recordfg.com
Modernisation and diversification…
the investment delivers
Record plc Annual Report 2022
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Our purpose
To continue to harness trends and
innovate by collaborating with our clients
Our vision
Diverse partnerships of financial specialists
– creating unique, opportunistic, sustainable
solutions
Our mission
Independent, candid advice derived from
our 40-year legacy – as we evolve into a
global asset management network
Our value proposition
Transparency and trust, above all. We listen
to clients, truly understand their needs then
collaborate with like-minded specialist
partners from a wide range of asset classes
to deliver solutions
Annual Report 2022
Contents
Strategic report
Financial highlights
About us
Chairman’s statement
Chief Executive Officer’s statement
Business model
Products and distribution
Products
Markets
Strategy
Key performance indicators
Sustainability
Task Force on Climate Related
Financial Disclosures (“TCFD”)
Section 172 Companies Act 2006 –
Our stakeholders
Operating review
Financial review
Risk management
Viability statement
Governance
Chairman’s introduction
Board of Directors
Corporate governance report
Nomination Committee report
Audit Committee report
Remuneration report
Directors’ report
Directors’ responsibilities
statement
Financial statements
Independent auditor’s report
Financial statements
Notes to the financial statements
Additional information
Five year summary
Information for shareholders
Definitions
1
2
4
6
8
10
12
14
18
22
26
32
37
40
44
49
55
57
58
60
67
70
76
94
97
99
106
113
146
147
148
Record plc
Annual Report 2022
1
Financial highlights
Our year in numbers
Assets Under Management Equivalents1 (“AUME”)
$83.1bn +3.7%
2021: $80.1bn
Earnings per share
4.52p +64.4%
2021: 2.75p
Revenue
£35.1m +38.2%
2021: £25.4m
Ordinary dividend per share
3.60p
2021: 2.30p
Profit before tax
+56.5%
£10.9m +75.8%
2021: £6.2m
Special dividend per share
0.92p
2021: 0.45p
+104%
1. As a currency and derivatives manager, Record manages only the impact of foreign exchange
and not the underlying assets, therefore its “assets under management” are notional rather
than real. To distinguish this from the AUM of conventional asset managers, Record uses the
concept of Assets Under Management Equivalents (“AUME”) and by convention this is quoted
in US dollars. AUME is an alternative performance measure and further detail on how it is
defined is provided on page 148.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
2
Record plc
Annual Report 2022
About us
Record began with a spark. An idea, Currency Overlay,
which led to the signing of the world’s first Currency
Overlay mandate in 1985. We’ve been harnessing trends
ever since, with curiosity, innovation and integrity.
We were one step ahead then when we began and we aren’t standing still
today – as we invite greater diversity of thought, specialist partnerships
and new solutions for our clients.
Rest of the world
$2.8bn
3%
United Kingdom
$9.0bn
11%
Continental Europe
$51.3bn
62%
North
America
$20.0bn
24%
Global AUME and operating locations
Head Office (Windsor)
Other offices
Client locations
Where we operate
The Group’s main geographical markets, as determined by
the location of clients to whom services are provided, are
the UK, North America and Continental Europe, in particular
Switzerland. The Group also has clients elsewhere,
including Australia.
The Group’s Head Office is in Windsor, UK from where the
majority of its operations are performed and controlled.
The Group also has offices in London, New York, Zürich and
Düsseldorf.
In addition to these main markets, we continue to explore
new geographical markets which we believe may offer
attractive opportunities.
Record plc
About us
Annual Report 2022
3
Our approach
Our values
Listen
A client-focused
approach
Understand
Using strengths and
experience developed
over almost 40 years
Deliver
Unique, innovative and
sustainable solutions
People first
Our clients value our understanding of how
achieving long‑term, sustainable investment
objectives is a mindful journey, as much as
an economic one. Then there’s our team –
championed for its intellectual diversity,
passion and dynamism. It’s our people that
makes us great.
Integrity
We’ve always had a legacy of honesty
and upfront client advice during almost
40 years in existence – and that will never
change. This ethos echoes throughout our
people, our relationships, our products and
our fees. And, as an impartial, independent,
listed business, we are guided by best
practice and ethical codes of conduct.
Collaboration
We firmly believe in the power of many.
Our expanding network of like‑minded
specialists from around the world means
we can call on various strengths and expertise.
This flexibility allows us to customise unique
solutions for our clients.
Curiosity
We are restless minds driven by curiosity, ideas
and innovation. We always question, so we can
give our clients excellence and value. We are not
afraid to say no if it’s not the right investment
fit. Or to dig a bit deeper – to unearth other
opportunities or create new solutions that don’t
yet exist.
Kindness
In many ways, we can be described as
empathetic investment advisers and champions
of varied thought. Listeners first, we get to
know our clients and learn what their needs are
– then we create customised solutions that fit
their specific needs.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
4
Record plc
Annual Report 2022
Chairman’s statement
While the general
economic, political and
security environment has
noticeably worsened in
the past year, Record plc
has enjoyed contrasting
fortunes with strong
rises in its revenues
and profits.
Neil Record
Chairman
The year ending 31 March 2022 (“FY‑22”) has been one of
enormous change for the business. Revenue is up 38% on
the comparative year and pre‑tax profit up 76%. We have
successfully launched and expanded our EM Sustainable
Finance Fund; our European subsidiary, Record Asset
Management GmbH, is bringing new ideas, new products
and new clients; and our US hedging business has grown
substantially on the back of large Dynamic Hedging mandates.
I consider FY‑22 to be the start of a new chapter in Record’s
history. It is clear from the pipeline of projects, clients and
ideas that the firm is no longer going to be a purely currency
management specialist. While we will maintain our currency
speciality, we are widening our offering in the alternative
asset management space.
We plan to diversify into areas where specialist skills
are well rewarded; where investor appetite is high, and
where our existing expertise can be put to use. We have
already demonstrated that we can work closely with large
international bank partners to launch the EM Sustainable
Finance Fund (moving us for the first time in scale into the
frontier currency world); and I am pleased to report that
we plan to launch further funds with a variety of different
investor appetites and asset classes.
The invasion of Ukraine and the resulting humanitarian crisis
is like no other experienced in our generation in Europe.
Our thoughts are with the people experiencing untold pain
and hardship, and we hope that negotiations to end the
conflict will prevail. I would like to offer particular thanks
to the group of Ukrainian nationals who have been working
to upgrade our IT infrastructure, despite the incredibly
challenging conditions. We are doing everything we can to
offer them our support.
I am very enthusiastic about our company’s future. We have
in place an extremely talented and effective CEO, Leslie Hill,
who since her appointment in early 2020 has masterminded
many of the growth orientated changes focused on delivering
results that we are now seeing. I also see a rising generation
of talented and energetic individuals with the skills,
background and support to continue to bring about change
and growth. I believe these individuals will add significant
value to the business by taking responsibility and bringing
broader strength in depth to the future leadership team.
Financial overview
This new chapter for Record has been accompanied by an
exceptional set of results, which not only go to illustrate
the strength of the leadership team, but also underlines the
credibility of the new strategy. Growth in management fees
of 37% has driven the reversal of the short‑term reduction
in profitability seen in FY‑21, with Record’s operating margin
increasing to 31% from 24% last year. Encouragingly, this
growth is linked to a positive change in our revenue weighting
Record plc
Annual Report 2022
5
Chairman’s statement
Operating margin
31%
FY‑21: 24%
Earnings per share
+7%
4.52p +64%
FY‑21: 2.75p
towards higher revenue‑margin products from both existing
and newly launched products, supporting the change in
strategic direction towards a more diversified set of products
and services. Notwithstanding an increase in both personnel
and non‑personnel costs as the business continues to invest
in its people and systems, the Group has delivered a 64%
increase in earnings and continues to be supported by its
robust and liquid Balance Sheet, with total equity of almost
£26 million.
Further information on financial results can be found in the
Financial review section on page 44.
Capital and dividend
The Board is pleased with the progress made from the
change in strategy and remains confident in the future
growth prospects of the business.
Our capital and dividend policies have not changed
during the last two years and we have continued to pay
both ordinary and special dividends over this period,
notwithstanding the significant disruption and uncertainty
arising from the pandemic when many companies were
cutting or cancelling their dividends.
Our capital policy aims to ensure retention of capital
assessed as required for regulatory purposes, for working
capital purposes and for investing in new opportunities
for the business. Our dividend policy now targets a level of
ordinary dividend within the range of 70% to 90% of annual
earnings, and which allows for progressive and sustainable
dividend growth in line with the trend in profitability. It is
also the Board’s intention, subject to financial performance
and market conditions at the time, to return excess earnings
over ordinary dividends for the financial year and adjusted for
changes in capital requirements, to shareholders, normally in
the form of special dividends.
The Board is recommending a final ordinary dividend of
1.80 pence per share (2021: 1.15 pence) with the full‑year
ordinary dividend at 3.60 pence per share (2021: 2.30 pence),
representing a 57% increase in the ordinary dividend and
an ordinary payout ratio of 80% of earnings. The interim
dividend of 1.80 pence was paid on 30 December 2021, and
the final ordinary dividend of 1.80 pence will be paid on
9 August 2022 to shareholders on the register at 1 July 2022,
subject to shareholder approval.
Having carefully reviewed the current level of Group
capital against its ongoing requirements for regulatory
and investment purposes and to support its continued
growth, the Board considers the current level of capital to be
sufficient and is announcing a special dividend of 0.92 pence
per share to be paid simultaneously with the final ordinary
dividend. Total proposed dividends per share for the year are
4.52 pence per share (2021: 2.75 pence) compared to earnings
per share of 4.52 pence (2021: 2.75 pence).
The Board
We have welcomed two new Non‑executive Directors to
the plc Board in FY‑22 – Matt Hotson and Krystyna Nowak.
We have said goodbye to both Rosemary Hilary, who retired
from the Board in September 2021 and, as I reported in my
statement last year, to Jane Tufnell who stood down from the
Board at the Company AGM in July 2021, when Tim Edwards
took over the role of Senior Independent Director.
I would like to thank Rosemary, who ably chaired the Audit
and Risk Committee during her tenure on the Board and
brought to that role a forensic mind and long experience of
the management of financial and business risk.
We have split the Audit and Risk Committee functions, and
Matt Hotson has taken on the Chair of the non‑executive
Audit Committee, while we have established a Risk
Committee as an executive function.
Matt comes to us with senior CFO experience, and brings a
sharp intellect and a current executive role elsewhere to our
Board team.
Krystyna Nowak has taken on the Chair of the Nomination
Committee. Krystyna’s background is in executive search
following a career in banking. She brings wide experience
of managing our most valuable asset – our people – and we
look forward to benefiting from her expertise.
Outlook
There appears to be a contrast between the outlook
for Record plc on the one hand, and the wider economic
environment on the other.
Taking first Record’s prospects. As I have already mentioned,
we are witnessing a fundamental change in the business,
which I believe has the potential to transform for the better
Record’s scale and resilience within the next few years.
This leaves me feeling very optimistic for the firm.
By contrast, I am concerned that the current economic,
financial and geopolitical pressures facing Western
democracies may well see a prolonged period of very difficult
conditions – high inflation; low, zero or negative growth;
overstretched fiscal positions; and the likelihood of political
instability. One way or another, these conditions may well
impact on Record’s growth prospects, but my current
judgement is that our growth will outweigh the headwinds
imposed on us by these global economic problems.
Neil Record
Chairman
20 June 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
6
Record plc
Annual Report 2022
Chief Executive Officer’s statement
Two years after taking
on the role of CEO, I can
now confidently report
that we are making
real progress against
our stated objectives
to modernise, diversify
and build our business.
Leslie Hill
Chief Executive Officer
The team and I are very pleased with the development of our
strategy, and have great plans for the future. To that end,
I am now detailing our aspirations in more concrete terms
than we have in the past. We can, I believe, achieve revenue
of approximately £60 million by this time in 2025 and will
continue to improve our operating margin, inflation willing.
This will give our investors a clearer sense of our trajectory
and confidence in the future.
Progress against strategy
Our “house”, to continue an analogy I used last year, is now
much more robust in so many ways, as you will see detailed
below and further on in this report. Our new ventures
and products are bearing fruit, and we are expanding
our strategic partnerships around the world, while also
developing interesting new opportunities with our loyal
client base. The longevity of our relationships continues to
be a source of great pride to us all, but we are also finding
new major groups and institutions who value what we have
to offer, and want to work with us. I will detail each of the
key pillars of our strategy as follows:
Diversification
In June of 2021 we did indeed launch our EM Sustainable
Finance Fund, and it has gone well. We now run
approximately $1.2 billion in this strategy, which was built
for and in partnership with UBS Global Wealth Management in
Switzerland. Despite a turbulent year in the world of Emerging
Markets we have succeeded in outperforming our benchmark
and growing assets while weathering some unusually volatile
geopolitical waters. We continue to invest considerable
resource in this opportunity and it is providing results. We are
working on some new and interesting Impact and Sustainable
Finance initiatives of which I look forward to reporting more in
the coming year. In addition, we set up a Senior Sustainability
Office this year to make sure we observe and are at the
forefront of best practice in this demanding area.
However, we are all about diversification and there are a
few other notable milestones reached this year which are
worth highlighting. We have been informed by BaFin that
our application has been approved which will enable us to
build our asset management business in Continental Europe,
and have created a strong core team in Zürich, Germany and
Amsterdam. Some of our projects are coming to fruition, with
clients added in Holland, and a new Municipal Bond fund
developed for the German market. We acquired our first ever
Japanese hedging client this year, and will plan to build on
this milestone.
Record plc
Annual Report 2022
7
Chief Executive Officer’s statement
Revenue
Profit before tax
£35.1m +38%
£10.9m +76%
FY‑21: £25.4m
FY‑21: £6.2m
In addition, we are building a suite of Luxembourg‑based
funds this year which will allow us to further realise our
aspirations to become a fully fledged asset manager, adding
to our existing credentials as an overlay and derivatives
manager. Our growth agenda is on target and we continue
to add clients for our currency and derivatives offerings,
particularly in the Asset Management field, where we
acquired four new clients this year, with more to come.
Modernisation
So much work has been done to bring our infrastructure up
to date and both strengthen and protect our business, and
therefore our clients. We are now established as a company
with sophisticated IT infrastructure, with hybrid cloud and
on‑premise capabilities to ensure maximum flexibility, and
we have managed to keep all of this work both on target
and on budget.
We are also working hard to continue expanding our software
development team, offering customised and cost‑effective
solutions to our business partners as well as to more and
more clients. Particularly of note is the enthusiasm with
which our Asset Management clients greet our willingness
to take the currency burden off their shoulders so they can
concentrate on growing their own businesses. Doing what
others do not want to do may not be glamorous but we
have the experience and the history of reliably taking on
the challenges of our clients and as a team we receive them
with open arms! We now view our technology stack as a
journey of constant evolution, not a single destination, and
I think we will have more interesting announcements in the
coming year.
Succession
We continue the progression – enabling young, vibrant
members of our team to become equity owners and take
on more responsibility. This year saw more promotions
within our ranks than any other year in our history, which is
a testament to our desire to develop talent. Our new London
office has allowed us to attract this talent and our continued
flexible working arrangements are enhancing rather than
reducing productivity.
However, we do know that you simply cannot replace
idea sharing and training face‑to‑face, and have found
the implementation of a working schedule that includes
core office days essential to teamwork and collaboration.
In addition to all of this, we are building strong and modern
Diversity and Inclusion policies and working to attract more
women and ethnic minorities into our senior roles; we just
this year implemented our first ever Mentoring and Coaching
programme for our mid and senior‑level women which we
sourced from a cutting‑edge US‑based company. We will do
more of this as it was well received by our staff.
Financial performance
In terms of results, rewardingly we have achieved a 38%
increase in revenues year on year and a 76% increase in
profits, and an increase in our operating margins from 24%
to 31%, all of which I think speaks for itself. We are just
starting to get into our stride here and while I want to keep
everything steady and calm I do believe we have a long way
to go. In addition we have seen a return to performance fees
earned this year after a hiatus, and while these earnings are
somewhat episodic, our clients’ patience and belief in us has
gratifyingly been proved worthwhile, for them and for us.
Outlook
We have so much yet to do, and so much further to go, as
we move from a niche overlay manager into the world of
mainstream asset management while not losing sight of
our core expertise and the importance of this part of our
business. I believe we can combine the flexibility and agility
of a small business – as is shown by our Tech transformation,
with the scale and credibility of a much larger business,
as is demonstrated by our asset base, our growing global
reach and the scalability of our product and service offering.
This will be the secret of success in coming years, and it is
making this company, and indeed my job, most interesting
and rewarding.
Leslie Hill
Chief Executive Officer
20 June 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
8
Record plc
Annual Report 2022
Business model
Our purpose
Our resources
Our strategy
Record was born of an
idea that no one else
in our industry had:
Currency Overlay,
which led to the
signing of the world’s
first Currency Overlay
mandate in 1985.
Almost four decades
later, we purposefully
continue to harness
trends, ignite ideas
and spark innovation,
with intellectual,
inquisitive and
diverse thinking.
And we apply this
never‑standing‑still
approach to all our
specialist
partnerships and
solutions.
This way, we stay
one step ahead
for our clients.
Client relationships
We forge strong, collaborative and
long‑standing client relationships
acting as a trusted adviser,
underpinned by a deep understanding
of each client’s opportunities and
investment objectives.
Expertise and
partnerships
We are experts in FX and derivatives
products and markets and we use this
in collaboration with our expanding
network of like‑minded specialist
partners to build unique solutions for
our clients.
Technology and
innovation
We continually invest in the
modernisation of our systems and
technology to help us innovate and to
ensure we achieve scalable, robust and
efficient delivery of our products and
services.
Financial strength
Record is a highly cash‑generative,
asset‑light business with a strong
balance sheet and a disciplined
and rigorous approach to capital
management – strengths which
have guided us through various
and challenging market cycles over
almost 40 years in business.
Values and culture
Strong values and a culture built
over almost 40 years underpin the
way we work, guiding our behaviour,
operations and communications in
everything we do.
Our strategy is focused
on accelerated growth
supported by the
following three pillars:
Modernisation
Investing in new technology is
essential for ensuring our
business remains competitive
and innovative. It gives greater
flexibility to adapt to changes in
markets and investor appetite,
whilst providing more efficient
working practices and scalable
solutions.
Diversification
Our expertise in collaboration
with like‑minded partners
combines to provide innovative
solutions that fulfil specific
investor objectives. Successful
diversification spans every
aspect of our business: people,
products, client types and
geographies, specialist skill sets
and alternative markets.
Succession
As our business moves into a
new era, it remains vital for
our future success that key
individuals are retained and
encouraged to become
long‑term employees and
equity holders in Record.
See more
on page 18
Record plc
Annual Report 2022
9
Business model
Our financial model
Benefits to our
stakeholders
The business is highly
cash‑generative with a robust
balance sheet and strong capital
position. A rigorous and disciplined
approach to capital management
allows the business to reinvest for
growth and to drive shareholder
value and returns. The Group holds
no external debt.
Cash generation
Our highly cash‑generative business
model allows us to remain independent,
self‑financing with no external debt.
We use the cash generated to reinvest into
the business in the pursuit of growth in line
with our strategy, to ensure the day‑to‑day
expenditure requirements of the business
are met, and to return surplus cash to our
shareholders in the form of dividends or
share repurchases.
Net cash inflow (before tax) from operating activities:
£12.7m +55%
FY‑21: £8.2m
Returns to shareholders – total dividends per share:
4.52p +64%
FY‑21: 2.75p
Clients
In all respects, we are a client-led business.
We listen to our clients, understand their
investment objectives and, using our expertise
alongside that of our chosen partners, deliver
innovative products and services and the highest
levels of client service.
People
Our people make our business great and are
championed for their intellectual diversity, passion
and dynamism. We are committed to ensuring
that our culture openly reflects our values and to
creating the best possible working environment
where our people can thrive.
Society
Providing support for local community-led projects
and charitable causes.
Environment
Reduced environmental impact – we have committed
to reduce our own carbon emissions and to develop
impactful and sustainable investment solutions
alongside our clients and partners.
Shareholders
To ensure the long-term success of the Group and to
deliver enhanced shareholder value through growth
in both financial performance and progressive and
sustainable capital distributions.
See more on
pages 38 and 39
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
10
Record plc
Annual Report 2022
Products and distribution
We aim to forge long-term partnerships with
clients, acting as their trusted adviser to fully
understand their investment objectives in
order to develop effective solutions.
Strategic approach
Record’s strategic sales objective is to drive accelerated
revenue growth diversified by product, geography and client
type. It aims to achieve this objective with a sharp focus on
the following four areas:
• a broad range of flagship products (which are
“best‑in‑class” amongst their respective competitors);
• a targeted but flexible approach to the sales process;
• strategic partnerships with our clients and the highest
levels of client service; and
• strong relationships with other service providers, for
example fund management companies or investment
consultants.
Flagship products
Record has been a specialist currency manager for almost 40
years and continues to put tailored currency solutions, both risk
management and return‑seeking, at the core of our offering.
Our currency products and services continue to evolve in line
with our clients’ requirements in terms of technology, service
and investment process. Examples include improvements
in efficiency and robustness for our Passive Hedging
clients, more flexible and responsive risk management for
our Dynamic Hedging clients, new investment strategies
(e.g. long‑short EM and G3 short‑volatility) for our
return‑seeking clients, and a continuously expanding
universe of frontier currencies which we price and execute.
Our currency risk management expertise continues to
resonate across Europe and the US, illustrated by growth
in assets in both Passive and Dynamic Hedging which has
continued in a world that looks a lot more uncertain and risky
than a few years ago. Our Dynamic Hedging team has done an
excellent job in working with our clients to adjust portfolios
regularly (sometimes daily) in sync with market movements.
The Record EM Sustainable Finance Fund (“EMSF”), which
we successfully launched in June 2021 in collaboration with
UBS Wealth Management, has substantially outperformed
its peers throughout the volatile period following the
Russian invasion of Ukraine. Our ability to actively manage
the currency portfolio and to invest in less liquid frontier
currencies has been a big contributor to this achievement.
As the world de‑globalises, the importance of multi‑lateral
development banks (“MDBs”) in support of emerging countries
is increasing, as is the role of a fund like ours which acts as a
conduit between hard and local currency for the MDBs.
A targeted but flexible approach
Beyond EMSF, we have, in collaboration with select
investment consultants, seen sales success in the area of
alternative credit. We are also preparing a series of mandates
in the areas of direct lending, alternative credit, trade finance
and infrastructure, all of which include Record to varying
degrees in the role of initiator and structurer, distributor,
portfolio manager or currency hedger.
This growth on the asset management side of the business
is testament to our sales team’s ability to address client
concerns and add value by crafting existing flagship products
into new and unique solutions, and to our investment
and operational teams’ abilities to deliver seamless
implementations.
Clients as partners
Record has long prided itself on client retention and
exceptional levels of client service and this forms the base
for the creation of any new product or service.
Paramount to developing desirable and client‑led products
is the input of, and engagement with, prospective clients so
that the products truly meet their needs and are a solution
to challenges they face. Where possible, we aim to forge
long‑term partnerships with clients, acting as their trusted
advisers. Working in this way with clients, where both sides
understand the other’s capabilities and desires, allows us to
design solutions that directly address the real investment
challenges faced by them.
With an expanding range of best‑in‑class building blocks
(created from our flagship products), combined with our
sales and investment teams’ flexibility and attention
to detail, we pursue a path to growing our base of large
clients through unique customised offerings.
Service providers and regional focus
Investment consultants have long formed a key part of
Record’s client engagement and sales strategy and have
contributed significantly to our success, which remains as
true as ever.
As the range of services that we offer expands with both
flagship products and tailored solutions, the importance
of service providers across our delivery infrastructure
increased, and we are proud to have forged excellent
working relationships with select fund management
companies, fund administrators, and legal and tax advisers,
allowing us to create new investment vehicles fast, reliably
and cost‑efficiently.
While the investment landscape is relatively standardised
when it comes to the locations where investment vehicles
are crafted and registered, client requirements (ranging
from the investment strategy itself to seemingly more
mundane things such as risk or solvency reporting) are
often driven by local legal specifications and communication
is often affected by cultural norms. To ensure a seamless
understanding of client needs, we work with local business
partners, as we have in the US, Germany, the Netherlands
and the Middle East, across important geographies where
we have no large presence ourselves.
Record plc
Annual Report 2022
11
Products and distribution
Q&A
with Dmitri Tikhonov,
Chief Investment Officer
What is it that makes you want to invest your time
at Record?
When I joined Record in 2002 as a quantitative analyst, the
company had a relatively narrow yet impressive expertise,
providing risk management solutions for developed
world currencies. Over only a few years the product
range expanded to include Currency for Return, emerging
market currencies and more sophisticated approaches to
currency risk management, expanding our client base in
turn. Record is a business that has demonstrated an ability
to evolve, innovate and grow. The thrill of participating in
this evolutionary process is exciting and rewarding. Record
has created a nurturing inclusive internal culture. National
and educational diversity offers opportunities for very
different individuals to learn and thrive in all parts of the
organisation.
What is it about your role that you most enjoy?
My role offers a unique combination of different types
of work; analytical and holistic, internally and externally
focused, tactical and strategic. This role offers autonomy,
as well as opportunity to develop mastery whilst pursuing
a clear purpose of serving clients and the business.
Working with teams of outstanding individuals is another
very important aspect that brings joy to my daily work.
How do you see Record’s role evolving over
the next few years?
Record has been focusing on the expansion of its
expertise beyond developed, emerging and frontier
currencies through product diversification. Moving
forward, we will continue to deliver unique investment
solutions by demonstrating excellence in sustainable
and impact‑related asset management, sophisticated,
multi‑faceted FX risk management as well as fixed
income and yield enhancement strategies.
Dmitri Tikhonov
Chief Investment Officer
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
12
Record plc
Annual Report 2022
Products
The Group’s suite of core products is split into
three main categories: Currency Risk Management,
Return-Seeking products, and Multi-product.
Currency Risk Management
Record’s primary risk management products are the hedging
products and are predominantly systematic in nature. Record
has the experience and expertise to deliver tailored hedging
programmes to suit the individual currency needs of our clients.
We continually enhance our product offerings so that they
maintain their premium product status. In a competitive
marketplace, our ability to differentiate our hedging products
is key to maintaining and growing our market share further.
Passive Hedging
Passive Hedging mandates have the cost‑effective reduction
of currency risk as their sole objective. This is achieved
through symmetrical and unbiased elimination of currency
exposure from clients’ international portfolios.
Core Passive Hedging
The core Passive Hedging product requires execution and
operational expertise to a greater extent than investment
judgement, and provides the following benefits to clients:
• independent, best execution;
• custom benchmarks;
• optimised exposure capture;
• netting benefits;
• regulatory reporting; and
• management of cash flows.
Enhanced Passive Hedging
The enhanced Passive Hedging product offers the same
benefits and requires the same level of execution and
operational expertise as the core product, but recognises the
opportunities presented for adding value by taking advantage
of structural inefficiencies and behavioural changes arising
in FX markets. It requires continuous monitoring, investment
judgement and specialised infrastructure to identify the
opportunities and then to take advantage of them with a
structured and risk‑managed approach.
Dynamic Hedging
Record’s Dynamic Hedging product is an alternative to
Passive Hedging and has reduction of currency volatility as
well as generating value as dual objectives. The Dynamic
Hedging product seeks to allow our clients to benefit from
foreign currency strength while protecting them from foreign
currency weakness relative to their own base currency.
Value is generated entirely through the asymmetric reduction
of pre‑existing currency risk and Dynamic Hedging’s ability
to outperform Passive Hedging is dependent on trending in
currency markets.
Record plc
Products
Annual Report 2022
13
We also offer bespoke solutions tailored
to individual client requirements.
Return‑Seeking
Multi‑product
Record’s Return‑Seeking strategies have the generation
of investment return as their principal objective.
Currency Multi-Strategy
The Currency Multi‑Strategy range includes six principal
strategies, being Carry, Emerging Market, Momentum,
Value, Range Trading and Short Volatility, and it is possible
to offer these in either a segregated or pooled fund structure.
These strategies can be combined in different weightings
that appeal to particular market segments under Record’s
Multi‑Strategy approach, which can be applied as an
“overlay” to help clients achieve a variety of investment
objectives, and offers clients access to the main sustainable
sources of return in the currency market. Clients receive
a diversified return stream which performs well under a
variety of market conditions and reduces the correlation of
their currency programme to other asset classes.
Record EM Sustainable Finance Fund (“EMSF”)
The EMSF was developed with the aim of investing currency
with impact by combining strategic investment in currencies,
an underlay of impact bonds, and focused counterparty
engagement.
Emerging and frontier economies often rely on loans
denominated in foreign currencies to progress. However,
currency volatility can act as a major barrier to the
development of domestic capital markets and the creation
of economic wealth. The costs of insuring the currency risk
can be high and subject to large fluctuations, leaving local
businesses and communities unprotected and vulnerable.
The number of affected emerging market countries is vast,
creating a large and diversified target universe for the fund.
Multi‑product mandates typically have combined risk‑
reducing and return‑seeking objectives, and are bespoke
in nature. These may include a hedging mandate overlaid
with selected elements of the Currency for Return product,
which cannot readily be separated into its hedging and
return‑seeking components for reporting purposes.
Municipal Loan Fund
In January 2022, Record announced the launch of a new
private debt fund (“KOMMUNALIS+”), investing primarily
in municipal loans. Record acts as asset manager, in
partnership with technology investment specialists
European Debt Solutions (“EDS”) and leading European
fund service provider, Universal‑Investments Group
(“Universal”). The fund is an open‑ended special AIF,
registered in Luxembourg.
The new technologically enabled alternative investment
fund aims at achieving returns of 60 basis points (0.60%)
over Euribor, with two‑month liquidity, by investing
in short‑term loans to European Municipalities and
adding short‑term receivables from investment grade
EU corporates. The fund utilises EDS’s innovation and
Universal’s expertise to provide a highly efficient fund
service platform for European investors. Initial funding
is expected by the end of the first half of FY‑23.
Cash and other
Record also provides ancillary services including cash
and liquidity management, collateral management and
derivatives overlays.
Information on product investment performance is given
in the Operating review section (pages 40 to 43).
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
14
Record plc
Annual Report 2022
Markets
Our market environment
and industry trends.
Our market
Industry trends
The currency market represents the
biggest and most liquid financial
market available, with exceptionally
low transaction costs and daily FX
volumes averaging $6.6 trillion
(source: BIS Triennial Central Bank
Survey of Foreign Exchange and OTC
Derivatives Markets 2019).
The FX market is essential to global trade and finance
and includes a high proportion of not‑for‑profit or forced
participants, resulting in profit‑seeking financial institutions
continuing to represent a minority of FX market participants.
Consequently, the market displays persistent patterns of
behaviour or inefficiencies which we believe can best be
exploited by a combination of systematic and discretionary
processes.
The FX market continues to offer opportunities for investors.
Record’s expertise is in identifying and understanding these
opportunities and then working with clients to understand
how such opportunities may be used to their best advantage,
taking account of each client’s individual circumstances and
attitude to risk.
Increase in demand for sustainable
investment products
The last twelve months have seen an acceleration in the
widespread incorporation of sustainability‑linked factors in
investment products as investors become ever more focused
on resilience. With broad understanding that “non‑financial”
data (climate, social, governance, etc.) can more completely
fortify portfolios to weather global shocks, asset managers
have had to review the remits of fiduciary duty to take
account of these fast‑evolving investor preferences and
broader understanding of material risk. Pandemic contagion
flagged risks that occur concomitant with an increasingly
interconnected world, reliant upon global supply chains
and geared by closely intertwined national economies.
Long‑term climate risks and the global consequences of
seemingly idiosyncratic sovereign‑level physical risks are
therefore now better comprehended in their magnitude, and
the importance of international co‑operation more seriously
acknowledged. Investors have translated macroeconomic
risks into portfolio risks, using frameworks such as that of
the Sustainability Accounting Standards Board (“SASB”) and
the Task Force on Climate‑Related Financial Disclosures
(“TCFD”) to understand what this means for the resilience
of their investments, and it is the responsibility of asset
managers to respond with credible and prudent sustainable
solutions. For a summary of Record’s TCFD disclosures,
please refer to pages 32 to 35.
Record plc
Markets
Annual Report 2022
15
Global and macro trends
Inflation comeback amidst covid‑19
policy overhang and geopolitical
conflicts
As the covid‑19 pandemic showed signs of morphing into
an endemic following a successful vaccination campaign
and the natural course of virus mutations, market attention
turned towards pandemic policy overhangs and the
implications for global asset classes. Pent‑up demand
from precautionary savings, commodity price increases
and supply side disruptions all contributed to an inflation
comeback in the second half of FY‑22. This fuelled debate as
to whether the new‑found ability of developed economies
to generate price increases was only transitory in nature or
now a permanent fixture of the global economy. Adding to
the complexity of this assessment were further commodity
price shocks as Russia began its invasion of Ukraine; with
inflation no longer appearing transitory, central banks
telegraphed their respective responses and most developed
market central banks saw rapid tightening cycles priced.
Although most central banks indicated higher forthcoming
interest rates, these were not always commensurate with
the expected levels of inflation, and stagflationary dynamics
began to weigh on the euro and British pound in particular.
