286 1,848 Fair value US$m 6 102 1 8 117 Notional US$m 395 2,097 8 198 2,698 Notional principal amounts are the amount of principal underlying the contracts at the reporting dates. (iii) Offsetting derivative financial assets and liabilities held with the same counterparty Reported in the Group balance sheet Related amounts not offset in the Group balance sheet Net amount Assets 2021 US$m 165 (60) 105 2020 US$m 120 (70) 50 Liabilities 2021 US$m 74 (60) 14 2020 US$m 117 (70) 47 There are no amounts offset within the assets and liabilities reported in the Group balance sheet. (c) Hedge accounting (i) Fair value and cash flow hedges We use interest rate swaps to hedge the interest rate risk arising on fixed rate borrowings, and cross-currency swaps to hedge the currency and interest rate risk arising on foreign currency fixed rate borrowings. Our risk management strategy for interest rate risk and currency risk is outlined in note 7. We determine the existence of an economic relationship between the hedging instruments and hedged items by comparing the currency, reference interest rates, duration, repricing and maturity dates and the notional amounts of the hedging instruments to those of the hedged items. We have established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of interest rate swaps and cross-currency swaps is identical to the hedged risk components. The main sources of ineffectiveness in the hedge accounting relationships arise from: The application of different interest rate curves to discount the cash flows of the hedged item and those of the hedging instrument. Differences in timing of cash flows of the hedged item and hedging instrument. The different impact of the counterparties’ credit risk on the fair value movements of the hedging instrument compared to the hedged item. (ii) Analysis of hedging instruments The Group held the following instruments to hedge exposures to changes in foreign currency and interest rates. At 31 March 2021 Fair value hedges Interest rate risk Interest rate swaps: Notional amount (US$m) Weighted average fixed interest rate Cross-currency swaps: Notional amount (US$m) Weighted average fixed interest rate Foreign currency risk Cross-currency swaps: Notional amount (US$m) EUR:USD forward contract rate GBP:USD forward contract rate Cash flow hedge Foreign currency risk Cross-currency swaps: Notional amount (US$m) GBP:USD forward contract rate Less than one year One to two years Two to three years Three to four years Four to five years Over five years Maturity 207 3.50% — — — — — — — — — — — — — — — — — — — — — — — — — — — 395 2.13% 395 — 1.32 — — — — — — — — — 515 1.29 300 1.66% 504 1.38% 504 1.12 — — — Notes to the Group financial statements continuedExperian plc Financial statements 187 30. Financial assets and liabilities continued (ii) Analysis of hedging instruments continued At 31 March 2020 Fair value hedges Interest rate risk Interest rate swaps: Notional amount (US$m) Weighted average fixed interest rate Cross-currency swaps: Notional amount (US$m) Weighted average fixed interest rate Foreign currency risk Cross-currency swaps: Notional amount (US$m) EUR:USD forward contract rate GBP:USD forward contract rate (d) Impact of hedging instruments Less than one year One to two years Two to three years Three to four years Four to five years Over five years Maturity — — — — — — — 186 3.50% — — — — — — — — — — — — — — 395 2.13% 395 — 1.32 300 1.66% 504 1.38% 504 1.12 — — — — — — — — 2021 Fair value hedges Interest rate risk Interest rate swaps Cross-currency swaps Foreign exchange risk Cross-currency swaps Cash flow hedge Foreign exchange risk Cross-currency swaps Fair value hedges Interest rate risk Interest rate swaps Cross-currency swaps Foreign exchange risk Cross-currency swaps Notional amount of hedging instrument US$m Carrying amount of hedging instrument Assets US$m Liabilities US$m Changes in fair value used for calculating hedge ineffectiveness (Note 15(c)) US$m 507 899 899 5 81 81 515 37 2020 — — — — 31 10 (85) (35) Notional amount of hedging instrument US$m Carrying amount of hedging instrument Assets US$m Liabilities US$m Changes in fair value used for calculating hedge ineffectiveness (Note 15(c)) US$m 486 899 899 35 10 10 — (6) (6) (26) 3 30 Interest rate swaps are reported within Other financial assets, and cross-currency swaps are reported within Other financial assets and Other financial liabilities in the Group balance sheet. Experian plc Annual Report 2021Financial statements 188 30. Financial assets and liabilities continued (e) Impact of hedged items 2021 Accumulated amount of fair value hedge adjustments included in the carrying amount of the hedged item Carrying amount of hedged item Liabilities US$m US$m 2020 Accumulated amount of fair value hedge adjustments included in the carrying amount of the hedged item Carrying amount of hedged item Liabilities US$m US$m Changes in fair value used for calculating hedge ineffectiveness (Note 15(c)) US$m Changes in fair value used for calculating hedge ineffectiveness (Note 15(c)) US$m (1,494) (987) 40 43 (35) 81 (1,424) (910) 70 (34) 12 (28) (551) n/a 35 — n/a — Fair value hedges Interest rate risk Borrowings Foreign exchange risk Borrowings Cash flow hedge Foreign exchange risk Borrowings The hedging reserve at 31 March 2021 includes US$2m (2020: US$nil) in respect of the cash flow hedge. Borrowings are reported within Borrowings in the Group balance sheet. (f) Impact of hedge ineffectiveness Fair value hedges (Note 15(c)) Interest rate risk Foreign exchange risk Gains/(losses) on items in hedging relationships – hedge ineffectiveness Hedge ineffectiveness is reported within Net finance costs in the Group income statement. (g) Analysis by valuation method for put options and items measured at fair value 2021 US$m 6 (4) 2 2020 US$m (11) 2 (9) Financial assets: Derivatives used for hedging Non-hedging derivatives Other financial assets at fair value through profit or loss Financial assets at fair value through profit or loss (note 30(b)) Derivatives used for hedging Listed and trade investments Financial assets revalued through OCI (note 30(a)) Financial liabilities: Derivatives used for hedging Non-hedging derivatives Put options Other liabilities at fair value through profit or loss Net financial assets/(liabilities) 2021 2020 Level 1 US$m Level 2 US$m Level 3 US$m Total US$m Level 1 US$m Level 2 US$m Level 3 US$m Total US$m — — — — — 44 44 44 — — — — — 44 86 42 — 128 37 — 37 165 — (74) — — (74) 91 — — 12 12 — 164 164 176 — — (220) (66) (286) (110) 86 42 12 140 37 208 245 385 — (74) (220 (66) (360) 25 — — — — — 32 32 32 — — — — — 32 45 75 — 120 — — — 120 (6) (111) — — (117) 3 — — 26 26 — 139 139 165 — — (13) (29) (42) 123 45 75 26 146 — 171 171 317 (6) (111) (13) (29) (159) 158 Notes to the Group financial statements continuedExperian plc Financial statements 189 30. Financial assets and liabilities continued (g) Analysis by valuation method for put options and items measured at fair value continued The analysis by level is a requirement of IFRS 13 and the definitions are summarised here for completeness: assets and liabilities whose valuations are based on unadjusted quoted prices in active markets for identical assets and liabilities are classified as Level 1; assets and liabilities which are not traded in an active market, and whose valuations are derived from available market data that is observable for the asset or liability, are classified as Level 2; and assets and liabilities whose valuations are derived from inputs not based on observable market data are classified as Level 3. Level 3 items principally comprise minority shareholdings in unlisted businesses, trade investments, contingent consideration and put options associated with corporate transactions. Unlisted equity investments, initially measured at cost, are revalued where sufficient indicators are identified that a change in the fair value has occurred. The inputs to any subsequent valuations are based on a combination of observable evidence from external transactions in the investee’s equity and estimated discounted cash flows that will arise from the investment. Valuations of material contingent consideration and put options associated with corporate transactions, are based on Monte Carlo simulations using the most recent management expectations of relevant business performance, reflecting the different contractual arrangements in place. There would be no material effect on the amounts stated from any reasonably possible change in such inputs at 31 March 2021. (h) Analysis of movements in Level 3 financial assets/(liabilities) Year ended 31 March 2021 Year ended 31 March 2020 Financial assets revalued through OCI US$m 139 24 — — Other financial assets at FVPL US$m 26 7 (24) — Contingent consideration US$m (29) (33) — — — — — 1 — 164 — 3 — — — 12 (1) — — (3) — (66) Put options US$m (13) (208) — — — 13 — (12) — (220) Total US$m 123 (210) (24) — (1) 16 — (14) — (110) Financial assets revalued through OCI US$m 67 74 — — Other financial assets at FVPL US$m — 21 — — Contingent consideration US$m (27) (34) — 25 Put options US$m (17) — — — — — (2) — — 139 — — — — 5 26 4 — — 3 — (29) — 2 — 2 — (13) Total US$m 23 61 — 25 4 2 (2) 5 5 123 At 1 April Additions1,2 Disposals Settlement of contingent consideration Adjustment to the fair value of contingent consideration Valuation gains recognised in the Group income statement3 Valuation losses recognised in OCI Currency translation gains/(losses) recognised directly in OCI Other At 31 March 1 Additions to put options, in the year ended 31 March 2021, comprised US$201m in respect of the acquisition of Arvato Risk Management, and US$7m in respect of the acquisition of Brain Soluções de Tecnologia Digital Ltda (note 41(a)). 2 Additions to contingent consideration comprised US$33m (2020: US$29m) in respect of acquisitions and US$nil (2020: US$5m) for transactions in respect of non-controlling interests. 3 Movements in the present value of expected future payments of put options are unrealised and are recognised in financing fair value remeasurements in the Group income statement. Experian plc Annual Report 2021Financial statements 190 31. Fair value methodology Information in respect of the carrying amounts and the fair value of borrowings is included in note 27(a). There are no material differences between the carrying value of the Group’s other financial assets and liabilities not measured at fair value and their estimated fair values. The following assumptions and methods are used to estimate the fair values: the fair values of receivables, payables and cash and cash equivalents are considered to approximate to the carrying amounts; the fair values of short-term borrowings, other than bonds, are considered to approximate to the carrying amounts due to the short maturity terms of such instruments; the fair value of that portion of bonds carried at amortised cost is based on quoted market prices, employing a valuation methodology falling within Level 1 of the IFRS 13 fair value hierarchy; the fair values of long-term variable rate bank loans and lease obligations are considered to approximate to the carrying amount; and the fair values of other financial assets and liabilities are calculated based on a discounted cash flow analysis, using a valuation methodology falling within Level 2 of the IFRS 13 fair value hierarchy. 32. Contractual undiscounted future cash flows for financial liabilities At 31 March 2021 Borrowings Net settled derivative financial instruments – interest rate swaps Gross settled derivative financial instruments: Outflows for derivative contracts Inflows for derivative contracts Gross settled derivative financial instruments Options in respect of acquisitions and non-controlling interests Trade and other payables Cash outflows At 31 March 2020 Borrowings Net settled derivative financial instruments – interest rate swaps Gross settled derivative financial instruments: Outflows for derivative contracts Inflows for derivative contracts Gross settled derivative financial instruments Options in respect of non-controlling interests Trade and other payables Cash outflows Less than one year US$m 749 28 One to two years US$m 138 26 Two to three years US$m 124 19 Three to four years US$m 660 11 Four to five years US$m 639 8 Over five years US$m 2,704 6 545 (539) 6 7 562 1,352 — — — — 43 207 — — — — — 143 — — — — — 671 — — — 11 — 658 — — — 202 2 2,914 Less than one year US$m 583 11 One to two years US$m 1,372 11 Two to three years US$m 249 11 Three to four years US$m 88 9 Four to five years US$m 573 6 Over five years US$m 2,047 6 207 (199) 8 13 538 1,153 9 (8) 1 — 30 1,414 9 (8) 1 — — 261 9 (8) 1 — — 98 400 (380) 20 — 1 600 — — — — 3 2,056 Total US$m 5,014 98 545 (539) 6 220 607 5,945 Total US$m 4,912 54 634 (603) 31 13 572 5,582 The table above analyses financial liabilities into maturity groupings, based on the period from the balance sheet date to the contractual maturity date. As the amounts disclosed are the contractual undiscounted cash flows, they differ from the carrying values and fair values. Contractual undiscounted future cash outflows for derivative financial liabilities in total amount to US$104m (2020: US$85m). Notes to the Group financial statements continuedExperian plc Financial statements 33. Share incentive plans (a) Cost of share-based compensation Share awards Share options Expense recognised (all equity-settled) Charge for associated social security obligations Total expense recognised in the Group income statement 191 2021 US$m 99 7 106 5 111 2020 US$m 78 5 83 5 88 The Group has a number of equity-settled, share-based employee incentive plans. Further information on share award arrangements is given in note 33(b). As the numbers of share options granted or outstanding and the related charge to the Group income statement are not significant, no further disclosures are included in these financial statements. (b) Share awards (i) Summary of arrangements and performance conditions There are three plans under which share awards are currently granted – the two Experian Co-investment Plans (the CIP) and the Experian Performance Share Plan (the PSP). Awards typically take the form of a grant of free shares which vest over a service period of three years, with a maximum term generally of the same length, and are settled by share distribution. The assumption at grant date for employee departures prior to vesting is 20% for certain unconditional awards, which are only made under the PSP. Other details in respect of conditional awards are given below. During the year ended 31 March 2021, a one-off award was made under the PSP to employees who are not eligible to participate in existing share award schemes. These awards had no service or performance conditions attached and vested immediately. Participants who hold the shares received for three years will be entitled to receive two matching shares for each share they originally received. The grant date assumption is that 30% of these matching awards will not vest. CIP For the purposes of IFRS 2, the grant date for these plans is the start of the financial year in which performance is assessed. This is before the number of shares to be awarded is determined but the underlying value of