IntegraFin Holdings Annual Report 2023

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FY2023 Annual Report · IntegraFin Holdings

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ANNUAL REPORT
AND FINANCIAL
STATEMENTS

FOR THE YEAR ENDED
30 SEPTEMBER 2023

Supportive

HIGHLIGHTS

Operational highlights

Financial highlights

Year-end Closing Funds Under Direction*:

Revenue:

£55.0bn
10% (2022: £50.1bn)

£134.9m
1% (2022: £133.6m)

Average Daily FUD*:

IFRS Profit before tax:

£53.6bn
2% (2022: £52.5bn)

Net inflows*:

£2.7bn

39% (2022: £4.4bn)

Client numbers*:

230.3k
2% (2022: 224.7k)

Client retention*:

95%

2% (2022: 97%)

Adviser numbers*:

7.7k

2% (2022: 7.5k)

£62.6m
15% (2022: £54.3m)

Underlying Profit before tax:

£63.0m
4% (2022: £65.8m)

IFRS Earnings per shar

15.1p

13% (2022: 13.3p)

Underlying Earnings per shar

15.2p

7% (2022: 16.3p)

*Alternative performance measures (APMs)

APMs are financial measures which are not defined by IFRS,
these have been indicated with an asterisk. They are used
in order to provide better insight into the performance of
the Group. Further details are provided in the glossary, on
page 235.

CONTENTS

STRATEGIC REPORT ...................2

CORPORATE GOVERNANCE REPORT ................................................... 73

Chair’s Statement .........................3

oard Leadership and Company Purpose ................................................. 76

CEO Statement ............................6

.172 Statement .................................................................................. 80

Market Overview ..........................10

ection 172(1) Statement ..................................................................... 87

Strategy and Business Model ..........13

he Role of the Board and its Responsibilities ........................................... 91

omposition, Succession and Evaluation .................................................. 94

udit and Risk Committee Report ........................................................... 97

omination Committee Report................................................................ 107

irectors’ Remuneration Report .............................................................. 113

irectors’ Report .................................................................................. 144

tatement of Directors’ Responsibilities ................................................... 150

Our Strategic Financial
Objectives ...................................16

Key Financial Performance
Indicators ....................................20

Task Force on Climate-Related
Financial Disclosures .....................23

Responsible Business –
Our People ..................................45

Financial Review ...........................53

Risk and Risk Management ............60

Going Concern and Viability
Statement ...................................69

Non-Financial Information
Statement ...................................72

FINANCIAL STATEMENTS ....................................................................152

OTHER INFORMATION ............ 234

Directors, Company Details,
Advisers ................................... 234

Glossary of Terms ...................... 235

Independent Auditor’s Report to the Members of Integrafin Holdings plc .......152

Consolidated Statement of Comprehensive Income ....................................166

Consolidated Statement of Financial Position .............................................167

Company Statement of Financial Position ..................................................169

Consolidated Statement of Cash Flows .....................................................170

Company Statement of Cash Flows .........................................................172

Consolidated Statement of Changes in Equity ............................................173

Company Statement of Changes in Equity .................................................174

Notes to the Financial Statements ............................................................175

STR ATEGIC
REPORT

2
2

CHAIR’S STATEMENT

Overview

I am pleased to introduce this year’s
annual report. IntegraFin Holdings

show Transact as the highest ranked
for client service and functionality

Over the last financial year, IHP
Group has continued to be affected

plc Group (IHP Group) has delivered

amongst platforms with over £30.0

by the consequences of the cost-

robust performance throughout FY23,

billion in assets.

with our investment platform offering

of-living crisis, high levels of global

inflation and increasing interest rates,

– Transact – growing funds under

This has resulted in net flows

which have in turn unsettled equity

direction (FUD) to a record high.

onto the platform of £2.7 billion,

markets. I am proud of our resilient

representing resilient performance

performance in the face of such

We have remained focused on our

whilst growing our market share.

headwinds.

underlying strategic objective: to be

Over the financial year, advisers

the number one provider of software

registered on the platform increased

Our financial and operational

and services for our clients and

by 2% and client numbers by 2%.

performance has been robust, and

their financial advisers. We have

The integration of Time4Advice (T4A)

our people have been instrumental

pursued this by maintaining best-in-

into the Group continues, whilst

in delivering a high-quality service.

class service levels and expanding

sales of the existing CURO product

Alexander Scott comments on the

the functionality of our investment

continue to grow, with 2.8k licenced

results in more detail in his Chief

platform. Industry surveys continue to

users at the year-end.

Executive Officer’s Review.

Developing our business

Supporting our people

Governance and culture

The digitalisation of the Transact

The varied hybrid models of office/

This is the fourth year that the

platform continues apace, with a focus

home working have all bedded in well.

2018 UK Corporate Governance

on improving the user experience

To better support our staff, we altered

Code (the Code) has applied to the

through enhanced, efficient processes.

the balance of fixed versus variable

Group. Confirmation of how we have

Our investment in software developers

pay across the London office, Isle

complied with the Code for the year

aims to continue delivering new

of Man office and the regional sales

under review is set out on page 118.

functionality and strengthening

forces. This has proved popular, as

We continue to monitor and prepare

our systems. Further detail on our

the results of our second staff survey

for signalled Corporate Governance

digitalisation strategy can be found

have shown.

reform.

in the Strategy and Business Model

section of this report on page 13.

The IHP board

We take great care of our corporate

culture and values, which are reflected

Sustainability and social issues are a

The membership of the IHP board

both in our employee relations and in

growing focus for our business. This

has been stable throughout the

our interactions with clients, advisers,

year, we were pleased to sign up to

year. We announced on 8 July 2023

and other key stakeholders. We believe

the Women in Finance charter and to

that we had recruited Euan Marshall

our culture of putting clients first has

receive the Living Wage accreditation

to become Group Chief Financial

been central to our compliance with

for the Group. We also joined the

Officer (CFO), and he will be joining

the new Consumer Duty requirements.

10,000 Black Interns programme,

in January 2024. I look forward to

It is particularly pleasing that

with our first cohort of interns starting

working with Euan, he will be a strong

we continue to rank so highly in

in Summer 2024. We continue

addition to the board and senior

customer service polls undertaken by

development of our sustainability

management team.

Investment Trends and CoreData.

strategy, led by Victoria Cochrane in

her role as Designated Non-Executive

Christopher Munro, who has been

Following the publication of our

Director (DNED) for Environmental and

a Non-Executive Director (NED) on

financial year 2022 results in

Social Sustainability.

various Group boards and Committees

December 2022 and financial year

since 2017, has decided to step down

2023 interim results in May 2023, our

from the board of the Company at
the end of September 2024. We are

Company Secretary, Helen Wakeford,
and I offered meetings with our largest

profoundly grateful for his input and

shareholders. We held 17 meetings,

expertise over the last seven years.

meeting 14 of our largest investors,

including three investors that we met

twice. The meetings gave shareholders

the opportunity to discuss topics of

concern and were felt by us to be

constructive and transparent. We plan

to continue open engagement with our

stakeholders outside of the boardroom

and this forms a critical aspect of

board-level activity.

We have rigorous Audit and Risk,

Nomination and Remuneration

Committees, which meet regularly

to review and challenge in-depth

Closing

the work of the executive. Further

I remain enormously impressed by

detail on their activities over the year

the professionalism and dedication

can be found in this report. We are

of our employees. Their continuing

committed to enhancing our corporate

commitment to putting our clients first

governance processes and expect to

is a vital component of our compliance

see continued benefits from doing so.

with the Consumer Duty.

On pages 80 to 90, we present our

Section 172 (s172) statement, which

sets out how we consider our key

stakeholders in our decision making

and the key decisions we have made

throughout the financial year.

The members of the board would
again like to thank all our colleagues
for the hard work that they have put
in over the last financial year.

The board effectiveness review for

These results, the published clients’

2023 was undertaken by an external

satisfaction surveys and our ranking

firm, Independent Audit Ltd, who also

within the platform sector are the

conducted our last external review in

product of their efforts.

Richard Cranfield

Chair

13 December 2023

2020. The results of that and review

of the Chair is discussed on page 95

to 96.

Remuneration

The Directors’ Remuneration Report

is set out on page 113. In particular

there are changes noted in the

incentive arrangements for executive
management and employees more

generally. These changes are detailed

on pages 116 and 117.

Dividend

In line with our dividend policy

and in recognition of our financial

performance, we have declared a

second interim dividend of 7.0 pence

per ordinary share. Together with our

first interim dividend paid in June of

3.2 pence per ordinary share, this

takes the total dividend to 10.2 pence

per ordinary share.

CEO STATEMENT

Overview

The Group has continued its record
of resilient growth, with Transact

towards year end led to a pause in
the rate rises that characterised much

technologies, seeking long-term
efficiencies through scale and ensuring

demonstrating robust performance

of the year but the high cost of living

we continue to attract investors to our

in increasing funds under direction

persisted.

platform.

(FUD), net inflows and client and

adviser numbers. This financial year

Under these challenging conditions, we

has been marked by persistently high

support our clients and their financial

inflation and interest rates, with only

advisers through our combination of

modest economic growth.

proprietary technologies – the Transact

investment platform and CURO – and

The first half of our financial year

our industry-leading customer service.

saw relatively solid equity market

performance. Global equity markets

We remain focused on our goal of

were volatile but there was an upward

making financial planning easier

trend during the period from October

and more efficient and, to this end,

2022 to March 2023. The latter

we have continued our programme

two quarters of financial year 2023

to deliver organic growth through

saw less volatility. Slowing inflation

investment in our people and our

Platform performance –

Financial performance

Transact overview

Driven by the rise in FUD, revenue

Throughout the period, Transact has

grew during the year. Annual

steadily grown both its adviser base

commission on client funds remains

Our people

and client numbers. In the first half of

the main contributor to revenue, whilst

the year, we undertook a programme

administration fees were the second

We have continued with the IT and

of portfolio rationalisation as part of

largest component. T4A’s contribution

software professional hiring plan

preparations for the Consumer Duty

also increased during this year.

announced in mid-2022 and since then

regulations, resulting in a one-time

we have added 27 such employees.

reduction.

Underlying expenses rose in 2023,

Based on this progress, we anticipate

Platform inflows fell across the whole

our increase in staff costs. This is in

are already benefitting from the new

advised retail sector due to the cost-

line with our expectations, as the bulk

expertise and scale, allowing us to

of-living crisis, which diminished the

of the IT software hires stipulated in

accelerate our programme of platform

with most of the uplift stemming from

finalising the plan during 2024. We

available income for investment.

our growth strategy fell within this

improvement.

Consequently, our gross inflows fell

year. Other cost increases were driven

during the year. This nevertheless

by both inflationary and scale-based

Given the importance of our people to

represents strong performance in

factors, as the Group continues to

the Group’s success, we have made

a difficult market, being the third

invest in its key competencies.

their wellbeing a priority during the

highest level of gross inflows in the

year. Responding to feedback from

industry which, coupled with high

The Group’s IFRS profit before tax

the previous employee engagement

retention, delivered 22% of net

has risen by £8.3m, a 15% increase

survey, we have reworked our

inflows within the advised platform

over the prior year. However, there is

remuneration approach. This has led to

market.

a decrease in underlying profit before

a tiered pay rise, changes to the bonus

tax from last year. The underlying

system and enhanced maternity and

Transact grew its market share as a

figure excludes exceptional items,

paternity benefits.

result of these resilient net inflows.

which were elevated in FY22 due to

Nevertheless, owing to both macro-

the impact of T4A post-combination

We have selected a new CFO, Euan

economic and industry factors,
outflows were substantially higher in

remuneration and the VAT decision.
The reduction in underlying profit

Marshall, who will be joining in January
2024. Euan brings with him significant

the year. In contrast to FY22 – where

before tax is driven by the increased

experience in listed financial services

sharply negative market movements

investment in the business in this year

companies and I look forward to

in the second half reduced otherwise-

and next year; we then anticipate the

working with him to execute on our

robust net inflows – market

resultant improvements from scale

Group strategy.

movements this year were broadly

and efficiency to start to come through

positive.

from 2025.

The Group has made other key senior

hires, specifically our first UK-based

The Group maintains its focus on

Chief Technology Officer (CTO),

organic platform growth, which has

Damien Francis, and a new Group

continued to yield steady increases in

Chief Risk Officer (CRO), Emma

both FUD and revenue. Our aim is to

Vernon, both of whom joined in

achieve sustainable growth through

January 2023. These new perspectives

incremental improvements to our

and skills will strengthen our strategy

proposition, thereby allowing us to

as well as helping the Group adapt

continue providing the high quality of

to key changes taking place in the

service to which we are committed.

industry.

Digitalisation programme

Protecting our customers –

Consumer Duty

Led by our new CTO, our programme

of platform digitalisation has delivered

Consumer Duty represented perhaps

does not take any client cash interest

significant improvements. We have

the largest regulatory change of

earned and instead passes it all onto

aimed to reduce as many paper

the year, with the legislation taking

our clients. At the time of writing, we

routes as possible on the platform,

effect in July 2023. Prioritising good

are paying the highest interest rate

especially those relating to account

outcomes for our clients and advisers

across the UK platform sector to our

transfers, and we have introduced

has always been at the centre of

clients.

efficient, intuitive digital alternatives.

the Group’s activities. We were well

The success of these initiatives means

positioned to adapt to the new rules

Throughout 2023, we have moved

that now all new accounts opened on

and have ensured the necessary

forward with our sustainability

our platform are paperless and the

changes have been implemented. This

initiatives including significantly

majority of wrappers in portfolios are

includes mandatory training for all

increased monitoring of energy

also opened on a paperless online

employees and new joiners.

usage and waste, as well as applying

basis.

tangible initiatives such as solar

Our commitment to Consumer Duty is

panels on our Melbourne office.

Our adviser support team is now well

embodied in our approach to interest

established and has been making

on client cash. With interest rates at

use of new support functionality to

their highest level in recent years,

promptly address questions from our

greater industry focus has been

clients and advisers; through our live

placed on the interest generated from

chat feature we have achieved a 96%

client cash. In accordance with our

query resolution rate. In addition to

‘customer first’ principles, Transact

the technical improvements to the

platform, we have sought also to

expand our service offerings.

Our BlackRock Model Portfolio Service

(MPS), launched in November 2022,
has outperformed our expectations in

terms of adviser and client interest.

This service offers our clients access

to flexible, diversified model portfolios

investing in a broad range of markets.

INVESTMENT APPROACH AND BELIEFS

Capital at risk. The value of investments and the income from them can fall as well as

rise and is not guaranteed. Investors may not get back the amount originally invested.

BlackRock believe that superior investment outcomes are best achieved through

an optimised and disciplined investment process. The Transact – BlackRock MPS

investment process is underpinned by the following core beliefs.

EXPERT RISK MANAGEMENT

GLOBALLY DIVERSIFIED

ESG

COST EFFECTIVE

Leveraging BlackRock’s investment

Spreading investment risk

expertise and global insight

The underlying investments offer

Central to the investment process is the

exposure to a broad range of markets

belief that asset allocation is the key

across multiple asset classes to offer

driver of returns. The service draws on

a globally diversified solution.

the deep level of investment and risk

expertise across BlackRock to determine

The models target between 60% and

the optimal asset allocation for each

80% of the allocation in low-cost index

model portfolio.

mutual funds and Exchange Traded Funds

(ETFs) operated by BlackRock. To further

Dynamic asset allocation

increase diversification the remainder will

BlackRock monitors the models,

invest in index funds from a range of

maintaining a forward looking

third-party, global investment managers

view of investment returns and risk.

selected by BlackRock.

They will be adjusted periodically with

the aim of maintaining optimal asset

allocation balancing risk, return and cost.

Asset allocation

Diversification

How BlackRock incorporates ESG

Low ongoing fees, meaning

factors in its investment process

investors keep more of their returns

BlackRock expects companies with better

The models invest in a range of index

ESG metrics to produce a better risk-

tracking funds and ETFs. These provide a

adjusted performance over the medium

globally diversified solution with cost-

to long term. It also thinks that the focus

effective ongoing charges.

on environmental concerns will be a

catalyst for growth across the globe in

The weighted ongoing charges figure

the coming decades and it wants to

position its portfolios to capture it.

THE TRANSACT – BLACKROCK
MPS MODELS

Whilst the Transact models do not have

the point of rebalance. BlackRock’s

investment manager (IM) annual fee is
0.06%1.

an explicit ESG objective, BlackRock is

but will target a maximum of 0.20% at

(OCF) for each model will vary over time

permitted to invest in ESG aligned

mutual funds and ETFs where it deems

appropriate, subject to the objectives

and constraints within the investment

The Transact – BlackRock MPS

guidelines which may, in some cases,

The underlying investments are a blend of

offers access to seven discretionary

limit the ESG exposure.

index mutual funds and ETFs which provide

model portfolios which aim to provide

transparency, offer exposure to a broad

long-term capital growth whilst

range of markets across multiple asset

managing risk in accordance with

ESG stands for:
predefined risk ranges.

classes and can be combined to offer a

Index Funds

diversified, cost-effective solution.

ASSET ALLOCATION AS AT 30 JUNE 2023

Cash

High Yield Bonds

Corporate Bonds

Government Bonds

Alternatives

Diversified Equities

Emerging Market Equities

Developed Market Equities

Transact – BlackRock MPS
Adviser Brochure

For Adviser use only

Produced by Integrated Financial Arrangements Limited

Asset allocation describes how your

In investment terms, diversification is the

Environmental, Social and Governance

Index funds and ETFs are investments

100%

investments are spread across different

concept of spreading your investment

investment types, including equities,

risk across a broad range of companies,

bonds, alternative investments, such

governments and countries rather than

as commodities and cash.

being exposed to a single investment.

There can be no guarantee that the

Diversification and asset allocation may

investment strategy will be successful,

not fully protect you from market risk.

and the value of investments may go

down as well as up.

and refers to criteria used to evaluate the

Each model portfolio aims to target a

robustness of a company’s governance
different level of volatility which increases

that aim to track the performance of a
The weighted ongoing charges figure (OCF)
specific index. An index represents the

for each model will vary over time but will

mechanisms and its ability to effectively

across the range – higher volatility

total return of a particular group of
target a maximum of 0.20% at the point of

manage its environmental and social

represents higher risk.

impacts.

The model portfolio name represents the

securities – usually equities or bonds.

rebalance. BlackRock’s investment manager
(IM) annual fee is 0.06%1.

There is no guarantee that index funds

ESG screening may adversely affect the

expected long-term percentage equity

For more information on the model

or ETFs will achieve perfect tracking of

value of a fund’s investments compared

holding, although the actual position will
to a fund without such screening.

vary depending on current market

portfolios including charges, holdings and

their respective benchmark indices.

to see the individual model factsheets

conditions. Higher risk portfolios will

please go to Transact Online:

generally have a larger exposure to

equities and lower exposure to bonds.

1BlackRock Investment Management (UK) Limited pay Integrated Financial Arrangements Ltd 0.02%
Templates > Transact – BlackRock MPS
to cover part of the costs associated with the Transact – BlackRock MPS. This payment is included in
BlackRock’s IM Annual Payment fee.

n
o

i
t
a
c
o

l
l

t
e
s
s
A

f
o
%

80%

60%

40%

20%

M O DE L
P O RTFO L IO

G ROW TH
25

G ROW TH
40

G ROW TH
50

G ROW TH
60

G ROW TH
70

G ROW TH
80

G ROW TH
95

FE E S (O C F)1

0.15%

0.16%

0.18%

0.19%

VO L AT IL I T Y
TA RG E T S 2

3.0%-
6.0%

4.5%-

7.5%

6.0%-

9.0%

7.0%-

11.0%

8.5%-

12.5%

10.0%-

15.0%

>12.0%

IN V E S TO R
R IS K
A PPE T I TE

Lower willingness to take risk
Potentially lower reward

•
•
• More bonds and cash

• Higher willingness to take risk
•
Potentially higher reward
• More equites (shares)

1BlackRock Investment Management (UK) Limited pay Integrated Financial Arrangements Ltd 0.02% to cover part
of the costs of the Transact – BlackRock MPS. This payment is included in BlackRock’s IM Annual Payment fee.

2 Source: BlackRock. Asset allocations as of 30 June 2023. Actual allocations may be different and change over time. Risk is
measured as annual volatility (standard deviation) on a three year half-life basis which means the first three years have a 50%
weighting. BlackRock includes more than 19 years of historic data in its risk modelling analysis.

1 Source: BlackRock. Ongoing charges figure (OCF) as at 30 June 2023.

Outlook

The market outlook for the coming

software will commence roll out to the

year is more optimistic than it was

pipeline of adviser firms. We will seek

at the start of FY23 but headwinds

further innovation including a data

are anticipated to persist. Inflation

interface with the Transact platform.

is expected to come down but at a

pace that is as yet unknown, and

In this period of ongoing economic

the Bank of England base rate is

and market volatility, clients rely

predicted to remain at a higher level

more than ever on their advisers for

than has been seen in the past 10

high quality, personalised financial

years. By investing in the key drivers

planning and support. As we have

of our competitive advantage – our

always done, we’ll continue to support

proprietary technology and our

UK financial advisers and their clients

industry-leading customer service –

by providing our combination of in-

the Group aims to continue to grow

house technology and well-trained

our adviser, client and FUD base.

people delivering high quality service.

Our holistic financial planning solution

Throughout FY24, we will continue

will serve clients and advisers alike in

our work on the platform digitalisation

managing their portfolios easily and

project. Our digitalisation approach

efficiently.

will focus on further limiting

paper-based forms and expanding

I would like to thank all my colleagues

straight-through processing. These

across the Group for their diligent work

technological developments will

over the year. Their commitment and

accelerate processing, making

dedication have been crucial in working

transfers quicker and easier for clients

towards our strategic objective: to be

and advisers. We also seek to add

the number one provider of software

additional data analysis functionality

and services for our clients and their

by making available to advisers
more data on the transactions they

financial advisers. I look forward to
continuing to grow our business and

perform.

deliver on our strategy throughout

FY24 and beyond.

Consumer Duty is expected to remain

one of the most prominent features

of the regulatory environment. We

Alexander Scott

put positive consumer outcomes at

IHP Group CEO

the centre of our business model. To

secure continued adherence to the

13 December 2023

new requirements, we will focus our

training and development to ensure

our people are well able to comply

with the objectives of Consumer Duty.

Following the successful beta client

test during the year, T4A’s next

generation Power Platform CURO

MARKET OVERVIEW

Financial adviser outlook

Financial adviser dynamics

The Group strategy focuses on

Over the past three years, the average

providing best in class services

size of adviser firms has gradually

and software that enable UK

increased. There has been ongoing

financial advisers to deliver financial

private equity investment into medium

plans for clients. The outlook

and large firms to support organic and

for UK financial advisers is very

inorganic growth strategies. However,

positive. Consumer demand for

some advisers and paraplanners in

advice continues to increase as

acquired firms leave and re-start

responsibility for retirement savings

their own businesses, so the pace

and income gradually shifts from

of consolidation lags the rate of

the UK government and employers

acquisitions.

to individuals. The complexity and

ongoing changes to the tax system,

Based on FCA data, the number of

plus changing attitudes towards

adviser firms reduced from 5,246

work and retirement are also driving

in 2018 to 5,118 in 2021, only 128

demand for advice. Only 31% of

fewer firms. Independent financial

households with investable assets

advisers continue to win clients from

above £100,000 use a financial

private banks and traditional wealth

adviser, so there is scope for further

managers, typically through a more

growth. Financial adviser numbers

objective, goals-based approach to

are also important for T4A, where the

financial planning. Transact and T4A

primary revenue is derived from a

enable these advisers. Many traditional

licence fee per user.

wealth managers now offer their

discretionary investment management

(DIM) services via Transact to financial

advisers; we now have over 120 DIMs

available on the platform. Outsourced

DIM services are increasingly popular

with advisers seeking to reduce risk

and cost while also freeing up time for

financial planning.

Transact offers its platform services
to small, medium and large financial

adviser firms, whilst T4A is currently

focused on medium and large

financial adviser firms, including

large consolidators and aggregators.

Throughout the year, both Transact

and T4A have increased their adviser

numbers and licence numbers,

respectively.

FIGURE 1. HOW ADVISERS AND PL ATFORMS FIT INTO
THE UK WEALTH MARKET

Financial advisers are
helping clients pass
wealth to children and
grandchildren and
retaining the next
generation of clients

Many affluent
customers seek
financial advice
pre/at retirement

Advised Platforms
~£500bn

H
T
L
A
E
W

Customers
accumulate
via workplace
pensions & non
advised products

Workplace
Pensions ~£500bn

Non advised
Products ~£1trn

Less affluent
customers
annuitise or
self-manage in
retirement

Private sector
DB schemes
in run-off
~£1trn

AGE

FIGURE 2. ADVISER PL ATFORM ASSET GROW TH FORECAST

2023-2028 CAGR

16%

11%

£1,300bn

£1,200bn

£1,100bn

£1,000bn

£900bn

£800bn

£700bn

£600bn

£500bn

£400bn

£300bn

2018-2023 CAGR

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

HISTORICAL

PESSIMISTIC

REALISTIC

OPTIMISTIC

Source: Fundscape Q323 November

Advised platform outlook

Analysts estimate the total UK wealth

management market at ~£3trn.

Growth is dependent on macro factors

such as asset returns, economic

performance and the savings rate.

The advised platform market is

currently ~£600bn, a fast-growing

sub-set of the UK wealth market.

Fundscape forecasts advised platform

growth at ~11% per annum over

the next five years. Transact’s target

market is growing because platforms

provide access to a wide range

of assets, consolidated reporting,

investment and retirement income

functionality across all tax wrappers.

Workplace pensions, legacy life and

pension products, direct to customer

products are migrated onto platforms

by financial advisers.

The schematic in figure 1 illustrates

the contestable market for platforms.

This process often takes place when

clients have accumulated some wealth

as the benefits of consolidation are

greater. Growth in platform assets

is especially important for Transact

where the primary revenue model is a

tiered basis point fee.

The schematic in figure 1 also
demonstrates at a high level how

financial advisers and the advised

platform market fit into the broader

UK wealth management market.

Advisers and platforms are replacing

private sector defined benefit schemes

as the key channel for affluent

clients pre-, at and post-retirement.

Furthermore, advisers are helping

clients pass wealth to children and

grandchildren. More than 50% of

client portfolios on Transact are within

linked family groups. Advisers are

improving how they engage the next

generation and retain them as clients.

Adviser and client numbers

Market outlook

Transact’s target market consists of

We continue to survey our advisers

The advised platform market is

the approximately 13,000 registered

to better understand their needs

expected to grow over the next

UK financial advisers that are not

and the needs of their clients. This

few years, driven by rising adviser

tied or restricted in their choice of

survey shows that of our advisers,

numbers and investor assets.

platform. At the end of FY23, 7,683

the majority use Transact as their 1st

such advisers were registered with the

choice and 72.1% are “satisfied” or

Transact remains well-positioned

Transact platform, compared to 7,537

“very satisfied” with our service.

within the market, with our compelling

in the previous year. There remains

business proposition. Our focus

a large pool of around 5,000 UK

Industry publications attest to the

remains on organic growth through

financial advisers in our contestable

effectiveness of our platform, with

continuous improvements to platform

market. This constitutes a significant

Transact as the highest-ranking

functionality and maintaining our

growth opportunity for us.

platform above >£30bn FUD in the

leading customer service. This strategy

Our client growth comes from existing

of platform improvements aims to

client/adviser numbers, despite the

registered advisers who introduce

further develop platform functionality

challenging conditions of the past year.

more clients to Transact and from new

and maintain our industry-leading

Nevertheless, we continue to look for

CoreData survey. Our programme

has yielded robust growth in FUD and

advisers registering with Transact.

satisfaction scores.

These two sources have led to our

client numbers growing by over 5,000

to 230,294.

ways to incorporate innovations in

our technology to add further value to

users of our platform.

The market remains competitive.

However, our proprietary technology

and award-winning client service focus

continues to distinguish our offering.

We remain committed to providing

high quality service and clear value-

for-money for our clients and their

advisers.

Jonathan Gunby

Transact CEO

13 December 2023

Note “Transact” is the operating name of
the investment platform run by Integrated
Financial Arrangements Ltd (IFAL).

STR ATEGY AND BUSINESS MODEL

Our strategy and

business model

Transact strategy

IHP Group has two core business

and our shared clients. We deliver this by offering comprehensive platform

propositions, which complement

functionality and leading customer service at a competitive price.

Transact's strategy is to make financial planning easier for financial advisers

each other to make financial

planning easier for clients and

their UK financial advisers. We

do this by harnessing technology,

allied with high quality human

service. We prefer to insource,

Leading functionality

and so we own and develop our

own software. Transact – our

We lead the market on wrapper choice, client reporting, retirement income

investment platform - aims to

functionality and investment choice for advisers and clients. This is supported

make financial planning easier

by independent adviser research from CoreData:

and CURO – our adviser practice

management solution - supports

advisers through the financial

advice process.

“Do the
right thing”

This is our core value, which

we believe ensures the

right outcomes for all our

stakeholders.

FIGURE 3. MARKET LEADING PL ATFORM FUNCTIONALIT Y

Schematic CoreData 2023 results (Large Platform Category >£30bn)

First for Choice of Unit Trusts

First for Choice of Tax Wrappers

First for Choice of Discretionary Fund Management and
Model Portfolio Services (MPS)

9.6/10

9.5/10

9.0/10

How?

First for Impact of Cash Interest

Through our market-leading

investment platform which

makes financial planning easier

and CURO software that supports

the financial advice process.

The systems enable advisers to

implement financial plans for

our mutual clients, simply and
efficiently, actively supported by

skilled client service and adviser

support teams. Our people

provide responsive and proactive

customer service support on a

range of queries. Through our

First for Range of Retirement Income Options

8.7/10

First for Overall Technical Support

8.5/10

First for Overall Satisfaction

First for Flexibility of Reporting

8.3/10

two core offerings, we aim to

Our functionality is enabled by our software development capability and our

be the number one provider of

focus on advisers. We have an expert in-house software development team in

software and services for clients

Melbourne, Australia where supply/demand dynamics for the specific skilled

and UK financial advisers.

developers that we need are superior to the UK. Our average developer tenure

is ~9 years, well above industry standards. It also means we are invested in

code quality and maintenance not just delivering new features and building

long-term complexity.

Leading service

Value for money

We have a regional service model so

We have implemented discounts and initiatives to simplify our charges. For

advisers and their support team can

example, in FY22 we removed wrapper fees on junior pensions and in FY23, we

build long-term relationships with

reduced our buy commission threshold, so no buy commission is payable by

our operational staff. This helps us

family group portfolios over £100,000.

to be more responsive, take more

ownership and solve problems faster

We are competitive on price and lead on value for money, particularly with the

than other platforms. Last year, we

inclusion of interest on client cash. Our interest rates on client cash are market

created specialist roles to improve

leading as we have always passed on 100% of interest to the client, we do

our service on the most complex

not skim client interest or “double dip”. Transact pays out one of the highest

adviser processes and create career

effective rates on client cash in the industry. This has proven very popular with

progression for our people. As we

advisers and clients, particularly as interest rates have increased. FCA attention

further digitalise the business, we

around client cash interest has grown as interest rates have risen; we believe

have invested in our online live chat

our approach is more in the spirit of the recently implemented Consumer Duty

and co-browse functionality which has

regulation.

proved very popular with advisers.

Our service is enabled by our software

Advisers value the sustainability of our pricing, our profitability and our financial

capability and our ownership of all tax

strength. This helps to differentiate us from unprofitable new entrants as well as

wrappers. Owning tax wrappers means

many incumbent platforms.

the adviser and client experience

is consistent and seamless across

General Investment Accounts (GIAs),

Individual Savings Accounts (ISAs),

pensions, onshore and offshore bonds.

FIGURE 4. TR ANSACT’S STR ATEGY AND BUSINESS MODEL

STRATEGY

To make financial planning easier

PROPOSITION

Service

Functionality

Value for money

PROPOSITION ENABLERS

Software capability

Adviser focus

Tax wrapper ownership

Financial strength

STRATEGIC INITIATIVES

Digitalisation

Data services

Transfers

Consumer Duty

The schematic in figure 4, above, illustrates our strategy and business model.

In a recent independent adviser study, ~25% of advisers cited Transact as

the platform leader, more than double any other player. In the same study,

more advisers say they are considering switching to Transact than to any other

platform. However, we will not be complacent. The key strategic initiatives for

Transact are greater digitalisation, data services, transfers, and Consumer Duty.

The first three initiatives are important elements of our platform functionality and

service that we want to improve and stay ahead of competitors.

T4A Strategy

T4A’s goal is to enable UK financial advisers to run their businesses more

efficiently by leveraging modern technology to help transform the way they work.

Our final strategic initiative is the

To facilitate this, we continue to provide CURO 3 – the current cloud-hosted

FCA’s Consumer Duty. We have

version – and have also developed CURO on Power Platform as a next generation,

always put the clients at the heart

Microsoft cloud-hosted solution.

of our business. But we will take

more responsibility for supply chain

oversight and invest more in our non-

advised proposition to meet the new

Consumer Duty standards. In addition,

we have made changes to our

Comprehensive functionality

Leading integrations

governance, training, and reporting

and commenced projects to address

CURO is designed and built to support

T4A works strategically with

potential consumer harm risks.

the entire advice process from the

recognised and market-leading

initial engagement, information

software partners to help users avoid

gathering and analysis, financial

duplicated data entry, to remove

needs assessment, solutions and

error and time waste; it achieves this

recommendations, implementation to

through secure data sharing using

ongoing review and monitoring.

Microsoft’s Web API.

CURO enables firms to leverage the

In addition to this expansive range

value of their data, which is centralised

of integrations, T4A will build an

and securely hosted on Microsoft’s

integration between CURO and the

Power Platform. Using Microsoft’s fully

Transact platform. Through this

integrated applications such as Power

synergy, we aim to bring further

BI, Excel, Word and Power Automate,

efficiencies to those advisers who

firms can extract invaluable business

make use of both of our software

insights and efficiencies through

solutions.

business and document automation.

T4A employs a team that is highly

experienced in the fields of software

development and financial services.

The business also surveys users

extensively to understand their needs

and to continue expanding the service

offering, to better serve the goal of
providing the best solution in the

market.

OUR STR ATEGIC FINANCIAL OBJECTIVES

Achievement of our strategic financial objectives comes through the continuing
successful delivery of our Transact and CURO propositions.

The key drivers are:

INCREASING
MARKET
SHARE

Increasing market share by growing and retaining the
adviser users of both our investment platform and
CURO software. Growing both platform and CURO
users increases Group revenue;

INVESTING

Investing in our people and software in order that the
Group can continue to provide best in class service and
to enhance our offerings, but focusing on efficiency and
making our financial investment work for us;

STRONG
CASH
PROFITS

Prudent expense management that ensures we
continue to generate strong cash profits for the benefit
of all our key stakeholders; and

MINDFUL
CAPITAL
MANAGEMENT

Mindful capital management, evidenced by robust cash
reserves, which means we are well placed to weather
and capitalise on any economic environment that
prevails.

Strategic financial objectives and key risks

Our strategic financial priorities and the key risks to achieving them are below,
they sit alongside risk management activities and controls, on pages 60 to 68.

Sustainable FUD growth and

CURO user growth

How?

We put client and adviser experience

at the heart of our business model

through superior service and software

offerings. We believe this is key to

attracting and retaining advisers, users

of our investment platform and of our

CURO software.

Therefore, by continuously developing

the service we offer, by prudently

seeking to reduce, or simply maintain,

charges and by considering investment

opportunities that may enhance the

Group proposition, we achieve growth

and retention.

FY23 progress

Investment platform FUD has grown

by 10% year on year to £55.0 billion.

This is due to both positive net flows of

£2.7 billion, plus positive stock market

movements of £2.3 billion.

Advisers using the Transact platform

increased by 2% and CURO users

increased by 22%.

We have achieved resilient net inflows

through the service that we continue
to develop and invest in.

Invest

How?

FY24 outlook

We have a proven track record

We will continue the IT and platform

The global macro-economic outlook

aspects of our technology, therefore

is well underway, investing in

is challenging and we recognise

ensuring our service quality and

additional headcount to support

increasing competition in the market

software remains award winning

systems and investment platform

place.

and operationally resilient.

development.

of investing in our people and all

developer recruitment plan that

However, we will continue to target

We aim to continue to generate

We have systems developments

advisers not yet using our services

profits and generate the best

that are already designed and

that are in our identified core

outcomes for all key stake holders,

timetabled that will be implemented

markets. We will continue to focus

but investment decisions must not:

and we look forward to making

on service and retaining existing UK

further enhancements that benefit

advisers and their clients, in addition

• Risk Group capital beyond

and support the client and adviser

to encourage adviser users to move

reasonable levels;

online experience in financial year

additional clients onto Transact, as

2024, as well as driving efficiencies

they have experienced the benefits

• Bring the Group into

through our operations.

that our service brings.

commercial conflict with our

target market;

Key risks

T4A will focus on rolling out next

generation CURO, and continue to

• Make it difficult for us to meet

• Diversion of development

support the existing CURO3 software

our regulatory responsibilities.

resource away from proposition

and users.

Key risks

FY23 progress

technology enhancements

• Fall in employee retention

• Service standard failure

invested in platform and CURO

£17.1 million (FY22: £14.1 million)

across the Group

(and next generation CURO)

Key financial performance

• Stock market volatility

development in the year. This is

indicator

impacting FUD

comprised of platform developer

• Strong, well capitalised

market entrants leading to

of new equipment and training
costs.

• Operating margin

and management cost, acquisition

• Profit before tax

increased platform outflows and

suppressed net inflows.

We continued the investment

Key financial performance

FY23, due to the efficiencies and

platform digitalisation initiative in

indicator

• Average FUD

• Client growth

improved service that it generates

for clients and their advisers, it also

generates efficiencies for us.

T4A’s FY23 priority was continuing

the live testing of next generation

• Client retention

CURO.

• Adviser growth

• Net inflows

Increase earnings

Generate cash

How?

FY24 outlook

How?

Through growing client FUD and

Again, the financial year closes on

We are a highly cash generative

wrappers on the investment

a challenging economic outlook.

business as all fees are received

platform and by increasing T4A

as cash, as they become due and

CURO users, we increase revenue.

To protect revenue, we will

payable. We expect to continue

continue to focus on investing in

generating cash profits.

We achieve the FUD and wrapper

the investment platform, CURO and

growth by retaining and increasing

next generation CURO, so that we

Shareholder cash has increased over

penetration of our current adviser

support and retain existing users

time, enabling reinvestment and

base and by attracting new adviser

and increase market share.

ensuring we remain well capitalised

users.

over and above our regulatory capital

Key risks

requirement.

We aim to maintain our strong

ratings amongst advisers and

• Service standard failure

We will continue our controlled

increase our share of wallet from

approach to expense management

contestable advisers in the market.

• Stock market volatility

and we expect to continue generating

impacting FUD

resilient cash profits.

We are mindful of competition in

the market and are not complacent,

• Strong, well capitalised

FY23 progress

hence we invest prudently and

market entrants leading to

maintain focus on what we do well.

increased platform outflows

IFRS profit before tax in FY23,

and suppressed net inflows.

generating profits from the cash

FY23 progress

received, was £62.6 million, which is

Key financial performance

an increase of 15% from £54.3 million

Average FUD through the year

indicator

in FY22.

increased by 2% from £52.5 billion

in FY22 to £53.6 billion in FY23,

• Average FUD

this led to a £0.4 million increase

in investment platform revenue

• Net inflows

to £130.1 million (2022: £129.7

million).

T4A’s licence and consultancy fee

income grew from £3.9 million for

FY22, to £4.8 million for FY23. The

growth is attributable to recurring

revenue from existing CURO user

licences.

The rise in PBT is due to the net effect

of: recognition and settlement of the

backdated VAT liability of £9.4 million,

plus interest of £0.8 million in FY22;

and an increase in admin expenses, as

forecast and detailed in the Financial
review on page 53, in FY23.

FY24 outlook

We will continue to manage all Group

expenses carefully and monitor against

projections, whilst continuing to invest

as necessary in our people and system

development. It is expected the

Group’s strong liquidity profile will be

maintained.

Key risks

Retain strong balance sheet

Deliver on dividend policy

• Service standard failure

How?

• Stock market volatility

We maintain robust capital

Our policy is to pay between 60% and

impacting FUD

resources, supported by

65% of full year profit before tax as

• Strong, well capitalised market

debt and our regulatory capital

entrants leading to increased

position remains resilient through

FY23 progress

platform outflows and suppressed

the economic cycle.

emerging profit. We have no

two interim dividends.

net inflows.

• Uncontrolled expenses

FY23 progress

A first interim dividend was paid of

3.2p per ordinary share and a second

interim dividend declared of 7.0 pence

Key financial performance

defined by Group net assets,

dividend policy (after excluding non-

indicator

grew 9% and ended the year at

underlying expenses).

The Group capital position, as

per ordinary share, in line with our

• Average FUD

million at the end of FY22.

FY24 outlook

£189.5 million, up from £163.2

• Profit before tax

FY24 outlook

Our dividend policy remains

unchanged, however, our income

• Operating margin

We will continue to manage our

may be impacted by continuing

• Earnings per share

to meet our regulatory capital

invasion of Ukraine, the Israel war with

capital prudently, to enable us

market uncertainty due to the Russian

requirements as the business

Hamas, high inflationary pressure on

grows.

Key risks

all costs, including recruitment, and

political instability.

• Stock market volatility

Key risks

impacting FUD

• Stock market volatility impacting

• Capital strain

FUD

• Uncontrolled expenses

Key financial performance
indicator

• Capital strain

• Shareholder funds

Key financial performance

indicator

• Cash generation

• Earnings per share

KEY FINANCIAL PERFORMANCE INDICATORS

We have several quantifiable

measures that we use to measure the

performance of our business against

our strategic financial objectives.

Our key financial performance

indicators and performance over

the last three financial years are

presented in the charts that follow.

LINK TO STR ATEGIC FINANCIAL OBJECTIVES:

Drive growth

Invest

Earnings

Cash generation

Strong balance sheet

Dividend policy

Average daily FUD* £53.6 billion (+2%)

The value of average daily FUD is the
primary driver of Group revenue, as it

is the basis of the annual commission

charge, which constitutes 86% of

Group revenue. The value of average

daily FUD generates cash and drives

earnings growth.

As markets have stabilised during the

financial year, albeit with some day to

day volatility, so average daily FUD has

increased by 2% compared to FY22.

Net inflows* of £2.7 billion (-39%)

Net inflows are a crucial component of

FUD growth and drive cash generation

and earnings growth.

Whilst net flows have decreased year

on year, our market share has risen

to 25%, demonstrating the strength

of our proposition through challenging

macro economic conditions.

n
b
2
.
7
4
£

n
b
5
.
2
5
£

n
b
6
.
3
5
£

FY21

FY22

FY23

n
b
0
.
5
£

n
b
4
.
4
£

n
b
7
.
2
£

FY21

FY22

FY23

*Our KPIs include alternative performance measures (APMs) which are indicated with an asterisk. APMs are financial measures which are not defined by IFRS.

They are used in order to provide better insight into the performance of the Group. Further details are provided in the glossary, on page 235.

230,294 clients* (+2%)

Client numbers continue to grow at a

steady rate, although a project to close

portfolios with small residual balances

impacted growth in FY23.

Advisers bring new clients and new

flows to the platform, as well as their

existing clients bringing new flows.

Clients are a driver of FUD and wrapper

numbers, which generates cash through

annual fees and wrapper charges,

which grows earnings. Our client

retention rate remains impressive.

Client retention* 95% (-2%)

k
9
0
2

k
5
2
2

k
0
3
2

FY21

FY22

FY23

FINANCIAL YEAR

Levels of client retention

2021

96%

2022

97%

2023

95%

Client retention is an important measure of satisfaction. It is also a driver of
ongoing revenue and we attribute our strong client retention levels to satisfaction
with our service and offering. The slight reduction in FY23 is due to the removal
of clients with small residual balances.

7,683 advisers registered on the investment platform* (+2%)

We continue to experience steady

growth in the number of advisers
using the platform, driving FUD, cash

generation and earnings growth. As

with client numbers, a project to close

portfolios with small residual balances

impacted growth in FY23.

1
6
1
,
7

7
3
5
,
7

3
8
6
,
7

FY21

FY22

FY23

*Our KPIs include alternative performance measures (APMs) which are indicated with an asterisk. APMs are financial measures which are not defined by IFRS.

They are used in order to provide better insight into the performance of the Group. Further details are provided in the glossary, on page 235.

IFRS profit before tax £62.6 million (+15%)

IFRS profit before tax has increased

by £8.3m (15%) in FY23. The material
factors driving the increase are:
total revenue and interest income

increasing by £7.0m, underlying

expenses increasing by £9.4m and

non-underlying expenses reducing by

£11.1m.

The drivers of the material movements

are explained in the Financial Review

m
6
.
3
6
£

m
3
.
4
5
£

m
6
.
2
6
£

on page 53.

FY21

FY22

FY23

Operating margin 42% (+4%)

Operating margin is operating profit

over revenue, expressed as a %,

representing the % of revenue that

translates to profit.

Operating margin has fallen over the

last two years, relative to the highs

of previous years, due to the planned

increases to the expense base,

primarily driven by increases in staff

costs and also the impact of non-

underlying expenses.

Operating margin remains robust for

the sector.

IFRS Earnings per share 15.1p (+13%)

%
1
5

%
1
4

%
2
4

FY21

FY22

FY23

Earnings per share is a measure of the

amount of profit after tax the Group

has generated for shares in issues and

the value generated for shareholders.

EPS has increased in FY23 as profit

after tax has increased year-on-year.

p
4
.
5
1

p
3
.
3
1

p
1
.
5
1

FY21

FY22

FY23

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES

Foreword from Victoria Cochrane – Designated Group Non-Executive
Director for Environmental and Social Sustainability (ESS)

Following our first report on the Task Force on Climate-Related Financial

Disclosures (TCFD) last year, over the past 12 months we have made good

progress in developing and enhancing our carbon reporting and climate change

management.

We are supportive of the UK government’s overall ambition to reach a net zero

position by 2050 and continue to be committed to meeting or exceeding this goal.

During the year we engaged Brite Green Limited, an independent sustainability

consultancy, to assist us in better understanding the climate related risks to our

business as well as the material strategic, tactical and operational opportunities

we can leverage on our pathway towards net zero. There have been sensible and

constructive recommendations and we will seek to make changes to reduce our

controllable emissions as early as practically possible and to develop our strategic

offering in a manner that promotes the development of our business as well as

supports the needs of advisers, clients, and our people.

To enhance our assessment and understanding of the impacts, risks, and

opportunities climate change presents for our business, we have also conducted

climate scenario analysis based on global-mean temperature rises of 1.5

degrees (the expected outcome of meeting net zero targets by 2050), 2 degrees

(transition is delayed by 5-10 years) and 2.6 degrees (based on current national

pledges for reducing emissions).

The board has overseen the approach and activities being undertaken, providing

review and challenge to the recommendations identified as and supporting the

management team who are actively managing our material climate-related

risks and opportunities. Informed by the insights from this work, our developing

climate change strategy sets clear objectives, with initiatives to deliver in the

short (up to 2025), medium (up to 2035) and longer term (up to 2050).

Our search for new premises for the London head office presents a significant

short-to-medium-term opportunity to reduce our carbon footprint. By

incorporating sustainability criteria into the new premises selection process, in

conjunction with the data and understanding we have gathered about our office

space utilisation following our hybrid working model, we have the opportunity to

considerably reduce our Scope 1 and 2 operational carbon emissions.

During FY23, the board set specific targets for carbon reduction, our performance

over FY24 will be measured and monitored against these targets and initiatives.

Our climate change journey

We have made positive strides

during the year in understanding and

defining the next steps of our climate

change journey. Key highlights include

the following:

Resource enhancements –

we have strengthened our

capability by appointing a

dedicated resource covering our

Group sustainability agenda. The

individual has responsibility for:

documenting Group standards

and procedures; collating and

measuring carbon emissions;

monitoring progress on climate

related strategies; working

closely with the functional

areas of the business to ensure

that impacts of risks and

opportunities are understood

and timely and effectively

captured and managed; ensuring

that sustainability strategies

are embedded into the business

plans of the senior leadership

team.

Independent consultancy

review – we engaged Brite

Green to undertake an

independent review across

several areas. This included

a review of our approach

Carbon reduction

implementation initiative – an

important initiative delivered this

year has been the installation

of solar panels on the roof of

our office in Melbourne. This is

and procedures towards the

expected to provide up to 57

collection and reporting of our

MWh annually of electricity for

Scope 1, 2 and 3 greenhouse gas

the business. This is equivalent

emissions; recommendations on

to 5% of the Group’s energy

carbon reduction strategies as

use, but 12% of the Group’s

part of our journey towards our

Scope 2 carbon emissions due

net zero objective; assistance in

to the higher carbon intensity

defining strategic climate change

of the Australian national grid

opportunities for the business

compared to the UK. We are

and a roadmap towards more

in the process of moving our

robust and insightful reporting.

London office-based data centre

off-premise into more energy

efficient premises. Both these

initiatives will reduce Scope 2

emissions going forward.

Approach improvements –

the independent consultancy

review has resulted in significant

improvements to our carbon

data collection approach and

processes. As a consequence,

we have broadened the

boundaries of our Scope 3

data to include emissions from

purchased goods and services

and capital spend as well as to

re-calibrate certain categories,
e.g. wastewater, from the

position previously reported.

These are set out in detail

under the metrics section of this

report. As a result of improved

Carbon reduction
opportunities – the board has
been presented with a range of

opportunities that focus on four

key themes:

1. Premises and flexible

working

2. National differences in

energy emissions

3. Site energy sources

data collection and corrections

4. Data centre environments

to some of the calculations, we

will be restating the FY22 prior

year data for Scope 1, 2 and 3

emissions which we will adopt

as the revised baseline against

which to measure future target

reductions.

By contrast, significantly more effort and consideration will be needed

in areas categorised under Scope 3, typically our purchased goods and

services and the asset owned investments.

We recognise that despite the progress made this year, we still have a

lot of work to do.

Understanding and managing climate change impacts from, and on, the

business is an iterative process and we are planning to address the following

aspects next year:

• Producing carbon emission reduction plans that align with science-based

target best practice.

• Committing to a climate transition plan to outline how we will become

carbon net zero by 2050 or before.

• Establishing a sustainability forum comprised of members of the senior

management team who will drive forward the agreed strategy at an

operational level.

• Encouraging employee engagement through training, workshops,

The basis of our approach to

and employee forums.

TCFD reporting

• Establishing a climate-related risk on the corporate risk register.

Our TCFD report follows the

In addition to the above, we anticipate in the medium term looking into

October 2021 covering the financial

recommended guidance published in

the following:

disclosures, and as part of our

obligations required under Listing Rule

• Understanding and embracing the reporting and other requirements under

9.8.6R. The financial impacts have

Taskforce for Nature-related Financial Disclosures (TNFD) and standards

been assessed to the extent that we

developed, but yet to be adopted by the UK, on sustainability reporting

have been able to measure these

by the International Accounting Standard Board (IASB) and International

through the application of appropriate

Sustainability Standards Board (ISSB).

analytical assessments based on the

available information to the Group.

• Drafting a plan for transition to a lower-carbon economy using the

Transition Plan Taskforce (TPT) disclosure framework published in October

The Supplemental Guidance for the

2023 within our future reporting.

• Looking at the emissions generated in our supply chain and drafting a

Sustainable Supply Chain Charter.

Financial Sector, in particular the

guidance for the insurance sector

and for asset owners, has been
considered but has not been deemed

relevant due to the nature of the

• Keeping abreast of the quality of environmental, social and governance

insurance contracts written by the

(ESG) metrics for assets held on the Transact platform to potentially

insurance companies in the Group and

enable clients and financial advisers to make more informed investment

the investment strategies not being

decisions.

under the control of the Group. Our

TCFD report reflects the activities

Underlying these initiatives, we will continue to measure and report our carbon

undertaken by the Group during

emissions and the progress towards the reductions achieved to ensure that we

financial year 2023. All Group entities,

meet the goal of being carbon zero in the decade leading up to 2050.

including the regulated entities, have

Victoria Cochrane

been considered when identifying and

measuring the climate-related financial

impacts, risks and opportunities,

Environmental and Social Sustainability Non-Executive Director

and their impact, which have been

13 December 2023

incorporated on a consolidated basis

within this report.

TCFD Disclosure Summary

The TCFD’s recommendations were first launched in 2017 with disclosures structured around four themes, governance,

strategy, risk management and metrics and targets. In support of these themes there are 11 recommendations that

provide guidance for developing effective disclosure. Here we set out these requirements and the approach adopted in our

disclosures. We have assessed our current disclosure against the recommendations and identified the areas where further

opportunities exist for enhancing our Group activities and reporting.

THEME

DESCRIPTION

Governance Disclose the

organisations
governance around
climate-related risks
and opportunities.

TABLE 1. TCFD DISCLOSURE SUMMARY

TCFD RECOMMENDED
DISCLOSURE

• Describe the board’s
oversight of climate-
related risks and
opportunities.

• Describe management’s
role in assessing and
managing of climate-
related risks and
opportunities.

PAGES OUR DISCLOSURE

28-30

• We have set out in more detail the
responsibilities and activities of
the board and its committees with
support from the ESS DNED.

• We have explained how

management has participated in
defining risks and opportunities.
Inclusion of a sustainability forum
into the governance structure.

FURTHER OPPORTUNITIES FOR IMPROVEMENT

• Establish and embed the sustainability forum into operational practices.

• Develop deeper climate change knowledge across the board, management team and broader people base.

THEME

DESCRIPTION

TCFD RECOMMENDED
DISCLOSURE

PAGES OUR DISCLOSURE

Strategy

Describe the actual
and potential
impacts of climate-
related risks and
opportunities on
the organisation’s
businesses,
strategy, and
financial planning
where such
information is
material.

• Describe the climate-
related risks and
opportunities the
organisation has
identified over the short,
medium, and longer
term.

• Describe the impact of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy and
financial planning.

• Describe the resiliency
of the organisation’s
strategy taking into
consideration different
climate related
scenarios, including a
2oC or lower scenario.

31-39

• Defined short, medium and longer-

term time horizon strategies for the
Group.

• We have set out our assessment

of how climate-related risk drivers
affect our strategy and business
objectives, operations, clients, and
products.

• Our Group-wide scenarios have

identified risks and opportunities to
our strategy. We have assessed the
impact of these against business
viability and resiliency.

• We have explained that we have not
yet incorporated the impact of risks
and opportunities into our financial
planning.

FURTHER OPPORTUNITIES FOR IMPROVEMENT

• Continue to refine scenario assessments.

• Develop further strategies and procedures to manage risks and capture strategic opportunities.

• Reflect climate-related risks and opportunities into the financial planning process as appropriate.

THEME

DESCRIPTION

TCFD RECOMMENDED
DISCLOSURE

PAGES OUR DISCLOSURE

Risk
management

Disclose how
the organisation
identifies, assesses,
and manages
climate-related
risks.

• Describe the

• We have explained how the

organisation processes

approach toward the identification

and management of climate-related

risks is integrated into the Group

Risk Management Framework. This

includes a measurement basis

consistent with other risks facing

the Group.

• We have set out our assessment

of how climate-related changes

impacts the Group and creates risks

and opportunities.

for identifying and

assessing climate-

related risks.

• Describe the

organisation processes

for managing climate-

related risks.

• Describe how

the processes for

identifying, assessing,

and managing climate-

related risks are

integrated into the

organisations overall

risk management

FURTHER OPPORTUNITIES FOR IMPROVEMENT

• Maintain appropriate corporate risk register entries to ensure climate-related risks remain on the agenda.

• Embed into regular process management and functional review and assessment of climate-related risks.

THEME

DESCRIPTION

TCFD RECOMMENDED
DISCLOSURE

PAGES OUR DISCLOSURE

Metrics and
targets

Disclose the metrics
and targets used to
assess and manage
relevant
climate-related
risks and
opportunities where
such information is
material.

• Disclose the metrics

40-44

• We have reported our operational

and targets used by the

organisation to assess

climate-related risks

and opportunities in

line with its strategy

and risk management

process.

• Disclose Scope 1, 2 and

3 greenhouse gas (GHG)

emissions, and related

risks.

scope 1, 2 and 3 emissions having

reassessed the coverage and

conversion factors this year.

• We have restated our 2022 position

and plan to use this as the revised

baseline position.

• Operational Scope 1 and 2 targets

have been set. Scope 3 targets

will be developed for disclosure in

financial year 2024.

FURTHER OPPORTUNITIES FOR IMPROVEMENT

• Set operational emissions reduction targets.

• Embed delivery performance metrics.

• Develop further transition targets and plans.

• Continue to monitor the availability of ESG related data for life company and platform held assets.

• Assurance certification of data reported.

1. Governance

Board and board committees

Management’s role in assessing

and managing climate-risks and

The board provides leadership and

Collectively these ensure that the

opportunities

direction and is accountable for the

following responsibilities are met:

long-term success of the Group. It

Following a review of our climate

sets the Group strategic objectives,

• establishing clear strategic goals

change management practices, we

see pages 13 to 15, within a risk

with appropriate supporting

have expanded our climate governance

appetite framework. The board is

business plans and resources

structure to support greater ownership

ultimately responsible for risks and

and accountability for climate issues

opportunities facing the business,

• monitoring strategy

at all levels in the business. Building

including those related to climate

implementation, financial

from this, we aim, over the course of

change.

performance and the integrity

financial year 2024, to strengthen the

The Group board has assigned

of reporting

ownership of climate issues across the

entire business and develop focused

a DNED, Victoria Cochrane, to

• ensuring that effective audit,

action plans aligned to reduction

oversee our Environmental and

risk management and compliance

targets for key business functions to

Social Sustainability (ESS) agenda.

systems are in place and

manage and progress.