The Bank of Japan was steadfast in its commitment to loose
monetary policy, which saw the currency decline significantly
versus the US dollar. The US dollar on aggregate made an
impressive recovery from the year prior, benefiting from
the “USD smile”, referring to positive performance during
both risk‑off (via safe haven demand), and risk‑on (via US
economic exceptionalism and Fed hawkishness) economic
environments.
What this means for our business
Record’s Currency for Return strategies are designed
to target persistent market patterns and risk premia.
As economic, political and societal norms change, so
must our approach. As such, we constantly challenge the
assumptions underlying our investment process. During the
period we evolved our flagship Emerging Markets (“EM”)
product to move away from a long‑only currency approach
and towards a long‑short methodology, which seeks to
capture the trend towards greater heterogeneity of economic
outlooks and return outlooks within the EM universe.
Such an approach is better placed to exploit the various risk
premia available in EM currencies, while benefiting from
reduced sensitivity to broader risk sentiment emanating from
external factors such as financial tightening elsewhere in the
world including the US.
The strong performance of the US dollar during the period
emphasised the benefits of active hedging strategies;
Dynamic Hedging performed as expected, protecting US
investors against foreign currency losses with higher hedge
ratios when the US dollar strengthened, whilst limiting
associated costs for strengthening base currencies such as
the euro investors via lower hedge ratios. The rapid repricing
of inflation risk and monetary policy tightening breathed
life into short‑term interest rates and the FX basis, which
presented opportunities to add value in enhanced Passive
Hedging programmes through the active management of
hedging tenor lengths. In addition, building on the prolonged
effects from the pandemic, various idiosyncratic country
crises affirmed interest in the bespoke management of EM
currency exposures, where we are working with clients to help
understand the risks emanating from EM currency and the
various approaches that can be taken to manage such risks.
Record has also focused on developing sustainable finance
strategies with a defined goal of achieving meaningful
positive impact within the emerging market community.
Record and UBS Global Wealth Management announced
a strategic partnership by collaborating on the launch of
the Record Emerging Market Sustainable Finance Fund
(“EMSF”). This unique investment strategy demonstrates
a commitment to innovation and the development of new
sustainable investment products, which Record expects
to have broad and growing appeal. The strategy’s impact
thesis spans a multidimensional investment process,
remaining active across the economic cycle in liquid and
illiquid EM and Frontier currencies in pursuit of stabilising
local market exchange rates and absorbing currency
risks, whilst simultaneously investing in an underlay of
sustainable development bonds issued by multilateral
development banks with a strong track record of deploying
sustainable development capital in emerging economies.
The strategy’s ambitions are reinforced through an active
engagement strategy with counterparty banks, incentivising
improvements in counterparties’ performance across the
ESG spectrum.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
16
Record plc
Annual Report 2022
Markets continued
Review of the year ended
31 March 2022.
Market review
The financial year began in a risk‑on fashion as a number
of economies emerged from winter lockdowns following
heavy vaccination drives which helped to alleviate stress on
healthcare systems. It was heterogeneity in vaccination rates
that initially captured investors’ attention, in particular the
developed versus emerging market divide, with IMF officials
warning of disparate recovery paths given developing
countries’ dependence on tourism and weaker public
finances. Indeed, the currencies of countries with favourable
inoculation rates received “vaccine dividends” as markets
priced in faster recoveries and faster monetary policy
tightening cycles.
The early summer gave way to the “transitory inflation”
narrative in central bank communique, with Fed officials
attributing temporary pressures to a range of factors including
base effects, pandemic stimuli, ongoing supply chain issues,
and economic re‑opening. Similarly elevated inflation prints
across the developed market spectrum saw a hawkish tilt in
central bank forward guidance with the Reserve Bank of New
Zealand (“RBNZ”) and Norges Bank signalling rate hikes later in
the year, the Bank of England (“BoE”) signalled the tapering of
asset purchases in late 2021, whilst the Bank of China (“BoC”)
reduced asset purchases in April.
Mid‑summer marked a significant convergence in the vaccine
race as Developed Markets (“DMs”) and several Emerging
Markets (“EMs”) including the likes of the Euro Area,
Canada, Turkey, Chile and Brazil made marked headway in
vaccination distribution, closing the gap with leaders of the
US and UK. Though growth prospects looked rosier, global
covid‑19 nervousness remained elevated in view of the
highly infectious but seemingly less‑deadly Delta variant.
Government responses varied, including pockets of localised
lockdowns linked with small outbreaks (particularly in the
Asia‑Pacific region including Australia and New Zealand),
delayed reopening schedules (UK by a month through to
July) and upping the ante with quarantine/travel restrictions
(notably seen between UK and EU countries).
The Fed Jackson Hole Economic Symposium in August passed
uneventfully, with Fed Chair Powell noting higher interest
rates were still “a way away”, reiterating the “transitory”
nature of recent inflation prints. Another notable dynamic
remained the increasing hawk‑dove division as a few
regional Fed presidents, including Waller and Bullard, vocally
advocated for immediate bond purchase tapering in light of
inflation risks and healthier labour market dynamics. Hawkish
moves were initiated by DM policymakers into the last quarter
of the year as committees aimed to balance inflation targets
and expectations against economic growth and labour
market recoveries. The RBNZ and Norges Bank became the
first central banks to embark on their rate hiking cycle, whilst
markets were also surprised by the BoC ending their bond
buying programme, and the Reserve Bank of Australia (“RBA”)
abandoning Yield Curve Control on three‑year bonds.
The second half of the year saw several idiosyncratic risk
episodes in emerging markets. In China, a heavy regulatory
crackdown on its education and big technology sectors,
followed by rising concerns that China’s real estate
behemoth Evergrande faced a major solvency and default
crisis, generated market volatility. The Turkish lira again
experienced a crisis episode in Q4, triggered by consecutive
Central Bank of the Republic of Turkey’s interest rate cuts
since mid‑summer despite headline inflation reading in
excess of 19% year‑on‑year during this time period.
Global market sentiment then took pause towards calendar
year end with the emergence of the highly infectious
Omicron variant, with multiple countries scrambling to levy
stringent travel restrictions and a degree of local restrictions
re‑introduced. Yet, global daily caseloads declined towards
the end of the financial year, supporting risk sentiment, and
owing to combined efforts of local restrictions and viral
resistance from boosters/previous infections which saw a
general “living with covid‑19” theme emerge. China remained
an outlier as the last major country which keeps up to its
zero‑covid‑19 policy with the recent rise in infections seeing
multiple cities/provinces placed under stringent lockdowns.
Market review
Record plc
Annual Report 2022
17
Markets continued
The last months of the financial year were largely
characterised by the escalation and eventual invasion
of Ukraine by Russia. Western countries enacted a swift
and unified economic response, imposing a moratorium
on transactions with the Central Bank of Russia, freezing
Russian assets held in domestic banks and blocking the Nord
Stream 2 pipeline project. Consequently, the risk of a larger
regional war and surging energy and agriculture prices fed
into market concerns and risk‑off sentiment. Investors were
particularly concerned about the European growth and
inflation picture given oil and gas dependence on Russia.
Rallying commodity prices as a result of the Russia‑Ukraine
war markedly benefited commodity‑linked currencies, such
as the Norwegian Krona (“NOK”), Australian Dollar (“AUD”)
and the Canadian Dollar (“CAD”) towards the end of the year.
Faced with the ongoing uncertainty of inflationary pressures
and persistent inflation overshooting relative to its targets,
G10 central banks largely abandoned all notions of transitory
inflation by the end of the fiscal year, escalating their fight
against inflation with more aggressive hiking language and
several banks enacting rate hikes, including the Federal Open
Market Committee (“FOMC”) (+25bps) and BoE (+50bps). The
latest Fed dot plot showed officials’ median projection was
for the benchmark rate to reach around 2.0% towards the
end of 2022, then 2.8% in 2023 and 2024. The Bank of Japan
(“BoJ”) and Swiss National Bank (“SNB”) remained at the
back of the pack with regard to policy tightening, whilst the
European Central Bank (“ECB”) sought to balance the risks
from surging inflation, a fragile economy and the potential
for financial market “fragmentation” as emergency bond
purchases are unwound. The prospect of premature policy
tightening forced by a sudden resurgence in inflation remains
a key risk in the minds of investors going into the 2022
financial year. Overall, the US dollar performed well for most
of the year, reflecting a mixture of risk‑off market sentiment,
US economic exceptionalism, and relative insulation to
commodity price shocks from the war in Ukraine.
US dollar trade-weighted spot exchange rate
Index, 31 March 2021 = 100
Source: Record, Macrobond.
110
105
100
95
90
Apr
2021
May
2021
Jun
2021
Jul
2021
Aug
2021
Sep
2021
Oct
2021
Nov
2021
Dec
2021
Jan
2022
Feb
2022
Mar
2022
Apr
2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
18
Record plc
Annual Report 2022
Strategy
Our strategy is to offer clients unique,
opportunistic and sustainable solutions
which are highly valued and well rewarded.
Our strategy recognises the strengths and expertise of
our business built over nearly 40 years, and combines this
with the adoption of modern technology and differentiated
skill sets through collaboration with like‑minded, specialist
partners. This approach allows us to offer our clients
unique, opportunistic and sustainable solutions to meet
their differentiated investment objectives – solutions which
are highly valued and well rewarded.
We use our long‑standing and trusted adviser relationships
with current clients as an opportunity to collaborate
and develop new ideas alongside willing participants.
Collaboration with our partners gives further opportunity
to expand our client base and relationships. The ability for
us to connect to modern, third‑party systems as opposed to
using in‑house systems development has both strengthened
and diversified our business, leading to more robust and
efficient processes. Technology continues to evolve at a pace
and our investment in technology and modernisation will
continue to evolve alongside, ensuring our aim of remaining a
high‑quality, innovative, client and technology‑led business
continues to adapt accordingly.
Modernisation
Diversification
Succession
The continued modernisation of
our business is key to our future
security and commercial success.
Investing in new technology
is essential for ensuring our
business remains competitive in
the fundamental areas of product
innovation, client servicing and
productivity. It allows us greater
flexibility to adapt in response to
changes in markets and investor
appetite, whilst providing more
efficient working practices and
scalable solutions.
Diversification of our business is
critical to our growth strategy as
we move from a niche currency
and derivatives manager
to becoming an alternative
asset manager. Our expertise
in currency and derivatives
married with that of our
specialist partners allows for
the development of innovative
and structured solutions that
fulfil specific investor and
market requirements, including
impactful and sustainable
investment products. The
key to achieving successful
diversification includes achieving
diversity across all aspects of our
business, including our people,
products, client types and
geographies, specialist skill sets
and alternative markets.
We are fundamentally a
people business with a focus
on nurturing and developing
existing members of our team,
whilst attracting future talent
to bring new and diverse skills
and ideas to the business. As
our business moves into a new
era, more opportunities arise
for developing the future talent
and senior management of the
Group and it is vital for our future
success that these individuals
are retained and encouraged to
take more responsibility, add
value and become long-term
employees and equity holders
in Record.
Record plc
Strategy
Annual Report 2022
19
Modernisation
Q+A
with Rebecca Venis,
Chief Technology Officer
What is it that makes you want to invest your
time at Record?
It is an easy choice to invest time at Record because there
are so many opportunities to make a difference to the
business. Record has seen real growth in recent years,
which validates everyone’s hard work and makes investing
time in the business incredibly rewarding.
How do you see Record’s role evolving over
the next few years?
We will continue in our role of being a trusted and reliable
partner capable of solving problems for clients. As we
expand our global footprint and our partnerships, we will
be able to solve more problems, for more clients, more
effectively.
What is it about your role that you most enjoy?
As the business continues to diversify, every team is
challenged to adapt and drive forward our products, services
and capabilities. I have loved helping people across the
business grow in skills and confidence as they seize the
opportunities presented to them. What is even more
rewarding is seeing those who are brave and take on new
challenges, receive the recognition and respect they deserve.
Rebecca Venis
Chief Technology Officer
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
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Record plc
Annual Report 2022
Strategy continued
Diversification
Q+A
with Jan Witte,
Global Head of Sales
What is it that makes you want to invest your
time at Record?
I find working at Record incredibly exciting, so I greatly
enjoy it as a way of spending my time. I am also proud of
what we are building and we all identify strongly with
it, which makes it very rewarding to see the excellent
progress we are making and the strong forward
momentum we have.
What is it about your role that you most enjoy?
The people. Across colleagues, clients, business partners
and service providers, I feel privileged to be able to work
with such reliable, impressive, focused and professional
people from all over the world. We have become a truly
global business and the progress we are making in some
areas is exhilarating. I also enjoy the camaraderie that
spans across the many different teams we work in and
the financial industry in general as an infinite source of
exciting new ideas.
How do you see Record’s role evolving over
the next few years?
Having made a deliberate effort to diversify our product
and service range over the last few years, we are now being
disciplined in identifying and prioritising those initiatives
which will allow us to become a network of collaborating
best‑in‑class entities; a fantastic vision to work towards.
Jan Witte
Global Head of Sales
Record plc
Annual Report 2022
21
Strategy continued
Succession
Q+A
with Kevin Ayles,
Head of Human Resources
What is it that makes you want to invest your
time at Record?
We have formed a strong new leadership team, with a clear
vision, and I feel that we are energised to work collectively
to deliver the strategy. The Record team is very capable,
hardworking and creative and being part of this makes this
a place where I want to invest my time.
What is it about your role that you most enjoy?
Personally, I find it very rewarding to see my colleagues
flourish with the opportunities that they have been given.
My team and I will now prioritise providing training, coaching
and support to those taking on new responsibilities as well
as continuing to identify and nurture talent.
How do you see Record’s role evolving over
the next few years?
Our core strategic priorities of diversification, modernisation
and succession all combine to provide very exciting
opportunities for Record to continue to evolve in currency
management, sustainable investing and asset management.
With the development of the business comes opportunities
for our colleagues to grow and work together to deliver
unique solutions for our clients.
Kevin Ayles
Head of Human Resources
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
22
Record plc
Annual Report 2022
Key performance indicators
Measuring our performance
against our strategy.
Financial KPIs
Revenue
(£m)
Operating profit margin
(%)
Basic earnings per share
(“EPS”) (pence per share)
Revenue is earned predominantly from
the provision of currency management
services in the form of management
fees and performance fees.
Operating profit margin is an
alternative performance measure,
calculated by dividing operating profit
by revenue.
The Group aims to create shareholder
value over the long term, delivered
through progressive and sustainable
growth in EPS.
2022
2021
2020
2019
2018
35.1
2022
31
2022
4.52
3.60
2022
0.92
25.4
25.6
25.0
23.8
2021
2020
2019
2018
24
30
2021
2020
32
2019
2.75
3.26
3.27
31
2018
3.03
Why this is important
Revenue is a key indicator of client
experience, growth and a key driver
of profitability. Growth in AUME,
especially into Record’s higher
revenue‑margin products, resulted in
a 37% increase in management fees.
Revenue also includes performance
fees, which increased by £0.4m to
£0.5m (2021: £0.1m).
Why this is important
EPS measures the overall effectiveness
of the business model and drives
both our dividend policy and the
value generated for shareholders.
Similarly to operating profit, EPS has
increased this year as the benefits
from the implementation of the new
strategy begin to deliver results in
financial terms.
Why this is important
Operating profit margin is an indicator
of the efficiency of the business in
turning revenue into profit. Inflows
into higher revenue‑margin products
in addition to efficiencies seen from the
adoption of technology in operational
areas both contributed to the increase
in operating margin to 31% for the year.
The Group aims to increase the
operating profit margin over time
through investment in resources and
technology to maintain its premium
products and services, whilst
increasing operating efficiency and
developing more diversified revenue
streams in higher‑margin products.
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Diversification
Diversification
Diversification
Modernisation
Modernisation
Modernisation
Succession
Diversification
Modernisation
Succession
Dividends per share (“DPS”) (pence per share)
Our dividend policy targets a level of ordinary dividend within the range of 70%
to 90% of annual earnings, and which allows for progressive and sustainable
dividend growth in line with the trend in profitability.
Ordinary
Special
2022
2021
2020
2019
2018
2.30
2.30
2.30
2.30
2021
0.45
2020
0.41
2019
2018
0.69
0.50
Why this is important
Progressive and sustainable dividend payments illustrate the cash‑generative
nature of Record’s business, and its strength in converting profits into cash and
providing a suitable return to shareholders. The ordinary dividend per share has
increased by 57%, reflecting the Board’s confidence in the ability of the business
to deliver its strategy and to achieve sustainable growth. The special dividend per
share has increased by 0.47 pence, resulting in a 64% increase in total dividends to
4.52 pence per share (2021: 2.75 pence per share).
Record plc
Annual Report 2022
23
Key performance indicators
The Board uses both financial and
non‑financial key performance
indicators (“KPIs”) to monitor and
measure the performance of the
Group against its strategic priorities.
Some KPIs link to specific strategic
areas as noted below, whilst others
represent higher level key metrics in
terms of the Group’s business and
financial performance.
Operating profit margin
Basic earnings per share
Dividends per share (“DPS”) (pence per share)
Our dividend policy targets a level of ordinary dividend within the range of 70%
to 90% of annual earnings, and which allows for progressive and sustainable
dividend growth in line with the trend in profitability.
Ordinary
Special
2022
2021
2020
2019
2018
2.30
2.30
2.30
2.30
3.60
2022
0.92
2021
0.45
2020
0.41
2019
2018
0.69
0.50
Why this is important
Progressive and sustainable dividend payments illustrate the cash‑generative
nature of Record’s business, and its strength in converting profits into cash and
providing a suitable return to shareholders. The ordinary dividend per share has
increased by 57%, reflecting the Board’s confidence in the ability of the business
to deliver its strategy and to achieve sustainable growth. The special dividend per
share has increased by 0.47 pence, resulting in a 64% increase in total dividends to
4.52 pence per share (2021: 2.75 pence per share).
Revenue
(£m)
(%)
(“EPS”) (pence per share)
Revenue is earned predominantly from
Operating profit margin is an
The Group aims to create shareholder
the provision of currency management
alternative performance measure,
value over the long term, delivered
services in the form of management
calculated by dividing operating profit
through progressive and sustainable
fees and performance fees.
by revenue.
growth in EPS.
2022
2021
2020
2019
2018
35.1
2022
31
2022
4.52
25.4
25.6
25.0
23.8
2021
2020
2019
2018
24
30
2021
2020
32
2019
2.75
3.26
3.27
31
2018
3.03
Why this is important
Why this is important
Why this is important
Revenue is a key indicator of client
Operating profit margin is an indicator
EPS measures the overall effectiveness
experience, growth and a key driver
of the efficiency of the business in
of the business model and drives
of profitability. Growth in AUME,
turning revenue into profit. Inflows
both our dividend policy and the
especially into Record’s higher
into higher revenue‑margin products
value generated for shareholders.
revenue‑margin products, resulted in
in addition to efficiencies seen from the
Similarly to operating profit, EPS has
a 37% increase in management fees.
adoption of technology in operational
increased this year as the benefits
Revenue also includes performance
areas both contributed to the increase
from the implementation of the new
fees, which increased by £0.4m to
in operating margin to 31% for the year.
strategy begin to deliver results in
£0.5m (2021: £0.1m).
financial terms.
The Group aims to increase the
operating profit margin over time
through investment in resources and
technology to maintain its premium
products and services, whilst
increasing operating efficiency and
developing more diversified revenue
streams in higher‑margin products.
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Diversification
Diversification
Diversification
Modernisation
Modernisation
Modernisation
Succession
Diversification
Modernisation
Succession
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
24
Record plc
Annual Report 2022
Key performance indicators continued
Measuring our performance
against our strategy.
Non-financial KPIs
AUME
($ billion)
As a currency and derivatives manager,
Record manages only the impact of
foreign exchange and not the underlying
assets of its clients, therefore its
Assets Under Management (“AUM”) are
notional. To distinguish this from the
AUM of conventional asset managers,
Record uses the concept of Assets
Under Management Equivalents
(“AUME”) and by convention this is
quoted in US dollars.
Client longevity
(%)
Client longevity measures how long
Record has been providing currency
and derivative management services
to each client with a mandate active
as at 31 March 2022.
Average number
of employees
The average number of employees
through the year includes
Non‑executive Directors.
Staff retention
Employees with equity
(%)
interest (%)
Staff retention is the number of
The percentage of employees who own
employees who were employed by
shares in Record plc at year end.
Record throughout the period as a
percentage of the number of employees
at the beginning of the period.
2022
2021
2020
2019
2018
83.1
>10 years
20%
80.1
6‑10 years
11%
2022
2021
58.6
57.3
3‑6 years
1‑3 years
62.2
0‑1 year
13%
29%
2020
27%
2019
2018
82
83
82
85
81
Why this is important
AUME is an alternative performance
measure and further detail on how it is
defined is provided on page 148.
AUME is a key driver of future revenue
and an indicator of business growth.
AUME increased by 3.7% for the year,
including net inflows of $2.4 billion
diversified across product lines.
Why this is important
Client longevity is both an indicator of
recent client growth, and also of the
Group’s success in sustaining quality
client relationships through investment
cycles. Building long‑standing and
trusted adviser relationships with
clients provides opportunities for
collaboration and partnerships on new
and innovative investment products.
Why this is important
Average employee numbers is an
indicator of business growth and also
of how effectively the Group is using
technology to make processes more
efficient. Implementing the new strategy
has required a change in mix of required
skill sets of employees, so whilst the
average number of employees has
not changed significantly, a degree
of employee turnover has brought
additional knowledge and experience
into the Group required to drive
innovation and the diversification into
new products and technology.
2022
2021
2020
2019
2018
74
2022
61
90
2021
81
84
2020
2019
93
2018
68
69
70
72
Why this is important
Why this is important
Planning for generational change is
The alignment of employee interests
key to the Group’s strategy. A decrease
with those of our shareholders is an
in staff retention in the year reflects
important factor in ensuring the
the focus on rebalancing the skill sets
longer‑term success of our business
required by the business to drive the
and is an important tool in managing
innovation and growth required to
generational change. The decrease this
deliver the strategy. The Group remains
year is linked to changes made under
cognisant of ensuring the retention
the new strategy resulting in a higher
and development of key talent as
turnover of staff and consequently a
well as the factors affecting all of our
short‑term decrease in employees
employees’ wellbeing.
holding shares. The Group’s
remuneration structure includes
schemes with both mandatory and
voluntary equity participation,
reflecting the importance the Group
places on alignment.
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Diversification
Diversification
Diversification
Diversification
Succession
Modernisation
Succession
Modernisation
Succession
Modernisation
Succession
Record plc
Annual Report 2022
25
Key performance indicators continued
AUME
($ billion)
Client longevity
(%)
Average number
of employees
As a currency and derivatives manager,
Client longevity measures how long
The average number of employees
Record manages only the impact of
Record has been providing currency
through the year includes
foreign exchange and not the underlying
and derivative management services
Non‑executive Directors.
assets of its clients, therefore its
to each client with a mandate active
Assets Under Management (“AUM”) are
as at 31 March 2022.
Staff retention
(%)
Staff retention is the number of
employees who were employed by
Record throughout the period as a
percentage of the number of employees
at the beginning of the period.
Employees with equity
interest (%)
The percentage of employees who own
shares in Record plc at year end.
notional. To distinguish this from the
AUM of conventional asset managers,
Record uses the concept of Assets
Under Management Equivalents
(“AUME”) and by convention this is
quoted in US dollars.
2022
2021
2020
2019
2018
83.1
>10 years
20%
80.1
6‑10 years
11%
58.6
57.3
3‑6 years
1‑3 years
29%
2020
27%
62.2
0‑1 year
13%
2022
2021
2019
2018
82
83
82
85
81
Why this is important
Why this is important
Why this is important
AUME is an alternative performance
Client longevity is both an indicator of
Average employee numbers is an
measure and further detail on how it is
recent client growth, and also of the
indicator of business growth and also
defined is provided on page 148.
Group’s success in sustaining quality
of how effectively the Group is using
AUME is a key driver of future revenue
and an indicator of business growth.
AUME increased by 3.7% for the year,
including net inflows of $2.4 billion
diversified across product lines.
client relationships through investment
technology to make processes more
cycles. Building long‑standing and
trusted adviser relationships with
clients provides opportunities for
efficient. Implementing the new strategy
has required a change in mix of required
skill sets of employees, so whilst the
collaboration and partnerships on new
average number of employees has
and innovative investment products.
not changed significantly, a degree
of employee turnover has brought
additional knowledge and experience
into the Group required to drive
innovation and the diversification into
new products and technology.
2022
2021
2020
2019
2018
74
2022
61
90
2021
81
84
2020
2019
93
2018
68
69
70
72
Why this is important
Planning for generational change is
key to the Group’s strategy. A decrease
in staff retention in the year reflects
the focus on rebalancing the skill sets
required by the business to drive the
innovation and growth required to
deliver the strategy. The Group remains
cognisant of ensuring the retention
and development of key talent as
well as the factors affecting all of our
employees’ wellbeing.
Why this is important
The alignment of employee interests
with those of our shareholders is an
important factor in ensuring the
longer‑term success of our business
and is an important tool in managing
generational change. The decrease this
year is linked to changes made under
the new strategy resulting in a higher
turnover of staff and consequently a
short‑term decrease in employees
holding shares. The Group’s
remuneration structure includes
schemes with both mandatory and
voluntary equity participation,
reflecting the importance the Group
places on alignment.
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Diversification
Diversification
Diversification
Diversification
Succession
Modernisation
Succession
Modernisation
Succession
Modernisation
Succession
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
26
Record plc
Annual Report 2022
Sustainability
Sustainability encompasses many aspects of
business operations, including both strategy
and investment as well as business practice,
community engagement and our workforce.
In conducting its business
operations, the Group has a
responsibility to its stakeholders
and the environment.
Sustainability pillars:
Responsible investment
See more
on page 28
Our people
See more
on pages 30 to 31
Climate action
See more
on pages 32 to 36
Record plc
Annual Report 2022
27
Sustainability
Responsibility for sustained and meaningful
progress within the area of sustainability lies
with our Sustainability Office.
Governance
The Office is constructed of our
Senior Sustainability Office (“SSO”),
the Sustainability Committee and the
Senior Sustainability Coordinator.
The SSO is comprised of key
senior business leaders who
take responsibility for setting
the sustainability strategy and
proactively integrating sustainable
practices across the business.
The Sustainability Committee is a
broader committee that seeks to
gather ideas and recommendations
from across seniority and teams
within the business, as well as taking
responsibility for implementing
ESG initiatives. The Sustainability
Committee has formalised the key
officer roles to delegate responsibility
in line with our three key areas of
sustainability: responsible investment,
our people and climate action, with
the aim of expanding the scope of
our efforts by utilising more time and
resources, and engaging more of our
workforce to have responsibility on
these key components.
The Senior Sustainability Coordinator
acts as conduit between the two
committees, representing and voicing
the views of the Sustainability
Committee at the senior level.
Sustainability organisational chart
Record plc Board
Oversees
Reports to
Senior Sustainability Office (“SSO”)
Chief Executive Officer
Head of Macroeconomic Research
Chief Investment Officer
Head of Trading
Global Head of Sales
Senior Sustainability Coordinator
Head of Human Resources
and Company Secretary
Reports to
Advises
Sustainability Committee
Chair
Senior Sustainability Coordinator
Responsible
investment
Our people
Climate action
ESG Investment
Officers
Inclusion & Diversity
Officers
Office Sustainability
Officers
Impact Investment
Officers
Community
Involvement Officers
Climate Risk Officers
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
28
Record plc
Annual Report 2022
Sustainability continued
Responsible
investment
Record has identified responsible investment as
an essential prerequisite to successful, resilient
and prudent investment management.
Philosophy
Record has identified responsible investment as an essential
prerequisite to successful, resilient and prudent investment
management. Consideration of environmental, social and
governance (“ESG”) factors within investment strategy was a
natural extension of its corporate philosophy, and continues
to infuse its strategy development and perception of risk
factors going forward. As part of our drive to incorporate ESG
factors into active currency products, Record has worked in
collaboration with Oxford‑based researchers to extend the
boundaries of ESG beyond its existing base in equities and
bonds, to encompass the currency markets. This manifested in
the creation of one of the first ESG Emerging Market Currency
for Return strategies in 2018, and has continued to evolve
since into a focus on sustainable investment with impact.
Collaboration
Record is actively exploring ways to collaborate with
external parties, including clients who might wish to apply
the methodology to reflect their own specific preferences
and views on various elements of sustainable finance.
Record’s research is ongoing, responding to improvements
in available data, as well as developing and improving on its
own strategies and building and innovating new approaches
to maintain its place at the forefront of research in such a
fast‑developing space. We purposefully seek to diversify our
product offering through working with third parties. Our aim
is to develop and identify unique investment opportunities
both within currency and potentially across other asset
classes, as we did in the development of the Record
Emerging Market Sustainable Finance Fund.
Record Emerging Market Sustainable Finance Fund
(“EMSF”)
During 2020, Record continued to pioneer research in this
space, developing an Emerging Market Sustainable Finance
product that combines strategic investment in currencies,
impact bond collateral and counterparty engagement to
nurture and enhance development in the currency universe
countries. This research culminated in the successful launch
of the EMSF in June 2021, in collaboration with one of our
partners, UBS Global Wealth Management in Switzerland.
Currency
The Record EM Sustainable Finance strategy aims to stabilise
currencies, which in turn can facilitate development and
harness the growth potential in developing countries,
in accordance with the academically supported theory that
EM currency stability is a key prerequisite for equitable and
sustainable economic and social development.
Correctly deployed, currency is an essential tool in
contributing to sustainable development in less‑developed
economies and in creating a lasting positive impact. This is
achieved via two channels: the Stabilisation Factor and the
Capital Incentive Factor. The fund seeks also to widen the
universe of currencies, extending to more illiquid currencies
in order to broaden the scope of impact.
Fixed income
In 2019 Record began using its own capital to invest
in Impact Bonds, organised through international and
regional multilateral organisations which align with the
UN Sustainable Development Goals (“SDGs”). Record believed
this would not only aid development and achieve impact, but
also presented an opportunity to gain experience in dealing,
holding and reporting on Impact Bonds which underscored
the fixed income component of the EMSF.
The fixed income strategy uses cash and invests in US
dollar‑denominated sustainable development bonds which
are primarily issued by highly rated multilateral development
banks (“MDBs”). The strategy can also invest in other impact
debt instruments such as green, social and sustainability
bonds issued by sovereigns and agencies. The fixed income
strategy is designed for investors who desire to make a
positive economic, social and environmental impact by
channelling financial resources to sustainable projects
in low and middle‑income economies.
ESG Counterparty Engagement Strategy (“ESG-CES”)
The ESG‑CES creates a watertight strategy which aligns
our execution with the aims of the overall strategy. Our
counterparty banks are considered as part of the financial
supply chain, and therefore the ESG risks associated with
counterparties represent a supply chain risk.
We thereby evaluate our counterparty bank panel using
primary, AI and third‑party ESG data to create an aggregated
proprietary ESG score used to direct flows towards more
sustainable banks. Crucially, this is paired with regular
engagement calls and quarterly reports to encourage
progress on key areas such as diversity, fossil fuel financing
and misconduct, internalising the externalities of our banks
on wider stakeholders.
Record plc
Annual Report 2022
29
Sustainability continued
Our people
We believe that investing in our staff
and developing their potential is key to
the success of the business.
Workplace
Record’s working environment is designed to encourage
bright, dynamic and committed individuals to thrive. We
believe that investing in our staff and developing their
potential is key to the success of the business and our
policies and practices reflect this. We actively listen to our
employees to help us understand their opinions, ideas and
suggestions. In this year’s employee engagement survey,
86% of employees took the time to have their say and
respond, helping us understand the underlying themes
which matter most.
The Group’s offices both in London and Windsor have been
designed to allow all departments to work together in an
open plan environment. The open plan office allows ease of
communication between departments, as well as enabling
staff to work closely with senior management. This year we
have been able to welcome colleagues back into the office
with the introduction of a hybrid working pattern, giving a
balance between flexibility and providing an environment
which fosters teamwork and innovation.
The office environment and culture promote staff
development and training. In October 2021 we partnered with
Advancing Women Executives (“AWE”) to run an accelerator
programme for mid‑level women to provide the relevant
training and networking opportunities which are critical
for career advancement. All staff are invited to participate
in Company update meetings which are led by the Chief
Executive Officer. The Group also provides study support
to employees who wish to pursue relevant professional
qualifications. The Board has established a staff‑run
welfare committee which organises team‑building and
other social events, enhancing interaction between different
departments within the business.
In addition, the Group continues to provide a number of
other benefits to employees, including pension, private
medical cover, life insurance, permanent health insurance,
maternity and shared parental benefits, and subsidised gym
membership. A new ultra‑low emission (“ULEV”) car benefit
scheme was implemented to continue our commitment to
sustainability through employee benefits. All employees
participate in the Group Profit Share Scheme and have the
opportunity to acquire shares in Record plc through this
scheme, as well as through the Record plc Share Incentive
Plan. All employees are also offered the Employee Assistance
Programme, which provides 24/7 confidential telephone
support from qualified counsellors as well as online
computerised cognitive behavioural therapy, to support
anyone struggling with mental health issues.
The Group has an established internship programme for
students and during the year welcomed interns from
the London School of Economics and Political Science,
University of Manchester, University of Warwick and the
University of Bath.