the award is known, subject to the outcome of the performance condition. The value of awarded shares reflects the performance outcome assumed at the date of their issue to participants and is recognised over a four-year period. The range of performance conditions for awards under these plans is set out below. The Profit performance condition requires Benchmark PBT per share growth at the stated percentages over a three-year period for the awards made in year ended 31 March 2019. The profit condition for awards made in the years ended 31 March 2021 and 31 March 2020 require adjusted Benchmark EPS growth at the stated percentages over a three-year period. The cumulative Benchmark operating cash flow performance condition (the ‘Cash flow condition’) is based on cumulative Benchmark operating cash flow over a three-year period. The period of assessment commences at the beginning of the financial year of grant. These are not market-based performance conditions as defined by IFRS 2. PSP The range of Profit performance conditions for conditional awards under this plan is the same as those for the CIP described above. For the years ended 31 March 2021 and 31 March 2020 there is an additional Return on Capital Employed condition (‘ROCE condition’). This condition requires average ROCE over the period at the percentages stated below. Both these conditions are not market-based performance conditions as defined by IFRS 2 and are also measured over a three-year period commencing at the beginning of the financial year of grant. The TSR performance condition is considered a market-based performance condition as defined by IFRS 2. In valuing the awarded shares, TSR is evaluated using a Monte Carlo simulation, with historic volatilities and correlations for comparator companies measured over the three-year period preceding valuation and an implied volatility for Experian plc ordinary shares. Experian plc Annual Report 2021Financial statements 192 33. Share incentive plans continued (i) Summary of arrangements and performance conditions continued Year ended 31 March 2021 31 March 2020 31 March 2019 Profit condition: Measure Proportion of awards subject to condition Minimum payout requirement Target payout requirement Maximum payout requirement Assumed outcome at grant date Cash flow condition: Proportion of awards subject to condition Minimum payout requirement Target payout requirement Maximum payout requirement Assumed outcome at grant date ROCE condition: Proportion of awards subject to condition Minimum payout requirement Target payout requirement Maximum payout requirement Assumed outcome at grant date TSR condition: Proportion of awards subject to condition Assumed outcome at grant date CIP PSP CIP PSP CIP PSP Adjusted Benchmark EPS 50% 3% per annum 4% per annum 7% per annum 77.8% Adjusted Benchmark EPS 50% 3% per annum 4% per annum 7% per annum 77.8% Adjusted Benchmark EPS 50% 5% per annum 6% per annum 9% per annum 66.7% Adjusted Benchmark EPS 50% 5% per annum 6% per annum 9% per annum 66.7% Benchmark PBT per share 50% 5% per annum 6% per annum 9% per annum 66.7% Benchmark PBT per share 75% 5% per annum 6% per annum 9% per annum 66.7% 50% US$3.7bn US$3.8bn US$4.1bn 77.8% — — — — — 50% US$3.7bn US$3.8bn US$4.1bn 77.2% — — — — — 50% — US$3.7bn US$4.1bn 66.4% — 25% — 14.5% per annum — 15.4% per annum — 16.0% per annum 83% — — — 25% 61.8% — 25% — 14.5% per annum — 15.4% per annum — 16.0% per annum 75% — — — 25% 61.8% — — — — — — — — — — — — — — — — — 25% 27.8% (ii) Information on share grant valuations Share grants are valued by reference to the market price on the day of award, with no modification for dividend distributions or other factors, as participants are entitled to dividend distributions on awarded shares. Market-based performance conditions are included in the fair value measurement on the grant date and are not revised for actual performance. Awards granted in the year ended 31 March 2021 had a weighted average fair value per share of £26.84 (2020: £23.45). (iii) Share awards outstanding At 1 April Grants Forfeitures Lapse of awards Vesting At 31 March Analysis by plan: CIP PSP – conditional awards PSP – unconditional awards At 31 March 2021 million 12.2 4.1 (0.5) (0.3) (4.6) 10.9 3.5 3.0 4.4 10.9 2020 million 13.7 4.3 (0.7) (0.3) (4.8) 12.2 4.2 3.4 4.6 12.2 Notes to the Group financial statements continuedExperian plc Financial statements 193 34. Post-employment benefit plans and related risks An overview of the Group’s post-employment benefit plans and the related risks is given below. The additional information required by IAS 19, which relates only to the Group’s defined benefit pension plans and post-employment medical benefits obligations, is set out in note 35. (a) Funded pension plans The Group’s principal defined benefit plan is the Experian Pension Scheme, which provides benefits for certain UK employees. The plan was closed to new entrants in 2009. It is intended that it will close to the accrual of new benefits from 1 April 2022, at which point all UK employees will be offered membership of the Group’s UK defined contribution plan. This is currently under consultation with the active members of the plan with the outcome expected to be determined no later than 1 September 2021. The Experian Pension Scheme has rules which specify the benefits to be paid, with the level of pension benefit that an employee will receive on retirement dependent on age, length of service and salary. As at 31 March 2021, there were 95 (2020: 110) active members of this plan, 1,309 (2020: 1,363) deferred members and 2,494 (2020: 2,596) pensioner members. The Group provides a defined contribution plan, the Experian Retirement Savings Plan, to other eligible UK employees. Under this plan, employee and employer contributions are paid by the Group into an independently administered fund, which is used to fund member pensions at retirement. As at 31 March 2021, there were 3,080 active members of this plan (2020: 3,128). Both UK plans are governed by trust deeds, which ensure that their finances and governance are independent from those of the Group. Trustees are responsible for overseeing the investments and funding of the plans and plan administration. The UK pensions environment is regulated by The Pensions Regulator whose statutory objectives and regulatory powers are described on its website at www.thepensionsregulator.gov.uk. A full actuarial funding valuation of the Experian Pension Scheme is carried out every three years, with interim reviews in the intervening years. The latest full valuation was carried out as at 31 March 2019 by independent qualified actuaries Mercer Limited, using the projected unit credit method and there was a small funding surplus. The next full valuation will be carried out as at 31 March 2022. Employees in the USA, Brazil and South Africa have the option to join local defined contribution plans and, as at 31 March 2021, there were 4,455 (2020: 4,368) active members in the USA, 1,100 (2020: 1,256) in Brazil and 485 (2020: 556) in South Africa. There are no other material funded pension arrangements. (b) Unfunded pension arrangements The Group’s unfunded pension arrangements are designed to ensure that certain directors and senior managers who are affected by the earnings cap, which was introduced by the UK government some years ago to set a ceiling on the amount of benefits that could be paid by defined benefit pension plans, are placed in broadly the same position as those who are not. There are also unfunded arrangements for certain former directors and employees of Experian Finance plc and Experian Limited. Certain of these unfunded arrangements in the UK have been secured by the grant to an independent trustee of charges over an independently managed portfolio of marketable securities owned by the Group and reported as financial assets revalued through OCI (note 30(a)). (c) Post-employment medical benefits The Group operates a plan which provides post-employment medical benefits to certain retired employees and their dependant relatives. This plan relates to former employees in the UK and, under it, the Group has undertaken to meet the cost of post-employment medical benefits for all eligible former employees who retired prior to 1 April 1994 and their dependants. (d) Related risks Through its defined benefit pension plans and post-employment medical benefits plan, the Group is exposed to a number of risks that are inherent in such plans and arrangements, which can be summarised as follows: asset value volatility, with the associated impact on the assets held in connection with the funding of pension obligations and the related cash flows; changes in bond yields, with any reduction resulting in an increase in the present value of pension obligations, mitigated by an increase in the value of plan assets; inflation, as pension obligations are generally linked to inflation and the prevailing rate of inflation experienced for medical benefits is typically higher than other inflation measures in the UK; and life expectancy, as pension and medical benefits are generally provided for the life of beneficiaries and their dependants. There are no unusual, entity-specific or plan-specific risks, and no significant concentrations of risk. Experian plc Annual Report 2021Financial statements 194 35. Post-employment benefits – IAS 19 information (a) Post-employment benefit amounts recognised in the Group financial statements (i) Balance sheet assets/(obligations) Retirement benefit assets/(obligations) – funded defined benefit plans: Fair value of funded plans’ assets Present value of funded plans’ obligations Assets in the Group balance sheet for funded defined benefit pensions Obligations for unfunded post-employment benefits: Present value of defined benefit pensions – unfunded plans Present value of post-employment medical benefits Liabilities in the Group balance sheet Net post-employment benefit assets 2021 US$m 1,274 (1,172) 102 (51) (4) (55) 47 2020 US$m 1,023 (940) 83 (44) (4) (48) 35 Pension assets are deemed to be recoverable and there are no adjustments in respect of minimum funding requirements as, under the Experian Pension Scheme rules, future economic benefits are available to the Group in the form of reductions in future contributions or refunds of surplus. (ii) Income statement charge By nature of expense: Current service cost Administration expenses Charge within labour costs and operating profit Interest income Total net charge to the Group income statement 2021 US$m 2020 US$m 4 2 6 (1) 5 6 2 8 — 8 The income statement charge and the remeasurement recognised in the Statement of comprehensive income relate to defined benefit plans. In the year ended 31 March 2019, we recognised a past service cost in respect of Guaranteed Minimum Pension equalisation of US$4m. The amount of any additional liability resulting from the UK High Court ruling on 20 November 2020 on historic transfers is not anticipated to be material to the Group. (b) Movements in net post-employment benefit assets/(obligations) recognised in the Group balance sheet At 1 April 2020 Income statement (charge)/credit: Current service cost Administration expenses Interest income/(expense) Total (charge)/credit to the Group income statement Remeasurements: Return on plan assets other than interest Gains from change in demographic assumptions Losses from change in financial assumptions Remeasurement of post-employment benefit assets and obligations Differences on exchange Contributions paid by the Group and employees Benefits paid At 31 March 2021 Present value of obligations Fair value of plan assets US$m 1,023 Defined benefit pensions – funded US$m (940) Defined benefit pensions – unfunded US$m (44) Post-employment medical benefits US$m (4) — — 23 23 142 — — 142 121 11 (46) 1,274 (4) (2) (21) (27) — 2 (137) (135) (112) (1) 43 (1,172) — — (1) (1) — — (5) (5) (3) — 2 (51) — — — — — — — — (1) — 1 (4) Total US$m (988) (4) (2) (22) (28) — 2 (142) (140) (116) (1) 46 (1,227) Movements in net position US$m 35 (4) (2) 1 (5) 142 2 (142) 2 5 10 — 47 Notes to the Group financial statements continuedExperian plc Financial statements 195 35. Post-employment benefits – IAS 19 information continued (b) Movements in net post-employment benefit assets/(obligations) recognised in the Group balance sheet continued At 1 April 2019 Income statement (charge)/credit: Current service cost Administration expenses Interest income/(expense) Total (charge)/credit to the Group income statement Remeasurements: Return on plan assets other than interest (Losses)/gains from change in demographic assumptions Gains from change in financial assumptions Experience gains Remeasurement of post-employment benefit assets and obligations Differences on exchange Contributions paid by the Group and employees Benefits paid At 31 March 2020 Present value of obligations Fair value of plan assets US$m 1,122 Defined benefit pensions – funded US$m (1,061) Defined benefit pensions – unfunded US$m (50) Post-employment medical benefits US$m (5) Total US$m (1,116) Movements in net position US$m 6 — — 25 25 (33) — — — (33) (55) 13 (49) 1,023 (6) (2) (23) (31) — (13) 56 12 55 52 (1) 46 (940) — — (2) (2) — 1 2 1 4 2 — 2 (44) — — — — — — — — — — — 1 (4) (6) (2) (25) (33) — (12) 58 13 59 54 (1) 49 (988) (6) (2) — (8) (33) (12) 58 13 26 (1) 12 — 35 (c) Actuarial assumptions and sensitivities The accounting valuations at 31 March 2021 have been based on the most recent actuarial valuations, updated by Willis Towers Watson to take account of the requirements of IAS 19. The assumptions for the real discount rate, pension increases, salary increases and mortality, used to calculate the present value of the defined benefit obligations, all have a significant effect on the accounting valuation. Changes to these assumptions in the light of prevailing conditions may have a significant impact on future valuations. Indications of the sensitivity of the amounts reported at 31 March 2021 to changes in the real discount rate, pension increases, life expectancy and medical costs are included below. While the methodology used to determine the discount rate is unchanged from that used at 31 March 2020, the data source used by our external actuary to construct the corporate bond yield curve has been updated due to changes in the classifications of relevant high-quality corporate bonds. In constructing the yield curve, judgment is required on the selection of appropriate bonds to be included and the approach then used to derive the yield curve. The change to the bond universe has reduced retirement benefit obligations at 31 March 2021 by approximately US$28m or 2.4%. In the year ended 31 March 2020 the CPI assumption was derived by assuming a margin of 80 basis points below RPI. Following the announcement by the UK Chancellor of the Exchequer on 25 November 2020, of the outcome of a consultation on the reform to RPI methodology, it is now expected that from 2030 RPI will be aligned with CPIH (the Consumer Price Index including owner occupiers’ housing costs). For the year ended 31 March 2021, a 100 basis point margin between RPI and CPI has been assumed to 2030, with a ten basis point margin assumed thereafter. This results in a single equivalent differential of 50 