Victoria assists the board in

monitored.

ensuring the Group has appropriate

environmental and social strategies

The structure of our climate

that are integrated with its core

governance is set out in figure 1.

business strategy and contribute to

below, with details of roles and

the long-term sustainability of the

responsibilities for our climate-change

Group; reviewing the strategies,

approach reflected in table 2.

FIGURE 1. GOVERNANCE STRUCTURE

IHP Board

Remuneration
Committee (RemCo)

Audit and Risk
Committee (ARC)

Subsidiary
Boards

Chief Executive
Officer

ARCs of subsidiary
companies

Senior Leadership
Team (SLT)

Sustainability
Forum

Business teams

Colleagues

policies and performance in relation

to environmental and social matters,

suggesting ways to drive improvement

in these areas, and ensuring these

strategies continue to evolve and are

aligned to the culture and values of

the Group.

In support of the board and Victoria,

key tasks have been assigned to two

board committees:

• the IHP Audit and Risk

Committee (ARC) which has the

responsibility for overseeing the

process of identifying climate-

related risks and opportunities

and reviewing and challenging

the assurance, where performed,

over the Group’s TCFD reporting

requirements; and

• the IHP Remuneration Committee

(RemCo) which is responsible

for including climate-related and

ESS factors into executive and

company reward.

TABLE 2. ROLES AND RESPONSIBILITIES

IHP board and
ESS DNED

The board provides leadership, setting the Group strategy, and is accountable for the long-term
sustainability of the Group. It ensures likely risks and opportunities are reflected in the corporate
strategy and budgets and ensures sound operating practices are embedded into the business.

IHP board
committees:
Audit and Risk
Committee
(ARC),
Remuneration
Committee
(RemCo)

CEO – IHP

Senior
leadership
team (SLT)

Sustainability
Forum and
Sustainability
Manager

The Chair of the board ensures the board meets its responsibilities which includes climate change.
Assisted by the ESS DNED, they ensure climate-related matters actions and strategies are included
on the board meeting agendas at least three times during the financial year and are considered as
part of the board decisions and strategy contributing to the long-term sustainability of IntegraFin.

The ARC is responsible for oversight of risks to the business including those arising from climate-
related scenarios. ARC challenges management on progress of actions identified to manage the
risks and improve the overall control environment.

The ARC has responsibility for monitoring the quality of reporting of the Group’s GHG emissions
and future decarbonisation targets within the TCFD disclosure. The Group Chief Risk Officer (CRO)
oversees the delivery, completeness, and quality of the full TCFD report. The Group Internal
Audit team undertake thematic reviews of processes, procedures, and controls and suggest
improvements. Both will utilise external consultants and expertise when needed.

RemCo supports governance accountability by linking deliverables with remuneration. TCFD and
ESS targets will be reviewed in 2024.

The CEO, in conjunction with the board, defines the strategy, values and culture of the Group. The
CEO sets the leadership tone and leads the senior leadership team in delivering the Group strategy
and achievement of business targets. This includes responsibility for ensuring climate-related
change is embedded into the Group’s business strategy and plans.

The SLT apply the plans to their business operations in support of the CEO. They are responsible
for business risk identification, including climate-related change and scenario risk and opportunities
assessments. In this regard they support the ARC with risk management activities. They are
responsible for embedding actions into their business plans, and support emissions data gathering
and delivering against targets.

We will be implementing a Sustainability Forum comprising members of the SLT who will be
responsible for supporting and driving the implementation of the broader sustainability agenda.

The forum will support the CEO and SLT in delivering the wider Group sustainability plans and
initiatives and embedding a climate-aware Group culture. The forum will be supported by the
Sustainability Manager who provides internal expertise to colleagues. Collectively the forum and
Sustainability Manager project manage the TCFD reporting process.

Business
teams and
Employees

Business teams are responsible for identifying material climate change risks, opportunities and
impacts and for owning and/or supporting the delivery of related actions. This may include the
update and modification of processes operated within the business.

The Group aspires to ensure that climate change and the wider sustainability agenda is embedded
within the culture of our business. Over the coming year we will strive to ensure that our employees
are engaged in understanding the issues and impacts. We recognise that employees are usually
the first to see the change opportunities and we plan to utilise the employee engagement forum
to engage colleagues in managing the risks and opportunities and supporting the implementation
plans.

Progress during the year

How climate-related risks and

opportunities are considered

During FY23, we set out to enhance

across our Group

our understanding of relevant

climate risks and opportunities for

We have continued to embed the

the business, improve our carbon

consideration of climate-related risks

reporting and establish a roadmap

and opportunities across our business

towards setting a net zero carbon

throughout the year. This includes

target. The board has overseen

engaging the business functions across

progress of this programme across

a range of activities, examples of which

the year and we are in the process of

are set out in the table below.

developing a performance dashboard

to provide the board with ongoing

performance data.

Our board and senior management

team have also completed training

on the legal, economic, and strategic

aspects of climate change risks and

opportunities during the year.

Management conducted its first

climate scenario analysis which

provided further insight into climate-

related risks and opportunities. These

outcomes have been presented to

the ARC and board. The risks and

opportunities are considered by the

board and management when setting

and updating strategy, this includes

any financial impacts and assessment

through the Company’s viability

testing.

Remuneration

In FY23, performance-based awards

of executive directors were referenced
against four key areas, one of these

was risk, regulation and ESG.

More detail on how these were

measured can be found in the

Remuneration section on pages 131

to 133.

TABLE 3. EX AMPLES OF CLIMATE-REL ATED BUSINESS ACTIVITIES

ACTIVITY

CONSIDERATION

Operations

Monitoring and management of our buildings’ exposure to
climate-related risks. Measurement and management of
operational emissions.

Procurement
and Supply
management
(including IT
services)

Monitoring suppliers’ contribution to our GHG emissions
and considering the resiliency of suppliers against potential
climate-related risks.

Actuarial and
Risk

Developed our approaches within our Group’s regulated
entities ICARA and ORSA processes reflecting on the risks
and impacts of climate-related changes.

Internal
Audit

Incorporated the assessment of climate-related risks and
management processes into our annual internal audit review
plans.

Compliance

Ensuring we assess and meet our climate-related standards
and obligations.

Financial
reporting

Consideration of the potential impacts of climate-related
changes on the financial statements.

Investor
Relations

Managing our investor stakeholders and supporting
voluntary disclosures through CDP (formerly known as
Carbon Disclosure Project).

Risk
Management

Embedding climate-related risks into our risk management
framework.

2. Strategy

Understanding the climate-related

risks and opportunities is fundamental

to shaping our strategy towards acting

as a responsible business. We have

considered the risks and impacts that

climate-related change might present

to our Group strategic objectives.

TABLE 4. CLIMATE-REL ATED R ISKS TO GROUP STR ATEGIC OBJECTIVES

CLIMATE RISK DRIVER

CHALLENGES

RISKS

STRATEGIC OBJECTIVES
POTENTIALLY IMPACTED1

Physical
The immediate risks
arising from weather-
related events and slow
onset climatic changes.

Acute, e.g.

Operational

Sustainable growth

• Change in frequency of weather

Reputational

Increase earnings

Business Planning
and Environment

Retain strong
balance sheet

events e.g. flooding, wildfires, high
winds.

• Change in the severity of weather

events e.g. heatwaves, lower
temperatures.

Chronic, e.g.

• Sea level rises

• Changing precipitation

• Rising temperatures

Transition
The financial risks arising
from the transition to a
lower carbon economy.

Liability/Regulatory
Action
The risk of actions
initiated by claimants
who have suffered loss
and damage arising
from climate change and
non-compliance with
regulations.

• Arising from changes in policy
(changes in emission reduction
targets), technology (new low
carbon technologies imposed), social
pressures and consumer preferences
(demand for lower carbon products
and services).

• Potential big shifts in the value of
assets or costs of doing business.

Market

Sustainable growth

Business Planning
and Environment

Retain strong
balance sheet

Reputational

Generate cash

Legal and
Regulatory

Increase earnings

• Climate laws and regulations are

Reputational

Sustainable growth

being developed across jurisdictions
and lack of compliance could lead to
fines and/or penalties.

Legal and
Regulatory

Invest

• Active litigation ranges from

individuals and corporates, as well
as class actions where damage has
been caused and restitution sought.

1 Details of the risks and opportunities arising from the climate-related drivers to the group strategies, as well as the impacts of these risks
are set out in table 8.

Understanding our emissions

Where we are today

and the impacts on strategy

Operational emissions

During this year we have achieved

more insight and understanding of

Our operational carbon footprint has been calculated and assessed across

the sources and scale of emissions

the last two financial years to enable us to understand the most material

across our business. We have

emission sources. The analysis, based on data from table 10 on pages 41 to

assessed these as:

42, indicates that emissions from purchased goods and services represent

the largest single source, at 48% (FY22: 43%) of the total. Business travel,

• Operational emissions – these

commuting and homeworking combined, representing 26% (FY22: 26%) is the

cover Scope 1, 2 and 3 arising

next largest source, with electricity use and gas use combined representing

from running our operations e.g.

17% (FY22: 24%).

leased premises, electricity and

gas, and our goods and services

supply chain.

• Asset owner – this represents

Scope 3 investments controlled

by us through the employee

pension fund or owned by the

life companies.

A review was performed of our

operational emission categories,

data collection procedures and the

application of the GHG protocol

conversion factors across our

business activities. We believe that

these categories fall more within

our immediate control and, as such,

will drive some of our short- and

medium-term initiatives. In order

for us to be able to set credible

strategies and targets to meet our

reduction aspirations, we needed

to assess where we are today. This

FIGURE 2. SUMMARY OF GHG EMISSIONS FOR IHP GROUP 2023¹

Employee commuting
and homeworking:
14.0%

Natural gas:
4.4%

Electricity:
12.9%

Business travel:
12.2%

Waste generated
in operations:
0.3%

Fuel and
energy related
activities: 1.0%

Capital goods:
7.6%

Purchased goods
and services:
47.6%

1 We have not yet included the emissions within our investment Scope 3 profile for the
Insurance assets given the level of complexity and uncertainty on the consistency of
published ESG profiles relating to these assets

review provided valuable insights

An independent site audit was performed, with the aim of helping us understand

into our operational emissions and a

areas of opportunity for delivering reductions in our operational GHG emissions.

range of strategic and tactical steps

The immediate focus fell on Scope 1 and 2 gas and electricity emissions.

and initiatives we could adopt to
reduce our Scope 1 and 2 emissions.

Further work is still required across

the broader Scope 3 elements which

we will complete as part of our target

setting for 2024.

TABLE 5. ANNUAL ENERGY USAGE ACROSS IHP GROUP SITES

ENERGY USE (kWh)

FY23

FY22

Site

Gas

Electricity

Total

540,415

863,490

1,403,905

Australia

136,859

238,570

375,429

Proportion
of total (%)

79%

21%

Gas

Electricity

Total

800,092

860,201

1,660,293

108,655

255,757

364,412

Proportion
of total (%)

82%

18%

Total

677,273

1,102,060

1,779,333

908,747

1,115,958

2,024,705

Proportion of
total (%)

38%

62%

45%

55%

The largest energy-using site across our estate is the London Head Office on

Clement’s Lane, which uses 68% (FY22: 72%) of the total energy, 75% (FY22:

83%) of the gas and 64% (FY22: 63%) of electricity.

TABLE 6. ANNUAL CARBON EMISSIONS BY LOCATION ACROSS IHP GROUP SITES

TONNES OF CARBON EMISSIONS (t CO2e)

FY23

FY22

Site

Australia

Total

Proportion of
total (%)

Scope 1

Scope 2

Total

124

25%

179

188

367

75%

278

213

491

Proportion
of total (%)

57%

43%

Scope 1

Scope 2

Total

146

166

217

383

312

237

549

30%

70%

Proportion
of total (%)

57%

43%

In relation to carbon emissions, the almost-four-times higher carbon intensity of

the national grid in Australia compared to the UK results in the carbon emissions

from the Melbourne site being 51% (2022: 57%), whilst only using 22% (2022:

23%) of the electricity. Emissions from electricity use in Australia make up 38%

(2022: 40%) of the Group’s Scope 2 emissions.

As part of our 2022 initiatives, solar panels have been installed of our office in
Melbourne. This is expected to provide up to 57 MWh annually of electricity for

the business and reduce the Scope 2 emissions at our Melbourne office by 21%

going forward.

Based on the site audit we have set out a range of short- and medium-term themes

and initiatives that will help us reduce our operational Scope 1 and 2 emissions.

Strategic reduction themes – Scope 1 and 2 operational emissions

There are several strategic levers which we plan to deploy to reduce carbon

emissions, and these have either already been reflected or are now being

assessed as part of our financial planning requirements.

The table below shows strategies available to the Group. Some of the short-term

initiatives may contribute to estimated savings in the medium-term initiatives, for

example the site selection for the new London premises may capture some of the

reductions of carbon emissions identified in moving away from natural gas.

TABLE 7. STR ATEGIC REDUCTION THEMES – SCOPE 1 AND 2 OPER ATIONAL EMISSIONS

STRATEGIC
REDUCTION
THEME

Site
selection and
specification

Flexible
working

COMMENTARY

When selecting our new London premises, the site selection criteria will include
a requirement for efficient plant and equipment, a commitment to net zero from
the landlord, zero carbon electricity, on-site renewable energy (if possible), and
avoiding natural gas (if possible). On-site IT infrastructure will be assessed and
where possible will be limited and placed in efficient off-site co-location premises
or in the cloud.

The use of flexible working offers the opportunity to appraise the size of office
space required. Our own studies indicate that whilst flexible working practices
have been adopted, the current space-management approach has resulted in a
sub-optimal utilisation. In the time left on the lease at Clement’s Lane, we will be
considering how to consolidate onto fewer floors and use the space to develop a
new model workplace to test the office aspects of a new digital workplace: a set
of technologies and policies to run a more efficient floorplan.

ESTIMATED
SAVING
t CO2e

TIMEFRAME
SHORT
(2023-25)
MEDIUM
(2025-35)

80 t CO2e

Short term

175 t CO2e Short term

Renewable
energy -
Estimated
Carbon saving

A major part of our carbon reduction strategy will be a move to renewable energy.
This will largely be achieved from a new London site. However, in the short-term,
opportunities on our current leased premises are more likely be achieved through
power purchased agreements (PPAs) or green electricity tariffs. This has already
commenced following the solar array which has been installed at the Melbourne
site early this year, the benefits of which will be recorded in 2024.

396 t CO2e Short to
Medium
term

Consolidate
operations in
high efficiency
and low carbon
environments

There are opportunities to move energy intensive operations to higher-efficiency
environments and lower carbon grids. This includes the remaining data centres
and servers in office environments.

84 t CO2e

Medium term

Move away
from natural
gas

Whilst there are a number of attractive renewable sources for electricity, there are
no price competitive low carbon substitutes for natural gas. As such, moving away
from the use of gas at all sites, should be a priority.

166 t CO2e Medium term

Engage with
landlords

The company should seek to include green-lease clauses into leasehold
agreements, placing obligations on the landlord to deliver a net zero carbon
strategy.

28 t CO2e

Medium term

Asset owner

Looking forward – Scenario Analysis

Given the complexity and diversity of

The risks and impacts associated with climate change for our Group will be

the underlying data required, we have

determined by the global governmental, social and technological approach to

yet to establish our Scope 3 approach

emissions reductions and projected temperature increase limits.

as an asset owner for directly held

assets within the life companies and

This review examines three possible climate scenarios, drawing on the

employee pension funds. We will be

Intergovernmental Panel on Climate Change (IPCC) representative concentration

developing our insight and strategic

pathway (RCP) models and the Financial Stability Board (FSB) and Network for

options with regard to these Scope 3

Greening the Financial System (NGFS) scenarios. Each scenario represents the

emissions as part of our medium-term

modelled increases in global average temperatures from pre-industrialised levels

development plan. We aim to be no

and the predicted mitigation approach that would deliver them.

less than in line with our peers and

to ensure that our policy as an asset

owner matches our corporate agenda

and targets in relation to climate

change. We will be transparent in

our approach in future reporting and

disclosures.

The key facets of each scenario are summarised below.

FIGURE 3. SUMMARY OF CLIMATE R ISKS IN SCENAR IOS

Climate scenarios considered

Net Zero by
2050

Delayed
transition

Assumed global temperature rise

Aligned to RCP 2.6

Aligned to RCP 4.5

At least 50%
chance does not
exceed 1.5⁰C

67% chance to
limit to 2⁰C

Key assumptions

Global annual
emissions do not
start to decrease
until 2030.

In the short-
term fossil fuel is
used to recover
from economic
challenges.

From 2030 strong
climate policies
are implemented.
Including a tax on
carbon emissions,
and emissions
decline rapidly.

Ambitious
climate policies
are introduced
immediately.

Innovation and
fast technological
changes, medium
to high use of
carbon dioxide
removals.

IntegraFin more
impacted by policy
and technology
changes

Nationally
Determined
Contributions
(NDCs)

Integrated with
RCP 6.0

Likely to limit to
2.6⁰C

Current pledged
policies, even
if not yet
implemented and
not aligned to UN
ambition level, are
met.

Technology change
is slow, and policy
change is low.

Moderate to
severe physical
risks but relatively
low transition risks
in short term, high
in long term.

IntegraFin more
impacted by
physical climate
change impacts

Physical impacts

Acute

Low

Moderate

High

Chronic

Moderate

Moderate to high

Very high

Transition impacts

Market & tech

High

Very high

Reputation

Moderate to high

Moderate

Policy & legal

High

Moderate

Society

Moderate

High

Scenario analysis

We recognise that the profitability

of our business is closely correlated

to the fluctuations in both the global

and particularly the UK economies

from where our clients’ wealth

predominantly originates. However,

we have also considered a range of

other climate-related boundaries

and impacts on our business such as

our ability to maintain operational

capability, the resiliency of our supply

chains, the financial markets and the

social, political and economic factors

affecting our stakeholders. These have

been collated into what we consider to

be the more significant climate-related

risks which might affect the Group over

the short, medium and long term. The

exercise has also helped to highlight

possible management actions available

to mitigate the potential impacts.

In addition, we have recognised that

there are opportunities presented by

transitioning towards a low carbon
economy for the Group and our

stakeholders over the longer-term.

From a modelling perspective it

should be noted that scenarios are

not predictions and reflect a series

of assumptions to assess a range of

possible outcomes. Consequently,

climate related scenarios are

currently limited by factors such as
simplifications in terms of data inputs
and event outcomes which are likely to
influence the range of potential future
impacts. Given the limited level of
certainty, we use scenario analysis as
a useful input to assess potential risks
and opportunities at this point.

Key risks and opportunities

Drawing on the scenarios, we have identified the material risks and opportunities

and assessed these for impact.

Measuring risks and

opportunities

We have measured the impact of

the climate risks using the Group’s

To consider the impacts consistently on the business we used the Group’s risk

business risk impact assessment

methodology, which considers both quantitative impacts (e.g. changes to revenue

matrix (BRIAM). This assesses

or costs) and qualitative impacts (e.g. reputational and client impacts) and their

the level of impact against five

likelihood.

categories: operational disruption,

financial impact, reputational and

In line with guidance, we have assessed the risks and opportunities across three

media interest, regulation and duty

operating categories:

of care to clients. Individually and

collectively, these are considered to

• Entity level – reflects the Group-wide impact of climate related risks and

be the significant drivers relevant to

opportunities.

the management and operation of

the business in the context of all our

• Portfolio level – distinguishing our platform service from that of the life

stakeholders.

companies and T4A.

• Product level – reflection of the T4A and insurance product risks.

Managing the risks

The most significant scenario-based

Given the operating structure of the Group and the level of interdependency of

risks identified are set out in table 8

the Transact branded business, we considered the impact of each climate change

below.

scenario to potentially have an influence on all three operating categories.

TABLE 8. SCENAR IO -BASED R ISKS, MATER IALIT Y AND AVAIL ABLE STR ATEGIC RESPONSES.

IMPACT PROFILE HAS BEEN BASED ON THE GROUP RMF BUSINESS RISK IMPACT MATRIX (BRIAM)

Low

Medium

High

BRIAM impact score of less

BRIAM impact score greater than nine

BRIAM impact score greater than 15.

than nine.

and less than 15.

POTENTIAL MATERIALITY

OF IMPACT BY TIMEFRAME

POTENTIAL IMPACT

SCENARIO

2025
(SHORT
TERM)

2035
(MEDIUM
TERM)

2050
(LONG
TERM)

STRATEGIC RESPONSE
AND RESILIENCE

Potential disruption to
technology and data centres
and damage to offices at
risk of flooding resulting in
increased costs.

Potential disruption to
employee’s availability to
work and ability to travel
to office (transport, offices,
caring responsibilities).

Net Zero by
2050

Delayed
Transition

NDC’s

Include climate in supplier risk
assessments, develop contingency
plans for all cloud and data services.

Our ongoing investment in IT services
will support further flexibility to
location of working and efficiencies
across the hybrid working model.

Location of offices in London are
being reviewed.

CLIMATE-RELATED
RISK

Acute and Chronic
(Physical)

The risk of longer-
term changes in
climate patterns such
as flooding, extreme
weather and higher
temperatures impacting
our operations. Failed
internal processes,
people and systems.

CLIMATE-RELATED
RISK

Policy legal and
regulatory
(Transition)

The risk that there
is a need to comply
with increasing legal,
regulatory, and
disclosure obligations.

Market
(Transition and physical)

The risk that climate
change or the transition
to a lower-carbon
economy negatively
impacts the global
economy, and therefore
the value of assets on
our platform and in
our range of managed
investment solutions.

Reputational
(Transition)

The perceived risk that
we are not contributing
or developing an
appropriate climate
strategy.

POTENTIAL MATERIALITY

OF IMPACT BY TIMEFRAME

POTENTIAL IMPACT

SCENARIO

2025
(SHORT
TERM)

2035
(MEDIUM
TERM)

2050
(LONG
TERM)

STRATEGIC RESPONSE
AND RESILIENCE

Net Zero by
2050

Delayed
Transition

NDC’s

Net Zero
by 2050

Delayed
Transition

NDC’s

Net Zero
by 2050

Delayed
Transition

NDC’s

A poor or deficient ESG
strategy across the Group
causing delays in compliance
with regulation requirements
leading to fines and severe
reputational damage.

Significant cost increases as
supply chains e.g. IT, data
centres and energy suppliers
accelerate delivery of zero
based services.

Potential for some product
offerings to be restricted or
sanctioned by regulators for
non-compliance.

Assets on our platform are
exposed to climate-related
risks, which can lead to
poor performance during
the transition to a low
carbon emissions economy,
impacting customer returns,
values of FUD and our fee
income.

Reduced net inflows to FUD
as investors react to market
volatility. Sustained levels of
economic inflation impacting
cost of living and available
disposable income.

Potential for earnings growth
to decline or stall coupled
with increase in costs putting
pressure on Group profit
margins.

Poor public perception of
the Group as a result of
inadequate or misleading
disclosure regarding the
Group’s climate strategies.

Customers become unhappy
with the level of responsible
investment offered by
our IFA’s and move funds
from the platform to more
integrated solutions offered
by peers.

Deterioration in meeting
stakeholder expectations.

We take our regulatory
responsibilities seriously. Our Risk
and Compliance teams conduct
regular horizon scanning and review
regulatory publications on an ongoing
basis.

We are developing our TCFD reporting
and have identified strategies in the
short and medium term to reduce our
operation emissions.

We have developed our sustainability
team and will be implementing
policies that support our sustainability
values with suppliers.

We hold a diverse portfolio on the
platform which helps to mitigate
market shocks either in a region or
specific investment sector.

Our clients are advised and as
a result are well informed about
managing long-term investment
growth and objectives when markets
are volatile.

We maintain and actively grow
our IFA base and consequently fee
generating clients.

We proactively monitor market
movements, inflows and outflows to
ensure our operations are responsive.
This supports our financial planning
process to ensure income, costs
and capital is managed in line with
external factors.

We are closely following regulatory
developments to ensure that we
reflect requirements in our business
strategy.

We have engaged with 3rd party
subject matter experts to obtain a
better level of insight and assessment
of the climate related risk to the
business.

We have developed and agreed some
challenging operational Scope 1 and
Scope 2 reduction targets.

We continue to be transparent and
engage in reporting through TCFD and
CDP on our climate related progress.
We are open about the steps and
actions that we still need to take
towards meeting our commitment of
meeting the Governments net zero
targets by 2050.

Managing opportunities

TABLE 9. OPPORTUNITIES

Opportunities are identified and

assessed slightly differently.

Often, they emerge from first

line ownership (see Governance

structure above), via our Horizon

Scanning Exercise, which is

conducted no-less-than-quarterly or

as a result of management action

plans and remediations presenting

opportunities as part of the

mitigation process.

For climate change specifically we

have used the scenario planning

exercise, as detailed above, to

consider opportunities on a forward-

looking basis up to 2050. These will

be considered and embedded into

our longer-term periodic horizon

scanning process.

As detailed in the Governance

section, opportunities are also

explored and identified by the

senior leadership team, aided,

were necessary, by engaging third

party specialists, and teams around

the business. through operational

process re-engineering, whereby

processes are regularly reviewed to

identify possible improvements which

include climate considerations; for

example, our Software Development

and Client Operations teams have

been identifying opportunities

to reduce the volume of paper

applications received by digitalising

the client onboarding process.

OPPORTUNITY DEFINITION

TIMEFRAME PROGRESS

IFA
Engagement

There is an opportunity for
us to engage in more depth
with our financial adviser base
to understand the demands
and expectations of clients
in relation to climate-related
investments.

POTENTIAL IMPACT

Short,
medium,
long

Incorporated
within the group’s
strategic initiative
pathway.

• The retention of our financial adviser base is key to our strategy of growing

FUD and the business.

• Developing our Transact and T4A product ensures we continue to use our

resources to create value for our stakeholders improving our reputation and
longer-term market share.

DELIVERY APPROACH:

We have 7,683 (FY22: 7,537) financial advisers and 230,294 (FY22: 224,705)
clients registered to use the Transact platform. This provides us with a unique
opportunity to engage with our IFA base to obtain a good understanding of our
clients’ expectations and demands in relation to climate-related investments and
supporting services.

We will continue to be responsive, where possible, for the inclusion of sustainable
investments onto the platform and for these to be included within tax-efficient
wrappers, as well as general investment portfolios.

We recognise that all parties are embracing the need to reduce their carbon
emissions. Through our in-house technology, we have the opportunity to develop
processes with the financial advisers and clients that embrace sustainable practices
e.g. paperless statements and digitalisation of on-line services.

OPPORTUNITY DEFINITION

TIMEFRAME PROGRESS

Operational
efficiencies
and
embedding a
sustainable
culture

There is an opportunity for
us to develop and deliver
operational efficiencies across
our business model.

Short,
medium,
long

Incorporated
within the group’s
strategic initiative
pathway.

POTENTIAL IMPACT

• Developing carbon reduction strategies can lead to longer term cost

efficiencies.

• Avoiding potential carbon taxes.

• Developing sustainable operational practices will increase the business

resilience and eliminate potential climate-related shocks.

• Improved reputation of the Group.

DELIVERY APPROACH:

We have identified a range of short-, medium- and longer-term opportunities to
develop and incorporate sustainable practices within our operations.

Implementation of the Sustainability Forum will engage senior leadership in
embedding climate, and wider ESG practices, across the Group.

Development of a sustainable culture, which is reflected in our strategy and
engagement of staff, financial advisers, clients and other external stakeholders.

Resilience of strategy and

Our carbon and climate change transition plan

viability assessment

The current viability testing is based

sets out the next steps to be taken over the short, medium and long term for the

upon a three-year planning cycle.

Group, as it transitions towards achieving its strategic goals of being net zero.

The below illustrates the achievements of the Group in the last two years and

environment that a delayed transition

to net zero presents to our business

SHORT TERM
(2023-2025)

We do not envisage any planning

impacts in the current three-year

cycle based on the scenarios set

out above. Specific climate-related

scenarios have a longer-term horizon

and consequently we have not yet

included any financial impacts based

on strategic opportunities in our

planning process for this financial

year. We have, therefore, largely

assessed the impacts of scenarios on

a qualitative basis.

We believe that the climate agenda

across our financial adviser base

and clients is developing but has yet

to develop any maturity on shaping

investment decisions.

The scenarios present insight

about the physical impacts to the

operations. In addition, it provides

the challenges we will face from a

rapid and strong government policy

and legislation implementation.

We are not unique in this situation

and consequently most companies

are equally assessing their related

financial and strategic impacts of

climate change scenarios.

By association we expect our

platform, which holds a diverse
portfolio of investments, to evolve

as markets and investors, over

time, select those companies

whose economic value continues to

grow because of embracing timely

and opportunistic climate-related

strategies.

The Group’s preferred scenario is

an orderly transition to net zero by

2050 as this aligns with the Group’s

current strategy. This outcome has

the least significant impact on key

stakeholders, as defined on page 80.

FIGURE 4. SUMMARY OF STR ATEGIC INITIATIVE PATHWAY

YEAR 1
REPORTING
2022
ACHIEVEMENTS

• Confirmed baseline year for

• Recognised of climate

emissions

change risks & opportunities

• Create Scope 1-2 inventory

• Establishment of senior

• Measured emissions and

report

governance responsibilities

YEAR 2
REPORTING
2023
ACHIEVEMENTS

• Revised baseline year for

emissions

• Updated Scope 1-2 and

created Scope 3
inventory

• Measured and reported

emissions

• Extended governance,
started full risks &
opportunities assessment

• Engagement of business

leadership

• Set net zero target and

• Climate change register of

roadmap

compliance

• Measure, reduce emissions

• Employee awareness and

and report

training

• ESG materiality assessment

• Supply chain climate change

• Full Climate Change Risks

standards

• Validation of net zero

• Supply chain standards

roadmap

extended to sustainability

• Measure, reduce and report

• Sustainability strategy

MEDIUM
TERM
(2025-2035)

emissions and strategy

• Climate Change Risks
framework review and
updating

• Employee, investor, client

engagement

• New product development

• Adoption of ISSB and TFND

standards

• Action delivery against net

• Supply chain auditing

zero roadmap

• Sustainability strategy

• Measure, reduce and report

embedded

emissions and strategy

LONG TERM
(2035-2050)

• Asset owner engagement

and influence

• New product development

• Platform ESG insights
supporting IFA/Clients

3. Risk Management

4. Metrics and targets

Risk management is a core part of

The Group adopted the reporting requirements of the Streamlined Energy and

our culture. Climate-related risks are

Carbon Reporting (SECR) policy, as implemented by the UK Government in 2019.

managed as part of our Group RMF

We have been collating GHG emission data covering several financial years and

which defines the Group’s systems

this has allowed us to establish further insight into the areas of our Scope 1 and

of governance, risk appetite and risk

2 emissions and estimates for our Scope 3 emissions covering our operational

management processes. See pages 60

activities.

to 68 for more information on our risk

management processes.

Carbon emissions calculation methodology and assumptions

We have assessed the impacts of

Scope 1 covers emissions from sources that an organisation owns or controls

the three climate risk drivers against

directly. For the Group, this comprises emissions from the use of gas to run

the strategic objectives of the

boilers.

Group. These are set out on page 31

above. We have utilised the scenario

Scope 2 covers emissions that an organisation makes indirectly, for example

assessment to measure the resiliency

when energy is purchased. For the Group, this comprises the purchase of

of our business strategy and the

electricity. This is reported using the location-based accounting method using the

impact on the viability of our business

UK and Australian Government’s GHG conversion factors for 2023.

against the scenarios, as set out on

pages 36 to 37.

Both Scope 1 and 2 include emissions relating to entities and assets which the

Group own or control. Where possible, primary energy-use data has been used.

We have considered, in more detail,

Where this is not available, estimations have been made based on average

the risk and opportunities facing

energy usage on other sites where primary data is available. Where sites are

our business based on the scenario

shared with other businesses, it is assumed that energy usage is proportionate

parameters. Utilising our RMF

with office space leased.

methodology we have evaluated

the business impacts of the risks

Scope 3 comprises emissions which are a consequence of an organisation’s

and opportunities identified and will

business activities but that it does not directly control. For the Group these

record these within the corporate risk

activities, including the methodology for collecting the related emissions

data and any significant judgements or assumptions made to determine the

periodically to assess whether any

emissions, are shown in the table below.

TABLE 10. SCOPE 3 DATA METHODOLOGY AND ASSUMPTIONS

CARBON EMISSIONS
CALCULATION
METHODOLOGY

SIGNIFICANT
JUDGEMENTS
OR ASSUMPTIONS

SCOPE 3 CATEGORY

Purchased goods
and services and
capital goods

Emissions data calculated
by annual spend using
DEFRA UK Footprint
results.

Data for the top 30
suppliers of the Group
(all UK-based) in terms
of spend is used as this
is where we think we can
have the most influence
on supplier behaviour.

It is assumed that this is
a percentage of electricity
use.

Fuel and energy
related activities

UK conversion factor
for Transmission and
Distribution losses
applied to total purchased
electricity use.

material changes have arisen and to

determine whether the forward-looking

response remains appropriate for our

strategy.

Understanding and managing

the risks

Once risks are identified, our Risk

Appetite Framework defines the

maximum level of residual risk the

board is willing to take in pursuit of its

strategic objectives and in the normal

course of business. Exceeding risk

appetite limits potentially presents a

financial or operational threat to the

business which could cause harm to

its customers or the firm. Whilst the

Group has not set any specific climate-

related appetites, it recognises that

existing appetites for operational and

financial thresholds maybe impacted

by climate change matters and

therefore considers root cause, of

which climate maybe one factor, for

any appetite breaches.

Waste generated
in operations

Business travel

Employee
commuting and
homeworking

Solid waste: Obtain waste
weight data and disposal
routes for all sites, or
where not available,
estimate based on sites
where data is available.

Water use: Water meter
readings requested from
landlord, or estimated
based on sites where
data is available.

Wastewater: Calculate
using GHG conversion
factors based on total
water usage.

Expense claim data is
used to collect distance
travelled using type of
travel multiplied by the
relevant GHG conversion
factors

Emissions estimated from
annual commuting and
homeworking survey,
which includes mode and
distance of travel and
typical number of days
travelled to the office per
week.

Where primary data
is not available, it is
assumed that each Group
location has similar levels
of waste per employee
despite the differences
in geographical locations
within different countries
and differing rental
situations of premises.

Where distance of travel
has not been recorded
an estimation has been
based on cost of travel.

Results are based
on extrapolating the
responses of the
annual commuting and
homeworking survey
from 88% of the staff.

The data availability for Scope 3 emissions is not as accessible as for Scope 1

and 2 and therefore the data quality is not as high. We will continue to review

and refine our methods for collecting data for all Scopes to ensure the accuracy

of the reporting improves year-on-year.

Greenhouse gas (GHG) emissions data

TABLE 11. SCOPES 1, 2 AND 3

UK AND ISLE OF MAN
EMISSIONS (t CO2e)

AUSTRALIA EMISSIONS
(t CO2e)

TOTAL EMISSIONS
(t CO2e)

FY23

FY22

FY23

FY22

FY23

FY22

SCOPE 1 AND 2

Scope 1

Scope 2
(Location-based)

Total Scope
1 and 2

SCOPE 3

Purchased goods
and services

Capital goods

Fuel and energy
related activities

Waste generated
in operations

Business travel

Employee
commuting and
homeworking

179

146

166

188

217

278

312

213

237

1,353

215

226

348

979

106

451

121

188

401

115

352

124

367

491

1,353

215

347

400

166

383

549

979

115

524

2,352

1,721

2,843

2,270

Total Scope 3

2,164

1,606

Total Scope 1,
2 and 3

2,442

1,918

In FY23, energy use under Scopes 1 and 2 were down 11% due to a combination

of factors. Firstly, an unplanned reduction in boiler use in the London office and,

secondly, a decrease in electricity usage in Melbourne following the installation of
solar panels in April 2023.

Scope 3 carbon emissions are up 37%. This is largely due to increased

expenditure with key suppliers and a return to pre-pandemic levels of business

travel between the offices in Melbourne and the Isle of Man and London.

Other material movements in Scope 3 include a decrease in employee

commuting and homeworking emissions, as a consequence of obtaining more

detailed data directly from employees and placing less reliance on using national

estimated averages.

By far the biggest source of Scope 3 emissions is purchased goods and services

from our key suppliers. However, next year we hope to move from a purely

spend-based methodology to a hybrid methodology. Obtaining better data from

our suppliers about their emissions will improve the accuracy of our data and to

allow us to work with our suppliers to reduce emissions.

Intensity metrics

As with last year, we believe number of employees and office space remain

appropriate business specific metrics for calculating the Emissions Intensity

Ratio, as they are the main drivers of our energy consumption and, therefore,

emissions.

TABLE 12. INTENSIT Y METR ICS

Emissions Intensity Ratio – t CO2
per employee

Emissions Intensity Ratio – t CO2
per m2 of office space

UK AND ISLE OF MAN

AUSTRALIA

TOTAL

FY23

FY22

FY23

FY22

FY23

FY22

4.4

0.5

3.7

0.4

4.9

0.4

4.5

0.3

4.5

0.5

3.8

0.4

Restatement 2022

Validation of metrics

We have restated the published 2022 figures, where relevant, to use the most

The GHG data calculation methodology

appropriate calculations, conversion factors and data collection methodology. This

process for FY23 has been validated

has resulted in substantial changes to the individual Scope 1, 2 and 3 emissions

by external independent sustainability

figures, however, total emissions are only 3 t CO2 (0.2%) higher than published.

consultants, Brite Green Limited, to

ensure it is appropriate and robust. In

We have also updated the FY22 data to include additional metrics such as

addition, Brite Green have reviewed

emissions from purchased goods and services, capital goods, fuel and energy

the calculations and figures for FY23

related activities and wastewater.

and the restated figures for financial

year 2022 based on the agreed

The updates and restatements to the emissions metrics reflects the continuous

methodology.

improvements being made to the quality and completeness of data and data

collection methodologies.

Boundary of reporting

We have not included any metrics

for Scope 3 emissions relating to

investments on our platform as we

have no control over the selection of

investments which is made by our

clients and their independent financial

advisers.

Targets

We are committed to setting targets aligned with best practice and have

decided to follow the SBTi (Science Based Targets initiative) Net Zero Standard

framework. As a result, we are selecting FY22 as a base year against which to

set targets, instead of FY19 as indicated in last year’s report, as this is the most

recent year for which data is available.

We commit to reaching net-zero GHG emissions across the value chain by 2050

from a 2022 base year.

The following targets have been agreed:

SHORT
TERM

In the short term our main target will be to improve the

quality of our data and to engage with our key suppliers

to see how we can work together to reduce supply chain

emissions. This is critical as carbon emissions coming from

the supply chain represent 43% of total carbon emissions in

our base year.

MEDIUM
TERM

We commit to reducing absolute Scope 1 and 2 emissions

by 60% by the end of financial year 2033 from a 2022

base year. We will continue to collect data on our Scope 3

emissions to identify how we can reduce emissions and what

we can realistically commit to reducing.

We will look at offsetting emissions through high-quality

carbon credits from the voluntary carbon markets or

supporting nascent neutralisation technologies in order to

achieve carbon neutral certification.

LONG
TERM

As a minimum we commit to reducing absolute Scope 1, 2

and 3 GHG emissions 90% by 2050 from a 2022 base year.

RESPONSIBLE BUSINESS — OUR PEOPLE

Our people have always been, and will continue to be, our priority.

People and culture

We know that our employees are

Last year, the board approved an

FY23 highlights

fundamental to our success and we

employee engagement framework

have worked this year to continue

and work has continued to ensure

to evolve our collaborative and

the activities within this framework

supportive culture through our

have been implemented. These

people strategy, aiming to recognise,

have enhanced existing practices

motivate and develop our talent by:

and provided employees with the

opportunity to share their views:

• Reinforcing our purpose, strategy

and values;

• Introduction of private sessions

between the non-executive board

• Enabling our employees to

and senior managers;

develop and grow through

training, development and career

• A people update from the Head of

opportunities;

HR at each Group board meeting

enhanced to include progress

• Enhancing our engagement

against the commitments that

activities;

were made to employees further

to the 2022 engagement survey;

• Ensuring our practices support

inclusivity and employee well-

• Maturing of the people

being.

management information (MI)and

narrative provided to the Group

In the past year we have focused

board to better understand people

on enhancing the engagement of

trends within the Group;

our employees through the creation

of a feedback loop with the IHP

• Introduction of employee forums

board, a primary focus on well-being

at each employing company in the

and ensuring our culture continues

Group.

to promote inclusion and belonging

for all.

We will continue to evolve these

activities in 2024.

We have continued to embed our

strategy, purpose and values to

Looking forward, we are committed to

support our employees to work

maintaining a culture which ensures

towards this common purpose as

employees are motivated, committed

we believe having a clear sense of

to their role and supporting the Group

purpose is fundamental to success
both of the individual and the

in achieving its goals. We are proud
of the culture we have created which

organisation. We have achieved

we will continue to strengthen so as

this through initiatives such as the

to retain and attract the best talent to

annual town halls with the Group

drive further success.

CEO and IFAL CEO, regular Group

wide communications from the Group

CEO and transparency about the

progress we have made against the

commitments made as a result

of the 2022 engagement survey.

Obtained
London
Living Wage
accreditation
for the Group

Carried
out our
second Group
engagement
survey

Embedded
our new
performance
management
framework to underpin
our performance
related variable
pay structure

Built a
well-being
suite at our
London office

Created
a feedback
loop between
the board and
employees through
the introduction
of employee
forums

Enrolled all
managers in
mental health
training

Enhanced our
occupational
maternity and
paternity pay
schemes

Signed
up to the
“Women in
Finance”
charter

FY24 priorities

People engagement

Continue
to enhance
employee
engagement and
motivation

Progressing
our diversity,
equity, and
inclusion
initiatives

Deepening the
board oversight
of culture and how
it supports our
strategy

Embed our
Training and
Development
strategy

Implement
a mentoring
programme

Embed
our Social
strategy

Engagement survey

Health and well-being

We strive to ensure employee

We place great importance on

engagement is at the core of what

promoting the health and well-being

we do as we know that employees

of our employees. We have continued

are at the heart of our success. This

to encourage open communication

year we held our second annual Group

and the breaking down of stigmas

engagement survey which enabled us

across the business this year so that

to identify the progress we have made

our employees are comfortable talking

since last year’s survey, what we are

and listening to each other.

doing well and future opportunities for

improvement.

We were pleased this continued to

be recognised within our employee

The survey was comprised of

engagement survey, with 94% of

twelve sections: role, training and

employees feeling their manager

development, leadership, reward

supports and cares about their

and recognition, wellbeing, inclusion,

wellbeing (up from 91% in FY22). We

communications, our Company, our

will measure this again in next year’s

clients, engagement, enablement, and

survey and hope to maintain our

empowerment. We were incredibly

strong performance in this key metric.

pleased with the results of this years’

survey, which showed high levels of

To ensure we promote the health

engagement in almost all areas. We

and wellbeing of our employees, we

scored particularly highly in relation to

have zero tolerance of any form of

employee wellbeing (94%), inclusion

bullying and harassment and this is

(94%) and our values being aligned

underpinned by our Anti-Harassment

to the way we do business (93%).

and Bullying Policy, to which all

Our results in these areas were higher

employees are required to adhere.

than the external benchmarks and the

results we received last year.

We understand the necessity

in supporting our employees in

We were also pleased to see that

managing their mental health.

there has been a positive impact on

This year we took a multi-pronged

the engagement scores of the areas
we focused on this year, particularly

approach by enrolling all managers
at our London office on a mental

that employees understand their

health awareness course facilitated

Company’s strategy and values (92%),

by an external expert organisation,

managers are communicating in a

provided non-mandatory sessions

timely manner (93%) and the ongoing

which employees were able to attend

belief that our Company actively looks

and continued to raise the number

for ways to improve and better our

of mental health first aiders in the

service for clients (95%).

Group, encouraging employee access

to support when needed. Employees

In response to this year’s feedback,

can contact the mental health first

we have received from employees, we

aiders if they are experiencing mental

have been able to create new localised

health issues and need someone to

action plans for each subsidiary

talk to. Additionally, we continue

company, recognising this multi-

to participate in mental health

tracked approach best engaged our

awareness week. We used this week

people to deliver results last year.

to promote internal and external

resources to employees and to raise

Internal communications

Engagement forums

money for Mind, the mental health

Our executive team recognise

To further enhance the feedback loop

charity that aims to ensure no one

the importance of effective

between the board and the rest of the

has to face mental health problems

communication with our employees, to

workforce and utilise the knowledge

alone.

maintain our culture, keep employees

gained to improve on our employee

These initiatives have been further

identify opportunities for the future.

Smith, Head of Human Resources,

complemented by a suite of non-

This year, we are pleased we have

chaired the Group’s first engagement

aligned in a hybrid environment and

offering, Rita Dhut, DNED and Lucy

salary benefits our employees and

enhanced our variety and formats of

forums this year.

their families can utilise if they are

communications. Our on-line updates

struggling with their physiological or

and internal monthly newsletter

Employees from each subsidiary

psychological health. Our employees

ensure all employees across the

company were invited to attend the

and their families are eligible to join

Group are aware of the key business

sessions and the topics of discussion

our company-funded private medical

updates and feel included in the

were derived from key feedback from

insurance. They also have direct

business and its successes. Our Group

the employee engagement survey.

access to our employee assistance

CEO, Alexander Scott, sends regular

We have evaluated the success of the

programme, which is a confidential

updates to the whole Group.

forums and have created an action

service and offers professional help

plan to implement improvements

and support on a wide range of life

Alexander and Jonathan have

in these areas. We will continue to

and domestic concerns.

continued to provide all-employee

hold these sessions over the next

Company updates in person. These

year, using key topics from the latest

To promote and protect the well-

events update colleagues on our

engagement survey. The feedback

being of our employees we have

financial results and our plans for the

obtained within these sessions will

also built a well-being suite at our

future. In these sessions, attendees

feed into our People strategy.

London office, which is comprised of

are provided with the opportunity

a medical room, a multi faith room

to ask questions of the senior

and a well-being room.

management team as well engage at

the social events that follow.

We understand the importance of

continuing to shine a light on other

Our NEDs host regular ‘manager

important topics and this year we

converse’ sessions with members of

have published our first Menopause

the senior management team. This

Policy. We have also appointed
Menopause Champions for employees

forum allows the senior manager
to provide an update on key

if they require confidential support.

departmental issues, future plans and

team environment. These meetings

Additionally, a well-being hub

are invaluable as they provide the

has been created on our intranet,

directors with insight into the culture

which provides access to tools and

and operational detail of the business

resources to support this and other

in a structured format.

areas of well-being.

Talent management

Support for certifications

We understand the importance of

Ensuring that we have robust talent

We recognise the importance of

retaining our existing talent and

maps and succession plans in place

providing job-relevant training, both

taking steps to ensure we are best

is key to preparing ourselves for the

in increasing our productivity and in

placed to attract future talent. A key

future. This year we have ensured

increasing employee engagement

component of this year’s progress is

that talent maps are in place for all

and job satisfaction. To this end,

the provision of wider ongoing training

employees and succession plans are

we encourage all our employees to

and development opportunities and

in place for the senior management

pursue professional qualifications to

the expansion of our internal Training

team. Over the next year we will

strengthen their skills.

and Development team to enhance

continue to deepen our succession

the resource available. The team

plans and work towards providing the

Our people are offered a range of

also continue to work closely with

appropriate training and support for

approved qualifications in the areas

the business to secure fulfilment of

these successors.

our internal and external training

of investment, pensions and other

relevant subjects; all employees

obligations.

Additionally, we have re-structured

are eligible to undertake these

our variable remuneration offering,

qualifications. To support our

This year we have taken steps to

so the annual cash bonus is more

employees, the Group offers financial

evolve our Training and Development

tangibly linked to performance. This

support by funding the cost of exam

strategy and identified Training

has had a positive impact on our

entry and the core study text, as

priorities. The implementation of this

ability to attract and retain talent

well as time support in the form of

strategy started this year and will

this year. All managers have been

additional study leave.

continue into next year. The priorities

supported through this change

and the talent maps referenced

above have ensured that employee

performance has been regularly

reviewed throughout the year, so

the process is fair and equitable for

all. Our performance management

framework will continue to evolve over

the next year and all managers will be

provided with the appropriate training

and support.

A focus over the next year to support

our talent will be to design, implement

and embed mentoring programmes.

One strand will ensure all new starters

to the business have access to a

mentor to support their integration

into the Group. A further strand will

consider how we introduce mentoring

for Women in Leadership.

2.
Regulatory
training

4.
Diversity,
Equity and
Inclusion

identified are:

1.
Performance
management

3.
New Manager
development

5.
Mental
health

Diversity, Equity and Inclusion (DE&I)

We firmly believe creating a culture of belonging will magnify our success and

we recognise the value of a diverse workforce and an equitable and inclusive

workplace. We continue to operate on the principle that greater diversity

Community

of thought and experience within our business will deliver a more robust

performance for our stakeholders.

We take pride that each year we

pro-actively source opportunities

The Group already has a number of people processes in place to ensure that

to support charitable causes our

its employees and potential employees are treated fairly and equitably, which

employees care about. This year,

is underpinned by our Equal Opportunities Policy and our DE&I strategy. We

we provided employees with the

regularly review and update our policy in order to fulfil more effectively our

opportunity to partake in supporting

DE&I goals.

the Turkey-Syria earthquake appeal.

The Company committed to matching

We work with our external recruitment partners to ensure a fair, non-

the employee donations and we raised

discriminatory and consistent recruitment process to provide opportunity to all

a total of £10,600.

potential employees, irrespective of gender or any other characteristic.

To continue to demonstrate the value we place on working parents, we

invasion of Ukraine, we also jointly

strengthened our company maternity pay and company paternity pay offering

sponsored a ‘Rock for Ukraine’ event

this year, our family friendly offering is now competitive within the financial

in February 2023. The event was

To mark one year on from Russia’s

services industry.

held in London to raise money for the

refugees from the war in Ukraine. The

We have augmented our collection of data on Group and company diversity. With

Company purchased tickets to the

deeper analysis of the data and clarity on achievable yet ambitious milestones we

event and all employees at the London

intend to progress our evidence-based DE&I strategy and framework.

office were able to recognise the hard

For 2024 our planned actions include:

• Partner with 10,000 Black Interns initiative.

work of their peers and nominate a

colleague to attend.

In a new initiative for the Group, we

partnered with Kingston University to

• Partner with universities to provide social education to students from

provide some of their finance students

underprivileged backgrounds.

from underprivileged backgrounds

with the opportunity to complete

• Review the structure of succession plans through the lens of equal

work experience at our London office.

opportunity for all.

The first cohort of work experience

students joined us in September 2023

and the students were able to obtain

experience of working within several of
our departments.

Over the next year we will continue to

explore ways in which we can enhance

our community support and the

evolution of our social strategy.

Our workforce

Gender pay gap

Our workforce is located in the UK, Australia and the Isle of Man. The

IntegraFin Services Limited (ISL),

headcount per subsidiary company, as at 30 September 2023, is as follows:

one of our Group subsidiaries, is

GROUP HEADCOUNT

IntegraFin Services Limited

IntegraLife International Limited

Time 4 Advice Ltd

IAD – (UK & Australia)

Total Group headcount

The charts below detail the gender ratio at each of the Group’s subsidiary
companies. These ratios are accurate as at 30 September 2023.

Female

38%

Male

Female

Male

ILINT

11%

89%

IAD

Female

30%

Male

21%

Female

Male

79%

ISL

62%

T4A

70%

required to publish its gender pay

gap information on an annual basis.

These results have always compared

favourably to other companies in

our sector and our 2022 results

demonstrate the ongoing steps we

have taken to support an equitable and

inclusive workplace.

457

114

649

MEAN
GENDER
PAY GAP
INCL.
BONUS

MEDIAN
GENDER
PAY GAP
INCL.
BONUS

12%

13%

14%

10%

18%

2018

2019

2020

2021

2022

We are pleased to see the median has

remained low, helping to evidence that

our overall pay structure remains fair

and equitable. It is acknowledged that

there has been a notable increase in

the mean gender pay gap this year.

This is due to the proportion of males

in more senior roles being adversely
affected by the following:

• The retirement of some senior

female employees;

• A higher proportion of senior

female employees reverting to

flexible working hours compared

to our senior male employees and,

as required by the rules, their

actual pay is included not their

full-time equivalent pay;

Diversity data

• Senior female employees being

The Group employed 649 employees and 6 NEDs are officers of the Company.

on maternity leave as at the

The breakdown of our people by gender as at September 2023, was as follows:

snapshot date and therefore

excluded, as required by the

rules, from our data;

• The impact of senior females

being on maternity leave having

a disproportionate effect when

compared to males on paternity

leave.

We keep our pay and benefits structure

under review to ensure our salaries are

equitable when compared to internal

peers and the external market.

Board directors

Senior managers

Direct reports

All employees

Total employees

MALE

FEMALE

NUMBER

% NUMBER

402

217

649

We will not exclusively advantage

Ethical standards

females but will continue to remove

any actual or perceived barriers female

The Group is committed to high standards of governance, ethical and moral

employees could have been more likely

standards. Our core value of ‘doing the right thing’ underpins all our operational

to face than their male colleagues.

practices and informs our people’s conduct. This is formalised in our internal

policies which are made available to all employees on our intranet. We require

our employees to undertake regular, mandatory training to ensure awareness and

understanding of their provisions. Our ethical standards are comprised primarily

of the policies that govern employee conduct, including the Equal Opportunities

policy, Anti-Harassment and Bullying policy, Anti-Bribery and Corruption policy,

Anti-Money Laundering policy and Whistleblowing policy.

Anti-bribery and corruption

The Group has a zero-tolerance approach to financial crime to protect ourselves,
our clients and our stakeholders. We have laid out the controls and processes in
place to prevent financial crime in Our Anti-Bribery and Corruption policy and our

Anti-Money Laundering Policy, as well as the responsibilities of our staff, both

generally and in key departments or roles. The Anti-Bribery and Corruption policy

and the Anti-Money Laundering policy are both reviewed and updated annually by

the Money Laundering Reporting Officer.

Internal audit conducts audits of our operations, controls and processes based

on risk; areas and policies identified as high-risk, that includes financial crime

related polices, form part of the risk assessment exercise to produce the internal

audit plan. For more information on our internal audit approach, the Group

Internal Audit Charter is available on our website at: https://www.integrafin.

co.uk/legal-and-regulatory-information/.

Whistleblowing policy

Recognising that the ability to voice genuine concern without fear of reprisal

is essential, the Group maintains a Whistleblowing policy applicable to all

employees and available to view on our intranet. This reiterates our employees’

responsibilities in reporting suspicions, outlines the reporting lines for

whistleblowing concerns and establishes that whistleblowers are protected from

retaliation. As with all policies, we periodically audit the Whistleblowing policy in

line with the risks in the annual risk plan.

Human rights and modern slavery

We continue to recognise the important role we have to play in the support of

human rights and we do not tolerate modern slavery of any kind. The Group

continues to underpin this support through the publication and enforcement

of our modern slavery statement which applies to all Group companies and

all suppliers. The statement can be found at https://www.integrafin.co.uk/

modern-slavery/.

FINANCIAL REVIEW

Headlines

Transact platform operational performance

Group revenue remained broadly

steady in FY23, increasing by

1% to £134.9 million. This was

against another year of economic

volatility, due to elevated

inflation and rapidly increasing

interest rates, both of which

impacted the financial markets

and client wealth.

Despite ongoing global economic

challenges, FY23 ended with a

record 230,294 Transact platform

clients (FY22: 224,705) and

Opening FUD

Inflows

Outflows

Net flows

Market movements

Other movements1

Closing FUD

FY23
£m

50,070

6,406

(3,753)

2,653

2,272

(36)

54,959

FY22
£m

52,112

7,275

(2,873)

4,402

(6,248)

(196)

50,070

1 Other movements includes fees, tax charges and rebates, dividends and interest.

7,683 registered advisers (FY22:

Funds Under Direction closed the year up 10% on FY22 at £55.0 billion.

7,537).

IHP Group has a strong liquidity

economic pressure on our clients, are due to the reliability and quality of our

FY23 gross inflows of £6.4 billion, in a competitive marketplace and with ongoing

profile, largely due to regulatory

advised investment platform.

capital requirements, and

therefore benefited from UK

Whilst outflows have increased to £3.8 billion, the annualised rate is 7% of

interest rates rising, with interest

opening FUD (FY22: 6%) therefore they are still within the historical banding,

received on cash increasing from

as a percentage of FUD, that we expect. One factor driving outflows is clients

£0.6 million in FY22 to £5.3

withdrawing savings as the cost of living has increased and also as the world has

million in FY23.

returned to normal post lockdown.

Headline IFRS profit before

Our net flows of £2.7 billion are strong for the sector and represent more than

tax rose 15% to £62.6 million

50% of the increase in FUD in FY23.

(FY22: £54.3 million), however

underlying profit before tax

T4A operational performance

fell by 4% to £63.0 million

(FY22: £65.8 million). The

In the 12 months to September 2022, T4A has increased CURO licence users by

reduction is due to an increase in

22%, from 2,253 at 30 September 2022, to 2,752 at September 2023.

administration expenses, largely

driven by the ongoing strategic

programme of investment in

software and IT infrastructure
and offset by the increase in

corporate interest income.