Staff retention %
FY-22
FY-21
FY-20
74%
90%
81%
This year’s reduction in staff retention reflects the change
in our business strategy, in particular our succession
planning, which saw higher levels of recruitment adding
additional skillsets and some changes at senior levels within
the business filled through internal promotions wherever
possible. We would expect our staff retention to increase or
normalise back to near previous levels going forward.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
30
Record plc
Annual Report 2022
Sustainability continued
Our people continued
Human rights
Record’s policies and procedures with regard to human rights
are in line with internationally recognised human rights
standards, such as the guidelines issued by the UN Global
Compact, to which Record is a signatory. We comply with
human rights standards across each of the countries we
operate in and we work to ensure that there are no instances
of modern slavery, human trafficking, child labour or any
other form of human rights abuse within our organisations.
In April 2022 we published our first Modern Slavery Act
statement in line with the government guidelines under the
2015 UK Modern Slavery and Human Trafficking Act. Strictly
we are not legally required to report, but we recognise our
corporate responsibility to ensure modern slavery is not
taking place in our organisation, and our policy outlines the
procedures we have in place to identify and prevent modern
slavery both in our own operations and in our supply chain.
See our policy on: recordfg.com.
Inclusion and Diversity
The Group’s aims include ensuring that all staff are provided
with equal opportunities and that the workplace is free of
discrimination. It also aims to ensure that all recruitment
processes are fair and are carried out objectively,
systematically and in line with the requirements of
employment law.
The Group ensures that all staff are aware that it is not
acceptable to discriminate, harass or victimise anyone, and
also that any such unlawful behaviour is not tolerated under
any circumstance.
The Group believes that valuing what is unique about
individuals and drawing on their different perspectives and
experience will add value to the way the Group does business.
By accessing, recruiting and developing talent from a
diverse pool of candidates, the Group can gain an insight into
different markets and better support client needs through
producing innovative and sustainable investment products.
The Group aims to create a productive environment,
representative of different cultures and groups, where
everyone has an equal chance to succeed.
The Group has made significant progress towards its
Inclusion and Diversity Action Plan, a summary of which can
be viewed in this year’s Sustainability Report 2021/2022 on
pages 22 to 25. See more: recordfg.com.
This year has seen the creation of the Inclusion and
Diversity Network (“I&D Network”), an umbrella group that
consolidates Record’s previous networks established in 2020
(Ethnic Diversity Network and Gender Equality Network). As
a smaller organisation, the decision to consolidate the Ethnic
Diversity and Gender Equality networks into one, all‑inclusive
I&D Network was taken to allow us to better reach, represent
and benefit the diaspora of underrepresented groups across
the spectrum. At the same time, the network allows us to
account for and understand the intricate intersectionalities
of identities as well as the individuality of experiences of
our colleagues both within the workplace and society. The
network seeks to engage with industry and community‑wide
initiatives, conducting key support for charities and initiatives
such as Destiny Transformers and The Great Project.
The network has purposely rebranded with the emphasis
of putting Inclusion (versus Diversity) first in the name, as
the former focuses on whether an individual feels valued,
respected, accepted and encouraged to actively participate
in a workplace setting. We recognise diversity as a key part
of an inclusive culture, and aim to foster a workplace which
is welcoming and supportive to all employees from all
walks of life.
Read more in our sustainability report
recordfg.com
Record plc
Annual Report 2022
31
Sustainability continued
The gender diversity within the Group is shown below:
Gender balance
As at 31 March 2022
Board Directors
Senior management
Other staff
All employees
Female
number
2
6
25
33
%
33%
24%
45%
38%
Male
number
4
19
31
54
%
67%
76%
55%
62%
See our separate Sustainability Report, on page 27 for our Gender Pay Gap and further diversity data and more information on
our diversity initiatives.
Community
Record recognises its obligations and responsibility to
contribute to the wider community outside of the firm.
Over the course of the year, the Group made charitable
donations totalling £18.2k. Our charitable giving is focused
on employee choice, with the Group matching employee
donations and sponsorship. The Group continues to
encourage employees to participate in fundraising activities
for charitable causes and this year employees participated in
a variety of events, including charity lunches and fundraising
competitions. Examples of supported charities and causes
included The Link Foundation, Jeans for Genes, SEBS Action
Trust, Orphans in Need, Mind, Thames Hospice and Destiny
Transformers. A scheme allowing UK employees to give to
charity through the payroll is also offered.
Charitable donations (£’000)
FY-22
FY-21
FY-20
18.2
19.2
15.2
We also provide financial assistance to students studying
at Balliol College, Oxford through a bursary scheme, which
provides grants to students who aim to pursue ambitions
which will benefit the wider community, for example in
medical or charitable fields.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
32
Record plc
Annual Report 2022
Sustainability continued
Climate action
This year, Record made significant progress to
reduce our Scope 2 emissions by becoming 100%
renewable across our UK operations.
Net Zero
Last year the Group made the commitment to become net
zero by 2050. In this year’s Climate‑Related Disclosure Report
2021/2022 we have set interim emission‑reduction targets
for the year 2030 to ensure immediate climate action is taking
place and we outline our net‑zero principles.
TCFD
The Group publicly supports the Task Force on Climate‑related
Financial Disclosures (“TCFD”). The following table provides
a summary of our response to the TCFD recommendations.
We provide supplemental detail in our Climate‑Related
Disclosures Report 2021/2022 in order to provide a more
comprehensive assessment of how the Group incorporates
climate‑related risks and opportunities into our governance,
strategy, risk management, and metrics and targets.
Read more in our climate report
recordfg.com
Governance
TCFD
Recommendations
Describe Board‑level oversight
of climate‑related risks and
opportunities.
Describe management’s role
in assessing and managing
climate‑related risks and
opportunities.
Compliant
1. All page numbers relate to our climate report, available at: recordfg.com
TCFD
Compliance
Current status
Reference
page1
Compliant
• The Board has complete oversight of
Pages 6 and 7
climate‑related risks and opportunities
posed to our business operations, including
progress towards our strategic goals
and disclosures made in climate and
sustainability‑related reports.
• The Board delegates overall responsibility
for managing operational climate‑related
risks and opportunities to the SSO and our
Head of Business Risk, with support from
the Sustainability Coordinator and the
Sustainability Committee.
Page 6
• Overall responsibility for managing
Page 7
investment climate‑related risks and
opportunities sits with our Investment
Committee and the Investment
Management Group.
Record plc
Annual Report 2022
33
Sustainability continued
Strategy
TCFD
Recommendations
Describe the climate‑related risks and
opportunities the organisation has
identified over the short, medium and
long term.
Describe the impact of these climate‑
related risks and opportunities on the
organisation’s business, strategy and
financial planning.
Describe the resilience of the
organisation’s strategy, taking into
account different climate‑related
scenarios, including a 2ºC or lower
scenario.
Partially
compliant
Additional recommendations included
in supplemental guidance for asset
managers.
Partially
compliant
1. All page numbers relate to our climate report, available at: recordfg.com
TCFD
Compliance
Current status
Compliant
• We identified a number of transitional
climate‑related risks and opportunities that
we believe are material to our business.
• Our assessment concluded that physical
climate risks do not pose a material threat
at this present time.
• Each risk and opportunity has been
considered in terms of the likelihood of
occurrence, the financial impact it could
have on the business, and the time horizon
over which it could occur.
Reference
page1
Pages 16
to 18 (Risk
management
section)
Compliant
• Each of the climate‑related risks and
Pages 9 to 14
opportunities identified in our assessment
have been integrated into our climate
change strategy to ensure we are mitigating
risks and acting on opportunities.
• Our current climate‑related risk and
Page 16
opportunity assessments are based off
a lower than 2°C warming scenario.
• Outcomes of this scenario were considered
while developing our current climate
change strategy.
Work in progress: We will assess
climate‑related risks and opportunities in line
with a higher than 2°C warming scenario to
evaluate the resilience of our current strategy.
• Record integrates ESG and impact
considerations as much as possible across
our investment processes, and climate
change falls within this.
• In particular, our Emerging Market
Sustainable Finance (“EMSF”) strategy
is categorised as Article 8 under the
Sustainable Finance Disclosure Regulation
and is therefore defined as promoting
environmental and social characteristics.
Work in progress: We will assess how our
hedging strategies might be affected by the
transition to a low‑carbon economy.
Page 12 and
Pages 19
and 20
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
34
Record plc
Annual Report 2022
Sustainability continued
Climate action continued
TCFD continued
Risk Management
TCFD
Recommendations
Describe the organisation’s processes
for identifying and assessing
climate‑related risks.
TCFD
Compliance
Compliant
Reference
page1
Page 19
Current status
• Climate risks are primarily identified and
assessed by our Head of Business Risk
and the Sustainability Office working on
an ongoing basis to evaluate any identified
climate‑related risks.
• The risk framework defines risks
qualitatively, with an assessment
of materiality and comparison with
appetite undertaken on a judgement and
collaborative basis.
Describe the organisation’s processes
for managing climate‑related risks
strategy and financial planning.
Compliant
• Once identified and evaluated, strategies
Page 19
for material risks are developed in
collaboration between the Sustainability
Office and the Head of Business Risk.
Compliant
• Climate risks are evaluated within the
Page 19
Group‑wide risk management framework.
The risk framework includes the
consideration of climate risk factors within
traditional risk categories such as strategic,
financial and operational risk.
• Where discretionary decisions are made
by our Investment Management Group,
ESG data informs of additional risks.
• Our EMSF strategy is one product in
particular which integrates climate risk into
the investment process across both fixed
income and currency markets.
Work in progress: We aim to investigate how
we can manage material climate‑related risks
for our hedging strategies.
Page 19
Pages 19
and 20
Describe how processes for
identifying, assessing and managing
climate‑related risks are integrated
into the organisation’s overall risk
management.
Additional recommendations included
in supplemental guidance for asset
managers.
Partially
compliant
1. All page numbers relate to our climate report, available at: recordfg.com
Record plc
Annual Report 2022
35
Sustainability continued
Metrics and Targets
TCFD
Recommendations
Disclose the metrics used by the
organisation to assess climate‑related
risks and opportunities in line with its
strategy and risk management process.
TCFD
Compliance
Partially
compliant
Reference
page1
Page 21
Current status
• Record uses its operational carbon footprint
(Scope 1, 2 and 3 greenhouse gas emissions)
to measure our climate‑related risks and
opportunities.
Work in progress: We will work to quantify the
extent to which our assets/business activities
are vulnerable to transitional and physical
risks, as well as how our assets/revenue align
with climate‑related opportunities.
Disclose Scope 1, Scope 2 and, if
appropriate, Scope 3 greenhouse gas
(“GHG”) emissions, and the related risks.
Compliant
• Our Scope 1, 2 and 3 emissions can be found
Page 21
in our carbon footprint data graphs.
Describe the targets used by the
organisation to manage climate‑
related risks and opportunities and
performance against targets.
Compliant
Additional recommendations included
in supplemental guidance for asset
managers.
Partially
compliant
• We have set ourselves a number of climate‑
related targets to meet by 31 March 2023.
Page 23
• We have set ourselves a target to be net
Page 22
zero by 2050 and this year have published
interim emissions reductions targets for the
year 2030.
Page 22
• We have assessed the category 15 Scope
3 greenhouse gas emissions of the bond
underlay section of our Emerging Market
Sustainable Finance strategy.
Work in progress: We will continue working
in partnership with external independent
investment impact assessors and verifiers to
assess the extent to which we can implement
rules‑based processes to measure the carbon
emissions related to our hedging strategies.
1. All page numbers relate to our climate report, available at: recordfg.com
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
36
Record plc
Annual Report 2022
Sustainability continued
Climate action continued
Streamlined Energy and Carbon Reporting (“SECR”)
and greenhouse gas emissions
The Group seeks to minimise its carbon footprint through
recognising the environmental impact of its activities, reducing
that impact through responsible procurement of goods and
services, and offsetting its remaining carbon emissions. The
Group first assessed its carbon footprint in July 2006, and has
offset its carbon emissions since then through investment in
sustainable development and renewable energy projects.
In the next fiscal year we expect to reduce our location‑based
Scope 2 emissions following the reduction of our office space
in Windsor, which we will do by taking measures to maximise
efficient use of the office space. We expect our Scope 3
emissions to remain below pre‑pandemic levels, and over time
we will see this downward trend continue as we encourage our
employees to engage in more sustainable behaviours at work
and at home.
Methodology
The method used to calculate GHG emissions is the GHG
Protocol Corporate Accounting and Reporting Standard
(revised edition), together with the latest emission factors
from recognised public sources including, but not limited
to, BEIS, the US Energy Information Administration, the US
Environmental Protection Agency and the Intergovernmental
Panel on Climate Change.
Energy efficiency actions taken
2022 saw a significant fall in our Scope 2 carbon emissions,
down 67% in energy consumption and 70% and 100% in
location‑based and market‑based emissions, respectively.
Location‑based emission reductions were as a result of
reduced office use due to home working. Market‑based
emissions dropped to zero over the year as we moved
to purchasing 100% renewable electricity across our UK
operations. Our Scope 3 emissions reduced slightly this year,
remaining low compared to pre‑pandemic years. Maintenance
of the low emissions reflects continued hybrid working
practices and reduced business travel post‑pandemic.
Energy consumption (kWh 000)1,3
FY-22
27
91
FY-21
82
90
Scope 2
Scope 3
Location-based methodology (tonnes of CO2e)1,3
FY-22
6
86
FY-21
19
80
Scope 2
Scope 3
Market-based methodology (tonnes of CO2e)1,3
FY-22
86
FY-21
28
80
Scope 2
Scope 3
Energy and GHG emissions annual % change2,3
Reporting category
Scope 1
Scope 2
Scope 3
Total
Energy
consumption
UK & offshore
Location-based
methodology
UK & offshore
Market-based
methodology
UK & offshore
—
‑67%
1%
-31%
—
—
‑ 70%
‑100%
‑8 %
-7%
‑8%
-21%
Scope 1, 2 & 3 CO2e
intensity ratio:
tonnes CO2e/FTE
1. Scope 1 emissions were zero for the reported years.
2. Scope 1 covers combustion of gas and combustion of fuel for transport purposes. Scope 2 covers purchased electricity. Scope 3 covers business travel in rental cars and
5%
‑10%
employee‑owned vehicles; premises waste, water, and transmission and distribution losses; business travel; outbound deliveries; commuting; other upstream emissions;
and homeworking. The total CO2e intensity ratio is calculated as the total CO2e tonnes divided by total firm FTE.
3. Please note that rounding errors may exist.
UK emissions data relates to the year ended on 31 March 2022.
Please note annual % change was calculated using only comparable activities from the previous reporting year. Scope 3 Other Upstream Emissions was included for the first
time in this reporting period and was not previously included as this is a new reporting category required under the Carbon Neutral Protocol.
Record plc
Annual Report 2022
37
Section 172 Companies Act 2006 – Our stakeholders
Our stakeholders, with whom we maintain
an ongoing dialogue, are detailed below.
We believe that all stakeholders are beneficiaries of
environmentally friendly business practice and socially
responsible investment. Record is therefore committed to
being a company with a culture which places sustainability,
corporate responsibility and community engagement firmly
at the centre of priorities.
Section 172 Companies Act 2006
We set out on pages 38 and 39 our key stakeholder groups,
their material issues and how we engage with them. Each
stakeholder group requires a tailored engagement approach
to foster effective and mutually beneficial relationships.
By understanding our stakeholders, we can factor into
Boardroom discussions the potential impact of our decisions
on each stakeholder group and consider their needs and
concerns, in accordance with Section 172 of the Companies
Act 2006.
This in turn ensures we deliver solutions our clients want
and need, continue to work effectively with our colleagues
and suppliers, comply with regulatory requirements, make
a positive contribution to local communities and achieve
long‑term sustainable returns for our investors.
Acting in a fair and responsible manner is a core element of
our business practice, more information on which can be
found in our separate Sustainability Report.
During the year, the Board made decisions to deliver against
our strategy, whilst considering the different interests of
our stakeholder groups and the impact of key decisions upon
them. The following provides an overview of some of the key
decisions taken and how integral our stakeholders are in the
Board’s decision‑making process:
Interests of clients – decision
• The launch of the Record EM Sustainable Finance Fund
in collaboration with UBS Global Wealth Management in
June 2021.
Interests of employees – decisions
• The opening of a London office.
• An employee engagement survey in January 2022.
Interests of shareholders – decision
• Communication with shareholders on the changes to the
Group remuneration policy proposed at the 2022 AGM.
The duties of the Directors – section 172
Under section 172 of the
Companies Act 2006 a director of
a company must act in the way he
considers, in good faith, would be
most likely to promote the success
of the company for the benefit of
its members as a whole, and in
doing so have regard (amongst
other matters) to:
• The likely consequences of any decision in
the long term
• The interests of the company’s employees
• The need to foster the company’s business
relationships with suppliers, customers and
others
• The impact of the company’s operations
on the community and the environment
• The desirability of the company maintaining
a reputation for high standards of business
conduct
• The need to act fairly towards all members
of the Company
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
38
Record plc
Annual Report 2022
Section 172 Companies Act 2006 – Our stakeholders continued
Clients
We are a client‑led business. Our ethos
is to “Listen” to clients, “Understand”
their investment objectives, and “Deliver”
sustainable solutions.
Shareholders
We rely on the support and engagement of our
shareholders to deliver our strategic objectives
and grow the business.
People
Our people are central to the ongoing success
of the business and we aim to attract, retain,
develop and motivate the right people for
current and future business success.
How we engage
Our operational infrastructure is built around
the specific requirements of our clients,
including systems and controls to reduce
risk and manage each stage of the process as
efficiently as possible.
We build strong and trusted relationships with
clients and collaborate on new developments
and opportunities as they evolve.
Regular review meetings with clients ensure
client requirements are consistently monitored.
Clients receive frequent and regular reports on
market and investment performance.
How we engage
The Group CEO and CFO presented the
full‑year and half‑year results to investors,
both institutional and retail.
The primary means of communicating with
shareholders are through the Annual General
Meeting, the Annual Report and Accounts,
half‑year results and related presentations.
All of these are available on the Company’s
website www.recordfg.com. The website also
contains information on the business of the
Group, corporate governance, all regulatory
announcements, key dates in the financial
calendar and other important shareholder
information.
How we engage
We engage with our employees through
a variety of channels including a Company
intranet, management briefings, employee
engagement surveys and workforce
engagement sessions, e‑mail updates and
Company‑wide presentations by the Group
Chief Executive Officer.
We seek to encourage employees in developing
and advancing their careers, offering assistance
in such forms as study support and the
possibility of secondments to overseas offices.
The Group’s remuneration framework includes
schemes aimed at aligning employees’
interests with those of shareholders by offering
the opportunity to share in business growth
through share ownership.
Their material issues
Our clients’ material interests are in the
performance of Record’s products, a robust
risk framework, transparency, value for
money, maintaining the high levels of service
they receive and the provision of innovative
products which meet their investment
objectives.
2022 highlights and future changes
In line with our clients’ increased appetite
for sustainable investment products, we
launched our EM Sustainable Finance strategy
in June 2021, which aims to invest currency
with impact. Categorised as Article 8 under
the Sustainable Finance Disclosure Regulation,
it is defined as promoting environmental
and social characteristics.
The Record Sustainability Office has provided
the governance structures to incorporate
sustainability across all aspects of our
business, including investment strategy,
corporate responsibility and risk management
for the benefit of clients and all of our
stakeholders.
Their material issues
Our shareholders want Record to ensure it is a
long‑term sustainable business which delivers
attractive returns through share price growth
and regular dividends.
Their material issues
Our people’s material interests relate to
the work balance and physical and cultural
environment provided by Record. They want
to be fairly rewarded for their contribution
and have opportunities for learning, growth
and further development as well as sharing in
business success.
2022 highlights and future changes
The Chair of the Remuneration Committee
contacted institutional shareholders to discuss
the planned changes to the remuneration policy
to be voted on at the AGM in July 2022.
2022 highlights and future changes
An employee engagement survey was run
in January 2022 to obtain feedback from
employees across a number of different topics,
with a high response rate of 86%.
The Company registered with Investor
Meets Company (“IMC”) during the year. IMC
facilitates access to the management of listed
companies for retail investors who would not
normally have the opportunity to hear from the
management team. The CEO and CFO presented
both the final FY‑21 and interim FY‑22 results
over the IMC portal to retail investors during
the year.
Subsequent workforce engagement sessions
discussed the main topics highlighted in the
survey in further detail. Tim Edwards is the
designated Non‑executive Director responsible
for workforce engagement and reports to the
Board on employee viewpoints. The sessions
were run by Tim in small groups and the
topics included technology, communication,
remuneration and career opportunities.
Our Ethnic Diversity Network and Gender
Equality Network have been consolidated into
our Inclusion and Diversity Network to allow
us to better reach, represent and benefit the
diaspora of underrepresented groups within
our organisation. The network has purposely
rebranded with the emphasis of putting
Inclusion first in the name (versus Diversity)
to align with our belief that diversity is a
by‑product of an inclusive culture.
The pandemic highlighted the benefits of
flexible working arrangements for both staff
and the business. As we welcomed employees
back to the office this year, we have done so on
a hybrid working pattern in order to achieve an
appropriate work‑life balance for the longer‑term
benefit of both our employees and the business.
Environment
and community
External suppliers
Regulators
We recognise the responsibility we have
We rely on the use of external suppliers and
As a global business, we seek to have
to the environment, local community and
service providers to supplement the Group’s
transparent and open relationships with our
wider society.
own infrastructure, benefiting from the
expertise these suppliers provide.
regulators around the world. Regulators
provide oversight to ensure the business
is operated within regulatory parameters,
thereby giving valuable assurance to clients
and other stakeholders.
How we engage
How we engage
How we engage
We are proud to support the communities in
We work to ensure that our key suppliers are
We have an experienced Head of Compliance to
which we operate and we have a long history
engaged with our business and that a mutual
manage the compliance function and oversee
of contributing through monetary donations,
understanding and close working relationship
regulatory matters.
gift giving and employee time. Further details
is maintained between us.
can be found in our Sustainability Report
2021/2022.
All material supplier contracts are subject to
of various industry bodies with regulators and
due diligence checks and reviews and include
policymakers as appropriate to ensure that
We engage directly and through membership
We champion responsible investment and
strict service level agreements for all supplies
our business understands and contributes to
corporate social responsibility and lead
of business‑critical services.
evolving regulatory requirements.
Record has a supplier payment policy which
The Audit Committee receives regular
ensures that all invoices are approved and duly
reports from the Head of Compliance which
paid within agreed terms.
cover the Group’s regulatory processes and
procedures and its relationship with regulators.
The reports also outline the material changes
in the regulatory environment in which the
Group operates.
We receive advice and updates on regulatory
matters from both our internal and external
auditors and also our legal advisers.
the way in the development of strategies
integrating ESG and impact in currency
investing. We work with like‑minded partners
to increase and meet the demand for
sustainable investment solutions.
Record has been a signatory to the Principles
for Responsible Investment since June 2018.
We make a positive impact in our community
by addressing societal issues and driving social
progress through our charitable efforts and
volunteering.
Record’s Sustainability Office and Sustainability
Committee ensure a strong focus on
sustainability and ESG factors across all
aspects of our business, including investment
strategy, corporate responsibility and risk
management for the benefit of clients and all
of our stakeholders.
Their material issues
Their material issues
Their material issues
We aim to manage the business in a
Key suppliers wish to develop mutually
Regulators aim to ensure that our business is
manner which minimises our impact on the
beneficial working relationships with growing
run responsibly in the best interests and safety
environment and helps to benefit society.
and successful businesses over the long term.
of our clients and other stakeholders. They
seek to protect the integrity of the financial
systems they supervise and promote fair
competition for the benefit of clients.
2022 highlights and future changes
2022 highlights and future changes
2022 highlights and future changes
Employees helped to raise £18.2k for local
Reviewed payment practices to ensure that
The Group has established a German subsidiary
and national charities during the year.
suppliers and service providers continue to be
and have been informed by BaFin that our
We published our inaugural Climate Report
paid on a timely basis.
application has been approved.
which includes interim science‑based
During the year we published our first Modern
Changes to the regulatory framework for
emissions reductions targets for 2030, our
Slavery Act statement in line with guidelines
investment firms (“IFPR”) were implemented
climate strategy and our integration of climate
under the 2015 Modern Slavery and Human
during the year, including changes to the
risk within our business and investment
Trafficking Act. Whilst not strictly a legal
calculation of the level of regulatory capital
processes.
requirement, we recognise our responsibility
required to be held by the Group.
We have been certified carbon neutral since
2007 and this year have made meaningful
supply chain.
to identify and prevent modern slavery in our
progress in our journey towards net zero by
We aim to introduce a Supplier Code of Conduct
reducing our Scope 2 emissions by becoming
to align our suppliers and service providers
100% renewable across our UK operations.
with our own standards on human rights,
Further details on our focus and actions on
both sustainability and climate can be found in
and ethical practice.
diversity and inclusion, environmental policy
our separate Sustainability and Climate reports
Further details on our focus and actions on
on our website: www.recordfg.com
human rights and modern slavery can be found
in our separate Sustainability and Climate
reports on our website: www.recordfg.com
Record plc
Annual Report 2022
39
Section 172 Companies Act 2006 – Our stakeholders continued
Clients
Shareholders
People
We are a client‑led business. Our ethos
We rely on the support and engagement of our
Our people are central to the ongoing success
is to “Listen” to clients, “Understand”
shareholders to deliver our strategic objectives
of the business and we aim to attract, retain,
their investment objectives, and “Deliver”
and grow the business.
sustainable solutions.
develop and motivate the right people for
current and future business success.
Environment
and community
We recognise the responsibility we have
to the environment, local community and
wider society.
External suppliers
We rely on the use of external suppliers and
service providers to supplement the Group’s
own infrastructure, benefiting from the
expertise these suppliers provide.
How we engage
We work to ensure that our key suppliers are
engaged with our business and that a mutual
understanding and close working relationship
is maintained between us.
All material supplier contracts are subject to
due diligence checks and reviews and include
strict service level agreements for all supplies
of business‑critical services.
Record has a supplier payment policy which
ensures that all invoices are approved and duly
paid within agreed terms.
How we engage
We are proud to support the communities in
which we operate and we have a long history
of contributing through monetary donations,
gift giving and employee time. Further details
can be found in our Sustainability Report
2021/2022.
We champion responsible investment and
corporate social responsibility and lead
the way in the development of strategies
integrating ESG and impact in currency
investing. We work with like‑minded partners
to increase and meet the demand for
sustainable investment solutions.
Record has been a signatory to the Principles
for Responsible Investment since June 2018.
We make a positive impact in our community
by addressing societal issues and driving social
progress through our charitable efforts and
volunteering.
Record’s Sustainability Office and Sustainability
Committee ensure a strong focus on
sustainability and ESG factors across all
aspects of our business, including investment
strategy, corporate responsibility and risk
management for the benefit of clients and all
of our stakeholders.
Regulators
As a global business, we seek to have
transparent and open relationships with our
regulators around the world. Regulators
provide oversight to ensure the business
is operated within regulatory parameters,
thereby giving valuable assurance to clients
and other stakeholders.
How we engage
We have an experienced Head of Compliance to
manage the compliance function and oversee
regulatory matters.
We engage directly and through membership
of various industry bodies with regulators and
policymakers as appropriate to ensure that
our business understands and contributes to
evolving regulatory requirements.
The Audit Committee receives regular
reports from the Head of Compliance which
cover the Group’s regulatory processes and
procedures and its relationship with regulators.
The reports also outline the material changes
in the regulatory environment in which the
Group operates.
We receive advice and updates on regulatory
matters from both our internal and external
auditors and also our legal advisers.
Their material issues
We aim to manage the business in a
manner which minimises our impact on the
environment and helps to benefit society.
Their material issues
Key suppliers wish to develop mutually
beneficial working relationships with growing
and successful businesses over the long term.
Their material issues
Regulators aim to ensure that our business is
run responsibly in the best interests and safety
of our clients and other stakeholders. They
seek to protect the integrity of the financial
systems they supervise and promote fair
competition for the benefit of clients.
2022 highlights and future changes
Employees helped to raise £18.2k for local
and national charities during the year.
We published our inaugural Climate Report
which includes interim science‑based
emissions reductions targets for 2030, our
climate strategy and our integration of climate
risk within our business and investment
processes.
We have been certified carbon neutral since
2007 and this year have made meaningful
progress in our journey towards net zero by
reducing our Scope 2 emissions by becoming
100% renewable across our UK operations.
Further details on our focus and actions on
both sustainability and climate can be found in
our separate Sustainability and Climate reports
on our website: www.recordfg.com
2022 highlights and future changes
Reviewed payment practices to ensure that
suppliers and service providers continue to be
paid on a timely basis.
2022 highlights and future changes
The Group has established a German subsidiary
and have been informed by BaFin that our
application has been approved.
Changes to the regulatory framework for
investment firms (“IFPR”) were implemented
during the year, including changes to the
calculation of the level of regulatory capital
required to be held by the Group.
During the year we published our first Modern
Slavery Act statement in line with guidelines
under the 2015 Modern Slavery and Human
Trafficking Act. Whilst not strictly a legal
requirement, we recognise our responsibility
to identify and prevent modern slavery in our
supply chain.
We aim to introduce a Supplier Code of Conduct
to align our suppliers and service providers
with our own standards on human rights,
diversity and inclusion, environmental policy
and ethical practice.
Further details on our focus and actions on
human rights and modern slavery can be found
in our separate Sustainability and Climate
reports on our website: www.recordfg.com
How we engage
How we engage
How we engage
Our operational infrastructure is built around
The Group CEO and CFO presented the
We engage with our employees through
the specific requirements of our clients,
full‑year and half‑year results to investors,
a variety of channels including a Company
including systems and controls to reduce
both institutional and retail.
risk and manage each stage of the process as
efficiently as possible.
The primary means of communicating with
shareholders are through the Annual General
We build strong and trusted relationships with
Meeting, the Annual Report and Accounts,
clients and collaborate on new developments
half‑year results and related presentations.
intranet, management briefings, employee
engagement surveys and workforce
engagement sessions, e‑mail updates and
Company‑wide presentations by the Group
Chief Executive Officer.
and opportunities as they evolve.
All of these are available on the Company’s
We seek to encourage employees in developing
Regular review meetings with clients ensure
client requirements are consistently monitored.
Clients receive frequent and regular reports on
market and investment performance.
website www.recordfg.com. The website also
and advancing their careers, offering assistance
contains information on the business of the
in such forms as study support and the
Group, corporate governance, all regulatory
possibility of secondments to overseas offices.
announcements, key dates in the financial
calendar and other important shareholder
information.
The Group’s remuneration framework includes
schemes aimed at aligning employees’
interests with those of shareholders by offering
the opportunity to share in business growth
through share ownership.
Their material issues
Their material issues
Their material issues
Our clients’ material interests are in the
Our shareholders want Record to ensure it is a
Our people’s material interests relate to
performance of Record’s products, a robust
long‑term sustainable business which delivers
the work balance and physical and cultural
risk framework, transparency, value for
attractive returns through share price growth
environment provided by Record. They want
money, maintaining the high levels of service
and regular dividends.
they receive and the provision of innovative
products which meet their investment
objectives.
to be fairly rewarded for their contribution
and have opportunities for learning, growth
and further development as well as sharing in
business success.
2022 highlights and future changes
2022 highlights and future changes
2022 highlights and future changes
In line with our clients’ increased appetite
The Chair of the Remuneration Committee
An employee engagement survey was run
for sustainable investment products, we
contacted institutional shareholders to discuss
in January 2022 to obtain feedback from
launched our EM Sustainable Finance strategy
the planned changes to the remuneration policy
employees across a number of different topics,
in June 2021, which aims to invest currency
to be voted on at the AGM in July 2022.
with a high response rate of 86%.
with impact. Categorised as Article 8 under
the Sustainable Finance Disclosure Regulation,
it is defined as promoting environmental
and social characteristics.
The Company registered with Investor
Subsequent workforce engagement sessions
Meets Company (“IMC”) during the year. IMC
discussed the main topics highlighted in the
facilitates access to the management of listed
survey in further detail. Tim Edwards is the
companies for retail investors who would not
designated Non‑executive Director responsible
The Record Sustainability Office has provided
normally have the opportunity to hear from the
for workforce engagement and reports to the
the governance structures to incorporate
management team. The CEO and CFO presented
Board on employee viewpoints. The sessions
sustainability across all aspects of our
both the final FY‑21 and interim FY‑22 results
were run by Tim in small groups and the
business, including investment strategy,
over the IMC portal to retail investors during
topics included technology, communication,
corporate responsibility and risk management
the year.
for the benefit of clients and all of our
stakeholders.
remuneration and career opportunities.
Our Ethnic Diversity Network and Gender
Equality Network have been consolidated into
our Inclusion and Diversity Network to allow
us to better reach, represent and benefit the
diaspora of underrepresented groups within
our organisation. The network has purposely
rebranded with the emphasis of putting
Inclusion first in the name (versus Diversity)
to align with our belief that diversity is a
by‑product of an inclusive culture.