basis points and an increase in retirement benefit obligations at 31 March 2021 of approximately US$14m or 1.2%. The other methods and types of assumptions used are consistent with those used in the prior year and the absolute sensitivity numbers are stated on a basis consistent with the methodology used in determining the accounting valuation as at 31 March 2021. The methodology evaluates the effect of a change in each assumption on the relevant obligations, while holding all other assumptions constant. Experian plc Annual Report 2021Financial statements 196 35. Post-employment benefits – IAS 19 information continued (i) Financial actuarial assumptions Discount rate Inflation rate – based on the UK Retail Prices Index (the RPI) Inflation rate – based on the UK Consumer Prices Index (the CPI) Increase in salaries Increase for pensions in payment – element based on the RPI (where cap is 5%) Increase for pensions in payment – element based on the CPI (where cap is 2.5%) Increase for pensions in payment – element based on the CPI (where cap is 3%) Increase for pensions in deferment Inflation in medical costs 2021 % 2.0 3.3 2.8 2.8 3.0 1.9 2.2 2.8 6.3 2020 % 2.2 2.6 1.8 2.1 2.5 1.5 1.7 1.8 5.6 The principal financial assumption is the real discount rate, which is the excess of the discount rate over the rate of inflation. The discount rate is based on the market yields on high-quality corporate bonds of a currency and term appropriate to the defined benefit obligations. In the case of the Experian Pension Scheme, the obligations are in pounds sterling and have a maturity on average of 17 years. If the real discount rate increased/decreased by 0.1%, the defined benefit obligations at 31 March 2021 would decrease/increase by approximately US$21m and the fair value of plan assets would decrease/increase by approximately US$20m. The annual current service cost would be broadly unchanged. The rates of increase for pensions in payment reflect the separate arrangements applying to different groups of Experian’s pensioners. If the inflation rate underlying the pension increases (both in payment and in deferment) increased/decreased by 0.1%, the defined benefit obligations at 31 March 2021 would increase/decrease by approximately US$12m and the annual current service cost would be broadly unchanged. (ii) Mortality assumptions – average life expectancy on retirement at age 65 in normal health For a male currently aged 65 For a female currently aged 65 For a male currently aged 50 For a female currently aged 50 2021 years 22.6 24.5 23.5 25.6 2020 years 22.5 24.3 23.3 25.4 The accounting valuation assumes that mortality will be in line with standard tables adjusted to reflect the expected experience of the Experian Pension Scheme membership, based on analysis carried out for the 2019 actuarial valuation. A specific allowance for anticipated future improvements in life expectancy is also incorporated. While COVID-19 has had an impact on mortality in FY21, the impact on future mortality trends is currently unknown and consequently no adjustment has been made to mortality assumptions in this regard. An increase in assumed life expectancy of 0.1 years would increase the defined benefit obligations at 31 March 2021 by approximately US$6m and the annual current service cost would remain unchanged. (iii) Post-employment medical benefits The accounting valuation in respect of post-employment medical benefits assumes a rate of increase for medical costs. If this rate increased/decreased by 1.0% per annum, the obligations at 31 March 2021 and the finance expense would remain unchanged. (iv) Increase in salaries An increase of 0.1% to the salary increase rate would increase the obligations at 31 March 2021 by approximately US$1m, and the annual current service cost would remain unchanged. (d) Assets of the Group’s defined benefit plans at fair value UK equities Overseas equities Index-linked gilts Global corporate bonds Secured credit Other unlisted Other 2021 2020 US$m 7 208 447 404 130 49 29 1,274 % 1 16 35 32 10 4 2 100 US$m 6 175 362 318 105 37 20 1,023 % 1 17 35 31 10 4 2 100 The Experian Pension Scheme investment strategy aims to reduce investment risk and funding volatility. With the exception of a target 5% allocation to senior private debt, all other assets are regarded as being readily marketable and regularly traded. The Trustee has adopted funding-based triggers to implement further de-risking of the investment strategy as conditions allow. As a result, during the year the target allocation to equities was reduced from 20% to 15%. These triggers will be kept under review. Over time, the Scheme is expected to increase its allocation to liability matching assets, to provide cash flows to match expected benefit payments. Notes to the Group financial statements continuedExperian plc Financial statements 197 35. Post-employment benefits – IAS 19 information continued (d) Assets of the Group’s defined benefit plans at fair value continued The Trustee believes that environmental, social and governance (ESG) factors may have a material impact on investment risk and return outcomes. ESG factors, including climate change and stewardship, are increasingly integrated within investment processes both in appointing new investment managers and in monitoring existing investment managers. Monitoring is undertaken and documented on a regular basis, making use of the investment consultant’s ESG rating framework. The Group’s defined benefit plans have no holdings of ordinary shares or borrowings of the Company. (e) Future contributions There was a small funding deficit at the date of the 2016 full actuarial valuation of the Experian Pension Scheme. To correct the shortfall the employer agreed to pay additional contributions of US$4m per annum over five years from 1 April 2017. The employer has agreed to continue to pay these contributions notwithstanding the small surplus recognised following the 2019 full actuarial valuation. Contributions, including additional contributions, currently expected to be paid to this plan during the year ending 31 March 2022 are US$8m by the Group and US$1m by employees. 36. Deferred and current tax (a) Deferred tax (i) Net deferred tax assets/(liabilities) At 1 April Differences on exchange Tax charge in the Group income statement (note 16(a)) Additions through business combinations Tax recognised within OCI Tax recognised directly in equity on transactions with owners At 31 March Presented in the Group balance sheet as: Deferred tax assets Deferred tax liabilities 2021 US$m (95) 4 (80) (100) (1) (3) (275) 86 (361) (275) Tax recognised in Other comprehensive income is in respect of the remeasurement of post-employment benefit assets and obligations. (ii) Movements in gross deferred tax assets and liabilities Assets At 1 April 2020 Differences on exchange Tax recognised in the Group income statement Tax recognised within OCI Tax recognised directly in equity on transactions with owners Transfers At 31 March 2021 Assets At 1 April 2019 Differences on exchange Tax recognised in the Group income statement Tax recognised within OCI Tax recognised directly in equity on transactions with owners Additions through business combinations Transfers At 31 March 2020 Intangibles US$m 246 (12) (8) — — — 226 Intangibles US$m 327 (81) (1) — — — 1 246 Tax losses US$m 94 (2) 16 — Share incentive plans US$m 35 1 3 — Accelerated depreciation US$m 10 1 7 — — — 108 (3) — 36 — — 18 Tax losses US$m 96 (2) (1) — Share incentive plans US$m 40 1 (2) — Accelerated depreciation US$m 11 — (1) — — — 1 94 (4) — — 35 — — — 10 Other US$m 215 2 (77) (1) — 3 142 Other US$m 270 (10) (41) (5) — 3 (2) 215 2020 US$m 15 2 (51) (52) (5) (4) (95) 107 (202) (95) Total US$m 600 (10) (59) (1) (3) 3 530 Total US$m 744 (92) (46) (5) (4) 3 — 600 Experian plc Annual Report 2021Financial statements 198 36. Deferred and current tax continued (ii) Movements in gross deferred tax assets and liabilities continued Liabilities At 1 April 2020 Differences on exchange Tax recognised in the Group income statement Additions through business combinations Transfers At 31 March 2021 Liabilities At 1 April 2019 Differences on exchange Tax recognised in the Group income statement Additions through business combinations Transfers At 31 March 2020 Intangibles US$m 650 (14) 23 100 — 759 Intangibles US$m 699 (92) (7) 51 (1) 650 Accelerated depreciation US$m 24 (2) 2 — 3 27 Accelerated depreciation US$m 19 — 5 — — 24 Other US$m 21 2 (4) — — 19 Other US$m 11 (2) 7 4 1 21 Total US$m 695 (14) 21 100 3 805 Total US$m 729 (94) 5 55 — 695 These movements do not take into consideration the offsetting of assets and liabilities within the same tax jurisdiction. Items classified as Other assets in the above analyses predominantly relate to future tax benefits deferred in line with local tax laws. (iii) Other information on deferred tax assets and liabilities As set out in note 5, there are a number of critical judgments in assessing the recognition of deferred tax assets. The Group has not recognised deferred tax on losses of US$581m (2020: US$480m) that could be utilised against future taxable income or on US$282m (2020: US$331m) in respect of capital losses that could be utilised against future taxable gains. While these losses are available indefinitely, they have arisen in undertakings in which it is not currently anticipated that future benefit will be available from their use. The capital losses arising on investments are available for use within five years, and future taxable gains against which the capital losses could be utilised are not currently anticipated. There are retained earnings of US$8,980m (2020: US$8,933m) in subsidiary undertakings which could be subject to tax if remitted to Experian plc. No deferred tax liability has been recognised on these earnings because the Group is in a position to control the timing of the reversal of the temporary difference and it is probable that such differences will not reverse in the foreseeable future. Given the mix of countries and tax rates, it is not practicable to determine the impact of such remittance. During the current year the main rate of UK corporation tax was 19% (2020: 19%). (b) Net current tax assets/(liabilities) At 1 April Differences on exchange Tax charge in the Group income statement (note 16(a)) Additions through business combinations Tax recognised directly in equity on transactions with owners Other tax paid At 31 March Presented in the Group balance sheet as: Current tax assets Current tax liabilities Tax recognised directly in equity on transactions with owners relates to employee share incentive plans. 2021 US$m (197) (1) (195) 10 5 236 (142) 34 (176) (142) 2020 US$m (286) 7 (212) (1) 9 286 (197) 28 (225) (197) Notes to the Group financial statements continuedExperian plc Financial statements 199 37. Provisions At 1 April Differences on exchange Amount charged in the year Utilised At 31 March 2021 North America security incident costs US$m — — 8 — 8 Other liabilities US$m 18 (2) 5 (4) 17 North America legal claims US$m 30 — — (28) 2 North America legal claims US$m 5 — 30 (5) 30 Total US$m 48 (2) 13 (32) 27 2020 North America security incident costs US$m 12 — — (12) — Other liabilities US$m 24 (7) 6 (5) 18 Total US$m 41 (7) 36 (22) 48 Legal claims represent a number of related legal claims arising in North America. In September 2015, Experian North America suffered an unauthorised intrusion to its Decision Analytics computing environment that allowed unauthorised acquisition of certain data belonging to a client, T-Mobile USA, Inc. We notified the individuals who may have been affected and offered free credit monitoring and identity theft resolution services. In addition, government agencies were notified as required by law. We have one remaining claim in respect of the incident and are working with the government bodies involved in this remaining claim, in connection with this we have provided US$8m in the year. It is currently difficult to predict the result, including the timing and scale, but we do not believe the outcome will be material to the Group. In the event of an unfavourable outcome, the Group may benefit from applicable insurance recoveries. Other liabilities principally comprise liabilities of Serasa S.A., in connection with local legal and tax issues, which were primarily recognised on its acquisition in 2007. 38. Called-up share capital and share premium account At 31 March 2021, there were 969.6m shares in issue (2020: 968.7m). During the year ended 31 March 2021, 0.9m (2020: 0.9m) shares were issued and no (2020: 3.6m) shares were cancelled. Further information on share capital is contained in note P to the Company financial statements. The difference between the amounts shown in the Group and Company financial statements in respect of called-up share capital and the share premium account arose due to translation of pound sterling amounts into the US dollar at various exchange rates on various translation dates. 