Profit after tax rose 13% to

£49.9 million (FY22: £44.0

million).

EPS is 15.1p (FY22: 13.3p).

After removing all non-

underlying expenses in FY23,

underlying EPS* is 15.2p,

compared with 16.3p in FY22.

*Alternative performance measures (APMs) which are indicated with an asterisk. APMs are financial measures which are not defined by IFRS.
They are used in order to provide better insight into the performance of the Group. Further details are provided in the glossary, on page 235.

Group financial performance

There are two streams of Group revenue: investment platform revenue

(96% of total revenue) and T4A revenue (4% of total revenue).

Investment platform revenue

T4A revenue

Investment platform revenue has increased by £0.4 million year-on-year to

T4A’s revenue was £4.8 million for

£130.1 million and comprises three elements, 99% (FY22: 98%) of which is

FY23, compared with £3.9 million for

from a recurring source.

FY22, an increase of 23%. This was

driven by an increase in recurring

Annual commission income (an annual, ad valorem tiered fee on FUD) and

revenue from additional CURO user

wrapper administration fee income (quarterly fixed wrapper fees for each of the

licences.

tax wrapper types available) are recurring. Other income is composed of buy

commission and dealing charges.

Interest income on corporate cash

Investment platform revenue

Annual commission income (recurring)

Wrapper fee income (recurring)

Other income

FY23
£m

116.1

12.3

1.7

FY22
£m

115.9

11.6

2.2

Total platform revenue

130.1

129.7

Interest income rose from £0.8 million

in FY22 to £6.4 million in FY23. The

average Group corporate cash balance

was £186.3 million over the year and

the Bank of England base rate rose 3%

over the course of the financial year,

ending the financial year at 5.25%.

This resulted in interest income on

Average daily FUD for the year, arising from the performance of the assets in

corporate cash balances rising £4.7

client portfolios, increased by 2% in FY23 to £53.6 billion. Annual commission

million, to £5.3 million. We also

income increased to £116.1 million in FY23. The increase in annual commission

received another £0.8 million, being

revenue was moderated by the reduction in the annual commission rate from

a combination of interest due from

0.27% to 0.26%, with effect from 1 July 2022, therefore only three months of

the Vertus loan facility and interest

the reduction impacted FY22, but a full 12 months impacted FY23.

received from HMRC.

Recurring wrapper administration fee income increased by £0.7 million (6%)

year-on-year, reflecting the increase in the number of open tax wrappers for

both existing and new clients.

Buy commission, included in other income, has been deliberately reduced as

a component of revenue each year. Buy commission was £0.7 million in FY23

(FY22: £1.5 million), falling due to the threshold at which clients receive a

rebate of buy commission being reduced from £0.2 million which was the

threshold from 1 March 2022, to £0.1 million with effect from 1 March 2023.

The reduction in the buy commission threshold is another positive step in our
responsible pricing strategy, as we seek to remove an increasing proportion of

clients from the buy commission charge and simplify our fee structure.

Operating expenses

Employee costs

Occupancy

Regulatory and professional fees

Other income – tax relief due to
shareholders

Other costs

Non-underlying expenses –
backdated VAT and interest

Non-underlying expenses – other

Total expenses

Depreciation and amortisation

Total operating expenses

FY23
£m

53.9

2.8

9.8

(1.6)

6.8

0.4

72.1

2.5

74.6

FY22
£m

47.1

2.4

9.8

(2.4)

6.3

8.8

2.7

74.7

3.0

77.7

Operating expenses on a statutory IFRS basis have reduced by £2.6 million,

or 3%.

Underlying expenses

Employee costs £53.9 million (+£6.8 million, +14%)

Costs have increased due to increased headcount and pay rises.

Group employee numbers through the year increased by 6% (FY22: 8%) from

an average of 594 in FY22 to an average of 631 in FY23, this accounted for

£2.7 million of the increase in costs. Notable senior additions are a CTO and

CRO. We have also recruited a further 26 people in IT through the year, as we

continue to implement plans announced in FY22 to significantly increase system

development capacity across the Group and drive future efficiencies.

We continued to enhance salaries to reflect the inflationary environment,

recognising the pressures being placed on our people due to the rise in the cost

of living. We also want to ensure we retain talent and we monitor the market

with regard to inflationary pressures and market-competitive salary levels.

Inflationary pay rises, including resultant impact on share scheme costs and

company pension contributions, increased costs by £3.7 million in FY23.

Current year VAT, included in Other costs (£3.6 million (+£0.4 million

(+13%))

Current year VAT has increased by £0.4 million, largely due to increased

investment platform development software fees, charged by IHP’s wholly

owned software development company and now subject to reverse charge VAT.

Occupancy costs £2.8 million (+£0.4 million, +17%), depreciation and

amortisation costs £2.5 million (-£0.5 million, -17%)

Occupancy costs increased by £0.4 million, and depreciation and amortisation

reduced by £0.5 million. The increase in occupancy costs is due to the head office

lease ending in June 2023 and the accounting impact of IFRS 16, the Leases

accounting standard, no longer applying. This means depreciation of the right of

use asset has been replaced by rent expense for the final three months of the

financial year. The lease is being renewed for a limited period.

Regulatory and professional fees £9.8 million (no change)

Regulatory and professional fees did not increase in FY23, due to an uplift in

professional fees being partially offset by regulatory fees that were lower than

expected.

Other income – tax relief due to shareholders £1.6 million (-£0.8 million,

-33%)

Tax relief due to shareholders relates to life insurance company tax requirements

and thus is subject to valuations at year-end, which are inherently dependent on

market valuations at that date.

Non-underlying expenses

Non-underlying expenses – other £0.4 million (-£2.3 million, -85%)

In FY22, within non-underlying expenses, we recognised £3.0 million of ongoing

expenses. This was attributable to the IFRS requirement that we recognise the

post combination deferred and additional consideration payable to the original

T4A shareholders in respect of the acquisition of T4A, as remuneration over the

four years from January 2021 to December 2024.

However, T4A has not met the minimum threshold for highly stretching targets

to earn the additional consideration element of post combination remuneration.
Therefore, the post combination expense in respect of the additional

consideration element that was recognised in FY21 and FY22 of £1.6 million has

been released, and we have not recognised any cost in FY23. This has led to the

reduction in non-underlying post combination remuneration expense for FY23

from £3.0 million to £0.4 million.

Moreover, the post combination consideration cost in respect of FY24 and FY25

is expected to reduce to £2.1 million and £0.5 million respectively, as only the

deferred consideration element will now be recognised.

Tax

Consolidated statement of financial position

The Group has operations in three

Net assets have grown 10% (FY22: 8%), or £16.7 million, in the year to £189.9

tax jurisdictions: UK, Australia and

million, and the material movements on the consolidated statement of financial

the Isle of Man. This results in profits

position are as follows:

being subject to tax at three different

rates. However, 96% of the Group’s

Cash and significant cash flows

income is earned in the UK.

Shareholder cash has decreased by £5.1 million year on year to £177.9

Shareholder tax on ordinary activities

million (FY22: £183.0 million). This is due to the strong cash flows generated

for the year increased by £2.5

from operating activities being used to invest in gilts to maximise returns,

million, or 24%, to £12.8 million

whilst maintaining minimal risk on assets supporting regulatory solvency

(FY22: £10.3 million) due to the

requirements. The gilt investments increased by £19.3 million from £3.1 million

increase in taxable profit and the

to £22.3 million. We also paid dividends of £33.7 million in the year (FY22:

increase in corporation tax rate from

£33.7 million).

19% to 25%, with effect from 6 April

2023.

We continue to operate without any need for debt, so have not incurred an

increase in financing costs from the increase in base rate through the year,

Our effective rate of tax over the

rather, we benefited due to our strong corporate cash reserves.

period was 20% (FY22: 18%).

The effective rate of tax in FY22

Deferred tax asset, non-current provisions and non-current deferred

was dampened by the effect of

tax liability

the backdated, non-recurring VAT

expense of £8.8 million, incurred

The reduction in the deferred tax asset of £5.2 million to £0.8 million

in September 2022, being tax

(FY22: £6.0 million) the non-current provisions of £5.6 million to £40.5 million

deductible.

(FY22: £46.1 million), and the current provision of £3.0 million to £7.7 million

(FY22: 10.7 million), plus the increase in non-current deferred tax liabilities of

Our tax strategy can be found at:

£6.4 million to £7.3 million (FY22: 0.9 million) are all a function of the realised

https://www.integrafin.co.uk/

and unrealised gains that have arisen on policyholder assets, as the value of

legal-and-regulatory-information/.

linked funds has risen year on year.

ILUK holds tax charges deducted from ILUK policyholders in reserve to meet

future tax liabilities and the tax reserve may be paid back to policyholders if

asset values do not recover such that the tax liability unwinds.

Investments and cash held for the benefit of policyholders and liabilities

for linked investment contracts (notes 17, 18 and 20)

ILUK and ILInt write only unit-linked insurance policies. They match the

assets and liabilities of their linked policies such that, in their own individual
statements of financial position, these items always net off exactly. These line

items are required to be shown under IFRS in the consolidated statement of

comprehensive income, the consolidated statement of financial position and the

consolidated statement of cash flows but have zero net effect.

Cash and investments held for the benefit of ILUK and ILInt policyholders have

risen to £24.4 billion (FY22: £22.2 billion). This increase of 10% is entirely

consistent with the rise in total FUD on the investment platform.

Capital resources and capital

Regulatory Capital as at 30 September 2023

management

To enable the investment platform

within the Group to offer a wide

range of tax wrappers, there are

three regulated entities within the

Group: a UK investment firm, a UK

life insurance company and an Isle of

Man life insurance company.

IFAL

ILUK

ILInt

REGULATORY CAPITAL

REGULATORY
REQUIREMENTS CAPITAL RESOURCES
£m

£m

33.3

201.4

23.8

44.4

261.6

41.1

Each regulated entity maintains

Regulatory Capital as at 30 September 2022

capital well above the minimum

level of regulatory capital required,

ensuring sufficient capital remains

available to fund ongoing trading and

future growth. Cash and investments

in short-dated gilts are held to cover

regulatory capital requirements and

tax liabilities.

IFAL

ILUK

ILInt

REGULATORY CAPITAL

REGULATORY
REQUIREMENTS CAPITAL RESOURCES
£m

£m

32.6

186.9

23.7

39.7

244.0

42.0

REGULATORY
COVER
%

133

130

173

REGULATORY
COVER
%

122

131

177

The regulatory capital requirements

The Company’s regulated subsidiaries continue to hold regulatory capital

and resources in ILUK and ILInt are

resources well in excess of their regulatory capital requirements. We will maintain

calculated by reference to economic

sufficient regulatory capital and an appropriate level of working capital. We will

capital-based regimes.

use retained capital to further invest in the delivery of our service to clients, pay

dividends to shareholders and provide fair rewards to employees.

IFAL is subject to Investment Firms

Prudential Regime (IFPR) regulatory

The following table shows the surplus capital held by the Group, after

capital and liquidity rules introduced

consideration of the Group’s risk appetite and future dividend payments. This is

in January 2022, following the

shown on a different basis to the above table, which is on a regulatory basis while

implementation in the UK of the

the below shows equity on an IFRS basis.

MiFIDPRU rule book.

These prudential rules require the

calculation of capital requirements

reflecting ‘K’ factor requirements that

cover potential harms arising from

business activities. The K factors are

calculated using formulae for assets

and cash under administration.

Capital as at 30 September

Dividends

Total equity

Loans and receivables, intangible assets and
property, plant and equipment

Available capital pre dividend

Interim dividend declared

Available capital post dividend

Additional risk appetite capital

Surplus

2023
£m

189.9

2022
£m

173.2

(30.6)

142.6

(23.2)

119.4

159.3

(23.2)

136.1

(72.7)

63.4

During the year to 30 September

2023, IHP (the Company) paid a

second interim dividend of £23.2

million to shareholders in respect of

financial year 2022 and a first interim

dividend of £10.6 million in respect of

financial year 2023.

In respect of the second interim

dividend for financial year 2023, the

board has declared a dividend of 7.0

(76.2)

pence per ordinary share (FY22: 7.0p).

43.2

The financial year 2023 total dividends

paid and declared of £33.7 million

Additional risk appetite capital is capital the board considers to be appropriate

compares with full year interim

for it to hold to ensure the smooth operation of the business such that it can

dividends of £33.7 million in respect of

meet future risks to the business plan and future changes to regulatory capital

financial year 2022.

requirements without recourse to additional capital – see the Going Concern and

Viability Statement on pages 69 to 71.

The board considers the impact of regulatory capital requirements and risk

appetite levels on prospective dividends from its regulated subsidiaries.

IFAL’s Public Disclosures document contains further details and can be found

on our website at: https://www.integrafin.co.uk/legal-and-regulatory-

information/.

As stated in the Chair’s report, the board has declared a second interim dividend

for the year of 7.0 pence per ordinary share, taking the total dividend for the

year to 10.2 pence per share (FY22: 10.2p).

RISK AND RISK MANAGEMENT

Understanding our risks is key to safeguarding our clients, shareholders and

Governance

employees. By maintaining an effective risk management framework we aim

to achieve good outcomes that meet the Group’s strategic objectives within

The IHP Audit and Risk Committee

approved risk appetites.

Overview

(IHP ARC) supports the board and

is responsible for reviewing and

challenging the manner in which the

Group implements and monitors the

Effective risk management is critical for the delivery of the Group’s strategic

adequacy of the RMF. The role and

objectives and supports positive outcomes for our stakeholders.

activities of the IHP ARC are set out on

Risk management assists the board in understanding its current and future risks

and provides appropriate information that is incorporated into our strategic

The audit and risk governance

decision making and business planning processes. It encompasses all strategic,

arrangements of the Group’s regulated

financial and operational risks that may prevent us from fulfilling our strategic

entities are undertaken by audit

objectives, as set out on pages 16 to 19. The inherent risk environment faced

and risk committees (ARC) for each

by the Group develops over time, the impact and mitigation of these risks are

regulated entity. These regulated

set out in the Principal Risks and Uncertainties section on pages 63 to 68.

entity ARCs, which provide risk and

pages 97 to 105.

Risk management and ownership culture

compliance challenge and oversight,

along with Internal Audit assurance

of the regulated entities, are made up

Promoting a culture of awareness and ownership is essential for ensuring that

of independent NEDs. The IHP ARC

risk implications are considered and managed for our stakeholders, who are

receives updates at each meeting from

defined on page 80.

the respective Chair of the regulated

entity ARCs on key areas of escalation.

The Group Risk Management Policy (RMP) establishes the requirement for risk

to be considered across all the Group’s operations. The RMP is overseen by the

Together, they assist the respective

IHP CEO, supported by the senior management team. The IHP CEO, together

boards and senior management in

with the CRO, is accountable to the board for effective risk management across

fostering a culture that encourages

the Group. The RMP is reviewed at least annually.

good stewardship of risk and an

emphasis that demonstrates the

The Risk Management Framework (RMF), which supports the RMP, defines the

benefits of a risk-based approach to

Group’s systems of governance, risk appetite and risk management processes.

management of the Group.

This framework drives a consistent approach to identifying, measuring and

controlling risks, forming a continuous and disciplined part of the evaluation of

business opportunities, uncertainties and threats in managing good stakeholder

The “three lines” risk governance

outcomes, within approved risk appetites.

model

Risks are captured through regular discussions with senior management and

The Group’s RMF is implemented

risk owners across the Group, using a robust and consistent measurement

through a “three lines” model, to

methodology, which is designed to ensure the capture of potential harms arising
from business activities.

enable delineation of responsibility and
to ensure that the Company operates

within the risk appetite defined by the

The measurement includes the application of stress testing and scenario

ARC and approved by the board.

analysis and considers whether relevant controls are in place, along with

available management actions.

The ’first line’ business is responsible

and accountable for managing risks

We ensure an embedded and consistent risk management approach is adopted,

on a day-to-day basis within appetite

coupled with effective policies and procedures, designed to prevent, minimise

and in line with risk policies. This is

and/or detect any risk of failure to comply with regulatory obligations. The

then combined with oversight from the

extent of the risk is compared to board-approved risk appetites, as well as

’second line’ Group risk management

specific limits and triggers. Reporting forms an integral part of the governance

and compliance functions, and

framework and breaches in limits or appetite thresholds are escalated through

independent assurance is provided by

the relevant Committees. There is also a clear process for the escalation of risk

the ‘third line’ Group internal audit

events.

function to form a ‘three lines’ model.

RISK APPETITE

Our risk appetite is the degree of risk that we are prepared to accept in pursuit

of our strategic financial objectives.

The board is responsible for establishing the risk strategy and approving the risk

appetite statements. We define our risk appetite statements on a quantitative

and qualitative basis, using the principal risk taxonomy set out in our RMF. This

provides a consistent approach from which each of our operating companies set

their own risk appetite statements to meet the common aims of the Group. We

have generally adopted an overall conservative approach, which is reflected in

our risk appetite preferences and in the overall approach to risk management.

Our risk appetite preferences, aligned to our risk exposures, business strategy

and our desire to ensure good outcomes for all our stakeholders, can be

articulated as follows:

RISK CATEGORY

RISK APPETITE PREFERENCES

Strategic and
business risk

We ensure that our business provides an acceptable level of return within the boundaries of
the risks that are taken which are aligned with our strategic aims and approved appetites. We
aim to manage market consensus to be in line with internal business planning forecasts. We
proactively engage with external agencies including, analysts, media, regulators and industry
groups. Our business model and investment supports our ambitions and strategy for delivering
against climate related obligations.

Operational risk

We do not actively seek to take operational risk to generate returns. We accept a level of
operational risk that means the controls in place should prevent material losses but should not
excessively restrict business activities.

We aim to have a zero-risk appetite for operational risk that creates harm to, or results in poor
client outcomes; this includes any harm arising from systematic failures, from our cultural
outlook or in any element of the client life cycle. We have a zero-risk appetite for material
regulatory breaches.

Market risk

We prefer secondary market risk through charges determined on clients’ portfolio values. This
is central to our proposition and we accept the potential impact of the volatility of market prices
on financial performance.

Capital and
liquidity risk

We have a prudent capital management approach and we currently invest shareholder assets in
high quality, highly liquid, short-dated investments.

We prefer savings and pension products with low capital requirements and without financial
guarantees.

Credit and
counterparty risk

We limit our exposures to credit institutions with a high credit quality score for bank deposits,
trading debtors and trading related, pre-funding activity. We have limited appetite for intra-
Group lending.

Insurance risk

As regards the writing and administration of insurance business, we have a preference for
savings and pensions products with low levels of sums assured and no financial guarantees.

Group risk

We accept certain risks and ensure that these are appropriately identified, managed, mitigated
and monitored through the Group risk register.

Concentration risk

The risks facing the Group are identified and recorded in the risk register. The inherent and
residual risk profile is regularly reviewed to understand and assess any concentration of risks
and to ensure these are appropriately managed and monitored through our risk appetites and
governance arrangements.

Risk exposures are regularly assessed by the Group’s risk management function

against risk appetite, using a comprehensive set of key risk indicators which

are reported to senior management, the subsidiary ARCs, and the IHP ARC as

appropriate.

Risk capital frameworks

The Company’s regulated subsidiaries fall under various risk capital regimes.

The regimes are guided by similar underlying risk principles, albeit the results

and reporting requirements are regime specific.

The Company’s regulated subsidiaries maintain a sound and appropriate

system of capital management in order to meet their strategic capital

objectives, preferring a simple system of capital management, which reflects

the nature of their businesses. At a legal entity level, the regulated subsidiaries

are capitalised at the required regulatory minimum, plus an adequate buffer

defined as part of their capital management, risk appetite and dividend policies.

Our stakeholders expect us to be resilient in our operations. We actively

manage our risk exposure against appetite across our defined principal risk

categories, as well as the emerging risks derived from management insight

and other reliable external sources to undertake stress and scenario testing.

These are used to identify additional impacts on the ability of the Group and its

regulated subsidiaries to meet capital and liquidity needs, due to changes in the

external environment that are over and above the amount of capital held. More

details of these are set out in the Principal Risks and Uncertainties statement,

pages 63 to 68.

Oversight is provided by management, ARCs and boards to ensure exposures

are adequately identified and acted upon in a timely manner. We ensure,

through our Risk Capital frameworks, that our regulated entities hold adequate

capital to meet obligations. During the reporting period, each regulated

subsidiary was fully compliant with the applicable risk capital regime and any

applicable solvency capital requirement (SCR). Additionally, the balance sheets

and SCRs are regularly monitored and, in line with regulatory requirements,

reported to the applicable regulators as required.

Regulatory capital requirements

For information on our compliance with the relevant regulatory capital

requirements, please see pages 58 to 59 in the Financial Review.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors, in conjunction with the board and ARC, have undertaken a review of

the potential risks to the Group that could undermine the successful achievement

of its strategic objectives, threaten its business model or future performance and

considered non-financial risks that might present operational disruption.

The tables below set out the Group’s principal risks and uncertainties to the

achievement of the identified strategic objectives, risk trend for 2023 together

with a summary of how we manage the risks. These have been referenced to the

strategic objectives set out on pages 16 to 19.

Business and strategic risks

PRINCIPAL RISK AND UNCERTAINTY

MANAGEMENT OF THE PRINCIPAL RISK AND UNCERTAINTY

We manage the risk by providing our client service teams with extensive
initial and ongoing training, supported by experienced subject matter experts
and managers. The challenges facing the business and the wider industry,
have increased during the year, however monitoring service metrics has
allowed us to identify the areas where there is deviation from expected
service levels or where processing backlogs have arisen and to deliver
targeted remediation plans to ensure client outcomes and service standards
are maintained. We have substantially reduced backlogs relative to FY22 and
are better able to address them when they occur.

We also conduct satisfaction surveys to ensure our service levels are still
perceived as excellent by our clients and their advisers. Service standards
are also dependent on resilient operations, both current and forward looking,
ensuring that risk management is in place.

T4A continues to develop the delivery of next generation CURO.

The risk of reduced investment in the platform is managed through a
disciplined approach to expense management and forecasting. We horizon
scan for upcoming regulatory and taxation regime changes and maintain
contingency to allow for unexpected expenses e.g. UK Financial Services
Compensation Scheme (FSCS) levies, which ensures we do not need to
compromise on investment in our platform to a degree that affects our
offering.

The risk has increased over the year driven in large part due to preparation
for, and the implementation of, the Consumer Duty regime for our regulated
entities, both as manufacturers and/or distributors.

We remain proactive in embedding all mandatory changes (e.g. Consumer
Duty, Operational Resilience, HMRC changes to lifetime allowances) through
our business-as-usual model. Our platform developers remain responsive to
the business needs and have increased developer resources over the year.

Service standard failure – our high levels
of client and adviser retention are dependent
upon our consistent and reliable levels of
service. Failure to maintain these service
levels would affect our ability to attract and
retain business. There is a potential risk of
greater outflows than expected and/or a net
outflow of FUD impacting profitability and/
or the medium/long-term sustainability of the
platform.

Change over the year
Stable

Aligned to strategic financial objectives

Sustainable growth

Increase earnings

Diversion of platform development
resources – maintaining our quality and
relevance requires ongoing investment.
Any reduction in investment due to diversion
of resources to other non-discretionary
expenditure (for example, regulatory
developments) may affect our competitive
position.

Change over the year

Increase

Aligned to strategic financial objectives

Sustainable growth

Invest

Increase earnings

PRINCIPAL RISK AND UNCERTAINTY

MANAGEMENT OF THE PRINCIPAL RISK AND UNCERTAINTY

Increased competition – cheaper and/or
more sophisticated propositions – we operate
in an increasingly competitive market, both for
clients and their advisers. Consolidation in the
adviser market makes it more challenging to
attract and retain business. The consequences
may be that greater outflows are experienced
than expected and/or a net outflow of FUD
impacting profitability and/or the medium/
long-term sustainability of the platform.

Change over the year
Increase

Aligned to strategic financial objectives

Sustainable growth

Increase earnings

The advised market remains our key target and competitor risk is mitigated
by focusing on providing exceptionally high levels of service and being
responsive to client and financial adviser feedback and demands through an
efficient process and operational base.

We also keep close to the landscape of our platform competitors, as well
as the trends impacting the financial adviser market. Our platform service
and developments remain award winning. We release a monthly update
to our proprietary platform technology, incorporating improvements and
new functionality. We continue to develop our digital strategy, expanding
our Transact Online interface allowing advisers direct processing onto the
platform. This is essential to remain relevant and competitive, improving both
functionality and service efficiency and allows us to continue to increase the
value-for-money of our service by reducing client charges, subject to profit
and capital parameters when deemed appropriate.

The Group continues to review its business strategy and growth potential. In
this regard, it primarily considers organic opportunities that will enhance or
complement its current service offerings to the adviser market.

T4A continues to broaden our service offering to advisers. We also continue to
support the diversification of the adviser market through the Vertus scheme
which continues to be successful.

Financial risks

PRINCIPAL RISK AND UNCERTAINTY

MANAGEMENT OF THE PRINCIPAL RISK AND UNCERTAINTY

The risk of depressed stock and bond market values, and the impact on
revenue, has been and remains high. External economic, political and
geopolitical factors continue to influence markets in 2023. The risk is
mitigated through a wide asset offering which ensures we are not wholly
correlated with one market, and which enables clients to switch assets in
times of uncertainty. In particular, clients are able to switch into cash assets,
which remain on our platform supported by our top quartile interest rates. In
addition, our wrapper fees are not impacted by market volatility as they are
based on a fixed quarterly charge.

We can closely monitor and control expenses by continually driving efficiency
improvements in our business processes including increasing online and
digital processing. Strong investment platform service and sales and
marketing activity ensures we attract new advisers and clients. Sustaining
positive net inflows during turbulent times presents the potential for longer-
term profitability.

This value volatility is not expected to ease in the foreseeable future and
while hedging options have been explored, they have been deemed expensive
in terms of the revenue protection they afford.

Stock and bond market value volatility
(Market Risk) – our core business revenue is
derived from our platform business which has
a fee structure based, in large part, upon a
percentage of the FUD. Depressed equity and
bond values have an impact on the revenue
streams of the platform business.

Change over the year
Increase

Aligned to strategic financial objectives

Sustainable growth

Increase earnings

Generate cash

Retain strong balance sheet

Deliver on dividend policy

PRINCIPAL RISK AND UNCERTAINTY MANAGEMENT OF THE PRINCIPAL RISK AND UNCERTAINTY

Uncontrolled expense risk –
higher expenses than expected and
budgeted for would adversely impact
cash profits.

Change over the year
Increase

Aligned to strategic financial
objectives

Generate cash

Deliver on dividend policy

Capital strain (including liquidity)
– unexpected, additional capital or
liquidity requirements imposed by
regulators may negatively impact our
solvency coverage ratio.

Change over the year
Stable

Aligned to strategic financial
objectives

Retain strong balance sheet

Deliver on dividend policy

Credit risk – loss due to defaults
from holdings of cash and cash
equivalents, deposits, formal loans
and reinsurance treaties with banks
and financial institutions.

Change over the year
Stable

Aligned to strategic financial
objectives

Retain strong balance sheet

The risk has increased over the year as a direct result of sustained inflationary
pressures on the UK and global economy.

The most significant element of our expense base is employee costs. These are
controlled through modelling employee requirements against forecast business
volumes. The Group has made sustainable salary increases to employees over the year
and built out its capability in several key areas across all three lines of risk governance
to support the business.

Planned investment in IT and software development deliver enhancements to our
proprietary platform enabling us to implement enhanced straight through processing
of operational activities. A robust multi-year costing plan is produced which reflects
the strategic initiatives of the business. This captures planned investment expenditure
required to build our operational capability and cost-effective scalability of the business.
Cost base variance analysis is completed monthly with any expenditure that deviates
unexpectedly from plan being rigorously reviewed to assess the likely trend with
reforecasts completed accordingly.

Occupancy and utility costs have also increased. Regulatory fees decreased slightly
while professional fees have increased in line with expectations, as a result of the broad
regulatory agenda.

Also notable, and a growing issue, is that suppliers are wrestling with the requirements
of climate initiatives in terms of disclosures, and with unit costs for sustainable or green
energy and supplies likely to attract a premium as organisations stride toward a net
zero carbon footprint. Such costs are difficult to control directly and may unexpectedly
impact the base case budget.

We continuously monitor the current and expected future regulatory environment
and ensure that all regulatory obligations are or will be met. This provides a proactive
control to mitigate this risk. Additionally, we carry out an assessment of our capital
requirements, which includes assessing the regulatory capital required. We retain a
capital buffer over and above the regulatory minimum solvency capital requirements.

We await the detail of corporate tax changes resulting from the OECD Base Erosion and
Profit Shifting project relating to our Isle of Man life company, ILInt. We anticipate that
there will be a reduced level of retained income, which will impact the future coverage
levels of regulatory capital.

The Group seeks to invest its shareholder assets in high quality, highly liquid, short-
dated investments. For the banks holding corporate cash, maximum counterparty limits
are set in addition to minimum credit quality steps.

The Vertus loan scheme has an agreed commitment level and the value of the drawn
and undrawn balances are monitored regularly. Loans are made on approved business
cases.

Non-financial risks

PRINCIPAL RISK AND UNCERTAINTY

MANAGEMENT OF THE PRINCIPAL RISK AND UNCERTAINTY

The Risk Management Framework provides the monitoring mechanisms
to ensure that reputational damage controls operate effectively and
reputational risk is mitigated.

Mitigation includes a focus on internal operational risk controls, error
management and complaints handling processes as well as root cause
analysis investigations. Additionally, controls include training for key
company staff on how to manage company reputation internally; regular
management and monitoring of the company websites and social media;
and engaging the services of an external PR firm to consult on reputational
matters.

Political and Geopolitical risk cannot be directly mitigated by the Group.
However, by closely monitoring developments through its risk horizon
scanning process, potential impacts are taken into consideration as part of
the business planning process.

The external geopolitical environment in 2023 has built on 2022 and
become increasingly uncertain through a series of significant global events,
including the continuing Russian invasion of Ukraine, the escalating conflict
in the Middle East, trade tensions between USA and China, the global
energy crisis and supply chain issues. Furthermore, domestic political
instability exists within both the UK and the USA with elections due
within the next 24 months. These dynamics and related events can cause
disruption to markets and macroeconomics with a direct impact on FUD for
the Group.

Reputational risk – the risk that current and
potential clients’ and their advisers desire to do
business with the Group reduces due to a lower
perception in the marketplace of the Group’s
offered services covering the Transact platform
and T4A adviser support software.

Change over the year
Stable

Aligned to strategic financial objectives

Sustainable growth

Political and Geopolitical risk – the risk of
changes in the political landscape within the UK
and between countries or geographies, disrupting
the operations of the business or resulting in
significant development costs.

Change over the year
Increase

Aligned to strategic financial objectives

Sustainable growth

Invest

Increase earnings

Generate cash

Retain strong
balance sheet

Deliver on
dividend policy

The Group aims to minimise operational risks at all times, through a strong
and well-resourced control and operational structure. Note that operations
form an integral part of the ESG and sustainability agenda.

Operational risk (including operational
resilience and the sustainability agenda) – the
risk of loss arising from inadequate or failed
internal processes, people and systems, or from
external events.

In terms of our progress in this area, please see the TCFD section, which
details our progress to reduce the Group’s carbon emissions and enhance
our reporting on pages 23 to 44, and the Responsible Business section
on pages 45 to 52 to see how the Group is ensuring diversity, equity and
inclusion is actively embedded across all areas of the business.

We note below the principal types of operational risk below and provide the
change over the year for each.

Change over the year
Increase

Aligned to strategic financial objectives

Sustainable growth

Invest

Increase earnings

Generate cash

PRINCIPAL RISK AND UNCERTAINTY

MANAGEMENT OF THE PRINCIPAL RISK AND UNCERTAINTY

People – the inability to attract, retain and
motivate performing and values-aligned
employees within the business.

Significant attrition rates of such employees
or an inability to attract such new employees
can have a detrimental impact on the
service provided as well as poor adherence
to regulatory procedures and requirements
resulting in reputational damage and potential
compliance breaches.

Change over the year

Decrease

IT Infrastructure and software – ageing
and underinvested IT infrastructure and
software has the potential to cause the Group
disruption through systems outages, a failure
to plan and maintain operational capacity and
create vulnerabilities to operational resilience
and loss of a competitive market share as
newer technology emerges.

Change over the year
Stable

The business operates both performance management and talent recognition
programmes to reward high performing employee members, identify future
leaders, and retain and attract talent within the business.

We maintain a comprehensive career and training development programme
and provide a flexible working environment that meets our employees’
and business needs. These are supported by robust Group HR policies and
practices. Our benefits package is competitive.

No less than annually, the Group undertakes a staff engagement survey and
addresses any identified areas for improvement to drive high engagement.

Since the “great resignation” of 21/22 difficulties with the retention of
employees and the ability to attract new recruits in our UK and Australian
operations have significantly improved.

The continuous and evolving sophistication of the cyber threat to our IT
infrastructure environment means risk within this space remains high.

Wars and conflict contribute to a global technology environment that is
constantly under attack. Protecting our services against this continues to be
a core focus. We continue to carry out cyber penetration testing and evolve
our cyber security capabilities. Awareness training is provided to ensure
employees understand and recognise threats to our business systems.

Investment in IT and software development continues, with modernisation
of our digital workplace capabilities presenting opportunity for improved
security controls.

There is a full programme of digitalisation work to be delivered over the
business planning period for our proprietary investment platform, focussing
on the provision of online, straight through processes for common financial
planning practices, which will benefit our UK advisers and their clients. This
will also significantly increase the scalability of our investment platform.

Integration between adviser software applications is paramount, with data
access and synchronisation between systems being key requirements. Our
Application Programming Interfaces (APIs) are already integrated with many
third-party software providers, and we will continue to enhance our data
services to meet the demands of our clients in a secure manner.

PRINCIPAL RISK AND UNCERTAINTY

MANAGEMENT OF THE PRINCIPAL RISK AND UNCERTAINTY

Data and continuity of services are critical focus areas for us given the increase
of risk in channels like cybersecurity. Ensuring that our core services are
resilient and that our controls around business and client data are robust is a
constantly evolving focus area. Resilience testing of the Transact platform, for
example, takes place every two months.

In particular, the Group has a dedicated financial crime team and an on-going
fraud and cyber risk awareness programme. Additionally, the Group carries out
regular IT system vulnerability testing. The crisis management team (CMT)
reviews the Group’s business continuity plans during the course of the year.

Key changes in the last year are the establishment of dedicated first and second
line Cyber Security teams, the heads of which are due to start in early 2024.
This will provide an improved governance and operational framework for Cyber
Security.

Beyond IT and cyber security, the Company also has a function led by the
Company’s Data Protection Officer (DPO) to manage information security risk
and compliance with UK GDPR. The DPO carries out monitoring and works with
the business to ensure the risks from its evolving physical and digital workplace
and business operations are managed.

The Group has an established compliance function that analyses regulation
and advises on and monitors how our financial services regulatory standards
are met.

The financial services regulated entities in the group ensure regulatory
standards are met through a framework of policies, procedures, governance,
training, horizon scanning, monitoring and engagement with our regulators.

Cross-departmental projects are established to deliver for significant regulatory
changes, with Group internal audit undertaking reviews during the project
phases and/or post-implementation thematic reviews. During the period such
projects included preparation and implementation of the FCA’s Consumer Duty,
which requires ongoing work to ensure it is embedded within operations, and
work to meet FCA PS21/3 Operational Resilience requirements.

Meeting the regulatory agenda is an imperative for the operation of our core
platform business. The regulatory agenda remains challenging, particularly in
light of the demands of the new Consumer Duty.

IT Resilience and Information Security
- the Group creates, obtains, stores,
processes and retrieve significant volumes of
commercial and corporate matters, some of
which is highly sensitive.

Change over the year
Increase

Regulatory risk - the financial services
regulated entities within the Group have
a full and stretching regulatory agenda.
Expanding law, regulation and guidance need
analysing and transitioning effectively into
business as usual to avoid failing to comply
with regulatory rules or standards.

Change over the year
Increase

Emerging risk focus

Through regular conversations and
more formal quarterly risk review

Emerging risks discussed during
2023 have included:

The directors have carried out a
robust assessment of the principal

meetings with risk owners and other

business stakeholders, attending

industry events and reviewing external

sources, emerging risks are identified.

These emerging risks by their nature

have uncertainty of likelihood and

• Changing expectations of the UK

and Isle of Man regulators.

• Increasing regulatory scrutiny

or focus impacting our platform
business model.

and emerging risks facing the Group,

including those that would threaten its

business model, future performance,

solvency or liquidity. Details of

the results and conclusions of this

assessment can be found in the “Going

impact on the business. Emerging

• Shift in tax regime which may

Concern and Viability Statement”

section on pages 69 to 71.

risks are categorised as near- (next

12 months), medium- and longer-

term (more than 3 years) and are

regularly reported and assessed, both

at the executive level and, no less than

quarterly, at ARCs and boards where

appropriate.

alter the tax benefits of pensions
and ISAs including the abolition
of inheritance tax.

• The aging population of the UK,
the platform client base and
the advisers using our platform
and/or the CURO software and
the generational shift in wealth
to different generations with
differing preferences and needs.

GOING CONCERN AND VIABILIT Y STATEMENT

In accordance with the Code, the directors have assessed whether the Group

is considered a going concern over the following 12-month period, as well

as the prospects and viability of the Group over a period of three years.

Going concern

Viability

The Strategic Report sets out the Group’s business model, its strategic

The key factors affecting the Group’s

objectives and the associated risks, and the annual financial review on pages

viability and prospects are its market

53 to 59.

position and recurring revenue.

Going concern is assessed over the 12-month period from when the Annual

Market position

Report is approved, and the board has concluded that the Group has adequate

resources to continue in operational existence for the next 12 months. As

Market position can be assessed

detailed in the going concern disclosure in the financial statements in note 1,

as follows: independent research

this is supported by:

• The current financial position of the Group;

• Detailed cash flow and working capital projections; and

consistently rates Transact as the top

platform in the market (page 13);

and, the number of advisers using the

platform and the number of clients on

the platform both increased by 2%

during the year.

• Stress-testing of liquidity, profitability and regulatory capital, taking

account of possible adverse changes in the economic climate

The above measures all demonstrate

adviser and client satisfaction with the

When making this assessment, the board has taken into consideration both the

service provided.

Group’s current performance and the future outlook, including the impact of the

cost-of-living crisis, sustained levels of high inflation, increasing interest rates

Recurring revenue

and volatile equity markets. The environment has been challenging during the

year, but our financial and operational performance has been robust, and the

The absolute level of revenue is

Group’s fundamentals remain strong.

dependent on market values, but key

to the recurrence is the retention of

Having conducted detailed cash flow and working capital projections, and

FUD. The T4A business also has a

appropriate stress-testing on liquidity, profitability and regulatory capital; taking

level of recurring business through

account of the economic challenges mentioned above; the board is satisfied that

repeat and long-term contracts to

the Group is well-placed to manage its business risks. The board is also satisfied

provide the CURO service. Maintaining

that it will be able to operate within the regulatory capital limits imposed by

the recurring revenue base across

regulators, being the FCA, PRA, and IoM FSA.

these activities is achieved through

retaining client and advisers through

The board has concluded that the Group has adequate resources and there

our service delivery. 98% of revenue

are no material uncertainties to the Group’s ability to continue to operate for

is of recurring nature (page 54).

the foreseeable future, being a period of at least twelve months from the date
this Annual Report is approved. For this reason, they have adopted the going

concern basis for the preparation of the financial statements.

Our approach is to focus on organic

growth of FUD through positive net

flows to the platform. We aim to

generate growth in revenue, and

to control costs, to ensure that the

Group’s profit margin is resilient over

the medium term.

Assessment period and measures

It is the board’s view that a three-

The key scenarios considered for the financial year are as follows:

year time horizon is an appropriate

period over which to assess its

Cyber-attack

viability and prospects and to execute

its business plan. This assessment

A hacker exploits a loophole in security allowing them to gain network access

period is consistent with the Group’s

and extract data and information which is used for fraudulent purposes,

current business plan projections

attracting significant media attention as well as a requirement to pay

and the Internal Capital and Risk

compensation to clients and fines.

Assessment process (ICARA) and

Own Risk and Solvency Assessments

Undetected bug after system development

(ORSA) of the Group’s regulated

entities. Consideration is also given to

A bug introduced within a system release goes undetected for a period of time

projections beyond this period, though

which causes client trades to be executed incorrectly. This causes reputational

this does not form part of the formal

damage, and remediation plans require significant resource along with

assessment.

compensation payments to clients.

The strategy and business plan are

Persistent high inflation and continued market uncertainty

reviewed and discussed annually by

the board and updated as appropriate.

Continued market uncertainty and an extended period of high inflation results

It considers the Group’s profitability,

in a loss of confidence in capital and investment markets that has a detrimental

cash flows, capital requirements,

effect on revenues.

dividend payments, and other key

variables such as liquidity and the

Supplier failures cause a severe impact to Transact’s service standards

solvency requirements of the regulated

entities. These are considered under

Multiple suppliers cause Transact to be unable to fulfil its contractual obligations

stress and scenario tests, to ensure

to clients and the business is therefore overwhelmed by queries, exacerbated

the business has sufficient flexibility to

by an outage of communication systems. This causes reputational damage,

withstand such impacts by adjusting

and remediation plans require significant resources along with compensation

its plans within the normal course of

payments to clients.

business.

Unforeseen customer harms as a result of a systemic process failure

The stress and scenario tests applied

are severe, yet plausible, at both an

Failure by our UK regulated entities to appropriately identify, implement or

individual and combined level. We

embrace appropriate conduct standards, which causes consumer harm. This

recognise the importance that climate

causes reputational damage, as well as a requirement to pay compensation to

change may have on our business and

clients and fines.

our approach for the current financial

year towards climate related scenarios
is set out in our TCFD disclosures on

Policyholder protection scheme levy event

pages 23 to 44.

An Isle of Man-authorized life company becomes insolvent, triggering

arrangements under the Life Assurance (Compensation of Policyholders)

Regulations 1991. ILInt makes the decision to pass through the levy to

policyholders to avoid becoming insolvent itself. A large number of policyholders

surrender their policies to avoid payment of the levy, and ILInt is therefore

required to top up the amount due. As a result, management determines that

ILInt is no longer viable.

To illustrate the severity of the scenarios modelled, the following table sets out

some of the key changes in parameters made in the scenarios. The most severe

scenarios modelled assumed a number of these changes occurred within the

same scenario during the business planning period.

ASSUMPTIONS UNDERLYING THE STRESS SCENAR IOS

RISK FACTOR

STRESS APPLIED TO BASE CASE ASSUMPTION

Market downturn

A market fall of 33% over a one month period.

Mass lapse

30% drop in the number of clients over three months.

Increase in outflows

65% increase in outflow rates for up to twelve months.

Decrease in inflows

30% decrease in inflow rates for twelve months.

One-off spikes in operating costs

Up to £12.0m one-off spike in operating costs depending on the underlying
stress scenario.

Expense increase

Expense increase over business planning period 10%.

The results of the above stress and scenario tests led to the following

conclusions:

• Under a range of stressed scenarios, no expected profit or liquidity issues

are expected to arise in the Group over the three-year business planning

period and beyond;

• Each of the regulated entities has sufficient available capital to cover its

regulatory solvency requirements, and this is expected to continue over the

three-year business planning period and beyond; and

• Under a range of stressed scenarios, the entities are still able to meet their

capital and liquidity requirements over the three-year business planning

period and beyond.

The directors’ assessment has been made with consideration and reference

to: the Group’s current position and three year business plan; the Group’s risk

appetite; the Group’s financial projections; and, the Group’s principal risks and
uncertainties, including uncertainty caused by the economic climate globally and

in the UK as well as the geopolitical uncertainty.

In accordance with the Code, the directors have assessed the Group’s prospects

by reference to the three-year planning period to September 2026. The directors

have a reasonable expectation that the Group will continue to meet its liabilities

as they fall due, and that it will be able to operate within the regulatory capital

limits imposed by the regulators over the period of this assessment and beyond.

NON-FINANCIAL INFORMATION STATEMENT

The Strategic Report includes non-financial information required in accordance

with section 414CB of the Companies Act 2006. The most directly relevant non-

financial information is signposted below; however, the Strategic Report does

touch on these topics briefly in other sections:

S414CB REQUIREMENT

RELEVANT STRATEGIC REPORT SECTION

Environmental matters

Employees

Taskforce on Climate-Related Financial Disclosures (TCFD)
Statement, pages 23 to 44

Responsible Business – Our People, pages 45 to 52, Nomination
Committee Report, pages 107 to 112

Social and community

Responsible Business – Our People, pages 45 to 52

Human rights

Responsible Business – Our People, page 52

Anti-bribery and corruption

Responsible Business – Our People, page 51

Business model

Strategy and Business Model, pages 13 to 15

Principal risks and how they are managed

Risk and Risk Management, pages 60 to 68

Non-financial key performance indicators

Strategy and Business Model, pages 13 to 15, Key Financial
Performance Indicators, pages 20 to 22

Approval of the Strategic Report

A statutory requirement of the Annual Report is that the directors produce a

Strategic Report.

Section 172 of the Companies Act states that the purpose of the report is to

inform members of the Company and help them assess how the directors have

performed their duty. To fulfil this, directors must act in a way they consider, in

good faith, would be most likely to “promote the success of the Company for the

benefit of its members as a whole”.

The Strategic Report should provide shareholders with a comprehensive and

balanced overview of the Group’s business model, strategy, development,

performance, position and future prospects. The Strategic Report should be

clear, concise and unambiguous, and should demonstrate how the Company

has considered the interest of employees, and the impact of the Company’s

operations on the community and environment.

The directors believe that the Strategic Report on pages 2 to 72 meets all

relevant statutory objectives and requirements.

By order of the board,

Helen Wakeford

Company Secretary

13 December 2023

CORPOR ATE
GOVERNANCE
REPORT

INTRODUCTION

On behalf of the board, I am pleased to present the report setting out the

Group’s corporate governance arrangements, which reflect the standards

required by the 2018 UK Corporate Governance Code (the ‘Code’).

The Group’s purpose is to enable clients to easily manage their financial plans

with the help of their financial advisers though the provision of high-quality

financial software and customer service. Proportionate and effective governance

facilitates the Group in the overall delivery of that purpose whilst providing

assurance and accountability to all our stakeholders that their interests are

paramount.

We continue to abide by the overriding principles of the 2018 Code which are

designed to:

• Promote the long-term sustainable success of the Company, generating

value for shareholders and contributing to wider society. Further details

relating to this are set out in the long-term consequences of decisions

section in the Companies Act Section 172 statement, on page 87;

• Provide suitable opportunity for employee engagement in the business.

Further details relating to this are set out in the interests of the Group’s

employees section in the Companies Act Section 172 statement, on

page 87;

• Assist the effective review and monitoring of the Group’s activities;

• Help identify and mitigate significant risks to the Group, as set out in our

Risk Report on pages 60 to 68; and

• Provide the necessary disclosures to stakeholders to make a meaningful

analysis of the Group’s business activities and its financial position.

To enable easy navigation our governance report has been structured to reflect

the composition of the Code. Where there are links to the content in our

strategic report, these are highlighted for the reader.

1. Board Leadership and Company Purpose

2. Division of Responsibilities and the Role of the Board

3. Board Composition, Succession and Evaluation

4. Audit Risk and Internal Control

5. Remuneration

Statement of compliance

The Code sets out the principles and provisions relating to good

governance of UK listed companies and can be found on the Financial

Reporting Council’s (FRC) website at www.frc.org.uk.

The Company has, throughout the year ended 30 September 2023, applied
the principles, and complied with the provisions, of the Code except in
relation to the following:

Provision 36: The Company’s remuneration structure has adopted a

vesting period for deferred bonus shares of three years, rather than

the Code’s recommended five years. Minimum shareholding and post-

employment shareholdings requirements are in place for executive

directors as recommended by the Code. The Company believes that the

executive directors are sufficiently invested in the Company’s long-term

success and that further restrictions are not currently required. We will

however keep this under review.

Provision 38: The Company’s remuneration policy allows all employees,

including executive directors, the option annually to have a portion of

their cash bonus paid as a contribution into their pension. This does not

comply with the Code’s requirement for directors that only basic salary

should be pensionable. However, none of the executive directors currently

take advantage of this provision in the remuneration policy. The Company

plans to review the policy on pension sacrifice for the directors in the next

iteration of the remuneration policy.

Richard Cranfield

Chair

13 December 2023

BOARD LEADERSHIP AND COMPANY PURPOSE

BOARD OF DIRECTORS

Richard Cranfield, Non-Executive Chair

Appointed to the board:

26 June 2019

Skills and expertise:

Richard is a qualified (no longer practicing) Solicitor and has an MA in Economics

and Law from Cambridge University. His previous experience includes working

for Allen & Overy LLP (and its predecessor firm) between 1978 and 2022, being

a partner from 1985 to 2021.

External appointments:

• Henderson High Income Trust Plc – Director, 2020 to present

Alexander Scott, Chief Executive Officer

Appointed to the board:

11 February 2014

Skills and expertise:

Alexander joined the Group as Actuary and Head of Group Technical Operations

in October 2009. From November 2010 he was Chief Financial Officer and Head of

Risk, becoming a director in July 2011. Alexander became Chief Executive Officer

in March 2020.

Alexander has a BSc in Actuarial Science from City University and is a Fellow

of the Institute of Actuaries. Alexander has spent thirty years in the insurance

market, quantifying and assessing risk and has held the Chief Risk Officer

function for both investment and insurance companies as well as holding the

Chief Actuary function. His previous experience includes various roles at Criterion

Assurance Group, including: Non-Executive Director (2003-2010); Director (1999-

2003); and Actuary (1997-1999), and Life Director and Chief Actuary at Sterling

Insurance Group between 2004 and 2009.

Jonathan Gunby, Executive Director

Appointed to the board:

2 March 2020

Skills and expertise:

Jonathan joined the Group in 2011 as Chief Development Officer and was

appointed to the board of Integrafin Financial Arrangements Limited (Transact) in

2018. He became an Executive Director of IHP in March 2020 and Chief Executive

Officer of Transact.

Jonathan has a BA in Business Studies from De Montfort University, Leicester,

and is a Fellow of the Chartered Institute of Marketing. He held senior marketing

roles at Royal Insurance Group across Life, Pensions and Fund Management and

at National and Provincial (N&P) Building Society. He served as a director in N&P’s

life assurance business, a joint venture with Aviva. Jonathan started a consulting

firm which, in 1999, was moved into NMG Holdings where Jonathan remained as

an Executive Director until 2011.

Audit and Risk Committee

Nomination Committee

Remuneration Committee

Michael Howard, Executive Director

Appointed to the board:

11 February 2014

Skills and expertise:

Michael co-founded the Group in 1999, was Executive Chair of the Group from

2001 until stepping down in October 2017 and becoming an Executive Director.

He founded ObjectMastery in Australia in April 1992, which developed the

software which underpinned the creation and development of the Transact

platform.

Michael holds a BA in Economics from York University and is qualified as a

chartered accountant. His previous experience includes working for Touche

Ross in the audit division in London (1980-1984) and Melbourne (1984-1986)

and working for Norwich Union Life Insurance, where he was responsible for

marketing and administration of investment funds including the launch of the

platform Navigator in 1990.

Caroline Banszky, Independent Non-Executive Director

Appointed to the board:

22 August 2018

Skills and expertise:

Caroline is a qualified Chartered Accountant, having originally trained at what

is now KPMG. Her previous experience includes being Chief Executive of The

Law Debenture Corporation plc between 2002 and 2016, COO of SVB Holdings

PLC (now Novae Group plc) between 1997 and 2022 and Finance Director of

N M Rothschild & Sons Limited between 1995 and 1997.

External appointments:

• Gore Street Energy Storage Fund plc - Chair of Audit Committee, 2018 to

present

• Benefact Trust Limited– Director and Trustee, 2018 to present

• The Open University - Member of the Investment Committee, 2016 to present

• 3i Group plc – Chair of Audit and Compliance Committee, 2014 to 2023

Victoria Cochrane, Senior Independent Non-Executive
Director and Designated Non-Executive Director for
Environmental and Social Sustainability

Appointed to the board:

28 September 2018

Skills and expertise:

Victoria is a qualified (non-practicing) Solicitor, with over twenty years’

experience as General Counsel and held various executive roles with Ernst

& Young between 2006 and 2013, including Global Head of Risk, where

she created the global enterprise risk management framework. Victoria’s

previous roles include: Non-Executive Director of Perpetual Income and

Growth Investment Trust plc between 2015 and 2020; Non-Executive Director

of Gloucester Insurance Limited between 2008 and 2013; Senior Adviser at

Bowater Industries Limited between 2014 and 2015; and Non-Executive Director

at HM Courts and Tribunal Service from 2014 to 2023.

External appointments:

• Ninety one plc – Chair of the Audit and Risk Committee, 2019 to present

• Euroclear Bank SA/NV – Non-Executive Director, 2016 to present

• CBI – Senior Independent Director and Audit and Risk Committee and

Nominations Committee Chair, 2023 to present

Rita Dhut, Independent Non-Executive Director and
Designated Non-Executive Director for Employee Engagement

Appointed to the board:

22 September 2021

Skills and expertise:

Rita has a BSc in Business Studies from City University. Her previous

experience includes: various positions at Aviva Investors between 2001 and

2012, including Head of European Equities and Head of Pan-European Equity

Value Investing; and various positions at M&G between 1994 and 2000,

including Director of European Equities.

External appointments:

• Financial Times Foundation for Financial Literacy – Founder Trustee and

Non-Executive Director, 2021 to present

• JP Morgan European Investment Trust Plc – Non-Executive Director, 2019

to present and Chair from 2022 to present

• Ashoka India Equity Investment Trust Plc – Non-Executive Director, 2018

to present

Robert Lister, Independent Non-Executive Director

Appointed to the board:

26 June 2019

Skills and expertise:

Robert has a BA in Classics from Oxford University. His previous experience

includes: Non-Executive Director of Credit Suisse Asset Management (UK)

Limited, between 2012 and 2022; Director of Aberdeen Smaller Companies

Income Trust PLC, between 2012 and 2022, Non-Executive Director of Investec

Wealth and Investment Limited between 2010 and 2020; Director of Rensburg

Sheppards PLC, between 2008 and 2010, as well as working for Dresdner

Kleinwort Wasserstein between 1998 and 2008 and Barclays de Zoete Wedd

between 1983 and 1998.

External appointments:

• Cavendish Financial – Director, 2021 to present

• The Salvation Army International Trustee Company – Director, 2016 to present

Christopher Munro, Independent Non-Executive Director

Appointed to the board:

1 February 2017

Skills and expertise:

Christopher is a qualified Chartered Accountant and has an LLB from Edinburgh

University. Christopher’s previous experience includes being Founding Partner

of London and Continental Partners LLP from 2016 to 2021, Director of Pacific

Capital Partners from 2004 to 2021, Director of Jupiter Enhanced Income Trust

from 1996 to 2009, CEO of River & Mercantile Investment Management from

1994 to 1996, Director of Robert Fleming Holdings Limited between 1988 and

1994 and Director of Jardine Fleming Holdings between 1983 and 1986.

All directors were in office throughout the financial year up to the date of the report.

S.172 STATEMENT

S.172 of the Companies Act (“the

Board leadership and Company purpose

Act”) requires each director to act in

the way they consider, in good faith,

Our purpose, values and strategy are set out on pages 13 to 15 and describe

would be most likely to promote

the Company’s focus. The board’s focus is to ensure that the Group delivers

the success of the Company for

long-term sustainable value for all stakeholders.

the benefit of its members as a

whole, and in doing so have regard

To deliver this the board oversees the maintenance of a sound system of

(amongst other matters) to:

internal controls and continually reviews the overall effectiveness of the Group’s

(a) the likely consequences of any

risk management systems.

decision in the long term,

The board also oversees the Group’s culture to ensure it is aligned with the

(b) the interests of the Company's

employees,

Measuring performance against strategic objectives

Company’s purpose, values and strategy.

Performance against the Company’s strategy, objectives, business plans and

Company's business relationships

budgets is considered at each board meeting. Working in co-ordination with

with suppliers, customers and

the Audit and Risk Committee the board maintains oversight of the Company’s

others,

operations and ensures the Company fulfils its business objectives.

(d) the impact of the Company's

Considering stakeholders

operations on the community and

the environment,

The board’s role in promoting the long-term success of the Group requires

consideration of the balance of interests between all stakeholders – those

(e) the desirability of the Company

being our clients and advisers, employees, regulators, shareholders, suppliers,

maintaining a reputation for high

and the community. Details of how the board has delivered its responsibilities

standards of business conduct, and

under s.172(1) of the Act during the financial year are outlined on pages 87

to 90. In addition, our s.172 statement outlines how the board has considered

(f) the need to act fairly as

stakeholders in its principal decision-making processes.

between members of the Company.

The following table supports our s.172 statement by setting out how we have

engaged and considered our key stakeholders during the year, the outcomes

and any highlights of such efforts.

Engaging with our stakeholders – what we did in the year

OUR
STAKEHOLDER

HOW WE ENGAGE AND CONSIDER
OUR STAKEHOLDERS

Our clients
and advisers

Transact

OUTCOMES AND HIGHLIGHTS

Transact

• Speaking/presenting to advisers and

paraplanners at ‘Connect day’ and regional
‘breakfast briefing’ events across the UK.