The pandemic highlighted the benefits of
flexible working arrangements for both staff
and the business. As we welcomed employees
back to the office this year, we have done so on
a hybrid working pattern in order to achieve an
appropriate work‑life balance for the longer‑term
benefit of both our employees and the business.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
40
Record plc
Annual Report 2022
Operating review
Growth in AUME has continued during
the year, increasing by $3.0 billion to
$83.1 billion including net inflows of
$2.4 billion.
Product investment performance
Hedging
Our hedging products are predominantly systematic in nature. The effectiveness of each client mandate is assessed regularly
and adjustments are made when necessary in order to respond to changing market conditions or to bring the risk profile of the
hedging mandate in line with the client’s risk tolerance.
Passive Hedging
Record’s enhanced Passive Hedging service aims to reduce the cost of hedging by introducing flexibility into the
implementation of currency hedges without changing the hedge ratio. While the strategy is partly systematic, the episodic
nature of many opportunities exploited by the strategy means it requires a higher level of discretionary oversight than
has historically been associated with Passive Hedging. Global markets have seen steepening interest rate curves from the
end of 2021, which stems from central banks being forced to engage in more hawkish monetary policy as they try to keep
inflationary pressures under control. This has had the effect of introducing a high degree of volatility into short‑term interest
rate markets, from which FX forward pricing is determined. The heightened volatility has increased the opportunity set for
our clients’ portfolios, and as such we positioned client portfolios appropriately to add value from this volatility, achieving
positive performance.
The table below shows the total value added relative to a fixed‑tenor benchmark for an enhanced Passive Hedging programme
for a representative account. The base currency used is Swiss francs.
Value added by enhanced Passive Hedging programme relative to a fixed‑tenor benchmark
Return for
year to
31 March 2022
Return
since
inception1
0.13% 0.09% p.a.
Dynamic Hedging
The performance of our Dynamic Hedging product depends on how the foreign currencies change in value relative to the base
currency of our client. During the year, US investors saw losses from currency on international assets when valuing positions
in US dollars, as the US dollar appreciated against the majority of G10 currencies. Record’s Dynamic Hedging product adjusted
hedge ratios in line with US dollar fluctuations, reducing hedging losses when the US dollar was weaker and helping to protect
against currency losses when the US dollar was episodically stronger – as a result, Dynamic Hedging performance was
positive, partially offsetting currency losses on the underlying foreign currency exposure.
The performance of the Dynamic Hedging programmes hedging US dollar exposures into other currencies was opposing and
reflective of the mandates’ specific objectives, benchmarks and inception dates in the reported period.
Value added by Dynamic Hedging programme for a representative account
Return for
year to
31 March 2022
Return
since
inception2
0.60% 0.46% p.a.
1. Since inception in October 2014.
2. Since inception in April 2009.
Record plc
Annual Report 2022
41
Operating review
Currency for Return
Sustainable investing
Record EM Sustainable Finance (“EMSF”) Fund
The Record EMSF Fund USD class A returned ‑0.94% from inception (28 June 2021) to 31 March 2022, outperforming the
relevant emerging market local debt benchmark by 11.13% (see table below).
The currency portfolio was a net positive contributor to fund returns, although performance was mixed as the escalation of
the Russia‑Ukraine conflict in calendar Q1‑22 drained market sentiment, reflecting the degree of regional interdependence
and highlighting the fragility of cross‑border banking and trade flows. Pockets of tumult emerged as investors weighed the
aftermath and set out to gauge the extent of spillovers across the global supply chain.
The positive performance of the currency overlay was led by the notable performance of the diversified hard currency funding
basket (particularly JPY and GBP shorts) and long exposures in Latin American emerging market currencies, given their
geographical insulation from the conflict, net positive exposure to commodity prices, and the relatively aggressive tightening
cycles embarked on by regional central banks. Discretionary management proved prudent, as timely intervention in the period
across a number of currency positions delivered a net contribution to returns, such as in the fallout of the CBRT’s monetary
unorthodoxy, and Russia’s invasion of Ukraine where rouble positions had already been closed. Within the frontier universe,
the Ukrainian hryvnia, Egyptian pound, Ghanaian cedi and Kazakhstan tenge detracted materially from returns.
Rising US treasury yields, amid stubbornly high inflation prints and a hawkish Fed backdrop, posed broad‑based headwinds
for external emerging market debt investors in the period; the USD bond portfolio underlay resultantly detracted from fund
performance as market conditions remained challenging for investors. The fund did, however, benefit from a lower duration
positioning versus the benchmark, cushioning downside sensitivity as yields rallied.
The table below shows the performance of the EMSF Fund USD class A and the relevant benchmark, being the JP Morgan
GBI‑EM Global Diversified. The performance is since inception of the EMSF Fund on 28 June 2021 to 31 March 2022.
EMSF Fund USD Share Class
JP Morgan GBI‑EM Global Diversified
Return since
inception
(0.94%)
(12.07%)
Currency Multi-Strategy
Record’s Currency Multi‑Strategy product combines a number of diversified return streams, which include:
• Forward Rate Bias (“FRB”, also known as Carry) and Emerging Market strategies which are founded on market risk premia
and as such perform more strongly in “risk on” environments; and
• Momentum, Value and Range Trading strategies which are more behavioural in nature, and as a result are less
risk‑sensitive.
Record’s Multi‑Strategy mandates delivered positive overall performance over the year which was driven by the
outperformance in FRB and EM strategies given their positive correlation to sentiment whilst heterogeneity in DM central
bank rate normalisation also provided conducive DM carry opportunities. Positive vaccine news supported the global growth
outlook and the mitigation of negative tail risk scenarios around a prolonged recession, which enticed inflows into EM and
risk‑on DM currencies. Intervention by portfolio managers in the factor investing process on the back of major idiosyncratic
events including the Russia‑Ukraine conflict offered significant protection to strategy performance. The long‑only EM module
within the Currency Multi‑Strategy was replaced with a long‑short EM strategy at the end of February, reflecting the latest
in‑house thinking on Currency for Return investing in EM FX.
Returns
Record Multi‑Strategy composite1
Return for
12 months to
31 March 2022
%
Return since
inception
% p.a.
Volatility since
inception
% p.a.
0.58%
0.83%
3.08%
1. Record Multi‑Strategy composite is since inception in July 2012, showing excess returns data gross of fees in USD base, and scaled to a 4% volatility target.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
42
Record plc
Annual Report 2022
Operating review continued
Product investment performance continued
Currency for Return continued
Scaling
The Multi‑Strategy product allows clients to select the level of exposure they desire in their currency programmes by
selecting the required level of scaling and/or the volatility target.
It should be emphasised that in this case “scaling” refers to the multiple of the aggregate notional value of forward contracts
in the currency programme to the mandate size. This is limited by the willingness of counterparty banks to take exposure to
the client. The AUME of those mandates where scaling or a volatility target is selected is represented in Record’s AUME at the
scaled value of the mandate, as opposed to the mandate size.
AUME development
AUME expressed in US dollar terms finished the year at $83.1 billion, an increase of 4% (2021: $80.1 billion). When expressed in
sterling, AUME increased by 9% to £63.1 billion (2021: £58.1 billion).
AUME development bridge – year to 31 March 2022 ($bn)
90
85
80
75
70
80.1
AUME at
1 April
2021
2.4
0.3
0.3
83.1
Net flows
Markets
FX effects
and scaling
adjustments
AUME
at 31 March
2022
AUME movements
Passive Hedging AUME increased by 2% to $62.8 billion (2021: $61.5 billion) driven by net inflows of $1.1 billion for the year from
new and existing clients. Further positive impacts arose from market movements ($0.6 billion) which were partially offset by
negative movements in exchange rates ($0.4 billion).
Dynamic Hedging AUME increased by 14%, ending the year at $10.6 billion (2021: $9.3 billion). The majority of the $1.3 billion
increase is attributable to net inflows ($1.4 billion), of which $0.6 billion were from new clients with the remaining $0.8 billion
from existing clients. Market movements reduced AUME slightly by $0.1 billion.
Currency for Return AUME increased to $5.0 billion (2021: $3.9 billion) by the end of the year, with the launch of the Record
EMSF Fund during the year contributing $1.2 billion of inflows, offset by outflows of $0.9 billion from one client exiting the
Multi‑Strategy product. There were positive movements both in exchange rates of $0.5 billion and market movements of
$0.3 billion.
Multi‑product AUME decreased to $4.5 billion (2021: $5.2 billion). Net outflows of $0.5 billion were driven primarily by the
reversal of $0.4 billion of inflow from a tactical bespoke mandate announced in QE 31 December 2020 which had been expected
to be temporary in nature. There were negative market movements of $0.2 billion.
Market performance
Record’s AUME is affected by movements in market levels because substantially all the Passive and Dynamic Hedging, and
some of the Multi‑product mandates, are linked to equity, fixed income and other market levels. Market movements increased
AUME by $0.3 billion in the year ended 31 March 2022 (2021: increase of $8.4 billion).
Further detail on the composition of assets underlying our Hedging and Multi‑product mandates is provided on page 43
in an attempt to illustrate more clearly the impact of equity and fixed income market movements on these mandate sizes.
Record plc
Annual Report 2022
43
Operating review continued
AUME composition by underlying asset class as at 31 March 2022
Passive Hedging
Dynamic Hedging
Multi‑product
Equity
%
26%
91%
—%
Fixed
income
%
32%
—%
—%
Other
%
42%
9%
100%
Forex
Approximately 81% of the Group’s AUME is non‑US dollar denominated. Therefore, foreign exchange movements may have an
impact on AUME when expressing non‑US dollar denominated AUME in US dollars. Foreign exchange movements increased
AUME by $0.3 billion over the year. This movement does not have an equivalent impact on the sterling value of fee income.
At 31 March 2022, the split of AUME by base currency was 12% in sterling, 43% in Swiss francs, 19% in US dollars, 15% in euros
and 11% in other currencies.
AUME composition by base currency
Base currency
Sterling
US dollar
Swiss franc
Euro
Australian dollar
Canadian dollar
Swedish krona
Product mix
AUME composition by product
Passive Hedging
Dynamic Hedging
Currency for Return
Multi‑product
Cash
Total
31 March 2022
31 March 2021
GBP 7.6bn
GBP 6.7bn
USD 17.6bn USD 16.2bn
CHF 33.1bn
CHF 35.2bn
EUR 11.4bn
EUR 9.9bn
AUD 2.9bn
AUD 2.1bn
CAD 6.1bn
CAD 4.8bn
SEK 0.0bn
SEK 0.4bn
31 March 2022
31 March 2021
US $bn
62.8
10.6
5.0
4.5
0.2
83.1
%
76%
13%
6%
5%
—%
US $bn
61.5
9.3
3.9
5.2
0.2
%
77%
12%
5%
6%
—%
100%
80.1
100%
Notwithstanding the product mix remaining broadly constant year on year, the growth and inflows into both Dynamic Hedging
and the newly launched Record EMSF Fund both represent higher revenue‑margin AUME which continues to diversify the
Group’s revenue streams and to dilute historical concentration on the lower revenue‑margin Passive Hedging product.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
44
Record plc
Annual Report 2022
Financial review
Two years into the
Group’s change in
strategic direction,
the financial benefits
are now starting to be
seen, with material
increases in revenue,
profits, operating margin
and earnings.
Steve Cullen
Chief Financial Officer
Overview
The Group has continued to implement its change in strategy
whilst building on its existing strong core of hedging
products. Further inflows into Dynamic Hedging this year
plus diversification into new and innovative products with
higher revenue‑margins have both served to drive the
increase in revenue and operating profit. We continue to
invest in the modernisation of our systems and to provide
additional resources required for the running of new
products and services, which has inevitably led to an increase
in our running costs. Whilst we expect to see a continuation
of this increase in the current financial year (FY‑23), not
least due to high inflationary pressures, we anticipate
seeing growth in our operating margin as the new products
gain further traction alongside the efficiencies and new
opportunities arising from investing in the modernisation our
systems and processes.
The Group remains independent and profitable, supported by
its strong and liquid balance sheet.
Revenues have grown to £35.1 million (2021: £25.4 million)
supported by a 37% increase in management fees. Operating
profit for the year increased by 77% to £10.8 million (2021:
£6.1 million) and the operating profit margin increased to
31% (2021: 24%) with a 76% increase in profit before tax to
£10.9 million (2021: £6.2 million). The increase in operating
profit reflects the change in product mix as a result of the
inflows into Record’s higher revenue‑margin products, and
to a lesser extent the efficiencies starting to emerge from
the investments made in the modernisation of the Group’s
technology.
Record plc
Annual Report 2022
45
Financial review
Revenue
Management fees
£35.1m +38%
£34.1m 37%
FY‑21: £25.4m
FY‑21: £24.9m
Profit and loss (£m)
Revenue
Cost of sales
Gross profit
Personnel (excluding GPS)
Non‑personnel costs
Other income or expense
Total expenditure (excluding GPS)
GPS
Operating profit
Operating profit margin
Net interest received
Profit before tax
Tax
Profit after tax
2022
35.1
(0.2)
34.9
(10.8)
(7.2)
(0.4)
(18.4)
(5.7)
10.8
31%
0.1
10.9
(2.3)
8.6
2021
25.4
(0.4)
25.0
(10.3)
(5.4)
—
(15.7)
(3.2)
6.1
24%
0.1
6.2
(0.8)
5.4
Revenue
Record’s revenue derives from the provision of currency and derivative management services, fees for which can be charged
through management fee only or management plus performance fee structures, which are available across Record’s product
range. Management fee only mandates are charged based upon the AUME of the product, and management plus performance
fee structures include a lower percentage fee applied to AUME, and a proportional share of the specific product performance
measured over a defined period.
Management fees are typically charged on a quarterly basis, although Record may charge fees monthly for some of its larger
clients. Performance fees can be charged on quarterly, six‑monthly or annual performance periods on the basis agreed with
the particular client.
Management fees earned during the year increased by 37% to £34.1 million (2021: £24.9 million) driven predominantly by
inflows into higher revenue‑margin products, with the launch of the Record EM Sustainable Finance Fund in June 2021 under
Currency for Return, and the continuation of the growth seen in the latter part of FY‑21 in Dynamic Hedging. Revenues
increased in the second half by 12% from £16.3 million to £18.3 million (ignoring performance fees).
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
46
Record plc
Annual Report 2022
Financial review continued
Revenue continued
Revenue analysis (£m)
Management fees
Passive Hedging
Dynamic Hedging
Currency for Return
Multi‑product
Total management fees
Performance fees
Other currency services income
Total revenue
Year
ended
31 Mar
2022
11.8
10.0
5.5
6.8
34.1
0.5
0.5
35.1
Year
ended
31 Mar
2021
11.4
5.6
2.0
5.9
24.9
0.1
0.4
25.4
Management fees
Passive Hedging management fees increased by 3% to
£11.8 million for the year (2021: £11.4 million) predominantly
linked to the net inflows of $1.1 billion in the year. Whilst
Passive Hedging commands a significantly lower average
fee rate than Record’s other products, it continues to provide
a robust and valuable revenue stream from a long‑standing
client base which itself provides potential synergies to
the Group in the form of future partnerships and product
innovation.
Dynamic Hedging management fees increased by 78% to
£10.0 million (2021: £5.6 million) as a result of the full‑year
impact of the $6.1 billion of inflows seen in the second half
of FY‑21, combined with the total net inflows of $1.4 billion
in FY‑22 from new and existing clients.
Management fees from Currency for Return mandates
increased 175% to £5.5 million (2021: £2.0 million).
The successful launch of the Record EM Sustainable Finance
Fund in June 2021 added $1.2 billion of AUME, which attracts
significantly higher fee rates than Record’s historical
Currency for Return products. This new and innovative
product has resulted in a material increase in Currency for
Return revenue, and has more than offset the outflow of
$0.9 billion from the Multi‑Strategy product in the third
quarter of the year.
Multi‑product management fees increased by 15% to
£6.8 million (2021: £5.9 million) as a result of the full‑year
impact of $1.0 billion of net inflows seen in the second half of
last year. However, net outflows of $0.5 billion in the second
half (including $0.3 billion from a bespoke tactical mandate of
a temporary nature) are expected to reduce revenues slightly
in the current year (FY‑23).
Performance fees
Performance fees are derived from a combination of
hedging and return‑seeking products. Our Currency for
Return and enhanced Passive Hedging products gradually
made up lost ground during the year versus previous
high water marks, especially towards the end of the year
which saw opportunities arising from increases to interest
rate differentials as a result of changes to central banks’
monetary policies, and which we anticipate may provide
further opportunities in the current year (FY‑23).
Aggregate performance fees of £0.5 million were earned
during the year (2021: £0.1 million).
Other currency services income
Other currency services income totalled £0.5 million
(2021: £0.4 million) and consists of fees from ancillary
currency management services including collateral
management, signal hedging and tactical execution
services. Fees charged for these ancillary services are
not linked to AUME.
Record plc
Annual Report 2022
47
Financial review continued
Expenditure
Cost of sales
Cost of sales decreased to £0.2 million from £0.4 million
in FY‑21 and comprises referral fees and costs in relation to
the Record Umbrella Fund, which was closed during the year.
Operating expenditure
The Group operating expenditure (excluding variable
remuneration and other expenses) increased by 15% to
£18.0 million for the year (2021: £15.7 million).
Average employee numbers for the year remained broadly
constant, notwithstanding the changes made linked to the
succession plans of the business. Consequently, growth in
personnel costs of 5% to £10.8 million (2021: £10.3 million)
reflects salary increases linked to internal promotions and
some costs associated with restructuring.
Non‑personnel costs increased by 33% during the year to
£7.2 million (2021: £5.4 million). The Group has continued
to invest in technology and systems to support the growth
and modernisation required under the change in strategy,
including additional associated running costs, for example
significant new data requirements and office space in London.
The Group remains conscious of the need for good cost
control balanced with ensuring the business is appropriately
resourced to achieve its strategic goals of growth,
modernisation and succession. However, it is anticipated
that inflationary pressures in the current environment will
inevitably lead to an increase in its cost base in the current
year (FY‑23).
Operating profit and margin
Group operating profit increased by 77% to £10.8 million
(2021: £6.1 million) and the Group operating margin increased
to 31% (2021: 24%). As expected, the decrease in the Group’s
operating margin to 24% last year proved temporary during
its transitional year and has since rebounded as the inflows
into new and existing products has changed the revenue mix
towards higher revenue‑margin products in line with the
strategic priority of diversification.
Cash flow
The Group consolidated statement of cash flows is shown
on page 109 of the financial statements.
The Group’s year‑end cash and cash equivalents stood at
£3.3 million (2021: £6.8 million) and the total assets managed
as cash were £17.3 million (2021: £19.8 million). The cash
generated from operating activities before tax increased
by 55% to £12.7 million (2021: £8.2 million). During the
year, taxation of £1.4 million was paid (2021: £1.4 million)
and £6.5 million was paid in dividends (2021: £5.3 million).
The Group spent £4.5 million (2021: £1.8 million) on the
purchase of its own shares for the EBT to set against the
future vesting of share options.
At the year end, the Group held money market instruments
with maturities between three and twelve months worth
£13.9 million (2021: £12.9 million). These instruments are
managed as cash by the Group but are not classified as cash
under IFRS rules (see note 18 of the financial statements for
more details).
Other expenses were £0.4 million for the year (2021: income
of £41k) and represent net losses/gains made on derivative
financial instruments employed by the Group’s seed funds,
hedging activities and other FX adjustments or revaluations.
Dividends
An interim ordinary dividend of 1.80 pence per share (2021:
1.15 pence) was paid to shareholders on 30 December 2021,
equivalent to £3.4 million.
Group Profit Share (“GPS”) Scheme
The GPS pool has increased by 78% to £5.7 million (2021:
£3.2 million) in line with the 77% increase in operating profit
for the year. The GPS pool has been calculated at 34% of
pre‑GPS operating profit.
Further information on variable remuneration can be found
in the Remuneration report starting on page 76.
As disclosed in the Chairman’s statement on page 4,
the Board is recommending a final ordinary dividend of 1.80
pence per share, equivalent to £3.4 million, taking the overall
ordinary dividend for the financial year to 3.60 pence per
share. Simultaneously, the Board is also paying a special
dividend of 0.92 pence equivalent to £1.8 million, making the
total dividend in respect of the year ending 31 March 2022 of
£8.6 million equivalent to 100% of total earnings.
The total ordinary and special dividends paid per share in
respect of the prior year ended 31 March 2021 were 2.30
pence and 0.45 pence respectively, equivalent to total
dividends of £5.3 million and representing 100% of total
earnings per share of 2.75 pence.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
48
Record plc
Annual Report 2022
Financial review continued
Financial stability and capital management
The Group’s balance sheet is strong and liquid with total
net assets of £25.9 million at the end of the year, including
current assets managed as cash totalling £17.3 million.
The cash generated by the business has increased in line
with the rise in profitability, with net cash inflows from
operating activities after tax of £11.4 million for the year
(2021: £6.8 million). For further information on cash flows,
see the consolidated statement of cash flows on page 109
of the financial statements.
Under the Board’s capital and dividend policies, the Group
can pay up to a maximum of 100% of earnings for that
financial year, thereby ensuring the continued strength of
its balance sheet.
To this end, the Group maintains a financial model to assist it
in forecasting future capital requirements over a three‑year
cycle under various scenarios and monitors the capital and
liquidity positions of the Group on an ongoing and frequent
basis. The Group has no debt.
Record Currency Management Limited (“RCML”) is a UK MiFID
investment firm authorised and regulated by the Financial
Conduct Authority (“FCA”) registered as an Investment
Adviser with the SEC and as a Commodity Trading Adviser
with the CFTC, and is a wholly owned subsidiary of Record
plc. Both RCML and the Group submit regular capital
adequacy returns to the FCA, and held significant surplus
capital resources relative to the regulatory financial resource
requirement throughout the year.
The Board has concluded that the Group is adequately
capitalised both to continue its operations effectively and
to meet regulatory requirements, due to the size and liquidity
of balance sheet resources maintained by the Group.
The Group held regulatory capital resources based on the
audited financial statements as at 31 March as follows:
Regulatory capital resources (£m)
Core Tier 1 capital
Deductions: intangible assets
Regulatory capital resources
2022
25.9
(0.6)
25.3
2021
26.8
(0.4)
26.4
Steve Cullen
Chief Financial Officer
20 June 2022
Cautionary statement
This Annual Report contains certain forward‑looking
statements with respect to the financial condition, results,
operations and business of Record. These statements
involve risk and uncertainty because they relate to events
and depend upon circumstances that will occur in the future.
There are a number of factors that could cause actual results
or developments to differ materially from those expressed or
implied in this Annual Report. Nothing in this Annual Report
should be construed as a profit forecast.
Record plc
Annual Report 2022
49
Risk management
Record adopts a unified approach to risk
management which is fully embedded
across all areas of the business.
The Group Board has ultimate responsibility for risk and
the oversight of the risk management process within
the business. Recognising that risk is inherent in all of
the Group’s business dealings, and in the markets and
instruments in which the Group operates, it places a high
priority on ensuring an integrated approach and a strong risk
management culture is embedded throughout the Group,
with accountability at all levels within the business. Effective
risk management and strong internal controls are integral
to the Group’s business model and are reflected in the risk
management framework adopted within the business.
Risk management framework
Risk appetite
As part of its responsibility for the oversight of the risk
management process, the Board determines its appetite for
all significant risk categories identified across the business.
This defines the level of risk it is willing for the business to
take to support its strategic and business objectives and
encourages an appropriate balance between risk and benefit
in a controlled and regulatory compliant context, taking into
account the interests of clients, our people and shareholders
as well as any capital or other regulatory requirements.
The Group maintains a risk register, which specifies each risk
appetite with independent and ongoing assessment of the
level of risk performed by the Head of Business Risk.
The Board reviews and considers the principal and emerging
risks and corresponding risk appetites on a regular and
ongoing basis in light of its strategic plans, and changes in
both the business and regulatory environment. The Board
currently considers the following significant risk categories in
determining the risk appetite of the Group:
Strategic
Operational
Systems
Investment
People
Each of these are outlined on pages 52 to 54.
Oversight
Oversight of the risk management framework is delegated
by the Board to the Head of Business Risk.
The Board provides oversight and independent challenge in
relation to internal controls, risk management systems and
procedures, and external financial reporting.
The Board of Record Currency Management Limited, being
the regulated entity and main trading subsidiary within
the Group, is the delegated decision‑making body for the
day‑to‑day operation of the business and includes the
executive Board members of Record plc and other senior
personnel within the business.
Risk management framework – overview
Record plc Board
RCML Board
Audit Committee
Investment Committee
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
50
Record plc
Annual Report 2022
Risk management continued
Oversight continued
The Board has delegated authority to the Investment
Committee to approve changes to any of the Group’s
investment processes and to establish and maintain policies
for these processes. The Investment Committee’s members
are listed on page 65. Investment Committee approval is
required prior to implementation of any new or amended
investment process or product.
During the year, the Group added further resource and split
the previous Compliance and Risk function into two separate
and distinct business units. Consequently, the separate
Compliance and Risk functions now provide a more focused
approach to the day‑to‑day management of these important
control activities within the Group, as well as giving further
scope to expand such activity in line with the Group’s
growth trajectory and changes in the business environment.
As of January 2022, the Group delegates risk management
processes previously delegated to the Risk Management
Committee to the Business Risk function managed by
the Head of Business Risk, with risk reports and updates
presented directly to the plc Board.
Lines of defence
The Record culture is one of integrity and accountability;
core values that are embedded into the control environment
surrounding all areas of the business.
The overall risk management framework is underpinned by
three lines of defence and is overseen by the Board.
Within this framework, the first line of defence provides
management assurance and rests with line managers
within their specific departments and with senior managers
responsible for the implementation and maintenance of
higher‑level controls to aim to ensure adherence to quality
standards and regulatory requirements.
Functions such as Front Office Risk Management, Compliance,
Business Risk and Legal provide the second line of defence
through the drafting, implementation and monitoring of
policies and procedures to align with best practice, to
ensure compliance and to provide assurance and oversight
for the Board.
The third line of defence is performed by internal audit,
which provides independent assurance on the adequacy
and effectiveness of the Group’s risk management, control
and governance processes, providing recommendations to
improve the control environment. Internal audit is provided
by Deloitte LLP (“Deloitte”).
External independent assurance for shareholders is achieved
by the Group commissioning RSM UK Risk Assurance Services
LLP (“RSM”), an independent third party, to perform the
annual service auditor’s report in respect of Record Currency
Management Limited under both the International Standard
on Assurance Engagement (“ISAE”) 3402 and the American
Institute of Certified Public Accountants Attestation Standard
AT‑C Section 320 (“AT‑C 320”). In performing this work, RSM
reports its opinion on the description of internal controls
with respect to the investment management and information
technology activities, and the operating effectiveness of
specific controls for the period 1 April to 31 March, in line with
the Group’s financial year.
The Group considers the strong capital buffer retained
under the capital and dividend policy provides an effective
additional line of defence in terms of mitigation when
considering its risks.
External independent assurance activity
ISAE 3402 and AT‑C 320 service auditor’s report on internal controls (RSM)
Embedded culture of integrity and accountability
1st line of defence:
2nd line of defence:
3rd line of defence:
Business operations and support
Control and oversight functions
Internal audit
(independent assurance – Deloitte)
Record plc
Annual Report 2022
51
Risk management continued
Covid-19
As a business, we continue to adapt to a world changed by
the impact of the covid‑19 pandemic. Our employees were
able to show great resilience and the ability to adapt fairly
seamlessly to working from home. As we return to the office,
we were mindful of allowing greater flexibility and choice for
employees to work from home whilst seeking to retain the
benefits, such as better opportunities for collaboration and
training, delivered through having physical presence in the
office. With this in mind, we have adopted a hybrid working
policy comprising “core” in‑person workdays alongside a
more flexible choice of where and how to work on non‑core
days, dependent on the requirements of individual business
units. Whilst society is learning to “live with” the virus given
wide vaccination coverage and milder variants currently in
circulation, we continue to monitor the risk of a substantial
re‑emergence and will adapt again if necessary.
Ukraine
We have been mindful from an early stage of the risks posed
to the business by the conflict in Ukraine. We continue to
closely monitor the ongoing situation, adapt to the changing
circumstances and to consider the best interests of our
chosen partners based in Ukraine.
The risks considered and addressed can be summarised as
follows:
• the impact on the delivery of IT projects linked the Group’s
external consulting partners being based in Ukraine;
• global recognition of the increased likelihood of
cyber‑attacks; and
• our products which include investments in RUB
(Russia rouble) and UAH (Ukraine hryvnia).
We have so far anticipated and successfully mitigated
these risks. For example: for 1) we pre‑emptively worked
with our IT partners to ensure Ukraine‑based staff could
continue to work safely and without interruption; for 2) the
Systems teams have increased phishing tests as we expect
this to be the most likely means of any attempted attack; for
3) the Investment team gradually closed out all exposures
ahead of 24 February 2022.
Emerging risks
We consider emerging risks in the context of known risks
which could become more likely to materialise, or external
shocks such as natural disasters and pandemics, geopolitics,
disruption to financial markets and business infrastructure
and changes or trends in the competitive landscape. The
Board, management and Head of Business Risk monitor
emerging risks by including these in the ongoing review of
risks performed through the risk management framework.
Top risks to the business
The following section shows the Board’s assessment of
the principal and emerging risks faced by the business. The
trend arrows indicate the perceived increase or decrease in
risk posed to the business following review by the Board and
the Head of Business Risk. These risks fall into a number of
distinct categories and the means to mitigate them are both
diverse and relevant to the nature of the risk concerned.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
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Record plc
Annual Report 2022
Risk management continued
Strategic risks
Our top two strategic risks are concentration and competitive
threats. We consider both of these to be “high” risk and, while
we accept these as a fact of doing business, a key pillar of the
CEO’s strategy is to mitigate these through diversification.
Other notable strategic risks are delivery of strategy,
regulatory trends, product innovation, third‑party products
and exogenous.
Risk
Link to strategy
Trend
Description
Concentration
Diversification
Competitive threats
Delivery of strategy
Regulatory trends
Product innovation
Third‑party products
Exogenous
Diversification
Modernisation
Diversification
Modernisation
Succession
Diversification
Diversification
Modernisation
Diversification
Diversification
Modernisation
Our clearest concentration risk comes through our historical
reliance on currency hedging (both passive and active).
Despite its acceptance as part of risk appetite, this risk has
reduced during the year with the change in product mix
through the successful development and marketing of new
products and strategies.
Asset management and currency are competitive industries,
and our business is exposed to competitive threats arising
from disruptive innovators and entrants, and consistent
pressure on fees. Notwithstanding the high barriers to entry
in our industry, our continued focus on the highest levels
of client service alongside our ability to tailor our service
offerings to fit specific client demands and our investment in
technology and innovation have served us well over 40 years
and will continue to do so.
We continue to successfully execute the CEO’s strategy –
we have increased revenue through both traditional and
new products, and made strides in introducing technology to
streamline a number of operational processes and have put
into action a plan for generational change.
We are susceptible to adverse regulatory trends in our core
markets. While we cannot control the likelihood, we have a
strong track record of working closely with our clients during
periods of regulatory transition (e.g. EMIR, Brexit, IFPR).
Separate to concentration and competitive threats, as with
any business we are exposed to the risks that our products
no longer fill a market need. Our strong client relationships
and product diversification help to mitigate this risk.
We continue to develop relationships to combine our
expertise with that of our preferred partners and third‑party
strategies. Along with the opportunity, we embrace
some risk that such strategies could underperform and
cause reputational damage. We mitigate this risk through
a thorough and robust due diligence process we have
reinforced our onboarding process.
We are mindful of the risks to the business from an
inflationary backdrop, for example through increased
operating costs, as well as the risk to asset prices that would
directly impact revenues, although this has proved to be
minimal through the impact of the pandemic.
Record plc
Annual Report 2022
53
Risk management continued
Operational risks
Our clients pay us fees to undertake high operational risk on
their behalf given the trading sizes and volumes we execute.
We embrace this risk, recognising it as a principal risk to
the business reflected in our bespoke business model and
risk framework, which is designed to mitigate this risk to
an acceptable level. We operate within our risk appetites
given our robust control framework and long‑standing and
experienced operational teams. In line with the strategy
to plan for generational change, several new heads of
department have been appointed using internal promotions,
thereby ensuring the knowledge and familiarity required to
run bespoke mandates remains in the business and these
operational risks continue to run within an acceptable
tolerance level aligned with the Board’s risk appetite.
Our biggest operational risks are trade configuration, the
responsibility of the Portfolio Implementation team, and
trade execution, undertaken by our Trading team. Other
notable risks include accuracy of market and portfolio data
(on which we trade), settlement risk (while we do not trade
on our own account, risk that we make a mistake with a
payment instruction), and reporting errors.
Risk
Link to strategy
Trend
Description
Trade configuration
and execution
Modernisation
Configuring a trade with the wrong currency or in the wrong
direction would expose us to market risk, as we make good
any trade errors that would result in a cost to the client. To
mitigate this risk, trades are configured independently and
then cross‑checked while our Front Office Risk team conduct
pre and post‑trade checks. The further introduction of
technological solutions will increase efficiency and reduce
risk as we continue to broaden our products and services.
System risks
Along with all businesses in our sector, we are reliant on a
range of in‑house and third‑party systems to deliver our
services, and all of these are susceptible to the risk of having
downtime, bugs, redundancy, integration issues and, of
course, cyber attacks.