39. Retained earnings and other reserves (a) Retained earnings Retained earnings comprise net profits retained in the Group after the payment of equity dividends. There are no significant statutory, contractual or exchange control restrictions on distributions by Group undertakings. (b) Other reserves (i) Movements in reserves At 1 April 2020 Shares delivered as consideration for acquisition Other vesting of awards and exercises of share options Change in the fair value of hedging instruments recognised in OCI Amounts reclassified from OCI to the Group income statement Currency translation gains At 31 March 2021 At 1 April 2019 Purchase of shares by employee trusts Other vesting of awards and exercises of share options Currency translation losses At 31 March 2020 Merger reserve US$m (15,682) — — — — — (15,682) Merger reserve US$m (15,682) — — — (15,682) Hedging reserve US$m 11 — — 35 (33) — 13 Hedging reserve US$m 11 — — — 11 Translation reserve US$m (1,367) — — — — 64 (1,303) Translation reserve US$m (1,055) — — (312) (1,367) Own shares reserve US$m (1,183) 90 87 — — — (1,006) Own shares reserve US$m (1,167) (92) 76 — (1,183) Total other reserves US$m (18,221) 90 87 35 (33) 64 (17,978) Total other reserves US$m (17,893) (92) 76 (312) (18,221) Experian plc Annual Report 2021Financial statements 200 39. Retained earnings and other reserves continued (ii) Nature of reserves The merger reserve arose on the demerger from GUS plc in 2006 and is the difference between the share capital and share premium of GUS plc and the nominal value of the share capital of the Company before a share offer at that date. Movements on the hedging reserve and the position at the balance sheet date reflect hedging transactions, originating from the management of foreign exchange risk, which are not charged or credited to the Group income statement, net of related tax. Movements on the translation reserve and the position at the balance sheet date reflect foreign currency translations since 1 April 2004 which are not charged or credited to the Group income statement, net of related tax. The movement in the year ended 31 March 2021 comprises currency translation gains of US$64m (2020: losses of US$312m) recognised directly in Other comprehensive income. The balance on the own shares reserve is the cost of ordinary shares in the Company and further details are given in note 39(b)(iii). The difference between the amounts shown in the Group and Company financial statements in respect of this reserve arose due to translation of pound sterling amounts into US dollars at different exchange rates on different translation dates. (iii) Movements in own shares held and own shares reserve Number of own shares held Cost of own shares held Treasury million 60 (7) (1) 52 Trusts million 8 — (4) 4 Total million 68 (7) (5) 56 Treasury US$m 973 (90) (12) 871 Trusts US$m 210 — (75) 135 Number of own shares held Cost of own shares held Treasury million 61 — (1) 60 Trusts million 9 3 (4) 8 Total million 70 3 (5) 68 At 1 April 2020 Shares delivered as consideration for acquisition Other vesting of awards and exercises of share options At 31 March 2021 At 1 April 2019 Purchase of shares by employee trusts Other vesting of awards and exercises of share options At 31 March 2020 40. Notes to the Group cash flow statement (a) Cash generated from operations Profit before tax Share of post-tax profit of associates Net finance costs Operating profit Loss/(profit) on disposal of fixed assets Profit on disposal of investment in associate Impairment of goodwill Impairment of other intangible assets Impairment of property, plant and equipment Amortisation and depreciation1 Charge in respect of share incentive plans Increase in working capital Acquisition expenses – difference between income statement charge and amount paid Fair value gain on revaluation of step acquisition Adjustment to the fair value of contingent consideration Movement in Exceptional and other non-benchmark items included in working capital Cash generated from operations 1 Amortisation and depreciation includes amortisation of acquisition intangibles of US$138m (2020: US$124m) which is excluded from Benchmark PBT. Total US$m 1,183 (90) (87) 1,006 Total US$m 1,167 92 (76) 1,183 2020 US$m 942 (14) 257 1,185 (1) — — — — 537 83 (112) 6 (17) (4) 17 1,694 Treasury US$m 985 — (12) 973 Notes 14(b), 23 20(a), 20(d) 21 22 12 33(a) 40(b) Trusts US$m 182 92 (64) 210 2021 US$m 1,077 (21) 127 1,183 3 (120) 53 33 4 591 106 (13) (9) — 1 (10) 1,822 Notes to the Group financial statements continuedExperian plc Financial statements 40. Notes to the Group cash flow statement continued (b) Increase in working capital Trade and other receivables Trade and other payables Increase in working capital (c) Purchase of other intangible assets Databases Internally generated software Internal use software Purchase of other intangible assets (d) Cash flows on acquisitions (non-GAAP measure) Purchase of subsidiaries (note 41(a)) Less: net cash acquired with subsidiaries Settlement of deferred and contingent consideration As reported in the Group cash flow statement Acquisition expenses paid Transactions in respect of non-controlling interests Cash outflow for acquisitions (non-GAAP measure) (e) Cash (inflow)/outflow in respect of net share purchases (non-GAAP measure) Issue of ordinary shares Purchase of shares by employee trusts Purchase and cancellation of own shares Cash (inflow)/outflow in respect of net share purchases (non-GAAP measure) As reported in the Group cash flow statement: Cash inflow in respect of shares issued Cash outflow in respect of share purchases Cash (inflow)/outflow in respect of net share purchases (non-GAAP measure) (f) Analysis of cash and cash equivalents Cash and cash equivalents in the Group balance sheet Bank overdrafts Cash and cash equivalents in the Group cash flow statement 2021 US$m (31) 18 (13) 2021 US$m 147 197 30 374 2021 US$m 568 (47) 5 526 47 10 583 2021 US$m (19) — — (19) (19) — (19) 2021 US$m 180 (10) 170 (g) Reconciliation of Cash generated from operations to Benchmark operating cash flow (non-GAAP measure) Cash generated from operations Purchase of other intangible assets Purchase of property, plant and equipment Sale of property, plant and equipment Payment of lease liabilities Acquisition expenses paid Dividends received from associates Cash flows in respect of Exceptional and other non-benchmark items Benchmark operating cash flow (non-GAAP measure) Notes 40(a) 40(c) 2021 US$m 1,822 (374) (48) 1 (56) 47 17 67 1,476 Benchmark free cash flow for the year ended 31 March 2021, as set out in the Financial review within the Strategic report, was US$1,124m (2020: US$774m). Cash flow conversion for the year ended 31 March 2021 was 106% (2020: 88%). 201 2020 US$m (145) 33 (112) 2020 US$m 175 189 39 403 2020 US$m 601 (26) 25 600 33 67 700 2020 US$m (15) 92 111 188 (15) 203 188 2020 US$m 277 (5) 272 2020 US$m 1,694 (403) (84) 5 (55) 33 6 18 1,214 Experian plc Annual Report 2021Financial statements 202 41. Acquisitions (a) Acquisitions in the year The Group made seven acquisitions during the year ended 31 March 2021, including the acquisition of a 60% stake in the Risk Management division of Arvato Financial Solutions (AFS) which completed on 30 June 2020. This investment enables us to expand our range of risk, anti-fraud and identity management services across Germany, Austria and Switzerland. The consideration was satisfied by the delivery of 7.2m Experian plc treasury shares at market value. There are put and call options associated with the shares held by the remaining shareholders of the Risk Management division of Arvato Financial Solutions, and these first become exercisable in January 2026. Accordingly, a provisional amount in respect of the present value of the put options of US$201m has been recognised as a non-current financial liability. On 19 November 2020 we acquired the whole of the issued share capital of Tapad, Inc. (Tapad) a leader in resolution of digital online identities, and on 23 March 2021, we acquired the whole of the issued share capital of BrScan Processamento de Dados e Tecnologia Ltda, (BrScan), a market leader in Fraud and Identity solutions in Brazil. In total provisional goodwill of US$657m was recognised based on the fair value of the net assets acquired of US$416m. Intangible assets: Customer and other relationships Software development Marketing-related acquisition intangibles Other non-acquisition intangibles Intangible assets Property, plant and equipment Trade and other receivables Current tax assets Cash and cash equivalents (note 40(d)) Trade and other payables Borrowings Deferred tax liabilities Total identifiable net assets Goodwill Total Satisfied by: Cash and cash equivalents (note 40(d)) Experian plc shares Put options Recognition of non-controlling interest Deferred consideration Contingent consideration Total Arvato Risk Management US$m Tapad US$m BrScan US$m Other US$m 149 14 5 11 179 3 15 10 1 (22) — (55) 131 323 454 — 253 201 — — — 454 156 16 3 7 182 1 16 — 18 (24) — (13) 180 110 290 290 — — — — — 290 31 12 1 — 44 1 4 — — (5) — (15) 29 103 132 106 — — — — 26 132 50 15 2 9 76 — 16 — 28 (12) (15) (17) 76 121 197 172 — 7 4 7 7 197 Total US$m 386 57 11 27 481 5 51 10 47 (63) (15) (100) 416 657 1,073 568 253 208 4 7 33 1,073 These provisional fair values are determined by using established estimation techniques such as discounted cash flow and option valuation models; the most significant assumption being the retention rates for customers. Provisional fair values contain amounts which will be finalised no later than one year after the date of acquisition. Provisional amounts, predominantly for intangible assets and associated tax balances, have been included at 31 March 2021, as a consequence of the timing and complexity of the acquisitions. Goodwill represents the synergies, assembled workforces and future growth potential of the acquired businesses. None of the goodwill arising in the period of US$657m is currently deductible for tax purposes. However, in the near future we expect to undertake a merger of BrScan into Serasa S.A. which we anticipate will create a separate tax deductible goodwill balance within that company. Goodwill for Arvato Risk Management has increased by US$141m, since we reported the provisional amount at 30 September 2020, as a result of adopting the assumed acquisition method of accounting for this non-controlling interest. Other includes adjustments to prior year acquisition provisional amounts, including a US$9m adjustment to the fair value of customer and other relationships of Auto I.D., Inc. acquired in the year ended 31 March 2020. Notes to the Group financial statements continuedExperian plc Financial statements 203 41. Acquisitions continued (b) Additional information (i) Current year acquisitions Increase/(decrease) in book value from fair value adjustments: Intangible assets Trade and other payables Deferred tax liabilities Increase in book value from fair value adjustments Gross contractual amounts receivable in respect of trade and other receivables Pro-forma revenue from 1 April 2020 to date of acquisition Revenue from date of acquisition to 31 March 2021 Profit before tax from date of acquisition to 31 March 2021 Arvato Risk Management US$m Tapad US$m BrScan US$m Other US$m Total US$m 172 (2) (50) 120 10 36 78 15 175 (7) (13) 155 16 35 22 7 44 (3) (15) 26 3 23 — — 67 (1) (17) 49 11 35 17 2 458 (13) (95) 350 40 129 117 24 At the dates of acquisition, the gross contractual amounts receivable in respect of trade and other receivables of US$40m were expected to be collected in full. If the transactions had occurred on the first day of the financial year, the estimated additional contribution to profit before tax would have been US$28m. (ii) Prior year acquisitions Deferred consideration of US$5m (2020: US$25m) was settled in the year in respect of acquisitions made in earlier years. These cash flows principally relate to the acquisitions of Runpath Group Limited and Clarity Services, Inc. acquired in the year ended 31 March 2018. The Group made eight acquisitions in the year ended 31 March 2020 which included the acquisition of the whole of the issued share capital of Compuscan (CSH Group (Pty) Limited) and Auto I.D., Inc. A cash outflow of US$575m was reported in the Group cash flow statement for that year, after deduction of US$26m in respect of net cash acquired. (iii) Post balance sheet acquisitions On 9 April 2021 the Group completed the acquisition of the entire share capital of Employment Tax Servicing, LLC for US$52m including deferred consideration of US$4m, and on 13 April 2021 we completed the acquisition of the entire share capital of Tax Credit Co., LLC for a cash consideration of US$250m and contingent consideration of up to US$110m. Both acquisitions will bolster our income verification business in North America. 42. Capital commitments Capital expenditure for which contracts have been placed: Other intangible assets Property, plant and equipment 2021 US$m 6 10 16 2020 US$m 2 23 25 Capital commitments at 31 March 2021 included US$1m (2020: US$7m) in respect of right-of-use assets. All commitments at 31 March 2021 and 31 March 2020 were expected to be incurred before 31 March 2022 and 31 March 2021 respectively. There were no material leases committed to that had not yet started at 31 March 2021 or 31 March 2020. Experian plc Annual Report 2021Financial statements 204 43. Contingencies (a) Latin America tax As previously indicated, Serasa S.A. has been advised that the Brazilian tax authorities are challenging the deduction for tax purposes of goodwill amortisation arising from its acquisition by Experian in 2007. The Brazilian courts have ultimately upheld Experian’s position in respect of the tax years from 2007 to 2011 with no further right of appeal. The Brazilian tax authorities have raised similar assessments in respect of the 2012 to 2016 tax years, in which approximately US$135m was claimed, and may raise similar claims in respect of other years. The possibility of this resulting in a liability to the Group is considered to be remote, on the basis of the advice of external legal counsel, success in cases to date and other factors in respect of the claim. We note that a similar challenge has been raised in Colombia in respect of the 2014 and 2016 tax years, in which approximately US$4m was claimed, and similar claims in respect of other years may be raised. We are contesting these on the basis of external legal advice. (b) UK marketing services regulation We have received a final enforcement notice from the UK Information Commissioner’s Office (ICO) with respect to a 2018 audit of several companies on the use of data for marketing purposes under the EU General Data Protection Regulation (GDPR), which relates to our marketing services activities in the UK. We disagree with the ICO’s decision and have appealed, during which time all requirements will be stayed. At this stage we do not know what the final outcome will be, but it may require significant changes to business processes in our UK marketing services business. This business represents approximately 1% of our global revenues and we do not expect this to result in a materially adverse financial outcome for the Group. (c) Other litigation and claims There continue to be an increasing number of pending and threatened litigation, regulatory and other claims involving the Group across all its major geographies which are being vigorously defended. The directors do not believe that the outcome of any such claims will have a materially adverse effect on the Group’s financial position. However, as is inherent in legal, regulatory and administrative proceedings, there is a risk of outcomes that may be unfavourable to the Group. In the case of unfavourable outcomes, the Group may benefit from applicable insurance recoveries. 