• Comprehensively reviewed our products and
pricing to ensure full compliance with the
requirements of Consumer Duty.

• Engaging with advisers and paraplanners
at annual Personal Finance Society and
Chartered Institute for Securities and
Investment events and other conferences
during the year.

• Implemented new controls and

communication systems to ensure that
clients and advisers are kept fully apprised
of changes to their portfolio/assets,
especially pertaining to fees and risk.

• Distribution of annual client and adviser
surveys to gain feedback on common
development requests from clients and
advisers, in an effort to tailor and enhance
our services and functionality.

• Liaising and coordinating with our user

firms as part of our Account Management
Programme to gain feedback on how best
we can develop our proposition for use by
user firms and their end clients.

• Increased the flow of information between
Transact and the manufacturers of other
financial services products, largely fund
managers, fulfilling our requirements as
distributor to have oversight of whether
products are providing the end client value
for money and meeting intended outcomes.

• Following feedback from clients, advisers
and firms we have made changes to our
offering including:

• Monthly newsletter to adviser firms to
provide updates and support on our
platform offering.

T4A

◦ e-signature capability with multiple

providers

◦

Increased security authentication via two-
step verification

• High-touch, pre-commitment engagement

◦ New online ‘transfer tracker’ has been

with prospective clients to ensure
suitability between our software capability
and the needs of the firm.

• Implementation consultants ensure that all
aspects of service delivery are planned and
delivered to clients until handed over to an
appointed account manager.

• Proactive engagement with clients and
online training sessions to increase
understanding and use of technology
and to ensure best customer service is
provided.

• T4A has engaged an independent third-

party to facilitate and chair quarterly user
groups to seek client feedback.

introduced

◦ The launch of our BlackRock-backed

Model Portfolio Service

◦ Comprehensive ‘Investor Reports’ that

can be sent by the adviser to the client in
the ‘Pick-Up-Page

T4A

• Client feedback helps T4A to continually
improve the training and information it
provides to clievnts on the full range of
functionality that CURO can provide.

• Clients are supported to customise specific
elements of CURO software to best support
the processes and services of the particular
adviser firms.

• Client influence on Product Providers and

Platforms also helps drive up the availability
of data feeds from these external parties
such as valuations.

OUR
STAKEHOLDER

HOW WE ENGAGE AND CONSIDER
OUR STAKEHOLDERS

OUTCOMES AND HIGHLIGHTS

Employees

• Employee engagement and pulse surveys.

• IHP has moved up to 11th place in the

• A ‘People Platform’ was implemented for the

London and Isle of Man offices.

FTSE Women Leaders report for FTSE 250
companies, which recognises our diverse
workplace.

• At IAD, team leader/project lead meetings

• The Training and Development function

and all-employee sessions are held
fortnightly.

• The DNED for Employee Engagement, in

conjunction with the Head of HR, facilitates
quarterly employee forums.

was reviewed, with further resource being
agreed, to help support the overall HR and
training/development strategies for the UK/
Isle of Man offices.

• Maternity and paternity pay was enhanced.

• Multiple in-person town halls led by

• A Menopause Support Policy has been

executive directors showcasing Group
performance and a business update.

approved and we have appointed a staff-
volunteered Menopause Champion.

• ‘Manager Converse’ sessions with the NEDs
are held during the year to give the NEDs
a deeper understanding of the Group and
generate interaction with managers beyond
the executive.

• Monthly Transact newsletters and bi-annual
Group CEO email updates are distributed to
employees.

• ISL has received London Living Wage

accreditation and IAD UK has now applied
for it as well.

• We are continuing to develop our Diversity

and Inclusion Strategy, policy and
framework for the Group.

• Employee participation in the 2023

employee survey was 60% and feedback
indicated satisfaction with communication
of company objectives and manager
investment in employee wellbeing.
Improvements to internal communications
was highlighted as an area for development.

• All managers were required to complete a

mental health training session.

• The London office held various initiatives to
promote ‘Mental Health Awareness Week’,
including providing healthy breakfasts,
offering staff to attend externally facilitated
mental health seminars, and a charity
raffle collecting donations to support MIND
charity.

OUR
STAKEHOLDER

HOW WE ENGAGE AND CONSIDER
OUR STAKEHOLDERS

OUTCOMES AND HIGHLIGHTS

Regulators

• The IHP CEO provided regular updates at
the IHP board and IHP ARC meetings on
topics either discussed with, or that are
important to, the regulators during the year
including Consumer Duty, IT infrastructure,
best execution, diversity and inclusion, and
non-standard assets.

• The boards and ARCs of IFAL and ILUK
are regularly briefed on regulatory
developments and expectations.

• All staff completed a Consumer Duty
training module in May 2023. All UK
executives and NEDs have received
multiple Consumer Duty training sessions
in preparation of the Consumer Duty
regulation coming into force.

• We have interacted proactively with the
relevant regulators when planning and
executing decisions affecting the boards of
the Group and companies within the Group

• The ILInt board and ARC are regularly

briefed on regulatory developments and
expectations.

• NEDs participated in, and contributed to, a
session on the development of the Group’s
climate change strategy.

• IHP’s remuneration committee, whose remit
covers the Group, is also regularly informed
of relevant regulatory developments and
expectations.

• In January 2023, the PRA updated its

supervisory priorities for ILUK and other life
insurers and the compliance team is keeping
these under review.

• In February 2023, both ILUK and IFAL (and
their peers) received letters from the FCA
setting out priorities for implementing the
Consumer Duty. The Consumer Duty team
undertook a gap analysis and made slight
adjustments to the project plan where
considered necessary.

• The boards of IFAL and ILUK receive

updates in relation to specific matters, such
as areas of interest to the FCA and PRA
including operational resilience; climate
change and diversity and inclusion.

• The ILInt board receives updates on IoM

FSA initiatives.

• The ILInt managing director and compliance
team maintains contact with the FSA and
the IFAL and ILUK’s compliance team
maintains regular contact with the FCA
and the PRA on behalf of IFAL and ILUK,
to ensure awareness of their respective
concerns, expectations and priorities.

• The IFAL and ILUK compliance team actively

participates in the UK Platforms Group,
which engages with the FCA.

◦

ILInt’s managing director sits on the
executive committee of the Isle of Man
Insurance Association which meets
quarterly with the FSA.

OUR
STAKEHOLDER

HOW WE ENGAGE AND CONSIDER
OUR STAKEHOLDERS

OUTCOMES AND HIGHLIGHTS

Shareholders

• Institutional shareholder

roadshows hosted by the CEO
for half-year and year-end
results.

• Extensive meetings have been held by IHP’s CEO with
major shareholders to explain the Group’s strategy,
financial plans, and operational enhancements.

• Ad hoc meetings with

investors after key information
updated to the market.

governance teams at major institutional investors to
share thoughts on a range of topics including ESG,
succession planning and remuneration.

• The Chair and Company Secretary met with the

• In-person Annual General
Meeting at our London
headquarters with the Chair
and all NEDs in attendance
to take questions from
shareholders.

• Proactive consultation by
the Board’s Chair, and the
Company Secretary with
major shareholders on various
governance matters, with 17
meetings held during the year.

• Board members receive a

quarterly Investor Relations
report.

• CEO and Head of Investor
Relations provide updates
at each board meeting on
investor engagement and
market movements.

• Ad hoc briefings to the board

on shareholder feedback

• We have engaged directly with MSCI ESG rating agency

(which provides guidance to institutional shareholders on
ESG data compliance) in order to enhance IHP’s rating
(now increased to BB), and to understand how we can
gain a higher score going forward.

• Feedback from shareholders has, in part, contributed to

the following outcomes:

◦ We have recruited a Group Chief Financial Officer who

is expected to take up the role in early 2024;

◦ We are reviewing executive and senior management

reward to ensure that their incentives are based upon
our four anchors and focused towards sustainable
growth of the Group over the long-term;

◦ We have enhanced IHP’s website information and

disclosures; and

◦ We have compiled (in-house) HY and FY Company

consensus reporting to ensure there is more
information available for sell-side analysts to use for
their estimates for IHP Group performance.

• We have enhanced our FY22 and HY23 reporting
presentations to analysts and investors given by
IHP’s CEO and IFAL’s CEO, by using an external
media company for producing and recording the live
presentation.

• IHP’s CEO and Head of Investor Relations have attended

various investor conferences.

• We have delivered a programme of IR video meetings with

potential investors in the US, UK and rest of Europe.

OUR
STAKEHOLDER

HOW WE ENGAGE AND CONSIDER
OUR STAKEHOLDERS

OUTCOMES AND HIGHLIGHTS

Suppliers

• We do not seek to disadvantage, or

• We endeavour to pay all suppliers within

compromise, suppliers with whom we
conduct business, in line with one of our
core principles of ethical behaviour.

• We have refocused our efforts on supplier
management as we continue to enhance
our due diligence with regard to cyber-
security and business resilience. As we
evolve our ESG strategy, we will collaborate
with our suppliers in order to achieve our
ESG goals.

• We remain focused on the correct

onboarding of all new suppliers ensuring
correct due diligence and contract reviews
are carried out. This is managed by our
dedicated supplier management manager.

• Information is shared with management

and board committees where appropriate,
in order to provide assurance regarding
supplier selection and management.

agreed payment terms.

• We work with suppliers to ensure no

modern slavery or enforced labour exists
in the supply chain. We include specific
clauses in supplier contracts that their
employees must be paid National Minimum
Wage.

• We undertake health checks on suppliers

highlighting areas that need more
information or where specific information
is missing, giving the business full
transparency of all suppliers.

• We require annual cyber attestations to be
completed by our significant and material
suppliers.

• We continue to focus on our Business
Continuity Plan and developing clear
exit strategies for material outsourcing
suppliers and significant suppliers.

OUR
STAKEHOLDER

HOW WE ENGAGE AND CONSIDER
OUR STAKEHOLDERS

OUTCOMES AND HIGHLIGHTS

Communities

• We provide staff with an opportunity
to be involved in company-led charity
initiatives and consider feedback on charity
suggestions when they are submitted to
the People Platform.

• The DNED for Environmental and Social

Sustainability is supporting the board and
management in developing the Group’s
social strategy.

• Annual Christmas initiative: all London

and Isle of Man employees given £10 each
to donate to one of five selected charities.

• Transact sponsored event to raise money

for Ukrainian refugees and

• Disaster Emergency Committee (DEC):
Turkey-Syria Earthquake Appeal, the
Company matched employee donations,
resulting in £10,596 being donated to
the DEC.

• Company matched employee donations
to MIND Charity during Mental Health
Awareness Week.

SECTION 172(1) STATEMENT

Understanding the views and

Long-term consequences of decisions

interests of our stakeholders helps

the Group make responsible and

IHP Group’s strategic objectives are stated on page 16 to 19. The Group’s

balanced decisions. In doing so, we

implementation of its strategy and our assessment of forward-looking risks

aim to generate long-term value

affecting its delivery in the future are set out within the strategic objectives. The

for the Company’s shareholders

directors make strategic decisions on future direction, investment and stakeholder

whilst contributing to wider society

value based on the clear, sustainable, long-term objectives.

by building strong and lasting

relationships with our other key

By successfully achieving strategic objectives, which result in the ongoing and

stakeholders. For our key stakeholders,

increased success of the offering, the directors are able to take decisions which

see those listed on page 80.

share the Group’s success with its key stakeholders.

You can read more about how we

Interests of our employees

engage with and consider the needs of

our key stakeholders on pages 81 to

We value our people. They are the core of our high-quality service delivery to our

86 of the Governance Report.

clients and advisers, so our employees’ well-being is paramount to the business’s

long-term sustainable success. Details on employee well-being and the culture

of the Group are outlined in the Responsible Business section on page 45. In

addition, the Directors’ Remuneration Report on page 113 sets out the Group’s

approach to remuneration which is intended to ensure equitable remuneration

across the Group and which improves value for employees.

Fostering business relationships

The Group’s business model and strategic objectives are set out on pages 16 to

19 and make clear the focus of the business on delivering high-quality service

to clients and advisers through investment in infrastructure and employees.

An integral part of our service offering is the provision of regular relationship

management to clients and advisers as they are our target market.

Fostering good relationships with our suppliers is an important factor in ensuring

we can continue to service our clients and advisers effectively. To help embed

good supplier management processes, we engage regularly with our suppliers and

ensure ongoing relationship management throughout the term of engagement.

We also ensure suppliers are paid within payment terms and do not seek to

disadvantage or compromise suppliers with whom we do business.

Impact on the community and the environment

The directors recognise that we have both a corporate and ethical responsibility

to minimise the impact of the Group’s business conduct on the environment and

community; this is considered during any principal decision-making processes by

the board.

The TCFD section on page 23 and the Responsible Business section on page

45 set out the impact of our operations on the environment and outline our

community activities that occurred during the year.

High standards of business conduct

The directors recognise that our service is only as good as the technology and

people behind it and that the Group’s reputation is built on high standards of

business conduct which must be maintained in order for the business to thrive

and grow. The board supports the CEO in embedding a culture that encourages

employees to act with integrity and to ‘do the right thing’, in line with the Group’s

values.

The Group maintains a number of policies governing employee conduct. These

are covered in detail in the People section on page 45.

The directors also recognise that as the business is regulated by three separate

regulators, as detailed on page 69, maintaining strong, open and productive

relationships with the respective regulators is also business critical.

Acting fairly between shareholders

All shareholders are treated equally, with information being made available to all

shareholders in a consistent manner. The board, supported by the Chair and CEO,

actively engages with the Group’s largest shareholders regularly and feedback

received is shared with the entire board.

PRINCIPAL DECISIONS AND CONSIDER ATIONS OF
STAKEHOLDER INTERESTS

The table below summarises how the board and the wider Group have had regard to

the duties under Section 172(1) when considering specific matters during the year.

PRINCIPAL
DECISION

STAKEHOLDERS
IMPACTED

OUR CONSIDERATIONS

Price reductions
for the Transact
Platform

Clients

Advisers

Shareholders

Regulators

Reframe of
workforce
compensation
and benefits

Employees

Communities

In December 2022, the IHP board considered the impact of price
reductions approved by IFAL, ILUK and ILInt for Transact, furthering
the simplification of our fee model and increasing transparency
and accessibility. As part of this process, the impacts on company
profitability and, therefore, shareholder value, were assessed. This
decision was in line with the Group’s strategic objectives to benefit
advisers and clients by reducing cost to client. The simplification is also
expected to attract new flows to Transact as the new model promotes
the accessibility of financial products to a wider community, which
ultimately supports the long-term sustainability of the business.

A capital and liquidity risk assessment was undertaken to ensure the
Group’s regulated entities continue to have sufficient capital to cover
their respective solvency risk appetites.

In 2022, employees were consulted on their views of their work
environment and reward structure.

As a result of the feedback received the structure of reward for London-
and Isle of Man-based employees was restructured to enable greater
flexibility in the variable reward to facilitate recognition of exceptional
performance.

The Company also responded to feedback on the shape of our family
friendly benefits by enhancing maternity, paternity and adoption pay.

More information is provided in the people section and the remuneration
section of this report.

Appointment
of CFO

Clients

Advisers

Shareholders

Employees

Regulators

During FY22, the board determined that the Group would benefit
from the addition of a CFO. The appointment will facilitate the greater
diversity of thought at executive level and at the board and will
reinforce the skills amongst the management team, providing additional
and valuable support to the CEO. This move was partially in response to
feedback from stakeholders and the reception of the decision from the
relevant groups has been positive.

THE ROLE OF THE BOARD AND ITS RESPONSIBILITIES

The role of the board

Key board activities during

the year

The board recognises the importance

of a clear division of responsibilities

between executive and non-executive

roles and, in particular, a clear

delineation of the Chair’s responsibility

to run the board and the CEO’s

responsibility for running the Group’s

business. The roles of Chair, CEO and

Senior Independent Director (SID)
are clearly defined and have been

approved by the board. The allocation

and division of responsibilities is

available on our website here: https://

www.integrafin.co.uk/corporate-

governance/.

Matters reserved for the board

The board is the main decision

making and review body for the

Company. It determines the overall

strategic direction of the Company

and is responsible for the overall

management of the Company and the

business operations for its subsidiaries.

The board’s remit is documented in

its terms of reference which include

details of matters reserved for the

board and matters delegated by

the board. The terms of reference

are reviewed and updated annually.

Matters which are reserved for

the board include strategy and

management, structure and capital,

financial reporting and controls,

internal controls, material contracts,

communication, board membership
and appointments, remuneration and

corporate governance matters. The

Business performance and
strategy

• Consider current and future

business initiatives

• Discuss Group strategy

including review of business
plans and pricing strategy

• Monitor Group performance

against strategy

• Review Transact, T4A and wider
industry market performance
updates

• Review quarterly investor

relations updates including
analyses of Company share
price performance

• Receive updates on and discuss
IT infrastructure and systems
and IT strategy

Finance and reporting

• Review quarterly and half-year

results

• Monitor performance and

capital position

board determines which matters are

• Approve annual report and

delegated to committees of the board

financial statements

and the management team.

• Approve two interim dividends

• Review HMRC VAT decision and

approve subsequent action

• Review Group tax strategy

• Review and monitor business

plans and projections, including
ongoing review of business
performance and comparison
to market consensus on
business performance

Risk management controls

• Review quarterly risk reports

• Approve Group’s Risk

Appetite Framework and Risk
Management Policy

• Receive cyber security and
Consumer Duty training

Sustainability and stakeholder
engagement

• Deep dive sessions on

environmental, social and
employee engagement
strategies

• Review Board Diversity Policy

• Receive HR updates including

monitoring culture and
employee survey feedback

• Review shareholder feedback
from engagement sessions
with Chair, SID, Remuneration
Committee Chair and Company
Secretary

Governance

• Review board evaluation

results and progress of prior
year’s evaluation actions

• Review board and management

succession plans

• Receive board committee

updates

• Approve AGM documentation

• Approve Modern Slavery

Statement

• Review and approve changes to

various Group policies

Independence and time commitment

Conflicts of interest

All of the NEDs are considered to be independent and the Chair was considered

The Company’s Articles of Association

to be independent on being appointed to the role. There are a number of ways

permit the board to consider and

in which the independence of NEDs is safeguarded and in which their time

authorise situations where a director

commitments are considered:

has an actual, or potential, conflict

of interest in relation to the Group.

• Meetings between the Chair and NEDs without management present occur

The Company maintains a conflicts

regularly;

• The SID meets at least annually with each NED to discuss feedback on the

Chair’s performance;

of interest register, which is reviewed

annually by the NomCo and the board.

In addition, prior to each board

meeting, the directors are asked to

• NEDs’ tenure on the board is reviewed annually by the Nomination

declare any conflicts they may have

Committee (NomCo) as part of board succession planning;

with regard to the business meeting.

Directors who declare a conflict of

• Any external commitments must be disclosed to the board as and when they

interest may be authorised by the rest

arise for consideration and approval before accepting; and

of the board to participate in decision

making in accordance with section 175

• When making new director appointments, the board takes into account other

of the Companies Act 2006.

demands on directors’ time.

The board considers and, if

The board has reviewed the other commitments of the NEDs and concluded it is

appropriate, authorises any conflicts

satisfied that each NED remains able to commit sufficient time to dedicate to their

or potential conflicts of interests of

role as a director.

directors and imposes any limitations,

qualifications or restrictions as

required or as recommended by the

NomCo.

Subsidiary governance

The Group’s regulated principal operating subsidiaries carry out their

business of providing investment and life insurance activities. Each of the

boards of Integrated Financial Arrangements Ltd (IFAL), IntegraLife UK

Limited (ILUK), and IntegraLife International Limited (ILInt) is comprised of

a mix of executive and NEDs in line with UK (IFAL and ILUK) and Isle of Man

(ILInt) regulatory requirements. In each case the membership of the board is

made up of a mix of skills and experience relevant to the board, resulting in

membership composed of both members with cross directorships within the

Group, and members who are independent of any other Group appointment.
We believe that this delivers the optimum governance to each entity.

The board and committee governance framework of the main regulated

operating subsidiaries is outlined below:

IHP board

IHP
Remuneration
Committee

IHP
Nomination
Committee

IHP
Audit and Risk
Committee

IFAL board

ILUK board

ILInt board

IAD board

ISL board

T4A board

IFAL
Audit and Risk
Committee

ILUK
Audit and Risk
Committee

ILInt
Audit and Risk
Committee

Each operating subsidiary Audit and Risk Committee (ARC) is responsible

for overseeing the internal controls and risk management systems for their

respective subsidiary and reporting assurances up to the IHP ARC annually that

these systems remain effective.

More details of how the board fulfilled its s.172(1) duties in relation to this

decision is noted in the “Principal Decisions” section on page 89. Further

information on how the Nomination Committee has been involved in subsidiary

board composition and succession planning under the new structure is outlined

on page 109.

COMPOSITION, SUCCESSION AND EVALUATION

Board composition

The Company has three executive directors and six independent NEDs (including

the Chair).

The Company has recently announced the selection of a CFO who will join the

executive team bringing the composition of the board to four executive directors

and six NEDs. The board will still meet the Code requirement that at least fifty

per-cent of the board (excluding the Chair) is comprised of independent NEDs.

Committees

There are three committees of the board: Audit and Risk, Nomination, and

Remuneration. The ARC and the Remuneration Committee (RemCo) are wholly

non-executive committees and the members are all independent NEDs. The Chair

of the board is a member of, and Chairs, the NomCo. The other members of the

NomCo comprise the SID), the CEO and two other independent NEDs, meaning

the committee has a majority of independent directors.

The membership and terms of reference of these board committees are

reviewed annually. The terms of reference for each committee is available on the

Company’s website https://www.integrafin.co.uk/corporate-governance/.

Board and committee meetings and attendance

BOARD MEETINGS

AUDIT AND RISK
COMMITTEE

NOMINATION
COMMITTEE

REMUNERATION
COMMITTEE

ELIGIBLE ATTENDED ELIGIBLE ATTENDED ELIGIBLE ATTENDED ELIGIBLE ATTENDED

Caroline Banszky

Victoria Cochrane

Richard Cranfield

Michael Howard

Robert Lister

Christopher Munro

Alexander Scott

Jonathan Gunby

Rita Dhut

Note: the Nomination Committee meeting missed by three NEDs was to shortlist candidates for subsidiary boards for interview.
The absences were due to the short notice of the meeting; all NEDs had reviewed and commented on the list of candidates beforehand.

Board succession

During FY22, the board agreed that the appointment of a CFO would enhance the

board, as well as providing additional and valuable support to the CEO.

The NomCo appointed an independent search firm to commence the selection

process, as a result of which the Company has announced that Euan Marshall will

be appointed to the role. A further announcement has been made giving details

of Euan’s commencement date in January.

Christopher Munro has indicated his intention to step down from the board in

FY24. The board will continue to assess the composition of the board and its

ongoing suitability throughout the year.

Directors’ induction

A tailored induction programme is prepared for each new director, based on their

individual needs. The programme comprises the following areas:

• Information and materials: a comprehensive library of materials is provided

electronically, including prior board and committee papers and minutes,

information on Company values and culture, strategy materials, regulatory

information, and statutory and governance documentation and policies.

• Scheduled meetings: individual meetings are arranged with key

stakeholders and employees to explore in more detail significant aspects of

the business and to assist with relationship building between the director

and management.

During the financial year, no new directors joined the IHP Board.

Directors’ development and training

Each board member is responsible for identifying training appropriate to their

needs, and the NEDs maintain individual annual training logs. The Chair and

Company Secretary ensure continuing training and development for all directors

based on individual requirements.

The board carries out periodic ‘deep dives’ into specific areas of the business

in order to broaden the board’s understanding of the Group’s business and the

opportunities and challenges it faces. During the financial year, training and deep

dive sessions were facilitated for the directors, covering the following topics:

• market abuse and disclosure obligations

• employee engagement strategy and monitoring culture

• investor sentiment and market reaction

• external market and macro-economic factors

• Consumer Duty including FCA’s approach to supervision and firm

evaluation model

In addition, open Q&A sessions between the directors and management are held

periodically to facilitate engagement with the layer below the board.

Election and re-election of directors

The Company’s Articles of Association require all existing directors to retire from

office at each AGM and be eligible for re-election.

Board effectiveness review

In line with best practice and the requirements of the Code, the board and its

committees undertake an external evaluation every three years. With the assistance

of Independent Audit Ltd, the Company undertook an external evaluation in FY23.

Independent Audit Ltd were selected to support this year’s review as having

undertaken the first external evaluation in FY20, it was felt that the most value would

be gained by understanding how the board had developed in the intervening years.

FY22 board evaluation – progress update

AREA OF ASSESSMENT

AGREED ACTION

PROGRESS

Designated strategy
session

The board would reinstate, post-COVID, an
annual deep dive strategy session to allow
for more time to discuss longer-term strategy
and performance horizon scanning.

The board discussed strategic opportunities
throughout the year and deep dive sessions
were reinstated immediately after year end.

Stakeholder
engagement and ESG

The board has improved its oversight
of stakeholder engagement in 2022, in
particular that of employees. The board will
continue to increase its understanding of the
Group’s stakeholder engagement and ESG
strategies.

ESG is now a standing agenda item, with
quarterly updates to the board.

Information flows
between parent and
subsidiaries

With the recent governance restructure,
continue to improve the framework of
information flow between the operating and
other subsidiaries and the parent company.

Refinement of reporting between subsidiary
and parent ARCs has been established
and improvement of information flow is a
continuous focus of the boards.

FY23 board evaluation

Independent Audit Ltd presented their report to the Chair and subsequently to the

board in September 2023.

The areas identified for the board to focus on in FY23 and beyond are summarised

below:

AREA OF ASSESSMENT

AGREED ACTION

Improved communication to
and from subsidiary boards,
as well as within the IHP
board

Improved timeliness of
board papers

IHP board members, subsidiary chairs and committee chairs commit to prioritising
improvements to the subsidiary reporting up to the board. There will also be a
renewed focus on improving communications outside of formal board meetings

Too many board papers are arriving after the cut off for submission, thereby reducing
directors’ ability to properly review. Writers and reviewers therefore commit to more
regimented scheduling when drafting papers.

Improved conciseness of
papers to the board

Papers are to be shortened and will all include executive summaries. The size of board
packs will be reduced to encourage the distillation of key information.

Chair evaluation

The SID led the performance evaluation of the Chair by meeting separately with each

of the executive and NEDs, and the Head of Legal and Company Secretary. The SID

then met with the Chair to discuss the directors’ feedback and agree actions for 2024

and beyond.

AUDIT AND RISK COMMIT TEE REPORT

Statement from the Chair

I am pleased to present the Audit and Risk Committee’s report for the

year ended 30 September 2023. The report provides insight into our work

undertaken this year.

I would like to welcome Rita Dhut to the committee following her appointment

in March and to thank all members for their work throughout the year.

The ARC has continued to consider the potential impact of the BEIS consultation

on Corporate and Audit Reform, and the emerging statements and consultation

from the FRC. Management continue to closely monitor developments and

report to the committee on the impact of the proposed changes on the

committee’s activities.

The committee continues to scrutinise management reporting on internal

controls, financial reporting and risk management. During FY23 the committee

commenced its oversight of the delivery of the Group’s agreed objectives. This

work is still in its infancy as we develop our strategy. For the environmental

aspects of this strategy, we have engaged the support of Brite Green,

sustainability consultants to enhance our disclosures. In addition, the committee

reviewed the Company’s development of the IT general controls and the

enhancement of the Group’s IT security framework.

I will be available to answer any questions at the AGM. Further details will be

set out in the Notice of AGM.

Further information on the activities of the Audit and Risk Committee is

provided below.

In FY24, the committee will continue to challenge management’s assessment

of and controls around the principal risks facing the business, both internally

and externally. The committee will continue to focus on the delivery of the ESG

objectives, the identification of the Group’s principal internal and external risks

and the development of the Group’s risk management framework, including with

respect to IT controls, continuously assessing whether the Group remains within

the risk appetite and to ensure that the Group is resilient to the ever changing

economic and social environment within which we operate. We also look forward

to welcoming Euan in the role of CFO and working with him to deliver high

quality financial reporting for the Group.

Caroline Banszky

Chair, Audit and Risk Committee

13 December 2023

Membership and attendance

The members of the committee as at 30 September 2023 were:

MEMBER

DATE OF APPOINTMENT

Caroline Banszky (Chair)

22 August 2018

Victoria Cochrane

28 September 2018

Robert Lister

Rita Dhut

4 September 2019

16 March 2023

The committee meets at least four times each year and may meet at other times,

as requested by the Chair. The committee met six times during this financial year.

The committee’s attendance is outlined on page 94.

All committee members are independent NEDs, as required by the Code, with

the ARC Chair being a qualified accountant. The board is satisfied that the

committee as a whole has an effective balance of skills and experience to perform

its responsibilities. Details of each member’s skills, education and experience are

outlined in the Directors’ Biographies on pages 76 to 79.

In FY23, Rita Dhut was appointed to the committee. The committee membership

is kept under review by the Chair of the committee, in collaboration with the

NomCo.

All committee members are provided with initial and ongoing training to

support them in carrying out their duties effectively. During the year, the

committee received training on the external platform market and the competitive

environment; directors’ s172 duties, market abuse and disclosure obligations;

and Consumer Duty.

Regular attendees at committee meetings include the board’s Chair, IHP CEO, the

IFAL CEO, Group Chief Financial Controller, Chief Actuarial Officer, CRO, Group

General Counsel, Group Head of Internal Audit, Company Secretary and the

Group’s external auditor.

Other NEDs are invited to attend meetings.

The committee Chair meets privately with the Group Chief Financial Controller,
Head of Internal Audit, Chief Actuarial Officer, CRO, external Audit Partner and

Independent Quality Assurance Partner at EY to discuss issued reports and

relevant financial and risk reporting and regulatory developments.

Role of the Committee

The primary role of the committee is to ensure the integrity of the financial

and non-financial reporting and auditing processes and monitor the

effectiveness of the Group’s internal control and risk management systems to

ensure there are continuing, appropriate levels of external and internal audit

and risk assessment to cover all material risks (including fraud) and controls,

including financial, operational and compliance processes and procedures and

non-financial reporting, including in particular, assurance over the Company’s

reporting under TCFD requirements.

The committee is also responsible for oversight of the Group’s relationship

with the external auditor. This includes making recommendations to the board

in relation to the (re)appointment of the external auditor, approving its scope

of work, fees and terms of engagement, as well as regularly reviewing its

independence, objectivity and effectiveness.

The detailed responsibilities of the committee are set out in its terms of

reference which can be found at https://www.integrafin.co.uk/corporate-

governance.

Details of the work of the committee in discharging its responsibilities during

the financial year are outlined further below.

Key committee activities through the year

AREA OF CONSIDERATION COMMITTEE REVIEW AND CONCLUSION

Financial reporting

During the financial year, the committee:

• Reviewed and challenged the financial reporting undertaken by the Group, with

input and support from the Group’s external auditor;

• Reviewed and considered the disclosures in the entire Annual report and financial
statements, recommended to the board the published Annual report and financial
statements and Half-year report and concluded that the reports were fair, balanced
and understandable;

• Considered the consistency of accounting policies, the financial reporting process

and the disclosure of key accounting and financial risks. Further information on the
key financial and non-financial risks can be found on page 63; and

• Reviewed the External Auditor report. The report confirmed that the External

Auditor identified the requirement to disclose a related party transaction under
IAS24.

Accounting
judgements and
estimates

The committee assessed and challenged the appropriateness of the judgements and
estimates applied by management in the preparation of the Annual report. This included
consideration of the following:

• ILUK tax provisions

• Goodwill

• T4A post combination remuneration

These areas have been discussed with the external auditor to satisfy them that the
Group makes appropriate judgements and provides the required level of disclosure.
Following consideration of the above, the committee concluded that the accounting
treatment of the ILUK tax provisions should be classified as a significant judgement and
there are no items that should be classified as critical accounting estimates in the Annual
report and financial statements.

Group wide financial
crime controls

• Reviewed the progress made on the implementation of the recommendations made

by the Legal team to expand the Financial Crime team’s remit to T4A and IAD and to
add and enhance the wider Group controls.

Whistleblowing
Champions assurance
re whistleblowing
arrangements

• Reviewed the Whistleblowing policy and the Whistleblowing framework for reporting
and confirmed that each are appropriate to the Group structure and organisation.

• Jeremy Brettell, as a member of the IFAL Audit & Risk Committee, is a key contact

in the Whistleblowing Policy and fulfils the role of “whistleblower’s champion”
under the Senior Managers’ Regime whilst Caroline as Chair of the Audit and Risk
Committee has oversight of Whistleblowing for the Group.

The induction
and transition of
responsibilities to
the incoming Chief
Financial Officer

• The Chair worked with the CEO and NomCo during the selection process of the

preferred candidate.

• Following recommendation made by management and the NomCo, the Chair of

the committee reviewed the credentials and experience of the incoming CFO and
endorsed the appointment. The same process applied to the selection of the CRO,
whose appointment was reviewed by the NomCo.

TCFD reporting

• The Company has published climate-related reporting in its Annual report and
financial statements based on the TCFD’s recommendations. Details on this
disclosure can be found on page 23.

• In preparing the Annual report and financial statements, the committee was

provided with information on the methodology used by management for collecting
climate-related data for publication in the Annual report and financial statements.

• The committee was made aware of the restatement of the FY22 emissions data. The
committee concluded that the impact of climate-related matters does not have a
material effect on the Group’s financial statements.

Committee evaluation

• The committee underwent an external evaluation provided by Independent Audit

Ltd. We continued to improve the performance of the committee.

Going concern and viability

The directors are required to make

individual Company and consolidated

of the assessment of the Group’s

a statement in the Annual report

Group level, forecast outcomes of

stress testing results, the committee

on IHP’s long-term viability. The

the business plan under the stress

agreed to recommend the Viability

committee provided the board with

scenarios agreed with the committee,

statement and three-year viability

advice on the form and content of that

detailing capital and liquidity

period to the board for approval.

statement. In advance of the year end,

performance against an assessment of

the committee reviewed the Group’s

risk appetite. The report was produced

The committee concluded that

proposed stress test scenarios and the

on financial data to 30 September

the Group has sufficient financial

assumptions underlying them, used to

2023 and included consideration of

resources and liquidity and is well-

support the Viability statement.

various scenarios as set out on page

placed to manage business risks in

70, both individually and combined.

the current economic environment,

At the year-end, management provided

having considered the potential

a report to the committee setting out

The committee discussed whether the

impacts of various risks, and can

its view of IHP’s long-term viability and

choice of a three-year period remained

continue operations for the foreseeable

the proposed Viability statement, based

appropriate. It concluded that this

future. The committee has therefore

on the Group’s three-year business

remained appropriate due to the

concluded that the going concern basis

plan. This report included, at both an

nature of the business. Taking account

is appropriate.

100

Fair, balanced and

understandable assessment

The committee also undertakes

a wider review of the content of

the Annual report and Financial

Risk management

Statements to advise the board as to

whether, taken as a whole, it is fair,

The committee oversees risk and

balanced and understandable and

control matters at a Group level,

provides the information necessary

with matters which are regulated

for shareholders to assess the Group’s

entity-specific overseen by the

performance, business model and

three regulated subsidiary ARCs.

strategy. This supports the board in

Consistency is achieved through the

providing the confirmations set out

application, across all entities, of the

on page 151 of the Statement of

Group Risk Management Policy and

Directors’ Responsibilities.

Framework.

In considering the wider content

Each subsidiary ARC has terms

of the Annual report and financial

of reference outlining their

statements, the committee pays

responsibilities and the committee

particular attention to ensuring the

receives updates at each meeting on

narrative sections provide context

key areas for escalation from each

for, and are consistent with, the

committee Chair including Consumer

financial statements, and that

Duty, service risk, and non-standard

an appropriate balance is struck

assets.

between the articulation of successes,

• considered the climate-related

risks and opportunities facing

opportunities, challenges and risks.

During the financial year, the

the Group and how the regulated

committee:

entities have assessed the impact;

The committee concluded that,

taken as a whole, the interim and

• oversaw the risk appetite

• reviewed and assessed the Group’s

annual reports were fair, balanced

statements and risk management

principal risks, uncertainties and

and understandable and provided

framework and reviewed its

emerging risks and updated them

the information necessary for

effectiveness in relation to IHP,

as appropriate;

shareholders, and other stakeholders,

and how Group companies have

to assess the Group’s position and

implemented the framework;

• assurance was sought from the

performance, business model and

strategy.

• reviewed Group Risk

Chairs of the IFAL, ILUK and ILInt

ARCs that management points

Management’s development of

raised have been addressed

T4A’s and IAD’s risk profiles;

through appropriate management

• reviewed the regular quarterly

actions;

risk reports presented by Group

• assisted the board in maintaining

Risk Management to ensure the

an appropriate culture within the

business continues to operate

Group, which emphasises and

effectively with the appropriate

demonstrates the benefits of the

risk profile under the hybrid

risk-based management of the

working model;

Group; and

• reviewed and challenged the Risk

• considered the points escalated

Reports presented by Group Risk

from the Group Company boards

Management, and considered

or committees which affect IHP, or

the progress of management

the Group as a whole.

action taken in order to address

management points raised on IHP

More details on the Group’s risk

specific risks;

management processes are outlined

on page 60.

101

Internal controls

Internal audit

The committee provides assurance to

• reviewed the Group Head of

The Group Internal Audit department

the board on the effectiveness of the

Internal Audit’s annual assessment

is focused on the delivery of high-

Group’s system of internal controls.

of the Group’s internal control

quality internal audit services to the

A key aspect of this is the review of

framework that included thematic

Group.

all material/ key controls, including

internal control observations

reporting, operational and compliance

and risk and control culture

Its mission is to protect and

controls, that identify, assess, manage

enhancements.

and monitor top risks, which are an

enhance the value, reputation and

sustainability of the Group, and

important aspect of ensuring the

Over the course of the year,

to help the Board and executive

integrity of the Group’s financial

management made significant progress

management of the Group to meet

statements as a whole.

to enhance the design and operating

its strategic objectives centred

effectiveness of IT General Controls

on making financial planning and

The Group’s internal controls comprise

to address improvement areas as

investment easier for UK financial

elements that together provide an

highlighted by the external auditors in

advisers and their clients.

effective and efficient framework,

the prior year financial statements. At

enabling the Group to prepare for, and

the end of FY23, the external auditors

To do this, the Group Internal Audit

if necessary, respond, to a variety of

concluded, to the extent controls

department performs independent,

operational, financial and commercial

could be assessed at that time, that

objective assurance and advisory

risks.

the design of IT General Controls

services designed to add value

During the financial year, the

The operation of these controls will

governance and internal controls.

committee:

continue to be assessed in FY24.

The committee monitors the scope,

appears to be designed effectively.

and enhance risk management,

activity and resource of the Group

• received reports from

The committee also continued

Internal Audit department formally

management on the effectiveness

to discuss with management the

on a quarterly basis, and regularly

of internal controls including over

preparation needed to comply with

meets with the Group Head of

critical IT and information security

those provisions of the proposed UK

Internal Audit without executive

risks and financial crime risks

Corporate Code changes published in

management present.

encompassing the detection and

May 2023 that will remain when the

prevention of fraud, bribery and

updated Code is published in January

During the financial year, the

corruption, money laundering and

2024. which, if approved in the current

committee:

market abuse;

form, will apply to the Company from

• reviewed annual control self-

out a revised framework of prudent

Audit Charter setting out

attestations received from senior

and effective controls to provide a

the Group Internal Audit

management;

stronger basis for reporting on and

departments purpose, authority,

1 October 2025. This includes setting

• approved the Group Internal

evidencing their effectiveness.

scope and responsibility;

• received quarterly reports from
the Group risk management

function on the risk management

framework which monitors top

risks against risk appetite and

target risk scores;

• received regular reports from the

Group Internal Audit function on

the sufficiency and effectiveness of

the internal controls in those areas

of the business included in the

Group Internal Audit Plan for the

period. Actions identified through

internal audits are regularly

monitored and challenged

throughout the process until the

required action has been achieved;

and

102

• approved the rolling 12-month

Group Internal Audit Plan,

including proposed changes to

the plan each quarter to ensure

alignment with the Group’s key

risks. In setting the plan, Group

Internal Audit consider the

business strategy, regulatory

priorities and its independent

view of current, emerging and

systematic risks;

• received and reviewed Group

Internal Audit reports at

committee meetings including

detailed review of any

recommendations made to

management, management’s

Delivery of internal audit plan

Effectiveness and independence

of Group internal audit function

response, and views over

There were several internal audit

risk and control culture and

engagements completed during FY23,

During the financial year, the

consumer outcomes;

in line with the approved Group

committee performed its annual

Internal Audit Plan. The results of

assessment on the independence and

• monitored the status of any

these internal audit engagements were

effectiveness of the Group Internal

open management action plans

reported and discussed and follow up

Audit function. Based on the scale

including receiving updates from

actions were reviewed or requested

and focus of the work conducted by

the Chair of the IFAL, ILUK and

where necessary. The internal audit

Group Internal Audit during the year

ILInt ARCs on the management

engagements included, but were not

and considering the results of Group

actions in response to the

limited to, the following:

Internal Audit’s report in respect to

findings and recommendations of

its effectiveness and independence

internal audit reports pertaining

• client assets and client money

completed during the year, the

to those entities;

compliance;

committee concluded that the Group

Internal Audit function is working

• challenged management on

• financial projections model;

effectively and independently in line

action delivery;

with relevant professional standards

• Consumer Duty implementation;

and that the team is appropriately

• reviewed all Group Internal Audit

qualified and staffed.

reporting escalated by either

• platforms IT infrastructure;

the IFAL, ILUK, or ILInt ARCs, or

A private session also took place

activities within other companies

• user access management and

between each of the four ARCs (see

in the Group, which represent a

monitoring;

significant risk to the Group as a

whole;

• TCFD reporting;

structure on page 93) and the Group

Head of Internal Audit. The subsidiary

sessions took place in August 2023

and the IHP ARC session took place in

• noted the conclusion of the

• operational resilience

September 2023.

annual Internal Audit report

requirements;

that there were no significant

deficiencies that would need

• Internal Capital and Risk

to be disclosed in the Annual

Assessment (ICARA);

report;

• complaints handling; and

• received reports on matters

relevant to the financial

• asset onboarding.

reporting processes including

assurances on internal controls,

The Group Internal Audit function also

processes and fraud risk; and

completed its annual assessment of

• assessed the effectiveness and

the Group’s risk management and key
internal controls relating to the Group’s

independence of the Group

major business processes and top

Internal Audit function.

risks that included an evaluation of the

Group’s annual fraud risk assessment.

Furthermore, using external IT security

testing experts, penetration testing

was completed across the Group’s

sites and IT environments including

T4A and IAD.

103

External auditor

Tenure

External auditor independence

Effectiveness of external audit

and non-audit services

process

The last tender for the external auditor

was conducted in 2021, when EY was

In order to safeguard the

The ARC is responsible for assessing

appointed as the Group’s External

independence and objectivity of the

the qualifications, expertise and

Auditor. EY’s re-appointment was

external auditor, the ARC is responsible

resources of the external auditor and

ratified by shareholders at the 2023

for the development, implementation

for reviewing the effectiveness of the

AGM. Michael Gaylor has been the lead

and monitoring of the Group’s

external audit process. As part of this

audit partner for two years.

policy on the provision of non-audit

process, the views from executive

services and oversight of the hiring of

management, including leadership at

Scope of the external audit plan

personnel from the external auditor,

ISL, IAD and T4A, ARC members, and

and fee proposal

should this occur. The committee must

the Chairs of the three subsidiary ARCs

During the financial year, the

in line with the requirements of the

committee:

FRC’s Revised Ethical Standard 2019.

• the efficiency of the year-end

pre-approve any non-audit services,

are sought on the following:

• reviewed EY’s overall work plan;

each meeting analysing fees paid for

The committee received a report at

process;

• advised EY, through regular

auditors. EY did not perform any non-

and team;

communication, of any specific

audit services during the 2023 financial

matters which the committee was

year. EY did provide Other Assurance

• the planning and execution of the

any non-audit work by the external

• the quality of the audit partner

considering from previous audits

Services, in line with the Revised

audit;

and current operations;

Ethical Standard 2019. These services

were required by regulation and are

• quality of audit reporting and

• approved EY’s remuneration and

further disclosed under Note 8.

delivery;

terms of engagement, taking into

consideration feedback from the

Full details of EY’s remuneration are

• extent and nature of challenge

three operating subsidiary ARCs;

set out in Note 8 of the Financial

demonstrated by EY in its work

Statements.

and interaction with management;

• assessed EY’s independence and

objectivity;

• reviewed and approved external

auditor fees;

• approved revisions to the External

Auditors Policy in relation to the

provision of non-audit services
and hiring of ex-employees;

• considered quarterly reporting

on non-audit services and

audit-related non-audit services

provided by EY; and

• assessed the effectiveness of the

external audit.

104

and

• EY’s independence and objectivity.

The committee also reviews the FRC’s

annual Audit Quality Inspection and

Supervision Report of EY and receives

a report from EY on its own internal

quality control procedures.

The responses indicated that, overall,

EY was performing in line with

expectations and has demonstrated

challenge and professional scepticism

in performing its role. The ARC

concluded that the external audit

process was effective, and the

committee remains satisfied that EY

continues to display the necessary

attributes of independence and

objectivity. Accordingly, the committee

has recommended to the board a

proposal for the reappointment of EY

as external auditor at the next AGM.

Committee self-evaluation

The following provides an update on progress against those areas agreed as

priority areas of focus for the committee in 2023:

AREA OF FOCUS

PROGRESS

Schedule a risk identification deep
dive session.

The induction and transition of
responsibilities to the incoming
Group CFO.

The CFO will join the Group in FY24.
This action will therefore carry
forward into the new financial year.

Monitor developments in relation to
the BEIS corporate governance and
audit reform and ESG reporting.

Management continue their analysis
of the changes and reported to the
committee throughout the year.

The following areas were agreed as priority areas of focus for the committee

in 2024:

• Schedule a risk identification deep dive session

• The induction and transition of responsibilities to the incoming Group CFO

Monitor developments in relation to the BEIS corporate governance

and audit reform and ESG reporting.

105

106

NOMINATION COMMIT TEE REPORT

Statement from the Chair of the Nomination Committee

I am pleased to present the Nomination Committee’s report for 2023.

We welcomed Robert Lister to the committee in March and I would like to extend

my thanks to all members for their work throughout the year.

Membership and attendance

The members of the Nomination Committee at 30 September 2023 were:

MEMBER

DATE OF APPOINTMENT

Richard Cranfield (Chair)

1 August 2019

Victoria Cochrane

28 September 2018

Robert Lister

Christopher Munro

Alexander Scott

16 March 2023

2 February 2018

2 March 2020

The committee meets at least once each year and may meet at other times as
requested by the Chair. The committee met nine times during the financial year,

due to the committee’s wider remit of oversight of subsidiary board succession

planning and increased senior management succession planning.

The committee’s attendance is outlined on page 94.

Composition

In adherence with the Code, the majority of members of the NomCo are

independent NEDs. The Chair of the board chairs the committee. However,

he is not permitted to chair when the committee is dealing with nominating a

successor to the Chair.

The CEO is a member of the committee, as permitted by the Code. We note

that some proxy advisory companies advise a vote against the Chair of the

Committee at AGM in circumstances where the CEO is a member of the

Committee. However, we believe that the CEO contributes valuable insight

into the composition of the management team, interaction of the board with

management and cultural fit of candidates to the board and senior management

team and that his membership of the committee does not affect the independent
decision making by the committee. The CEO recuses himself from any discussion

or recommendation about him.

During the year, the Company reviewed advice from the Company Secretary

regarding feedback from the proxy advisers in advance of the AGM on the

composition of the committee. The feedback did not indicate any significant

concerns with the composition however it is clear that for some investors the

balance of independent non-executives did not align with their expectations. As

a result, and upon considering the mix of skills and experience of the members,

the board appointed Robert Lister to the committee.

Training

The Group provides initial and ongoing training for committee members, to

support them in carrying out their duties effectively. This is delivered through

in-house technical employees, through the attendance at formal conferences as

required, and an in-house training programme.

107

Role of the committee

The primary purpose of the committee is to develop and maintain a formal,

rigorous and transparent procedure, and to lead the process for, board and

committee appointments and reappointments, including making recommendations

to the board. To achieve a balanced board, the committee considers the board’s

size and composition, the extent to which skills, experience and attributes are

represented and the need to maintain high standards of corporate governance.

The role and responsibilities of the NomCo are set out in its terms of reference

which can be found at www.integrafin.co.uk/corporate-governance.

Key committee activities through the year

AREA OF FOCUS

WORK CONDUCTED

Board composition and
succession planning

• Considered the skills, tenure and independence of the NEDs and made

recommendations to the board for reappointment.

• Reviewed the composition of the IHP board including reviewing the mix of skills,

experience and expertise, identifying any gaps and ensuring diversity, including of
thought and ideas.

Management succession
planning

• Reviewed the emergency and long-term management succession plans.

• Interviewed a short-list of candidates and recommended to the board a candidate

for CFO.

Operating Subsidiaries
board succession
planning

• Discussed succession plans for the IFAL board Chair.

• Reviewed board and committee member composition.

• Supported the selection of NEDs to the IFAL and ILUK boards on rotation of

incumbents who had reached the end of their tenure.

Diversity and Inclusion

• The committee discussed the Group’s diversity and inclusion strategy.

• The committee reviewed proposals from the Head of HR with regard to the

collection and reporting of diversity data within the Group.

• The committee reviewed the board’s Diversity Policy.

• Board composition in relation to tenure, skills and diversity at operating

subsidiary level was also reviewed.

Committee evaluation

• The committee did not conduct a self-assessment of the effectiveness of the

committee, the individual members and the committee Chair in FY23 as the board
and its committees were part of the wider external board evaluation process.

108

Succession planning

IHP board succession planning

Subsidiary board and committee

succession planning

The IHP board composition remained

stable during FY23. There were no

During the financial year, the

resignations or appointments made

committee assisted the regulated

during the year.

operating subsidiaries. IFAL and

ILUK both required support with the

The committee reviewed the size,

process of appointing new NEDs as

composition and skill set of the board

existing board members reached the

and its committees. The committee

end of their tenure. In the Spring, we

considered the composition of the

supported the process of recruiting a

board in the context of Christopher

new NED, Mary Gavigan, as a member

Munro’s indicated intention to step

of the ILUK board and Chair of the

down from the board in FY24 and

IFAL ARC upon the retirement of Neil

of the selection of Euan Marshall

Holden. Jeremy Brettell replaced

as CFO and his additional skills and

Neil Holden as Chair of ILUK. In the

experience.

summer months, a further search

was undertaken for two new non-

The committee also considered the

executives in anticipation of the

skills and tenure of the NEDs. We

retirement of Jeremy Brettell. We were

continue to keep in mind the profile of

pleased to be able to assist with the

our board members and formulate our

search for a new Chair of the ILUK ARC

succession planning accordingly.

and a new NED of the IFAL board.

Senior management succession

planning

Senior management succession

planning continues to be a key focus

of shareholders and the committee.

With the appointment of the CRO, CTO

and the upcoming appointment of the

CFO, the committee is satisfied that

the management succession plan is

strengthened but maintains oversight

of developments to ensure a resilient

pipeline which will support the future

success of the business.

109

Diversity and inclusion

Inclusivity throughout the business is

Board diversity policy

Equal opportunities policy

important to us and we continue to

focus on this by developing our diverse

The board has a Diversity Policy which

The Group has an Equal Opportunities

talent pipeline. The board supports

is reviewed and assessed annually.

Policy which applies to all employees.

the Hampton-Alexander Review on

We are proud to have a culture of

gender diversity and the Parker Review

New appointments to any Group or

developing our workforce to provide

on ethnic diversity. I am pleased to

subsidiary board are made on merit,

opportunities for promotion within

say that we have 33% representation

taking into account the different skills,

the organisation, alongside recruiting

of women on our board (FY22: 33%)

industry experience, independence,

external talent to enhance diversity

and 57% female representation in

knowledge and background required

of thought. Internal opportunities

roles which we define internally as our

to achieve a balanced and effective

not only include traditional vertical

senior management equivalent (FY22:

board. When identifying suitable

promotions, but in many cases

67%). In addition, one member on our

candidates for appointment to any

opportunities to move to different

board is ethnically diverse (FY22: one)

Group board, we consider candidates

departments within the Group

and our SID is female.

on merit against objective criteria and

and learn new skills or undertake

with due regard for the benefits of

professional development. This

We recognise that developing diverse

diversity on the board.

talent at the executive, senior

management and direct report levels is

important and this is being considered

in the Group’s ongoing leadership

succession plans.

approach ensures that we develop a

pool of talented individuals who may

have the potential for succession into

senior roles. We support employees by

providing relevant training, assistance

and resources to help them succeed

in their new roles. In the last year,

72 employees accepted internal

job opportunities (FY22: 118). In

contrast, 112 job opportunities were

filled by employees hired externally

(FY22: 132).

110

Composition of the board

The board’s membership comprises a mix of long-standing and more recent

appointments who collectively deliver a balance of historical knowledge and

industry experience.

Age profile of the board
(number of directors)

Tenure of board
(number of directors)

50-55

60-65

65-70

70+

0-3 years

3-6 years

6-9 years

9+ years

Board gender split (%)

Ethnic diversity of the board (%)

Women

11%

33%

Men

Caucasian

Ethnically
diverse

67%

89%

Board skills matrix disclosure
(number of directors)

Accounting/Finance

Actuarial

Asset/Fund Management

Audit

Compliance

ESG

Executive Management

Financial Services

Insurance

IT/Technology

Legal/Governance

Marketing

People

Risk Management

111

Renewal of existing NED

Committee self-evaluation

appointments

The NomCo conducted a self-assessment of the effectiveness of the

The committee reviewed the profile

committee, the individual members and the committee Chair in FY23. In

of board tenure of our NEDs in light

addition to considering the composition of the committee as described above,

of its future needs. As part of this, it

the internal evaluation considered the performance of the committee and

considered the renewal of Christopher

concluded that the committee continues to be effective.

Munro’s term as a NED, his second

three-year term of which was due

The following provides an update on progress against those areas agreed as

to expire in FY23. The committee

priority areas of focus for the committee in FY23:

agreed, taking account of the

current cycle of board development

and succession and Christopher’s

knowledge of and contribution to

the business, to recommend to the

board for approval the renewal of his

appointment for a further three-year

term, subject to annual re-election by

shareholders which was approved at

the AGM. This decision was taken in

the February AGM.

Board effectiveness

An external board evaluation

AREA OF FOCUS

PROGRESS

Continue to strengthen oversight
and input into the Group’s
operating subsidiary NED
appointments.

The committee has participated in the
selection process for the non-executive
hires in the subsidiary firms.

Further oversight into executive’s
pipeline and talent development.

The committee continues to review
proposals for building a pipeline of talent
into the succession planning process.

The following areas were agreed as priority areas of focus for the committee
in 2024:

effectiveness review was conducted

• Further oversight into executive’s pipeline and talent development

during the year. The review was

conducted by Independent Audit Ltd

who conducted our first review in

Richard Cranfield

2020. The board considered that using

Chair, Nomination Committee

the same firm would provide insight

into how the board had developed

13 December 2023

in the intervening three years. Full

details are set out on page 95 above.

Victoria Cochrane, our SID, also met

with the directors to appraise my own

performance, and Victoria and I have

discussed the feedback received.

112

DIRECTORS’ REMUNER ATION REPORT

Annual statement by the Chair of the Remuneration Committee

(unaudited)

Remuneration Overview

As Chair of the Remuneration

Whilst we remain committed to

Committee I am pleased to present the

ensuring that employees participate

Directors’ Remuneration Report for the

in our success on broadly the same

year ended 30 September 2023.

terms as our executive directors and

senior managers, where we take steps

In keeping with prior years the report

to drive exceptional performance

is set out in four sections.

amongst our management team, we

do so in a way that focuses delivery

• This letter which summarises

not on short-term outcomes but on

our remuneration ethos and

the sustainable long term future

objectives and how the

success of the Group. Our objective is

committee has worked to

to align their financial interests with

deliver those during the year;

the interests of our investors, whilst

keeping their reward measured and

• A summary of our remuneration

proportionate, and avoiding a “them

policy “at a glance” along with

and us” culture within the workforce.

the outcomes for our executive

directors can be found on page

Recognising the challenges of the

120;

external economy, the Company

awarded meaningful but responsible

• A summary of our approach to

pay-rises in June, weighting pay

directors’ remuneration can be

rises in favour of those on the lowest

found on page 122;

salaries, for whom the cost of living

• Our annual directors’

result pay rises of 8% or more were

remuneration report which can

awarded to lower earners whilst the

be found on page 124 and sets

most senior leaders received more

has had the greatest impact. As a

out how the committee has

prudent rises.

delivered its responsibilities

throughout the year.

During the year, we welcomed Rita

Dhut as an additional member of the

• A summary of how we have

committee, broadening the skills and

applied the policy can be found

experience of the membership.

on page 127.

Our current Directors’ Remuneration

The committee continues to review
the structure and composition of

Policy (DRP) was approved by over

remuneration for directors and senior

92% of shareholders at the 2022 AGM.

leaders. The committee’s work so

far indicates that the overall limits

Our remuneration philosophy is

on variable reward set out in the

underpinned by a responsible and

FY21 DRP, approved by shareholders

sustainable remuneration structure,

at the AGM in 2022, are no longer

recognising that employees are one of

sufficient to facilitate the flexibility

our key stakeholders. However, as we

required to deliver a model which both

develop and diversify our management

attracts and retains the talent that will

team to support the demands of

effectively support the business over

the business, our structure has to

the longer term. Instead, a wide-

be adaptable to attract and retain

ranging restructure of the DRP will be

talent, and to reward delivery of our

required.

objectives and corporate goals.