Notwithstanding our robust systems and mitigating controls,
we nonetheless maintain a business continuity plan and
disaster recovery site in order to continue to run the business
should material disruption occur. These contingencies are
regularly tested.
Risk
Link to strategy
Trend
Description
Cyber and
Data Security
Modernisation
Cyber risk represents the risk of loss from cybercrime or the
malicious disruption to networks through theft of data or
corruption of information. The Group has established cyber
security programmes which are continuously reviewed and
adjusted to keep pace with regulatory, legislative and cyber
threat landscapes, the latter heightened from the Group now
operating across various locations and more recently as a
result of the war in Ukraine. Record Group did not experience
any material client or operational impact nor any data
breaches in the year.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
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Record plc
Annual Report 2022
Risk management continued
Investment risks
Any asset manager must embrace the risk of product
underperformance, whether against their benchmarks or
indeed in absolute terms; we are no different. This is our key
investment risk.
Investment risks also cover the research process and any
potential impact on product development, which we see as
low risk given our highly qualified and experienced research
colleagues, a rigorous review process and strict scrutiny by
the Investment Committee for all product developments.
Risk
Link to strategy
Trend
Description
Product
underperformance
Diversification
Market liquidity
Modernisation
We are increasingly exposed to emerging markets and their
inherent risks, given the geopolitical environment as well as
our activity in this space. We expect this risk to increase as
we grow this part of the business.
Market liquidity is another risk of doing business and one
that asset managers must embrace. That said, we mitigate
this risk through extensive access to, and long‑standing
relationships with, liquidity sources, and have successfully
navigated recent liquidity events such as covid‑19, Brexit and
the SNB decision to stop supporting the Euro‑Swiss franc
floor. We see this as a core competitive advantage.
People risks
People are our biggest asset and, as such, present various
risks. We have worked hard to mitigate both key person and
succession risks over the previous twelve months; indeed,
succession planning is a key focus of the Board.
Risk
Link to strategy
Trend
Description
Key person
and succession
Succession
Talent acquisition
and retention
Succession
The Group has been in business for almost 40 years and was
previously vulnerable to key person risk in the executive,
operational and investment teams. As we continue to execute
the CEO’s strategy by planning for generational change and
promoting from within, this key person and succession risk
posed to the business becomes further diluted.
The inflationary environment has forced many firms,
including ours, to consider risks to talent acquisition and
retention. While there has been some turnover and internal
promotions to key operational roles, we continue to
successfully attract talent into all areas of the business.
We also monitor risks such as conduct and conflicts of
interest, as well as staff engagement and wellbeing. Staff
wellbeing was a focal point during the Delta and Omicron
peaks, given the risks to multiple team members being sick
and the knock‑on effects of critical functions; as many staff
have worked in other departments, we are able to rely on
cross‑department experience should we need to.
Record plc
Annual Report 2022
55
Viability statement
In accordance with the UK Corporate Governance Code,
the Directors have performed a robust assessment of the
viability of the Group considering the business model, the
Group’s expected financial position, Board strategy and risk
appetite, the Group’s solvency and liquidity and its principal
risks. Based on this assessment, the Directors have a current
and reasonable expectation that the Group will continue
to operate and meet its liabilities as they fall due up to
31 March 2025.
The scenarios assume mitigating actions including the
potential for non‑critical cost reductions and reassessing
the dividend policy, although any mitigating actions
would need to be reassessed depending on the specific
circumstances and expected duration of the factors affecting
the business model at the time. The possibility that the
impact and timing of factors potentially affecting the viability
of the Group could be more severe than assumed plausible
for the above testing should also be noted.
The Directors review the financial forecasts and position
of the Group on an ongoing basis. The capital and dividend
policies reflect the stated objectives of maintaining a
strong balance sheet whilst allowing the Group flexibility
to adapt its products and services to market conditions, to
take advantage of emerging business opportunities, and to
make progressive and sustainable returns to shareholders.
The Group’s strategy and principal risks are assessed and
reviewed regularly at Board and Executive level, and by
operational subsidiaries within the Group. Further detail
on the Group’s strategy and principal risks is given in the
Strategic report on pages 18 to 21 and 52 to 54 respectively.
In assessing the viability of the Group, the Directors have
considered the principal risks affecting the Group, which
underpin the basis for the stress testing of the business plan
conducted under the Investment Firm Prudential Regime
(“IFPR”). This uses severe but plausible stress scenarios
assuming the crystallising of a number of these principal
risks to assess the options for mitigating the impact on the
Group, and for ensuring that the ongoing viability of the
Group is sustained.
Our resilience to the effects of covid‑19 has been
demonstrated by the robust operational and financial
performance over the two financial years ended 2021 and
2022, which supports our assessment that it does not
represent a high risk of impacting our future viability.
Changes in our industry such as the increase in demand for
sustainable investment products and advances in technology
provide both challenge but also opportunity to the Group,
and economic uncertainty continues, linked to the war in
Ukraine. Through its change in strategy and increased focus
on growth, combined with the continued enhancement of
its products and services and in maintaining its approach to
innovation and the use of technology, the Directors believe
the Company to be capable of meeting such challenges,
as evidenced by the growth in revenue and profits and
the diversification of AUME seen over the year. However,
the Directors consider a three‑year horizon over which to
assess the viability of the Group to be appropriate under
such circumstances, since it provides a sharper focus and
any further planning horizon provides a greater level of
uncertainty to financial projections.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
56
Record plc
Annual Report 2022
Governance
Governance
Chairman’s introduction
Board of Directors
Corporate governance report
Corporate governance overview
Board structure
Board activity
Board effectiveness
Corporate governance framework
Internal control and risk management
Nomination Committee report
Audit Committee report
Remuneration report
Chair of the Remuneration Committee’s statement
Remuneration Policy
Annual report on remuneration
Directors’ report
Directors’ responsibilities statement
57
58
60
60
61
62
64
65
66
67
70
76
76
79
85
94
97
Record plc
Annual Report 2022
57
Chairman’s introduction
Good corporate
governance is one of
the most valuable assets
of any business and at
Record we intend to
maximise the value of the
company by promoting
an environment of trust,
accountability and
transparency necessary
for the long-term
sustainable success of
the business.
Neil Record
Chairman
In this section of the Annual Report we explain our corporate
governance arrangements and describe the operation of the
Board and its Committees during the year.
The year was again one of change for Record and we
successfully implemented new organisational and
governance structures designed to support long-term
business growth. Our talented team worked hard to deliver
excellent results in making the business agile and resilient
to the ongoing challenges of covid-19. All this could not
happen without a strong and robust corporate governance
framework which the Group has in place, together with the
Board and its Committees working closely with the Group’s
highly experienced management team to support Record’s
operational teams in continuing to deliver a high-quality and
innovative range of products and services to our clients.
I am confident that the Group’s governance arrangements
are both appropriate and effective and that going forward
the Group will continue to embrace regulatory, governance
and best practice changes in its drive to best serve all
its stakeholders.
Neil Record
Chairman
20 June 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
58
Record plc
Annual Report 2022
Board of Directors
Neil Record
Chairman
Leslie Hill
Chief Executive Officer
Steve Cullen
Chief Financial Officer
Tim Edwards
Matt Hotson
Krystyna Nowak
Senior Independent Director
Independent Non-executive Director
Independent Non-executive Director
Appointed:
Neil founded Record in 1983 and has
been its principal shareholder and
Chairman since then. Neil also served
as Record’s CEO until October 2010.
Appointed:
Leslie joined Record in 1992. She was
appointed Head of Sales and Marketing
in 1999, and Chief Executive Officer in
February 2020.
Appointed:
Steve was appointed to the Board
and made Chief Financial Officer in
March 2013.
Appointed:
Appointed:
Appointed:
Tim was appointed as a Non-executive
Matt was appointed as an independent
Krystyna was appointed as an
Director of Record in March 2018 and
Non-executive Director of Record in
independent Non-executive Director
as Senior Independent Director in
July 2021.
in September 2021.
July 2021.
Previous appointments:
Prior to founding Record, Neil was an
economist at the Bank of England and
worked in the commodity and currency
trading department at Mars Inc’s UK
subsidiary.
Previous appointments:
Leslie’s extensive prior experience
includes working at Lloyds Bank and
Merrill Lynch where she was Director
and Head of Corporate Foreign
Exchange Sales worldwide.
Previous appointments:
Steve qualified as a Chartered
Accountant in 1994 and gained
15 years of audit experience within
public practice before joining Record.
Current external appointments:
Neil is Chairman of the Board of The
Institute of Economic Affairs and a
director of IEA Forum Limited, Chairman
of The Global Warming Policy Forum
and a director of Aims of Industry
Limited, Oxford Festival of the Arts,
Circular Wave Limited and Restore
Trust Ltd.
Skills and experience:
With almost 40 years of experience
in financial services, Neil remains
integral to the development of the
business strategy. As Chairman he
is a strong figurehead, well-known
and well-respected within the field of
currency management and as such is
an asset to the Board.
Neil is the author of numerous books
and articles on currency and other risk
management topics.
Current external appointments:
Leslie is a director of Trade Record Ltd.
Current external appointments:
Steve has no other appointments
outside of the Record Group.
Skills and experience:
Having worked at Record for 30 years,
Leslie has a deep understanding of
Record’s products and the needs of
clients. As Head of the Client Team
she was instrumental in driving the
client-focused culture of the business
and helped to maintain existing and
develop new client relationships. Leslie
is therefore very well placed to provide
a client perspective during Board
discussions.
This extensive experience means that,
as CEO, Leslie is ideally suited to leading
Record through its transition from
currency manager to asset manager
and in driving the delivery of the
Board’s strategy.
Skills and experience:
Steve joined Record in October 2003
and led Record’s Finance team for over
nine years, reporting directly to the
Chief Financial Officer. He was part
of the internal management team at
Record involved in the preparation for
admission to trading on the London
Stock Exchange in December 2007.
With his ICAEW FCA qualification and
over 30 years’ experience, including
over 18 years within financial services,
Steve brings considerable accounting,
financial and risk management
expertise to the Board.
Previous appointments:
Previous appointments:
Previous appointments:
Previously, Tim was a member of the
Matt’s experience spans core finance,
Previously, Krystyna was a Managing
governing Board of Innovate UK, the
strategy, investor relations and
Director of Norman Broadbent and
UK’s innovation agency, a director of
business leadership gained from
prior to this worked at Citigroup in a
the UK Cell and Gene Therapy Catapult
Arrows Global Finance plc, RSA
variety of senior roles across shipping
and chair of the UK BioIndustry
insurance Group plc, Cable and Wireless
finance, oil project finance and risk
Association.
plc and Legal and General Group plc.
management, in Europe and Asia.
Current external appointments:
Current external appointments:
Current external appointments:
Tim is a biotech entrepreneur, who
Matt has recently joined the Mishcon
Krystyna is Senior Managing Director
is currently non-executive chair of
de Reya Group as its Group CFO
of the Teneo People Advisory Board
Schroder UK Public Private Trust and
Designate to lead the potential IPO.
Practice and is Senior Independent
EndLyz UK Limited, Karus Therapeutics
Limited and Storm Therapeutics Limited,
and a director of AstronauTX Limited.
Director of abrdn Asian Income Fund
Ltd. Krystyna is also a Trustee of
London Youth Rowing and of the Oxford
and Cambridge Rowing Foundation.
Skills and experience:
Skills and experience:
Skills and experience:
Tim is a Chartered Accountant (FCA)
Matt is a highly experienced finance
Krystyna has a wealth of City
with a background in corporate
professional, having worked for more
experience, both in banking and in
finance and venture investing, and he
than 25 years at leading FTSE 100
executive search. She has an expertise
has extensive corporate development
companies. He has a proven track
in succession planning and Board
and people management experience.
record in leading finance strategy,
composition having worked as a
Tim adds insight to Board discussions
business improvement, and financial
director for a specialist board-level
ensuring that the Board continues
control for large listed companies.
search boutique. Krystyna is a graduate
to focus on mid to long-term value
He is currently studying for a PhD in
from Oxford University where she
development.
Digital Economics.
studied Physics and gained a Law
Degree in 2003.
Committee memberships:
N
Committee memberships:
Committee memberships:
Committee memberships:
A
N R
A
N R
A N
R
A Audit Committee
N Nomination Committee
R Remuneration Committee
Chair
Record plc
Annual Report 2022
59
Board of Directors
Neil Record
Chairman
Appointed:
Leslie Hill
Chief Executive Officer
Steve Cullen
Chief Financial Officer
Tim Edwards
Senior Independent Director
Matt Hotson
Independent Non-executive Director
Krystyna Nowak
Independent Non-executive Director
Neil founded Record in 1983 and has
Leslie joined Record in 1992. She was
Steve was appointed to the Board
been its principal shareholder and
appointed Head of Sales and Marketing
and made Chief Financial Officer in
Chairman since then. Neil also served
in 1999, and Chief Executive Officer in
March 2013.
Appointed:
Appointed:
as Record’s CEO until October 2010.
February 2020.
Appointed:
Tim was appointed as a Non-executive
Director of Record in March 2018 and
as Senior Independent Director in
July 2021.
Appointed:
Matt was appointed as an independent
Non-executive Director of Record in
July 2021.
Appointed:
Krystyna was appointed as an
independent Non-executive Director
in September 2021.
Previous appointments:
Previous appointments:
Previous appointments:
Prior to founding Record, Neil was an
Leslie’s extensive prior experience
Steve qualified as a Chartered
economist at the Bank of England and
includes working at Lloyds Bank and
Accountant in 1994 and gained
worked in the commodity and currency
Merrill Lynch where she was Director
15 years of audit experience within
trading department at Mars Inc’s UK
and Head of Corporate Foreign
public practice before joining Record.
subsidiary.
Exchange Sales worldwide.
Current external appointments:
Current external appointments:
Current external appointments:
Neil is Chairman of the Board of The
Leslie is a director of Trade Record Ltd.
Steve has no other appointments
outside of the Record Group.
Institute of Economic Affairs and a
director of IEA Forum Limited, Chairman
of The Global Warming Policy Forum
and a director of Aims of Industry
Limited, Oxford Festival of the Arts,
Circular Wave Limited and Restore
Trust Ltd.
Skills and experience:
Skills and experience:
Skills and experience:
With almost 40 years of experience
Having worked at Record for 30 years,
Steve joined Record in October 2003
in financial services, Neil remains
Leslie has a deep understanding of
and led Record’s Finance team for over
integral to the development of the
Record’s products and the needs of
nine years, reporting directly to the
business strategy. As Chairman he
clients. As Head of the Client Team
Chief Financial Officer. He was part
is a strong figurehead, well-known
she was instrumental in driving the
of the internal management team at
and well-respected within the field of
client-focused culture of the business
Record involved in the preparation for
currency management and as such is
and helped to maintain existing and
admission to trading on the London
an asset to the Board.
develop new client relationships. Leslie
Stock Exchange in December 2007.
Neil is the author of numerous books
and articles on currency and other risk
management topics.
is therefore very well placed to provide
a client perspective during Board
discussions.
With his ICAEW FCA qualification and
over 30 years’ experience, including
over 18 years within financial services,
This extensive experience means that,
Steve brings considerable accounting,
as CEO, Leslie is ideally suited to leading
financial and risk management
Record through its transition from
expertise to the Board.
currency manager to asset manager
and in driving the delivery of the
Board’s strategy.
Previous appointments:
Previously, Tim was a member of the
governing Board of Innovate UK, the
UK’s innovation agency, a director of
the UK Cell and Gene Therapy Catapult
and chair of the UK BioIndustry
Association.
Previous appointments:
Matt’s experience spans core finance,
strategy, investor relations and
business leadership gained from
Arrows Global Finance plc, RSA
insurance Group plc, Cable and Wireless
plc and Legal and General Group plc.
Previous appointments:
Previously, Krystyna was a Managing
Director of Norman Broadbent and
prior to this worked at Citigroup in a
variety of senior roles across shipping
finance, oil project finance and risk
management, in Europe and Asia.
Current external appointments:
Tim is a biotech entrepreneur, who
is currently non-executive chair of
Schroder UK Public Private Trust and
EndLyz UK Limited, Karus Therapeutics
Limited and Storm Therapeutics Limited,
and a director of AstronauTX Limited.
Current external appointments:
Matt has recently joined the Mishcon
de Reya Group as its Group CFO
Designate to lead the potential IPO.
Skills and experience:
Tim is a Chartered Accountant (FCA)
with a background in corporate
finance and venture investing, and he
has extensive corporate development
and people management experience.
Tim adds insight to Board discussions
ensuring that the Board continues
to focus on mid to long-term value
development.
Skills and experience:
Matt is a highly experienced finance
professional, having worked for more
than 25 years at leading FTSE 100
companies. He has a proven track
record in leading finance strategy,
business improvement, and financial
control for large listed companies.
He is currently studying for a PhD in
Digital Economics.
Current external appointments:
Krystyna is Senior Managing Director
of the Teneo People Advisory Board
Practice and is Senior Independent
Director of abrdn Asian Income Fund
Ltd. Krystyna is also a Trustee of
London Youth Rowing and of the Oxford
and Cambridge Rowing Foundation.
Skills and experience:
Krystyna has a wealth of City
experience, both in banking and in
executive search. She has an expertise
in succession planning and Board
composition having worked as a
director for a specialist board-level
search boutique. Krystyna is a graduate
from Oxford University where she
studied Physics and gained a Law
Degree in 2003.
Committee memberships:
N
Committee memberships:
Committee memberships:
Committee memberships:
A
N R
A
N R
A N
R
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
60
Record plc
Annual Report 2022
Corporate governance report
Company purpose
Our purpose is to continue to harness trends and innovate
by collaborating with our clients, with the aim of achieving
diverse partnerships of financial specialists – creating
unique, opportunistic, sustainable solutions.
Corporate culture
Since being established in 1983, the Group has endeavoured
to put the interests and needs of our clients first and
this cultural belief is encouraged and deeply embedded
within all business functions. The Board has worked hard
to ensure that the importance of client focus through
diligence, transparency, accountability and probity has been
disseminated to all staff, contractors and consultants across
the Group. There has been a focus on employees’ wellbeing
through covid-19, transitioning from remote working to our
current hybrid working arrangements, including core office
days. The Board of Directors understands the importance
of maintaining the strong corporate culture within the
business, ensuring that it is embedded at every level
of the organisation.
Board and corporate governance changes
This year saw changes to the composition of the Board.
Rosemary Hilary and Jane Tufnell both stepped down from
their position as Chair of the Audit and Risk Committee and
Nomination Committee respectively, to be succeeded by
Matt Hotson as Chair of the Audit Committee, and Krystyna
Nowak as Chair of the Nomination Committee. Both Matt
and Krystyna bring a wealth of experience and knowledge
to the Board and have made a significant impact since
their appointments. Tim Edwards replaced Jane Tufnell
as Senior Independent Director and continued his role
as the designated Non-executive Director for workforce
engagement in line with the requirement of the Corporate
Governance Code 2018. I would like to thank Rosemary and
Jane for their contribution and look forward to working with
the new Board members.
There have also been changes in the corporate governance
structure with the dissolution of the Executive Committee,
which was previously responsible for the day-to-day
management of the business. A new Board of Directors of
the regulated UK subsidiary of the Group – Record Currency
Management Limited (“RCML”) – is now responsible for the
day-to-day management and works closely with the Record
plc Board to successfully deliver the strategy for the Group.
During the year, the prior Compliance and Risk team was
split with the appointment of a dedicated Head of Business
Risk which has strengthened the Group’s risk management
framework during a period of significant change and growth.
Consequently, the prior Audit and Risk Committee is now
the Audit Committee, and risk is actively discussed at Board
meetings of both Record plc and RCML. The continued focus
on risk culture is crucial and we constantly seek to improve
culture through embedding effective risk management
systems at every level within the Group.
Further information on the corporate governance framework
is provided on pages 65 and 66.
Compliance with the 2018 UK Corporate Governance Code
Throughout the year, the Company has applied the main
principles and provisions of the Code as deemed appropriate
to the Group. Page 60 provides an overview of how the Code
has been applied and Record’s departures from the Code are
fully explained.
Section 172 disclosure
Section 172 of the Companies Act 2006 requires directors
to promote the success of the company for the benefit of
the members as a whole and in doing so to have regard to
the interests of stakeholders, including clients, employees,
suppliers, regulators and the wider society in which it
operates. Details of how the Board engaged with Record’s
various stakeholders are shown on pages 38 and 39.
Corporate governance overview
Compliance with the UK Corporate Governance Code
(the “Code”)
The Board is supportive of the principles of the Code and has
been since its Admission to the Official List of the UK Listing
Authority in December 2007, with the Board complying as it
deems appropriate given the nature and size of the business.
The latest version of the Code was published in July 2018
and is applicable to accounting periods beginning on or
after 1 January 2019.
Copies of the Code can be obtained from the FRC’s website at
www.frc.org.uk.
Listed companies are required under the Financial Conduct
Authority Listing Rules either to comply with the provisions
of the Code or explain to investors in their next Annual Report
why they have not done so.
The Board has reviewed the appropriateness of the
provisions to determine whether they should be applied
or if departure is justified. All provisions of the Code have
been applied as necessary as part of Record’s corporate
governance framework except for the following:
Provision 9 of the Code recommends that the chair should
be independent on appointment. Neil Record is deemed to
be a controlling shareholder and so was not independent
on appointment. However, the Board is of the opinion that
the potential issue of non-independence is outweighed by
the attributes of leadership and guidance that Neil brings
to the role.
Provision 19 of the Code recommends that the chair should
not remain in post beyond nine years from the date of
first appointment to the board. Neil Record founded the
Record Group in 1983 and led the business until its IPO in
December 2007. At the time of the IPO it was agreed Neil
was best placed to continue to chair the business, a role
he has undertaken ever since. Neil is well-known and well
respected within the field of currency management and
his long established involvement with the business, his
ideas and character have built the business to what it is
today. The Board is of the opinion that Neil continues to
add considerable value and that retaining him as Chairman
is therefore justified for the foreseeable future. Details of
the Nomination Committee’s review of the tenure of the
Chairman conducted in 2022, together with its conclusion,
are provided on page 69.
Provision 21 of the Code recommends that the chair should
consider having a regular externally facilitated board
evaluation. In FTSE 350 companies this should happen at
least every three years. As a non-FTSE 350 company the
triennial requirement for an external assessment does
not apply to Record plc, although an externally facilitated
workshop was carried out in 2021. Details of the evaluation
process previously conducted were provided in the Annual
Report and Accounts 2021.
Record plc
Annual Report 2022
61
Corporate governance report
Board structure
Board composition
The Record plc Board consists of six members and is headed
by Neil Record (Chairman), with the Executive Directors
Leslie Hill (Chief Executive Officer) and Steve Cullen (Chief
Financial Officer). There are currently three Non-executive
Directors: Tim Edwards, being the Senior Independent
Director, Krystyna Nowak and Matt Hotson. The biographical
details of the Board members are set out on pages 58 and 59.
In July 2021 Jane Tufnell stepped down from the Board
and was succeeded by Krystyna Nowak, who was
appointed as an independent Non-executive Director in
September 2021, becoming Chair of the Nomination Committee.
In September 2021 Rosemary Hilary stepped down from the
Board and was succeeded by Matt Hotson who was appointed
as an independent Non-executive Director in July 2021 and took
the lead as Chair of the Audit Committee in September 2021.
Code provision
The Code recommends that at least half the board, excluding
the chair, should be non-executive directors whom the
board considers to be independent and the Board’s structure
complies with this provision. The Board considers that
the current composition is appropriate given the size and
structure of the business.
The division of responsibilities between the Chairman and
the Chief Executive Officer is clearly established, set out in
writing and agreed by the Board.
Board responsibilities
The Board has a schedule of matters specifically
reserved for its decision and approval, which
includes, but is not limited to:
• determining the Group’s long-term strategy
and objectives;
• authorising significant capital expenditure;
• approving the Group’s annual and interim
reports and preliminary announcements;
• the setting of interim and special dividends and
recommendation of final dividend payments;
• ensuring the effectiveness of internal controls
and the risk management framework;
• the authorisation of Directors’ conflicts or
possible conflicts of interest; and
• communication with shareholders and the
stock market.
Chairman
The Chairman is responsible for leadership of the Board. He is also
responsible for overseeing the activities of the Chief Executive Officer
and providing advice, guidance and support to the executive team.
He works with the Board to develop Group strategy and support its
implementation. The Chairman is a principal ambassador of Record
and a guardian of the Group’s ethos and values.
Chief Executive Officer
The Chief Executive Officer is responsible for the executive
management of the Group with focus on profitable business
growth while acting in the interests of all stakeholders – clients,
shareholders, employees and industry regulators – and upholding the
core values of Record. Her statement on FY-22 and the outlook for the
Group can be found on pages 6 and 7.
Chief Financial Officer
The Chief Financial Officer is responsible for the finance function, the
financial management and control of the business, and for developing
and delivering appropriate internal and external financial reporting.
His financial review for FY-22 can be found on pages 44 to 48.
Senior Independent Director
The Senior Independent Director’s role is to act as a sounding board for the Chairman, oversee the evaluation of the
Chairman’s performance (see page 69) and serve as an intermediary for the other Directors if necessary. He is also available
as an additional point of contact for shareholders and other stakeholders should they wish to raise matters with him rather
than the Chairman or the Chief Executive Officer.
Non-executive Directors
The Non-executive Directors are responsible for upholding high standards of integrity and probity, providing constructive
challenge and helping to develop proposals on strategy.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
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Record plc
Annual Report 2022
Corporate governance report continued
Board structure continued
Independence of the Non-executive Directors
In determining the independence of Non-executive Directors,
the Board has taken into consideration the guidance provided
by the Code. The Board considers Matt Hotson, Krystyna
Nowak and Tim Edwards to be independent at the current
time. Neil Record is a Non-executive Chairman, although
he is not considered to be independent.
Director appointments and time commitment
The rules providing for the appointment, election, re-election
and the removal of Directors are contained in the Company’s
Articles of Association.
The Company’s Articles of Association were revised in
2020 to align with the UK Corporate Governance Code July
2018, current legislation and market practice and were
subsequently approved by shareholders at the 2020 AGM.
Under the Articles, all Directors are subject to annual election
or re-election by shareholders and all of the Directors will
stand for election or re-election at the 2022 AGM.
The Board has agreed that all Directors standing for election
or re-election continue to make a valuable contribution to
the Board's deliberations and recommends their election
or re-election. As required by the UK Listing Rules, the
appointment of independent directors must be approved by a
simple majority of all shareholders and by a simple majority
of the independent shareholders. Further details are set out
in the 2022 Notice of AGM.
Non-executive Directors’ letters of appointment stipulate
that they are expected to commit sufficient time to discharge
their duties. Non-executive Directors are required to notify
the Chairman before taking on any additional appointments.
Details of other roles held by the Non-executives are set out
in their biographies on pages 58 and 59. The Board is satisfied
that all Directors continue to be effective and demonstrate
commitment to their respective roles.
The Executive Directors are employed on a full-time basis
and do not have any other significant commitments outside
of the Record Group. Neil Record, as Non-executive Chairman,
works on a part-time basis.
Details of Executive Directors’ service contracts,
termination arrangements and Non-executive Directors’
letters of appointment are included in the Remuneration
report on page 83.
Board member diversity
The Board has approved a policy for ensuring Board member
inclusion and diversity and has delegated the responsibility
for addressing Board diversity to the Nomination Committee.
The Nomination Committee reviews Board composition in the
context of diversity and reports its recommendations to the
Board to ensure diversity is achieved.
The Board acknowledges the importance of diversity
in the boardroom in its broadest sense as a driver of
board effectiveness. Diversity encompasses diversity
of perspective, experience, background, psychological
type and personal attributes. The Board recognises that
gender diversity is a significant aspect of diversity and
acknowledges the important role that women with the right
skills and experience can play in contributing to diversity of
perspective in the boardroom. The Group’s Board Inclusion
and Diversity Policy sets out that the Board will endeavour
to ensure that the minority gender on the Board represents
at least one-third of the Board.
The Board currently has two female members in a board of
six and thus women make up one-third of the Board. The
Board’s opinion is that the current composition of members
comprises a good mixture of skills, experience, knowledge
and backgrounds and is therefore appropriate for the
business at the present time. Future Executive Director
succession planning will take into account the benefits
of diversity, including gender diversity, as set out in the
Group’s Board Inclusion and Diversity Policy. Diversity in
the workplace is described on page 30.
Board activity
Board focus and decision-making
The regular scheduled Board meetings have a set,
strategically focused agenda and Board members are invited
in advance of each meeting to add any additional issues they
wish to be addressed.
Material circulated in advance of the meetings has included:
• minutes of the previous Board meetings;
• CEO report;
• subsidiary company reports;
• management information pack;
• KPI data pack;
• investment performance report;
• IT strategy and systems report;
• compliance report;
• risk management report;
• HR report;
• sustainability report; and
• governance report.
Updates from the respective Chairs of the Nomination
Committee, Remuneration Committee and Audit Committee
are provided at each meeting.
The Board discussed progress against strategy, focusing
on product diversification, technology modernisation and
succession planning on an ongoing basis. In addition, the
Board also discussed global regulatory developments, the
covid-19 pandemic and the conflict between Russia and
Ukraine.
Record plc
Annual Report 2022
63
Corporate governance report continued
During the year, the Board focused on the key matters detailed below:
Key matters considered by the Board in the year ended 31 March 2022
June 2021
July 2021
September 2021
November 2021
February 2022
March 2022
• Going concern and long-term viability review (Finance, Risk management)
• Annual Report and Accounts 2021 and dividend review and approval (Finance)
• Board workshop (Governance)
• Sustainability report (Governance)
• Conflicts of interest framework (Compliance, Governance)
• Client and product strategy (Strategy)
• Pillar 3 disclosure (Risk management)
• Technology and budget for a new platform (Strategy, Finance)
• Business Risk Framework review (Risk)
• Office structure (Strategy, HR, Finance)
• Group governance structure review (Governance)
• Going concern review (Finance)
• Interim report review (Finance)
• Interim dividend proposal (Finance)
• Conduct risk review (Risk, Compliance)
• Separation of Record plc and Record Currency Management Limited Boards and RCML Board
membership (Governance)
• Change of the corporate bank provider (Finance)
• Financial crime review (Compliance)
• Money laundering risk assessment (Compliance, Risk)
• New risk framework review (Risk)
• Closed periods review (Finance, Compliance)
• Third-party products review (Strategy)
• Record plc Board terms of reference review (Governance)
• Employee engagement survey (Workforce)
• Three-year strategic plan (Strategy)
• FY-23 budget (Finance)
• Risk capital methodology (Risk)
• Introduction to Record Digital Asset Ventures (Strategy)
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Record plc
Annual Report 2022
Corporate governance report continued
Board activity
Meeting frequency and attendance
The Board met six times between 1 April 2021 and
31 March 2022 to review financial performance and to
follow the schedule of matters reserved for its decision
and approval. Comprehensive Board papers, comprising
an agenda and formal reports and briefing documents, are
sent to Directors in advance of each meeting. Directors
are regularly informed by senior executives and external
advisers on the Group’s affairs, including commercial,
regulatory, legal, corporate governance and other
relevant matters.
Appropriate and timely notice is given of all Board meetings
and all Directors receive information in advance so that if
they are unable to attend, their input can be tabled and taken
into consideration. The Board has regular offsite strategy
meetings and additional meetings as required to address
specific issues.
Any concerns raised by Directors which are not resolved are
recorded in the Board minutes. No such matters were noted
during the year ended 31 March 2022.
Directors are expected to attend all meetings of the Board.
Details of Board meeting attendance are included in the
table below:
Meetings in the year: 6
Neil Record
Leslie Hill
Steve Cullen
Tim Edwards
Matt Hotson
Krystyna Nowak
Former Directors who served during the year
Jane Tufnell
Rosemary Hilary
6/6
6/6
6/6
6/6
4/4
3/3
1/1
3/3
Matt Hotson attended four meetings due to his appointment
in July 2021.
Krystyna Nowak attended three meetings due to her
appointment in September 2021.
Jane Tufnell stepped down in July 2021 and therefore
attended one meeting.
Rosemary Hilary stepped down in September 2021 and
therefore attended three meetings.
The Non-executive Directors met without the Executive
Directors on several occasions throughout the year,
prior to scheduled meetings.
Board effectiveness
Board induction and training
New Directors appointed to the Board receive advice as
to the legal obligations arising from the role of a director
of a UK-listed company as part of a tailored induction
programme. Following the appointment of Matt Hotson in
July and Krystyna Nowak in September, a comprehensive
and tailored induction programme was provided and is
ongoing. This induction includes briefings with the Chairman,
Executive Directors and senior management to help new
Directors familiarise themselves with their duties and
the Group’s culture and values, strategy, business model,
operations, risk and governance arrangements.
The Company Secretary, under the direction of the Chairman,
is responsible for maintaining an adequate continuing
education programme, reminding the Directors of their duties
and obligations on a regular basis, ensuring good information
flow between the Board, its Committees and management
and assisting with Directors’ continuing professional
development needs.
All Directors have access to independent professional advice,
when required, at the Company’s expense as well as to the
advice and services of the Company Secretary.