44. Related party transactions (a) Related undertakings A full list of the Company’s related undertakings, including subsidiary and associate undertakings, is given in note S to the Company financial statements. There are no significant non-controlling interests. (b) Transactions with associates Following the divestment of CCM in the year ended 31 March 2018 the Group owns 23.1% of the issued share capital of Vector CM Holdings (Cayman), L.P. (Vector). The Group recorded the following transactions and balances with Vector and its subsidiaries: Promissory note and accrued interest Net amounts collected/(settled) and receivable Transaction amount Year ended 31 March 2021 US$m 8 — 2020 US$m 7 — Balance owed to Experian At 31 March 2021 US$m 102 1 2020 US$m 94 2 The promissory note is due and payable to Experian on 31 May 2024 with interest also payable on this date. During the year ended 31 March 2021, we ceased processing transactions on behalf of Vector and no amounts were received or paid. In the year ended 31 March 2020 cash of US$2m was received and US$2m was paid on behalf of Vector. We did not receive any margin on individual transactions. Transactions with associates are made on normal market terms and in the year ended 31 March 2021 comprised the provision and receipt of services to other associates of US$3m (2020: US$1m) and US$12m (2020: US$9m) respectively. At 31 March 2021, amounts owed by associates, other than Vector, were US$nil (2020: US$nil) and amounts due to associates, other than Vector were US$nil (2020: US$1m). Notes to the Group financial statements continuedExperian plc Financial statements 205 44. Related party transactions continued (c) Transactions with other related undertakings The Group transacts with a number of related undertakings in connection with the operation of its share incentive plans, pension arrangements in the UK, the USA, Brazil, South Africa and Germany, and the provision of medical cover in the UK. These undertakings are listed in note S(v) to the Company financial statements. Transactional relationships can be summarised as follows: The assets, liabilities and expenses of the Experian UK Approved All-Employee Share Plan and The Experian plc Employee Share Trust are included in these financial statements. During the year ended 31 March 2021, US$57m (2020: US$57m) was paid by the Group to related undertakings, in connection with the provision of post-employment pensions benefits in the UK, the USA, Brazil and South Africa and US$3m (2020: US$3m) was paid by the Group to Experian Medical Plan Limited, in connection with the provision of healthcare benefits. There were no other material transactions or balances with these related undertakings during the current or prior year. (d) Remuneration of key management personnel Salaries and short-term employee benefits Share incentive plans Pension payments 2021 US$m 10 11 — 21 2020 US$m 10 11 1 22 Key management personnel comprises the Company’s executive and non-executive directors and further details of their remuneration are given in the audited parts of the Report on directors’ remuneration. There were no other material transactions with the Group in which the key management personnel had a personal interest, in either the current or prior year. 45. Events occurring after the end of the reporting period Details of the second interim dividend announced since the end of the reporting period are given in note 19. We completed the acquisitions of Employment Tax Servicing, LLC and Tax Credit Co., LLC on 9 April 2021 and 13 April 2021 respectively. Further details are provided in note 41(b)(iii). Experian plc Annual Report 2021Financial statements 206 Company profit and loss account for the year ended 31 March 2021 Other operating income Staff costs Depreciation Other operating expenses Operating profit/(loss) Interest receivable and similar income Interest payable and similar expenses Dividend income from subsidiary undertakings Profit before tax Tax on profit Profit after tax and for the financial year Notes F G M F H I L J 2021 US$m 70.2 (3.9) (0.3) (65.1) 0.9 81.5 (0.3) 100.0 182.1 (20.8) 161.3 2020 US$m 79.2 (3.8) (0.2) (91.3) (16.1) 82.9 (0.2) 197.1 263.7 (16.5) 247.2 Company statement of comprehensive income for the year ended 31 March 2021 The Company has no recognised items of income and expenditure other than those included in the profit and loss account. Total comprehensive income for the financial year is therefore equal to the profit for the financial year. Company balance sheet at 31 March 2021 Fixed assets Investments – shares in Group undertakings Right-of-use assets Deferred tax assets Current assets Debtors – amounts falling due within one year Cash at bank and in hand Current liabilities Creditors – amounts falling due within one year Net current assets Total assets less current liabilities Creditors – amounts falling due after more than one year Net assets Equity Called-up share capital Share premium account Profit and loss account reserve Total shareholders’ funds These financial statements were approved by the Board on 18 May 2021 and were signed on its behalf by: Kerry Williams Director Notes 2021 US$m 2020 US$m L M J N O O P P Q 17,919.5 2.7 15.6 17,937.8 1,761.2 0.4 (1.1) 1,760.5 19,698.3 (2.9) 19,695.4 73.0 1,425.7 18,196.7 19,695.4 17,413.2 3.0 36.4 17,452.6 1,728.7 0.3 (1.4) 1,727.6 19,180.2 (2.9) 19,177.3 72.9 1,243.6 17,860.8 19,177.3 Experian plc Financial statements Company statement of changes in equity for the year ended 31 March 2021 207 At 1 April 2020 Profit and Total comprehensive income for the financial year Transactions with owners: Employee share incentive plans: – value of employee services – shares issued on vesting – other vesting of awards and exercises of share options Shares delivered as consideration for acquisition Dividends paid Transactions with owners At 31 March 2021 At 1 April 2019 Profit and Total comprehensive income for the financial year Transactions with owners: Employee share incentive plans: – value of employee services – shares issued on vesting – purchase of shares by employee trusts – other vesting of awards and exercises of share options Purchase and cancellation of own shares Dividends paid Transactions with owners At 31 March 2020 Called-up share capital (Note P) US$m 72.9 Share premium account (Note P) US$m 1,243.6 Profit and loss account reserve Profit and loss account US$m 19,012.4 Own shares reserve US$m (1,151.6) Total (Note Q) US$m 17,860.8 Total equity US$m 19,177.3 — — 161.3 — — — 87.3 90.0 — 177.3 (974.3) 161.3 161.3 106.3 — — 90.0 (21.7) 174.6 18,196.7 106.3 19.4 — 252.8 (21.7) 356.8 19,695.4 106.3 — (87.3) — (21.7) (2.7) 19,171.0 Profit and loss account reserve Profit and loss account US$m 18,892.8 Own shares reserve US$m (1,136.5) Total (Note Q) US$m 17,756.3 Total equity US$m 19,058.5 — 247.2 — 247.2 247.2 — 14.5 — — — — 14.5 1,243.6 83.0 — — (76.7) (111.9) (22.0) (127.6) 19,012.4 — — (91.5) 76.4 — — (15.1) (1,151.6) 83.0 — (91.5) (0.3) (111.9) (22.0) (142.7) 17,860.8 83.0 14.6 (91.5) (0.3) (112.2) (22.0) (128.4) 19,177.3 — 19.3 — 162.8 — 182.1 1,425.7 Share premium account (Note P) US$m 1,229.1 — 0.1 — — — 0.1 73.0 Called-up share capital (Note P) US$m 73.1 — — 0.1 — — (0.3) — (0.2) 72.9 Experian plc Annual Report 2021Financial statements 208 Notes to the Company financial statements for the year ended 31 March 2021 A. Corporate information Corporate information for Experian plc (the Company) is set out in note 1 to the Group financial statements, with further information given in the Strategic report and the Corporate governance report. B. Basis of preparation The separate financial statements of the Company are presented voluntarily and are: prepared on the going concern basis under the historical cost convention and in accordance with UK accounting standards; presented in US dollars, the Company’s functional currency; and designed to include disclosures in line with those required by those parts of the UK Companies Act 2006 applicable to companies reporting under UK accounting standards even though the Company is incorporated and registered in Jersey. The directors opted to prepare the financial statements for the year ended 31 March 2021 in accordance with FRS 101 ‘Reduced Disclosure Framework’. The Company intends to continue to use this accounting framework until further notice. Going concern In adopting the going concern basis for preparing these financial statements, the directors have considered the business activities, the principal risks and uncertainties and the other matters that could threaten the long-term financial stability of the Company. The directors believe that the Company is well placed to manage its financing and other business risks satisfactorily, and have a reasonable expectation that the Company will have adequate resources to continue in operational existence for at least 12 months from the date of signing these financial statements. The directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the Company financial statements. C. FRS 101 exemptions FRS 101 allows certain exemptions from the requirements of IFRS to avoid the duplication of information provided in the Group financial statements and to provide more concise financial reporting in entity financial statements. The following exemptions have therefore been applied in the preparation of these financial statements: Paragraphs 45(b) and 46 to 52 of IFRS 2 ‘Share-based Payment’, exempting the Company from providing details of share options and of how the fair value of services received was determined. IFRS 7 ‘Financial instruments: Disclosures’. Paragraphs 91 to 99 of IFRS 13 ‘Fair Value Measurement’, exempting the Company from disclosing valuation techniques and inputs used for the measurement of assets and liabilities. Paragraph 38 of IAS 1 ‘Presentation of Financial Statements’, exempting the Company from disclosing comparative information required by: – paragraph 79(a)(iv) of IAS 1 – shares outstanding at the beginning and at the end of the period; and – paragraph 73(e) of IAS 16 ‘Property, Plant and Equipment’ – reconciliations between the carrying amount at the beginning and end of the period. The following paragraphs of IAS 1: – paragraphs 10(d) and 111, exempting the Company from providing a cash flow statement and information; – paragraph 16, exempting the Company from providing a statement of compliance with all IFRS; – paragraph 38A, exempting the Company from the requirement for a minimum of two of each primary statement and the related notes; – paragraphs 38B to D, exempting the Company from the requirement to provide additional comparative information; and – paragraphs 134 to 136, exempting the Company from presenting capital management disclosures. IAS 7 ‘Statement of Cash Flows’. Paragraphs 30 and 31 of IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, exempting the Company from disclosing information where it has not applied a new IFRS which has been issued but is not yet effective. Paragraph 17 of IAS 24 ‘Related Party Disclosures’, exempting the Company from disclosing details of key management compensation. The requirements in IAS 24 to disclose related party transactions with wholly-owned members of the Group. The use of critical accounting estimates and management judgment is required in applying the accounting policies. Areas involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the Company financial statements, are highlighted in note E. D. Significant accounting policies The significant accounting policies applied are summarised below. They have been consistently applied to both years presented. The explanations of these policies focus on areas where judgment is applied or which are particularly important in the financial statements. Content from accounting standards, amendments and interpretations is excluded where there is simply no policy choice under UK accounting standards. (i) Foreign currency Transactions in foreign currencies are recorded at the exchange rate prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate prevailing at the balance sheet date. All differences are taken to the profit and loss account in the year in which they arise. (ii) Investments – shares in Group undertakings Investments in Group undertakings are stated at cost less any provisions for impairment. The fair value of share incentives issued by the Company to employees of Group undertakings is accounted for as a capital contribution and recognised as an increase in the Company’s investment in Group undertakings, with a corresponding increase in equity. (iii) Debtors and creditors Debtors are initially recognised at fair value and subsequently measured at this value. Where the time value of money is material, they are then carried at amortised cost using the effective interest method. Creditors are initially recognised at fair value. Where the time value of money is material, they are then carried at amortised cost using the effective interest method. Experian plc Financial statements 209 D. Significant accounting policies continued (iv) Cash at bank and in hand Cash at bank includes deposits held at call with banks and other short-term highly liquid investments. (v) Accounting for derivative financial instruments The Company uses forward foreign exchange contracts to manage its exposures to fluctuations in foreign exchange rates. The interest differential reflected in forward foreign exchange contracts is taken to interest receivable and similar income or interest payable and similar expenses. Forward foreign exchange contracts are recognised at fair value, based on forward foreign exchange market rates at the balance sheet date. Gains or losses on forward foreign exchange contracts are taken to the profit and loss account in the year in which they arise. (vi) Leases The Company undertakes an assessment of whether a contract is or contains a lease at its inception. The assessment establishes whether the Company obtains substantially all the economic benefits from the use of an asset and whether it has the right to direct its use. Low-value lease payments are recognised as an expense, on a straight-line basis over the lease term. For other leases the Company recognises both a right-of-use asset and a lease liability at the commencement date of a lease contract. The right-of-use asset is initially measured at cost, comprising the initial amount of the lease liability adjusted for payments made at or before the commencement date, plus initial direct costs and an estimate of the cost of any obligation to refurbish the asset or site, less lease incentives. Subsequently, right-of-use assets are measured at cost less accumulated depreciation and impairment losses and are adjusted for any remeasurement of the lease liability. Depreciation is calculated on a straight-line basis over the shorter of the estimated useful life of the right-of-use asset and the period of the lease. The lease term comprises the non-cancellable period of a lease, plus periods covered by an extension option, if it is reasonably certain to be exercised, and periods covered by a termination option if it is reasonably certain not to be exercised. The lease liability is initially measured at the present value of lease payments that are outstanding at the commencement date, discounted at the interest rate implicit in the lease or if that rate cannot be easily determined the Company’s incremental borrowing rate. Lease payments comprise payments of fixed principal less any lease incentives. The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, or if the Company changes its assessment of whether it will exercise an extension or termination option. When a lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recognised in the Company profit and loss account if the asset is fully depreciated. (vii) Tax Current tax is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in Ireland, where the Company is resident. Deferred tax is provided in respect of temporary differences that have originated but not reversed at the balance sheet date and is determined using the tax rates that are expected to apply when the temporary differences reverse. Deferred tax assets are recognised only to the extent that they are expected to be recoverable. (viii) Own shares The Group has a number of equity-settled, share-based employee incentive plans. In connection with these, shares in the Company are held by The Experian plc Employee Share Trust and the Experian UK Approved All-Employee Share Plan. The assets, liabilities and expenses of these separately administered trusts are included in the financial statements as if they were the Company’s own. The trusts’ assets mainly comprise Experian shares, which are shown as a deduction from total shareholders’ funds at cost. Experian shares purchased and held as treasury shares, in connection with the above plans and any share