113

The committee is not seeking to

Executive Directors’ remuneration

increase the incentive limits set out

in the 2021 DRP in this annual report,

It remains one of our key principles

however, the committee engaged and

to create, maintain and improve

will engage with shareholders on any

value provided to our customers,

proposed changes during FY23 and

shareholders and employees and

early FY24, before tabling a change

to share profits between all three

Distinctive approach to performance

of policy for approval at a General

of these stakeholders. This reward

measurement – Historically we have

Meeting.

philosophy remains unchanged. We

not had mechanical performance

Further details of all these themes
are provided in the Director’s

are committed to sharing our success

targets which apply to variable

evenly across the workforce through

pay awards, because we believe

the use of responsible, sustainable and

that applying formulaic measures

Remuneration Report below.

proportionate variable remuneration.

can lead to undesirable behaviours

Board and senior management

for our approach to executive director

recognise that there is a need to

changes

remuneration on pages 122 to 123.

hold management responsible and

We have set out further the rationale

and / or outcomes. We do however

The key features of our reward

accountable for the long-term success

There were no changes to the

framework are as follows:

and stability of the business. The

board composition during the year.

However, the board has recruited a

CFO to further enhance the skills of

the executive team. The RemCo has

reviewed the proposed reward and

committee will therefore continue

to exercise independent judgement

and discretion when authorising

cash bonus and deferred bonus

remuneration outcomes, taking into

confirmed that it meets the framework

Base salary – Our ethos is to pay

account both company and individual

of the DRP.

base salaries which are set at a

performance. Variable remuneration

level to attract and retain talented

awards are now more closely linked to

In addition, a CRO joined the senior

and valued employees. Salaries are

pre-set target deliverables, including

management team in January.

benchmarked externally but the

ESG outcomes. We continue to

external market is only one factor

develop performance metrics for the

Together with the Senior Independent

taken into consideration when

exercise of the deferred element of

NED, the Chair of the board and

assessing appropriateness of salaries.

any awards however this is linked to

the Company Secretary, I attended

Internal parity and the desire to

the development of a more flexible

a number of investor meetings

maintain an inclusive, sustainable and

variable reward structure which will

throughout the year to understand

responsible reward framework are

be the subject of a revised Directors’

investor sentiment on, amongst other

equally important.

matters, executive reward. I am

pleased to report that the messages

we received were in line with our own

views on the link between reward and

performance.

Remuneration Policy. Investors will be

engaged in the development of that

new Policy in due course.

Our performance measurement

framework will still consider the same

Relatively modest additional

four anchors – financial performance;

incentives – Above basic salary, our

stakeholder outcomes; risk, regulation

maximum total additional incentive

and ESG; and strategy delivery, but

opportunity is currently 100% of

within those criteria specific target

salary per annum. In accordance

deliverables will be set.

with our approach of keeping staff

and executive award aligned, it is

rare for any executive director’s

total annual variable remuneration

award to exceed 65% of salary. As a

result, remuneration for senior roles

currently sits in the lower quartile of

the FTSE 250. We recognise that this

has an impact on our ability to attract

and retain the highest quality talent

and that therefore for some roles, a

more flexible approach to variable

reward is required.

114

Alignment with wider workforce

employees with the assurance of

The pension policy for executive

whilst rewarding the long term

competitive rates of fixed reward,

directors is equivalent to that of the

sustainable and responsible

total compensation which is

workforce but both Jonathan and

business mode – Our approach

equivalent to the outcome prior to

Alexander have elected to cap their

to remuneration for executive

the reframe, but with the possibility

contributions at the HMRC annual

directors is consistent with that for

of enhanced bonuses to reward

allowance which at the beginning of

all employees. It has always been our

excellence.

culture that we do not use reward

the financial year was £4,000, rising

to £10,000 following the budget

to grow the wealth of our executives

At the same time, we recognise

changes. As a result, at 1.49% for

and senior managers at the expense

the importance of focusing senior

Alexander and 1.49% for Jonathan,

of our wider workforce. Our reward

management on the long-term

the actual employer pension

framework is designed to drive

sustained performance of the

contributions made in respect of

equitability in the remuneration

business. Adjusting reward for the

executive directors are well below the

outcomes in order to drive alignment

most senior managers to reduce the

12.3% of salary contribution available

in the high performance of all our

scope for variable reward would be

to all employees. Our current pension

employees. We recognise that our

inconsistent with this approach. As

arrangements therefore align with the

proposition relies upon our workforce

a result, we have maintained the

new Corporate Governance Code as

performing to the highest standard to

cash bonus element of reward for the

regards the alignment of executive

deliver the best service proposition

most senior employees at 30% and

pensions with the wider workforce.

to the market and support all our

retained the ability for all members

stakeholders in their success. Our

of the management team, including

Employees (including the executive

variable cash bonus and Share

executive directors, to be considered

directors) may also elect to sacrifice

Incentive Plan (SIP) reward incentive

for an additional bonus award

a percentage of their cash bonus

structure reflects this ethos because

deferred into shares. As a reflection

award and receive additional employer

it is aligned across the workforce and

of our measured reward structure the

contributions. This diverges from the

all employees (excluding T4A) are

quantum of these deferred awards

Code provision, but neither Alexander

awarded cash bonuses and invited to

currently remains capped at 33%.

nor Jonathan take advantage of this

participate in the SIP under the same

opportunity.

performance framework.

As its next step to transforming the

reward framework, the committee is

At the commencement of this

considering the mix of cash, medium,

performance year and in response

and long-term incentives available to

to feedback from the work force

senior management, whilst retaining

provided by way of our annual
employee engagement survey, the

the overall alignment of interests
with the wider workforce. Whilst

committee endorsed a restructure

the design of a new proposal is at

of the fixed and variable reward for

an advanced stage, further details

the ISL, ILInt and IAD UK employees,

of these plans will be presented to

recognising that fixed reward is

shareholders in due course and in

of fundamental importance to our

advance of seeking approval at a

people, particularly during these

General Meeting.

times of extraordinary inflation

and cost of living pressures. The

rebalancing of reward resulted in all

employees below the most senior

managers receiving a higher fixed

salary and a lower target cash bonus

of 10%, but with the potential to

receive a cash bonus award of up

to 20% for performance recognised

as excellent. The out-turn of this

approach has been to provide

115

Share ownership – Our executive

• We operate an HM Revenue &

directors are significant shareholders

Customs tax-advantaged Share

in the Company with Alexander and

Incentive Plan (SIP) for UK and

Jonathan having a direct or indirect

Isle of Man employees (excluding

interest in 1,305,570 shares and

T4), as well as a parallel scheme

960,189 shares, respectively. Michael

for our Australian employees.

Howard as founder executive director

has a direct or indirect interest in

• The Group’s deferred bonus share

32,000,000 shares. With the exception

option plan has a maximum award

of employees of T4A, all UK and Isle

opportunity of 33% of salary.

of Man based employees with the

required accrued service are invited

• For executive directors, we

to become shareholders by way of the

reference performance against

all staff SIP which we are delighted

four key areas – financial

to report, during financial year 2023,

performance; stakeholder

has once again had a 100% uptake

outcomes; risk, regulation and

for Free Shares and has had a 69.79%

ESG; and strategy delivery.

uptake for Partnership and Matching

The committee takes a

shares. All IAD employees based in

holistic approach to reviewing

Australia are invited to participate in a

performance, linking the award

parallel scheme created in accordance

and the out-turns of the award

with local remuneration rules.

to defined performance metrics.

Malus and clawback provisions

In summary, we retain our belief

are available to the committee to

in simple and transparent reward

use in the event of non-delivery,

which is linked to Group success and

should the committee wish to

individual personal performance; long

exercise their discretion to do so.

term engagement amongst the more

senior management; and which is

• We will develop our variable

delivered in a way that is sustainable,

reward framework for our

and does not drive a them-and-

most senior managers to align

us reward culture, undesirable

with these foundations whilst

behaviours or encourage excessive

driving long term, sustainable

risk taking:

• We have designed our

and responsible growth of the
business.

remuneration structure to be

We believe our approach to

inclusive and to align executive

remuneration supports both

remuneration with that of the

the objectives of the Group,

workforce.

our shareholders and our other

stakeholders, and is aligned to the key

• We encourage share ownership

principles shared between us.

by all staff to align the success of

the business with their own and

support this by way of company-

operated share ownership plans.

116

Remuneration outcomes for year ended 30 September 2023

Alignment with shareholders

The Company achieved robust and resilient financial results with profit before

We are mindful of our shareholders’

tax of £62.6 million (15% increase on prior year). Directors’ salary and bonus

interests and are keen to ensure a

awards were made in accordance with the Policy.

demonstrable link between reward and

value creation. We remain committed

The Company restructured the reward framework for ISL and ILInt employees

to an open and ongoing dialogue with

to reflect employee sentiment shared by way of employee engagement survey.

our shareholders regarding executive

The restructuring did not result in an increase to overall reward but rebalanced

remuneration and we welcome

compensation to increase fixed reward, reduce target cash bonuses whilst

feedback.

building greater personal performance measures into variable reward out-turns.

To this end I, along with other non-

The Company and the committee then reviewed salaries in June and determined

executive members of the Board

that against a backdrop of inflationary and talent pressures it would be

and our Company Secretary met

appropriate to structure fixed remuneration awards in a way that directed the

with a selection of our investors to

available resources to those who needed them most. The average award to

understand their views and consider

all employees who were eligible for an increase was 7.3%. Salary increases

feedback around our reward structure.

for executive directors were also considered, carefully taking into account the

We have listened to those views and

competitive positioning of their packages as against the market. As a result,

hope that this report clearly articulates

awards were made of 4% for Alexander and Jonathan, which was lower than the

our ethos whilst also demonstrating

average for all employees.

the connection of reward out-turns to

individual performance.

Directors’ bonuses were awarded within the parameters of the Policy. Alexander

was awarded a cash bonus of 30% and a target bonus award deferred into

I hope that you find this year’s report

shares of 31.5%. Jonathan was awarded a cash bonus of 30% and a target

informative and look forward to

bonus award deferred into shares of 31.5%. Michael Howard did not receive a

receiving your continued support at

bonus. The committee considered that these bonus awards were a fair reflection

the forthcoming AGM.

of the Company’s overall performance.

In order to further align incentives with performance, the deferred share awards

Signed on behalf of the IHP

for our more senior managers, including Alexander and Jonathan, have this year

Remuneration Committee

been assessed by reference to individual and Group performance.

Christopher Munro

In making these awards the Remuneration Committee considered the

Chair of the IHP Remuneration

quantitative and qualitative anchors. In particular, the committee considered

Committee

the performance of the Company over the financial year against its strategic

objectives; the business plans approved by the Board; market consensus;

13 December 2023

regulatory requirements; the current state of financial markets and the

recruitment market. The focus throughout the financial year has been the

delivery of organic growth, improvement in service delivery and systems
enhancements and variable awards have been assessed against the extent to

which these deliverables have been achieved.

117

AREA OF FOCUS

OUR APPROACH

Clarity

Our approach to remuneration supports the strategic
objectives of the Company, and we seek to maintain a
simple remuneration model which is communicated to
stakeholders, including shareholders and employees in a
clear and transparent way.

We consider that our remuneration framework is simple
and effective. Our incentive framework comprises only a
cash bonus award, an all-employee share incentive plan
and a deferred bonus share option award.

We believe our approach to performance measurement
supports appropriate consideration of risk management
and a long-term view of the business based on
sustainable growth. Total remuneration is structured in
a way which does not encourage short-term risk taking
in order to deliver financial outcomes for executives. The
annual bonus rewards performance against four anchors
for the business, ensuring a holistic view of business
performance.

The Report describes how the board

has complied with the provisions set

Simplicity

Risk

This report has been prepared in

accordance with the provisions of

the Companies Act 2006 and the

Large and Medium-Sized Companies

and Groups Regulations 2013, as

amended.

out in the UK Corporate Governance

Code 2018 relating to remuneration

matters.

The Remuneration Committee

confirms throughout the financial

year that the Company has complied

with these governance rules and best

practice provisions.

UK Corporate Governance Code –

Provision 40

When developing the DRP and

considering its implementation,

the committee was mindful of

the UK Corporate Governance

Code and considers that the

Predictability

The maximum opportunities are outlined in the
Remuneration Policy. Taking into account our approach
to incentives, total remuneration is predictable in
comparison with other listed companies.

executive remuneration framework

Proportionality

appropriately addresses the following

considerations:

Our executive director remuneration is aligned with that
of the wider workforce and the result is a total reward
structure that for the most senior executives is low in
comparison to the wider FTSE 250.

Alignment to
culture

Our overall approach to remuneration and the associated
remuneration policy for executive directors is consistent
with that for all employees. Our remuneration structure
is designed to be responsible, inclusive and to ensure
that we reward on merit. Our pension policy is aligned
across the workforce. However, out-turns for the most
senior management currently fall below those of the
wider workforce, given the effect of HMRC funding limits.
We consider that our approach is fully aligned with our
culture.

We do however recognise that investors wish to see reward tied to long-

term managed and sustainable growth of the business. We do not believe

that a traditional LTIP will best achieve these objectives. We will consult with

shareholders regarding our plans to achieve greater alignment with investor

sentiment by way of a DRP which will be tabled for shareholder consideration in

early FY24.

118

119

1. DRP ‘at a glance’

ELEMENT

OPERATION

OUT-TURNS FY23 AND IMPLEMENTATION IN FY24

Base salary

• Increases will take into account

The salary increase awarded was 4% for Alexander

a number of factors including the

and 4% for Jonathan which was below the UK and

scale of the role and the individual’s

IoM workforce increase of 7.3%.

experience and wider workforce

increases.

Salary with effect from 1 June 2023:

• Alexander Scott, CEO: £481,700

• Jonathan Gunby, Executive Director: £481,700

Benefits1

• Includes, for example, death in

• Benefits for Alexander and Jonathan comprise

service, private medical insurance

private healthcare, death in service and PMI.

and a discount to the fees for use of

the Transact Platform.

• Alex, Jonathan and Michael Howard benefited

from the discounted platform charges.

• Executive directors are eligible to

receive the same benefits on the

same terms as the wider workforce.

Pension

• The pension policy is equivalent to

• Alexander received a £7,000 pension

that of the wider workforce.

contribution (1.49%).

• The executive directors’ current

• Jonathan received a £7,000 pension contribution

pension arrangements are lower

(1.49%).

than those of the workforce.

Variable reward

• Total maximum opportunity is 100%

• Ordinarily, we do not expect awards to be in

comprising

of salary.

excess of 65% of salary.

i) an annual

cash bonus

element; and

ii) a deferred

bonus award of

• The committee retains flexibility to

• Awards are made by reference to delivery

adjust the balance between cash

against defined metrics which are based on a

and deferred bonus awards within

mixture of individual and Group performance.

the parameters set out in this policy

and the scheme rules.

• The committee uses judgement and discretion

when determining outcomes under the annual

• The deferred bonus awards will

bonus and deferred bonus awards.

usually vest on the third anniversary

of the grant date.

• Outcomes are made by reference to the four

anchors – financial performance; stakeholder

• Deferred bonus awards granted

outcomes; risk, regulation and ESG, and

under the company’s PSP are

strategy delivery.

subject to malus and clawback

provisions as described below.

• For 2022 Alexander was awarded a cash bonus

of 30% and a bonus award deferred into shares

of 31.5%. Jonathan was awarded a cash bonus

of 30% and a bonus award deferred into shares

of 31.5%.

All employee

The plan is operated in line with HMRC

Executive directors are eligible to participate in

share incentive

guidance.

the all-employee SIP on the same terms as all

plan

120

employees.

ELEMENT

OPERATION

OUT-TURNS FY23 AND IMPLEMENTATION IN FY24

Shareholding

• Executives are expected to build up and hold 100% of salary in shares over four years, for

guidelines

in-employment shareholding guidelines.

• Post-employment, these guidelines will apply in full (i.e. 100% of salary) for the first

year post departure and taper down to half (i.e. 50% of salary) for the second year post

departure. This policy does not apply to shares purchased with an Executive’s own funds and

applies only to awards that vest after the approval of the 2021 Remuneration Policy.

Non-Executive

Fees are paid quarterly

Fees with effect from 1 October 2021:

Director fees

• Board Chair: £140,000

• Base fee for Non-Executive Director: £70,000

• Additional fee for chairing a Committee: £10,000

• Additional fee for role of Senior Independent

Director: £7,500

• No changes for 2022/2023

FY23 remuneration outcomes for our executive directors

Alexander Scott, CEO

Total remuneration

Fixed –
£469,400

Cash bonus –
£144,510

Deferred bonus –
£151,761

Other –
£7,688

£773,359

Jonathan Gunby, Executive Director

Fixed –
£469,400

Cash bonus –
£144,510

Deferred bonus –
£151,761

Other –
£7,400

£773,071

121

2. DRP summary - The IntegraFin approach to executive remuneration

Our approach to executive director remuneration is, we believe, aligned to our

culture, our strategy and our success to date. In 2021 we considered it afresh as

part of our triennial Policy review and whilst we still believe that it supports our

success, we recognise the need to develop our approach to reflect the need to

attract and retain the best possible talent who will be instrumental in building and

developing the proposition over the coming years.

Modest incentive quantum

Our approach to Senior

Management incentives

We currently operate only an annual bonus with a portion deferred into shares,

and the level normally does not exceed 65% of salary. This approach has aligned

Our current reward structure has

to our values and culture such that our executives and the wider workforce

delivered the flexibility required to

are rewarded on the same terms, with only the addition of the deferred bonus

enable the committee to effectively

element being available to the more senior managers, the purpose of which is to

recognise management performance

drive forward and strategic thinking and resilience of the Group. A comparison

for the period since listing.

with a more typical FTSE 250 package is illustrated below.

ILLUSTR ATIVE
F TSE 250 PACK AGE

INTEGR AFIN APPROACH
TO EXECUTIVE PAY

Salary

• Market rate

Salary

• No more than market rate

Bonus max 150% of
salary

• Deferral of half for

3 years

• Targets set up front

Performance shares max
175% of salary

• Performance period of

3 years + 2-year holding
period

• Targets set up front

Bonus max 100% of
salary

• Maximum of 100% of

salary, but ordinarily not
expected to exceed 65%
of salary

No long term incentive

• Typical deferral of half
for 3 years (33% of
salary max)

• Performance assessed
on “look-back” basis

We do however recognise that as

we refresh our senior leadership and

build our pipeline of talent to take

the Group forward, there is a need

to structure our reward to recognise

that those individuals do not have

shareholdings in the Group of a

quantum which significantly enhance

those individuals’ income or wealth,

and that a more flexible structure

with the potential for higher reward

in the form of equity is appropriate

to properly link incentives to desired

out-turns.

We are therefore undertaking a review

of the structure and composition of

variable remuneration to recognise

past, short-term and long-term

delivery of the Group’s objectives.

We believe that an appropriately

structured model will continue to drive

the right behaviours whilst enabling

the Group to attract and retain talent
in a competitive market.

122

Approach to performance

measurement

Historically we have used a “look-

back” approach when it comes

to assessing performance and

determining bonus outcomes. This

year we have continued to award cash

and deferred bonuses based on the

look-back approach but the awards

themselves are more closely linked to

the delivery of metrics agreed by the

committee during the performance

year. Those metrics are still aligned

with the four anchors that underpin

our business success.

PERFORMANCE ASSESSMENT — OUR FOUR QUANTITATIVE ANCHORS

Financial
performance

Stakeholder
outcomes

Risk and
regulation
(including
ESG)

Strategy
delivery

Approach to performance assessment is underpinned by
the Remuneration Committee considered qualitative and quantitative
actual performance within this framework (individual performance
is also considered).

We believe that this design continues

Through this approach we look to drive

The committee considers that this

to promote long-term thinking, and

sustainable long-term value for all

is a controlled, responsible and

to promote actions which deliver

our stakeholders. We believe that our

proportionate approach to executive

long-term success whilst maintaining

performance measurement framework

pay in the round in the context of

alliance with workforce reward and

is the best way to achieve this and

low overall quantum and internal

reflecting our culture of not creating

support our culture.

alignment.

wealth for our directors at the expense

of our workforce.

Performance is assessed within a

A critical contributor to the success

of individual and company performance

of the Group is the high standard of

against four anchors and, for individual

client service delivered, collectively,

performance, pre-set metrics.

framework which includes consideration

by our staff. Our approach allows the

committee to assess performance

in the round, taking into account all

relevant factors in order to ensure
that outcomes are appropriate and

aligned with the experience of our

wider stakeholder but guided by the

objectives under each anchor. As a

result, our Executives’ strategic focus

is on growing inflows on a controlled

and responsible trajectory, in order

to maintain the level of customer

satisfaction through delivery of

the best platform, supported by

exceptional service and the provision

of associated ancillary services which

make it easier for our clients and

advisers to plan and manage their

financial affairs.

123

3. Annual Remuneration Report

This report details the remuneration

Governance

arrangements in place for people

who were directors of the Company

Committee membership during the year

during the financial year.

There have been no changes to

Directors’ remuneration throughout

the year save for the annual bonus

award made in December 2022 and

The members of the Remuneration Committee at 30 September 2023 were:

Christopher Munro (Chair)

19 January 2018

DATE OF APPOINTMENT

the annual pay award made in

Richard Cranfield

June 2023.

Wider workforce - IAD and T4A

Rita Dhut

Robert Lister

Note that throughout this report,

Role of the RemCo

there are various references and/or

17 December 2019

22 March 2023

1 September 2021

comparatives to the wider workforce

The purpose of the committee is to review, set and agree aspects of the overall

or the wider UK workforce. The

remuneration policy and strategy for the Group and the total compensation

structure of reward for T4A employees

package for certain officers and employees within the Group. It does so with a

continues to be gradually integrated

view to aligning remuneration with the successful achievement of the Group’s

into the IntegraFin business model.

long-term objectives while taking into account the Code, relevant regulatory

Whilst basic pay rise awards have

requirements, market rates and value for money.

been benchmarked and aligned,

variable remuneration continues

By delegation from IFAL and ILUK, the committee monitors the content and

to differ reflecting the different

application of the Company’s remuneration policy to individuals whose roles

incentives applicable to the T4A

bring them into scope of the FCA and PRA remuneration codes and the Corporate

business. Therefore references to

Governance Code. To the extent that the committee does not approve their

wider workforce currently excludes

individual remuneration, the committee considers whether the total reward

T4A employees save where expressly

for each of those employee remains compliant with the provisions of the

included. In some instances it also

relevant code. The committee is also responsible for reviewing an annual

excludes our Australian employees

statement prepared by IFAL setting out how IFAL complies with FCA regulatory

in IAD as Australian employment

requirements on remuneration.

arrangements differ from those in

the UK.

In all its activities, the committee gives due consideration to laws and

regulations, the provisions of the Code, the requirements of the UK Listing

Authority’s Listing, Prospectus and Disclosure Guidance and Transparency Rules

and other applicable rules, as appropriate, and to shareholder feedback.

Composition of the Remuneration Committee

The board appointed Rita Dhut to the RemCo in FY23. The committee is now

comprised of three independent NEDs and the Chair of the Board and therefore

the composition continues to comply with the requirements of the Code.

Following the implementation of MiFIDPRU, IFAL is required to comply with the

provisions of SYSC19G. When reviewing the composition of the committee,

consideration was given to the requirements under SYSC19G and the ongoing

obligations for ILUK under the Solvency II regime. The committee composition

continues to comply with both requirements.

The committee ensures that members take individual responsibility for

identifying training appropriate to their needs and for keeping appropriate

records of such training. Each committee member provides copies of their

training record to the Company Secretary annually and undertakes all regulatory

training requested by the Group.

124

Committee meetings and

The Committee’s work throughout

attendance

the year

The committee meets at least twice

The committee has performed

annually and more frequently when

its duties with a view to aligning

required. The committee has met

remuneration with the successful

ten times during this financial year.

achievement of the Group’s long-

Attendance by each member of the

term objectives while taking into

committee as at 30 September 2023

account the Code, relevant regulatory

is set out in the Board and Committee

requirements, market rates and value

attendance table on page 94.

for money.

The Head of Legal and Company

The committee has undertaken the

Secretary and the Head of Human

following this financial year:

Resources attend all meetings and

other individuals such as the CEO, the

Group Counsel, and external advisers

may be invited to attend for all or part

of any meeting.

AREA OF FOCUS

WORK CONDUCTED

Governance

• Reviewing the Committee Terms of Reference to

ensure their continuing appropriateness.

• Considering the membership of the Committee

and the provisions of the Code and recommending

the appointment of Rita Dhut to the Committee

to enhance the skills on the Committee and to

demonstrate the importance of remuneration

considerations in the context of our employee

engagement strategy.

• Considering the FCA and PRA remuneration

requirements in respect of employees who hold

Senior Management Functions within the business

or who have been identified as Remuneration Code

Staff.

Awards

• Reviewing the appropriateness of the proposed

annual staff pay award by reference to the FCA, PRA

and FRC expectations, and the DRP.

• Approving the proposed remuneration for the

executive directors and senior managers.

• Considering proposals for the remuneration of

the CFO.

• Considering the appropriateness of remuneration

for Code staff and the staff pay award.

• Reviewing and approving the making of deferred

bonus awards to executive directors and senior

managers.

• Approving the grant of the Free Share Award.

• Considering and developing proposals for a

restructure of variable remuneration.

125

Committee self-evaluation

The committee continued to develop its performance in the context of the

feedback from the 2022 self-evaluation. In particular the Chair of the committee

and the Chair of the board have met with institutional investors to share insight

into and receive feedback on our remuneration model. The committee has

continued its work to more closely align the linkage of variable remuneration to

individual as well as Company performance and to introduce clearer objectives

and measures of performance and is developing the framework further to align

with stakeholder interests.

Feedback regarding the interaction between the committee and the regulated

subsidiary boards continues to be considered and there is a structure in place

for cascade of information from the committee Chair to the chairs of the UK

regulated subsidiary ARCs.

DRP

The DRP was approved by ordinary resolution at the Company’s AGM held on

24 February 2022 and can be found on pages 94 to 102 of the Company’s

Annual Report and Financial Statements for the year ended 30 September 2021,

which is available in the Investor Information section of the Company’s website

integrafin.co.uk.

Statement of voting at the AGM

The Company remains committed to ongoing shareholder dialogue and takes a

close interest in voting outcomes. The following table sets out voting outcomes in

respect of the resolutions relating to approving directors’ remuneration matters at

the Company’s AGM for the last three annual meetings:

YEAR

RESOLUTION

VOTES FOR /
DISCRETIONARY

% OF
VOTE

VOTES
AGAINST

% OF
VOTE

VOTES
WITHHELD

2023

Approve the Director’s Remuneration Report

221,114,781

92.18

18,760,062

7.82

2022

Approve the Director’s Remuneration Policy

216,703,830

91.90

19,098,977

8.10

1,361,995

2022

Approve the Director’s Remuneration Report

214,085,945

90.89

21,456,381

9.11

1,622,476

2021

Approve the Remuneration Report

181,687,872

81.57

41,040,519

18.43

4,742,263

126

4. Application of the Policy

How the Policy was applied in FY23

Summary of total remuneration – executive directors (audited)

GROSS
BASIC
SALARY

BENEFITS1

PENSION

TOTAL
FIXED PAY

CASH
BONUS

DEFERRED
SHARES

LTIP

OTHER2

ANNUAL BONUS

TOTAL
VARIABLE
PAY

TOTAL

DIRECTOR

YEAR

£'000

£’000

£'000

Alexander Scott

Jonathan Gunby

Michael Howard

2023

2022

2023

2022

2023

2022

469

443

469

443

477

448

477

448

145

116

152

146

152

146

305

247

304

270

782

704

781

703

1 Benefits for Alexander Scott were £922 for 2023 and £842 for 2022
Benefits for Jonathan Gunby were £922 for 2023 and £842 for 2022
2 Other remuneration relates to Share Incentive Plan awards and the employee discount on platform charges.

Michael Howard receives nil remuneration from the Company, but his employer,

ObjectMastery Pty Ltd, receives a fee of AUD80k for his executive appointment to

IAD Pty Ltd, a company within the Group.

Base salary (audited)

The basic annual salaries for Alexander Scott and Jonathan Gunby were reviewed

in June 2023 in accordance with the Company’s all-employee pay review resulting

in the following changes to the annualised salary figures:

BASIC ANNUAL SALARY
AS AT 1 JUNE 2022

SALARY EFFECTIVE
AS AT 1 JUNE 2023

£’000

463

£’000

481

DIRECTOR

Alexander Scott

Jonathan Gunby

Benefits

Executive directors do not receive any benefits which are not available to all

employees. Benefits for the executive directors comprise private health care,
death in service benefits and an employee discount on platform charges.

127

Incentives

IntegraFin has a culture focused on

ii) Employer funded

Proportionate incentive opportunity

our principal stakeholders – customers,

contractual-enrolment

shareholders and employees. Our

company pension scheme

Our maximum total variable

incentive structure has been developed

Employer contributions are 9% of

remuneration opportunity for

to support this culture:

post-pension-sacrifice salary but

executive directors is 100% of salary,

participants may elect to reduce

and ordinarily in practice we do

Alignment across all staff

that if contributions would exceed

not expect awards to exceed 65%

HMRC tax free contribution

of salary. This relatively modest

All staff are eligible for an annual cash

allowance. If an employee does

incentive level (compared to normal

bonus award and to participate in the

not sacrifice into (i) above, the

UK practice) supports the alignment of

all staff SIP. Our incentive structure

employer contribution to the

executive and workforce reward.

is designed to align across the

contractual enrolment company

workforce and all employees are made

pension scheme will be 9% of

Variable reward comprises Cash

awards under the same performance

basic or lower.

bonus and deferred shares awards

framework. This ensures that the

executive team and the workforce

iii) Employees (including

The company operates a directors’

share in the success of the business

directors) are eligible to

discretionary bonus arrangement with

and drives a culture of inclusivity in

sacrifice a maximum of 25% of

the anticipated award of 65% of basic

the reward structure.

any variable cash bonus award

salary arranged as follows:

into their pension

Aligned pension provision

Any such contribution will receive

i) Immediate Cash bonus

30% employer contribution. The

Anticipated 10% of salary awarded

The majority of UK and Isle of Man

committee continues to review

in November and settled in

employees, including executive

the appropriateness of this

December.

directors have access to three pension

arrangement The Company’s

arrangements which interrelate.

directors’ pension funding

ii) Deferred cash bonus

It is key that, save with respect to

arrangements are not excessive

Anticipated 20% of salary awarded

employees of T4A, the Company’s

and align completely with those

in November with 10% settled in

executive directors are not eligible

available to the wider workforce.

February and a further 10% in

for pension benefits which differ

April provided the director remains

from or exceed those available to

Australian based employees of

in service and not in their notice

other UK staff.

IAD participate in a comparable

period by reason of being a “bad

i) Salary Sacrifice pension

with the Australian tax rules.

arrangement structured to comply

leaver”.

Employees (including directors)

Each element is only payable if the

can fund as much as they wish.

T4A operates an employer and

employee remains employed on

The Company will match 1% of

employee funded auto-enrolment

the payment date. We believe that

basic annual salary for every 2%
of basic annual salary sacrificed,

scheme. All employees of T4A,
including executive directors who do

this both rewards performance and
encourages loyalty.

up to a maximum of 4% employer

not hold executive office elsewhere

contributions.

in the Group, are able to participate

iii) Deferred bonus into shares

on equivalent terms. We continue

The company operates a

to look at the synergies between

discretionary deferred bonus

the T4A remuneration structure and

share option plan by which cash

that of the wider workforce but will

bonuses of up to 33% of salary,

not make any significant changes to

less employer funded Free and

the arrangements currently in place

without due consideration of the

Matching SIP shares, are deferred
into share options. The holding

interests of both the Company and

period is three years and there is

the employees.

no post vesting holding period.

The plan therefore does not comply

with the components specified in the

Code relating to a phased release of

awards and a five year holding period.

128

At present we believe that a three-

year vesting period is adequate.

We maintain flexibility on the

proportion of each element of the

awards. The Company is focused

on the long-term delivery of

outcomes which balance the interests

of customers, employees and

shareholders and this is best served by

ensuring that executive behaviour is

focused on investment in the platform

and ancillary activity in accordance

with the Group’s strategy and purpose.

Four qualitative and quantitative

Annual bonus (cash and deferred

anchors

share) awards for FY23 (audited)

The Committee considers company

and individual performance against

DIRECTOR

four qualitative and quantitative

Alexander Scott

anchors:

Jonathan Gunby

CASH AWARD
£’000

DEFERRED AWARD
£’000

145

30% of salary

152

31.5% of salary

• Financial performance

The cash and deferred award

• Stakeholder outcomes

percentages are by reference to the

basic salary on 30 September 2023.

• Risk and Regulation (including

This is aligned to the approach taken

Environmental, Social and

for all employees.

Governance)

The bonus for Alexander is

• Strategy delivery

recommended by the board Chair. The

bonus for Jonathan is recommended

Each director’s delivery of their

by Alexander. The committee considers

objectives is assessed against each

detailed information which covers

anchor, as well as the Group’s delivery

factors such as financial performance,

in the round. Whilst the committee

risk, compliance, conduct, internal

has not set targets for apportionment
of variable awards against each

controls, client and client adviser
metrics, and delivery of strategy.

anchor, the awards are assessed by

reference to delivery of those anchors

This year, as in past years, we

and awards are adjusted for non-

reviewed the board Chair’s and the

delivery.

CEO’s proposals in that context, and

considered whether the executive

Within those anchors, the RemCo

directors had delivered appropriate

considers a wide variety of

stakeholder, financial and strategic

management information available to

performance, whilst also managing risk

the Board and its committees. Whilst

and maintaining internal controls.

the committee considers metrics

linked to each anchor, the essence of

the process is to use the metrics to

arrive at a balanced judgement as to

whether an award is warranted and, if

so, at what level.

129

For FY23 the assessment of whether cash and deferred bonus awards

were justified was in particular informed by the following metrics and

performance in the year:

Quantitative anchor (metrics and performance)

Financial performance

Stakeholder outcomes

Ensure effective financial

Out-turns

performance of the Group by:

In FY23:

• Delivering financial performance

Create, maintain and improve

value to our four groups of

stakeholders – customer,

shareholders, suppliers and

against forecast, in accordance

• Financial performance fell below

employees by:

with projections and market

original projections but, in the

expectations.

main, this was due to negative

• Identifying and executing

market movements outside the

opportunities for consistent

• Sustaining service excellence

Company’s control.

within the context of managed

growth in gross and net inflows

and sustained or improved market

expenses.

• Profit margin has reduced as

share of net inflows.

• Managing costs and headcount

charges and interest thereon;

• Sustaining our platform’s adviser-

effectively.

and the removal of T4A post

voted industry awards.

a result of the historical VAT

• Managing the dividend flow and

Normalised profit results in a

• Ensuring adviser satisfaction with

distributable reserves/regulatory

reduced profit of just 6.5%.

the Company’s propositions.

combination remuneration.

capital from subsidiaries.

Measures of success

• Net inflows

• Earnings per share

• Expense ratio

• Profit margin

• Share price

• Market cap

• T4A user licences

• Payment of a dividend

• External factors outside of the

Company’s control, e.g. sudden
FTSE and global movements.

• Service delivery, whilst subject

• Creating a culture which

to stretch, continued to be

encourages openness, honesty,

regarded as market leading

prevents harm and results in

by our Financial Advisers and

behaviours that are consistent

has not impacted on financial

with the Group’s values.

performance.

• Maintaining a staff attrition rate

• Dividend flow and distributable

that remains within appetite.

reserves/regulatory capital
from subsidiaries to support

• Ensuring that the Group does not

Group dividend were managed

risk capital beyond reasonable

effectively and dividends to

levels, does not create any

shareholders have been paid in

commercial conflict or make

line with policy.

it difficult to meet regulatory

responsibilities.

• Forward-looking projections

indicate that the Company is well

placed to sustain performance

over the coming year taking into

account stress-tested scenarios.

130

Measures of success

Out-turns

• Net inflows

In FY23, the Company delivered

• The Employee emphasised

• Adviser + user/client retention

• Market share of inflows

the following:

Clients and advisers

employee focus on the delivery

of enhancements to the work

environment London based

employees.

• Adviser voted awards received

remained above 10% and net

Shareholders

flows make up approximately 22%

• Market share of gross inflows

• Market research results (internal

of the market.

• The Company distributed

and external)

dividends in accordance with its

• Staff attrition rates

UK Investment Platform study

• Staff engagement survey results

Platform award 2023 “Platform of

stable throughout the year.

2023 and won Schroders UK

• The share price has remained

• Transact rated first in CoreData

dividend policy.

the Year”.

• Under performance rates

• In order to add strength and

• Clients benefited from further

depth to our Group financial

• Shareholder engagement

price reduction on buy

reporting and financial

commission, removal of wrapper

management the Board has

• Performance and management of

fees on junior pensions and the

selected a CFO to start in

third-party suppliers

reduction in fee for non-advised

January 2024.

clients.

• Clients and advisers benefit from

Suppliers

continued investment in the
development of digital onboarding

• The Group settled around 95%
of its invoices within 30 days of

tools.

Employees

receipt in the last fiscal year.

No one stakeholder is prioritised

over the others and the Committee

• Changes to performance related

considers the balance of the

pay for London and Isle of Man

outcomes for stakeholders when

staff has addressed concerns over

determining the appropriateness of

basic pay levels and strengthened

variable remuneration awards.

the basis on which performance is

measured and rewarded.

• 100% of eligible employees took

up the SIP free share award and

69.79% took up the Partnership

Share award.

131

Risk, regulation and ESG

• Effective leadership of risk

Measures of success

TCFD reporting reviewed and

management by reference to

enhanced. The above achievements

all capital liquidity, operational

• Complaint and error metrics

are also underpinned by the following:

resilience and compliance

with regulatory requirements

• Review of non-compliance or

• The Group has shown appropriate

applicable to the Group, including

sanctions affecting the Group

adherence to internal, legal and

those applicable to the Company

as a UK listed plc and those

• Customer satisfaction

applicable to our UK investment

regulatory policies, laws and rules

and board reports demonstrate

appropriate understanding and

firm, UK insurance firm and Isle of

• Internal audit reports and

implementation of regulatory

Man insurance firm.

findings, and the resolution

change projects.

thereof

• Demonstrable adherence to

• Monitoring, auditing and other

internal, legal and regulatory

• Performance against Risk control

assurance activities demonstrate

policies, law and rules.

self-assessment

appropriate attention to

maintaining the internal control

• Effective management of internal

• Progress on environmental

environment.

governance of the Group both

response plan

at Board level and through the

subsidiaries and management

Out-turns

structure and the interrelationship

The committee considers all of

these aspects when determining

the appropriateness of a variable

with the delivery of the strategy

In FY23 the Company delivered:

remuneration award. No individual

and financial performance.

weighting is applied to one or more of

• Ongoing engagement with the

these aspects so that the committee

• Making moral decisions and

FCA, the PRA and the IoM FSA on

has the flexibility to adjust the award

demonstrating a values-driven

matters such as board succession

by reference to the impact of internal

approach that seeks to prevent

and non-standard assets.

and external constraints on the

rather than cure.

delivery of each.

• Effective delivery of the

completed.

environmental response plan.

• Risks including regulatory

The committee considers the steps

taken to recruit and retain talent
within the organisation. In doing

• Internal Audit programme

compliance managed within

so, the committee receives reports

appetite. Minor risk appetite

on staff numbers, recruitment and

breaches promptly identified and

retention, and internal development

addressed.

opportunities by way of promotions

and movement between departments

and business functions.

The committee considers the

appropriateness of executive reward

in the context of these measures.

132

Strategy delivery

Ensuring that the Group and

Measures of success

Out-turns

each of its subsidiary companies

achieves its strategic goals

• Assessment of the ancillary

In FY23, the key strategic deliverables

through:

services offered to clients and

by the Company were:

advisers

• Continuous improvement of

• Delivery of organic growth.

the platform functionality,

• Management of expenses

responding to customer

feedback.

• Enhanced resilience of the

• Number of retained advisers and

clients

• Improvement in service delivery.

• Continuing the development of

the enhanced CURO proposition

core platform and associated

• Number of new advisers and

on Power Platform software.

services.

clients

• Continued delivery of system

• Increased number of advisers

• Number of advisers and clients

enhancements.

and clients using CURO.

using CURO

• Growth of ancillary services to

enhance the adviser and client

experience.

133

How the Committee’s discretion

was applied

In determining the award for the

In considering the anchors we

vest after three years and will be

executive directors, we considered

reviewed the performance of the

subject to malus and clawback

the Group’s performance against its

external market and the impact of

provisions as detailed in the DRP.

strategic objectives, the business

factors that the Group could not

plans approved by the Board,

control, alongside the delivery of the

In certain circumstances, the

market consensus, regulatory

platform and stakeholder outcomes

Committee has the right to reduce or

requirements, the current state of

that it could.

financial markets and the recruitment

withhold the deferred bonus award.

This includes but is not limited to

market. The committee weighed up

We considered the impact of stock

where there has been a material

the performance of the Company in

market volatility on the Company’s

misstatement and/or significant

FY23 and the future projections for

financial performance.

downward revision in the financial

FY24. Consideration was given to

results, where the calculated number

the extent to which we delivered the

We considered the ongoing investment

of shares awarded to an individual

superior customer service to which

in T4A, their delivery of their business

director is determined to be too

we aspire and to the Group’s financial

plan, and the Company’s steps to align

high, or where the Award Holder has

performance. Financial performance

the independent businesses to deliver

engaged in misconduct justifying the

was considered by reference to the

optimum outcomes for customers.

director’s summary dismissal.

business plan shared with the board

at the beginning of the financial year

Based on a holistic assessment

Going forward the committee is

and to the delivery of stakeholder

of Group performance, including

giving consideration to applying

expectations. Having balanced these

consideration of the 2023 outcomes

performance conditions to the

deliverables the committee then

set out in the table above, and

deferred share award.

considered whether the proposed

individual performance, the committee

awards were sustainable given the

granted the following awards:

current projections and future plans

and deliverables within the Group.

Alexander Scott was granted an overall

award (cash and deferred bonus

We sought assurance that the

shares) equal to 61.5% of salary. In

recommendations were made in

making this award, the committee

accordance with a balanced view of

had particular regard to the financial

future profitability and in the interests

performance of the Group, the delivery

of all stakeholders, not just based on

of the shareholder experience and

backward looking performance, and

progress towards climate related

that the awards were consistent with

commitments. The committee

the expectations of our regulators

allocated the award as 30% cash and

and our other stakeholders regarding

31.5% deferred into shares.

proportionate reward that focused
executive remuneration on sustainable

Jonathan Gunby was granted an

delivery over the medium to long

overall award (cash and deferred

term whilst discouraging inappropriate

bonus shares) equal to 61.5% of

risk taking or focus on driving up

salary. In making this award, the

share price at the expense of other

committee had particular regard to the

stakeholder outcomes.

financial performance of the Group,

the delivery of new and retention of

The committee concluded that

existing business through the platform

payment of an award was appropriate

proposition, enhancement of the

given the Group’s delivery in the

technology offering and management

financial year and sustainable in light

of the delivery ancillary services in

of the forward-looking projections

support of our strategic objectives. The

and the forecast performance of the

committee allocated the award as 30%

Company over the coming year. The

cash and 31.5% deferred into shares.

committee discussed the quantum

of the proposals and evaluated the

The deferred bonus award is granted

appropriate level of awards to the

following the announcement of the

Directors.

134

Group’s annual results. Awards will

LTIPs

SIP

Pension contributions

The Company does not currently

Executive directors can participate

Pension contributions for Alexander

operate a traditional LTIP and, in FY22,

in the SIP. The board may make an

Scott and Jonathan Gunby are

no award was made to executive

award to participants of Free Shares

currently made by reference to

directors that was dependent on

up to the value of 3% of salary or

the relevant personal allowance.

performance conditions relating to

£3,600 (whichever is lower) and may

In the FY23 performance year, the

more than one year. Awards made to

permit participants to subscribe for

employer’s pension contribution for

executive directors in respect of FY23

Partnership Shares up to the value of

both Alexander Scott and Jonathan

were assessed against the delivery

1.5% of salary or £1,800 (whichever

Gunby was £2,000 for the period 1

of performance conditions; however,

is lower). For every Partnership Share

October 2022 to 31 March 2023 and

they are not under the framework of

purchased, two Matching Shares were

£5,000 for the period 1 April 2023 to

an LTIP.

awarded. The £3,600 and £1,800 limits

30 September 2023.

are set by applicable legislation and

will be revised automatically in the

In line with our remuneration

event of any changes to the legislation.

principles, pension contributions for

executive directors are aligned with

During FY23, the maximum SIP award

those available to the wider workforce.

was granted to qualifying employees

In FY23, at 1.49% of basic salary, both

(including Alexander Scott and

Alexander Scott and Jonathan Gunby

Jonathan Gunby). The Partnership

received pension contributions below

and Matching Share Award was made

the minimum level contributed in

on an evergreen basis and therefore

respect of the wider workforce.

all qualifying employees will be able

to continue to participate in the plan

The minimum employer contribution

unless it is revoked by the committee.

available to all employees in FY23

Based on the Group’s performance in

was 9%. For employees other than

FY23 the board has not revoked that

executive directors the Group has

award. The board has considered the

made contributions to personal

Group’s performance in FY23 and,

pension arrangements for those

with the approval of the Remuneration

employees who have sacrificed

Committee, has approved the making

salary. Whilst this benefit is available

of a further maximum SIP Free

to executive directors, none of the

Share award to qualifying employees

current executive directors has

(including Alexander Scott and

sacrificed salary.

Jonathan Gunby) when the Company

is not in a closed period. This will be

following the announcement of the

Group’s financial results.

135

Shareholding guidelines

In-employment

Post-employment

In the 2021 DRP, the Company

The Company has adopted post-

adopted in-employment shareholding

employment shareholding guidelines

guidelines pursuant to which a serving

pursuant to which an executive

executive director must build up and

director must retain for 12 months

maintain a holding of IntegraFin shares

following cessation of employment

with a value (as determined by the

such of their “relevant shares”

committee) at least equal to 100%

as have a value (as determined

of salary over a period of four years.

by the committee) equal to the

Unvested share options awarded under

in-employment guidelines most

deferred bonus arrangements and

recently applicable to them, and for

shares subject to other share awards

a further 12 months such of their

which are no longer subject to any

“relevant shares” as have a value (as

performance condition (including any

determined by the committee) equal to

exercisable but unexercised awards)

50% of the in-employment guidelines

count towards the requirement, on

most recently applicable to them.

a net of assumed tax basis where

Shares which the executive director

relevant.

has purchased or which they acquire

pursuant to share plan awards granted

Individual shareholdings for each of

before this Policy came into effect

Alexander Scott, Jonathan Gunby and

are not “relevant shares” for these

Michael Howard are set out below and

purposes.

all meet the minimum requirements

under the policy.

The committee retains discretion

to vary the shareholding guidelines

to take account of compassionate

circumstances.

No executive directors have left office

since the implementation of the policy

and therefore there is no report to

provide in this respect.

136

Percentage change in remuneration of directors compared to the

average employee

The table below shows the percentage movement in the salary, benefits

and annual bonus for the Directors compared to that for the average Group

employee over the past five years.

The SIP scheme is provided to all UK and Isle of Man employees, including

executive directors, but excluding T4A and is not included above.

FY23

FY22

FY21

FY20

FY19

SALARY
/ FEES
%

BENEFITS
%

BONUS
%

SALARY
/ FEES
%

BENEFITS
%

BONUS
%

SALARY
/ FEES
%

BENEFITS
%

BONUS
%

SALARY
/ FEES
%

BENEFITS
%

BONUS
%

SALARY
/ FEES
%

BENEFITS
%

BONUS
%

31.25

11.71

31.25

1.76

n/a

33.3

29.2

28.3

26.6

(10.1)

2.5

19.5

(-0.7)

56.4

0.0

63.8

3.8

26.6

(1.4)

2.51

19.5

0.6

(14.3)

0.0

(30.0)

119.1

0.0

25.8

(9.4)

7.3

31.25 (37.46)2

7.3

26.6

16.75

3.2

19.5

17.98

2.9

5.5

12.8

3.6

26.8

1.1

DIRECTOR

Alexander
Scott

Jonathan
Gunby

Michael
Howard

Caroline
Banszky

Victoria
Cochrane

Richard
Cranfield

Rita
Dhut

Robert
Lister

Christopher
Munro

Average
employee
(exc. T4A)

Notes to the table:

Alexander Scott’s basic remuneration increased in 2020 upon appointment as CEO.

Jonathan Gunby was appointed in 2020 and there is therefore no comparable data for 2019.

1Jonathan’s basic salary increased 2.5% year on year, however in 2020 Jonathan purchased annual leave and therefore received lower basic and
variable remuneration in 2020 than Alexander.

2The reduction in the average employee bonus award is reflective of the restructure of employee reward to increase basic and reduce the variable
proportion to a targets met out-turn of 10% (2022 - 20%).

Michael Howard receives nil remuneration from the Group but his employer, ObjectMastery Pty Ltd, receives a fee of AUD80k for his executive
appointment to IAD Pty Ltd, a company within the Group. This fee remained consistent until FY23.

Christopher Munro was appointed to interim chair in 2019 and then stood down from this position in 2020 which is why there is a fee differential year
on year.

In 2021 the NED fees were restructured resulting in a reduction in the fee payable to Christopher Munro.

The change in salary/ fees for the directors is based on the salary as at 30 September for each financial year.

Some staff received a deferred share bonus award in 2020, 2021, 2022 and 2023 which is why there is a significant increase from 2019.

The table does not include salary and benefits movement for IAD employees employed in Australia as their employment benefit package differs
from the UK staff package in recognition of different compensation and benefit rules in Australia. It has therefore been deemed inappropriate to
include their remuneration in this comparison. Similarly, the “average employee” calculation in the table excludes T4A due to slight differences in the
remuneration structure.

137

CEO pay ratio table

The following table sets out the ratio of the CEO’s pay to each of the

Group’s median, lower quartile and upper quartile pay for UK employees for

the last five years.

METHOD

PAY RATIO

RATIO

PAY RATIO

25TH PERCENTILE

MEDIAN PAY

75TH PERCENTILE

FY23

FY22

FY21

FY20

FY19

Salary

Method A

Total remuneration

Salary

Method A

Total remuneration

Salary

Method A

Total remuneration

Salary

Method A

Total remuneration

Salary

Method A

Total remuneration

11:1

17:1

14:1

16:1

14:1

16:1

17:1

18:1

n/a

18:1

8:1

13:1

10:1

12:1

11:1

13:1

15:1

n/a

15:1

7:1

9:1

6:1

8:1

7:1

9:1

10:1

n/a

10:1

The salary and total remuneration ratios for 2023 above are based on the

following figures:

FY23

Salary

Total remuneration

25TH PERCENTILE

MEDIAN PAY

75TH PERCENTILE

CEO

PAY RATIO

RATIO

PAY RATIO

469,367

780,839

41,641

47,273

58,492

61,764

70,133

89,028

The CEO pay ratios were calculated using ‘Option A’, set out in the Companies

(Miscellaneous Reporting) Regulations 2018. Under this method, the full pay

and benefits of each UK employee were used to identify those employees that

represented the Group’s median, lower quartile and upper quartile pay for UK

employees. The full pay and benefits of these employees were then used to

calculate the ratios as at 30 September 2023. The Group elected to use Option

A as its method of calculation as it felt that using the full pay and benefits of all
employees was the most accurate method of identifying those employees that

represented the Group’s mean median, lower quartile and upper quartile pay

for UK employees. To determine the full-time equivalent pay and benefits of

non-standard workers, part-time workers’ remuneration was grossed up to the

equivalent full time pay.

The ratio for the median and 75th percentile has decreased in FY23. There has

been no overall change to the reward structure or benefits provision in the year.

The Company has however experienced higher turnover in FY23 compared to

prior years, resulting in a net reduction in the number of employees included in

the comparative calculation. In addition, the remuneration used to calculate the

gap is based upon remuneration awarded in respect of the reference year and

therefore the reduced bonus awarded for the IHP CEO in FY22 has resulted in a

decreased pay gap.

138

Executive director remuneration compared to wider workforce

Our approach to remuneration for executive directors is consistent with that for

all employees.

• Incentives – our incentive structure is aligned across the workforce,

excluding T4A, and all employees are made awards under the same

performance framework. For more senior employees a portion is deferred

into shares.

• Pension – for all employees the maximum company contribution available

in FY23 was 22%. Whilst executive directors are eligible to receive the same

level as (but no more than) all employees, the pension currently provided to

executive directors is 1.49% of salary, considerably lower than the pension

provided to the workforce.

• SIP – all-employees receive SIP shares based on company performance.

This year the maximum of 3% of salary (up to a maximum of £3,600) was

awarded, with additional partnership and matching shares available.

Relative importance of spend on pay

The following table sets out the percentage change in profit, dividends paid and

overall spend on pay in the year ending 30 September 2023, compared to the

year ending 30 September 2022.

FY23 £m

FY22 £m PERCENTAGE CHANGE

IFRS profit after tax

Dividends

Employee remuneration costs

49.9

33.7

46.0

44.0

33.7

38.3

13%

20%

Payments to past directors (audited)

There were no payments to past directors

Payments for loss of office (audited)

No director received payment for loss of office in FY23

139

Share Awards made during the year (audited)

TYPE OF INTEREST
AWARDED

BASIS ON WHICH
AWARD MADE 2

Deferred
bonus

Conditional
share award

33% salary less
award of SIP Free and
Matching shares

DATE OF
AWARD

FACE
VALUE
AWARDED 3

PERCENTAGE

RECEIVABLE

FOR MINIMUM

PERFORMANCE

NUMBER
OF
SHARES
AWARDED

END OF
DEFERRAL
PERIOD

20.12.2022

£145,656

100%

48,187

20.12.2025

Alexander
Scott

SIP

Free Shares

Partnership
Shares

Matching
Shares

Dividend
Shares

3% (Free and
Matching shares)
of Salary subject to
maximum of £3,600
each per annum and
1.5% (for Partnership
Shares) subject to a
maximum of £1,800
per annum

06.01.2023

£3,598

23.01.2023

£1,800

23.01.2023

£3,600

100%

27.01.2023
30.06.2023

1,205

675

1,350

178
142

N/A*

Deferred
bonus

Conditional
share award

33% salary less
award of SIP Free and
Matching shares

20.12.2022

£145,656

100%

48,187

20.12.2025

Jonathan
Gunby

SIP

Free Shares

Partnership
Shares

Matching
Shares

Dividend
Shares

3% (Free and
Matching shares)
of Salary subject to
maximum of £3,600
each per annum and
1.5% (for Partnership
Shares) subject to a
maximum of £1,800
per annum

06.01.2023

£3,598

23.01.2023

£1,800

23.01.2023

£3,600

100%

27.01.2023
30.06.2023

1,205

675

1,350

178
142

N/A*

1 Deferred share awards form part of the annual incentive, for which awards were determined based

on performance to 30 September 2022.

2 SIP Free Share awards were determined based on Group performance to 30 September 2022. SIP

Partnership and Matching awards are loyalty awards. The awards are evergreen and are purchased

monthly and will continue unless revoked by the Remuneration Committee. The award date shown is

the first purchase date following publication of the Company’s annual report and financial statements

but the amount reflects the award for the full financial year.

3 The face-value of the deferred bonus share award is calculated using average share price from

15 December 2022 to 19 December 2022 which was £3.02. The face value of the Free Shares is

calculated using the share price paid by the SIP administrator on the date of purchase which was

£2.99. The face value of the Partnership and Matching Share award is calculated using the total

number of Partnership and Matching Shares bought on behalf of the relevant individuals during the

financial year and an average share price for matching share purchases.

4 The SIP is operated in line with HMRC guidance.

140

Shareholding requirements and directors’ share interests (audited)

No share awards other than the all staff SIP and the deferred bonus Share Option

Plan award were awarded to executive directors during the financial year.

During the FY21 policy review, the Company implemented a requirement that

executive directors are required to build up a holding of one year’s salary

equivalent in shares within four years of appointment. In assessing whether an

individual director meets this requirement, the Company will include shares held

in the director’s own name, those held in any pension over which the director

directs the investment profile, and those unvested shares held in an employee

share plan.

We recognise that the Investment Association guidance recommends that

executive directors hold two year’s basic salary equivalent in shares within two

years of appointment, however the Company believes that it is incompatible

with social diversity to require a new director to acquire any more than one

year’s salary equivalent in shares in a period any less than four years from

appointment. To do so would require the director to be so economically

advantaged that it would exclude individuals from wider, more diverse

backgrounds from taking up an appointment with the board. The Company

believes that by limiting the requirement to one year’s basic salary, permitting

the inclusion of a wider range of shares and providing a period of four years for

the accrual of those shares, the appropriate balance is struck between inclusion,

and directors’ personal investment in the long-term outcomes of the Company.