Board performance evaluation
The Board is required by the Code to undertake an annual
evaluation of its performance. The Code states that “There
should be a formal and rigorous annual evaluation of the
performance of the Board, its Committees, the Chair and
individual Directors”.
The Code recommends that evaluation of the Board of FTSE
350 companies should be externally facilitated at least every
three years.
The last externally facilitated Board effectiveness
workshop was conducted in March 2021 and further details
were provided in the Nomination Committee report of the
Annual Report and Accounts 2021. This year Record decided
to undertake an internal Board and Committee evaluation by
using a questionnaire tailored to the specifics of the Company
and its business.
Individual appraisal of each Director’s performance is
undertaken by the Chief Executive Officer and the Chairman.
The Senior Independent Director conducts an annual
appraisal of the performance of the Chairman with input
from the other Board members. The outcome of these
appraisals in 2022 was positive and all roles were considered
to be undertaken effectively.
Record plc
Annual Report 2022
65
Corporate governance report continued
Corporate governance framework
The Board has established a framework of committees and sub-committees to ensure robust corporate governance practices
throughout the business. The Board is confident that this structure is appropriate and that the delegation of responsibilities
allows the business to operate in a structured manner and to respond rapidly when issues arise.
The diagram below gives an overview of the Group’s core governance framework.
Record plc Board
Record Currency Management Limited Board
Board Committees
Operational Committees
Nomination
Remuneration
Audit
Investment
Portfolio Management Group
HR
Sustainability
Record plc – Board Committees
The Board has established three Board Committees and
delegated authority to each Committee to enable it to
execute its duties appropriately. The annual reports of the
three Committees provide a statement of each Committee’s
activities in the year with a separate report from:
• Nomination Committee – report set out on pages 67 to 69;
• Audit Committee – report set out on pages 70 to 75; and
• Remuneration Committee – report set out on pages
76 to 93.
The Record plc Board Committees operate on written
terms of reference, which are reviewed annually and which
are available on the Group’s website or on request from
the Company Secretary at the registered office address.
The Chair of each Committee reports regularly to the Board.
The work undertaken by the Nomination, Audit and
Remuneration Committees was reviewed by the respective
Committee Chair to assess each Committee’s effectiveness
during the year. The reviews concluded that the Committees
were operating in an effective manner and no concerns were
raised and these conclusions were reported to the Board
accordingly.
Record Currency Management Limited –
Operational Committees
The subsidiary Board has four Committees responsible for
operational oversight and decision-making as follows:
Investment Committee
Role: The Board has delegated the responsibility for
authorising changes to existing investment processes and
for approving new investment strategies to the Investment
Committee.
Members: The Committee consists of the Chief Investment
Officer, the Chief Executive Officer, the Group Chairman,
the Head of FX Risk Management Solutions, the Director of
Enhanced Passive and Rates and the Head of Macro Research.
Meetings: The Committee meets as necessary, responding
both to internal developments and external events.
Reporting: Reports on the activities of the Committee
are presented at each formal Record plc and RCML Board
meeting for review and comment.
Portfolio Management Group
Role: The Group is responsible for client take-on, new and
amended products/service operational approval, business
as usual operational activities and operational incidents,
errors and breaches.
Members: The Chief Operations Officer, the Head of Client
Onboarding, the Head of FX Risk Management Solutions, the
Head of Portfolio Implementation, the Head of Reporting,
the Head of Front Office Risk Management and the
Head of Trading.
Meetings: The Group meets at least once a week and
as necessary in response to individual or specific events
requiring review.
Reporting: Reports on the activities of the Group are
presented to the RCML Board meeting for review and
comment.
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Record plc
Annual Report 2022
Corporate governance report continued
Corporate governance framework continued
Record Currency Management Limited –
Operational Committees continued
HR Committee
Role: The Committee is responsible for the development
and review of the Group Human Resources strategy,
approach to the systems for performance management,
staff remuneration and benefits, training and development
and ensures rigorous and transparent employment policies,
procedures and systems are in place and kept under review.
Members: The Chief Executive Officer, the Head of HR and
the HR Director.
Meetings: The Committee meets at least once a month and
as necessary in response to individual or specific events
requiring review.
Reporting: Reports on the activities of the Committee
are presented to the RCML Board meeting for review and
comment and to the Record plc Board meeting.
Senior Sustainability Office ("SSO")
Role: The SSO is responsible for delivering on Record’s
commitment to be a sustainability leader and in ensuring
Group efforts are strategically aligned with the principles of
sustainability and that environmental, social and governance
principles are embedded in Group decision-making
processes.
Members: The Chief Executive Officer, the Chief Investment
Officer, the Head of Trading, the Head of Macro Research,
the Head of HR and the Sustainability Coordinator.
Meetings: The Office meets at least once a month and
as necessary in response to individual or specific events
requiring review.
Reporting: Reports on the activities of the SSO are presented
to the RCML Board meeting for review and comment and to
the Record plc Board meeting.
Internal control and risk management
The Board has overall responsibility for the Group’s
systems of internal control and the management of
significant risks. The Board sets appropriate policies on
internal control, which are reviewed annually. The authority
for the operational risk management is delegated to the
RCML Board.
The Board seeks ongoing assurance from the RCML Board,
the Head of Business Risk, the Head of Compliance and
senior management about the effectiveness of the internal
controls, which include operational and compliance controls,
risk management and the Group’s high-level internal control
arrangements. Such a system of internal controls is designed
to manage, rather than eliminate, risk of failure to meet
business objectives and can only provide reasonable and not
absolute assurance against material misstatements or loss.
Further information on the Group’s risk management
framework is provided on pages 49 to 50 of the
Strategic report.
The Record plc Board has undertaken a review of the
effectiveness of internal controls for the year ended
31 March 2022 and is satisfied that the internal control
environment is appropriate (see “Internal controls and
risk management” on page 63).
Approved by the Board and signed on its behalf by:
Kevin Ayles
Company Secretary
20 June 2022
Record plc
Annual Report 2022
67
Nomination Committee report
This year the Nomination
Committee has focused
on succession plans for
the Board and senior
management and I am
confident we are building
a highly effective new
team to deliver value
to our stakeholders.
Succession planning
continues to be the
top priority for the
Committee.
Krystyna Nowak
Chair of the Nomination Committee
Role of the Committee
The role of the Nomination Committee is to
ensure that the Board and senior management
have the optimal talents and experience to enable
the Company to grow, compete in its markets and
manage risks effectively.
The Committee serves both Record plc and the
Group’s FCA regulated entity, Record Currency
Management Limited.
Committee meeting attendance
Jane Tufnell
Rosemary Hilary
Krystyna Nowak
Matt Hotson
Tim Edwards
Neil Record
3/3
4/4
2/2
3/3
6/6
6/6
Matt Hotson attended three meetings due to
his appointment in July 2021.
Krystyna Nowak attended two meetings due to
her appointment in September 2021.
Jane Tufnell stepped down in July 2021.
Rosemary Hilary stepped down in
September 2021.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
68
Record plc
Annual Report 2022
Nomination Committee report continued
I am pleased to present the Nomination Committee report for
the year ended 31 March 2022. This will be my first report as
Chair of the Nomination Committee since I joined the Record
plc Board in September 2021. I would like to thank Jane Tufnell
for her contribution during her five years as the previous
Chair of the Committee.
Key responsibilities
The key responsibilities of the Committee are to:
• review the structure, size and composition of the Board
and Committees including the diversity and balance of
skills and experience;
• consider succession planning for Directors and other
senior management;
• identify and nominate for the approval of the Board
candidates to fill Board vacancies; and
• review annually the time commitment required of
Non-executive Directors.
Membership of the Committee
I chair the Committee and am supported by the other
independent Directors, Matt Hotson and Tim Edwards, and
the Group Chairman, Neil Record.
Committee meetings
The Committee met on six occasions during the year ended
31 March 2022 and invited the Chief Executive Officer and
the Head of Human Resources and Company Secretary to
join the meetings as the Committee considered appropriate.
Committee member meeting attendance is detailed above.
The Chair of the Nomination Committee reported regularly to
the Board on the Committee’s activities, identifying matters
where any action was deemed to be required and making
recommendations as considered appropriate.
Key areas of focus
Board composition
The Committee continues to focus on ensuring that the
Board has the skills and experience to ensure the Group can
develop strategic growth plans by diversifying its products,
investing in technological change and developing robust
succession plans. After Jane Tufnell and Rosemary Hilary
stepped down during the year, the Committee reviewed
the composition of the Record plc Board by taking into
consideration the priorities of the business, the need for
diversity and compliance with the Corporate Governance
Code 2018 and two new candidates were selected, namely
Matt Hotson and myself. During the selection process, Matt
was immediately shortlisted due to his strong financial
services experience, having worked for more than 25 years
at leading FTSE 100 companies, which made him a perfect
candidate for the position of Chair of the Audit Committee.
Due to my background and experience in the banking sector
and executive search, in particular focused on governance
and Board succession planning, the Board decided that I
would be a suitable candidate for the role of Chair of the
Nomination Committee.
Appointment of Tim Edwards as Senior
Independent Director ("SID")
Following the resignation of Jane Tufnell, the Committee
reviewed the role of Senior Independent Director ("SID") and
decided that Tim Edwards was the most suitable candidate
for this role. In addition, Tim has continued as the designated
Non-executive Director for workforce engagement.
Board diversity
The Group’s Board Inclusion and Diversity Policy was last
reviewed by the Committee in January 2022 and was updated
to ensure that the Board was championing inclusion and
diversity through clear tone from the top and that it aligned
with the many inclusion and diversity initiatives for the
broader staff group. The Committee also acknowledged that
future Director succession planning should embrace the
benefits of diversity, including gender diversity, to ensure
that any individual selected will add to the Board’s mix of
perspective, experience, background and personal attributes.
The Committee is satisfied that the current composition of
the Board is appropriate and meets the gender target set in
the Group’s Board Diversity Policy.
Record plc
Annual Report 2022
69
Nomination Committee report continued
Board gender
Board tenure
As at year end
Female
33%
Male
67%
>6 years
50%
0-6 years
50%
Performance of the Directors and the Board
Having undertaken an externally facilitated Board review
in 2021, Record undertook an internal Board evaluation in
March 2022 based on a self-assessment questionnaire
considered appropriate for the size of the business and
the environment that the Company operates in. The focus
of the evaluation was directed to matters such as Board
structure, information that is presented to the Board, Board
discussions, Board Committees and Board dynamics.
The outcomes of the Board evaluation have been discussed
by the Committee, which in turn reported the results to the
Board. The Non-executive Directors, led by the SID, also met
without the Chair present to evaluate his performance during
the year, which they considered satisfactory.
Looking forward
The focus for the Committee continues to be succession
planning, including for the roles of Chair and Chief Executive
Officer. With Leslie Hill driving the delivery of the Group
strategy over the next three years, we will be working during
this time on CEO transition planning to ensure a smooth and
seamless handover at the appropriate time.
Approved by the Committee and signed on its behalf by:
Krystyna Nowak
Chair of the Nomination Committee
20 June 2022
Board competency matrix
One of the main focuses of the Nomination Committee this
year and going forward is succession planning and as a result
a Board competency matrix has been prepared to analyse the
competencies of the current Board members and to highlight
any gaps in the Board’s skills and competencies. The results
of the analysis will be used in the future when new members
are to be identified and selected to fill the available positions
on the Board and it will also lead to some training and
development opportunities for Board members. The current
Board composition is considered to be adequate and with
appropriate skills to promote the success of the Company
and to deliver the agreed strategy.
Tenure and effectiveness of the Chairman
The UK Corporate Governance Code recommends that the
Chair should not remain in post beyond nine years from
the date of appointment to the Board. The Committee is
aware that Neil Record has been in post since Record’s IPO
in 2007. The Committee has reviewed this tenure and has
noted the benefits of continuity of the Board Chair during
a period of continued transition for the business. Previous
discussion of the issue by the Committee Chair with major
shareholders has confirmed they remain confident with
Neil’s ongoing tenure.
The Committee has concluded that Neil’s extensive
experience in the currency industry as well as his leadership
and challenge to the Board during this time of business
transition supports the decision to retain him as Chair for
the foreseeable future. The Committee Chair conducted a
review of the Board Chair with all Board members in 2021.
The review concluded that Neil had made a very positive
contribution in the period and he continues to provide
valuable support to both the business and Leslie Hill as
Chief Executive Officer.
The tenure of the Chair will continue to be reviewed by
the Committee on an annual basis and the succession
plan for the Chair of the Company will be prepared for
the Committee's consideration.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
70
Record plc
Annual Report 2022
Audit Committee report
I am pleased to confirm
the Committee has
continued to be central
to the oversight of
the Group’s financial
reporting, control and
assurance processes
and internal and
external audit.
Matt Hotson
Chair of the Audit Committee
Role of the Committee
The role of the Audit Committee is to encourage
and safeguard a high standard of integrity in
financial reporting having regard to laws and
regulations applicable to the Group and the
provisions of the UK Corporate Governance Code.
The Committee serves both Record plc and the
Group’s FCA regulated entity, Record Currency
Management Limited (“RCML”).
Committee meeting attendance
Rosemary Hilary
Jane Tufnell
Tim Edwards
Matt Hotson
Krystyna Nowak
3/3
3/3
6/6
3/3
3/3
Matt Hotson attended three meetings due to his
appointment in July 2021.
Krystyna Nowak attended three meetings due to
her appointment in September 2021.
Jane Tufnell stepped down in July 2021.
Rosemary Hilary stepped down in
September 2021.
Record plc
Annual Report 2022
71
Audit Committee report
I am pleased to present the Audit Committee report for the
year ended 31 March 2022 (“FY-22”). This will be my first
report as Chair of the Audit Committee since I joined the
Record plc Board in July 2021. I would like to thank Rosemary
Hilary for her contribution during her five years as the
previous Chair of the Committee.
Committee duties
At the beginning of the 2022 financial year the Record
Group decided to review and dedicate more time to the
risk management framework and risk culture in the
business and it was decided that risk management should
be reported to and discussed at Board meetings, allowing
the Audit Committee to focus on the audit agenda. The
Head of Business Risk, a new role created in April 2021, led
the review and successfully implemented changes to the
risk management framework. It is now a well-established
system where the Record plc Board dedicates sufficient time
to discussing risk at the Group level and the RCML Board is
responsible for overseeing risk on the operational level.
Under its terms of reference, the Committee is tasked with
the following:
Financial internal controls and operational conflicts of
interest:
External audit:
• making recommendations relating to the appointment,
re-appointment and removal of the external auditor and
overseeing any tender of external audit services;
• approving the remuneration and terms of engagement
of the external auditor;
• reviewing and monitoring the independence and
objectivity of the external auditor, and reviewing
the effectiveness of the audit process, taking into
consideration relevant UK professional and regulatory
requirements; and
• overseeing the provision of any non-audit services by
the external auditor.
Internal audit:
• reviewing and approving the role, mandate and annual
internal audit plan of the internal audit function, ensuring
that the function has the necessary resources and access
to information to enable it to fulfil its mandate;
• monitoring and reviewing the effectiveness of the Group’s
internal audit function; and
• reviewing and monitoring management’s responsiveness
to the internal auditor’s findings and recommendations.
• monitoring and reviewing the Group’s internal financial
Financial reporting:
controls;
• review of the Group’s annual statement on its systems
of internal financial controls prior to endorsement by the
Board.
Whistleblowing and fraud:
• overseeing whistleblowing arrangements by which
staff may raise concerns about possible improprieties in
financial reporting or other matters; and
• reviewing the Group’s procedures for detecting fraud
and investigating and handling allegations from
whistleblowers and ensuring that arrangements are
in place by which Group employees may in confidence
raise concerns about possible improprieties in financial
reporting and financial controls.
• monitoring the integrity of the Group’s financial
statements, including the review of this Annual Report and
any other formal announcements relating to the Group’s
performance;
• reviewing any significant financial reporting judgements;
• reviewing the assumptions and any qualifications made
in support of the going concern statement and the
longer-term viability statement; and
• reviewing the application and consistency of accounting
policies and accounting standards.
The full terms of reference of the Committee were
last updated and approved by the Board in April 2022.
They comply with the UK Corporate Governance Code
(the “Code”) and are available on the Group’s website or
from the Company Secretary at the registered office address.
The Chair of the Committee provides regular reports to
the Board detailing how the Committee has discharged its
responsibilities as set out in its terms of reference.
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Audit Committee report continued
Membership of the Committee
Rosemary Hilary chaired the Committee until July 2021
when she stepped down and I was appointed successor.
I am supported by the other independent Directors:
Krystyna Nowak and Tim Edwards.
Committee evaluation
An internal review of Committee effectiveness was overseen
as part of the Board evaluation process in March 2022.
The conclusion was that the Committee was effective in
carrying out its duties.
Committee activities
The Committee has discharged its responsibilities under
its terms of reference for the period under review by the
following actions:
• reviewing the form, content and integrity of financial
information prior to release, including the Annual and
Interim Reports;
• reviewing the content of each of the Interim Management
Statements for subsequent Board approval;
• reviewing the adequacy and effectiveness of the Group’s
internal controls and risk management systems (before
the delegated authority for risk was transferred);
• considering the Pillar 3 disclosures prior to their
recommendation for acceptance by the Board;
• receiving and reviewing internal audit updates and
reports;
• evaluating the performance and independence of the
internal auditor during the engagement period;
• reviewing the independence of the Group’s external
auditor and the nature of non-audit services supplied by
the auditor;
• reviewing the external auditor’s audit strategy for the
interim review and the final audit;
• assessing the external auditor’s concluding report for the
interim review and the year-end financial statements;
• evaluating the performance of the external auditor over
the period;
• reviewing regular reports by the Head of Compliance and
the Head of Business Risk detailing internal compliance
and risk management activities and issues (before the
delegated authority for risk was transferred); and
• examining departmental KPI and KRI data to ensure
financial risks are identified and appropriately addressed
by management.
The Board considered that I was the most appropriate
independent Director for the role of Audit Committee Chair
due to my financial services experience gained through
the role of CFO in various listed companies and this view
is supported by the other members of the Committee.
The Board is satisfied that by virtue of their experience
gained in other organisations, the Committee members
collectively have competence relevant to the sector in
which the Group operates. The biographical details of the
Committee members are set out on pages 58 and 59.
The composition of the Committee complies with the Code
provision for smaller companies requiring at least two
independent Non-executive Directors throughout the year.
Committee meetings
The Committee met six times during the year ended
31 March 2022, being four quarterly meetings and two
meetings ahead of results announcements. The meetings
were also attended by the Chief Executive Officer, the Head
of Compliance, the Head of Business Risk, the Chief Financial
Officer and the Chief Operating Officer.
Representatives from BDO attended four meetings as the
incumbent external auditor and the Deloitte internal auditor
partner attended all six meetings. Minutes of the meetings
were documented by the Company Secretary and retained
on file.
Committee member meeting attendance for the year ended
31 March 2022 is detailed on page 70.
The Committee also separately met the Group’s external
auditor on one occasion and the internal auditor on one
occasion, providing an opportunity for them, privately and
in confidence, to raise matters of concern.
The Chair of the Committee reported regularly to the Board
on the Committee’s activities, identifying any matters on
which the Committee considered that action was required,
and made recommendations on the steps to be taken.
Committee Chair meetings
During the year the Chair of the Committee has had
separate discussions with the key people involved in the
Company’s governance, including the Board Chairman, the
Chief Executive Officer, the Chief Financial Officer, the Head
of Compliance, the Head of Business Risk, the Company
Secretary and also the external audit partner and the internal
audit partner to obtain updates and insights into business
activities.
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Audit Committee report continued
Key areas of focus
Risk management changes and risk appetite review
During the year the Board and the Committee approved
the new Business Risk Framework and undertook a
comprehensive review of risk registers and appetites across
the Group. This included the implementation of a new risk
management system, a review of the risk evaluation process
and all risk appetites. The ICARA risk capital review was also
conducted and approved. The governance change, for risk
to be discussed at Board meetings alongside strategy and
operational matters, was implemented.
Review of the regulatory landscape
Briefings on regulatory developments were provided to
the Committee at each meeting by Deloitte as internal
auditor and by the Head of Compliance. Topics included IFPR,
FCA policy and discussion statements, FRC guidance and
regulatory changes in other jurisdictions relevant to Record.
Technology and systems
Before the delegated authority for internal controls and
risk management was transferred from the Audit and Risk
Committee to the main Board of the Group, the Committee
considered and received regular updates from the Chief
Technology Officer and the Head of Strategic Initiatives
who also attended meetings to respond to the Committee’s
questions related to the changes to technology and
infrastructure, the digital platform development, the
timelines and budget connected with the project and the risks
associated with it. The Committee has received reassurance
that there is appropriate management involvement and
oversight of the IT projects being undertaken. The Committee
has been satisfied that business and technology risks are
being considered and monitored and that controls are in
place as necessary.
Third-party assurance services
RSM UK Risk Assurance Services LLP (“RSM”) was appointed
in January 2020 to conduct the Reporting Accountant and
Independent Service Auditor (ISAE 3402/AT-C 320) reports on
internal controls on an annual basis. Their report for 2022 is
scheduled to be completed on 30 June 2022.
Conflicts of interest
During the year the Committee and the Board undertook
a comprehensive review of the Conflict Management
Framework together with the Conflicts of Interest Policy, the
Gifts and Entertainment Policy and the Conflicts of Interest
Register and relationships log. Both the Audit Committee
and the Board confirmed they were comfortable with the
conflicts of interest structures and controls in place.
Financial reporting
The Committee has thoroughly reviewed the half-year and
annual results and the Annual Report, before recommending
them to the Board for approval.
During the year, the Committee also considered the
significant financial and regulatory reporting issues and
judgements made in connection with the financial statements
and the appropriateness of accounting policies. In particular,
the Committee considered management reports providing
assessments of the internal controls environment, future
cash flows, going concern and ongoing viability.
The Committee was satisfied that all judgements made by
management which affect financial reporting, have been
made in accordance with the Group’s accounting policies and
made a recommendation to the Board that it was appropriate
for the Group to adopt the going concern basis of accounting
in preparing the half-year and annual financial statements
for the year ended 31 March 2022.
The Committee further considered reports from the
external auditor, in particular its independent assessment
of financial reporting and key controls, the audit opinion on
the Annual Report and the independent review report on the
half-year results.
The Committee is satisfied that the financial reporting control
framework operated effectively after considering reports
from both management and the external auditor.
The Committee has reviewed the narrative statements in
the Annual Report to ensure they are fair, balanced and
understandable and consistent with the reported results, and
also reviewed the auditor’s findings report which identified
no significant issues.
The Committee was satisfied with the content of the
Annual Report, confirmed there were no significant issues
or concerns to be addressed and recommended that it be
approved by the Board.
Internal controls and risk management
Prior to the responsibility for risk management transferring
to the Board, the Committee was providing oversight and
independent challenge to the internal controls and risk
management systems of the Group.
In July 2021 the Committee undertook a detailed review of
the Group’s Pillar 3 disclosures which had been prepared
in accordance with the Capital Requirements Directive.
The Committee members agreed they were satisfied with
the disclosures made in the document and recommended
the Pillar 3 disclosures for the Board’s approval.
The Committee has reviewed and evaluated the system of
internal controls and risk management operated within the
Group, and is satisfied that the internal control environment
is appropriate. More information on the Group’s risk
management framework is given in the Strategic report on
pages 49 and 50.
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Audit Committee report continued
Internal audit
The internal audit function undertakes a programme of
reviews as approved by the Committee, reporting the
results together with its advice and recommendations to
the Committee. The function is provided by Deloitte LLP
(“Deloitte”) under an outsourcing contract which commenced
in May 2010. The objectives and responsibilities of internal
audit are set out in a charter reviewed and approved on an
annual basis. The charter was last reviewed and approved by
the Committee in June 2022. Deloitte reports directly to the
Committee and the relationship is subject to periodic review.
Russell Davis was appointed as the Deloitte internal audit
partner, succeeding Terri Fielding, who had been the previous
partner for seven years.
The Committee and the internal auditor have developed a
planning process to ensure that the audit work performed
focuses on significant risks. The plans include deep-dive
thematic and risk-based audits and also high level in-flight
reviews of specific projects as agreed by the Committee,
Deloitte and management. Each review is scoped at the
start of the audit to ensure an appropriate focus reflecting
business activities, the market environment and regulatory
matters. The plans are periodically reviewed to ensure they
are adapted as necessary to capture changes in the Group’s
risk profile.
The Committee has received regular reports on the
programme of reviews and internal audit findings at each of
its meetings during the course of the year. The Committee
has reviewed the findings and recommendations made by
the internal auditor and has aimed to ensure that any issues
arising are suitably addressed by management in an effective
and timely manner.
The Committee has reviewed Deloitte’s work and discussed
the delivery of internal audit with management and is
satisfied with the internal audit work conducted and
the coverage and standard of the reports produced. The
Committee has monitored whether sufficient and appropriate
resources are dedicated to the internal audit function and
this has been reported to and noted by the Board.
External audit
A tender process was last conducted in 2020, when BDO
was approved by shareholders at the AGM as the Company’s
external auditor. Orla Reilly, who had previously worked
on the external audit, was appointed as statutory auditor
in January 2022, succeeding Neil Fung-On. BDO’s fees
and the terms of the audit engagement letter for the year
ended 31 March 2022 were approved by the Committee in
January 2022.
The Committee has reviewed reports from the external
auditor on the audit plan (including the proposed materiality
level for the performance of the annual audit), the status of
its audit work and issues arising. The Committee discussed
the findings with the auditor and was satisfied with the
conclusion reached by the auditor that there was no evidence
of material misstatements. The Committee has confirmed
that no material items remained unadjusted in the financial
statements.
An assessment of the quality and effectiveness of BDO as
the Group's external auditor was considered by way of a
review completed by the Committee with the assistance of
senior members of the Finance team and with reference to
the FRC’s practice aid on assessing audit quality, published in
December 2019. The Committee evaluated the judgements;
mindset and culture; skills, character and knowledge; and
quality control demonstrated by BDO throughout the audit
process and concluded that BDO had provided a quality
external audit service which was appropriate for the Group
given its size and structure.
External auditor independence
Policy on provision of non-audit services by the
external auditor
During the year the Committee operated a policy covering
the provision of non-audit services by the external auditor to
ensure that the ongoing independence and objectivity of the
external auditor was not compromised. The policy adheres
to the Financial Reporting Council’s revised Ethical Standard
issued in December 2019. Under the Ethical Standard the
aggregate of fees for all non-audit services, excluding
audit-related assurance services required under regulation,
may not exceed 70% of the average of the audit fees for the
preceding three-year period. The Committee considers it
best practice to adhere to the fee cap on an annual basis and
monitors fees accordingly.
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Audit Committee report continued
Non-audit services undertaken by the external auditor
The following permitted non-audit services, pre-approved by
the Committee and within a pre-determined cost limit, have
been undertaken by BDO in the year under review:
• independent auditor report to the FCA on compliance
with client asset rules; and
• the interim review work performed on the half-year
accounts.
Details of the total fees paid to BDO are set out in note 5
to the accounts. Non-audit fees, excluding audit-related
assurance services required under law or regulation, were
equivalent to 7% (2021: 8%) of audit fees and were therefore
within the permitted cap of 70%.
Assessment of external auditor independence
The Committee was satisfied that the quantity and nature
of non-audit work undertaken during the year did not impair
BDO’s independence or objectivity and that its appointment
for these assignments was in the best interests of the Group
and its shareholders.
The Committee is satisfied that the external auditor has
maintained its independence and objectivity over the period
of its engagement.
Approved by the Committee and signed on its behalf by:
Matt Hotson
Chair of the Audit Committee
20 June 2022
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Record plc
Annual Report 2022
Remuneration report
Our remuneration
policy is designed to
align the interests of
our employees and
executives with those
of our key stakeholders,
including our clients,
shareholders and
regulators.
Tim Edwards
Chair of the Remuneration Committee
Role of the Committee
The role of the Remuneration Committee is to
review and approve the remuneration strategies
of the Group, encompassing the Chair, the
Executive Directors, and the staff as a whole.
The Remuneration Committee also reviews and
advises on the remuneration policy and ensures
that it complies with regulatory requirements and
it promotes good conduct consistent with sound
and effective risk management, and is properly
disclosed to stakeholders.
Committee meeting attendance
Tim Edwards
Matt Hotson
Krystyna Nowak
Rosemary Hilary
Jane Tufnell
7/7
4/4
4/4
3/3
3/3
Matt Hotson attended four meetings due to his
appointment in July 2021.
Krystyna Nowak attended four meetings due to
her appointment in September 2021.
Jane Tufnell stepped down in July 2021.
Rosemary Hilary stepped down in September 2021.
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77
Remuneration report
Chair of the Remuneration Committee’s
statement
Introduction
I am pleased to present our Remuneration report for the
year ended 31 March 2022. The Remuneration Committee
is proposing a new Remuneration Policy in the year ended
31 March 2023 for the next three years and our report is split
into three sections:
• our new Remuneration Policy;
• the annual report on remuneration for 2021-22; and
• the role and activity of the Remuneration Committee.
New Remuneration Policy
Remuneration principles
Our approach to remuneration is driven by long-term
thinking to promote the sustainable growth of the Group.
Identifying, developing and appropriately compensating our
high performers, at all levels of the business, is critical to
long-term business success and is aligned to both clients'
and shareholders’ interests.
Our key remuneration principles are:
• a consistent remuneration structure for all employees, not
just Directors, which is transparent and straightforward;
• our employees should be rewarded and incentivised to
deliver profitable business growth;
• remuneration should comprise i) fixed salary, pension and
benefits; ii) variable remuneration based on individual and
Company performance; and iii) longer-term incentives
based primarily on Company performance; and
• Executive Directors’ remuneration should include a
deferred element, which is satisfied by paying it in the
form of equity.
Priorities for the new Remuneration Policy for 2022
A new Remuneration Policy is being put forward to our
shareholders for approval at our AGM in July 2022. In setting
this policy, the priorities for the Remuneration Committee
have been to ensure that remuneration structures and
performance measures:
• motivate and retain our CEO to deliver our three-year
strategy;
• create a remuneration structure that aligns with and
supports our succession plans;
• use robust performance metrics to ensure payment for
success; and
• align the interests of our Executive Directors with those
of our shareholders.
Proposed changes to our Remuneration Policy
Background: total remuneration spend
The Group is in a three-year transitional phase where
the current senior managers prepare to hand over to the
next generation under our succession plans. Over the
medium term, the Board has set a target ratio of total
remuneration costs to be up to 50% of revenue. This includes
all remuneration costs for Directors and staff. In total, the
Executive Directors' and Staff Bonus Schemes will be capped
at 35% of operating profit pre-bonuses.
CEO remuneration structure
To deliver the Group's three-year strategy, the Board
believes that it is imperative that our current CEO, Leslie
Hill, continues to drive this strategy. Our new Remuneration
Policy for our CEO has therefore been designed to ensure that
she is motivated and incentivised to deliver this three-year
strategy whilst acknowledging that she is a significant
shareholder and therefore fully aligned with shareholders
over the longer term. Leslie will receive a salary and
participate in the Executive Directors' Bonus Scheme.
The proposed CEO remuneration structure is unique to
Leslie and, as we work on CEO transition planning, has
been designed to ensure a smooth and seamless handover
at the appropriate time. It is envisaged that when her
successor is appointed, the CEO remuneration package
will be re-considered so as to maintain alignment with the
long-term strategy of the business.
Executive Directors' Bonus Scheme
In determining annual bonus outcomes, the focus is on paying
for performance. There is a balance between a formulaic
and discretionary approach to assessing performance and
determining bonus awards. The CEO and CFO will participate
in the Executive Directors' Bonus Scheme. The Committee will
ensure that the measures and targets used to determine the
variable elements of the Executive Directors' remuneration
are aligned with the strategic three-year plan and key
performance indicators. 75% of any Executive Director bonus
will directly relate to the delivery of annual profits and
25% will relate to strategic objectives, focused particularly
on progress in product diversification, technology and
succession planning – and appropriate metrics will apply to
each of these components.
Executive Directors are required to take one-third of their
bonus payment in shares, subject to lock-up conditions of one
to three years. In addition, they are offered the opportunity
for up to a further third of their bonus payment to be paid in
shares. The remaining amount can be taken in cash.
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Record plc
Annual Report 2022
Remuneration report continued
Chair of the Remuneration Committee’s
statement continued
Proposed changes to our Remuneration Policy continued
LTIP
A new performance share plan will be introduced to align,
incentivise and retain Executive Directors and senior
managers over the long term. LTIP awards will be granted up
to 150% of base salary, with the vesting of awards subject
to the satisfaction of three-year targets and continued
employment. Any vested shares must be held for a two-year
post-vesting holding period. Performance measures will
comprise an EPS condition (as to two-thirds of the award)
and a TSR condition (as to one-third of the award) with
performance measured relative to a benchmark. The CFO,
Steve Cullen, and the Record Currency Management Limited
subsidiary Board members will initially participate in the
LTIP. This replaces the previous share option scheme for the
Executive Directors, although the scheme can still be used
to award options to staff.
JSOP and Share Scheme
Alongside the LTIP, we will maintain the Joint Share
Ownership Plan ("JSOP") and Share Scheme to accelerate
the acquisition of shares for the next generation of
management as part of our succession plans.