purchase programme, are also shown as a deduction from total shareholders’ funds at cost. The par value of shares that are purchased and cancelled, in connection with any share purchase programme, is accounted for as a reduction in called-up share capital with any cost in excess of that amount being deducted from the profit and loss account. The Company is not required to recognise the par value of cancelled shares in a capital redemption reserve. Contractual obligations to purchase own shares are recognised at the net present value of expected future payments. Gains and losses in connection with such obligations are recognised in the profit and loss account. Gains and losses which arise on financial instruments created by advance instructions to trade in own shares are recognised directly in equity. (ix) Profit and loss account format Income and expenses, which are recognised on an accruals basis, are reported by nature in the profit and loss account, as this reflects the composition of the Company’s income and cost base. (x) Dividend income Dividend income is recognised in the Company profit and loss account on the date on which the Company’s right to receive payment is established. Liquidation dividends are treated as a return of capital to the extent they are used to recover the carrying value of the investment in the liquidated entity. Any amount received in excess of the investment value is treated as income in the Company profit and loss account. Experian plc Annual Report 2021Financial statements 210 Notes to the Company financial statements continued E. Critical accounting estimates, assumptions and judgments (i) Critical accounting estimates and assumptions In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amount of income, costs and charges, assets and liabilities and the disclosure of contingent liabilities. The resulting accounting estimates, which are based on management’s best judgment at the date of the financial statements will, by definition, seldom equal the related actual results. The most significant of these estimates and assumptions for the Company that has a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year is in respect of the carrying value of investments in subsidiary undertakings. (ii) Critical judgments In applying the Company’s accounting policies, management may make judgments that have a significant effect on the amounts recognised in the Company financial statements. These judgments may include the classification of transactions between the Company profit and loss account and the Company balance sheet. The most significant of these judgments for the Company is in respect of contingencies where, in the case of pending and threatened litigation claims, management has formed a judgment as to the likelihood of ultimate liability. No liability has been recognised where the likelihood of any loss arising is possible rather than probable. F. Other operating income and expenses Other operating income and expenses principally comprise charges to and from other Group undertakings in respect of Group management services and guarantees provided during the year. The reduction in other operating expenses in the year ended 31 March 2021 compared to the prior year is due to the timing of invoicing. Other operating expenses include a fee of US$0.1m (2020: US$0.1m) payable to the Company’s auditor and its associates for the audit of the Company financial statements. G. Staff costs Directors’ fees Wages and salaries Social security costs Other pension costs 2021 US$m 2.3 1.3 0.1 0.2 3.9 2020 US$m 2.3 1.3 0.1 0.1 3.8 Executive directors of the Company are employed by other Group undertakings and details of their remuneration, together with that of the non-executive directors, are given in the audited part of the Report on directors’ remuneration. The Company had three employees in the year ended 31 March 2021 and two employees throughout the prior year. H. Interest receivable and similar income Interest receivable on amounts owed by subsidiary undertakings Foreign exchange gains I. Interest payable and similar expenses Interest payable on lease obligation Foreign exchange losses 2021 US$m 81.5 — 81.5 2021 US$m 0.2 0.1 0.3 2020 US$m 81.8 1.1 82.9 2020 US$m 0.2 — 0.2 Experian plc Financial statements J. Tax on profit (a) Analysis of tax charge in the profit and loss account Current tax: Irish corporation tax charge on profit for the financial year Deferred tax: Origination and reversal of timing differences Adjustment in respect of prior years Total deferred tax charge for the financial year Tax charge for the year 2021 US$m — 20.7 0.1 20.8 20.8 (b) Factors affecting the tax charge for the financial year The tax charge for the year is at a rate lower than the main rate of Irish corporation tax of 25% (2020: 25%) with the differences explained below. Profit before tax Profit before tax multiplied by the applicable rate of tax Effects of: Income not taxable Expenses not deductible Adjustment in respect of prior years Tax charge for the year 2021 US$m 182.1 45.5 (25.8) 1.0 0.1 20.8 The Company’s tax charge will continue to be influenced by the nature of its income and expenditure and prevailing Irish and Jersey tax laws. (c) Deferred tax asset The deferred tax asset is in respect of tax losses and the movements thereon are as follows: At 1 April Tax charge in the profit and loss account At 31 March The Company has no unrecognised deferred tax (2020: US$nil). 2021 US$m 36.4 (20.8) 15.6 211 2020 US$m — 16.5 — 16.5 16.5 2020 US$m 263.7 65.9 (50.2) 0.8 — 16.5 2020 US$m 52.9 (16.5) 36.4 K. Dividends Total gross dividends of US$426.8m (2020: US$424.2m) were paid to Experian shareholders during the year. The Company paid interim dividends of US$21.7m (2020: US$22.0m) to those shareholders who did not elect to receive dividends under the Income Access Share arrangements. The balance of US$405.1m (2020: US$402.2m) was paid by a subsidiary undertaking, Experian (UK) Finance Limited (EUKFL), under the Income Access Share arrangements. The Company’s profit and loss account reserve is available for distribution by way of dividend. At 31 March 2021, the distributable reserves of EUKFL as determined under UK company law were US$11,972.4m (2020: US$13,551.8m). Since the balance sheet date, the directors have announced a second interim dividend of 32.5 US cents per ordinary share for the year ended 31 March 2021. No part of this dividend is included as a liability in these financial statements. Further details of payment arrangements, including the Income Access Share arrangements, are given in the Shareholder and corporate information section of the Annual Report. Experian plc Annual Report 2021Financial statements 212 Notes to the Company financial statements continued L. Investments – shares in Group undertakings Cost and net book amount At 1 April Additions – fair value of share incentives issued to Group employees Additional investment in direct subsidiary undertakings Return of capital from direct subsidiary undertakings At 31 March 2021 US$m 17,413.2 106.3 400.0 — 17,919.5 2020 US$m 5,301.3 83.0 13,299.8 (1,270.9) 17,413.2 During the year ended 31 March 2021 Experian plc undertook one transaction as a result of group restructuring which included subscription for an additional US$400.0m of shares in an existing subsidiary undertaking. During the year ended 31 March 2020 Experian plc undertook a number of transactions as a result of group restructuring, including: subscription for additional shares in existing subsidiary undertakings for US$13,299.8m; and receipt of dividends of US$1,468.0m. US$1,270.9m was recorded as a return of capital, with the remaining US$197.1m recorded as dividend income in the Company’s profit and loss account. A list of the Company’s subsidiary undertakings is given in note S(i). The Company directly holds interests in the whole of the issued share capital of the following undertakings: Company Experian Group Services Limited Experian Holdings Ireland Limited Experian Ireland Investments Limited Country of incorporation Ireland Ireland Ireland M. Leases The Company leases its offices. The original lease term is 25 years and includes periodic break options throughout the lease exercisable only by the Company and not the lessor. (a) Amounts recognised in the Company balance sheet Right-of-use asset: At 1 April Depreciation charge for the year At 31 March Lease obligation: Current Non-current At 31 March 2021 US$m 2020 US$m 3.0 (0.3) 2.7 0.2 2.9 3.1 3.2 (0.2) 3.0 0.2 2.9 3.1 Experian plc Financial statements M. Leases continued (b) Maturity of lease obligation – contractual undiscounted cash flows Less than one year One to two years Two to three years Three to four years Four to five years Over five years Total undiscounted lease obligation at 31 March (c) Amounts recognised in the Company profit and loss account Depreciation charge for right-of-use asset Interest expense 213 2020 US$m 0.3 0.3 0.3 0.3 0.3 2.4 3.9 2020 US$m 0.2 0.2 0.4 2021 US$m 0.4 0.4 0.4 0.4 0.4 2.2 4.2 2021 US$m 0.3 0.2 0.5 (d) Lease cash flow The total lease cash outflow in the year ended 31 March 2021 was US$0.4m (2020: US$0.4m), of which US$0.2m (2020: US$0.2m) related to payments of interest and US$0.2m (2020: US$0.2m) was for repayments of principal. N. Debtors – amounts falling due within one year Amounts owed by Group undertakings Other debtors Amounts owed by Group undertakings are primarily unsecured, interest bearing and repayable on demand. 2021 US$m 1,759.5 1.7 1,761.2 2020 US$m 1,728.0 0.7 1,728.7 O. Creditors Lease obligation (note M) Accruals Due within one year 2021 US$m 0.2 0.9 1.1 Due after more than one year 2021 US$m 2.9 — 2.9 Due within one year 2020 US$m 0.2 1.2 1.4 Due after more than one year 2020 US$m 2.9 — 2.9 Experian plc Annual Report 2021Financial statements 214 Notes to the Company financial statements continued P. Called-up share capital and share premium account Allotted and fully paid 969,611,616 (2020: 968,719,632) ordinary shares of 10 US cents 20 (2020: 20) deferred shares of 10 US cents 2021 US$m 73.0 — 73.0 2020 US$m 72.9 — 72.9 At 31 March 2021 and 31 March 2020, the authorised share capital of the Company was US$200m, divided into 1,999,999,980 ordinary shares and 20 deferred shares, each of 10 US cents. The ordinary shares carry the rights to (i) dividend, (ii) to attend or vote at general meetings and (iii) to participate in the assets of the Company beyond repayment of the amounts paid up or credited as paid up on them. The deferred shares carry no such rights. During the year ended 31 March 2021, the Company issued 891,984 (2020: 865,828) ordinary shares for a consideration of US$19.4m (2020: US$14.6m) in connection with the Group’s share incentive arrangements, details of which are given in note 33 to the Group financial statements. The difference between the consideration and the par value of the shares issued is recorded in the share premium account. In addition, a premium of US$162.8m was recorded on treasury shares delivered in the year as acquisition consideration (2020: US$nil). There were no share repurchases during the year following the suspension of the Company’s share repurchase programme. In the year ended 31 March 2020, 3,623,753 ordinary shares were cancelled after being purchased by the Company. Q. Profit and loss account reserve The profit and loss account reserve is stated after deducting the balance on the own shares reserve from that on the profit and loss account. The balance on the profit and loss account comprises net profits retained in the Company, after the payment of equity dividends. The balance on the own shares reserve is the cost of ordinary shares in the Company and further details are given below. At 1 April 2020 Shares delivered as consideration for acquisition Other vesting of awards and exercises of share options At 31 March 2021 At 1 April 2019 Purchase of shares by employee trusts Other vesting of awards and exercises of share options At 31 March 2020 R. Contingencies The Company has guaranteed: Number of shares held Treasury million 60.4 (7.2) (0.9) 52.3 Trusts million 7.4 — (3.7) 3.7 Number of shares held Treasury million 61.5 — (1.1) 60.4 Trusts million 8.6 3.0 (4.2) 7.4 Total million 67.8 (7.2) (4.6) 56.0 Total million 70.1 3.0 (5.3) 67.8 Cost of shares held Trusts US$m 180.3 — Treasury US$m 971.3 (90.0) (12.2) 869.1 (75.1) 105.2 Cost of shares held Trusts US$m 151.9 91.5 Treasury US$m 984.6 — (13.3) 971.3 (63.1) 180.3 Total US$m 1,151.6 (90.0) (87.3) 974.3 Total US$m 1,136.5 91.5 (76.4) 1,151.6 borrowings of Group undertakings of US$4,123m (2020: US$4,208m); the liabilities of The Experian plc Employee Share Trust and the Experian UK Approved All-Employee Share Plan; and the retirement benefit obligations of Group undertakings that participate in the Experian Pension Scheme and of a Group undertaking that participates in a small UK defined benefit pension plan. An indication of the Company’s contingent liability for the year ended 31 March 2021, in the event that the Group undertakings fail to pay their contributions, is given in note 35(e) to the Group financial statements. The Company has also issued a small number of other guarantees in connection with the performance of business contracts by Group undertakings. Experian plc Financial statements 215 S. Related undertakings at 31 March 2021 (i) Subsidiary undertakings Country of incorporation Company Argentina Experian Strategic Solutions SA Australia Compuscan Australia (Pty) Ltd Australia Experian Asia Pacific Pty Ltd Australia Experian Australia Credit Services Pty Ltd Australia Experian Australia Fraud Services Pty Ltd Australia Experian Australia Holdings Pty Ltd Australia Experian Australia Pty Ltd Australia Look Who’s Charging Pty Ltd Australia Riverleen Finance Pty Ltd Australia Tallyman Australia Pty Limited Austria1 Credify Informationsdienstleistungen GmbH Austria1 Experian Austria GmbH Austria2 Experian Österreich Verwaltungsgesellschaft mbH Botswana Experian Botswana (Pty) Ltd Brazil3 Brain Soluções de Tecnologia Digital Ltda BrScan Processamento de Dados e Tecnologia Ltda Brazil4 Brazil5 Experian Tecnologia Brasil Ltda Brazil6 Serasa S.A. Bulgaria Experian Bulgaria EAD Canada Experian Canada Inc. Chile7 Experian Holdings Chile SpA Chile8 Experian Services Chile S.A. China9 Beijing Yiboruizhi Technology Co., Ltd China10 Experian Credit Service (Beijing) Company Limited China11 Experian Hong Kong Holdings Limited China11 Experian Hong Kong Limited Experian Information Technology (Beijing) Company Limited Byington Colombia S.A.S. Experian Colombia S.A. Experian Services Costa Rica, S.A. Experian A/S Accolade Unlimited Castlight Limited CCN UK 2005 Limited CCN UK Unlimited Chatsworth Investments Limited CSID International Limited* EHI 2005 Limited EHI UK Unlimited EIS 2005 Limited EIS UK Unlimited Experian (UK) Finance Limited Experian (UK) Holdings 2006 Limited Experian 2001 Unlimited Experian 2006 Unlimited Experian CIS Limited Experian Colombia Investments Limited Experian Europe Unlimited Experian Finance 2012 Limited Experian Finance plc Experian Group Limited Experian Holdings (UK) Unlimited Experian Holdings Limited Experian International Unlimited Experian Investment Holdings Limited China12 Colombia Colombia