DIRECTOR/
CONNECTED
PERSON

1P ORDINARY
SHARES

TOTAL
2018 SIP
SHARES1

DEFERRED
BONUS SHARE
SCHEME (NO
PERFORMANCE
CONDITIONS)

VESTED BUT
UNEXERCISED

OPTIONS
EXERCISED

Alexander Scott

1,148,260

11,413

145,897

47,152

Jonathan Gunby2

803,665

11,413

145,111

46,677

Michael Howard3

32,000,000

Christopher Munro

1,003,324

Caroline Banszky

Victoria Cochrane

7,500

3,750

Richard Cranfield4

20,000

Rita Dhut

Robert Lister

15,000

6,015

(1) Includes dividend reinvestment shares relating to SIP shares.

(2) Includes Cheryl Gunby shareholdings and family trusts controlled by Jonathan.

SHARES
HELD AT
30.09.2023
TOTAL

PERCENTAGE
OF BASIC PAY
/ FEE HELD IN
SHARES

SHARES
HELD AT
30.09.2022
TOTAL

PERCENTAGE
OF BASIC PAY
/ FEE HELD IN
SHARES

1,305,570

652%

1,253,833

960,189

479%

908,452

629%

441%

32,000,000

175,449%

32,000,000

175,532%

1,003,324

7,500

3,750

20,000

15,000

6,015

7,500

3,750

10,000

15,000

6,015

(3) Michael Howard’s shareholding is shown as a percentage of the fee paid to ObjectMastery for his services to the IHP board.

(4) Includes Gillian Cranfield shareholdings.

The value of each director’s shareholding has been calculated by reference to the

average of the share price over the final three months of the financial year.

The value of unvested and unexercised share options is shown net of Income Tax

at the additional rate and Employee’s NI.

The rate for Michael Howard has been calculated by reference to the exchange

rate on 30 September of the relevant financial year.

No Directors have any other vested or unvested share options as at the end of

the FY23.

141

Shareholder return performance graph and CEO pay over the same period

This graph shows the Company’s total shareholder return performance from

Admission to 30 September 2023

The Company has chosen to show total shareholder return against the FTSE 250

total return over the same period, as the Board considers this to be the most

appropriate comparator.

TOTAL SHAREHOLDER RETURN PERFORMANCE VS F TSE 250
SINCE 2 MARCH 2018

250

200

150

100

8
1
-
b
e
F

8
1
-
y
a
M

8
1
-
g
u
A

8
1
-
v
o
N

9
1
-
b
e
F

9
1
-
y
a
M

9
1
-
g
u
A

9
1
-
v
o
N

0
2
-
b
e
F

0
2
-
y
a
M

0
2
-
g
u
A

0
2
-
v
o
N

1
2
-
b
e
F

1
2
-
y
a
M

1
2
-
g
u
A

1
2
-
v
o
N

2
2
-
b
e
F

2
2
-
y
a
M

2
2
-
g
u
A

3
2
-
b
e
F

3
2
-
y
a
M

3
2
-
g
u
A

IHP

FTSE 250 TR

The following table shows the history of the Chief Executive Officer’s

remuneration since admission:

CEO SINGLE

PAYOUT (AS A

OUT-TURN (AS A

ANNUAL BONUS

LTIP VESTING

CEO

FIGURE OF

% OF MAXIMUM

REMUNERATION

OPPORTUNITY)

FY23

FY22

FY21

FY20

FY19

FY18

£782k

£695k

£704k

£639k

£751k

£769k

61.5%

52.4%

62%

72%

82%

83%

N/A

Note to the table

The figures for FY18 and FY19 relate to the previous CEO, Ian Taylor. The figures for FY20 to date

relate to the current CEO, Alexander Scott.

142

Fees for the Chair and Non-Executive Directors (audited)

There has been no increase to the remuneration paid to the Chair and NEDs

during the financial year. In respect of the financial year ending 30 September

2023 the amounts are as follows.

ELEMENT OF REMUNERATION
BY DIRECTOR

Chair

Base Fee

Senior Independent NED

Committee Chair (excl NomCo)

Advisers

FY23 (£)

140,000

70,000

7,500

10,000

PERCENTAGE
INCREASE ON FY22

Deloitte LLP (Deloitte) is retained as adviser to the Remuneration Committee.

Deloitte was appointed by the committee, and the committee is satisfied the

advice provided by Deloitte is objective and independent. Deloitte is a founding

member of the Remuneration Consultants Group and voluntarily operates under

the Code of Conduct in relation to executive remuneration consulting in the UK.

Deloitte has provided advice on the content of this Directors’ Remuneration

Report. For FY23, total fees were £23k, with fees on a time and materials basis.

Deloitte has provided no other services to the Company during the financial year.

Korn Ferry LLP provided information to support the benchmarking of

remuneration for executive directors and senior managers.

In addition to Deloitte, the following people have provided material advice or

services to the committee during the year:

• Alexander Scott – CEO

• Helen Wakeford – Head of Legal and Company Secretary

• Lucy Smith – Head of Human Resources

143

DIRECTORS’ REPORT

The directors present their report and financial statements for the year ending

30 September 2023.

The content of the ‘Management Report’ required by the FCA Disclosure and

Transparency Rule DTR4.1 is in the Strategic Report and the Governance section

of the Annual report and financial statements, which also contains details of likely

future developments identified by the board. This information is shown in the

Strategic Report rather than in the Directors’ Report under sections 414 C (11)

of the Companies Act.

The Corporate Governance Report on page 7 forms part of the Directors’ Report.

Information disclosed in accordance with the requirements of the applicable

sections of the FCA Listing Rule LR9.8 (Annual Financial Report) can be found

here:

Details of Long-Term Incentive
Schemes

The Directors’ Remuneration Report

Directors’ Interests in the Company’s
Shares

The Directors’ Remuneration Report

Major Shareholders’ Interests

Directors’ Report

Non-Executive Directors’ terms of
appointment

Directors’ Report

Directors’ transactions in the
Company’s Shares

Director’s Report

Details of non-financial reporting

Corporate Social Responsibility Report

Principal risks and uncertainties

The review of the business and principal risks and uncertainties are disclosed in

the Strategic Report at pages 2 to 72.

Internal control and risk management systems

A description of the Group’s internal control and risk management systems in
relation to the financial reporting process is set out on pages 60 to 68 of the

Strategic Report.

Directors

The executive directors who served during the financial year were Alexander

Scott, Jonathan Gunby and Michael Howard.

The NEDs who served during the financial year were Richard Cranfield, Caroline

Banszky, Victoria Cochrane, Rita Dhut, Christopher Munro and Robert Lister.

All of the current directors are standing for re-election at the upcoming AGM.

The appointment and replacement of directors is governed by the Company’s

Articles of Association, the UK Corporate Governance Code, the Companies Act

2006 and related legislation. The directors may exercise all the powers of the

Company.

144

Service contracts and letters of appointment

All executive directors have written service contracts in place with an employing

Company in the Group. Although the executive directors’ service contracts do

not have fixed end dates, they may be terminated with six months’ notice from

either side. In the event that notice is given to terminate the executive director’s

contract, the Company may make a payment in lieu of notice or place the

individual on garden leave.

Entitlement to any variable remuneration arrangements will be determined in

accordance with the relevant plan rules and the DRP. Executive directors’ service

contracts do not make any other provision for termination payments.

NEDs do not have service contracts but are bound by letters of appointment

which are available for inspection on request at the Company’s registered office.

NEDs are appointed for a three-year term, subject to confirmation by

shareholders at the following annual general meeting and annual re-election at

each subsequent annual general meeting.

Details of Non-Executive Directors’ terms of appointment

Details of the NEDs’ terms of appointment are set out below:

NON-EXECUTIVE
DIRECTOR

DATE OF FIRST
APPOINTMENT

DATE OF LATEST
RENEWAL TERM

DATE FOR FURTHER
RENEWAL TERM

Christopher Munro

1 February 2017

13 February 2023

N/A

Caroline Banszky

22 August 2018

22 August 2021

22 August 2024

Victoria Cochrane

28 September 2018

28 September 2021

28 September 2024

Richard Cranfield

25 June 2019

25 June 2022

25 June 2025

Robert Lister

26 June 2019

26 June 2022

26 June 2025

Rita Dhut

22 September 2021

N/A

22 September 2024

Directors’ interests

Details of the directors’ interests in the Company’s ordinary shares can be found
on page 141, within the Remuneration Report. During the financial year, rights

for share options were granted to Alexander and Jonathan under the Company’s

deferred bonus Share Option Plan.

Throughout the financial year, no director had any material interest in a contract

to which the Company or any of its subsidiary undertakings was a party (other

than their own service contract) that requires disclosure under the requirements

of the Companies Act 2006.

Directors’ indemnities

The Company has made qualifying third-party indemnity provisions for the

benefit of its directors. These provisions were for the purposes of section 234

of the Companies Act 2006 and were in force throughout the financial year

and remain so at the date of this report. In addition, the Company maintains

Directors’ and Officers’ Liability insurance which gives appropriate cover for legal

action brought against its directors.

145

Status of Company

Share capital

The Company is registered as a

Structure of the Company’s capital

Restrictions on share transfers

public limited Company under the

Companies Act 2006.

As at 30 September 2023, the

There are restrictions on share

Company’s issued and fully paid-

transfers, all of which are set out

Stakeholders

up share capital was 331,322,014

in the Company’s Articles. The

ordinary shares of £0.01 each. The

board may decline to register: a

The Group considers its principal

Company does not hold any treasury

transfer of uncertificated shares in

stakeholders to be clients, advisers,

shares. The ordinary shares have

the circumstances set out in the

employees, regulators, shareholders,

attached to them equal voting,

Uncertificated Securities Regulations

suppliers, and communities. Details on

dividend and capital distribution

2001; a transfer of certificated shares

the Group’s stakeholder engagement

rights.

is outlined on page 81.

Voting rights

Diversity and inclusion

that are not fully paid; a transfer

to more than four joint holders; a

transfer of certificated shares which

is not in respect of only one class

At any General Meeting, on a show

of share; a transfer which is not

The Company recognises the benefits

of hands, any member present in

accompanied by the certificate for

of companies having a diverse board

person has one vote and every

the shares to which it relates; a

and sees diversity at board level

proxy present, who has been duly

transfer which is not duly stamped

as important in maintaining good

appointed by a member entitled to

and deposited at the Transfer Office

corporate and board effectiveness.

vote on a resolution, has one vote.

(or such other place in England and

The Group has an established

On a poll vote every person present

Wales as the directors may from time

board Diversity Policy dealing with

in person or by proxy has one vote

to time decide); or a transfer where

appointments to the board.

for every share held. All shares carry

in accordance with section 794 of

equal voting rights and there are no

the Companies Act 2006 a notice

The objective of the Group’s board

restrictions on voting rights.

(under section 793 of that Act) has

Diversity Policy is to ensure that new

been served by the Company on a

appointments to any board within the

Two employee benefit trusts (EBTs)

shareholder who has then failed to

Group are made on merit, taking into

operate in connection with the Group’s

give the information required within

account the different skills, industry

deferred bonus share option plan. The

the specified time.

experience, independence, knowledge

Trustees of the EBTs may exercise

and background required to achieve

all rights attaching to the shares in

Purchase of own shares

a balanced and effective board. The

accordance with their fiduciary duties

Policy also states that the Company

other than as specifically restricted

At the 2023 AGM, shareholders

will only use executive search firms

in the relevant Plan governing

authorised the Company to buy back

that have signed up to the Voluntary

documents. The Trustees of the EBTs

up to 10% of its own ordinary shares

Code for Executive Search Firms.

have informed the Company that

by market purchase at any time prior

their normal policy is to abstain from

to the conclusion of the AGM to be

When determining the composition
of the board, consideration is given

voting in respect of the Company’s
shares held in trust. The Trustees of

held in 2024.

to the diversity of board members

the Company’s two Share Incentive

Whilst such authority would only be

and, when possible, appointments

Plans (SIPs) will vote as directed by

used if the board was satisfied that

are made with a view to achieving a

SIP participants in respect of the

to do so would be in the interests of

balance of skills with diversity. More

allocated shares but the Trustees will

shareholders, the board considers it

information on the Group’s approach

not otherwise vote in respect of the

desirable to have the general authority

to Diversity and Inclusion is outlined

unallocated shares held in the SIP

in order to maintain compliance with

in the People section on page 45.

Trusts.

146

the regulatory capital requirements or

targets applicable to the Group.

The Company did not purchase any

of its own shares during the financial

year. However, the Employee Benefit

Trusts purchase the Company’s shares

from time to time as authorised

under the Trust Deeds in respect of

awards granted under the Company’s
employee share schemes.

Substantial shareholders

As at 13 December 2023, the

Company had been notified of the

following interests in 3% or more of

the Company’s issued ordinary share

capital disclosed to the Company

under Rule DTR 5. The information

provided below was correct as at the

date of notification. It should be noted

that these holdings are likely to have

changed since being notified to the

Company. However, notification of any

change is not required until the next

applicable threshold is crossed.

SHAREHOLDER

Michael Howard

BlackRock Inc.

NATURE OF
HOLDING

Direct

Indirect

Securities
Lending

Contracts for
difference

Liontrust Investment
Partners LLP

Montanaro Asset
Management Limited

Direct

NUMBER OF
ORDINARY
SHARES AT 30
SEPTEMBER 2023

% OF VOTING
RIGHTS AT 30
SEPTEMBER 2023

NUMBER OF
ORDINARY SHARES
AT 13 DECEMBER
2023

% OF VOTING
RIGHTS AT
13 DECEMBER
2023

25,911,753

6,088,247

24,634,941

7.82%

1.84%

7.43%

25,911,753

7.82%

6,088,247

1.84%

21,651,470

6.53%

121,115

0.03%

570,804

0.17%

2,147,909

0.64%

2,169,066

0.65%

16,910,112

5.10%

16,910,112

5.10%

10,040,000

3.03%

10,040,000

3.03%

The percentage provided was correct

Directors’ interests

at the date of notification.

Save for the shareholding details set

The interests of the directors, and

out in the Directors’ Remuneration

any persons closely associated, in the

Report, there has been no change to

issued share capital of the Company

the interests of any of the directors or

are shown on page 141.

their Persons Closely Associated during

the financial year.

147

Dividends

In FY23, the Company paid two interim

dividends. Both dividends were paid

by reference to the Company’s issued

and allotted share capital on the record

date.

An interim dividend of 7.0 pence per
share - £23.2 million - was paid on
27 January 2023.

An interim dividend of 3.2 pence per
share - £10.6 million - was paid on
30 June 2023.

An interim dividend of 7.0 pence
per share - £ 23.2 million - has been
declared by the board and will be paid
in January 2024.

The Trustees of the EBTs have each

waived dividends on shares declared

in the Company shares held by those

trusts and the Trustees of the SIP have

waived dividends on unallocated shares

in the Company shares held by it.

148

Employee information and

engagement

The Company has no employees

(FY22: nil), but the Group had 649

employees at year end (FY22: 595).

The Group continues to promote

a culture whereby employees are

encouraged to develop and to

contribute to the overall aims of the

business.

The Company has considered

the requirements of s.172 of the

Companies Act on page 80, to ensure

that the interests of employees are

considered by the board in discussions

and decision making, and the

associated provisions of the 2018

Corporate Governance Code regarding

the method of engagement with the

workforce. Details of how the Company

has engaged with its employees are

outlined on page 82 of the Governance

Report and in the Responsible Business

section on page 45.

Significant agreements and

change of control

All the Company’s share plans contain

provisions relating to a change of

control. In the event of a change

of control, outstanding awards and

options may be lapsed and replaced

with equivalent awards over shares

in the new company, subject to the

Remuneration Committee’s discretion.

Engagement with suppliers

The Group monitors its relationships

with key suppliers and relationship

meetings are held with suppliers of

critical business services. The Group

monitors its payment performance

with suppliers and further details are

set out in the Stakeholder Engagement

section on page 85 above.

Articles of Association

The Articles of Association may be

amended by special resolution of the

shareholders.

Emissions

Auditor

For commentary on emissions, please

Resolutions to reappoint EY as

see the TCFD section on page 42.

external auditor of the Company

Political donations

and to authorise the Audit and

Risk Committee to determine its

remuneration will be proposed at the

The Group does not make political

AGM to be held on 29 February 2024.

donations.

Employment of disabled people

2024 AGM

The AGM will be held in person at the

The Company’s policy regarding

Company’s headquarters in London

employment, training, career

on 29 February 2024. Details of the

development and promotion of

resolutions to be proposed at the

disabled employees, and employees

AGM are set out in the separate

who become disabled whilst in

circular which has been sent to all

employment, is to make reasonable

shareholders and is available on

adjustments as required.

the Company’s website at https://

www.integrafin.co.uk/shareholder-

Post year end events

information/.

As detailed in note 34, there were no

reportable events after the reporting

By order of the board,

date, apart from the declaration of

the second interim dividend (FY22:

Alexander Scott

none, apart from the declaration of the

Chief Executive Officer

13 December 2023

second interim dividend).

Disclosure of information to

external auditor

Each of the persons who is a director

at the date of approval of this report

confirms that:

• So far as the director is

aware, there is no relevant

audit information of which the

Company’s auditor is unaware;
and

• The director has taken all the

steps that they ought to have

taken as a director in order to

make themselves aware of any

relevant audit information and

to establish that the Company’s

auditor is aware of that

information.

This confirmation is given in

accordance with the provisions of

section 418 of the Companies Act

2006.

149

STATEMENT ON DIRECTORS’ RESPONSIBILITIES

The directors are responsible for preparing the Annual report and financial

statements in accordance with applicable United Kingdom law and regulations.

Company law requires the directors to prepare financial statements for each

financial year. Under that law the directors have elected to prepare the Group and

parent Company financial statements in accordance with UK-adopted international

accounting standards (IFRSs). Under Company law the directors must not

approve the financial statements unless they are satisfied that they give a true

and fair view of the state of affairs of the Group and the Company and of the

profit or loss of the Group and the Company for that period.

In preparing these financial statements the directors are required to:

• select suitable accounting policies in accordance with IAS 8 Accounting

Policies, Changes in Accounting Estimates and Errors and then apply them

consistently;

• make judgements and accounting estimates that are reasonable and

prudent;

• present information, including accounting policies, in a manner that

provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific

requirements in IFRSs is insufficient to enable users to understand the

impact of particular transactions, other events and conditions on the Group

and Company financial position and financial performance;

• in respect of the Group financial statements, state whether IFRSs have been

followed, subject to any material departures disclosed and explained in the

financial statements;

• in respect of the parent Company financial statements, state whether

IFRSs have been followed, subject to any material departures disclosed and

explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is

inappropriate to presume that the Company and/ or the Group will continue

in business.

150

The directors are responsible for keeping adequate accounting records that are

sufficient to show and explain the Company’s and Group’s transactions and

disclose with reasonable accuracy, at any time, the financial position of the

Company and the Group and enable them to ensure that the Company and the

Group financial statements comply with the Companies Act 2006. They are also

responsible for safeguarding the assets of the Group and parent Company and

hence for taking reasonable steps for the prevention and detection of fraud and

other irregularities.

Under applicable law and regulations, the directors are also responsible for

preparing a strategic report, directors’ report, directors’ remuneration report

and corporate governance statement that comply with that law and those

regulations. The directors are responsible for the maintenance and integrity of

the corporate and financial information included on the Company’s website.

Directors’ responsibilities pursuant to DTR4

The directors confirm, to the best of their knowledge:

• that the consolidated financial statements, prepared in accordance with

IFRSs give a true and fair view of the assets, liabilities, financial position

and profit of the parent Company and undertakings included in the

consolidation taken as a whole;

• that the annual report, including the strategic report, includes a fair review

of the development and performance of the business and the position of

the Company and undertakings included in the consolidation taken as a

whole, together with a description of the principal risks and uncertainties

that they face; and

• that they consider the annual report, taken as a whole, is fair, balanced

and understandable and provides the information necessary for

shareholders to assess the Company’s position, performance, business

model and strategy.

By order of the board,

Helen Wakeford

Company Secretary

13 December 2023

151

FINANCIAL
STATEMENTS

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTEGR AFIN HOLDINGS PLC

Opinion

In our opinion:

• IntegraFin Holdings plc’s Group financial statements

and Parent Company financial statements (the

‘financial statements’) give a true and fair view of
the state of the Group’s and of the Parent Company’s

affairs as at 30 September 2023. and of the Group’s

profit for the year then ended;

• the Group financial statements have been properly

prepared in accordance with UK adopted international

accounting standards;

• the Parent Company financial statements have been

properly prepared in accordance with UK adopted

international accounting standards as applied in

accordance with section 408 of the Companies Act

2006; and

• the financial statements have been prepared in

accordance with the requirements of the Companies

Act 2006.

152

We have audited the financial statements of IntegraFin

Holdings plc (the ‘Parent Company’) and its subsidiaries

(the ‘Group’) for the year ended 30 September 2023

which comprise:

GROUP

PARENT COMPANY

Consolidated Statement
of Comprehensive Income
for the year ended 30
September 2023

Company Statement of
Financial Position as at 30
September 2023

Consolidated Statement of
Financial Position as at 30
September 2023

Company Statement of
Cash Flows for the year
ended 30 September 2023

Company Statement of
Changes in Equity for the
year ended 30 September
2023

Notes 1 to 36 to the
financial statements

Consolidated statement
of Cash Flows for the year
ended 30 September 2023

Consolidated Statement of
Changes in Equity for the
year ended 30 September
2023

Notes 1 to 36 to the
financial statements

The financial reporting framework that has been applied

risks identified by management. We evaluated

in their preparation is applicable law and UK adopted

management’s analysis by testing the clerical

international accounting standards and as regards the Parent

accuracy and challenging the conclusions reached in

Company financial statements, as applied in accordance with

the stress and reverse stress test scenarios;

section 408 of the Companies Act 2006.

Basis for opinion

• performing enquiries of management and those

charged with governance to identify risks or events

that may impact the Group’s ability to continue as a

We conducted our audit in accordance with International

going concern. We also reviewed the management

Standards on Auditing (UK) (ISAs (UK)) and applicable

paper presented to the board, minutes of meetings of

law. Our responsibilities under those standards are further

the board and regulatory correspondence; and

described in the Auditor’s responsibilities for the audit of

the financial statements section of our report. We believe

• assessing the appropriateness of the going concern

that the audit evidence we have obtained is sufficient and

disclosures by comparing the consistency with the

appropriate to provide a basis for our opinion.

Directors’ assessment and for compliance with the

Independence

relevant reporting requirements.

Based on the work we have performed, we have not

We are independent of the Group and Parent Company in

identified any material uncertainties relating to events

accordance with the ethical requirements that are relevant

or conditions that, individually or collectively, may cast

to our audit of the financial statements in the UK, including

significant doubt on the Group and Parent Company’s

the FRC’s Ethical Standard as applied to listed public

ability to continue as a going concern for a period of 12

interest entities, and we have fulfilled our other ethical

months from when the financial statements are authorised

responsibilities in accordance with these requirements.

for issue.

The non-audit services prohibited by the FRC’s Ethical

In relation to the Group and Parent Company’s reporting

Standard were not provided to the Group or the Parent

on how they have applied the UK Corporate Governance

Company and we remain independent of the Group and the

Code, we have nothing material to add or draw attention

Parent Company in conducting the audit.

to in relation to the directors’ statement in the financial

Conclusions relating to going concern

it appropriate to adopt the going concern basis of

statements about whether the directors considered

In auditing the financial statements, we have concluded that

accounting.

the Directors’ use of the going concern basis of accounting

Our responsibilities and the responsibilities of the directors

in the preparation of the financial statements is appropriate.

with respect to going concern are described in the relevant

Our evaluation of the Directors’ assessment of the Group

sections of this report. However, because not all future

and Parent Company’s ability to continue to adopt the going

events or conditions can be predicted, this statement is

concern basis of accounting included:

not a guarantee as to the Group’s ability to continue as a

going concern.

• obtaining an understanding of the Directors’ going
concern assessment process and obtaining the

Directors’ going concern assessment covering the

period 12 months from the date of authorisation of the

financial statements;

• assessing and challenging the assumptions used in

management’s forecast and determining the model

are appropriate to enable the Directors to make an

assessment on the going concern;

• testing the clerical accuracy of the model;

• evaluating the capital and liquidity position of the

Group;

• assessing the appropriateness of the stress and

reverse stress test scenarios that consider the key

153

Overview of our audit approach

An overview of the scope of the Parent Company

Audit scope

Key audit
matters

Materiality

• We performed an audit of the
complete financial information
of seven components and audit
procedures on specific balances for
a further one components.

• The components where we

performed full or specific audit
procedures accounted for 100%
of Profit on ordinary activities
before taxation attributable to
shareholders, 100% of Revenue
and 98% of Total assets.

and Group audits

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality

and our allocation of performance materiality determine

our audit scope for each company within the Group.

Taken together, this enables us to form an opinion on

the consolidated financial statements. We take into

account size, risk profile, the organisation of the Group

and effectiveness of Group-wide controls, changes in the

business environment, the potential impact of climate

change and other factors such as recent Internal audit

results when assessing the level of work to be performed at

• Recognition of revenue.

each company.

• Overall Group materiality of £3.1m
which represents 5% of profit on
ordinary activities before taxation
attributable to shareholders.

In assessing the risk of material misstatement to the Group

financial statements, and to ensure we had adequate

quantitative coverage of significant accounts in the financial

statements, we selected eight components covering entities

within the United Kingdom, Isle of Man and Australia.

Of the eight components selected, we performed an audit

of the complete financial information of seven components

(‘full scope components’) which were selected based on

their size or risk characteristics. For the remaining one

components (‘specific scope components’), we performed

audit procedures on specific accounts within that component

that we considered had the potential for the greatest impact

on the significant accounts in the financial statements either

because of the size of these accounts or their risk profile.

The charts below illustrate the coverage obtained from the

work performed by our audit teams.

Profit on ordinary activities
before taxation attributable
to shareholders

Revenue

100%
Full scope
components

0%
Specific scope
components

Total assets

100%
Full scope
components

0%
Specific scope
components

98%
Full scope
components

2%
Specific scope
components

154

Involvement with component teams

Climate change

In establishing our overall approach to the Group audit, we

There has been increasing interest from stakeholders as

determined the type of work that needed to be undertaken

to how climate change will impact the Group. The Group

at each of the components by us, as the primary audit

has considered the physical and transition risks from

engagement team, or by component auditors from other EY

climate change and has identified this as an emerging

global network firms operating under our instruction.

risk, but has concluded that these do not currently pose

Of the seven full scope components, audit procedures were

financial statements on page 175. Climate change risk is

performed on one of these by both the primary audit team

further assessed on pages 23 to 44 in the Task Force for

and component audit team based on where the procedures

Climate related Financial Disclosures and on page 66 in

were performed from a client perspective. For the remaining

the principal risks and uncertainties, which form part of

six components all procedures were performed by the

the “Other information,” rather than the audited financial

a material risk to the Group, as described in note 1 to the

primary team.

statements. Our procedures on these disclosures therefore

consisted solely of considering whether they are materially

The primary team interacted regularly with the component

inconsistent with the financial statements or our knowledge

teams where appropriate during various stages of the audit,

obtained in the course of the audit or otherwise appear to

reviewed relevant working papers and were responsible for

be materially misstated.

the scope and direction of the audit process. This, together

with the additional procedures performed at Group level,

Our audit effort in considering climate change was focused

gave us appropriate evidence for our opinion on the Group

on evaluating management’s assessment of the impact of

financial statements.

physical and transition risk, and management’s resulting

conclusion that there was no material impact from

climate change on the recognition and measurement of

the assets and liabilities in these financial statements as

at 30 September 2023 and the adequacy of the Group’s

disclosures in the financial statements which explains the

rationale. We also challenged the Directors’ considerations

of climate change in their assessment of going concern and

viability and associated disclosures.

Based on our work we have not identified the impact of

climate change on the financial statements to be a key audit

matter or to impact a key audit matter.

Key audit matters

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the

financial statements of the current period and include the

most significant assessed risks of material misstatement

(whether or not due to fraud) that we identified. These

matters included those which had the greatest effect on:

the overall audit strategy, the allocation of resources in the

audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit

of the financial statements as a whole, and in our opinion

thereon, and we do not provide a separate opinion on these

matters.

155

Risk

Recognition of revenue (£134.9 million, 2022:

£133.6 million)

Refer to the accounting policies (pages 178 to 179); and

There is therefore a risk that revenue may be materially

Note 5 of the Consolidated Financial Statements (page 200)

misstated due to errors in the underlying data inputs into

Revenue is material to the Group and is a key focus

IAS.

of stakeholders. As disclosed in note 5 of the financial

There is also the risk that stakeholder expectations place

statements, the Group categorise revenue into five sub-

pressure on management to manipulate the recognition of

categories:

revenue. This may result in an overstatement of revenue to

• Annual commission income (£116.1m, PY £115.98m)

is charged for the administration of products on the

In relation to License and Consultancy Income there is a risk

Transact platform.

that revenue is not recognised in line with the terms of the

underlying contracts and agreements.

meet targets and expectations.

• Wrapper fee income (£12.3m, PY £11.6m) is charged

for each of the tax wrappers held by clients.

• Advisor back-office technology (comprising license

income and consultancy income) (£4.8m, PY £4.0m)

is the rental charge for use of access to T4A’s CRM

software and the charge for consultancy services

provided by T4A.

• Other income (£1.7m, PY £2.2m) are charges levied

on the acquisition of assets which comprises buy

commissions and dealing charges.

Annual commission income, wrapper fee income and

other income account for 96% of total fee income. These

revenues are automatically calculated by the Integrated

Administration System (‘IAS’) IT platform. There is a risk

therefore that revenue may be misstated due to failure or

manipulation of the calculation methodology within IAS.

The principal data inputs into the automated fee calculations

include the quantity and pricing of underlying positions and

commission percentages.

156

Our response to the risk

For all material revenue streams, we have:

2. Testing to address the risk of data inputs being

• confirmed and updated our understanding of the

procedures and controls in place throughout the

• agreed inputs to the underlying agreements for

revenue process at the Group through walkthrough

onboarding clients onto the platform;

incorrect. On a sample basis, we have:

procedures; and

• performed enquiries of management and performed

to the published Transact Commission and Charges

• agreed the fee terms used in the revenue calculation

journal entry testing in order to address the risk of

Schedule;

management override.

In the prior year audit we identified design deficiencies in

portfolio value used within the fee calculations based

relation to IT General Controls. These deficiencies were

on the daily pricing per IAS;

remediated by management during the current year and we

concluded the IT General Controls were designed effectively

• for annual commissions, agreed the quantity

from the point of remediation.

of positions per portfolio back to the custodian

• for annual commissions recalculated the average

statements per IAS;

As the IT General Controls were not considered to be

effective for the full year, we performed additional tests

• agreed fees paid back to bank statements; and

of detail and tests over information prepared in respect of

the functionality of the IAS system and the accuracy of the

• as part of cut off testing, performed analytical reviews

inputs to the system.

over pre year end and post year end journals to

ensure these relate to the correct period by agreeing

Our testing of annual commissions, wrapper fee income and

to IAS reports.

buy commissions income was split into two elements:

For licence income, consultancy income and other income,

1. Testing to address the risk of failure or manipulation

on a sample basis we have:

within the calculation. We have:

• recalculated all revenue sub-categories (annual

agreements; and

commissions, buy commissions and wrapper fees)

using the criteria and logic per the underlying

• agreed the fees to underlying agreements and

agreements with investors;

invoices and vouched balances to the bank

• agreed the fee terms used in the calculation to

statements.

• performed a variance analysis between the EY

recalculated revenue balance per each sub-category

and the amounts per the general ledger, investigating

any material differences;

• performed completeness checks between the IAS

Key observations communicated to the Audit and
Risk Committee

reports and general ledger; and

Based on the procedures performed, we have no matters

to report in respect of revenue recognition.

• on a sample basis, reperformed calculations that are

automatically performed in IAS and form part of the

inputs into the revenue calculations. For example, the

daily average value of the portfolio which forms part of

the annual commission calculation.

157

Our application of materiality

In the prior year, our auditor’s report included the

We apply the concept of materiality in planning and

following key audit matters which we do not consider to

performing the audit, in evaluating the effect of identified

be key audit matters for the 2023 audit:

misstatements on the audit and in forming our audit

• ‘Valuation of assets held for the benefit of the

policyholders to cover unit-linked liabilities’ due to

Materiality

the low quantum of level 3 investments;

opinion.

• ‘Impairment of goodwill and intangibles in Group and

individually or in the aggregate, could reasonably be

investments in subsidiaries in Parent Company’ due

expected to influence the economic decisions of the users

to the significant headroom available; and

of the financial statements. Materiality provides a basis for

determining the nature and extent of our audit procedures.

• ‘First year audit transition’ which is no longer

applicable for the current year.

We determined materiality for the Group to be £3.1

The magnitude of an omission or misstatement that,

million (2022: £3.1 million), which is 5% (2022: 5%) of

profit on ordinary activities before taxation attributable to

shareholders. We believe that profit on ordinary activities

before taxation attributable to shareholders is the most

relevant performance measure to the stakeholders of the

Group.

158

We determined materiality for the Parent Company to be

£0.58 million (2022: £0.63 million), which is 1% (2022:

1%) of net assets. The Parent Company primarily holds the

investments in Group entities and, therefore, net assets

is considered to be the key focus for users of the financial

statements.

During the course of our audit, we reassessed initial

materiality based on 30 September 2023 financial

statement amounts and adjusted our audit procedures

accordingly.

Performance materiality

The application of materiality at the individual account

or balance level. It is set at an amount to reduce to an

appropriately low level the probability that the aggregate

of uncorrected and undetected misstatements exceeds

materiality.

On the basis of our risk assessments, together with our

assessment of the Group’s overall control environment,

our judgement was that performance materiality was 75%

(2022: 50%) of our planning materiality, namely £2.3

million (2022: £1.5 million). We have set performance

materiality at 75% due to a lower expectation of

misstatement following our first year audit.

Reporting threshold

Other information

An amount below which identified misstatements are

The other information comprises the information included

considered as being clearly trivial.

in the Annual Report, including the Strategic Report,

Governance Report and Other Information sections, other

We agreed with the Audit Committee that we would

than the financial statements and our auditor’s report

report to them all uncorrected audit differences in excess

thereon. The Directors are responsible for the other

of £0.15 million (2022: £0.15 million), which is set at

information contained within the Annual Report.

5% of planning materiality, as well as differences below

that threshold that, in our view, warranted reporting on

Our opinion on the financial statements does not cover

qualitative grounds.

We evaluate any uncorrected misstatements against both

the quantitative measures of materiality discussed above

the other information and, except to the extent otherwise

explicitly stated in this report, we do not express any form
of assurance conclusion thereon.

and in light of other relevant qualitative considerations in

Our responsibility is to read the other information and,

forming our opinion.

in doing so, consider whether the other information is

materially inconsistent with the financial statements

or our knowledge obtained in the course of the audit,

or otherwise appears to be materially misstated. If

we identify such material inconsistencies or apparent

material misstatements, we are required to determine

whether this gives rise to a material misstatement in the

financial statements themselves. If, based on the work

we have performed, we conclude that there is a material

misstatement of the other information, we are required to

report that fact.

We have nothing to report in this regard.

159

Opinions on other matters prescribed by the

Matters on which we are required to report by

Companies Act 2006

exception

In our opinion, the part of the Directors’ Remuneration

In the light of the knowledge and understanding of the

Report to be audited has been properly prepared in

Group and the Parent Company and its environment

accordance with the Companies Act 2006.

obtained in the course of the audit, we have not identified

material misstatements in the Strategic Report or the

In our opinion, based on the work undertaken in the course

Directors’ Report.

of the audit:

• the information given in the Strategic Report and the

matters in relation to which the Companies Act 2006

Directors’ Report for the financial year for which the

requires us to report to you if, in our opinion:

financial statements are prepared is consistent with

the financial statements; and

• adequate accounting records have not been kept by

We have nothing to report in respect of the following

• the Strategic Report and the Directors’ Report have

have not been received from branches not visited by

the Parent Company, or returns adequate for our audit

been prepared in accordance with applicable legal

us; or

requirements.

• the Parent Company financial statements and the part

of the Directors’ Remuneration Report to be audited

are not in agreement with the accounting records and

returns; or

• certain disclosures of directors’ remuneration specified

by law are not made; or

• we have not received all the information and

explanations we require for our audit.

160

Corporate Governance Statement

Responsibilities of Directors

We have reviewed the directors’ statement in relation to

As explained more fully in the Statement of Directors’

going concern, longer-term viability and that part of the

Responsibilities set out on page 150, the Directors are

Corporate Governance Statement relating to the Group and

responsible for the preparation of the financial statements

Parent Company’s compliance with the provisions of the UK

and for being satisfied that they give a true and fair view,

Corporate Governance Code specified for our review by the

and for such internal control as the directors determine is

Listing Rules.

necessary to enable the preparation of financial statements

that are free from material misstatement, whether due to

Based on the work undertaken as part of our audit, we

fraud or error.

have concluded that each of the following elements of the

Corporate Governance Statement is materially consistent

In preparing the financial statements, the directors are

with the financial statements or our knowledge obtained

responsible for assessing the Group and Parent Company’s

during the audit:

ability to continue as a going concern, disclosing, as

applicable, matters related to going concern and using

• Directors’ statement with regards to the

the going concern basis of accounting unless the Directors

appropriateness of adopting the going concern basis

either intend to liquidate the Group or the Parent Company

of accounting and any material uncertainties identified

or to cease operations, or have no realistic alternative but

set out on page 69;

to do so.

• Directors’ explanation as to its assessment of

the Parent Company’s prospects, the period this

assessment covers and why the period is appropriate

Auditor’s responsibilities for the audit of the

set out on page 71;

financial statements

• Director’s statement on whether it has a reasonable

Our objectives are to obtain reasonable assurance about

expectation that the Group will be able to continue in

whether the financial statements as a whole are free from

operation and meets its liabilities set out on page 71;

material misstatement, whether due to fraud or error,

and to issue an auditor’s report that includes our opinion.

• Directors’ statement on fair, balanced and

Reasonable assurance is a high level of assurance, but is

understandable set out on page 151;

not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement

• Board’s confirmation that it has carried out a robust

when it exists. Misstatements can arise from fraud or

assessment of the emerging and principal risks set out

error and are considered material if, individually or in the

on page 68;

aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these

• The section of the Annual Report that describes the

financial statements.

review of effectiveness of risk management and

internal control systems set out on page 101; and

• The section describing the work of the Audit and Risk

Committee set out on page 97.

161

Explanation as to what extent the audit was

judgements, complex transactions and economic or

considered capable of detecting irregularities,

external pressures and the impact these have on the

including fraud

control environment. Where the risk was considered to

be higher, we performed audit procedures to address

Irregularities, including fraud, are instances of non-

each identified fraud risk.

compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above,

• Based on this understanding we designed our audit

to detect irregularities, including fraud. The risk of not

procedures to identify non-compliance with such laws

detecting a material misstatement due to fraud is higher

and regulations. Our procedures involved journal entry

than the risk of not detecting one resulting from error, as

testing, with a focus on manual journals and journals

fraud may involve deliberate concealment by, for example,

indicating large or unusual transactions based on our

forgery or intentional misrepresentations, or through

understanding of the business; enquiries of senior

collusion. The extent to which our procedures are capable of

management and the Group’s legal adviser, including

detecting irregularities, including fraud is detailed below.

those at full and specific scope; and focused testing,

as referred to in the key audit matters section above.

However, the primary responsibility for the prevention

We also enquired about the policies that have been

and detection of fraud rests with both those charged with

established to prevent non-compliance with laws and

governance of the Parent Company and management.

regulations by officer and employees and the Parent

Company’s methods of enforcing and monitoring

• We obtained an understanding of the legal and

compliance with such policies. We inspected significant

regulatory frameworks that are applicable to the

correspondence with the PRA and FCA.

Group and determined that the most significant are

those that relate to the reporting framework (UK-

A further description of our responsibilities for the audit

adopted international accounting standards, the

of the financial statements is located on the Financial

Companies Act 2006 and UK Corporate Governance

Reporting Council’s website at https://www.frc.org.uk/

Code) and relevant tax compliance regulations.

auditorsresponsibilities. This description forms part of our

In addition, we concluded that there are certain

auditor’s report.

significant laws and regulations which may have

an effect on the determination of the amounts and

disclosures in the financial statements being the

Listing Rules and relevant Prudential Regulation

Authority (‘PRA’) and Financial Conduct Authority

(‘FCA’) rules and regulations.

• We understood how IntegraFin Holdings plc is

complying with those frameworks by making enquiries

of management, internal audit, those responsible

for legal and compliance matters and those charged

with Governance. We also reviewed correspondences

between the Parent Company and UK regulatory
bodies; reviewed minutes of the Board, and the Audit

and Risk Committee; and gained understanding of the

Group’s approach to governance framework.

• We assessed the susceptibility of the Group’s

financial statements to material misstatement,

including how fraud might occur by meeting with

management to understand where they considered

there was susceptibility to fraud. We have considered

performance targets and their potential influence on

efforts made by management to manage or influence

the perceptions of analysts. We considered the

controls that the Group has established to address

risks identified, or that otherwise prevent, deter

and detect fraud, including in a remote-working

environment and how senior management monitors

these controls. We also considered areas of significant

162

Other matters we are required to address

Use of our report

• Following the recommendation from the audit

This report is made solely to the Parent Company’s

committee, we were appointed by the Parent Company

members, as a body, in accordance with Chapter 3 of Part

on 24 February 2022 to audit the financial statements

16 of the Companies Act 2006. Our audit work has been

for the year ending 30 September 2022 and

undertaken so that we might state to the Parent Company’s

subsequent financial periods.

members those matters we are required to state to them

in an auditor’s report and for no other purpose. To the

• The period of total uninterrupted engagement including

fullest extent permitted by law, we do not accept or assume

previous renewals and reappointments is two years,

responsibility to anyone other than the Parent Company and

covering the years ending 30 September 2022 to 30

the Parent Company’s members as a body, for our audit

September 2023.

work, for this report, or for the opinions we have formed.

• The audit opinion is consistent with the additional

report to the Audit and Risk Committee.

Michael Gaylor (Senior statutory auditor)

for and on behalf of Ernst & Young LLP,

Statutory Auditor

London

13 December 2023

163

164

165

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Note

16, 22

Revenue

Cost of sales

Gross profit

Expenses

Administrative expenses

Expected credit losses on financial assets

Operating profit

Interest income

Interest expense

Net policyholder returns

Net income/(loss) attributable to policyholder returns

Change in investment contract liabilities

Fee and commission expenses

Policyholder investment returns

Net policyholder returns

Profit on ordinary activities before taxation attributable to
policyholders and shareholders

Policyholder tax (charge)/credit

Profit on ordinary activities before taxation attributable to
shareholders

Total tax attributable to shareholder and policyholder returns

Less: tax attributable to policyholder returns

Shareholder tax on profit on ordinary activities

2023

£m

134.9

(3.9)

131.0

(74.6)

(0.1)

56.3

6.4

(0.1)

2022

£m

133.6

(2.1)

131.5

(77.7)

(0.2)

53.6

0.8

(0.1)

12.1

(1,056.0)

(193.3)

1,249.3

12.1

(38.5)

2,770.3

(192.6)

(2,577.7)

(38.5)

74.7

(12.1)

62.6

(24.8)

12.1

(12.7)

15.8

38.5

54.3

28.2

(38.5)

(10.3)

Profit for the financial year

49.9

44.0

Other comprehensive (loss)/income

Exchange (losses)/gains arising on translation of foreign operations

Total other comprehensive (losses)/income for the financial year

(0.1)

0.1

Total comprehensive income for the financial year

49.8

44.1

Earnings per share

Earnings per share – basic

Earnings per share – diluted

All activities of the Group are classed as continuing.

Notes 1 to 36 form part of these Financial Statements.

166

15.1p

13.3p

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Non-current assets

Loans receivable

Intangible assets

Property, plant and equipment

Right-of-use assets

Deferred tax asset

Current assets

Investments

Prepayments and accrued income

Trade and other receivables

Current tax asset

Cash and cash equivalents

Current liabilities

Trade and other payables

Provisions

Lease liabilities

Non-current liabilities

Provisions

Contingent consideration

Lease liabilities

Deferred tax liabilities

Policyholder assets and liabilities¹

Cash held for the benefit of policyholders

Investments held for the benefit of policyholders

Liabilities for linked investment contracts

Net assets

Note

2023

£m

6.3

21.4

1.1

1.0

0.7

30.5

22.4

17.2

3.6

14.3

177.9

235.4

19.5

7.7

0.3

27.5

40.5

0.8

7.2

48.5

2022

£m

5.5

21.8

1.2

2.1

6.0

36.6

3.1

17.2

2.0

15.0

183.0

220.3

21.5

10.7

1.9

34.1

46.1

1.7

0.9

49.6

1,419.2

23,021.7

1,458.6

20,715.8

(24,440.9)

(22,174.4)

189.9

173.2

167

Equity

Called up equity share capital

Share-based payment reserve

Employee Benefit Trust reserve

Foreign exchange reserve

Non-distributable reserves

Retained earnings

Total equity

Note

2023

£m

3.3

3.4

(2.6)

(0.1)

5.7

180.2

189.9

2022

£m

3.3

2.6

(2.4)

5.7

164.0

173.2

These Financial Statements were approved by the Board of Directors on 13 December 2023 and are signed on their behalf by:

Alexander Scott
Director

Company Registration Number: 08860879

Notes 1 to 36 form part of these Financial Statements.

168

COMPANY STATEMENT OF FINANCIAL POSITION

Non-current assets

Investment in subsidiaries

Loans receivable

Current assets

Prepayments

Trade and other receivables

Cash and cash equivalents

Current liabilities

Trade and other payables

Loans payable

Non-current liabilities

Contingent consideration

Loans payable

Net assets

Equity

Called up equity share capital

Share-based payment reserve

Employee Benefit Trust reserve

Profit or loss account

Brought forward retained earnings

Profit for the year

Dividends paid in the year

Profit or loss account

Note

2023

£m

2022

£m

35.3

6.3

41.6

0.1

26.0

26.1

2.5

1.0

3.5

6.0

33.3

5.5

38.8

0.1

0.2

33.1

33.4

2.4

1.0

3.4

1.7

7.0

8.7

58.2

60.1

3.3

2.7

(2.4)

56.7

31.6

(33.7)

54.6

3.3

2.2

(2.1)

50.7

39.8

(33.8)

56.7

Total equity

58.2

60.1

The Company has taken advantage of the exemption in section 408 (3) of the Companies Act 2006 not to present its

own income statement in these Financial Statements.

These Financial Statements were approved by the Board of Directors on 13 December 2023 and are signed on their

behalf by:

Alexander Scott

Director

Company Registration Number: 08860879

Notes 1 to 36 form part of these Financial Statements.

169

CONSOLIDATED STATEMENT OF CASH FLOWS

2023

£m

RESTATED
2022

£m

Cash flows from operating activities

Profit on ordinary activities before taxation attributable to policyholders
and shareholders

74.7

15.8

Adjustments for income statement non-cash movements:

Amortisation and depreciation

Share-based payment charge

Interest charged on lease

(Decrease)/increase in contingent consideration

(Decrease)/increase in provisions

2.5

2.1

0.1

(1.7)

(8.6)

3.0

2.0

0.1

0.9

38.5

Adjustments for cash effecting investing and financing activities:

Interest on cash and loans

(6.4)

(0.8)

Adjustments for statement of financial position movements:

(Increase)/decrease in trade and other receivables, and prepayments
and accrued income

(Decrease)/increase in trade and other payables

Adjustments for policyholder balances:

(Increase)/decrease in investments held for the benefit of policyholders

Increase/(decrease) in liabilities for linked investment contracts

Increase/(decrease) in policyholder tax recoverable

Cash generated from operations

Income taxes paid

Interest paid on lease liabilities

Net cash flows generated from operating activities

Investing activities

Acquisition of property, plant and equipment

Purchase of financial instruments

Redemption of financial instruments

Increase in loans

Interest on cash and loans

Net cash generated from/(used in) investing activities

170

(1.6)

(2.0)

(2,305.9)

2,266.5

10.0

29.7

(22.4)

(0.1)

7.2

(0.7)

(22.3)

3.0

(0.8)

6.4

(14.4)

0.5

4.0

1,071.3

(879.0)

(6.0)

250.3

(13.5)

(0.1)

236.7

(0.3)

(3.0)

5.0

(2.1)

0.8

0.4

Financing activities

Purchase of own shares in Employee Benefit Trust

Purchase of shares for share scheme awards

Equity dividends paid

Payment of principal portion of lease liabilities

Net cash used in financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Exchange losses on cash and cash equivalents

Cash and cash equivalents at end of year

Cash and cash equivalents consist of:

Cash and cash equivalents

Cash held for the benefit of policyholders

Cash and cash equivalents

Notes 1 to 36 form part of these Financial Statements.

See note 36 for details on 2022 restated balances.

2023

£m

(0.4)

(1.1)

(33.7)

(1.9)

(37.1)

(44.3)

1,641.6

(0.1)

RESTATED
2022

£m

(0.5)

(1.3)

(33.7)

(2.4)

(37.9)

199.2

1,442.4

1,597.1

1,641.6

177.9

1,419.2

1,597.1

183.0

1,458.6

1,641.6

171

COMPANY STATEMENT OF CASH FLOWS

Cash flows from operating activities

Loss before interest and dividends

Adjustments for non-cash movements:

2023

£’000

RESTATED
2022

£’000

(2.0)

(4.9)

(Decrease)/increase in contingent consideration

(1.7)

0.9

Adjustment for statement of financial position movements:

Decrease/(increase) in trade and other receivables

Increase in trade and other payables

Net cash flows used in operating activities

Investing activities

Dividends received

Interest received

Increase in loans receivable

Net cash generated from investing activities

Financing activities

Purchase of own shares in Employee Benefit Trust

Purchase of shares for share scheme awards

Repayment of loans

Interest expense on loans

Equity dividends paid

Net cash used in financing activities

0.2

0.1

(3.4)

33.3

0.9

(0.8)

33.4

(0.3)

(1.3)

(1.0)

(0.6)

(33.7)

(37.1)

(0.2)

(4.2)

45.0

0.2

(2.0)

43.2

(0.5)

(1.3)

(1.0)

(0.2)

(33.8)

(36.8)

Net (decrease)/increase in cash and cash equivalents

(7.1)

2.2

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

33.1

26.0

30.9

33.1

Notes 1 to 36 form part of these Financial Statements.

See note 36 for details on 2022 restated balances.

172

CONSOLIDATED STATEMENT OF CHANGES IN EQUIT Y

NON-
DISTRIBUTABLE
INSURANCE
AND FOREIGN
EXCHANGE
RESERVES

CALLED UP
EQUITY
SHARE
CAPITAL

SHARE-
BASED
PAYMENT
RESERVE

EMPLOYEE
BENEFIT
TRUST
RESERVE

RETAINED
EARNINGS

TOTAL
EQUITY

£m

Balance at 1 October 2021

Comprehensive income for the year:

Profit for the year

Movement in currency translation

Total comprehensive income for
the year

Share-based payment expense

Settlement of share based payment

Purchase of own shares in EBT

Excess tax relief charged to equity

Exercised share options

Release of actuarial reserve

Other movement

Distributions to owners -
Dividends paid

£m

3.3

Balance at 30 September 2022

Comprehensive income for the year:

3.3

Profit for the year

Movement in currency translation

Total comprehensive income for
the year

Share-based payment expense

Settlement of share based payment

Purchase of own shares in EBT

Excess tax relief charged to equity

Exercised share options

Distributions to owners -
Dividends paid

6.2

0.1

(0.5)

(0.1)

5.7

(0.1)

2.4

(2.1)

153.5

163.3

2.0

(1.5)

(0.5)

0.2

44.0

0.1

44.0

44.1

(0.2)

0.5

2.0

(1.5)

(0.5)

(0.3)

(0.1)

(0.2)

(33.7)

(2.4)

164.0

173.2

164.0

173.2

(0.4)

0.2

49.9

(0.1)

49.9

49.8

2.1

(1.5)

(0.4)

0.2

(33.7)

(0.3)

2.6

2.1

(1.5)

0.2

Balance at 30 September 2023

3.3

5.6

3.4

(2.6)

180.2

189.9

Notes 1 to 36 form part of these Financial Statements.

173

COMPANY STATEMENT OF CHANGES IN EQUIT Y

CALLED UP
EQUITY
SHARE
CAPITAL

SHARE-
BASED
PAYMENT
RESERVE

EMPLOYEE
BENEFIT
TRUST

RESERVE

RETAINED
EARNINGS

TOTAL
EQUITY

£m

Balance at 1 October 2021

Comprehensive income for the year:

3.3

1.7

(1.8)

Profit for the year

Total comprehensive income for the year

Share-based payment expense

Settlement of share-based payments

Purchase of own shares in EBT

Distributions to owners - dividends

2.0

(1.5)

(0.3)

50.7

39.8

53.9

39.8

2.0

(1.5)

(0.3)

(33.8)

Balance at 30 September 2022

3.3

2.2

(2.1)

56.7

60.1

Comprehensive income for the year:

Profit for the year

Total comprehensive income for the year

Share-based payment expense

Settlement of share-based payments

Purchase of own shares in EBT

Distributions to owners - dividends

1.9

(1.4)

(0.3)

31.6

1.9

(1.4)

(0.3)

(33.7)

Balance at 30 September 2023

3.3

2.7

(2.4)

54.6

58.2

Notes 1 to 36 form part of these Financial Statements.

174

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation and significant accounting policies

General information

IntegraFin Holdings plc (the “Company”), a public limited

Company incorporated and domiciled in the United

Kingdom (“UK”), along with its subsidiaries (collectively the

“Group”), offers a range of services which are designed to

help financial advisers and their clients to manage financial

plans in a simple, effective and tax efficient way.

The registered office address, and principal place of

business, is 29 Clement’s Lane, London, EC4N 7AE.

A) BASIS OF PREPARATION

The consolidated Financial Statements have been prepared

Going concern

and approved by the directors in accordance with IFRSs.

The Financial Statements have been prepared on the

concern basis, following an assessment by the board.

historical cost basis, except for the revaluation of certain

financial instruments, which are stated at their fair value,

Going concern is assessed over the 12-month period from

have been prepared in pound sterling, which is the

when the Annual Report is approved, and the board has

functional currency of the Company and are rounded to the

concluded that the Group has adequate resources, liquidity

nearest thousand.

and capital to continue in operational existence for the next

The financial statements have been prepared on a going

Climate risks have been considered where appropriate

in the preparation of these Financial Statements, with

• The current financial position of the Group:

particular consideration given to the impact of climate risk

on the fair value calculations and impairment assessments.

◦ The Group maintains a conservative balance

This has concluded that the impact of climate risk on the

sheet and manages and monitors solvency and

12 months. This is supported by:

financial statements is not material.

liquidity on an ongoing basis, ensuring that it

always has sufficient financial resources for the

foreseeable future.

◦ As at 30 September 2023, the Group had

£177.9 million of shareholder cash on the statement
of financial position, demonstrating that liquidity

remains strong.

• Detailed cash flow and working capital

projections; and

• Stress-testing of liquidity, profitability and regulatory

capital, taking account of possible adverse changes in

trading performance.

When making this assessment, the board has taken into

consideration both the Group’s current performance and

the future outlook, including the impact of the cost-of-living

crisis, sustained levels of high inflation, increasing interest

rates and volatile equity markets. The environment has

been challenging during the year, but our financial and

operational performance has been robust, and the Group’s

fundamentals remain strong.

175

1. Basis of preparation and significant accounting policies (continued)

Basis of consolidation

As detailed in the Going Concern and Viability Statement

The consolidated Financial Statements incorporate the

(page 69), stress and scenario testing has been carried

Financial Statements of the Company and its subsidiaries.

out, in order to understand the potential financial impacts

Where the Company has control over an investee, it

of severe, yet plausible, scenarios on the Group. This

is classified as a subsidiary. The Company controls an

assessment incorporated a number of stress tests covering

investee if all three of the following elements are present:

a broad range of scenarios, including a cyber attack, system

power over the investee, exposure to variable returns

and process failures, and persistent high inflation with

from the investee, and the ability of the investor to use its

continued market uncertainty.

power to affect those variable returns. Control is presumed

to exist where the Group owns the majority of the voting

Having conducted detailed cash flow and working capital

rights of an entity. Control is reassessed whenever facts

projections, and stress-tested liquidity, profitability

and circumstances indicate that there may be a change in

and regulatory capital; taking account of the economic

any of these elements of control.

challenges mentioned above; the board is satisfied that the

Group is well placed to manage its business risks. The board

Subsidiaries are fully consolidated from the date on which

is also satisfied that it will be able to operate within the

control is obtained by the Company and are deconsolidated

regulatory capital limits imposed by the Financial Conduct

from the date that control ceases. Acquisitions are

Authority (FCA), Prudential Regulation Authority (PRA), and

accounted for under the acquisition method. Intercompany

Isle Man Financial Services Authority (IoM FSA).

transactions, balances, income and expenses, and profits

and losses are eliminated on consolidation.

The board has concluded that the Company has adequate

resources and there are no material uncertainties to the

The Financial Statements of all of the wholly owned

Company’s ability to continue to operate for the foreseeable

subsidiary companies are incorporated into the

future, being a period of at least twelve months from

consolidated Financial Statements. Two of these

the date the financial statements are approved. For this

subsidiaries, IntegraLife International Limited (ILInt)

reason, they have adopted the going concern basis for the

and IntegraLife UK Limited (ILUK) issue contracts with

preparation of the financial statements.

the legal form of insurance contracts, but which do not

transfer significant insurance risk from the policyholder to

the Company, and which are therefore accounted for as

investment contracts.

In accordance with IFRS 9, the contracts concerned

are therefore reflected in the consolidated statement of

financial position as investments held for the benefit of

policyholders, and a corresponding liability to policyholders.