Staff Bonus Scheme
Staff bonus awards relate to performance during the period
against objectives, measured by the line manager and
approved by the HR Committee, with those identified as
Material Risk Takers ("MRTs") bonus payments being subject
to Remuneration Committee review.
Group performance for 2021-22
The year to 31 March 2022 has seen revenues increase by
38% compared with last year, an increase in operating profit
of 76% and our AUME reached $83.1 billion. Our Group Profit
Share Scheme pool was 34% of pre-GPS underlying operating
profit, which represented £5.7 million, directly linking the
Company’s financial performance to the size of the variable
remuneration pool. The payments made under the Group
Profit Share Scheme increased by 78% compared to the
previous period.
Executive Directors were awarded profit share units
under the Group Profit Share Scheme by the Remuneration
Committee based on their individual level of performance
measured against their objectives. Some discretion was
exercised by the Committee in the allocation of these profit
share units. Details can be found within the annual report
on remuneration.
The Remuneration Committee also received input from the
Head of Compliance, who reports any legal or compliance
issues that relate to Executive Directors who are due to
receive awards under the Scheme. Payments were made in
accordance with the Group Profit Share Scheme rules and
were approved by the Committee.
No option awards were made to Executive Directors during
the year and details of previous awards can be found on page
87. No options vested for Executive Directors during the year
as the performance conditions had not been met. Details can
be found on page 79.
Executive Director remuneration outcomes 2021-22
To reflect Leslie Hill’s leadership and critical value in
delivering the change in strategy and succession, and
consistent with the inflationary increase in remuneration
for staff generally, her salary was increased to £682,500
from 1 April 2022. Leslie’s variable remuneration was based
on her performance against agreed objectives and this is
detailed on page 86.
To reflect the increasing breadth of Steve Cullen’s role with
the expansion of the Record Group, his salary was increased
to £150,147 from 1 April 2022. Steve’s variable remuneration
was based on his performance against agreed objectives and
this is detailed on page 87.
Alignment with shareholders
As at 31 March 2022, 37% of the Company’s shares were
held by the Chairman and the Directors, and each of the
current Executive Directors has a shareholding significantly
greater than 150% of their base salary. In addition, 61% of the
Company’s employees are shareholders.
Engaging with employees
The Remuneration Committee takes an active involvement
in remuneration for the whole Company. Record staff
participate in both the current Group Profit Share Scheme and
the Share Option Scheme and the Remuneration Committee
reviews all GPS and option awards. A significant proportion of
our colleagues are shareholders, so are able to express their
views in the same way as other shareholders.
When determining Executive Director remuneration
arrangements, the Remuneration Committee takes into
account pay conditions throughout the Group to ensure
that the structure and quantum of Executive Directors’ pay
remains appropriate in the circumstances.
In my role as Employee Engagement Director, leading our
workforce engagement initiatives, I have been working
closely with Kevin Ayles, Head of HR and Company Secretary.
We have been able to seek the views of the wider workforce
on a range of topics including strategy, remuneration and
working arrangements, through our employee engagement
survey, meetings and conversations with staff.
Shareholder consultation
It remains our policy to discuss any substantive proposed
changes to the Group’s remuneration structures with key
external shareholders in advance of any implementation.
The Remuneration Committee takes into account shareholder
views received in relation to resolutions to be considered at
the AGM each year, and values shareholder feedback when
forming remuneration policy.
Tim Edwards
Chair of the Remuneration Committee
20 June 2022
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Annual Report 2022
79
Remuneration report continued
Remuneration Policy to be proposed to shareholders at the AGM
The Directors' Remuneration Policy, modified as described in the Remuneration Committee Chairman’s statement and set out
in full below, is proposed by the Remuneration Committee and the Board. Shareholders will be asked to approve the new Policy
at the 2022 AGM on 29 July 2022. This Policy will take effect for Directors from the date of its approval and is expected to be
applied for the next three years. The Company’s previous Remuneration Policy will continue to apply awards and entitlements
granted under it.
In summary, the key proposed policy changes are to introduce an LTIP, the separation of the Executive Directors' Bonus Scheme
and the Staff Bonus Scheme and to target a ratio of total remuneration costs to revenue. These changes are designed to
motivate and retain our CEO to deliver our three-year strategy and to create a remuneration structure that aligns with and
supports our succession plans.
Summary remuneration structure
The table below illustrates the remuneration structures that we have in place for Executive Directors.
Salary
Cash
Pension and
benefits
Cash
Executive Directors
Cash
Bonus Scheme
Shares
1/3 shares
released from
lock up
1/3 shares
released from
lock up
1/3 shares
released from
lock up
LTIP
EPS and TSR performance conditions
Vesting
Held until year 5
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Note: Executive Directors are required to take one-third of their bonus payment in shares, which are locked up and released over three years. Executive Directors can elect to
take a further third of their bonus payment in shares, and these have no lock up.
Total remuneration spend
Over the medium term, the Board has set a target ratio of
total remuneration costs to be up to 50% of revenue. This
includes all remuneration costs for Directors and for staff.
Executive Directors can participate in the Executive Director
Bonus Scheme and the LTIP. Staff remuneration schemes
have also been included in the Remuneration Policy, to
provide shareholders with full transparency of remuneration
and the alignment with future succession planning.
Executive Director fixed remuneration
Executive Directors receive a basic salary, pension and
certain standard benefits such as private medical insurance,
life assurance and permanent health insurance.
Executive Directors' Bonus Scheme
The Executive Directors' Bonus Scheme is our annual
short-term variable remuneration structure and both the
CEO and CFO participate in the Scheme. The Remuneration
Committee will ensure that the measures and targets
used to determine the variable elements of the Executive
Directors' bonus are aligned with the strategic three-year
plan and key performance indicators. The purpose is to
ensure that there is a transparent link between our business
strategy and the Executive Directors’ contribution in
delivering it, that the assessment of individual performance
is clear, and that variable remuneration rewards high levels
of Company performance.
The Executive Directors' bonus pool will be determined as
follows:
• Financial (75%) The Committee will consider the firm’s
financial performance and, specifically, delivery of
operating profit against targets for the year.
• Non-financial (25%) The Committee will assess strategic
progress made during the year and will focus specifically
on progress in product diversification, technology and
succession planning. These are all fundamental to the
Group’s long-term success. Performance of each Executive
Director against agreed objectives will also be considered.
The Remuneration Committee determines the bonus pool
size, which together with the Staff Bonus Scheme will not
exceed 35% of profits. The Scheme is discretionary and there
is no contractual right to receive a bonus.
Bonus payments are made in cash and in shares. To ensure
that the interests of management and shareholders are
aligned, Executive Directors are required to take a proportion
(initially one-third) in shares, subject to a three-year "lock-up"
period. These shares are released from lock up in three equal
tranches on the first, second and third anniversary of the
bonus payment date. Additionally, Executive Directors are
offered the opportunity to elect for up to a further one-third
of their bonus to be paid in shares, which has no lock up.
The remaining one-third is paid in cash.
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Record plc
Annual Report 2022
Remuneration report continued
Remuneration Policy to be proposed to shareholders at the AGM continued
LTIP
It is of great importance for the long-term success of the business that the Group retains and motivates its current and future
key employees, and that they are incentivised over the longer term in a manner that aligns their interests with those of the
shareholders. The new LTIP will be implemented to align senior management remuneration with the Company’s long-term
business success and it is envisaged that the CFO, Steve Cullen, and the Record Currency Management Limited subsidiary Board
members will initially participate in the LTIP, with the exception of Leslie Hill for reasons explained above.
Initial awards under the LTIP will be subject to the performance conditions set out below and measured over a three-year
performance period. Annual awards under the LTIP can be made up to a maximum of 150% of base salary. Any shares received
after vesting will be subject to a two-year holding period commencing on the date of vesting. The Remuneration Committee
will determine the applicable performance conditions for each annual award and set challenging criteria that are consistent
with the Group’s strategy. Vesting of LTIP awards to be granted to Executive Directors will be determined as follows:
• EPS (2/3 of award) Basic earnings per share is a firm-wide key performance indicator, which supports long-term financial
sustainability. The Group aims to grow earnings per share consistently and the Remuneration Committee will set a
three-year cumulative EPS threshold target of 15 pence, which would result in the LTIP awards vesting at 25%, rising on a
straight-line basis to 100% vesting for a three-year cumulative EPS of 18 pence at the end of the performance period.
• TSR (1/3 of award) Relative TSR using a benchmark of the FTSE Small Cap index with vesting based on the outperformance
of the index. The threshold target for the TSR portion of the award will be a TSR outcome in the 25th percentile of the index
at which 25% of the TSR portion of the award would vest, rising on a straight-line basis to 100% vesting of the TSR portion
of the award at a TSR outcome in the 75th percentile of the index.
Following the end of the performance period, the Remuneration Committee will determine the extent to which the
performance conditions have been met and the proportion of awards that will vest. The Remuneration Committee will have
discretion to adjust the vesting level where it determines appropriate.
Directors’ Remuneration Policy table
The following table summarises the key features of each element of the Policy, their purpose and link to strategy, subject to
approval at the AGM in July.
Element, purpose and
link to strategy
Operation
Base salary
Fixed remuneration that reflects
the role, responsibilities,
experience and knowledge of
the individual.
The Remuneration Committee reviews salaries
for Executive Directors on an annual basis.
Any review will take into account market rates,
business performance and individual contribution.
There is no prescribed maximum salary.
However, increases are normally expected to be
in line with the typical level of increase awarded
across the Group.
Performance metrics
Not applicable, though individual
performance will be considered
when reviewing base salary levels.
Benefits
To provide a benefits package
that provides for the wellbeing
of our colleagues.
Benefits include, but are not limited to, private
medical insurance, dental insurance, permanent
health insurance, life assurance and annual holiday.
Not applicable
Executive Directors receive benefits on the same
basis as all other employees, at the prevailing rates.
Pension
To provide an appropriate
retirement income, to aid
attraction and retention of
high-calibre executives.
Not applicable
Executive Directors receive an employer pension
contribution of 11% of salary which can be paid into
the Group Personal Pension Scheme or delivered as
a cash allowance.
The pension contribution for Executive Directors is
fully in line with pension contributions paid to all
staff (which also comprise an employer pension
contribution of 11% of salary).
Record plc
Annual Report 2022
81
Remuneration report continued
Element, purpose and
link to strategy
Operation
Bonus Scheme
To motivate Executive Directors
to achieve sustainable financial
performance and strategic
objectives aligned with the
Group strategy.
Long Term Incentive Plan
("LTIP")
A performance share plan
to incentivise delivery of
long-term performance and
strategy delivery, aligning
interests with shareholders.
Bonus payments are based on performance
measured over the financial year.
Executive Directors are required to take one-third
of their bonus payment in shares subject to lock-up
conditions of one to three years and in addition are
offered the opportunity for up to a further third
of the bonus to be paid in shares. The remaining
amount is paid in cash.
Up to 35% of operating profits (pre-bonus) are
allocated in total to the Executive Director Bonus
Scheme and the Staff Bonus Scheme.
Malus and clawback provisions apply to all awards.
Further details are set out below.
Awards under the LTIP may be granted as nil or
nominal cost options, market value options or
conditional share awards.
The maximum opportunity for Executive Directors
is an award of up to 150% of base salary.
Any awards will be delivered in Company shares.
Awards vest at the end of a three-year performance
period, after which any shares must be held for a
two-year post-vesting holding period.
Malus and clawback provisions apply to all awards.
Further details are set out below.
The Committee has discretion in the treatment
of leavers as set out below and in respect of the
assessment of performance and vesting levels
(including to amend performance conditions and
measures).
Performance metrics
Bonus will be based on the
achievement of Group financial
operating profit targets (75%) and
delivery of strategic objectives
(25%).
Individual awards are based on role,
responsibilities and delivery and
determined by the Remuneration
Committee.
Vesting is based two-thirds on EPS
growth and one-third on relative
TSR compared with the FTSE Small
Cap index.
The Remuneration Committee has
discretion to set other performance
conditions for the future operation
of the LTIP.
Share Incentive Plan
A share saving plan to
encourage long-term equity
ownership.
The Group has an approved, Share Incentive Plan
(“SIP”). All staff are able to buy shares from pre-tax
salary up to an HMRC-approved limit (£1,800 for
the financial year ended 31 March 2022), which is
matched at a rate of 50%.
Not applicable
Notes to the Remuneration Policy table
Staff remuneration schemes
In addition to a basic salary, pension and certain standard benefits such as private medical insurance, life assurance and
permanent health insurance, there are a number of share schemes in which staff can participate. These schemes have been
implemented to encourage employee share ownership as a means of incentivising, rewarding and aligning employee interests
with those of shareholders. The relevant schemes are summarised below and, for the avoidance of doubt, do not form part of
the Directors’ Remuneration Policy:
Staff Bonus Scheme
Individual bonus awards relate to performance during the year and are measured against objectives, assessed by the line
manager and approved by the HR Committee. Bonuses awarded to individuals identified as Material Risk Takers ("MRTs")
are subject to Remuneration Committee review.
The actual size of the staff bonus pool will be determined by the accumulation of individual performance and the Remuneration
Committee will approve the pool size, within the cap of 35% of operating profits for both the Executive Director and Staff
Bonus Schemes.
Bonus payments are made in cash and in shares. Senior Managers and MRTs are required to take a proportion (initially
one-third) in shares, subject to a three-year "lock-up" period. These shares are released from lock up in three equal tranches
on the first, second and third anniversary of the payment date. Additionally, Senior Managers and MRTs are offered the
opportunity to elect for up to a further one-third of their bonus to be paid in shares, which has no lock up. The remaining
one-third is paid in cash.
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Record plc
Annual Report 2022
Remuneration report continued
Remuneration Policy to be proposed to
shareholders at the AGM continued
Notes to the Remuneration Policy table continued
Staff Remuneration Schemes continued
Joint Share Option Plan ("JSOP")
The JSOP is designed for key staff to accelerate their
acquisition of shares in the Company to further align their
interests with those of shareholders. The JSOP requires a
financial commitment from individual participants, thereby
further aligning the individual’s contribution and retention
with business performance. Executive Directors do not
participate in the JSOP.
Purchased shares are jointly held by the EBT and the
employee under the JSOP. The vesting hurdle is set at market
value of the shares subject to the JSOP on grant and the
participants own any value above the hurdle. JSOP awards
vest over a four-year period, one quarter each year, and any
share appreciation is settled in shares which are then subject
to a two-year holding period.
Share Scheme
The Share Scheme has been designed to award share options
to high potential senior managers and staff. Executive
Directors do not participate in the Share Scheme. HMRC
tax-qualified options (“Approved Options”) as well as
non-tax-qualified options (“Unapproved Options”) can be
granted. In total, the value of options granted under the
Share Scheme is limited to 2% per annum of the market
capitalisation of Record plc (being approximately 4 million
shares).
Each participant may be granted Approved Options over
shares with a total market value of up to £30,000 on the date
of grant. There is no such limit on the value of Unapproved
Options, which may be granted with any exercise price
(including nil). Approved Options become exercisable on
the fourth anniversary of grant, subject to the participant’s
continued employment with the Group and, should they have
been set, any other performance conditions being met. One
quarter of any Unapproved Option becomes exercisable each
year for four years, subject to the participant’s continued
employment and, should they have been set, any other
performance conditions being met.
The Remuneration Committee retains the power to grant
options under the Share Scheme, although it can and has
delegated to management the task of identifying suitable
recipients of options and the number of shares subject to
options for those employees below Board level.
Commission Scheme
The Company’s Commission Scheme rewards and
incentivises staff to grow the business. Executive Directors
do not participate in the Scheme, however all other staff
are eligible to participate. Any participant is required to
meet their individual performance objectives to be eligible
for a payment. There is a robust process in place to ensure
that the Commission Scheme does not create a conflict of
interest in relation to clients. All payments will be reviewed
by the Remuneration Committee after input from the Head
of Compliance.
Remuneration Policy table for the Chairman and the Non-executive Directors
The table below sets out the Remuneration Policy for the Chairman and the Non-executive Directors.
Element, purpose and
link to strategy
Current operation for Chairman
and Non-executive Directors
Further information
Fees
Fixed remuneration that reflects
the role, skills and experience
The Chairman’s fees are determined by the
Remuneration Committee.
The Non-executive Directors’ fees are approved
by the Board.
Increases are normally expected to be in line
with the typical level of salary increase awarded
across the Group.
Fees are reviewed annually.
Any review will take into account
market rates, business performance
and individual contribution.
Pension and Benefits
To enable the Chairman and
Non-executive Directors to
carry out their roles.
The Chairman receives benefits on the same basis
as the Executive Directors, including pension,
private medical insurance, dental insurance,
permanent health insurance and life assurance.
The Non-executive Directors
receive expenses but do not receive
any additional benefits.
Record plc
Annual Report 2022
83
Remuneration report continued
Service contracts and loss of office payment policy
All Executive Directors have service agreements with the
Company. None of the service agreements are for a fixed
term and all include provisions for termination on six months’
notice by either party. Service agreements do not contain any
contractual entitlement to receive bonuses, nor to participate
in the LTIP, nor to receive any fixed provision for termination
compensation.
Non-executive Directors are appointed for an initial
three-year period and are required to provide at least six
months’ notice of their intention to resign. Their continued
engagement is subject to annual re-election by shareholders
at the Company’s AGM.
The terms and conditions of appointment of the Executive
Directors and Non-executive Directors are available for
inspection at the Company’s registered office.
When an Executive Director leaves the Group, the
Remuneration Committee will review the circumstances and
apply the appropriate treatment to their final remuneration.
Any payments and vesting of share awards under the
Executive Director Bonus Scheme and the LTIP will be in
accordance with the relevant scheme rules and discretion
as set out in those plans at the time the Executive Director
leaves. All payments will be in line with contractual
entitlements and statutory requirements. No Executive
Director will be rewarded for failure.
Salary and benefits will continue to be paid throughout the
notice period although the Remuneration Committee has the
discretion to make a payment in lieu of notice.
Other matters
Engaging with employees and shareholders,
decision-making processes and general employee
pay and conditions
The Group’s approach to engaging with employees and
shareholders is detailed in the Chair of the Remuneration
Committee’s statement. The Group’s remuneration
decision-making processes are also summarised in that
statement and detailed further above in the Remuneration
Policy tables, as well as the general approach to employee
pay and conditions.
Malus and clawback
Malus and clawback provisions under all of the Company’s
incentive schemes (including the Executive Director and Staff
Bonus Scheme, LTIP, Share Scheme, Commission Scheme
and JSOP) are in line with regulatory requirements. Under
the relevant rules, the Remuneration Committee may apply
malus and/or clawback where:
• the relevant individual participated in, or was responsible
for, conduct which resulted in significant losses to the
Company or relevant business unit;
• the relevant individual failed to meet appropriate
standards of fitness and propriety;
• there is reasonable evidence of misbehaviour or material
error by the individual;
• the Company, or business unit for which the relevant
individual is responsible, suffers a material downturn in
its financial performance; and/or
• the Company, or business unit in which the relevant
individual works, suffers a material failure of risk
management.
Source and funding of shares
Share awards under the Executive Director Bonus Scheme
and Staff Bonus Scheme are covered wherever possible
through market purchases by the Company’s Employee
Benefit Trust (“EBT”) rather than through the issue of new
shares, and this has been the case since the inception of
the previous Group Profit Share Scheme in 2007. It remains
our intention to continue to operate in this manner in order
to minimise potential dilution of shareholders’ interests.
Similarly, grants under the LTIP and the Share Scheme are
not normally satisfied by the issue of new shares, in order to
minimise potential dilution. The JSOP uses market purchase
shares only. The Company provides funds to the EBT to allow
it to purchase shares in the market with which to satisfy the
exercise of options. The number of shares purchased by the
Group to hedge the satisfaction of options is based on an
appropriate hedge ratio at each grant date, as calculated by
management and approved by the Remuneration Committee.
Implementation of Remuneration Policy
The Group has implemented the Remuneration Policy, as
approved by shareholders previously. The Remuneration
Committee has approved variable remuneration payments
for the CEO and CFO based on their performance against their
objectives and in accordance with the previous Group Profit
Share Scheme rules.
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Record plc
Annual Report 2022
Remuneration report continued
Remuneration Policy to be proposed to
shareholders at the AGM continued
Other matters continued
Approach to remuneration for new Executive Directors
On the recruitment of a new Executive Director, the level of
fixed remuneration will be appropriate to the candidate’s
skills and experience and the responsibility that they will be
undertaking. New Executive Directors would be eligible to join
the Executive Directors' Bonus Scheme and would be eligible
to be considered for participation in the LTIP as deemed
appropriate by the Remuneration Committee, subject to the
applicable policy at the time.
The Remuneration Committee recognises that a new
Executive Director may forfeit remuneration as a result of
leaving a previous employer and the Committee will consider
mitigating that loss or part of that loss by making a buyout
award in addition to the remuneration outlined above.
The Committee will consider any relevant factors including
any performance conditions attached to any previous
incentive arrangements and the likelihood of these conditions
being met and will take reasonable steps to ensure that any
payment is at an appropriate level.
When recruiting a new Non-executive Director, fees will be
in line with the prevailing fee schedule paid to other Board
members and Non-executive Directors at that time.
Executive shareholding policy
Any new Executive Director will be encouraged to build a
shareholding with a value of at least 150% of base salary,
for example through the use of the Executive Directors'
Bonus Scheme and LTIP scheme, within a reasonable time
of being appointed.
At the end of the appointment, an Executive Director would
need to retain a shareholding with a value of at least 150%
of base salary previously built up through awards under the
Company’s remuneration schemes (but excluding any shares
bought for cash). Half of this shareholding must be held for
a period of one year and the other half held for a period of
two years.
Regulation
We continue to review our Remuneration Policy in line
with regulatory changes and good practice and to ensure
compliance with the principles of the Remuneration Code
of the UK financial services regulator, as applicable to the
Group. In particular, we have reviewed our Remuneration
Policy in line with the Investment Firm Prudential Regulation
as a non-SNI firm implementing the basic and standard
remuneration requirements.
Remuneration Policy – illustrations
The charts below show the lowest, highest and average
remuneration for the CEO and CFO over the past two
years and three years respectively. Fixed remuneration is
comprised of salary, pension contributions, other benefits
and any cash alternative. Variable remuneration comprises
Group Profit Share, including cash and share payments, as
well as any gains on share options.
As variable remuneration is not capped at the individual
level, we have used the two and three-year average, highest
and lowest remuneration as an indication of the Executive
Director’s earnings potential. Future remuneration will
be determined based on profitability and performance as
described in the Remuneration Policy.
Leslie Hill (as CEO)
Minimum
100%
£760,549
2-year
low
2-year
high
41%
59%
£1,270,178
30%
70%
£2,395,183
2-year
average
34%
66%
£1,832,681
£
0
500k
1,000k
1,500k
2,000k
2,500k
Steve Cullen (as CFO)
Minimum
100%
£168,060
3-year
low
3-year
high
3-year
average
70%
59%
64%
30%
£214,527
41%
£258,159
36%
£237,377
Key:
Fixed
Variable
£
0
100k
200k
300k
The above charts exclude the value
of options granted to Directors.
Record plc
Annual Report 2022
85
Remuneration report continued
Annual report on remuneration
This part of the report has been prepared in accordance with Schedule 8 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 (as amended), and relevant sections of the Listing Rules. The annual report on
remuneration will be put to an advisory shareholder vote at the 2022 AGM. The information on pages 85 to 91 has been audited,
where required, under the regulations and is indicated as audited information where applicable.
Directors’ remuneration as a single figure (audited information)
The remuneration of the Directors for the year ended 31 March 2022 is detailed below together with their remuneration for the
previous year.
Executive Directors
Salaries and fees
Benefits1
Pensions2
Total fixed pay
Short-term incentive (GPS cash)
Short-term incentive (GPS shares)3
Total variable pay4
Total
Leslie Hill
2022
£
Bob Noyen
(left the Board on 4 February 2021)
2021
£
2022
£
2021
£
Steve Cullen
2022
£
2021
£
650,000
450,000
2,974
71,500
2,325
62,250
724,474
514,575
1,113,806
427,420
556,903
328,183
1,670,709
755,603
2,395,183
1,270,178
—
—
—
—
—
—
—
—
242,830
136,496
129,997
1,243
33,592
1,397
15,015
1,128
17,983
277,665
152,908
149,108
84,795
42,397
127,192
404,857
70,167
35,084
105,251
258,159
43,612
21,807
65,419
214,527
Non-executive Directors
Salaries and fees
Benefits1
Pensions2
Total
Non-executive Directors
Salaries and fees
Benefits1
Pensions2
Total
Neil Record
Jane Tufnell
(resigned 27 July 2021)
Rosemary Hilary
(resigned 16 September 2021)
2022
£
2021
£
2022
£
2021
£
Tim Edwards
2022
£
2021
£
20,515
63,500
23,077
49,862
53,287
43,497
—
—
—
—
106
—
—
—
59
—
161
—
2022
£
81,293
3,453
8,942
2021
£
79,310
2,561
10,971
93,688
92,842
20,515
63,500
23,183
49,862
53,346
43,658
Matt Hotson
(appointed on 30 July 2021)
Krystyna Nowak
(appointed on 16 September 2021)
2022
£
33,526
—
—
33,526
2021
£
—
—
—
—
2022
£
27,115
—
—
27,115
2021
£
—
—
—
—
1. This value includes matching shares under the SIP scheme, medical benefits, payments made in lieu of medical benefits, overtime payments and reimbursement of taxable
travel expenses.
2. This includes payments made in lieu of pension contributions. Pension contributions were decreased from 13.5% to 11% on 1 April 2021.
3. Short-term incentive payments are subject to individual performance conditions summarised in the objectives table below. The shares vest immediately but are subject
to lock-up restrictions and are calculated based on the overall profitability of the Group.
4. No options vested or were exercised and no Directors had an option gain in the current year, or in the prior year.
Payments for loss of office and payments made to former Directors
Bob Noyen left the Board of Directors on 4 February 2021 and left employment on 31 March 2021. To assist with the transition
and maintenance of client relationships, Bob agreed to provide consultancy support to the Company. Payments in respect of
this consultancy support totalled £357,044 in the year to 31 March 2022.
No payments were made to Jane Tufnell or Rosemary Hilary following their resignations in July 2021 and September 2021
respectively.
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86
Record plc
Annual Report 2022
Remuneration report continued
Annual report on remuneration continued
Pensions (audited information)
Executive Directors are entitled to join the Group Personal Pension Scheme. This is a defined contribution plan and for
the financial year ending 31 March 2022, the Group made contributions of 11% of each Director’s salary, which could either
be paid into the Group Personal Pension Scheme, taken as cash or a combination of the two.
All Directors who make personal contributions into the Company pension scheme via salary sacrifice receive an amount
equivalent to the employer’s national insurance saved by the Company into their pension as an additional contribution.
The employer pension contributions for the financial years ending 31 March 2021 and 31 March 2022 are detailed in the
tables on page 85.
Allocation of the profit share pool to Executive Directors
The Remuneration Committee is able to exercise discretion over the level of base Group Profit Share units that are awarded
to Executive Directors based on the role and level of responsibility. The final allocation is adjusted based on an assessment
of the individual Executive Director’s performance compared to their objectives. On two occasions during the year, the
Remuneration Committee approved awards to the Executive Directors after considering the role and performance of each
individual Director for the relevant six-month period. The overall performance for the year for each Executive Director is
summarised below. The Remuneration Committee also receives reports from the Head of Compliance regarding any legal
or compliance issues relevant to the award.
Leslie Hill
Objectives
Strategic
Sales
Support our sales environment to enhance the sales
of both our traditional products and new strategies.
Investments
Diversify our investment product offering and build
asset management business in Continental Europe.
Outcomes
Revenues increased by 38% compared with last year, operating profit
increased by 76% and our AUME increased by $3.7 billion, finishing
the year at $83.1 billion.
Product diversification being achieved through our own strategies
and collaboration with external partners. EM Sustainable Finance
Fund launched in June 2021. BaFin have informed the Group that our
application has been approved and Municipal Bond fund developed
for the German market.
Technology
Modernise our IT platform. Provide long-term
flexibility and cost savings.
Good progress in technology, with hybrid cloud and on-premises
capabilities expanded and the introduction of customised and
cost-effective technology solutions to clients.
Succession and organisational structure
Develop an organisational structure that is fit to
deliver profitable growth and to support succession.
Creation of a new Record Currency Management Limited Board,
changes to the governance structure and new leadership teams
in sales, investment and operations as well as the development of
a new European team.
Operational
People
Recruit, develop and retain high-performing
colleagues as part of Record plc leadership and
participation.
This was achieved through the development and retention of high
performers in the team.
Press and investors
Build positive relationships with investors, brokers,
city contacts and press.
Good relationships established.
Award:
200%. Objectives were exceeded and the Committee made an award of 200% to recognise overperformance.
Record plc
Annual Report 2022
87
Remuneration report continued
Steve Cullen
Objectives
Outcomes
Strategic
Implement opportunities for the Finance team
to become more commercial.
New accounting and payroll systems embedded, process
efficiencies introduced and manual processes minimised.
Operational
Cost discipline and accounting
Ensure maintenance of cost discipline across the
business through adherence to approved budget, and
expenditure authorisation policy and procedures.
Cost discipline was maintained throughout the financial year.
Risk management
Ensure suitable systems and controls in place within
Finance to minimise potential errors/breaches.
No material errors or breaches in routine reporting, confirmed
by external audit.
Reporting
Ensure timely delivery of key reporting metrics,
including the Annual Report, internal audit relationship
and investor relations. Meet regulatory reporting
requirements.
Annual Report delivered and improvements made to the style
of the report.
Effective transition to new Investment Firm Prudential Regime
capital and liquidity requirements.
Department
Ensure appropriate team structure and skills and
review areas for improving efficiency.
External relationships
Continue to develop relationships with external
auditors, internal auditors, company brokers and
investor relations.
Award:
100%. Objectives were met for the period.
New team working well together, improved use of technology.
Good relationships established with internal and external auditors.
Increased involvement with brokers and investor relations.
Directors’ share options and share awards (audited information)
During the financial year ended 31 March 2022 no option awards were made to the Executive Directors.
All of the Executive Directors have previously been awarded share options and the table below sets out details of Executive
Directors’ outstanding share option awards, which may vest on an annual basis over three, four and five years subject to
continued service and performance conditions. The table also sets out any options that have lapsed or been exercised.
Name
Date of grant
Total
options at
1 April
2021
Options
granted
in period
Leslie Hill
30/11/16
183,334
Steve
Cullen
26/01/18
186,667
21/08/19
575,000
30/11/16
183,334
26/01/18
83,334
21/08/19
260,000
—
—
—
—
—
—
Options
lapsed
in period
(183,334)
(93,333)
—
(183,334)
(41,666)
—
Options
exercised
in period
Total
options at
31 March
2022
Exercise
price
Earliest
exercise
Latest
exercise
—
—
—
—
—
—
—
34.072p 30/11/2021 29/11/2022
93,334
575,000
43.5p 26/01/2022 25/01/2023
31.1p 21/08/2022 20/08/2025
—
34.072p 30/11/2021 29/11/2022
41,668
260,000
43.5p 26/01/2022 25/01/2023
31.1p 21/08/2022 20/08/2025
The outstanding share options above vest subject to performance conditions, which are detailed on page 88.