Costa Rica Denmark England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales Company Experian Latam Holdings Unlimited Experian Limited Experian NA Holdings Unlimited Experian NA Unlimited Experian Nominees Limited Experian SURBS Investments Limited Experian Technology Limited Experian US Holdings Unlimited Experian US Unlimited G.U.S. Property Management Limited GUS 1998 Unlimited GUS 2000 Finance Unlimited GUS 2000 UK Unlimited GUS 2000 Unlimited GUS 2002 Unlimited GUS 2004 Limited GUS 2005 Finance Unlimited GUS Catalogues Unlimited GUS Finance (2004) Limited GUS Finance 2006 Unlimited GUS Finance Holdings Unlimited GUS Financial Services Unlimited GUS Holdings (2004) Limited GUS Holdings Unlimited GUS International GUS International Holdings UK Societas GUS Ireland Holdings UK Societas GUS NA Unlimited GUS Netherlands Unlimited GUS Overseas Holdings UK Societas GUS Overseas Investments UK Societas GUS Overseas Retailing Unlimited GUS Overseas Unlimited GUS Property Investments Limited GUS Unlimited GUS US Holdings UK Societas GUS US Holdings Unlimited GUS US Unlimited GUS Ventures Unlimited Hugh Wyllie, Limited International Communication & Data Limited Motorfile Limited QAS Limited* Riverleen Finance Unlimited* Runpath Group Limited Runpath Pilot Limited Runpath Regulated Services Limited Serasa Finance Limited Tallyman Limited Tapad UK Limited Techlightenment Ltd* The Royal Exchange Company (Leeds) Unlimited The Witney Mattress, Divan & Quilt Co. Unlimited Compuscan (Pty) Ltd Experian France S.A.S. Experian Holding EURL Country of incorporation England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales eSwatini/Swaziland France France Experian plc Annual Report 2021Financial statements 216 Notes to the Company financial statements continued S. Related undertakings at 31 March 2021 continued Country of incorporation France France Germany13 Germany14 Germany15 Germany16 Germany14 Germany14 Germany17 India18 India18 India19 Indonesia Ireland Ireland Ireland Ireland Ireland Ireland Italy Italy Japan Republic of Korea Lesotho (i) Subsidiary undertakings continued Company Experian Holding France SAS Experian PH Sarl 3 C Deutschland GmbH CONET Corporate Communication Network GmbH Experian GmbH Informa HIS GmbH Informa Solutions GmbH Infoscore Consumer Data GmbH Tapad Germany GmbH Experian Credit Information Company of India Private Limited Experian Services India (Private Limited) W2 Software (India) Private Limited* PT. Experian Decision Analytics Indonesia Experian Group Services Limited Experian Holdings Ireland Limited Experian Ireland Investments Limited Experian Ireland Limited GUS Finance Ireland Unlimited Company GUS Investments 2003 Unlimited Company Experian Holding Italia S.r.l. Experian Italia S.p.A. Experian Japan Co., Ltd MCI-Experian Co., Ltd Experian Lesotho (Pty) Ltd Experian Information Services (Malaysia) Sdn. Bhd. Malaysia20 Malaysia21 Experian (Malaysia) Sdn. Bhd. Malaysia21 Experian Marketing Services (Malaysia) Sdn Bhd Malaysia22 Ringgit Arajaya Sdn. Bhd. Mexico ESI Servicios S. de R.L. de C.V. Mexico Experian de Mexico S. de R.L. de C.V. Mexico Experian Soluciones de Informacion, S.A. de C.V. Monaco Experian Micro Analytics SAM Monaco Scorex SAM Mozambique Sistema de informacao de credito S.A Namibia Compuscan Credit Reference Bureau (Pty) Ltd New Zealand Experian New Zealand Limited Norway Experian AS Norway Experian Gjeldsregister AS Norway TapAd Norway AS Peru Sentinel Peru S.A Compuscan Philippines, Inc The Philippines Experian Polska spółka z ograniczoną odpowiedzialnością DP Management Pte Ltd ENROC Pte. Ltd. Experian Credit Bureau Singapore Pte. Ltd. Experian Credit Services Singapore Pte. Ltd. Experian Asia-Pacific Holdings Pte. Ltd. Experian Singapore Pte. Ltd Compuscan Academy (Pty) Ltd Compuscan Holdings International (Pty) Ltd Compuscan Holdings South Africa (Pty) Ltd* Compuscan Information Technologies (Pty) Ltd* Poland Singapore Singapore Singapore Singapore Singapore Singapore South Africa23 South Africa23 South Africa23 South Africa23 Numeric superscripts refer to registered office addresses given in note S(ii) Company CSH Group (Pty) Ltd Encentivize (Pty) Ltd* Encentivize Rewards (Pty) Ltd* Experian South Africa (Pty) Limited Great Universal Stores (South Africa) (Pty) Ltd PCubed Analytical Intelligence (Pty) Ltd* Prolinx (Pty) Ltd* Scoresharp (Pty) Ltd* Techtonic Information Technologies (Pty) Ltd* Axesor Business Process Outsourcing S.L.U. Axesor Conocer Para Decidir, S.A. Experian Bureau de Crédito, S.A. Experian Colombian Investments, S.L.U. Experian España, S.L.U. Experian Holdings Espana, S.L. Experian Latam España Inversiones, S.L. Rexburg Spain, S.L.U. Experian Switzerland AG Experian (Thailand) Co., Ltd Experian Micro Analytics B.V. Experian Nederland BV Experian Scorex Russia B.V. GUS Europe Holdings BV GUS Holdings BV GUS Treasury Services BV Experian Bilgi Hizmetleri Limited Şirketi Experian Uganda CRB Limited Ground Up Limited Auto I.D., Inc. ClarityBlue Inc Clarity Services, Inc. ConsumerInfo.com Inc CSIdentity Corporation CSIdentity Insurance Services, Inc. Experian Background Data, Inc. Experian Credit Advisors, Inc. Experian Data Corp Experian Fraud Prevention Solutions, Inc. Experian Health, Inc. Experian Holdings, Inc. Experian Information Solutions Inc Experian Marketing Solutions, LLC Experian Reserved Response, Inc. Experian Services Corp. MyExperian, Inc. MyHealthDirect, Inc. RewardStock, Inc. Riverleen Finance, LLC StatSchedules India, LLC Strategic Cost Control, Inc. String Automotive Solutions, Inc. String Enterprises, Inc. Tapad, Inc. The 41st Parameter, Inc. * In voluntary liquidation Country of incorporation South Africa23 South Africa24 South Africa24 South Africa24 South Africa24 South Africa24 South Africa23 South Africa24 South Africa23 Spain25 Spain25 Spain26 Spain26 Spain26 Spain26 Spain27 Spain26 Switzerland Thailand The Netherlands The Netherlands The Netherlands The Netherlands The Netherlands The Netherlands Turkey Uganda Uganda USA28 USA29 USA28 USA30 USA28 USA28 USA28 USA28 USA28 USA28 USA28 USA28 USA30 USA28 USA28 USA28 USA28 USA29 USA28 USA28 USA28 USA31 USA28 USA28 USA28 USA28 Experian plc Financial statements 217 S. Related undertakings at 31 March 2021 continued (ii) Addresses of registered offices of subsidiary undertakings Country of incorporation Address of registered office Argentina Country of incorporation Address of registered office Ireland Australia Austria1 Austria2 Botswana Brazil3 Brazil4 Brazil5 Brazil6 Bulgaria Canada Chile7 Chile8 China9 China10 China11 China12 Colombia Costa Rica Denmark England and Wales eSwatini/Swaziland France Germany13 Germany14 Germany15 Germany16 Germany17 India18 India19 Indonesia Carlos Pelligrini 887, 4th Floor, Ciudad Autonoma de Buenos Aires, Buenos Aires Level 6, 549 St Kilda Road, Melbourne, VIC 3004 Gumpendorfer Straße 19-21/5. OG, 1060, Wien Strozzigasse 10/14, 1080 Vienna Plot 64518 Deloitte House, Fairgrounds, Gaborone Avenida Presidente Vargas, 2921 – 6º Andar – sala 611, Vila Homero, Indaiatuba/SP, 13338-705 St SCS Quadra 02 Bloco c, 109 - Sala 301 401 501 e 601 Edif, Brasília, Distrito Federal, 70.302-911 Al. Vicente Pinzon, 51, cj. 1301, Reserva Vila Olímpia, São Paulo/SP, 04547-130 Avenida das Nações Unidas, 14401 – Torre C-1 do Complexo Parque da Cidade – conjuntos 191, 192, 201, 202, 211, 212, 221, 222, 231, 232, 241 e 242, Chácara Santo Antônio, São Paulo/SP, CEP 04794-000 Sofia 1784, “Mladost” district, 115G “Tsarigradsko Shosse” 115G, Business center MEGAPARK, FL. 10-11 199 Bay Street, Suite 4000, Toronto, Ontario M5L 1A9 Av el Golf 40 piso, 20 Santiago Av. del Valle 515, Huechuraba, Santiago Room 604 6F, One Indigo, 20 Jiuxianqiao Road, Chaoyang District, Beijing, 100015 Room 601-602 6F, One Indigo, 20 Jiuxianqiao Road, Chaoyang District, Beijing, 100015 Room 2604, 26th Floor, The World Trade Center, 280 Gloucester Road, Causeway Bay, Hong Kong Room 607, One Indigo, 20 Jiuxianqiao Road, Chaoyang District, Beijing, 100015 Carrera 7, No. 76 -35 Floor 10, Bogota Edificio Oller Abogados, Provincia de 5551007, Av. 18, San José Province, San José Lyngbyvej 2, DK-2100, Copenhagen The Sir John Peace Building, Experian Way, NG2 Business Park, Nottingham, NG80 1ZZ c/o PricewaterhouseCoopers, Rhus Office Park, Kal Grant Street, Mbabane 1 Avenue du Général de Gaulle, 92800 PUTEAUX, Immeuble PB5 Edisonstraße 19, 74076, Heilbronn Rheinstraße 99, 76532, Baden-Baden Speditionstraße 21, 40221, Düsseldorf Kreuzberger Ring 68, 65205, Wiesbaden Walther-von-Cronberg-Platz 13, 60594 Frankfurt a. Main 5th Floor, East Wing, Tower 3, Equinox Business Park, LBS Marg, Kurla (West), Mumbai, 400070 1st Floor, Plot No. 6, Janakpuri Colony, Gunrock, Hyderabad, Telangana 500009 World Trade Centre 3 Lantai 27, Jl. Jendral Sudirman Kav. 29-31, Kelurahan Karet, Kecamatan Setiabudi, Kota Adm. Jakarta Selatan, DKI Jakarta Italy Japan Republic of Korea Lesotho Malaysia20 Malaysia21 Malaysia22 Mexico Monaco Mozambique Namibia The Netherlands New Zealand Norway Peru The Philippines Poland Singapore South Africa23 South Africa24 Spain25 Spain26 Spain27 Switzerland Thailand Turkey Uganda USA28 USA29 USA30 USA31 Newenham House, Northern Cross, Malahide Road, Dublin 17, D17 AY61 Piazza dell’Indipendenza No 11/B, 00185, Rome 1-1 Otemachi 1-chome, Chioyda-ku Tokyo 10F Shinhan L Tower, 358 Samil-daero, Jung-gu, Seoul Plot No. 582, Ha Hoohlo Extension, Maseru 17-9 & 79-9, 9th Floor, The Boulevard Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur 10th Floor Menara Hap Seng, No. 1 & 3 Jalan P. Ramlee, 50250 Kuala Lumpur, Wilayah Persekutuan Ground, 1st, 2nd & 3rd Floors, Block B, Quill 18, Lingkaran Teknokrat, 3 Barat, Cyber 4, 63000 Sepang, Cyberjaya, Selangor Paseo de la Reforma No. 115, Desp. 1503, Col. Lomas de Chapultepec, D.F., C.P. 11000 Athos Palace 2, Rue de la Lujerneta, MC 98000 Edifício Millennium Park, Avenida Vladimir Lenine, 174, 13°, Maputo C/O Aus Secretarial Services, Bougain Villas, 8 Sam Nujoma Drive, Windhoek Grote Marktstraat 49, 2511BH’s-Gravenhage Level 8, DLA Piper Tower, 205 Queen Street, Auckland, 1010 Karenslyst Allé 6, 0278 Oslo Av. Canaval y Moreyra Nº 480, Piso 19, San Isidro, Lima 24th Floor Philam Life Tower, 8767 Paseo de Roxas, Makati City Plac Marsz. Józefa Piłsudskiego 3, 00-078 Warsaw 10 Kallang Avenue, #14-18 Aperia Tower 2, Singapore, 339510 Compuscan House, 3 Neutron Avenue, Techno Park, Stellenbosch, 7600 Experian House, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston Ext 7, 2191 Calle Graham Bell, s/n, Edificio Axesor, Parque Empresarial San Isidro, C.P. 18100, Armilla C/Principe de Vergara 132, 1a Planta, 28002, Madrid Principe de Vergara 131 1°, Madrid Thurgauerstrasse 101a, CH-8152, Opfikon No. 1788 Singha Complex Building, Room No. 1905, 19th Floor, New Petchburi Road, Bangkapi, Huai Kwang, Bangkok River Plaza Büyükdere Cad.Bahar Sok.No:13 K:8 Levent 34394 İstanbul Plot 23, 3rd Floor, North Wing, Soliz House, Lumumba Avenue, Nakasero, Kampala The Corporation Trust Company, 1209 Orange Street, Wilmington DE 19801 475 Anton Boulevard, Costa Mesa, CA 92626 CT Corporation System, 818 West 7th Street, Los Angeles, CA 90017 CSC, 975 Brush Hill Rd, Milton MA 02186 Numeric superscripts refer to subsidiary undertakings given in note S(i) Experian plc Annual Report 2021Financial statements 218 Notes to the Company financial statements continued S. Related undertakings at 31 March 2021 continued (iii) Additional information on subsidiary undertakings Summary The results of the undertakings listed at note S(i) are included in the Group financial statements. Except as indicated below, the Company has direct or indirect interests in the whole of the issued equity shares of these undertakings. Undertakings which are direct subsidiaries of the Company are detailed in note L to these financial statements. Since demerger from GUS plc in 2006, the Company has eliminated dormant and inactive companies through an ongoing internal programme. Holdings comprising less than 100% Interests of less than 100% of the issued equity of subsidiary undertakings are: Brain Soluções de Tecnologia Digital Ltda – 55.0% Credify Informationsdienstleistungen GmbH – 60.0% DP Management Pte Ltd – 51.0% Experian Australia Credit Services Pty Ltd – 84.7% Experian Bureau de Crédito, S.A. – 75.0% Experian Colombia S.A. – 99.9% Experian Credit Information Company of India Private Limited – 66.7% Experian Italia S.p.A. – 95.0% Experian Information Services (Malaysia) Sdn. Bhd. – 74.0% Experian South Africa (Pty) Limited – 87.5% Informa Solutions GmbH – 60.0% MCI-Experian Co., Ltd – 51.0% Serasa S.A. – 99.7% Holdings comprising other than ordinary shares, common stock or common shares The Company’s equity interests comprise direct or indirect holdings of ordinary shares, common stock or common shares only, except as listed below: GUS 2004 Limited, Motorfile Limited and Experian Soluciones de Informacion, S.A. de C.V. – A ordinary and B ordinary shares GUS International and GUS Investments 2003 Unlimited Company – B ordinary shares GUS 2000 Unlimited – X ordinary and Y ordinary shares Experian Holdings, Inc. – class A and B common stock Experian Information Solutions Inc – common no par value shares Experian Services Corp. – common no par value shares Opt-Out Services, LLC – membership interests shares Riverleen Finance, LLC – common stock shares Experian plc Financial statements Holding 23.1% 25.0% 25.0% 32.9% 25.0% 25.0% 33.3% 33.3% 33.3% 219 Country of incorporation Cayman Islands England and Wales Russia South Africa USA USA USA USA USA Country of incorporation or operation Brazil England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales England and Wales Germany Ireland Jersey South Africa South Africa USA S. Related undertakings at 31 March 2021 continued (iv) Associate undertakings Company Vector CM Holdings (Cayman), L.P. London & Country Mortgages Limited United Credit Bureau Who Owns Whom (Pty) Limited Online Data Exchange LLC Opt-Out Services, LLC Central Source LLC New Management Services, LLC VantageScore Solutions, LLC (v) Other undertakings Undertaking Serasa Experian Pension Plan Brigstock Finance Limited Experian Medical Plan Limited Experian Pension Scheme Experian Retirement Savings Plan Experian Retirement Savings Trustees Limited Experian Trustees Limited Experian UK Approved All-Employee Share Plan The Pension and Life Assurance Plan of Sanderson Systems Limited Versorgungsordnung der Barclays Industrie Bank GmbH vom April 1988 (incl. amendments) The Experian Ireland Pension Plan The Experian plc Employee Share Trust Compuscan Team Investment Trust CSH Education & Welfare Trust Experian Personal Investment Plan These undertakings are not subsidiaries or associates. Brigstock Finance Limited is a finance company. The other undertakings operate in connection with the Group’s share incentive plans, pension arrangements in the UK, the USA, Brazil, South Africa and Germany, and the provision of medical cover in the UK. Experian plc Annual Report 2021Financial statements 220 Shareholder and corporate information Analysis of share register at 31 March 2021 By size of shareholding Over 1,000,000 100,001 to 1,000,000 10,001 to 100,000 5,001 to 10,000 2,001 to 5,000 1 to 2,000 Total By nature of shareholding Corporates