176

1. Basis of preparation and significant accounting policies (continued)

Changes in accounting policies

i) There have been no new standards, amendments to

prospectively to future transactions and events, but changes

standards or interpretations adopted during the financial

in accounting policies are applied retrospectively to past

year that had a material effect.

transactions and events.

ii) Future standards, amendments to standards, and

The Group has assessed the impact of this amendment and

interpretations not yet effective are noted below.

does not note any significant impact.

The following amendments are effective for periods

Deferred Tax Related to Assets and Liabilities arising

beginning on or after 1 January 2023:

from a Single Transaction (Amendments to IAS 12)

IFRS 17 Insurance Contracts

In May 2021, the IASB issued amendments to IAS 12 which

In June 2022, the IASB issued amendments to IFRS

transactions which, on initial recognition, give rise to equal

17 which will replace IFRS 4 Insurance Contracts.

amounts of taxable and deductible temporary differences.

will require recognition of deferred taxes on particular

IFRS 17 establishes the principles for the recognition,

measurement, presentation and disclosure of insurance

The Group has assessed the impact of this amendment and

contracts within the scope of the Standard. The Group

does not note any significant impact.

would be required to provide information that faithfully

represents those contracts, such that users of the financial

Amendments to IAS 12: International Tax Reform

statements can assess the effect insurance contracts have

Pillar Two Model Rules

on the entity’s financial position, financial performance

and cash flows.

Amendments to IAS 12 Income Taxes have been introduced

in response to the OECD’s BEPS Pillar Two Model Rules. The

The Group has performed an assessment regarding the

amendments include a temporary mandatory exception

impact of IFRS 17 on the Financial Statements and, while

from accounting for deferred taxes arising from the Pillar

the insurance companies in the Group do administer

Two model rules and a requirement to disclose that the

insurance business and hold capital relating to the risks

exception has been applied immediately and retrospectively.

associated with this, there is no significant insurance

IHP has taken up this exemption for FY23.

risk in any of the contracts. Therefore all contracts are

investment contracts under IFRS 9, and IFRS 17 has no

The Group is continuing to assess whether it will be in scope

impact.

of the Pillar Two model Rules. If so, the rules would be

expected to apply to the Group from 1 October 2024 and

Disclosure of Accounting Policies (Amendments to

give rise to a financial impact. However, the Group does

IAS 1 and IFRS Practice Statement 2)

not anticipate that any tax liabilities that may arise from its

overseas operations will be material to the Group, as most

In February 2021, the IASB issued amendments to IAS

of its revenue and profits are generated in the UK and taxed

1 to assist in determining which accounting policies

at a rate of 25%.

to disclose, with reference to materiality and how to

determine which policies fall into this category. IFRS

The following amendments are effective for periods

Practice Statement 2 includes guidance to support this.

beginning on or after 1 January 2024:

The Group has assessed the impact of this amendment

Classification of Liabilities as Current or Non-Current

and does not note any significant impact.

(Amendments to IAS 1)

Definition of Accounting Estimates (Amendments
to IAS 8)

In February 2021, the IASB issued amendments to IAS 8
to clarify how to distinguish changes in accounting policies
from changes in accounting estimates. That distinction

In October 2022, the IASB issued amendments to IAS 1
regarding how conditions with which an entity must comply
within twelve months after the reporting period, affect the
classification of a liability.

The Group has assessed the impact of this amendment

being that changes in accounting estimates are applied

and does not note any significant impact.

177

1. Basis of preparation and significant accounting policies (continued)

B) PRINCIPAL ACCOUNTING POLICIES

The following amendments are effective for the

Revenue from contracts with customers

period beginning 1 January 2025:

The Effects of Changes in Foreign Exchange Rates

the Company. All fee income is recognised as revenue on an

(IAS 21)

accruals basis and in line with the provision of the services.

Revenue represents the fair value of services supplied by

In August 2023, the IASB issued amendments to IAS

Fee and commission income is recognised at an amount

21 to provide guidance to specify when a currency is

that reflects the consideration to which the Group expects

exchangeable and how to determine the exchange rate

to be entitled in exchange for providing the services.

when it is not.

The Group has assessed the impact of this amendment and

satisfaction, are identified, and determined, at the inception

The performance obligations, as well as the timing of their

does not note any impact as the only non-Sterling currency

of the contract.

in use is Australian Dollars.

No other future standards, amendments to standards, or

consideration is generally due immediately upon satisfaction

interpretations are expected to have a material effect on

of a service provided at a point in time or at the end of the

When the Group provides a service to its customers,

the financial statements.

178

contract period for a service provided over time. The Group

has generally concluded that it is the principal in its revenue

arrangements because it typically controls the services

before transferring them to the customer.

The Group has discharged all of its obligations in relation

to contracts with customers, and the amounts received or

receivable from customers equal the amount of revenue

recognised on the contracts. All amounts due from

customers are therefore recognised as receivables within

accrued income, and the Group has no contract assets or

liabilities.

Fee income comprises:

Annual commission income

Annual commission is charged for the administration of
products on the Transact platform, and is levied monthly in

arrears on the average value of assets and cash held on the

platform. The value of assets and cash held on the Platform

is driven by market movements, inflows, outflows and other

factors.

Wrapper fee income

Wrapper fees are charged for each of the tax wrappers held

by clients and are levied quarterly in arrears based on fixed

fees for each wrapper type.

Annual commission and wrapper fees relate to services

provided on an on-going basis, and revenue is therefore

recognised on an on-going basis to reflect the nature of the

performance obligations being discharged. As the benefit to

the customer of the services is transferred evenly over the

1. Basis of preparation and significant accounting policies (continued)

Administrative expenses

service period, these fees are recognised as revenue evenly

recognised in the Consolidated Statement of Comprehensive

over the period, based on time elapsed.

Income on an accruals basis.

Administration expenses relate to overhead costs and are

Accrued income on both annual commission and wrapper

Fee and commission expenses

fees is recognised as a trade receivable on the statement

of financial position, as the Group’s right to consideration is

Fee and commission expenses are paid by ILUK and ILInt

conditional on nothing other than the passage of time.

policyholders to their financial advisers. Expenses comprise

Licence income

annual commission which is levied monthly in arrears on

the average value of assets and cash held on the platform

in the month and upfront fees charged on new premiums on

Licence income is the rental charge for use of access to

the platform.

T4A’s CRM software. The rental charge is billed monthly

in advance, based on the number of users. Revenue is

Investments

recognised in line with the provision of the service.

Consultancy income

less any provision for impairment.

Fixed asset investments in subsidiaries are stated at cost

Consultancy income relates to consultancy services

Other investments comprise UK Government gilts held

provided by T4A on an as-needs basis. Revenue is

as shareholder investments. The Group held a gilt in the

recognised when the services are provided.

prior year that matured in the current year, which was

Other income

held at fair value through profit or loss as it fell under the

‘other’ business model, and was stated at quoted bid price

which equates to fair value, with any resultant gain or loss

This comprises buy commission and dealing charges. These

recognised in profit or loss.

are charges levied on the acquisition of assets, due upon

completion of the transaction. Revenue is recorded on the

New gilts were acquired in the current financial year, which

date of completion of the transaction, as this is the date

were assessed upon purchase and deemed to meet the

the services are provided to the customer. As the benefit

criteria to classify as amortised cost under IFRS 9 Financial

to the customer of the services is transferred at a point

Instruments, namely:

in time, these fees are recognised at the point they are

provided.

Interest income

• they are held within a business model whose objective

is to hold assets in order to collect contractual cash

flows; and,

Interest on shareholder cash, policyholder cash, loans and

• the contractual terms of the financial assets give

coupon on shareholder gilts are the sources of interest

rise on specified dates to cash flows that are solely

income received. These are recognised in the Consolidated

payments of principal and interest on the principal

Statement of Comprehensive Income in interest income

amount outstanding.

and within policyholder returns. Under IFRS 9, interest

income is recorded using the effective interest method

Investment contracts – investments held for the

for all financial assets measured at amortised cost

benefit of policyholders

and is recognised in the Consolidated Statement of

Comprehensive Income.

Cost of sales

Investment contracts held for the benefit of policy holders

are comprised of unit-linked contracts. Investments held

for the benefit of policyholders are stated at fair value and

reported on a separate line in the statement of financial

Cost of sales relate to costs directly attributable to

position, see accounting policy on financial instruments for

the supply of services provided to the Group and

fair value determination. Investment contracts result in

are recognised in the Consolidated Statement of

financial liabilities whose fair value is dependent on the fair

Comprehensive Income on an accruals basis.

value of underlying financial assets. They are designated at

179

1. Basis of preparation and significant accounting policies (continued)

inception as financial liabilities at ‘fair value through profit

Goodwill is held at cost and, in accordance with IFRS, is not

or loss’ in order to reduce an accounting mismatch with the

amortised but is subject to annual impairment reviews.

underlying financial assets. Gains and losses arising from

changes in fair value are presented in the Consolidated

Property, plant and equipment

Statement of Comprehensive Income within “Policyholder

investment returns”.

Property, plant and equipment are stated at cost less

accumulated depreciation and accumulated impairment

Investment inflows received from policyholders are invested

losses. Cost includes expenditures that are directly

in funds selected by the policyholders. The resulting

attributable to the acquisition of the asset. Subsequent

liabilities for linked investment contracts are accounted for

costs are included in the asset’s carrying amount or

under the ‘fair value through profit or loss’ option, in line

recognised as a separate asset, as appropriate, only when

with the corresponding assets as permitted by IFRS 9.

it is probable that future economic benefits associated

As all investments held for the benefit of policyholders are

measured reliably. Repairs and maintenance costs are

matched entirely by corresponding linked liabilities, any

charged to the Consolidated Statement of Comprehensive

gain or loss on assets recognised through the Consolidated

Income during the period in which they are incurred.

Statement of Comprehensive Income are offset entirely

by the gains and losses on linked liabilities, which are

The major categories of property, plant, equipment are

with the item will flow to the Group and the cost can be

recognised within the “change in investment contract

depreciated as follows:

liabilities” line. The overall net impact on profit is therefore

£nil.

Investment contracts are measured at fair value using

quoted mid prices that are available at the reporting

date and are traded in active markets. Where this is not

available, valuation techniques are used to establish

the fair value at inception and each reporting date. The

ASSET CLASS

ALL UK AND ISLE
OF MAN ENTITIES

AUSTRALIAN
ENTITY

Leasehold
improvements

Straight line over
the life of the lease

Straight line over
40 years

Fixtures &
fittings

Straight line over
10 years

Company’s main valuation techniques incorporate all factors

that market participants would consider and are based on

Equipment

Straight line over 3
to 10 years

Straight line over
3 years

observable market data. The financial liability is measured

both initially and subsequently at fair value. The fair value

of a unit-linked financial liability is determined using the

fair value of the financial assets contained within the funds

linked to the financial liability.

Motor vehicles

N/A

25% reducing
balance

Residual values, method of depreciation and useful lives

of the assets are reviewed annually and adjusted if

Dividends

appropriate.

Equity dividends paid are recognised in the accounting

Goodwill and goodwill impairment

period in which the dividends are declared and approved.

Goodwill represents the excess of the cost of an acquisition

Intangible non-current assets

over the fair value of the Group’s share of the identifiable

net assets of the acquired entity at the date of acquisition.

Intangible non-current assets, excluding goodwill, are

Goodwill is recognised as an asset at cost at the date when

stated at cost less accumulated amortisation and comprise

control is achieved and is subsequently measured at cost

intellectual property software rights. The software rights

less any accumulated impairment losses.

were amortised over seven years on a straight line basis, as

it was estimated that the software would be rewritten every

Goodwill is allocated to one or more cash generating

seven years, and therefore have a finite useful life. The

units (CGUs) expected to benefit from the synergies of

software rights are now fully amortised, but due to ongoing

the combination, where the CGU represents the smallest

system development and coding updates no replacement is

identifiable group of assets that generates cash inflows

required.

180

that are largely independent of the cash inflows from

1. Basis of preparation and significant accounting policies (continued)

Impairment of non-financial assets

other assets or group of assets. Goodwill is reviewed for

Property, plant and equipment, right-of-use assets and

impairment at least once annually, and also whenever

intangible assets are tested for impairment when events or

circumstances or events indicate there may be uncertainty

changes in circumstances indicate that the carrying amount

over this value. The impairment assessment compares the

may not be recoverable. Recoverable amount is the higher of

carrying value of goodwill to the recoverable amount, which

an asset’s fair value less costs to sell and value in use (being

is the higher of value in use and the fair value less costs of

the present value of the expected future cash flows of the

disposal. Any impairment loss is recognised immediately in

relevant asset).

the Consolidated Statement of Comprehensive Income and

is not subsequently reversed.

The Group evaluates impairment losses for potential

reversals when events or circumstances warrant such

Intangible assets acquired as part of a business

consideration.

combination

Intangible assets acquired as part of a business combination

impairment is recognised this cannot be reversed. For more

are recognised where they are separately identifiable and

detailed information in relation to this, please see note 12.

Goodwill is tested for impairment annually, and once an

can be measured reliably.

Acquired intangible assets consist of contractual customer

Pensions

relationships, software and brand. These items are

The Group makes defined contributions to the personal

capitalised at their fair value, which are based on either the

pension schemes of its employees. These are chargeable to

‘Relief from Royalty’ valuation methodology or the ‘Multi-

Consolidated Statement of Comprehensive Income in the

period Excess Earnings Method’, as appropriate for each

year in which they become payable.

asset. Subsequent to initial recognition, acquired intangible

assets are measured at cost less accumulated amortisation

Foreign currencies

and any recognised impairment losses.

Amortisation is recognised in the consolidated statement of

the functional currency at the exchange rate in effect at

comprehensive income within administration expenses on

the date of the transaction. Foreign currency monetary

a straight line basis over the estimated useful lives of the

assets and liabilities are translated to sterling at the year

Transactions in foreign currencies are translated into

assets, which are as follows:

ASSET CLASS

USEFUL LIFE

Customer relationships

15 years

Software

Brand

7 years

10 years

end closing rate. Foreign exchange rate differences that

arise are reported net in the Consolidated Statement of

Comprehensive Income as foreign exchange gains/losses.

The assets and liabilities of foreign operations are
translated to sterling using the year end closing exchange

rate. The revenues and expenses of foreign operations

are retranslated to sterling at rates approximating the

foreign exchange rates ruling at the relevant month of

The method of amortisation and useful lives of the assets

the transactions. Foreign exchange differences arising on

are reviewed annually and adjusted if appropriate.

retranslation are recognised directly in the reserves.

181

1. Basis of preparation and significant accounting policies (continued)

Taxation

Current income tax

The taxation charge is based on the taxable result for

Unrecognised deferred tax assets are re-assessed at each

the year. The taxable result for the year is determined in

reporting date and are recognised to the extent that it has

accordance with enacted legislation and taxation authority

become probable that future taxable profits will allow the

practice for calculating the amount of corporation tax

deferred tax asset to be recovered.

payable.

Policyholder tax comprises corporation tax payable at

the Group relies on the same forecast assumptions

the policyholder rate on the policyholders’ share of the

used elsewhere in the financial statements and in other

taxable result for the year, together with deferred tax at

management reports, which, among other things, reflect

the policyholder rate on temporary differences relating to

the potential impact of climate-related development on the

policyholder items.

business, such as increased cost of production as a result of

In assessing the recoverability of deferred tax assets,

measures to reduce carbon emissions.

Current income tax assets and liabilities are measured

at the amount expected to be recovered from or paid to

The Group offsets deferred tax assets and deferred tax

the taxation authorities. The tax rates and tax laws used

liabilities if and only if it has a legal enforceable

to compute the amount are those that are enacted or

right to set off current tax assets and current tax liabilities

substantively enacted at the reporting date in countries

and the deferred tax assets and deferred tax liabilities relate

where the Group operates and generates taxable income.

to income taxes levied by the same taxation authority on

Management periodically evaluates positions taken in the

either the same taxable entity or different taxable entities

tax returns with respect to situations in which applicable

which intend to either settle current tax liabilities and

tax regulations are subject to interpretation and establishes

assets on a net basis, or to realise the assets and settle

provisions where appropriate.

the liabilities simultaneously, in each future period in which

significant amounts of deferred tax liabilities or assets are

Deferred tax

expected to be settled or recovered.

Deferred tax assets and liabilities are recognised where the

Policyholder Tax

carrying amount of an asset or liability in the statement of

financial position differs from its tax base.

HMRC requires ILUK to charge basic rate income tax on its

life insurance policies (FA 2012, s102). ILUK collects this

The amount of the asset or liability is determined using

tax quarterly, by charging 20% tax (FY22: 20%) on gains

tax rates that have been enacted or substantively enacted

from assets held in the policies, based on the policyholder’s

by the reporting date and are expected to apply when the
deferred tax assets/liabilities are recovered/settled.

acquisition costs and market value at each quarter end.
Additional charges are applied on any increases in the

previously charged gain. The charge is adjusted by the

With regard to capital gains tax on policyholders’ future

fourth financial year quarter so that the total charge for the

tax obligations, management has determined that reserves

year is based on the gain at the end of the financial year.

should be held to cover this, based on a reserve charge

When assets are sold at a loss or reduce in market value

rate of 20%. The deferred capital gains upon which the

by the financial year end, a refund of the charges may be

reserve charges are calculated are reflected in the closing

applied. Policyholder tax is recorded as a tax expense/(tax

deferred tax balance.

credit) in the statement of comprehensive income, with a

corresponding asset/(liability) recognised on the statement

We are aware of the proposed BEPS Pillar 2 changes which

of financial position (under IAS 12).

might impact the tax rate in some jurisdictions in future

years and continue to monitor for updates.

The carrying amount of deferred tax assets is reviewed at

each reporting date and reduced to the extent that it is no

longer probable that sufficient tax profit will be available

to allow all or part of the deferred tax asset to be utilised.

182

1. Basis of preparation and significant accounting policies (continued)

Segmental reporting

Operating segments are reported in a manner

Short-term leases

consistent with the internal reporting provided to the

The Group defines short-term leases as those with a lease

chief operating decision-maker. The chief operating

term of 12 months or less and leases of low value assets.

decision-maker is responsible for allocating resources and

For these leases, the Group recognises the lease payments

assessing performance of the operating segments and

as an operating expense on a straight line basis over the

has been identified as the Chief Executive Officer of the

term of lease.

Company.

Client assets and client monies

Cash and cash equivalents

Integrated Financial Arrangements Ltd (IFAL) client assets

instant access and notice accounts, call deposits, and

and client monies are not recognised in the parent and

other short-term deposits with an original maturity of

consolidated statements of financial position as they are

three months or less. The carrying amount of these assets

owned by the clients of IFAL.

approximates to their fair value.

Cash and cash equivalents comprise cash balances from

Lease assets and lease liabilities

Cash and cash equivalents held for the benefit of the

policyholders are held to cover the liabilities for unit linked

investment contracts. These amounts are 100% matched to

corresponding liabilities.

Right-of-use assets

The Group recognises right-of-use assets on the date

the leased asset is made available for use by the Group.

These assets relate to rental leases for the office of the

Group, which have varying terms clauses and renewal

rights. Right-of-use assets are measured at cost, less any

accumulated depreciation and impairment losses, and

adjusted for any re-measurement of lease liabilities. The

cost of right-of-use assets includes the amount of lease

liabilities recognised, initial direct costs incurred, and

lease payments made at or before the commencement

date.

Depreciation is applied in accordance with IAS 16:

Property, Plant and Equipment. Right-of-use assets are

depreciated over the lease term. See note 13 and 14.

Lease liabilities

The Group measures lease liabilities in line with IFRS

16 on the balance sheet as the present value of all

future lease payments, discounted using an incremental

borrowing rate at the date of commencement. After the

commencement date, the amount of lease liabilities is

increased to reflect the addition of interest and reduced

for the lease payments made. The Group’s incremental

borrowing rate is the rate at which a similar borrowing

could be obtained from an independent creditor under

comparable terms and conditions. See note 25.

183

1. Basis of preparation and significant accounting policies (continued)

Financial instruments

Financial assets and liabilities are recognised when the

is to hold assets to collect contractual cash flows and

Group becomes a party to the contractual provisions of

their contractual cash flows represent solely payments of

the instrument. Financial assets are derecognised

principal and interest.

when the rights to receive cash flows from the assets

have expired or have been transferred and the Group

The carrying value of assets held at amortised cost are

has transferred substantially all risks and rewards of

adjusted for impairment arising from expected credit losses.

ownership. Financial liabilities are derecognised when

the obligation specified in the contract is discharged,

(iii) Financial liabilities at amortised cost

cancelled or expires.

At initial recognition, the Group classifies its financial

other payables and loans payable. These are initially

instruments in the following categories, based on the

recognised at fair value. Subsequent measurement is at

business model in which the assets are managed and

amortised cost using the effective interest method. Trade

Financial liabilities at amortised cost comprise trade and

their cash flow characteristics:

and other payables are classified as current liabilities due to

their short-term nature. The loan is split between current

(i) Financial assets and liabilities at fair value

and non-current liabilities, based on the repayment terms.

through profit or loss

This category includes financial assets and liabilities

acquired principally for the purpose of selling or

Expected credit losses are required to be measured through

repurchasing in the short-term, comprising of listed

a loss allowance at an amount equal to:

Impairment of financial assets

shares and securities.

Financial instruments in this category are recognised

losses from possible default events within 12 months

on the trade date, and subsequently measured at fair

after the reporting date); or

• the 12-month expected credit losses (expected credit

value. Purchases and sales of securities are recognised

on the trade date. Transaction costs are expensed

• full lifetime expected credit losses (expected credit

in the Consolidated Statement of Comprehensive

losses from all possible default events over the life of

Income. Gains and losses arising from changes in fair

the financial instrument).

value are presented in the Consolidated Statement of

Comprehensive Income within “investment returns”

A loss allowance for full lifetime expected credit losses

for corporate assets and “net income attributable to

is required for a financial instrument if the credit risk of

policyholder returns” for policyholder assets in the period

that financial instrument has increased significantly since

in which they arise. Financial assets and liabilities at
fair value through profit or loss are classified as current

initial recognition, as well as to contract assets or trade
receivables, where the simplified approach is applied

except for the portion expected to be realised or paid

to assets that do not contain a significant financing

beyond twelve months of the balance sheet date, which

component.

are classified as long-term.

(ii) Financial assets at amortised cost

are measured at an amount equal to the 12-month

For all other financial instruments, expected credit losses

expected credit losses.

These assets comprised of accrued fees, trade and

other receivables, loans, investments in quoted debt

Impairment losses on financial assets carried at amortised

instruments and cash and cash equivalents. These are

cost are reversed in subsequent periods if the expected

included in current assets due to their short-term nature,

credit losses decrease.

except for the element of the loan payable to subsidiary

which is to be settled after 12 months, which is included

in non-current assets.

Financial assets are measured at amortised cost when

they are held within the business model whose objective

184

1. Basis of preparation and significant accounting policies (continued)

Provisions

Share-based payments

Provisions are recognised when the Group has a present

Equity-settled share-based payment awards granted

obligation (legal or constructive) as a result of a past

to employees are measured at fair value at the date of

event, it is probable that an outflow of resources

grant. The awards are recognised as an expense, with a

embodying economic benefits will be required to settle

corresponding increase in equity, spread over the vesting

the obligation and a reliable estimate can be made of the

period of the awards, which accords with the period for

amount of the obligation.

which related services are provided.

If the effect of the time value of money is material,

The total amount expensed is determined by reference to

provisions are discounted using a current pre-tax rate

the fair value of the awards as follows:

that reflects, when appropriate, the risks specific to the

liability. When discounting is used, the increase in the

(i) Share Incentive Plan (SIP) shares

provision due to the passage of time is recognised as a

finance cost.

The fair value is the market price on the grant date. There

are no vesting conditions, as the employees receive the

The ILUK policyholder reserves, which are part of the

shares immediately upon grant.

provisions balance, arises from tax reserve charges

collected from life insurance policyholders, which are held

(ii) Performance share plan (PSP) share options

to cover possible future tax liabilities. If no tax liability

arises the charges are refunded to policyholders, where

The fair value of share options is determined by applying

possible. As these liabilities are of uncertain timing

a valuation technique, usually an option pricing model,

or amounts, they are recognised as provisions on the

such as Black Scholes. This takes into account factors such

statement of financial position.

as the exercise price, the share price, volatility, interest

Balances due to HMRC are considered under IAS 12

Income Taxes, whereas balances due to policyholders are

At each reporting date, the estimate of the number of

considered under IAS 37 Provisions, Contingent Liabilities

share options expected to vest based on the non-market

rates, and dividends.

and Contingent Assets.

vesting conditions is assessed. Any change to original

estimates is recognised in the statement of comprehensive

income, with a corresponding adjustment to equity

reserves.

185

2. Critical accounting estimates and judgements

Critical accounting estimates are those where there is

a significant risk of material adjustment in the next 12

months, and critical judgements are those that have

the most significant effect on amounts recognised in the

accounts.

In preparing these Financial Statements, management has

made judgements, estimates and assumptions about the

future that affect the application of the Group’s accounting

policies and the reported amounts of assets, liabilities,

income and expenses. Management uses its knowledge

of current facts and applies estimation and assumption

techniques that are aligned with relevant accounting

policies to make predictions about the future. Actual results

may differ from these estimates.

Estimates and judgements are reviewed on an ongoing

basis and revisions are recognised in the period in which

the estimate is revised. There are no assumptions made

about the future, or other major sources of estimation

uncertainty at the end of the reporting period, that have a

significant risk of resulting in a material adjustment to the

carrying amounts of assets and liabilities within the next

financial year.

Judgements which do not involve estimates

The assessment to recognise the ILUK policyholder

provision comes from an evaluation of the likelihood of a

constructive or legal obligation, and whether that obligation

can be estimated reliably. The provision required has been

calculated based on an assessment of tax payable to HM

Revenue & Customs (HMRC) and refunds payable back to

policyholders.

186

3. Financial instruments

(i) Principal financial instruments

(ii) Financial instruments by category

The principal financial instruments, from which financial
instrument risk arises, are as follows:

• Trade and other receivables

• Accrued fees

• Investments – Gilts

• Investments – Listed shares and securities

• Trade and other payables

• Loans receivable and loans payable

As explained in note 1, financial assets and liabilities

have been classified into categories that determine their

basis of measurement and, for items measured at fair

value, whether changes in fair value are recognised in the

statement of comprehensive income. The following tables

show the carrying values of assets and liabilities for each

of these categories for the Group:

FINANCIAL ASSETS:

FAIR VALUE THROUGH PROFIT OR LOSS

AMORTISED COST

Cash and cash equivalents

Cash and cash equivalents policyholder

Investments - Listed shares and securities

Investments - Gilts

Loans receivable

Accrued income

Trade and other receivables

Investments held for the policyholders

Total financial assets

2023

£m

0.1

2022

£m

0.1

3.0

23,021.7

23,021.8

20,715.8

20,718.9

Assets which are not financial instruments

Prepayments

Current tax asset

Trade and other receivables – repayment interest due from HMRC

Total financial assets

See note 36 for details on 2022 restated balances.

2023

£m

177.9

RESTATED
2022

£m

183.0

1,419.2

1,458.6

22.3

6.3

12.5

3.2

5.5

12.1

2.0

1,641.4

1,661.2

2023

£m

4.7

14.3

0.4

19.4

RESTATED
2022

£m

5.1

15.0

20.1

187

3. Financial instruments (continued)

FINANCIAL LIABILITIES:

FAIR VALUE THROUGH PROFIT OR LOSS

AMORTISED COST

Trade and other payables

Lease liabilities

Other payables

2023

£m

2022

£m

2023

£m

0.7

1.1

5.9

Liabilities for linked investments contracts

Total financial liabilities

23,021.7

20,715.8

1,419.2

1,426.9

RESTATED
2022

£m

1.6

2.8

5.4

1,458.6

1,468.4

RESTATED
2022

£m

8.3

2.2

2.3

1.7

2023

£m

7.8

2.6

0.9

1.6

12.9

16.2

Liabilities which are not financial instruments

Accruals and deferred income

PAYE and other taxation

Other payables – due to HMRC

Deferred consideration

Contingent consideration

See note 36 for details on 2022 restated balances.

The following tables show the carrying values of assets and

liabilities for each of these categories for the Company:

FINANCIAL ASSETS:

FAIR VALUE THROUGH PROFIT OR LOSS

AMORTISED COST

Cash and cash equivalents

Trade and other receivables

Loans receivable

Total financial assets

2023

£m

2022

£m

2023

£m

26.0

0.1

6.3

32.4

FINANCIAL LIABILITIES:

FAIR VALUE THROUGH PROFIT OR LOSS

AMORTISED COST

2023

£m

2022

£m

2023

£m

0.4

7.0

7.4

Other payables

Loans payable

Due to Group undertakings

Total financial liabilities

188

2022

£m

33.1

0.2

5.5

38.8

RESTATED
2022

£m

0.3

8.0

0.1

8.4

3. Financial instruments (continued)

Liabilities which are not financial instruments

Accruals and deferred income

PAYE and other taxation

Deferred consideration

Contingent consideration

(iii) Financial instruments not measured at

fair value

2023

£m

0.3

0.1

1.6

2.0

RESTATED
2022

£m

0.3

0.1

1.7

3.8

Financial instruments not measured at fair value include

The following table shows the three levels oaf the fair value

cash and cash equivalents, accrued fees, investments

hierarchy:

held in gilts, loans, trade and other receivables, and trade

and other payables. Due to their short-term nature and/

• Level 1: quoted prices (unadjusted) in active markets

or expected credit losses recognised, the carrying value of

for identical instruments;

these financial instruments approximates their fair value.

(iv) Financial instruments measured at fair

provide regular observable prices; and

value – fair value hierarchy

The table below classifies financial instruments that are

data, but for which the last known price is over a year

• Level 3: inputs that are based on Level 1 or Level 2

• Level 2: instruments which are not actively traded but

recognised on the statement of financial position at fair

old (unobservable inputs).

value in a hierarchy that is based on significance of the

inputs used in making the measurements. The levels of

The following table shows the Group’s financial instruments

hierarchy are disclosed on the next page.

measured at fair value and split into the three levels:

2023

Assets

Term deposits

Investments and securities

Bonds and other fixed-income securities

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

£m

182.0

740.3

16.5

181.9

1.0

0.5

182.0

922.7

17.5

Holdings in collective investment schemes

21,754.5

143.3

1.7

21,899.5

Investments held for the benefit of policyholders

22,693.3

326.2

2.2

23,021.7

Investments – listed shares and securities

0.1

Total

Liabilities

22,693.4

326.2

2.2

23,021.8

Liabilities for linked investments contracts

22,693.3

326.2

2.2

23,021.7

Total

22,693.3

326.2

2.2

23,021.7

189

3. Financial instruments (continued)

2022

Assets

Term deposits

Investments and securities

Bonds and other fixed-income securities

LEVEL 1

LEVEL 2

LEVEL 3

TOTAL

£m

63.9

631.9

137.9

10.9

1.2

0.3

63.9

770.1

12.1

Holdings in collective investment schemes

19,730.4

137.7

1.6

19,869.7

Investments held for the benefit of policyholders

20,437.1

276.8

1.9

20,715.8

Investments

Total

Liabilities

3.1

20,440.2

276.8

1.9

20,718.9

Liabilities for linked investments contracts

20,437.1

276.8

1.9

1.7

20,715.8

1.7

20,437.1

276.8

3.6

20,717.5

Contingent consideration

Total

Level 1 valuation methodology

Level 3 valuation methodology

Financial instruments included in Level 1 are measured at

Financial instruments included in Level 3 are measured at

fair value using quoted mid prices that are available at the

fair value using the last known price and for which the price

reporting date and are traded in active markets. These are

is over a year old. These are mainly OEICs and Unit Trusts.

mainly Open-Ended Investment Companies (OEICs), Unit

These instruments have unobservable inputs as the current

Trusts, Investment trusts and Exchange Traded Funds.

observable market information is no longer available. Where

these instruments arise management will value them based

The price is sourced from our 3rd party provider, who

on the last known observable market price.

source this directly from the stock exchange or obtain the

price directly from the fund manager.

The prices are sourced as noted in Level 1 and Level 2

Level 2 valuation methodology

above.

Financial instruments included in Level 2 are measured at

For the purposes of identifying Level 3 instruments,
unobservable inputs means that current observable market

fair value using observable mid prices traded in markets

information is no longer available. Where these instruments

that have been assessed as not active but which provide

arise management will value them based on the last known

regular observable prices. These are mainly Structured

observable market price. No other valuation techniques are

products and OEICs.

applied.

The price is sourced from the structured product provider

or from our 3rd party provider, who obtain the price

directly from the fund manager.

190

3. Financial instruments (continued)

Level 3 sensitivity to changes in unobservable

measurements

For financial instruments assessed as Level 3, based on

Level 3 assets are presented in the table below:

The reconciliation between opening and closing balances of

its review of the prices used, the Group believes that any

change to the unobservable inputs used to measure fair

value would not result in a significantly higher or lower fair

value measurement at year end, and therefore would not

have a material impact on its reported results.

Review of prices

As part of its pricing process, the Group regularly reviews

whether each instrument can be valued using a quoted

price and if it trades on an active market, based on

available market data and the specific circumstances of

each market and instrument.

Opening balance

Unrealised gains or losses in the
year ended 30 September 2023

Transfers in to Level 3 at 30
September 2023 valuation

Transfers out of Level 3 at 30
September 2023 valuation

Purchases, sales, issues and
settlement

2023

2022

£m

1.9

£m

1.9

(0.1)

(0.4)

0.4

The Group regularly assesses instruments to ensure they

Closing balance

2.2

1.9

are categorised correctly and Fair Value Hierarchy (FVH)

levels adjusted accordingly. The Group monitors situations

that may impact liquidity such as suspensions and

Any resultant gains or losses on financial assets held for the

liquidations while also actively collecting observable market

benefit of policyholders are offset by a reciprocal movement

prices from relevant exchanges and asset managers.

in the linked liability.

Should an instrument price become observable following

the resumption of trading the FVH level will be updated to

reflect this.

Changes to valuation methodology

There have been no changes in valuation methodology

during the year under review.

Transfers between Levels

The Group’s policy is to assess each financial instrument it

holds at the current financial year end, based on the last
known price and market information, and assign it to a

Level.

The Group recognises transfers between Levels of the fair

value hierarchy at the end of the reporting period in which

the changes have occurred. Changes occur due to the

availability of (or lack thereof) quoted prices and whether a

market is now active or not.

Transfers between Levels between 01 October 2022 and 30

September 2023 are presented in the table below at their

valuation at 30 September 2023:

TRANSFERS FROM

TRANSFERS TO

Level 1

Level 2

Level 1

£M

32.3

20.9

191

3. Financial instruments (continued)

(v) Capital maintenance

The regulated companies in the Group are subject to

capital requirements imposed by the relevant regulators

as detailed below:

LEGAL ENTITY

REGULATORY REGIME

IFAL

ILUK

ILInt

IFPR

Solvency II

Isle of Man risk based capital regime

Group capital requirements for 2023 are driven by

the regulated entities, whose capital resources and

requirements as detailed below:

IFAL
30 SEPTEMBER

ILUK
30 SEPTEMBER

ILINT
30 SEPTEMBER

2023

£m

269.2

215.8

125%

2022

£m

244.0

186.9

131%

2023

2022

£m

46.6

27.1

£m

42.0

23.7

172%

177%

Capital resource

Capital requirement

2023

2022

£m

44.4

33.3

£m

39.7

32.6

Coverage ratio

133%

122%

The Group has complied with the requirements set by

the regulators during the year. The Group’s policy for

managing capital is to ensure each regulated entity

maintains capital well above the minimum requirement.

Further information is detailed in the Risk and Risk

Management section of this report on page 60 and in the

Financial Review on page 53.

192

4. Risk and risk management

This note supplements the details provided in the Risk

and Risk Management section of this report on page 60.

Risk assessment

The board has overall responsibility for the determination

of the Group’s risk management objectives and policies

Market risk is the risk of loss arising either directly or

and, whilst retaining ultimate responsibility for them, it

indirectly from fluctuations in the level and in the volatility

has delegated the authority for designing and operating

of market prices of assets, liabilities and other financial

(1) Market risk

processes that ensure the effective implementation of the

instruments.

objectives and policies to the Group’s risk function.

(a) Price risk

Risk assessment is the determination of quantitative

values and/or qualitative judgements of risk related to a

Market price risk from reduced income

concrete situation and a recognised threat. Quantitative

risk assessment requires calculations of two components

The Company’s dividend income from its regulated

of risk, the magnitude of the potential impact, and the

subsidiaries, IFAL, ILUK and ILInt, is exposed to market

likelihood that the risk materialises. Qualitative aspects of

risk. The Group’s main source of income is derived from

risk, despite being more difficult to express quantitatively,

annual management fees and transaction fees which are

are also taken into account in order to fully evaluate the

linked to the value of the clients’ portfolios, which are

impact of the risk on the organisation.

determined by the market prices of the underlying assets.

The Group’s revenue is therefore affected by the value of

assets on the platform, and consequently it has exposure

to equity market levels and economic conditions.

The Group mitigates the second order market price risk

by applying fixed charges per tax wrapper in addition to

income derived from the charges based on clients’ linked

portfolio values. These are recorded in note 5 as wrapper

fee income and annual commission income, respectively.

This approach of fixed and variable charging offers an

element of diversification to its income stream. The risk of

stock market volatility, and the impact on revenue, is also

mitigated through a wide asset offering which ensures the

Group is not wholly correlated with one market, and which

enables clients to switch assets, including into cash on the

platform, in times of uncertainty.

Sensitivity testing has been performed to assess the

impact of market movements on the Group’s Profit for the

year. The sensitivity is applied as an instantaneous shock

at the start of the year, and shows the impact of a 10%

change in values across all assets held on the platform.

IMPACT ON PROFIT AND EQUITY FOR THE YEAR

10% increase in asset values

2023

2022

£m

8.7

£m

8.5

10% decrease in asset values

(8.7)

(8.5)

193

4. Risk and risk management (continued)

Market risk from direct asset holdings

The Group and the Company have limited exposure to

The table below shows a breakdown of the material foreign

primary market risk as capital is invested in high quality,

currency exposures for the unit-linked policies within the

highly liquid, short-dated investments.

Group:

Market risk from unit-linked assets

The Group and the Company have limited exposure to

primary market risk from the value of unit-linked assets as

fluctuations are borne by the policyholders.

(b) Interest rate risk

The Group receives interest on its cash and cash equivalents

of £177.9 million (FY22: £183.0 million), on its loans of £6.3

CURRENCY

£m

2023

2022

GBP

USD

EUR

Others

Total

24,279.2

99.3

22,021.1

99.3

133.4

15.9

12.4

0.5

0.1

127.0

16.4

9.8

0.6

0.1

0.0

24,440.9

100.0

22,174.3

100.0

million (FY22: £5.5 million) and on financial investments

99.3% of investments and cash held for the benefit of

of £22.4 million (FY22: £3.1 million). The Group mitigates

policyholders are denominated in GBP, its base currency.

interest rate risk by diversifying its investments, which

Remaining currency holdings greater than 0.1% of the

include government gilts which have a fixed rate of interest.

total are shown separately in the table. However, it is

recognised that the majority of investments held for the

Sensitivity testing has been performed to assess the impact

benefit of policyholders are in collective investment schemes

of a 1% change in interest rates. This would be expected

and some of their underlying assets are denominated in

to increase/decrease interest received on cash and cash

currencies other than GBP, which increases the funds under

equivalents by £1.7 million (FY22: £1.8 million) and on

direction currency risk exposure. A significant rise or fall in

loans by £0.1 million (FY22: £0.1 million), which would

sterling exchange rates would not have a significant first

increase/decrease profit after tax and equity by £1.4 million

order impact on the Group’s results since any adverse or

(FY22: £1.5 million).

favourable movement in policyholder assets is entirely offset

by a corresponding movement in the linked liability.

The Group is not directly exposed to significant currency risk

however it is exposed to currency risk which arises on the

platform software maintenance and support fees charged by

IAD Pty, which are charged in Australian Dollars. The total

amount of software maintenance and support fees in FY23

amounted to £7.2 million (FY22: £6.2 million).

Sensitivity testing has been performed to assess the impact

of a 10% change in the GBP-AUD exchange rate. This would

be expected to cause an increase/decrease of £0.7 million

(FY22: £0.6 million) on the software maintenance and
support fees.

194

4. Risk and risk management (continued)

(2) Credit (counterparty default) risk

Credit risk is the risk that the Group or Company is

Details of the ECLs recognised in relation to loans can be

exposed to a loss if another party fails to meet its financial

seen in note 16. No ECLs have been recognised on the

obligations. For the Company, the exposure to counterparty

undrawn loan commitments, as any ECLs would not be

default risk arises primarily from loans directly held by the

considered to be material.

Company, while for the Group this risk also arises from

fees owed by clients.

Assets held at amortised cost

The Group has a low risk appetite for credit risk, which

(a) Accrued income

is mainly limited to exposures to credit institutions for its

bank deposits. A range of major regulated UK high street

banks is used. A rigorous annual due diligence exercise

This comprises fees owed by clients. These are held at

is undertaken to assess the financial strength of these

amortised cost, less expected credit losses (“ECLs”).

banks with those used having a minimum credit rating of

Under IFRS 9, a forward-looking approach is required

A (Fitch).

to assess ECLs, so that losses are recognised before the

In order to actively manage the credit and concentration

occurrence of any credit event. The Group estimates that

risks, the board has agreed risk appetite limits for the

pending fees three months or more past due are unlikely to

regulated entities of the amount of corporate and client

be collected and are written off. Based on management’s

funds that may be deposited with any one bank; which

experience, pending fees one or two months past due are

is represented by a set percentage of the respective

generally expected to be collected, but consideration is

bank’s total customer deposits. Monthly monitoring of

also given to potential losses on these fees. Historical loss

these positions along with movements in Fitch ratings

rates have been used to estimate expected future losses,

is undertaken, with reports presented to the Directors

while consideration is also given to underlying economic

for review. Collectively these measures ensure that the

conditions, in order to ensure that expected losses are

Group diligently manages the exposures and provide

recognised on a forward-looking basis. This has led to the

the mitigation scope to be able to manage credit and

additional recognition of an immaterial amount of ECLs.

concentration exposures on behalf of itself and its

Details of the ECLs recognised in relation to accrued

income can be seen in note 22.

Counterparty default risk exposure to loans

customers.

(b) Loans

The Company has loans of £6.3m (FY22: £5.5m).

There are no other loans held by the Group.

Loans subject to the 12 month ECL are £6.3m (FY22:

£5.5m). While there remains a level of economic

Counterparty default risk exposure to Group companies

uncertainty in the current climate, leading to potentially

higher credit risk, there is not considered to be a significant

As well as inconvenience and operational issues arising from

increase in credit risk, as all of the loans are currently

the failure of the other Group companies, there is also a risk

performing to schedule, and there are no significant

of a loss of assets. The Company is due £81k (FY22: £160k)

concerns regarding the borrowers. There is therefore no

from other Group companies.

need to move from the 12 month ECL model to the lifetime

ECL model. Expected losses are recognised on a forward-

looking basis, which has led to the additional recognition of

an immaterial amount of ECLs.

In addition to the above, the Company has committed a

further £5.0m in undrawn loans.

195

4. Risk and risk management (continued)

Counterparty default risk exposure to other receivables

The Company has no other receivables arising, due to the

and have not experienced a significant increase in credit

nature of its business, and the structure of the Group.

risk since initial recognition) with no material expected

Across the Group, there is exposure to counterparty

default risk arising primarily from:

Corporate assets and funds held on behalf of clients

credit loss provision held.

• corporate assets directly held by the Group;

There is no significant risk exposure to any one UK

• exposure to clients; and

• exposure to other receivables.

clearing bank.

Counterparty default risk exposure to clients

The Group is due £12.3m (FY22: £11.8m) from fee

The other exposures to counterparty default risk include a

income owed by clients.

credit default event which affects funds held on behalf of

clients and occurs at one or more of the following entities:

Impact of credit risk on fair value

• a bank where cash is held on behalf of clients;

Due to the limited direct exposure that the Group and the

• a custodian where the assets are held on behalf of

material impact on the fair value movement of financial

Company have to credit risk, credit risk does not have a

clients; and

instruments for the year under review. The fair value

movements on these instruments are predominantly due

• Transact Nominees Limited (TNL), which is the legal

to changes in market conditions.

owner of the assets held on behalf of clients.

There is no first order impact on the Group from one of

the events in the preceding paragraph. This is because

any credit default event in respect of these holdings will

be borne by clients, both in terms of loss of value and loss
of liquidity. Terms and conditions have been reviewed by

external lawyers to ensure that these have been drafted

appropriately. However, there is a second order impact

where future profits for the Group are reduced in the event

of a credit default which affects funds held on behalf of

clients.

There are robust controls in place to mitigate credit risk,

for example, holding corporate and client cash across a

range of banks in order to minimise the risk of a single

point of counterparty default failure. Additionally, maximum

counterparty limits and minimum credit quality steps are

set for banks.

Cash and cash equivalents and investments are classed

as stage 1 on the expected credit loss model (meaning

that they are not credit-impaired on initial recognition

196

4. Risk and risk management (continued)

(3) Liquidity risk

Liquidity risk is the risk that funds are not accessible

The payment of loan obligations is covered by the upward

such that the Company, although solvent, does not have

dividends from subsidiary entities which were assessed

sufficient liquid financial resources to meet obligations

against the financial plans and capital projections of the

as they fall due, or can secure such resources only at

regulated entities to ensure the level of affordability of the

excessive cost.

future dividends.

As a holding company, the Company’s main liquidity risk is

The purchase price for T4A comprised three elements,

related to paying out shareholder dividends and operating

a fixed sum payable on deal completion which has been

expenses it may incur. Additionally, the Company has made

settled, a further fixed sum to be paid in four equal annual

short term commitments, in the form of a capped facility

instalments and a variable amount by reference to T4A’s

arrangement, to Vertus Capital SPV1 Limited (‘Vertus’)

performance over that four year period. The payment of

(as one of Vertus’ sources of funding) to assist Vertus

these future obligations is expected to be met from the

in developing its business, which is to provide tailored

company’s own reserves and dividends it expects to receive

niche debt facilities to adviser firms to fund acquisitions,

from its subsidiaries.

management buy-outs and other similar transactions.

Across the Group, the following key drivers of liquidity risk

to ensure that clients maintain a percentage of liquidity in

The Group has set out two key liquidity requirements: first,

have been identified:

• liquidity risk arising due to failure of one or more of

the Group’s banks;

their funds at all times, and second, to maintain access to

cash through a spread of cash holdings in bank accounts.

There are robust controls in place to mitigate liquidity risk,

for example, through regular monitoring of expenditure,

• liquidity risk arising due to the bank’s system failure

closely managing expenses in line with the business plan,

which prevents access to Group funds; and

and, in the case of the Vertus facility, capping the value of

loans. Additionally, the Group holds corporate and client

• liquidity risk arising from clients holding insufficient

cash across a range of banks in order to mitigate the risk of

cash to settle fees when they become due.

a single point of counterparty default failure.

The Group’s liquidity risk arises from a lack of readily

Maturity schedule

realisable cash to meet debts as they become due. This
takes a number of forms – clients’ liabilities coming due,

The following table shows an analysis of the financial assets

other liabilities (e.g. expenses) coming due, insufficient

and financial liabilities by remaining expected maturities as

liquid assets to meet loan repayments to subsidiary

at 30 September 2023 and 30 September 2022. All financial

companies and future payment commitments over the next

liabilities are undiscounted.

three years following the acquisition of T4A.

The first of these, clients’ liabilities is primarily covered

shown in the tables below, the Company committed a

through the terms and conditions with clients’ taking their

further £5.6m in undrawn loans. These are available to be

own liquidity risk, if their funds cannot be immediately

drawn down immediately.

In addition to the financial assets and financial liabilities

surrendered for cash.

Payment of other liabilities depends on the Group having

sufficient liquidity at all times to meet obligations as they

fall due. This requires access to liquid funds, i.e. working

banks and it also requires that the Group’s main source

of liquidity, charges on its clients’ assets, can also be

converted into cash.

197

4. Risk and risk management (continued)

FINANCIAL ASSETS:

2023

Investments held for the policyholders

Investments

Accrued income

Trade and other receivables

Loans

Cash and cash equivalents

Cash held for the benefit of policyholders

Total

RESTATED 2022

Investments held for the policyholders

Investments

Accrued income

Trade and other receivables

Loans

Cash and cash equivalents

Cash held for the benefit of policyholders

Total

See note 36 for details on 2022 restated balances.

FINANCIAL LIABILITIES:

2023

Liabilities for linked investment contracts

Trade and other payables

Lease liabilities

Total

2022

Liabilities for linked investment contracts

Trade and other payables

Lease liabilities

Total

UP TO 3
MONTHS
£m

23,021.7

12.5

3.2

177.9

1,419.2

24,634.5

UP TO 3
MONTHS
£m

20,715.8

0.1

12.1

2.0

183.0

1,458.6

22,371.6

UP TO 3
MONTHS

£m

24,440.9

6.6

0.1

24,447.6

UP TO 3
MONTHS

£m

22,174.4

7.0

0.6

22,182.0

3-12
MONTHS
£m

1-5
YEARS
£m

OVER 5
YEARS
£m

22.4

6.3

28.7

3-12
MONTHS
£m

1-5
YEARS
£m

OVER 5
YEARS
£m

3.0

5.5

8.5

3-12
MONTHS

£m

0.3

3-12
MONTHS

£m

1.3

1-5
YEARS

£m

OVER 5
YEARS

£m

0.9

1-5
YEARS

£m

OVER 5
YEARS

£m

0.9

TOTAL
£m

23,021.7

22.4

12.5

3.2

6.3

177.9

1,419.2

24,663.1

TOTAL
£m

20,715.8

3.1

12.1

2.0

5.5

183.0

1,458.6

22,380.1

TOTAL

£m

24,440.9

6.6

1.3

24,448.8

TOTAL

£m

22,174.4

7.0

2.8

22,184.2

As per note 3, accruals, deferred consideration and contingent consideration have been reclassified as non-financial instruments and
have therefore been removed from this table.

198

4. Risk and risk management (continued)

(4) Outflow risk

(5) Expense risk

Outflows occur when funds are withdrawn from the

Expense risk arises where costs increase faster than

platform for any reason. Outflows typically occur where

expected or from one-off expense “shocks”.

clients’ circumstances and requirements change. However,

these outflows can also be triggered by operational failure,

The Group and the Company has exposure related to

competitor actions or external events such as regulatory or

expense inflation risk, where actual inflation deviates from

economic changes.

expectations. As a significant percentage of the Group’s

expenses are staff related the key inflationary risk arises

Outflow risk is mitigated by focusing on providing

from salary inflation. The Group and the Company have

exceptionally high levels of service. Outflow rates

no exposures to defined benefit staff pension schemes or

are closely monitored and unexpected experience is

client related index linked liabilities.

investigated. Despite the current challenging and uncertain

economic and geopolitical environment, outflow rates

The Group’s expenses are governed at a high level by

remain stable and within historical norms.

the Group’s Expense Policy. The monthly management

accounts are reviewed against projected future expenses

by the board and by senior management and action is

taken where appropriate.

199

5. Disaggregation of revenue

6. Segmental reporting

The Group has the following categories of revenue:

The revenue and profit before tax are attributable to

activities carried out in the UK and the Isle of Man.

• Annual commission - based on a fixed percentage

applied to the value of the client’s portfolio each

The Group has three classes of business, which have been

month.

organised primarily based on the products they offer, as

• Wrapper fee income - based on a fixed quarterly

charge per wrapper.

detailed below:

• Investment administration services – this relates to

services performed by IFAL, which is the provider of

• Other income – buy commission is based on a set

the Transact wrap service. It is the provider of the

percentage charge applied to each transaction. Dealing

General Investment Account (GIA), is a Self-Invested

charges are charged based on a fixed fee for each type

Personal Pension (SIPP) operator, an ISA manager and

of transaction.

• Adviser back-office technology – licence income

is the custodian for all assets held on the platform

(except for those held by third party custodians).

based on a fixed monthly charge per number of users.

• Insurance and life assurance business – this relates to

Consultancy income is charged based on the services

ILUK and ILInt, insurance companies which provide the

provided.

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER

2023

£m

2022

£m

Annual commission income

116.1

115.8

Wrapper fee income

12.3

11.6

Other income

Adviser back-office technology

1.7

4.8

2.2

4.0

Transact Personal Pension, Executive Pension, Section

32 Buy-Out Bond, Transact Onshore and Offshore

Bonds, and Qualifying Savings Plan on the Transact

platform.

• Adviser back-office technology - this relates to T4A,

provider of financial planning technology to adviser

and wealth management firms via the CURO adviser

support system.

Other Group entities relates to the rest of the Group, which

provide services to support the Group’s core operating

Total revenue

134.9

133.6

segments.

Analysis by class of business is given below.

200

6. Segmental reporting (continued)

Statement of comprehensive income – segmental information for the year ended 30 September 2023:

INVESTMENT
ADMINISTRATION
SERVICES

INSURANCE
AND LIFE
ASSURANCE
BUSINESS

ADVISER
BACK-OFFICE
TECHNOLOGY

OTHER
GROUP
ENTITIES

CONSOLID-
ATION
ADJUSTMENTS

£m

Revenue

Annual commission income

Wrapper fee income

Adviser back-office technology

Other income

Total revenue

Cost of sales

Gross profit/(loss)

63.1

3.0

1.2

67.3

(2.1)

65.2

53.0

9.3

0.5

62.8

(0.6)

62.2

4.8

(0.7)

4.1

76.0

(0.5)

75.5

(76.0)

TOTAL

£m

116.1

12.3

4.8

1.7

134.9

(3.9)

Administrative expenses

(42.2)

(30.2)

(5.5)

(72.3)

75.6

(74.6)

Expected credit losses on financial assets

Operating profit/(loss)

23.0

32.0

(1.4)

(76.0)

131.0

(0.1)

3.1

(0.7)

1.4

(0.4)

0.6

(0.6)

(0.1)

56.3

(0.1)

6.4

12.1

(1,056.0)

(193.3)

1,249.3

12.1

Interest expense

Interest income

Net policyholder returns

Net income/(loss) attributable to policyholder
returns

Change in investment contract liabilities

Fee and commission expenses

Policyholder investment returns

Net policyholder returns

Profit/(loss) on ordinary activities before
taxation attributable to policyholders and
shareholders

1.2

4.4

12.1

(1,056.0)

(193.3)

1,249.3

12.1

24.2

48.5

(1.4)

3.8

(0.4)

74.7

Policyholder tax credit/(charge)

(12.1)

Profit on ordinary activities before
taxation attributable to shareholders

Total tax attributable to shareholder and
policyholder returns

24.2

36.4

(1.4)

3.8

(0.4)

62.6

(5.0)

(18.7)

0.5

(1.7)

(0.1)

(24.9)

Less: tax attributable to policyholder returns

12.1

Shareholder tax on profit on ordinary
activities

(5.0)

(6.6)

0.5

(1.7)

(0.1)

(12.8)

Profit/(loss) for the period

19.2

29.8

(0.9)

2.1

(0.3)

49.9

201

6. Segmental reporting (continued)

Statement of comprehensive income – segmental information for the year ended 30 September 2022:

INVESTMENT
ADMINISTRATION
SERVICES

INSURANCE
AND LIFE
ASSURANCE
BUSINESS

ADVISER
BACK-OFFICE
TECHNOLOGY

OTHER
GROUP
ENTITIES

CONSOLID-
ATION
ADJUSTMENTS

£m

63.4

2.8

1.3

67.5

(0.7)

66.8

52.6

8.7

0.9

62.2

(0.4)

61.8

3.9

(0.5)

3.4

64.4

(0.5)

63.9

(43.0)

(28.8)

(5.3)

(64.6)

(0.1)

23.7

0.1

33.0

1.0

(38.5)

2,770.3

(192.6)

(2,577.7)

38.5

(0.1)

(1.9)

(0.8)

(0.4)

TOTAL

£m

116.0

11.5

3.9

2.2

(64.4)

133.6

(2.1)

(64.4)

64.0

(0.4)

131.5

(77.7)

(0.2)

53.6

0.3

(0.3)

(0.1)

0.8

(38.5)

2,770.3

(192.6)

(2,577.7)

(38.5)

Revenue

Annual commission income

Wrapper fee income

Adviser back-office technology

Other income

Total revenue

Cost of sales

Gross profit/(loss)

Administrative expenses

Expected credit losses on financial assets

Operating profit/(loss)

Interest expense

Interest income

Net policyholder returns

Net income/(loss) attributable to policyholder
returns

Change in investment contract liabilities

Fee and commission expenses

Policyholder investment returns

Net policyholder returns

Profit/(loss) on ordinary activities before
taxation attributable to policyholders and
shareholders

23.8

(4.5)

(1.9)

(1.2)

(0.4)

15.8

Policyholder tax credit/(charge)

38.5

Profit on ordinary activities before
taxation attributable to shareholders

Total tax attributable to shareholder and
policyholder returns

23.8

34.0

(1.9)

(1.2)

(0.4)

54.3

(4.4)

32.6

0.3

(0.4)

0.1

28.2

Less: tax attributable to policyholder returns

(38.5)

Shareholder tax on profit on ordinary activities

(4.4)

(5.9)

0.3

(0.4)

0.1

(10.3)

Profit/(loss) for the period

19.4

28.1

(1.6)

(0.3)

44.0

202

6. Segmental reporting (continued)

Statement of financial position – segmental information for the year ended 30 September 2023:

INVESTMENT
ADMINISTRATION
SERVICES

INSURANCE AND
LIFE ASSURANCE
BUSINESS

ADVISER
BACK-OFFICE
TECHNOLOGY

Assets

Non-current assets

Current assets

Total assets

Liabilities

Current liabilities

Non-current liabilities

Total liabilities

Policyholder assets and liabilities

Cash held for the benefit of policyholder

Investments held for the benefit of policyholders

Liabilities for linked investment contracts

Total policyholder assets and liabilities

Net assets

Non-current asset additions

£m

10.3

78.0

88.3

8.4

0.8

9.2

79.1

0.3

£m

19.1

154.6

173.7

18.1

47.5

65.6

1,419.2

23,021.7

(24,440.9)

108.1

0.3

£m

1.1

2.8

3.9

1.0

0.2

1.2

2.7

0.0

TOTAL

£m

30.5

235.4

265.9

27.5

48.5

76.0

189.9

0.6

203

6. Segmental reporting (continued)

Restated Statement of financial position – segmental information for the year ended 30 September 2022:

INVESTMENT
ADMINISTRATION
SERVICES

INSURANCE AND
LIFE ASSURANCE
BUSINESS

ADVISER
BACK-OFFICE
TECHNOLOGY

Assets

Non-current assets

Current assets

Total assets

Liabilities

Current liabilities

Non-current liabilities

Total liabilities

Policyholder assets and liabilities

Cash held for the benefit of policyholder

Investments held for the benefit of
policyholders

Liabilities for linked investment contracts

Total policyholder assets and liabilities

£m

10.4

71.8

82.2

10.5

1.9

12.4

£m

25.4

144.7

170.1

22.5

47.6

70.1

1,458.6

20,715.8

(22,174.4)

Net assets

Non-current asset additions

69.8

0.2

100.0

0.1

See note 36 for details on 2022 restated balances.

Segmental information: Split by geographical location

£m

0.8

3.8

4.6

1.1

0.1

1.2

3.4

TOTAL

£m

36.6

220.3

256.9

34.1

49.6

83.7

1,458.6

20,715.8

(22,174.4)

173.2

0.3

Revenue

United Kingdom

Isle of Man

Total

2023

£m

129.4

5.5

134.9

2022

£m

Non-current assets

128.3

United Kingdom

5.3

Isle of Man

133.6

Total

2023

£m

23.4

0.1

23.5

2022

£m

25.1

204

7. Earnings per share

Profit

2023

2022

Profit for the year and earnings used in basic and diluted earnings per share

£49.9m

£44.0m

Weighted average number of shares

Weighted average number of Ordinary shares

331.3m

Weighted average numbers of Ordinary Shares held by Employee Benefit Trust

(0.5m)

(0.4m)

Weighted average number of Ordinary Shares for the purposes of basic EPS

330.8m

330.9m

Adjustment for dilutive share option awards

0.5m

0.4m

Weighted average number of Ordinary Shares for the purposes of diluted EPS

331.3m

Earnings per share

Basic

Diluted

Earnings per share (“EPS”) is calculated based on the

share capital of IntegraFin Holdings plc and the earnings

of the consolidated Group.

Basic EPS is calculated by dividing profit after tax

attributable to ordinary equity shareholders of the

Company by the weighted average number of Ordinary

Shares outstanding during the year. The weighted

average number of shares excludes shares held within the

Employee Benefit Trust to satisfy the Group’s obligations

under employee share awards.

Diluted EPS is calculated by adjusting the weighted

average number of Ordinary Shares outstanding to assume

conversion of all potentially dilutive Ordinary Shares.

15.1p

13.3p

205

8. Expenses by nature

The following expenses are included within administrative expenses:

Group

Depreciation

Amortisation

Wages and employee benefits expense

Other staff costs

Auditor’s remuneration:

- auditing of the Financial Statements of the Company pursuant to the legislation

- auditing of the Financial Statements of subsidiaries

- other assurance services

Other professional fees

Regulatory fees

- Non-underlying expenses - backdated VAT

- Non-underlying expenses - interest on backdated VAT

- Other non-underlying expenses – deferred consideration

- Other non-underlying expenses –contingent consideration

- Other non-underlying expenses

Short-term lease payments:

- land and buildings

Other occupancy costs

Other costs

Other income – tax relief due to shareholders

Total administrative expenses

2023

£m

2.1

0.4

52.8

1.1

0.2

0.6

0.4

4.8

3.9

2.1

(1.7)

0.6

2.2

6.7

(1.6)

74.6

2022

£m

2.6

0.4

46.1

1.0

0.1

0.4

0.3

4.7

4.2

8.0

0.8

2.1

0.9

(0.3)

0.1

2.3

6.4

(2.4)

77.7

“Other income – tax relief due to shareholders” relates to the release of policyholder reserves to the statement of comprehensive income.

Company

Wages and employee benefits expense

Non underlying expenses:

- Remuneration

Auditor’s remuneration:

- auditing of the Financial Statements of the Company pursuant to the

legislation

Other professional fees

Other costs

Total administrative expenses

206

2023

£m

0.7

0.3

0.2

0.6

0.2

2.0

2022

£m

0.6

3.0

0.2

0.8

0.2

4.8

8. Expenses by nature (continued)

Wages and employee benefits expense

The average number of staff (including executive directors) employed by the Group during the financial year

amounted to:

CEO

Client services staff

Finance staff

Legal and compliance staff

Sales, marketing and product development staff

Software development staff

Technical and support staff

The Company has no employees (2022: nil).

2023

2022

No.

232

139

631

No.

223

131

594

Wages and employee (including executive directors) benefits expenses during the year, included within administrative

expenses, were as follows:

Wages and salaries

Social security costs

Other pension costs

Share-based payment costs

2023

£m

43.9

4.8

2.0

2.1

52.8

2022

£m

36.3

4.2

3.6

2.0

46.1

Compensation of key management personnel

Key management personnel are defined as those persons having authority and responsibility for planning, directing

and controlling the activities of the entity and as such, only directors are considered to meet this definition.

2023

2022

Short-term employee benefits*

Post-employment benefits

Share based payment

Social security costs

Highest paid director:

Short-term employee benefits*

Other benefits

Number of directors for whom pension contributions are paid

*Short-term employee benefits comprise salary and cash bonus.

£m

3.0

0.2

0.5

4.2

0.6

0.2

No.
8

£m

2.9

0.2

0.4

4.1

0.6

0.2

No.
8

207

9. Interest income

Interest income on bank deposits

Interest income on tax repayments

Interest income on loans

Interest income on financial investments

GROUP
2023

COMPANY
2023

GROUP
2022

COMPANY
2022

£m

5.3

0.4

0.3

6.4

£m

0.5

0.4

0.9

£m

0.6

0.2

0.8

£m

0.2

All interest income is calculated using the effective interest rate method, except for interest income on tax repayments.

10. Policyholder investment returns

Change in fair value of underlying assets

Investment income

Total policyholder investment returns

11. Tax on profit on ordinary activities

Group

a) Analysis of charge in year

The income tax expense comprises:

Corporation tax

Current year - corporation tax

Adjustment in respect of prior years

Deferred tax

Current year

Change in deferred tax charge/(credit) as a result of higher tax rate

Total shareholder tax charge for the year

Policyholder taxation

UK policyholder tax at 20% (2022: 20%)

Deferred tax at 25% (2022: 25%)

Prior year adjustments

Tax deducted on overseas dividends

Total policyholder taxation

Total tax attributable to shareholder and policyholder returns

208

2023

£m

1,024.2

225.1

1,249.3

2022

£m

(2,729.2)

151.5

(2,577.7)

2023

£m

12.7

(0.1)

12.6

0.1

12.7

11.8

0.3

12.1

24.8

2022

£m

10.0

0.7

10.7

(0.4)

10.3

(33.8)

(4.9)

0.2

(38.5)

(28.2)

11. Tax on profit on ordinary activities (continued)

b) Factors affecting tax charge for the year

The tax on the Group's profit before tax differs from the

amount that would arise using the weighted average tax rate

applicable to profits of the consolidated entities as follows:

Profit on ordinary activities before taxation attributable to shareholders

Profit on ordinary activities multiplied by effective rate of
Corporation Tax 22% (2021: 19%)

Effects of:

Non-taxable dividends

Group relief

Income / expenses not taxable / deductible for tax purposes multiplied by
effective rate of corporation tax

Adjustments in respect of prior years

Effect of change in tax rate

Effect of lower tax rate jurisdiction

Other adjustments

Add policyholder tax

Company

a) Analysis of charge in year

Deferred tax charge/(credit) (see note 26)

b) Factors affecting tax charge for the year

Profit on ordinary activities before tax

Profit on ordinary activities multiplied by effective rate of
Corporation Tax 22% (2021: 19%)

Effects of:

Non-taxable dividends

Income / expenses not taxable / deductible for tax purposes multiplied
by effective rate of Corporation Tax

Group loss relief to ISL

2023

£m

62.6

13.8

(0.6)

0.1

(0.6)

12.7

12.1

24.8

2023

£m

2023

£m

31.6

7.0

2022

£m

54.3

10.3

(0.2)

0.7

(0.5)

10.3

(38.5)

(28.2)

2022

£m

2022

£m

39.9

7.6

(7.3)

(8.5)

0.3

0.6

0.3

209

12. Intangible assets – Group

SOFTWARE
AND IP
RIGHTS

GOODWILL

CUSTOMER
RELATIONSHIPS

SOFTWARE

BRAND

Cost

At 1 October 2022

At 30 September 2023

Amortisation

At 1 October 2022

Charge for the year

At 30 September 2023

Net Book Value

At 30 September 2022

At 30 September 2023

Cost

At 1 October 2021

At 30 September 2022

Amortisation

At 1 October 2021

Charge for the year

At 30 September 2022

Net Book Value

At 30 September 2021

At 30 September 2022

£m

12.5

18.3

12.5

18.3

£m

2.1

0.3

0.1

0.4

1.8

1.7

2.1

0.1

0.2

0.3

2.0

1.7

£m

2.0

0.5

0.3

0.8

1.5

1.2

2.0

0.2

0.3

0.5

1.8

1.5

£m

0.3

0.1

0.2

0.3

0.1

0.2

TOTAL

£m

35.2

13.4

0.4

13.8

21.8

21.4

35.2

12.9

0.5

13.4

22.3

21.8

All intangible assets are externally generated.

Goodwill impairment assessment

In accordance with IFRS, goodwill is not amortised,

The carrying amount of the IAD Pty goodwill is allocated to

but is assessed for impairment on an annual basis. The

the two cash generating units (“CGUs”) that relate to the

impairment assessment compares the carrying value of

Transact platform, as these are benefitting from the IAD PTY

goodwill to the recoverable amount, which is the higher

acquisition. The carrying amount of the goodwill for T4A is

of value in use and the fair value less costs of disposal.

allocated to the CGU that relates to the CURO software as

The recoverable amount is determined based on value

this is the source of revenue for T4A.

in use calculations. The use of this method requires the

estimation of future cash flows and the determination of a

discount rate in order to calculate the present value of the

cash flows.

The goodwill relates to the acquisition of IAD Pty in July

2016 and T4A in January 2021.

210

12. Intangible assets – Group (continued)

IAD Pty

Investment administration services

Insurance and life assurance business

Total

Other assumptions are as follows:

Discount rate

Period on which detailed forecasts are based

Long-term growth rate

The carrying amount of the T4A goodwill is all allocated to

the below CGU:

T4A

Adviser back-office technology

Other assumptions are as follows:

Discount rate

Period on which detailed forecasts are based

Long-term growth rate

2023
£m

7.2

5.7

12.9

2023

13.2%

5 years

2.0%

2023

£m

5.3

2023

14.0%

5 years

2.0%

2022
£m

7.2

5.7

12.9

2022

13.3%

5 years

1.0%

2022

£m

5.3

2022

11.6%

5 years

2.0%

The recoverable amounts of the above CGUs have been

Projected cash flows are impacted by movements in

determined from value in use calculations based on cash

underlying assumptions, including equity market levels,

flow projections from formally approved budgets covering

number of CURO users, employee numbers and cost

a five-year period to 30 September 2028. Post the five

inflation. The Group considers that projected cash flows

year business plan, the growth rate used to determine

of the investment administration services and insurance

the terminal value of the cash generating units was based

and life assurance business CGUs are most sensitive to

on a long-term growth rate of 2.0%. The discount rate is

movements in equity markets, because they have a direct

assessed on an annual basis and has been calculated using

impact on the level of the Group’s fee income, while the

the weighted average cost of capital.

adviser back-office technology CGU is most sensitive to
the number of CURO users, as this forms the basis of its

Based on management’s experience, the key assumptions

licence income.

on which management has calculated its projections are

net inflows, market growth and expense inflation.

A sensitivity analysis has been performed, with key

assumptions being revised adversely to reflect the

The annual impairment tests relating to both acquisitions

potential for future performance being below expected

indicated that there is significant headroom in the

levels. This estimated that a fall in equity markets of

recoverable amount over the carrying value of the CGUs.

approximately 45%, or a reduction of CURO users of

There is therefore no indication of impairment.

approximately 30% compared to expectations, would

be required before the carrying value of any CGU would

exceed the recoverable amount.

211

13. Property, plant and equipment – Group

LEASEHOLD
IMPROVEMENTS
£m

EQUIPMENT
£m

FIXTURES AND
FITTINGS
£m

MOTOR
VEHICLES
£m

TOTAL
£m

Cost

At 1 October 2022

Additions

Disposals

Reclassification

Foreign exchange

At 30 September 2023

Depreciation

At 1 October 2022

Charge in the year

Disposals

Reclassification

Foreign exchange

At 30 September 2023

Net Book Value

At 30 September 2022

At 30 September 2023

Cost

At 1 October 2021

Additions

Disposals

At 30 September 2022

Depreciation

At 1 October 2021

Charge in the year

Disposals

At 30 September 2022

Net Book Value

At 30 September 2021

At 30 September 2022

1.7

0.1

1.8

1.4

0.1

1.5

0.3

1.7

1.3

0.1

1.4

0.4

0.3

3.7

0.4

(0.4)

(0.2)

(0.1)

3.4

2.9

0.7

(0.5)

(0.1)

2.9

0.8

0.5

3.6

0.3

(0.2)

3.7

2.3

0.8

(0.2)

2.9

1.3

0.8

0.2

0.1

0.2

0.5

0.1

0.3

0.1

0.2

0.1

5.6

0.7

(0.4)

(0.1)

5.8

4.4

0.9

(0.5)

(0.1)

4.7

1.2

1.1

5.5

0.3

(0.2)

5.6

3.7

0.9

(0.2)

4.4

1.8

1.2

The Company holds no property, plant and equipment.

212

14. Right-of-use assets – Property – Group

Cost

At 1 October 2022

Additions

Disposals

Foreign exchange

At 30 September 2023

Depreciation

At 1 October 2022

Charge in the year

Disposals

At 30 September 2023

Net Book Value

At 30 September 2022

At 30 September 2023

Cost

At 1 October 2021

Foreign exchange

At 30 September 2022

Depreciation

At 1 October 2021

Charge in the year

At 30 September 2022

Net Book Value

At 30 September 2021

At 30 September 2022

£m

6.6

0.4

(5.2)

(0.1)

1.7

£m

4.5

1.4

(5.2)

0.7

2.1

1.0

£m

6.5

0.1

6.6

£m

2.8

1.7

4.5

3.6

2.1

Depreciation is calculated on a straight line basis over the

term of the lease.

During the year, the right of use asset for the Group’s

Clement’s Lane office was fully depreciated as the lease

came to an end in June 2023. The Group has ‘security of
tenure’ and therefore the original lease continues until it
is terminated by either party. The Group intends to occupy
the building whilst the terms of the new lease are finalised.
Costs of the lease from July 2023 onwards were therefore
recognised directly in the statement of comprehensive

income as occupancy costs.

213

15. Investment in subsidiaries

Carrying value at 1 October

Share-based payments

Carrying value at 30 September

2023

£m

33.3

2.0

35.3

2022

£m

31.6

1.7

33.3

The Company has investments in the ordinary share capital
of the following subsidiaries at 30 September 2023:

NAME OF COMPANY

HOLDING

% HELD

INCORPORATION
AND SIGNIFICANT
PLACE OF BUSINESS BUSINESS

Direct holdings

Integrated Financial Arrangements
Ltd

Ordinary Shares

100%

United Kingdom

Investment
Administration

IntegraFin Services Limited

Ordinary Shares

100%

United Kingdom

Services Company

Transact IP Limited

Ordinary Shares

100%

United Kingdom

Software provision &
development

Integrated Application Development
Pty Ltd

Ordinary Shares

100%

Australia

Software maintenance

Transact Nominees Limited

Ordinary Shares

100%

United Kingdom

Non-trading

IntegraLife UK Limited

Ordinary Shares

100%

United Kingdom

Life Insurance

IntegraLife International Limited

Ordinary Shares

100%

Isle of Man

Life Assurance

Transact Trustees Limited

Ordinary Shares

100%

United Kingdom

Non-trading

Objective Funds Limited

Ordinary Shares

100%

United Kingdom

Dormant

Objective Wealth Management
Limited

Ordinary Shares

100%

United Kingdom

Dormant

Time For Advice Limited

Ordinary Shares

100%

United Kingdom

Financial planning
software

Indirect holdings

IntegraFin Limited

Ordinary Shares

100%

United Kingdom

Non-trading

ObjectMastery (UK) Limited

Ordinary Shares

100%

United Kingdom

Dormant

IntegraFin (Australia) Pty Limited

Ordinary Shares

100%

Australia

Non-trading

214

15. Investment in subsidiaries (continued)

The Group has 100% voting rights on shares held in each

Transact Nominees Limited holds customer assets as

of the subsidiary undertakings.

a nominee company on behalf of Integrated Financial

Arrangements Ltd.

All the UK subsidiaries have their registered office

address at 29 Clement’s Lane, London, EC4N 7AE.

IntegraFin (Australia) Pty Limited is currently non-trading.

ILInt’s registered office address is at 18-20 North Quay,

Douglas, Isle of Man, IM1 4LE. IntegraFin (Australia) Pty’s

Transact IP Limited licenses its proprietary software to

registered office address is at Level 4, 854 Glenferrie Road,

other members of the IntegraFin Group.

Hawthorn, Victoria, Australia 3122. Integrated Application

Development Pty Ltd.’s registered office address is 19-25

IntegraLife UK Limited is authorised by the Prudential

Camberwell Road, Melbourne, Australia.

Regulation Authority and regulated by the Financial

The above subsidiaries have all been included in the

Its principal activity is the transaction of ordinary long-

consolidated Financial Statements.

term insurance business within the United Kingdom.

Conduct Authority and the Prudential Regulation Authority.

Integrated Financial Arrangements Ltd is authorised and

IntegraLife International Limited is authorised and

regulated by the Financial Conduct Authority. The principal

regulated by the Isle of Man Financial Services Authority

activity of the Company and its subsidiaries is the provision

and its principal activity is the transaction of ordinary

of ‘Transact’, a wrap service that arranges and executes

long-term insurance business within the United Kingdom

transactions between clients, their financial advisers and

through the Transact Offshore Bond.

financial product providers including investment managers

and stockbrokers.

Time For Advice Limited is a specialist software provider for

financial planning and wealth management.

IntegraFin Services Limited (ISL), is the Group services

company. All intra-group service contracts are held by this

services company.

Integrated Application Development Pty Ltd (IAD Pty)

provides software maintenance services to the Group.

IntegraFin Limited is the trustee of the IntegraSIP Share

Incentive Plan, which was set up to allocate Class C Shares

in the capital of the Company to staff. IntegraFin Limited

undertakes no other activities.

215

2023

£m

6.5

0.1

6.6

(0.3)

6.3

2023

£m

(0.2)

(0.1)

(0.3)

2022

£m

5.7

(0.2)

5.5

2022

£m

(0.2)

2023

2022

£m

7.0

1.0

6.0

7.0

£m

8.0

1.0

7.0

8.0

16. Loans

This note analyses the loans payable by and receivable to

the Company. The carrying amounts of loans are as follows:

Loans receivable

Loans receivable from third parties

Interest receivable on loans

Total gross loans

Expected credit losses

Total net loans

Movement in the expected credit losses for the loan is as

follows:

Opening expected credit losses

Increase during the year

Balance at 30 September

The loans receivable are measured at amortised cost with

the expected credit losses charged straight to the statement

of comprehensive income.

Loans payable

Loan payable to subsidiary

To be settled within 12 months

To be settled after 12 months

Total loan payable

The loans payable are initially recognised at fair value.

Subsequent measurement is at amortised cost using the

effective interest method. The interest charge is recognised

on the statement of comprehensive income.

Interest on the loan is paid quarterly, whilst the remaining

capital repayments are annual over the next 7 years.

216

17. Investments held for the benefit of policyholders

ILInt

Investments held for the benefit of
policyholders

ILUK

Investments held for the benefit of
policyholders

2023
COST
£m

2023
FAIR VALUE
£m

2022
COST
£m

2022
FAIR VALUE
£m

2,155.5

2,310.3

1,988.9

2,057.2

2,155.5

2,310.3

1,998.9

2,057.2

19,249.9

20,711.4

19,215.4

18,658.6

19,249.9

20,711.4

19,215.4

18,658.6

Total

21,405.4

23,021.7

21,214.3

20,715.8

All amounts are current as customers are able to make

same-day withdrawal of available funds and transfers to

third-party providers are generally performed within a

month.

These assets are held to cover the liabilities for unit linked

investment contracts. All contracts with customers are

deemed to be investment contracts and, accordingly, assets

are 100% matched to corresponding liabilities.

217

18. Liabilities for linked investment contracts

ILInt

Unit linked liabilities

ILUK

Unit linked liabilities

Total

Analysis of change in liabilities for linked investment contracts

Opening balance

Investment inflows

Investment outflows

Changes in fair value of underlying assets

Investment income

Other fees and charges - Transact

Other fees and charges – third parties

Closing balance

2023

2022

FAIR VALUE

£m

2,481.5

21,959.4

24,440.9

2023

£m

22,174.4

2,670.3

(1,400.5)

1,024.1

225.1

(59.2)

(193.3)

24,440.9

2,201.4

19,973.0

22,174.4

2022

£m

23,053.4

3,113.9

(1,163.1)

(2,729.0)

151.5

(59.7)

(192.6)

22,174.4

The benefits offered under the unit-linked investment contracts are based on the risk appetite of policyholders and the

return on their selected collective fund investments, whose underlying investments include equities, debt securities, property

and derivatives. This investment mix is unique to individual policyholders. When the diversified portfolio of all policyholder

investments is considered, there is a clear correlation with the FTSE 100 index and other major world indices, providing a

meaningful comparison with the return on the investments.

The maturity value of these financial liabilities is determined by the fair value of the linked assets at maturity date. There

will be no difference between the carrying amount and the maturity amount at maturity date.

19. Cash and cash equivalents

Bank balances – instant access

Bank balances – notice accounts

Total

2023
£m

165.9

12.0

177.9

2022
£m

173.5

9.5

183.0

Bank balances held in instant access accounts are current and available for use by the Group.

All of the bank balances held in notice accounts require less than 35 days’ notice before they are available for use
by the Group.

218

20. Cash held for the benefit of policyholders

Cash and cash equivalents held for the benefit of the policyholders
– instant access - ILUK

Cash and cash equivalents held for the benefit of the policyholders
– instant access - ILInt

Total

2023
£m

1,248.0

171.2

1,419.2

Cash and cash equivalents held for the benefit of the policyholders are held to cover the liabilities for unit linked
investment contracts. These amounts are 100% matched to corresponding liabilities.

21. Investments

Fair value through profit or loss

Listed shares and securities

Gilts

Total

Amortised cost

Gilts

Total

GROUP
2023

£m

0.1

22.3

22.4

2022
£m

1,314.3

144.2

1,458.5

GROUP
2022

£m

0.1

3.0

3.1

In July 2023, the previously held gilt of £3.0 million matured, and new gilts of £22.3 million were purchased in August 2023.
These gilts are interest-bearing and the associated income is referenced in note 9 as “interest on financial investments”.

22. Prepayments and accrued income

Accrued income

Less: expected credit losses

Accrued income - net

Prepayments

Total

GROUP

2023

£m

13.5

(1.0)

12.5

4.7

17.2

COMPANY

2023

£m

GROUP

2022

£m

13.1

(1.0)

12.1

5.1

17.2

COMPANY

2022

£m

0.1

Movement in the expected credit losses (for accrued income, loans receivable and trade and other receivables) is as follows:

Opening expected credit losses

Increase during the year

Balance at 30 September

2023
£m

(1.0)

2022
£m

(0.8)

(0.2)

(1.0)

219

23. Trade and other receivables

Other receivables

Less: expected credit losses

Other receivables net

Amounts owed by Group undertakings

Repayment interest due from HMRC

Total

GROUP
2023

£m

3.2

(0.1)

3.1

0.4

3.6

COMPANY
2023

£m

0.1

GROUP
2022

£m

2.1

(0.1)

2.0

COMPANY
2022

£m

0.2

Amount due from HMRC is in respect of tax claimed on behalf of policyholders for tax deducted at source.

24. Trade and other payables

GROUP
2023

COMPANY
2023

GROUP
2022

COMPANY
2022

Trade payables

PAYE and other taxation

Other payables

Accruals

Deferred consideration

Total

£m

0.7

2.6

6.8

7.8

1.6

19.5

£m

0.1

0.4

1.6

2.5

£m

1.6

2.2

7.7

8.3

1.7

21.5

Other payables mainly comprises £5.3 million (FY22: £4.8 million) in relation to bonds awaiting approval.

25. Lease liabilities

Opening balance

Additions

Lease payments

Interest expense

Balance at 30 September

Amounts falling due within one year

Amounts falling due after one year

2023
£m

2.8

0.2

(2.0)

0.1

1.1

0.3

0.8

£m

0.1

0.3

1.7

2.4

2022
£m

5.1

(2.4)

0.1

2.8

1.9

0.9

The Group has various leases in respect of property as a lessee. Lease terms are negotiated on an individual basis and run

for a period of one to five years.

As per note 14, the lease for the Group’s Clement’s Lane office ended in June 2023.

220

26. Deferred tax

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 20% (FY22: 20%)

on policyholder assets and liabilities and 25% (FY22: 25%) on non-policyholder items. The increase in the UK corporation

tax rate from the current rate of 19% to 25% was substantively enacted in May 2021. This new rate has been applied to

deferred tax balances which are expected to reverse after 1 April 2023, the date on which that new rate becomes effective.

Deferred Tax Asset

ACCELERATED
CAPITAL
ALLOWANCES

SHARE
BASED
PAYMENTS

POLICYHOLDER
UNREALISED
LOSSES/
(UNREALISED
GAINS)

POLICYHOLDER
EXCESS
MANAGEMENT
EXPENSES AND
DEFERRED
ACQUISITION
COSTS

POLICYHOLDER
UNREALISED
LOSSES ON
INVESTMENT
TRUSTS

OTHER
DEDUCTIBLE
TEMPORARY
DIFFERENCES

At 1 October 2021

Excess tax relief
charged to equity

Charge to income

Offset Deferred
Tax Liability

At 30 September
2022

Excess tax relief
charged to equity

Charge to income

Offset Deferred
Tax Liability

At 30 September
2023

£m

0.6

(0.3)

0.1

0.2

0.1

0.5

0.2

(0.2)

0.1

0.5

£m

8.1

(5.2)

2.9

(2.9)

£m

0.1

TOTAL

£m

0.7

(0.3)

2.2

0.2

10.8

(5.2)

2.2

0.2

0.1

6.0

0.3

0.4

0.2

0.1

(2.3)

(2.5)

(0.6)

(0.1)

(3.2)

0.1

0.7

Deferred Tax Liability

At 1 October 2021

Charge to income

Offset against Deferred Tax asset

At 30 September 2022

Charge to income

Offset against Deferred Tax asset

At 30 September 2023

ACCELERATED
CAPITAL
ALLOWANCES

POLICYHOLDER TAX
ON UNREALISED
GAINS

OTHER TAXABLE
DIFFERENCES

£m

0.1

(0.1)

£m

28.4

(23.2)

(5.2)

9.6

(3.1)

6.5

£m

1.0

(0.1)

0.9

(0.1)

0.7

The Company has no deferred tax assets or liabilities.

TOTAL

£m

29.5

(23.4)

(5.2)

0.9

9.5

(3.2)

7.2

221

2023

£m

56.8

(9.7)

1.1

48.2

7.7

40.5

0.2

1.1

46.9

48.2

2022

£m

17.8

(0.3)

(0.1)

45.0

(5.6)

56.8

10.7

46.1

0.2

56.6

56.8

2023
£m

2022
£m

1.7

27. Provisions - Group

Balance brought forward

(Decrease)/increase in dilapidations provision

Decrease in ILInt non-linked unit provision

(Decrease)/increase in ILUK policyholder reserves

Increase/(decrease) in other provisions

Balance carried forward

Amounts falling due within one year

Amounts falling due after one year

Dilapidations provisions

Other provisions

ILUK policyholder reserves

Total

ILUK policyholder reserve comprises claims received
from HMRC that are yet to be returned to policyholders,
charges taken from unit-linked funds and claims received

from HMRC to meet current and future policyholder

tax obligations. These are expected to be paid to

policyholders over the course of the next seven years.

28. Contingent consideration – Group and company

Contingent consideration

The T4A acquisition cost included additional consideration

between £0 and £8.6 million, which was payable in January

2025 and contingent on T4A meeting certain highly

stretching performance targets over the next four years.

During the year, it was determined that T4A is not expected

to meet these targets, and therefore, the contingent

consideration recognised to date has been released.

222

29. Share-based payments

Share-based payment reserve

GROUP

2023

COMPANY

2023

GROUP

2022

COMPANY

2022

Balance brought forward

Movement in the year

Balance carried forward

Share schemes

(i) SIP 2005

£m

2.6

0.8

3.4

£m

2.2

0.5

2.7

£m

2.4

0.2

2.6

£m

1.7

0.5

2.2

IFAL implemented a SIP trust scheme for its staff in

The share awards are made by the Company each

October 2005. The SIP is an approved scheme under

year, dependent on 12 months continuous service at 30

Schedule 2 of the Income Tax (Earnings & Pensions) Act

September. The cost to the Group in the financial year to

2003.

30 September 2023 was £0.8m (FY22: £0.6m).

This scheme entitled all the staff who were employed in

Partnership and Matching Shares

October 2005 to Class C shares in IFAL, subject to their

remaining in employment with the Company until certain

The Company provides employees with the opportunity to

future dates.

enter into an agreement with the Company to enable such

employees to use part of their pre-tax salary to acquire

The Trustee for this scheme is IntegraFin Limited, a wholly

Partnership Shares. If employees acquire Partnership

owned non-trading subsidiary of IFAL.

Shares, the board grants relevant Matching Shares at a ratio

Shares issued under the SIP may not be sold until

of 2:1.

the earlier of three years after issue or cessation of

The cost to the Group in the financial year to 30 September

employment by the Group. If the shares are held for five

2023 was £0.5m (FY22: £0.5m).

years they may be sold free of income tax or capital gains

tax. There are no other vesting conditions.

(iii) Performance Share Plan

The cost to the Group in the financial year to 30 September

The Company implemented an annual PSP scheme in

2023 was £nil (FY22: £nil). There have been no new share

December 2018. Awards granted under the PSP take

options granted.

(ii) SIP 2018

the form of options to acquire Ordinary Shares for nil

consideration. These are awarded to Executive Directors,

Senior Managers and other employees of any Group
Company, as determined by the Remuneration Committee.

The Company implemented an annual SIP awards scheme

in January 2019. This is an approved scheme under

The exercise of the PSP awards is conditional upon the

Schedule 2 of the Income Tax (Earnings & Pensions) Act

achievement of a performance condition set at the time of

2003, and entitles all eligible employees to ordinary shares

grant and measured over a three-year performance period.

in the Company. The shares are held in a UK Trust.

The scheme includes the following awards:

2023 was £0.9m (FY22: £0.8m). This is based on the fair

The cost to the Group in the financial year to 30 September

Free Shares

The Company may give Free Shares up to a maximum

value, calculated at the date of the award of such Free

Shares, of £3,600 per employee in a tax year.

value of the share options at grant date, rather than on the

purchase cost of shares held in the Employee Benefit Trust

reserve, in line with IFRS 2 Share-based Payment.

223

29. Share-based payments (continued)

Details of the share awards outstanding are as follows:

SIP 2018

Shares in the plan at start of the year

Granted

Shares withdrawn from the plan

Shares in the plan at end of year

Available to withdraw from the plan at end of year

Details of the movements in the share scheme during the

year are as follows:

2023
SHARES
(NUMBER)

854,247

504,113

(152,748)

1,205,612

557,544

2022
SHARES
(NUMBER)

692,683

292,318

(130,754)

854,247

314,161

SIP 2005

Outstanding at start of the year

Shares withdrawn from the plan

Shares in the plan at end of year

Available to withdraw from the plan
at end of year

2023

2022

WEIGHTED
AVERAGE
EXERCISE PRICE

(PENCE)

(NUMBER)

(PENCE)

(NUMBER)

0.00

805,509

(42,804)

762,705

0.00

872,709

(67,200)

805,509

The weighted average share price at the date of withdrawal

for shares withdrawn from the plan during the year was

273.1 pence (FY22: 425.5 pence).

At 30 September 2023 the exercise price was £nil as they

were all nil cost options.

2023

2022

WEIGHTED
AVERAGE
EXERCISE PRICE

(PENCE)

(NUMBER)

(PENCE)

(NUMBER)

0.00

675,307

293,376

(69,019)

899,664

249,985

0.00

576,088

184,772

(85,553)

675,307

183,958

PSP

Outstanding at start of the year

Granted

Forfeited

Exercised

Outstanding at end of year

Exercisable at end of year

224

29. Share-based payments (continued)

The fair value of options granted during the year has been

estimated using the Black-Scholes model. The principal

assumptions used in the calculation were as follows:

PSP

Share price at date of grant

Exercise price

Expected life

Risk free rate

Dividend yield

Weighted average fair value per option

30. Employee Benefit Trust reserve

Group:

Balance brought forward

Purchase of own shares

Balance carried forward

Company:

Balance brought forward

Purchase of own shares

Balance carried forward

The Employee Benefit Trust (“EBT”) was settled by the
Company pursuant to a trust deed entered into between

the Company and Intertrust Employee Benefit Trustee

Limited (“Trustee”). The Company has the power to

remove the Trustee and appoint a new trustee. The EBT is a

discretionary settlement and is used to satisfy awards made

under the PSP.

The Trustee purchases existing Ordinary Shares in the

market, and the amount held in the EBT reserve represents

the purchase cost of IHP shares held to satisfy options

awarded under the PSP scheme. IHP is considered to be the

sponsoring entity of the EBT, and the assets and liabilities

of the EBT are therefore recognised as those of IHP. Shares

held in the trust are treated as own shares and shown as a

deduction from equity.

2023

287.8

Nil

3 years

3.5%

258.8p

2023

£m

(2.4)

(0.2)

(2.6)

2023

£m

(2.1)

(0.3)

(2.4)

2022

522.5p

Nil

3 years

0.7%

1.9%

493.3p

2022

£m

(2.1)

(0.3)

(2.4)

2022

£m

(1.8)

(0.3)

(2.1)

225

2023

£m

(0.1)

5.7

2022

£m

5.7

AMOUNTS OWED BY RELATED PARTIES

2023

£m

2022

£m

0.1

31. Other reserves – Group

Foreign exchange reserves

Non-distributable merger reserve

Foreign exchange reserves are gains/losses arising on

retranslating the net assets of IAD Pty into sterling.

Non-distributable reserves relate to the non-distributable

merger reserve held by one of the Company’s subsidiaries,

IFAL, which is classified within other reserves on a Group level.

32. Related parties

During the year the Company did not render nor receive

any services with related parties within the Group, and at

the year end the Company had the following intra-Group

receivables:

Company

Integrated Financial Arrangements Ltd

A loan of £10 million was issued to the Company by

IntegraLife UK Limited in FY21. This is an arm’s length

transaction as interest is charged at a commercial rate. IHP

is paying the loan off over ten years and made the second

payment of £1 million, plus accrued interest, during the

year. The current loan balance is £7 million.

The Group has not recognised any expected credit losses in

respect of related party receivables, nor has it been given

or received any guarantee during 2023 or 2022 regarding

related party transactions.

Payments to key management personnel, defined as

members of the board, are shown in the Remuneration

Report. Directors of the Company received a total of £3.6

million (FY22: £3.6 million) in dividends during the year and

benefitted from staff discounts for using the platform of £4k

(FY22: £2k). The number of IHP shares held at the end of

the year by key management personnel was 35,321,348, an

increase of 132,224 from last year.

Schrodinger Pty Ltd, the company which leases office space

to IAD Pty in Melbourne, Australia, is considered a related

party of the Company, as Michael Howard has control or

226

32. Related parties (continued)

35. Dividends

joint control of Schrodinger and is a member of the key

During the year to 30 September 2023 the Company paid

management personnel (as a director) of the Company.

interim dividends of £33.7 million (FY22: £33.8 million)

During the year IAD Pty paid Schrodinger £0.3 million

to shareholders. The Company received dividends from

(FY22: £0.3 million) in relation to the lease. The lease has

subsidiaries of £33.4 million (FY22: £45.0 million).

been in place since April 2012 and was last renewed in

May 2021.

ObjectMastery Services Pty Ltd (OM) provides the service

of executive directors consultancy services to IAD Pty,

and IAD Pty provides consultancy and book-keeping

services to OM. OM is considered a related party of the

36. Restatement of prior period
information

Company, as Michael Howard has control or joint control

Certain changes have been made to the comparative

of it. IAD Pty paid OM £71k (FY22: £72k) for services

financial information included in these financial statements

received during the year, £44k (FY22: £44k) of which

in order to correct prior period errors and align it to the

related to Michael Howard’s services. IAD Pty received

current year presentation. These changes are noted in the

£43k (FY22: £39k) from OM for services provided during

tables below.

the year. IAD owed £2k to OM as at 30 September 2023

(30 September 2022: £1k).

The Schrodinger and OM related party transactions and

these financial statements, given there is no impact to total

balances were not disclosed in the financial year 2022

assets, total liabilities, profit or equity, and the nature of

related parties note, so the above has been restated to

the values impacted are such that they do not change from

include this.

year to year to an extent that would influence the decision

No prior year opening balance sheet has been included in

All of the above transactions are commercial transactions

undertaken in the normal course of business.

Consolidated Statement of Cash Flows

of a user.

33. Contingent liability

The following changes have been made to the comparative

information in the Consolidated Statement of Cash Flows:

• Profit on ordinary activities before taxation

attributable to policyholders and shareholders has

There are some assets in ILUK policyholder linked funds

been used as the starting point of cash flows from

which are under review. Our current best estimate of

operating activities, rather than profit on ordinary

possible future outflow, in the event of remediation, is

activities before taxation. Increase/(decrease) in

£1.2 million. A future outflow is possible but not probable
and the timing of any outflow is uncertain. Accordingly,

policyholder tax recoverable has subsequently been
adjusted to reflect the movement in tax attributable

no provision for any liability has been made in these

to shareholder and policyholder returns

financial statements.

• All other movements relate to reclassifications

between headings

34. Events after the reporting date

As per the Chair’s statement on page 3, a second interim

dividend of 7.0 pence per share was declared on 13

December 2023. This dividend has not been accrued in the

consolidated statement of financial position.

227

Consolidated Statement of Cash Flows (continued)

PER 2022
FINANCIAL
STATEMENTS

MOVEMENT

RESTATED 2022

Cash flows from operating activities

Profit on ordinary activities before taxation

Profit on ordinary activities before taxation attributable to
policyholders and shareholders

Adjustments for non-cash movements (previously
income statement non-cash movements):

Release of actuarial provision

Interest charged on lease

Increase in contingent consideration

Increase in provisions

Adjustments for cash effecting investing and financing
activities:

Interest charged on lease

Decrease in current asset investments

Adjustments for statement of financial position
movements:

Increase in contingent consideration

Settlement of share-based payment reserve

Increase in provisions

Adjustments for policyholder balances:

£m

54.3

(0.5)

0.1

2.0

0.9

(1.3)

39.0

£m

(54.3)

15.8

0.5

0.1

0.9

38.5

(0.1)

(2.0)

(0.9)

1.3

(39.0)

£m

15.8

0.1

0.9

38.5

Increase/(decrease) in policyholder tax recoverable

(44.5)

38.5

(6.0)

Cash generated from operations

Net cash flows (used in)/generated from operating
activities

Investing activities

Acquisition of property, plant and equipment (previously
tangible assets)

Purchase of financial instruments

Redemption of financial instruments

251.0

237.5

(0.4)

Net cash (used in)/generated from investing activities

(1.7)

Financing activities

Purchase of shares for share scheme awards

Net cash used in financing activities

(36.6)

(2.0)

(2.1)

0.1

(3.0)

5.0

2.1

(1.3)

249.0

235.4

(0.3)

(3.0)

5.0

0.4

(1.3)

(37.9)

228

Company Statement of Cash Flows

The following change has been made to the comparative

information in the Company Statement of Cash Flows, which

is a reclassification between headings:

Adjustments for non-cash movements:

Settlement of share-based payment reserve

Net cash flows used in operating activities

Financing activities

Purchase of shares for share scheme awards

Net cash used in financing activities

Note 3 - Financial instruments – (ii) Financial

instruments by category

The following changes have been made to the comparative

information within the financial instruments note 3, to the

tables in (ii) Financial instruments by category table:

• Assets and liabilities which are not financial

instruments have been presented in the note to allow

users to clearly reconcile back to other supporting

notes

• Accruals, contingent consideration, deferred

consideration and balances due to HMRC have been

reclassified from financial liabilities, to liabilities which

are not financial instruments. Note that the bonus

accrual was already excluded from the table as it was

not classified as a financial instrument

• Liabilities held for the policyholders have been split to

show the liabilities linked to cash holdings at amortised

cost, with those linked to investments remaining at fair

value through profit or loss

• Trade and other receivables has been restated to

include the full balance, to correct an error in the note

• Trade and other payables has been split out to show

trade payables and other payables separately, and has

been restated to correct an error in the note

PER 2022
FINANCIAL
STATEMENTS

MOVEMENT

RESTATED 2022

£m

1.3

(5.5)

(35.5)

(1.3)

(4.2)

(1.3)

(36.8)

229

Note 3 - Financial instruments – (ii) Financial instruments by category (continued)

FINANCIAL ASSETS:

FAIR VALUE THROUGH THE
PROFIT OR LOSS

AMORTISED COST

Trade and other receivables

Total financial assets

Assets which are not financial
instruments

Prepayments

Current tax asset

PER 2022
FINANCIAL
STATEMENTS

£m

0.6

2022

£m

20,718.9

1,659.8

PER 2022
FINANCIAL
STATEMENTS

£m

MOVEMENT

RESTATED 2022

£m

1.4

£m

2.0

1,661.2

MOVEMENT

RESTATED 2022

£m

5.1

15.0

£m

5.1

15.0

20.1

FINANCIAL LIABILITIES:

FAIR VALUE THROUGH THE
PROFIT OR LOSS

AMORTISED COST

PER 2022
FINANCIAL
STATEMENTS

MOVEMENT

RESTATED
2022

PER 2022
FINANCIAL
STATEMENTS

MOVEMENT

RESTATED
2022

£m

Trade payables (previously
trade and other payables)

Other payables

Accruals

Deferred consideration

Contingent consideration

1.7

(1.7)

Liabilities held for the
policyholders

20,714.4

(1,458.6)

20,715.8

£m

7.4

3.0

1.7

£m

(5.8)

5.4

(3.0)

(1.7)

£m

1.6

5.4

1,458.6

Total Financial liabilities

22,176.1

20,715.8

14.9

1,468.4

PER 2022
FINANCIAL
STATEMENTS

£m

MOVEMENT

RESTATED 2022

£m

8.2

2.2

2.3

1.7

£m

8.2

2.2

2.3

1.7

16.1

Liabilities which are not financial
instruments

Accruals and deferred income

PAYE and other taxation

Other payables – due to HMRC

Deferred consideration

Contingent consideration

230

Note 3 - Financial instruments – (ii) Financial instruments by category (continued)

The following table show the carrying values of the liabilities for the Company:

Trade payables (previously trade and other
payables)

Loans payable (previously loans)

Deferred consideration

Contingent consideration

Accruals

Other payables

Due to Group undertakings

Total financial liabilities

Liabilities which are not financial
instruments

Accruals and deferred income

PAYE and other taxation

Deferred consideration

Contingent consideration

Note 4 - Risk and risk management – (3) Liquidity

risk – Maturity schedule

The following changes have been made in the 2022 risk and
risk management note 4, to the tables in (3) liquidity risk,

maturity schedule:

• Corrected an error in the investment balance, as the

amount was shown in thousands rather than millions

• Trade and other receivables has been restated to

correct an error in the note

• Removed accruals, VAT balances included within

other taxation, deferred consideration and contingent

consideration as these have been reclassified to

liabilities which are not financial instruments

• Lease liabilities have been added to the maturity table

AMORTISED COST

PER 2022 FINANCIAL
STATEMENTS

MOVEMENT

RESTATED 2022

£m

0.4

8.0

1.7

0.2

10.3

£m

(0.4)

(1.7)

(0.2)

0.3

0.1

£m

8.0

0.3

0.1

8.4

PER 2022 FINANCIAL
STATEMENTS

MOVEMENT

RESTATED 2022

£m

0.3

0.1

1.7

£m

0.3

0.1

1.7

3.8

231

Note 4 - Risk and risk management – (3) Liquidity risk – Maturity schedule (continued)

FINANCIAL ASSETS:

PER 2022 FINANCIAL
STATEMENTS

2022

Investments

Trade and other receivables

Total

MOVEMENT

2022

Investments

Trade and other receivables

Total

RESTATED

2022

Investments

Trade and other receivables

Total

FINANCIAL LIABILITIES:

PER 2022 FINANCIAL
STATEMENTS

2022

Trade and other payables

Deferred consideration

Contingent consideration

Total

MOVEMENT

2022

Trade and other payables

Lease liabilities

Deferred consideration

Contingent consideration

Total

RESTATED

2022

Trade and other payables

Lease liabilities

Total

232

UP TO 3
MONTHS

£m

124.2

2.0

22,495.7

UP TO 3
MONTHS

£m

(124.1)

UP TO 3
MONTHS

£m

0.1

2.0

22,371.6

UP TO 3
MONTHS

£m

11.8

22,186.8

UP TO 3
MONTHS

£m

(4.8)

0.6

(4.8)

UP TO 3
MONTHS

£m

7.0

0.6

22,182.0

3-12 MONTHS

1-5 YEARS OVER 5 YEARS

£m

0.2

£m

3.1

8.6

£m

3-12 MONTHS

1-5 YEARS OVER 5 YEARS

£m

(0.2)

£m

(0.1)

£m

TOTAL

£m

127.3

2.2

22,504.5

TOTAL

£m

(124.2)

(0.2)

(124.4)

3-12 MONTHS

1-5 YEARS OVER 5 YEARS

TOTAL

£m

3.0

8.5

£m

3.1

2.0

22,380.1

3-12 MONTHS

1-5 YEARS OVER 5 YEARS

TOTAL

£m

3.7

1.5

6.5

£m

0.2

1.7

2.8

£m

15.5

1.7

22,196.1

3-12 MONTHS

1-5 YEARS OVER 5 YEARS

TOTAL

£m

(3.7)

1.3

(1.5)

(5.2)

£m

0.9

(0.2)

(1.7)

(1.9)

£m

(8.5)

2.8

(1.7)

(11.9)

3-12 MONTHS

1-5 YEARS OVER 5 YEARS

TOTAL

£m

1.3

£m

0.9

£m

7.0

2.8

22,184.2

Note 6 – Segmental reporting – Statement of

financial position

The following changes have been made in the 2022

segmental reporting note 6, to the statement of financial

position:

• Non-current assets and non-current liabilities have

been adjusted by an equal amount to correct a prior

year error in the note

Assets

Non-current assets

Total assets

Liabilities

Non-current liabilities

Total liabilities

INSURANCE AND LIFE ASSURANCE BUSINESS

PER 2022 FINANCIAL
STATEMENTS

MOVEMENT

RESTATED 2022

£m

30.6

175.3

52.8

75.3

£m

(5.2)

£m

25.4

170.1

47.6

70.1

233

OTHER
INFORMATION

DIRECTORS, COMPANY DETAILS, ADVISERS

Executive Directors

Independent Auditors

Principal Bankers

Alexander Scott

Michael Howard

Jonathan Gunby

Non-Executive Directors

Richard Cranfield

Christopher Munro

Rita Dhut

Caroline Banszky

Victoria Cochrane

Robert Lister

Company Secretary

Helen Wakeford

234

Ernst & Young LLP,

25 Churchill Place,

Canary Wharf,

London, E14 5EY

Solicitors

Eversheds Sutherland

(International) LLP,

One Wood Street,

London, EC2V 7WS

Corporate Advisers

Peel Hunt LLP,

7th Floor 100 Liverpool Street,

London, EC2M 2AT

Barclays Bank PLC,

1 Churchill Place,

Canary Wharf,

London, E14 5HP

National Westminster Bank Plc,

250 Bishopsgate,

London, EC2M 4AA

Registrars

Equiniti Group Ltd,

Sutherland House,

Russell Way,

Crawley, RH10 1UH

Registered Office

29 Clement’s Lane,

London, EC4N 7AE

Investor Relations

Luke Carrivick 020 7608 4900

Website
www.integrafin.co.uk

Company number

8860879

GLOSSARY OF TERMS

AGM Annual General Meeting

IFAL Integrated Financial Arrangements Ltd

APM Alternative Performance Measure

IFPR Investment Firm Prudential Regime

ARC Audit and Risk Committee

BEIS Business Energy and Industrial Strategy

CASS Client Assets Sourcebook

CEO Chief Executive Officer

CFO Chief Financial Officer

CMP/CPP Company Maternity/Paternity Pay

CMT Crisis Management Team

COO Chief Operating Officer

COSO

Committee of Sponsoring Organisation of
the Treadway Commission

CRO Chief Risk Officer

CTO Chief Technological Officer

IFRS

International Financial
Reporting Standards

IHP IntegraFin Holdings Plc

ILInt IntegraLife International Limited

ILUK IntegraLife UK Limited

ISA Individual Savings Account

ISAs (UK) International Standards on Auditing (UK)

ISL IntegraFin Services LTD

IT Investment Trust

MI Management Information

MiFID II

Second Markets in Financial
Instruments Directive

DE&I Diversity, Equity and Inclusion

Investment Firms

MIFIDPRU the Prudential sourcebook for MiFID

DIM Discretionary Investment Management

MPS Managed Portfolio Service

DNED Designated Non-Executive Director

NED Non-Executive Director

DTR Disclosure Guidance and Transparency

Net inflow Net new business onto the platform

Rulebook

EBT Employee Benefit Trusts

ETF Exchange-traded Fund

FCA Financial Conduct Authority

FRC Financial Reporting Council

FUD Funds Under Direction

GDPR General Data Protection Regulation

GIA General Investment Account

Gross inflow Gross new business onto the platform

HMRC His Majesty’s Revenue and Customs

IAD

Integrated Application Development
Pty Ltd

ICA Individual Capital Assessment

ORSA Own Risk and Solvency Assessment

Outflow Business leaving the platform

PRA Prudential Regulation Authority

RMF/RMP Risk Management Framework/Policy

SCR Solvency Capital Requirement

SID Senior Independent Director

SIP Share Incentive Program

TCF Treating Customers Fairly

TCFD Task Force on Climate-Related

Financial Disclosures

The Company IntegraFin Holdings plc

The Group

IntegraFin Holdings plc and
its subsidiaries

ICARA Internal Capital and Risk Assessment

VCT Venture Capital Trust

235

Glossary of Alternative Performance Measures (“APMs”)

Various alternative performance measures are referred to in the Annual Report, which are not defined by IFRS. They
are used in order to provide better insight into the performance of the Group. Further details are provided below.

APM

FINANCIAL DATA
PAGE REF

Operational performance measures

DEFINITION AND PURPOSE

Funds under
direction
(“FUD”)

Data sourced internally

Calculated as the total market value of all cash and assets on the platform,
valued as at the respective year end.

YEAR END

Cash

Assets

FUD

% change on the previous year

AVERAGE DAILY FUD

Cash

Assets

FUD

% change on the previous year

2023
£bn

3.92

51.04

54.96

10%

2023
£bn

3.54

50.10

53.64

2022
£bn

3.51

46.56

50.07

(4%)

2022
£bn

3.23

49.27

52.50

11%

The measurement of FUD is the primary driver of the largest component of
the Group’s revenue. FUD is used to derive the annual commissions due to
the Group.

These values are not reported within the financial statements or the
accompanying notes.

Gross inflows
and Net
inflows

Data sourced internally

Calculated as gross inflows onto the platform less outflows leaving the
platform by clients during the respective financial year.

Inflows and outflows are measured as the total market value of assets and
cash joining or leaving the platform.

Gross inflows

Outflows

Net inflows

2023
£bn

2022
£bn

6.41

3.75

2.66

7.28

2.88

4.40

% change on the previous year

(40%)

(11%)

The measurement of net inflows onto the platform shows the net
movement of cash and assets on the platform during the year. This directly
contributes to FUD and therefore revenue.

These values are not reported within the financial statements or the
accompanying notes.

236

Adviser and
client
numbers

Data sourced internally

Calculated as the total number of advisers or clients as at the financial
year end.

Advisers are calculated as the number of advisers on the platform.

Clients are calculated as the total number of clients on the platform.

T4A licence users calculated as the total number of core licence users
active on the CURO platform.

Advisers

% increase

Clients

% increase

T4A licence users

% increase

2023
£’000

2022
£’000

7.7

7.5

230.3

224.7

2.8

2.3

22%

44%

This measurement is an indicator of our presence in the market.

These values are not reported within the financial statements or the
accompanying notes.

Client
retention

Data sourced internally

Calculated as the total number of clients with a non-zero valuation present
in the final month of both financial periods, as a percentage of total clients
in the current financial period.

Client retention

2023

95%

2022

97%

This is a measurement of client loyalty and an indicator of customer
satisfaction with our services provided.

These values are not reported within the financial statements or the
accompanying notes.

Income statement measures

Non-
underlying
expenses

Consolidated statement
of comprehensive income

Calculated as costs which have been incurred outside of the ordinary
course of the business.

Page 166

NON-UNDERLYING
EXPENSES

Backdated VAT

Interest on backdated VAT

Other

Non-underlying expenses

2023
£m

2022
£m

0.4

8.0

0.8

2.7

11.5

Our non-underlying expenses represent costs which do not relate to our
recurring business operations and hence should be separated from
operating expenses in the income statement.

237

Other costs consist of post-combination remuneration. Post-combination
remuneration relates to the payment to the original shareholders of T4A.
This is comprised of the deferred and additional consideration payable in
relation to the acquisition of T4A and is recognised as remuneration over
four years from January 2021 to December 2024.

T4A is not expected to meet the minimum threshold for highly stretching
targets to earn the additional consideration element of post combination
remuneration. Therefore, the post combination expense in respect of the
additional consideration element that was recognised in FY22 of £1.6 million
has been released, and we have not recognised any cost in FY23.

Moreover, the post combination consideration cost in respect of FY24 and
FY25 is expected to reduce to £2.1 million and £0.4 million respectively, as
only the deferred consideration element will now be recognised.

Underlying
earnings per
share

Financial review

Page 53

Calculated as profit after tax net of non-underlying expenses, divided by
called up equity share capital.

Profit after tax

Non-underlying expenses

Tax allowable element of costs

Underlying profit after tax

Divide by: Called up equity
share capital

2023
£m

2022
£m

49.9

0.4

50.3

3.3

44.0

11.5

(1.4)

54.1

3.3

Underlying earnings per share

15.2p

16.3p

Underlying
profit before
tax

Financial review

Calculated as profit before tax net of non-underlying expenses.

Page 53

Profit before tax

Add: Non-underlying expenses

Underlying profit before tax

2023
£m

2022
£m

62.6

0.4

63.0

54.3

11.5

65.8

238

Cash flow measures

Shareholder
returns

Consolidated statement
of comprehensive income

Calculated as dividend per share paid to shareholders, which relate to the
respective financial years.

Page 166

2023

2022

1st interim dividend

3.2 pence

2nd interim dividend

7.0 pence

Shareholder returns

10.2 pence 10.2 pence

% increase on previous
financial year

0.0%

2.0%

There are generally two dividend payments made relating to each financial
year. Shareholder returns is a measurement of the total cash dividend received
by each shareholder for each individual share held by them.

Dividend
policy

Consolidated statement
of comprehensive income

Calculated as total cash dividends paid in relation to the respective financial
year, divided by the post-tax profit relating to that same financial year.

Page 166

Total cash dividends paid

Profit for the financial year

Dividends as a % of profit

2023
£m

2022
£m

33.7

49.9

68%

33.7

44.0

77%

Our policy is to pay 60% to 65% of full year profit after tax as two interim
dividends.

Delivery on dividend policy is a measurement of our performance against
the policy and the businesses ability to generate distributable profits.

239

IntegraFin Holdings plc, 29 Clement's Lane, London, EC4N 7AE
Tel: (020) 7608 4900 Fax: (020) 7608 5300

(Registered office: as above; Registered in England and Wales under number: 8860879)