Individuals Treasury shares Total Company website A full range of investor information is available at www.experianplc.com. Details of the 2021 AGM, to be held in Dublin, Ireland on Wednesday, 21 July 2021, are given on the website and in the notice of meeting. Information on the Company’s share price is available on the website. Electronic shareholder communication Shareholders may register for Share Portal, an electronic communication service provided by Link Market Services (Jersey) Limited, via the Company website at www.experianplc.com/shares. The service is free and it facilitates the use of a comprehensive range of shareholder services online. When registering for Share Portal, shareholders can select their preferred communication method – email or post. Shareholders will receive a written notification of the availability on the Company’s website of shareholder documents, such as the Annual Report, unless they have elected to either (i) receive such notification by email or (ii) receive paper copies of shareholder documents, where such documents are available in that format. Dividend information Dividends for the year ended 31 March 2021 A second interim dividend in respect of the year ended 31 March 2021 of 32.5 US cents per ordinary share will be paid on 23 July 2021, to shareholders on the register of members at the close of business on 25 June 2021. Unless shareholders elect by 25 June 2021 to receive US dollars, their dividends will be paid in pounds sterling at a rate per share calculated on the basis of the exchange rate from US dollars to pounds sterling on 2 July 2021. A first interim dividend of 14.5 US cents per ordinary share was paid on 5 February 2021. Number of shareholders 144 366 753 581 2,039 17,839 21,722 Number of shareholders 3,663 18,058 1 21,722 % 0.7 1.7 3.5 2.7 9.4 82.0 100.0 % 16.9 83.1 — 100.0 Number of shares 802,461,521 120,910,798 25,666,597 3,962,292 6,173,291 10,437,117 969,611,616 Number of shares 897,137,030 20,196,573 52,278,013 969,611,616 % 82.8 12.5 2.6 0.4 0.6 1.1 100.0 % 92.5 2.1 5.4 100.0 Income Access Share arrangements As its ordinary shares are listed on the London Stock Exchange, the Company has a large number of UK resident shareholders. In order that shareholders may receive Experian dividends from a UK source, should they wish, the Income Access Share (IAS) arrangements have been put in place. The purpose of the IAS arrangements is to preserve the tax treatment of dividends paid to Experian shareholders in the UK, in respect of dividends paid by the Company. Shareholders who elect, or are deemed to elect, to receive their dividends via the IAS arrangements will receive their dividends from a UK source (rather than directly from the Company) for UK tax purposes. Shareholders who hold 50,000 or fewer Experian plc shares on the first dividend record date after they become shareholders, unless they elect otherwise, will be deemed to have elected to receive their dividends under the IAS arrangements. Shareholders who hold more than 50,000 shares and who wish to receive their dividends from a UK source must make an election to receive dividends via the IAS arrangements. All elections remain in force indefinitely unless revoked. Unless shareholders have made an election to receive dividends via the IAS arrangements, or are deemed to have made such an election, dividends will be received from an Irish source and will be taxed accordingly. The final date for submission of elections to receive UK sourced dividends via the IAS arrangements is 25 June 2021. Dividend Reinvestment Plan (DRIP) The DRIP enables those shareholders who receive their dividends under the Income Access Share arrangements to use their cash dividends to buy more shares in the Company. Eligible shareholders, who wish to participate in the DRIP in respect of the second interim dividend for the year ended 31 March 2021, to be paid on 23 July 2021, should return a completed and signed DRIP application form, to be received by the registrars no later than 25 June 2021. Shareholders should contact the registrars for further details. Experian plc Shareholder and corporate information 221 Contact information Corporate headquarters Experian plc Newenham House Northern Cross Malahide Road Dublin 17 D17 AY61 Ireland T +353 (0) 1 846 9100 F +353 (0) 1 846 9150 Investor relations E investors@experian.com Registered office Experian plc 22 Grenville Street St Helier Jersey JE4 8PX Channel Islands Registered number – 93905 Registrars Experian Shareholder Services Link Market Services (Jersey) Limited PO Box 532 St Helier Jersey JE4 5UW Channel Islands T 0371 664 9245 T (for calls from outside the UK) +44 800 141 2952 E experian@linkregistrars.com Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the United Kingdom will be charged at the applicable international rate. Lines are open from 8.30am to 5.30pm (UK time) Monday to Friday excluding public holidays in England and Wales. Stock exchange listing information Exchange: London Stock Exchange, Premium Main Market Index: FTSE 100 Symbol: EXPN Capital Gains Tax (CGT) base cost for UK shareholders On 10 October 2006, GUS plc separated its Experian business from its Home Retail Group business by way of demerger. GUS plc shareholders were entitled to receive one share in Experian plc and one share in Home Retail Group plc for every share they held in GUS plc. The base cost of any GUS plc shares held at demerger is apportioned for UK CGT purposes in the ratio 58.235% to Experian plc shares and 41.765% to Home Retail Group plc shares. This is based on the closing prices of the respective shares on their first day of trading after their admission to the Official List of the London Stock Exchange on 11 October 2006. For GUS plc shares acquired prior to the demerger of Burberry on 13 December 2005, which are affected by both the Burberry demerger and the subsequent separation of Experian and Home Retail Group, the original CGT base cost is apportioned 50.604% to Experian plc shares, 36.293% to Home Retail Group plc shares and 13.103% to Burberry Group plc shares. Shareholder security Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount or offers of free reports about the Company. More detailed information on such matters can be found at www.moneyadviceservice.org.uk. Details of any share dealing facilities that the Company endorses will be included on the Company’s website or in Company mailings. The Unclaimed Assets Register Experian owns and participates in The Unclaimed Assets Register, which provides a search facility for shareholdings and other financial assets that may have been forgotten. For further information, please contact The Unclaimed Assets Register, The Sir John Peace Building, Experian Way, NG2 Business Park, Nottingham, NG80 1ZZ, United Kingdom (T +44 (0) 333 000 0182, E uarenquiries@uk.experian.com) or visit www.uar.co.uk. American Depositary Receipts (ADR) Experian has a sponsored Level 1 ADR programme, for which Bank of New York Mellon acts as Depositary. This programme trades on the highest tier of the US over-the-counter market, OTCQX, under the symbol EXPGY. Each ADR represents one Experian plc ordinary share. Further information can be obtained by contacting: Shareholder Correspondence BNY Mellon Depositary Receipts PO Box 505000 Louisville, KY 40233-5000 USA T +1 201 680 6825 (from the USA 1-888-BNY-ADRS) E shrrelations@cpushareownerservices.com W www.mybnymdr.com Financial calendar Second interim dividend record date Trading update, first quarter AGM Second interim dividend payment date Half-yearly financial report Trading update, third quarter Preliminary announcement of full-year results 25 June 2021 15 July 2021 21 July 2021 23 July 2021 17 November 2021 14 January 2022 May 2022 Experian plc Annual Report 2021Shareholder and corporate information 222 Glossary The following abbreviations are used in this Annual Report, and are taken to have the following meanings: Meaning Annual General Meeting Artificial intelligence Application Programming Interface Business-to-Business Business-to-Business-to-Consumer Business-to-Consumer Benchmark earnings before interest and tax. See note 6 to the Group financial statements Benchmark earnings before interest, tax, depreciation and amortisation. See note 6 to the Group financial statements Benchmark earnings per share. See note 6 to the Group financial statements Abbreviation AGM AI API B2B B2B2C B2C Benchmark EBIT Benchmark EBITDA Benchmark EPS Benchmark operating cash flow See note 6 to the Group financial statements Benchmark PBT CCM CCPA CDP CEO CFO CGU CIP Code Company COO CPIH CSID DEFRA DEI EITS EMEA EPS ERG ERMC ESG FBU FCA FRS FTE FVOCI FVPL FX FY19 FY20 FY21 FY22 FY23 GAAP GDP GDPR GIA GSO H1 H2 HMRC IAS IAS arrangement IASB IFRIC Benchmark profit before tax. See note 6 to the Group financial statements Experian’s email/cross-channel marketing business (a discontinued operation) California Consumer Privacy Act CDP, formerly known as the Carbon Disclosure Project Chief Executive Officer Chief Financial Officer Cash-generating unit Co-investment Plans The UK Corporate Governance Code Experian plc Chief Operating Officer The Consumer Price Index including owner occupiers’ housing costs The CSID group of companies comprising CSIdentity Corporation and CSID International Limited The UK Government’s Department for Environment, Food and Rural Affairs Diversity, equity and inclusion Experian Information Technology Services Europe, Middle East and Africa Earnings per share Employee Resource Group Executive Risk Management Committee Environmental, social and governance Fair, balanced and understandable The UK Financial Conduct Authority Financial Reporting Standard Full-time equivalent Fair value through Other comprehensive income Fair value through profit or loss Foreign exchange rate(s) Year ended 31 March 2019 Year ended 31 March 2020 Year ended 31 March 2021 Year ending 31 March 2022 Year ending 31 March 2023 Generally Accepted Accounting Practice Gross Domestic Product General Data Protection Regulation Global Internal Audit Global Security Office The first half of Experian’s financial year, being the 6 months ending 30 September The second half of Experian’s financial year, being the 6 months ending 31 March The UK’s ‘Her Majesty’s Revenue & Customs’ International Accounting Standard Income Access Share arrangement for the payment of dividends from a UK source International Accounting Standards Board International Financial Reporting Standards Interpretations Committee Experian plc Shareholder and corporate information 223 Abbreviation IFRS or IFRSs IRS ISO KPI LGPD MSCIP NED NGO NPS OCI OpCo Policy PSP Q1 Q2 Q3 Q4 RF ROCE SaaS TCFD TSR UK&I WACC Meaning International Financial Reporting Standards The US Internal Revenue Service International Organization for Standardization Key performance indicator Brazil General Data Protection Law Marketing Services Consumer Information Portal Non-executive director Non-governmental organisation Net Promoter Score Other comprehensive income Group Operating Committee Directors’ remuneration policy Performance Share Plan The first quarter of Experian’s financial year, being the 3 months ending 30 June The second quarter of Experian’s financial year, being the 3 months ending 30 September The third quarter of Experian’s financial year, being the 3 months ending 31 December The fourth quarter of Experian’s financial year, being the 3 months ending 31 March Radiative Forcing Return on capital employed Software-as-a-Service Task Force on Climate-related Financial Disclosures Total shareholder return United Kingdom and Ireland The Group’s pre-tax weighted average cost of capital Experian plc Annual Report 2021Shareholder and corporate information Notes Sustainability: at a glance Environment Committed to becoming carbon neutral in own operations by Science-based Target for 2030 set Overall CO2e in tonnes Carbon intensity (CO2e per US$1,000 of revenue) FY21 carbon emissions offset Electricity from renewable sources CDP Climate Change score (in the Leadership band) Social Improving financial health Number of people with profiles in Experian’s consumer information bureaux Number of free consumer memberships Consumers connected to Experian Boost in the USA Value of debt written off by Limpe Nome in FY21 Total people reached by our Social Innovation products since 2013 Target to reach people through Social Innovation products by 2025 Total people reached in FY21 through our United for Financial Health education programme Target to reach people through United for Financial Health by 2024 Number of credit offers to people in emerging markets using our micro analytics Unbanked people who could benefit through alternative data sources and Experian technology platforms Data Data security, accuracy, privacy and transparency are a top priority Rigorous security controls based on ISO 27001 and we hold Cyber Essentials Certification Employees Glassdoor employee rating Gender diversity targets set Signatory of UN Women’s Empowerment Principles Mandatory annual training for all employees: Code of Conduct Security and data Anti-corruption Supply Chain A member of the Slave-Free Alliance Suppliers must comply with our Supply Chain Principles, which are aligned with UN Universal Declaration of Human Rights Supplier Diversity Programme Governance Independent Board members, including independent Chairman Female Board members Board meets Hampton-Alexander Review recommendation on gender diversity Ethnically diverse Board members Board meets Parker Review Committee recommendation on ethnic diversity Independence of Audit, Remuneration and Nomination and Corporate Governance committees Independent Chair and clear division of responsibilities between the Chairman and CEO Independent external evaluation of the Board’s performance, occurs every three years Executive remuneration linked to Group performance Voting rights for ordinary shareholders 2030 Yes Reduced by 58% Reduced by 60% 20% 34% A- 1.3bn 110m 6.7m US$6.7bn 61m 100m 35m 100m 3.1bn 1.7bn 4.1 Yes Yes Yes 73% 36% Yes 2 Yes 100% Yes Yes Yes Yes Designed and produced by Friend www.friendstudio.com Print: Pureprint Group This report has been printed on UPM Finesse Silk which is FSC® certified and made from 100% Elemental Chlorine Free (ECF) pulp. The mill and the printer are both certified to ISO 14001 environmental management. The report was printed using vegetable based inks by a CarbonNeutral® printer. Annual Report 2021 www.experianplc.com/annualreport Sustainable Business Report 2021 www.experianplc.com/sbreport Experian plc website www.experianplc.com E x p e r i a n A n n u a l R e p o r t 2 0 2 1 Corporate headquarters Experian plc Newenham House Northern Cross Malahide Road Dublin 17 D17 AY61 Ireland Operational headquarters Experian 475 Anton Boulevard Costa Mesa CA 92626 United States Serasa Experian Av. Doutor Heitor José Reali 360 CEP 13571-385 São Carlos Brazil Experian The Sir John Peace Building Experian Way NG2 Business Park Nottingham NG80 1ZZ United Kingdom T +353 (0) 1 846 9100 www.experianplc.com T +1 714 830 7000 www.experian.com T +55 11 3004 7728 www.serasaexperian.com.br T +44 (0) 115 941 0888 www.experian.co.uk
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