No options were exercised in the year ended 31 March 2022.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
88
Record plc
Annual Report 2022
Remuneration report continued
Annual report on remuneration continued
Directors’ share options and share awards (audited information) continued
Options granted to Executive Directors vest on an annual basis (in years three, four and five) and vesting is subject to Record’s
average annualised EPS growth over the relevant period since grant as follows:
Record’s annualised EPS growth over the period from grant to vesting
>RPI growth + 13%
>RPI growth + 10%, =RPI growth + 7%, =RPI growth + 4%, = 3 months
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Corporation tax liabilities
Provisions
Lease liabilities
Financial liabilities
Derivative financial liabilities
Total current liabilities
Non‑current liabilities
Provisions
Lease liabilities
Total non‑current liabilities
Total net assets
Equity
Issued share capital
Share premium account
Capital redemption reserve
Retained earnings
Equity attributable to owners of the parent
Total equity
Approved by the Board on 20 June 2022 and signed on its behalf by:
Neil Record
Chairman
Steve Cullen
Chief Financial Officer
Company registered number: 1927640
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
Note
2022
£’000
2021
£’000
11
12
13
14
15
16
17
18
18
19
19
12
20
17
21
12
22
562
1,421
401
3,447
253
6,084
9,883
—
13,913
3,345
27,141
33,225
420
684
683
3,046
212
5,045
8,006
260
12,932
6,847
28,045
33,090
(4,721)
(3,426)
(924)
(75)
(366)
—
(124)
(315)
—
(539)
(1,696)
(16)
(6,210)
(5,992)
(125)
(960)
(1,085)
(200)
(99)
(299)
25,930
26,799
50
3,238
26
22,616
25,930
25,930
50
2,418
26
24,305
26,799
26,799
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
108
Record plc
Annual Report 2022
Consolidated statement of changes in equity
Year ended 31 March 2022
As at 1 April 2021
Profit and total
comprehensive
income for the year
Dividends paid
Own shares acquired
by EBT
Release of shares held
by EBT
Share‑based payment
reserve movement
Transactions with
shareholders
As at 31 March 2022
Year ended 31 March 2021
As at 1 April 2020
Profit and total
comprehensive
income for the year
Trade Record sale
Dividends paid
9
Own shares acquired
by EBT
Release of shares held
by EBT
Share‑based payment
reserve movement
Transactions with
shareholders
As at 31 March 2021
Called‑up
share capital
£’000
Share premium
account
£’000
Note
Capital
redemption
reserve
£’000
50
2,418
26
9
—
—
—
—
—
—
—
—
—
820
—
820
50
3,238
—
—
—
—
—
—
26
Equity
attributable to
equity holders
of the parent
£’000
26,799
Retained
earnings
£’000
24,305
8,631
8,631
(6,512)
(6,512)
(5,807)
(5,807)
2,258
3,078
(259)
(259)
(10,320)
(9,500)
22,616
25,930
Non‑controlling
interests
£’000
—
—
—
—
—
—
—
—
Called‑up
share capital
£’000
Share premium
account
£’000
Note
Capital
redemption
reserve
£’000
50
2,259
26
—
—
—
—
—
—
—
—
—
—
—
159
—
159
—
—
—
—
—
—
—
Equity
attributable to
equity holders
of the parent
£’000
28,029
Retained
earnings
£’000
25,694
5,351
5,351
Non‑controlling
interests
£’000
132
—
32
32
(132)
(5,290)
(5,290)
(2,338)
(2,338)
994
1,153
(138)
(138)
(6,772)
(6,613)
—
—
—
—
—
—
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
50
2,418
26
24,305
26,799
Total
equity
£’000
26,799
8,631
(6,512)
(5,807)
3,078
(259)
(9,500)
25,930
Total
equity
£’000
28,161
5,351
(100)
(5,290)
(2,338)
1,153
(138)
(6,613)
26,799
Record plc
Annual Report 2022
109
Consolidated statement of cash flows
Year ended 31 March 2022
Profit after tax
Adjustments for non‑cash movements
Depreciation of right‑of‑use assets
Depreciation of property, plant and equipment
Amortisation of intangible assets
Share‑based payments
Decrease/(increase) in other non‑cash items
Finance income
Finance expense
Tax expense
Changes in working capital
(Increase)/decrease in receivables
Increase in payables
Cash inflow from operating activities
Corporation tax paid
Net cash inflow from operating activities
Purchase of intangible assets
Purchase of property, plant and equipment
Purchase of investments
Payment to seed fund holders
Redemption of bonds
Investment in subsidiaries
Purchase of money market instruments with maturity > 3 months
Sale of Trade Record shares
Interest received
Net cash outflow from investing activities
Cash flow from financing activities
Lease repayments
Purchase of own shares
Dividends paid to equity shareholders
Net cash outflow from financing activities
Net decrease in cash and cash equivalents in the year
Exchange gains/(losses)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Closing cash and cash equivalents consist of:
Cash
Cash equivalents
Cash and cash equivalents
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
Note
12
13
11
2022
£’000
8,631
489
357
192
559
877
(44)
23
7
2,225
11
13
12
9
(1,877)
1,296
12,728
(1,373)
11,355
(334)
(75)
(1,773)
(1,808)
1,462
—
(557)
(4,462)
(6,512)
(11,531)
(3,643)
141
6,847
3,345
3,345
—
18
3,345
2021
£’000
5,351
490
298
168
486
(492)
(71)
38
802
696
417
8,183
(1,385)
6,798
(189)
(230)
(881)
(335)
—
(23)
(560)
(1,808)
(5,290)
(7,658)
(7,300)
(147)
14,294
6,847
2,372
4,475
6,847
(983)
(4,973)
—
44
120
71
(3,467)
(6,440)
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
110
Record plc
Annual Report 2022
Company statement of financial position
As at 31 March 2022
Non‑current assets
Right‑of‑use assets
Investments
Deferred tax
Total non‑current assets
Current assets
Corporation tax
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
Non‑current liabilities
Lease liabilities
Provisions
Total non‑current liabilities
Total net assets
Equity
Issued share capital
Share premium account
Capital redemption reserve
Retained earnings
Total equity
Note
12
14
16
18
19
12
12
21
22
2022
£’000
2021
£’000
1,232
5,029
1
6,262
3
3,522
43
3,568
9,830
(4,161)
(326)
75
(4,562)
(812)
(125)
(937)
642
4,315
7
4,964
17
1,387
173
1,577
6,541
(16)
(501)
—
(517)
(96)
(200)
(296)
4,331
5,728
50
1,809
26
2,446
4,331
50
1,809
26
3,843
5,728
The Company’s total comprehensive income for the year (which is principally derived from intra‑group dividends) was
£4,558,705 (2021: £5,133,381).
Approved by the Board on 20 June 2022 and signed on its behalf by:
Neil Record
Chairman
Steve Cullen
Chief Financial Officer
Company registered number: 1927640
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2022
111
Company statement of changes in equity
Year ended 31 March 2022
As at 1 April 2021
Profit and total comprehensive income for the year
Dividends paid
Share option reserve movement
Transactions with shareholders
As at 31 March 2022
Year ended 31 March 2021
As at 1 April 2020
Profit and total comprehensive income for the year
Dividends paid
Share option reserve movement
Transactions with shareholders
As at 31 March 2021
Note
9
Note
9
Called‑up
share
capital
£’000
50
—
—
—
—
50
Called‑up
share
capital
£’000
50
—
—
—
—
50
Share
premium
account
£’000
1,809
—
—
—
—
1,809
Share
premium
account
£’000
1,809
—
—
—
—
1,809
Capital
redemption
reserve
£’000
26
—
—
—
—
26
Capital
redemption
reserve
£’000
26
—
—
—
—
26
Retained
earnings
£’000
3,843
4,559
Total
shareholders’
equity
£’000
5,728
4,559
(6,512)
(6,512)
556
(1,356)
2,446
556
(1,356)
4,331
Retained
earnings
£’000
3,819
5,133
Total
shareholders’
equity
£’000
5,704
5,133
(5,290)
(5,290)
181
(5,109)
3,843
181
(5,109)
5,728
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
112
Record plc
Annual Report 2022
Company statement of cash flows
Year ended 31 March 2022
Loss after tax
Adjustments for non‑cash movements
Depreciation of right‑of‑use assets
Loss on investments
Decrease in other non‑cash items
Finance expense
Tax expense
Changes in working capital
Increase in receivables
Increase in payables
Cash inflow/(outflow) from operating activities
Corporation taxes received
Net cash inflow/(outflow) from operating activities
Cash flow from investing activities
Dividends received
Investment in subsidiaries
Purchase of investments
Payments to seed fund holders
Disposal of subsidiary
Net cash inflow from investing activities
Net cash flow from financing activities
Lease repayments
Dividends paid to equity shareholders
Net cash outflow from financing activities
Net decrease in cash and cash equivalents in the year
FX revaluation
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Closing cash and cash equivalents consist of:
Cash
Cash equivalents
Cash and cash equivalents
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
Note
18
2022
£’000
(41)
453
—
45
16
(19)
(2,134)
2,470
790
37
827
4,600
(325)
—
1,798
—
6,073
(518)
(6,512)
(7,030)
(130)
—
173
43
43
—
43
2021
£’000
(137)
453
167
—
35
(30)
(1,245)
6
(751)
4
(747)
5,270
(23)
(881)
—
120
4,486
(517)
(5,290)
(5,807)
(2,068)
—
2,241
173
173
—
173
Record plc
Annual Report 2022
113
Notes to the financial statements for the year ended 31 March 2022
These financial statements exclude disclosures that are both
immaterial and judged to be unnecessary to understand our
results and financial position.
1. Accounting policies
In order to provide more clarity to the notes to the financial
statements, accounting policy descriptions appear at the
beginning of the note to which they relate.
The principal accounting policies adopted in the preparation
of these consolidated financial statements are set out in the
notes below. These policies have been consistently applied to
all periods presented unless otherwise stated.
a. Accounting convention
Basis of preparation
The Group financial statements have been prepared in
accordance with UK adopted international accounting
standards and the Company and other Group entities
financial statements have also been prepared in accordance
with UK adopted international accounting standards. The
financial statements have been prepared on a historical cost
basis, modified to include fair valuation of derivative financial
instruments. Investments are measured at fair value through
profit or loss.
The Directors are satisfied that the Company and the Group
have adequate resources with which to continue to operate
for the foreseeable future. In arriving at this conclusion, the
Directors have considered in detail the impact of the covid‑19
pandemic on the Group, the market it operates in and its
stakeholders. For this reason, the financial statements have
been prepared on a going concern basis. Please refer to the
Directors’ report on page 94 for more detail on going concern,
and also see management’s detailed review of the impact of
covid‑19 and the Russia/Ukraine crisis on page 51.
The preparation of financial statements in accordance with
the recognition and measurement principles set out in IFRSs
requires management to make judgements, estimates and
assumptions that affect the application of policies and
reported amounts of assets and liabilities, income and
expenses. The bases for management judgements, estimates
and assumptions are discussed further in note 2.
Future accounting developments
The Group did not implement the requirements of any other
standards or interpretations that were in issue but were not
required to be adopted by the Group at the year end date.
No other standards or interpretations have been issued
that are expected to have a material impact on the Group’s
financial statements.
b. Basis of consolidation
The consolidated financial information contained within the
financial statements incorporates financial statements of
the Company and its subsidiaries drawn up to 31 March 2022.
Subsidiaries are entities controlled by the Company and
are included from the date that control commences until
the date that control ceases. Control is achieved where the
Company is exposed to or has rights over variable returns
from its involvement with the entity and it has the power
to affect returns. The Group has applied UK adopted IFRSs
for periods commencing on or after January 2021.
An Employee Benefit Trust has been established for the
purposes of satisfying certain share‑based awards. As the
Group has “de facto” control over this special purpose entity,
the trust is fully consolidated within the financial statements.
Significant judgement
The Group uses judgement to determine whether
investments in its seed funds constitute controlling
interests in accordance with IFRS 10 – “Consolidated
Financial Statements”. The Group considers all relevant
facts and circumstances in assessing whether it has
control over specific funds or other entities. This includes
consideration of the extent of the Group’s exposure to
variability of returns as an investor and the Group’s ability
to direct the relevant activities, through exercising its voting
rights as an investor, or as investment manager. We consider
that the Group exerts such control in cases where (either
in isolation or together with its related parties) it holds a
majority of units in the fund.
If the Group is in a position to be able to control a fund,
then the fund is consolidated within the Group financial
statements. Such funds are consolidated either on a line‑
by‑line basis, or if the fund meets the definition of a disposal
group held for sale it is classified and accounted for on that
basis. In the case that the Group does not control a fund for
the complete reporting period, then the fund is consolidated
only for the part of the reporting period for which the Group
has control over the entity.
Where the Group controls an entity, but does not own all
the share capital of that entity, the interest of the other
shareholders’ non‑controlling interests is stated within
equity at the non‑controlling interests’ proportion of the
fair value of the recognised assets and liabilities. In the case
of the funds controlled by the Group, the interests of any
external investors in such funds are recognised as a financial
liability as investments in the fund are not considered to be
equity instruments.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
114
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
1. Accounting policies continued
b. Basis of consolidation continued
Significant judgement continued
The financial statements of subsidiary undertakings,
which are prepared using uniform accounting policies,
are coterminous with those of Record plc, referred to as
the "Company", apart from those of the seed funds which
have accounting reference dates of 30 September. The
consolidated financial statements incorporate the financial
performance and the financial position of the seed funds in
the year ended 31 March 2021. The seed funds were closed in
June 2021.
The Company is taking advantage of the exemption under
the Companies Act 2006 s408(1) not to present its individual
statement of comprehensive income and related notes that
form part of the financial statements. The Company and its
subsidiaries are collectively referred to as the Group; the
Group’s total comprehensive income for the year includes
a profit of £4,558,705 attributable to the Company (2021:
£5,133,381). The Company's principal activity is that of a
holding company.
All intra‑group transactions, balances, income, expenses
and dividends are eliminated on consolidation.
c. Foreign currencies
The financial statements are presented in sterling (£), which
is the functional currency of the parent company. Foreign
currency transactions are translated into the functional
currency of the parent company using prevailing exchange
rates which are updated on a monthly basis. Foreign
exchange gains and losses resulting from the settlement
of such transactions and from the remeasurement of
monetary items at year‑end exchange rates are recognised
in the statement of comprehensive income under “other
income or expense”.
d. Administrative expenses
Administrative expense includes staff costs, marketing and IT
costs, which are recognised on an accruals basis as services
are provided to the Group.
e. Financial instruments
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of
the financial instrument. Financial assets are derecognised
when the contractual rights to the cash flows from the
financial assets expire, or when the financial asset and all
substantial risks and rewards are transferred. A financial
liability is derecognised when it is extinguished, discharged,
cancelled or expires.
f. Impairment of assets
The Group assesses whether there is any indication that
any of its assets have been impaired at least annually.
If such an indication exists, the asset’s recoverable amount
is estimated and compared to its carrying value.
An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount.
Impairment losses are recognised in profit or loss.
g. Provisions and contingent liabilities
Provisions are recognised when present obligations as a
result of a past event will probably lead to an outflow of
economic resources from the Group and amounts can be
estimated reliably. Timing or amount of the outflow may still
be uncertain. A present obligation arises from the presence
of a legal or constructive commitment that has resulted
from past events.
Provisions are measured at the estimated expenditure
required to settle the present obligation, based on the
most reliable evidence available at the reporting date,
including the risks and uncertainties associated with the
present obligation. Provisions are discounted to their
present values, where the time value of money is material.
Any reimbursement that the Group can be virtually certain
to collect from a third party with respect to the obligation
is recognised as a separate asset. However, this asset may
not exceed the amount of the related provision.
All provisions are reviewed at each reporting date and
adjusted to reflect the current best estimate. In those cases
where the possible outflow of economic resources as a result
of present obligations is considered improbable or remote,
no liability is recognised.
h. Equity
Share capital represents the nominal (par) value of shares
that have been issued. Share premium includes any premium
received on issue of share capital. From time to time, the
Group has bought in ordinary shares for cancellation.
The cost of the buy‑ins was taken directly to retained
earnings. The nominal value of the shares was taken to a
capital redemption reserve. Retained earnings includes all
current and prior period retained profits and share‑based
employee remuneration. All transactions with owners of
the parent are recorded separately within equity.
Record plc
Annual Report 2022
115
Notes to the financial statements for the year ended 31 March 2022 continued
2. Critical accounting estimates and judgements
In order to prepare the financial statements in accordance
with IFRS, management make certain critical accounting
estimates. Management are also required to exercise
judgement in the process of applying the Group’s accounting
policies and in determining the reported amount of certain
assets and liabilities.
The estimates and associated assumptions are based on
historical experience and various other factors including
expectations of future events that are believed to be
reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent
from other sources. As a consequence, actual results may
differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the
revision affects both current and future periods.
Areas of significant judgement –
consolidation of seed funds
Note 1b describes the basis which the Group uses to
determine whether it controls seed funds; further detail
on consolidation of seed funds is provided in note 14.
Sources of estimation uncertainty
Management recognise that the use of estimates is
important in calculating both the fair value of share options
offered by the Group to its employees (see note 23) and
deferred tax (see note 15), however the sources of estimation
uncertainty do not present a significant risk of material
adjustment to the carrying amounts of assets or liabilities
within the next financial year in either case.
Calculation of leased assets and liabilities requires the
use of both estimation and judgement. The identification
of an appropriate discount rate to use in the calculation of
the lease liability involves both estimation and judgement.
Where the lease’s implicit rate is not readily determinable, an
incremental borrowing rate must be calculated by the Group.
The discount rate used has a direct effect on the size of the
lease liability capitalised and although this has been included
as an area where the use of estimation and judgement in
note 12 is important, it is unlikely to materially impact the
Group. Intangible assets are written down in accordance with
the Group’s amortisation policy on page 120. The assets are
reviewed by management to ensure the amortisation period
is appropriate. Investments are revalued at market value
monthly and any potential impairments would be written
down as and when the Group is notified.
3. Segmental analysis
The Directors, who together are the entity’s Chief Operating
Decision Maker, consider that its services comprise one
operating segment (being the provision of currency and
derivatives management services) and that it operates in
a market that is not bound by geographical constraints.
The Group provides Directors with revenue information
disaggregated by product, whilst operating costs, assets and
liabilities are presented on an aggregated basis. This reflects
the unified basis on which the products are marketed,
delivered and supported. Further information on the Group’s
operations and principal activities is provided in the Business
model section from page 8. Revenue analysed by product is
provided in note 4.
4. Revenue
Revenue recognition
Revenue comprises the fair value of the consideration
received or receivable for the provision of currency
management services. Our revenues typically arise
from charging management fees, performance fees and
other currency services income and are accounted for
in accordance with IFRS 15 – “Revenue from contracts
with customers”.
Management fees and other currency services income are
recorded on a monthly basis as the service occurs; there are
no other performance obligations (excluding standard duty
of care requirements). Management fees are calculated as
an agreed percentage of the Assets Under Management
Equivalents (“AUME”) denominated in the client’s chosen
base currency. The percentage varies depending on the
nature of services and the level of AUME. Management
fees are typically invoiced to the customer quarterly
with receivables recognised for unpaid invoices. Fees are
recognised on a monthly based on the agreed fee rate and
AUME over the period.
The Group is entitled to earn performance fees from some
clients where the performance of the clients’ mandates
exceeds defined benchmarks over a set time period, and
are recognised when the fee amount can be estimated
reliably and it is highly probable that it will not be subject to
significant reversal.
Performance fee revenues are not considered to be highly
probable until the end of a contractual performance period
and therefore are not recognised until they crystallise, at
which time they are payable by the client and cannot be
clawed back. There are no other performance obligations
or services provided which suggest these have been earned
either before or after crystallisation date.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
116
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
4. Revenue continued
Revenue recognition continued
a. Revenue from contracts with customers
The following table provides a breakdown of revenue from contracts with customers, with management fees analysed by
product. Other currency services income includes fees from signal hedging and fiduciary execution.
Revenue by product type
Management fees
Passive Hedging
Dynamic Hedging
Currency for Return
Multi‑product
Total management fee income
Performance fee income
Other currency services income
Total revenue from contracts with customers
2022
£’000
2021
£’000
11,768
10,020
5,513
6,782
11,377
5,623
2,005
5,873
34,083
24,878
499
570
81
453
35,152
25,412
Management fees are recognised at a point in time and are invoiced typically on a quarterly basis, although Record may
invoice fees monthly for some of its larger clients. Performance fees are recognised at a point in time and can be invoiced on
a quarterly, six‑monthly or annual basis, as agreed with our clients.
b. Geographical analysis
The geographical analysis of revenue is based on the destination i.e. the location of the client to whom the services are
provided. All turnover originated in the UK. Other relates to a number of regions that are individually immaterial.
Revenue by geographical region
Management and performance fee income
UK
US
Switzerland
Europe (excluding UK and Switzerland)
Other
Total revenue
2022
£’000
2021
£’000
2,775
13,049
10,877
6,926
1,525
35,152
2,322
8,619
9,097
3,223
2,151
25,412
c. Major clients
During the year ended 31 March 2022, two clients individually accounted for more than 10% of the Group’s revenue.
The two largest clients generated revenues of £4.9 million and £4.8 million in the year (2021: two largest clients generated
revenues of £4.1 million and £2.7 million in the year).
Record plc
Annual Report 2022
117
Notes to the financial statements for the year ended 31 March 2022 continued
5. Operating profit
Operating profit for the year is stated after charging/(crediting):
Staff costs
Other staff‑related costs
IT and technology
Professional fees
Occupancy
Depreciation of property, plant and equipment
Depreciation of leased property
Amortisation of intangibles
Auditor fees:
Fees payable to the Group’s auditor for the audit of the Company’s annual accounts
Fees payable to the Group’s auditor for the audit of subsidiary undertakings
Auditor fees total
Fees payable to the Group’s auditor and its associates for other services:
Audit‑related assurance services required by law or regulation
Other non‑audit services
Loss/(gain) on forward FX contracts held to hedge cash flow
Loss on derivative financial instruments held by seed funds
Exchange losses/(gains) on revaluation of external holding in seed funds
Other exchange (gains)/ losses
Investment losses/(gains)
6. Staff costs
The average number of employees, including Directors, employed by the Group during the year was:
Corporate
Client relationships
Investment research
Operations
Risk management
Support
Annual average
The aggregate costs of the above employees, including Directors, were as follows:
Wages and salaries
Social security costs
Pension costs
Other employment benefit costs
Aggregate staff costs
2022
£’000
16,479
1,352
2,380
1,139
2021
£’000
13,470
864
1,231
1,043
668
357
489
192
72
103
175
5
12
467
42
—
(141)
4
540
299
490
168
70
80
150
5
12
(673)
53
97
652
(170)
2022
2021
6
14
16
24
5
17
82
7
17
16
23
5
15
83
2022
£’000
11,931
1,758
635
2,155
2021
£’000
10,542
1,349
574
1,005
16,479
13,470
Other employment benefit costs include share‑based payments, share option costs, and costs relating to the Record plc
Share Incentive Plan.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
118
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
7. Taxation – Group
Current tax is the tax currently payable based on taxable profit for the year. Current income tax assets and/or liabilities
comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods that
are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial
statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted
by the end of the reporting period.
UK current year charge
Overseas taxes
Prior year adjustments
Current tax charge
Origination and reversal of temporary differences
Prior year adjustment
Impact of change in tax rate for deferred tax
Total deferred tax
Tax on profit on ordinary activities
The total charge for the year can be reconciled to the accounting profit as follows:
Profit before taxation
Taxation at the standard rate of tax in the UK of 19% (2021: 19%)
Tax effects of:
Other disallowable expenses and non‑taxable income
Higher tax rates on subsidiary undertakings
Adjustments recognised in current year in relation to Research and Development
claims in respect of prior years
Prior year adjustment
Change in tax rates
Total tax expense
The tax expense comprises:
Current tax expense
Deferred tax expense/(income)
Total tax expense
2022
£’000
2,006
56
(88)
1,974
(12)
240
23
251
2,225
2022
£’000
10,856
2,062
(37)
15
(78)
240
23
2,225
1,974
251
2,225
2021
£’000
1,144
64
(108)
1,100
(298)
—
—
(298)
802
2021
£’000
6,153
1,169
(278)
19
(108)
—
—
802
1,100
(298)
802
The standard rate of UK corporation tax for the year is 19% (2021: 19%). A full corporation tax computation is prepared at
the year end. The actual charge as a percentage of the profit before tax may differ from the underlying tax rate. Differences
typically arise as a result of capital allowances differing from depreciation charged, and certain types of expenditure not
being deductible for tax purposes. Other differences may also arise. The rate is due to increase to 25% from 1 April 2023.
The tax charge for the year ended 31 March 2022 was 20% of profit before tax (2021: 13%). Other temporary differences for
the year ended 31 March 2022 include the impact of deferred tax expense of £251k (2021: income of £298k).
Record plc
Annual Report 2022
119
Notes to the financial statements for the year ended 31 March 2022 continued
8. Earnings per share
Basic earnings per share is calculated by dividing the profit after tax for the financial year attributable to equity holders of
the parent by the weighted average number of ordinary shares in issue during the year.
Diluted earnings per share is calculated as for the basic earnings per share with a further adjustment to the weighted average
number of ordinary shares to reflect the effects of all potential dilution.
There is no difference between the profit for the financial year attributable to equity holders of the parent used in the basic
and diluted earnings per share calculations.
Weighted average number of shares used in calculation of basic earnings per share
Effect of potential dilutive ordinary shares – share options
Weighted average number of shares used in calculation of diluted earnings per share
Basic earnings per share
Diluted earnings per share
2022
£’000
2021
£’000
191,068,307
194,461,787
6,230,794
1,705,089
197,299,101
196,166,876
pence
4.52
4.37
pence
2.75
2.73
The potential dilutive shares relate to the share options and JSOP awards granted in respect of the Group’s Share Scheme
(see note 23). There were share options and JSOP awards in place at the beginning of the year over 14,344,421 shares.
During the year 2,531,875 share options were exercised, 625,000 JSOP awards vested and a further 1,454,501 options lapsed
or were forfeited. The Group granted 3,780,000 share options and JSOP awards with a potentially dilutive effect during the
year. Of the 13,513,045 share options and JSOP awards in place at the end of the period, 11,362,625 have a dilutive impact at
the year end.
9. Dividends
Ordinary, special and interim dividends are recognised in the financial statements when paid. Final ordinary dividends are
required to be approved by shareholders.
The dividends paid by the Group during the year ended 31 March 2022 totalled £6,511,887 (3.40 pence per share) which
comprised a final dividend in respect of the year ended 31 March 2021 of £2,220,404 (1.15 pence per share), a special dividend
in respect of the year ended 31 March 2021 of £868,854 (0.45 pence per share) and an interim dividend for the year ended
31 March 2022 of £3,422,629 (1.80 pence per share).
The dividends paid by the Group during the year ended 31 March 2021 totalled £5,290,324 (2.71 pence per share) which
comprised a final dividend in respect of the year ended 31 March 2020 of £2,261,779 (1.15 pence per share), a special dividend
in respect of the year ended 31 March 2020 of £806,374 (0.41 pence per share) and an interim dividend for the year ended
31 March 2021 of £2,222,171 (1.15 pence per share).
For the year ended 31 March 2022, a final ordinary dividend of 1.80 pence per share has been proposed and a special
dividend of 0.92 pence per share has been declared, totalling £3.4 million and £1.8 million respectively.
10. Retirement benefit obligations
The Group operates defined contribution pension plans for the benefit of employees. The Group makes contributions to
independently administered plans, such contributions being recognised as an expense when they fall due. The assets of
the schemes are held separately from those of the Group in independently administered funds.
The Group is not exposed to the particular risks associated with the operation of defined benefit plans and has no legal
or constructive obligation to make any further payments to the plans other than the contributions due.
The pension cost charge disclosed in note 6 to the accounts represents contributions payable by the Group to the funds.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
120
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
11. Intangible assets
Intangible assets are shown at historical cost less accumulated amortisation and impairment losses. Amortisation is charged
to profit or loss on a straight‑line basis over the estimated useful lives of the intangible assets unless such lives are indefinite.
Amortisation is included within operating expenses in the statement of comprehensive income. Intangible assets are
measured from the date they are available for use. Useful lives are as follows:
• Software – 2 to 5 years
Amortisation periods and methods are reviewed annually and adjusted if appropriate.
The Group’s intangible assets comprise both purchased software and the capitalised cost of software deployment. No internal
costs of software development are capitalised. Internal software costs, which would represent attributable employee costs,
would be capitalised if they meet the IAS 38 criteria. The carrying amounts can be analysed as follows:
2022
Cost
At 1 April 2021
Additions
Disposals
At 31 March 2022
Amortisation
At 1 April 2021
Charge for the year
Disposals
At 31 March 2022
Net book amounts
At 31 March 2022
At 1 April 2021
2021
Cost
At 1 April 2020
Additions
Disposals
At 31 March 2021
Amortisation
At 1 April 2020
Charge for the year
Disposals
At 31 March 2021
Net book amounts
At 31 March 2021
At 1 April 2020
Software
£’000
1,141
334
—
1,475
721
192
—
913
562
420
Software
£’000
Total
£’000
1,141
334
—
1,475
721
192
—
913
562
420
Total
£’000
1,903
1,903
189
(951)
1,141
1,433
168
(880)
721
420
470
189
(951)
1,141
1,433
168
(880)
721
420
470
The annual contractual commitment for the maintenance and support of the above software is £396,710 (2021: £221,004).
All amortisation charges are included within administrative expenses.
Record plc
Annual Report 2022
121
Notes to the financial statements for the year ended 31 March 2022 continued
12. Leases
The Group’s lease arrangements consist of business premises property leases. Rental contracts are typically made for
fixed periods of three to six years but they may have extension and/or modification options. Lease terms are negotiated
on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any
covenants, but leased assets cannot be used as security for borrowing purposes.
New and modified leases have been recognised as a right‑of‑use asset and a corresponding liability at the date at which
the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right‑of‑use asset is depreciated over the shorter of the asset’s useful
life and the lease term on a straight‑line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Right‑of‑use assets include the net
present value of the lease payments less any lease incentives receivable.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group’s
incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions. As the Group has no borrowings
it has estimated the incremental borrowing rate based on interest rate data available in the market, adjusted to reflect
Record’s creditworthiness, the leased asset in question and the terms and conditions of the lease. For those leases which
existed prior to the IFRS 16 transition date on 1 April 2019, a discount rate of 4% was used in calculating the lease liability
on transition.
The leases relevant to the twelve months ended 31 March 2022, and the comparative period, are as described below:
On 7 September 2016, the Group signed a new lease on premises at Second and Third Floors, Morgan House, Madeira Walk,
Windsor, at an annual commitment of £507,603, expiring on 1 September 2022. On 11 February 2022, the Group signed a lease
on premises at Second Floor, Morgan House, Madeira Walk, Windsor, at an annual commitment of £267,900, expiring on
1 September 2026. The 1 September 2022 lease modification has been capitalised and discounted at a rate of 3.95%.
On 1 June 2017, the Group signed a five‑year lease on premises in Zürich, at an annual commitment of CHF 49,680.
On 12 August 2021, the Group extended the lease to 1 June 2027, at an annual commitment of CHF 49,680.
Record assesses whether a contract, is or contains, a lease at the inception of the contract.
Right‑of‑use (“ROU”) assets
Right‑of‑use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date, less any lease incentives received;
• any initial direct costs; and
• an estimate of costs to be incurred to restore the assets to the condition required by the terms and conditions of the lease.
Depreciation is calculated on a straight‑line basis over the lease term and included within administration costs (note 5).
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
122
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
12. Leases continued
Net book value of right‑of‑use assets
Year ended 31 March 2022
Net book value on transition at 1 April 2021
Addition
Depreciation
Net book value at 31 March 2022
Year ended 31 March 2021
Net book value at 1 April 2020
Addition
Depreciation
FX revaluation
Net book value at 31 March 2021
Lease liabilities
Current
Non‑current
Total lease liabilities
At 1 April 2021
Additions
Interest expense
Lease payments
Lease interest payments
Foreign exchange movements
At 31 March 2022
Group
£’000
684
1,226
(489)
1,421
Group
£’000
1,175
—
(490)
(1)
684
Group
£’000
366
960
1,326
Group
£’000
638
1,226
17
(540)
(17)
2
Company
£’000
642
1,043
(453)
1,232
Company
£’000
1,096
—
(454)
—
642
Company
£’000
326
812
1,138
Company
£’000
597
1,042
16
(501)
(16)
—
1,326
1,138
Record plc
Annual Report 2022
123
Notes to the financial statements for the year ended 31 March 2022 continued
Lease payments
At 31 March 2022, the undiscounted operating lease payments on an annual basis are as follows:
Maturity of lease liability at 31 March 2022
Within 1 year
1‑2 years
2‑3 years
After 3 years
Total lease liability before discounting
Group
£’000
Company
£’000
357
321
321
375
330
280
280
327
1,374
1,217
The remainder of the movement in the lease liability relates to non‑cash movements. The lease term is determined as the
non‑cancellable period of a lease, together with periods covered by an option to extend the lease if the Group considers that
exercise of the option is reasonably certain.
13. Property, plant and equipment – Group
All property, plant and equipment assets are stated at cost less accumulated depreciation. Depreciation of property, plant
and equipment is provided to write off the cost, less residual value, on a straight‑line basis over the estimated useful life
as follows:
• Leasehold improvements – period from lease commencement to the earlier of the lease termination date and the next rent
review date
• Computer equipment – 2 to 5 years
• Fixtures and fittings – 4 to 6 years
Residual values, remaining useful economic lives and depreciation methods are reviewed annually and adjusted if appropriate.
Gains or losses on disposal are included in profit or loss.
The Group’s property, plant and equipment comprise leasehold improvements, computer equipment and fixtures and fittings.
The carrying amount can be analysed as follows:
2022
Cost
At 1 April 2021
Additions
Disposals
At 31 March 2022
Depreciation
At 1 April 2021
Charge for the year
Disposals
At 31 March 2022
Net book amounts
At 31 March 2022
At 1 April 2021
Leasehold
improvements
£’000
Computer
equipment
£’000
Fixtures
and fittings
£’000
693
—
—
693
520
122
—
642
51
173
983
73
—
1,056
515
203
—
718
338
468
305
2
(14)
293
263
32
(14)
281
12
42
Total
£’000
1,981
75
(14)
2,042
1,298
357
(14)
1,641
401
683
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
124
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
13. Property, plant and equipment – Group continued
2021
Cost
At 1 April 2020
Additions
Disposals
At 31 March 2021
Depreciation
At 1 April 2020
Charge for the year
Disposals
At 31 March 2021
Net book amounts
At 31 March 2021
At 1 April 2020
Leasehold
improvements
£’000
Computer
equipment
£’000
Fixtures
and fittings
£’000
692
1
—
693
397
123
—
520
173
295
952
228
(197)
983
573
139
(197)
515
468
379
327
2
(24)
305
250
37
(24)
263
42
77
The Group’s tangible non‑current assets are located predominantly in the UK.
14. Investments
Group
Company
Investment in subsidiaries at cost
Capitalised investment in respect of share‑based payments
Investment in funds
Investment in impact bonds
Other Investments
Total investments
2022
£’000
—
—
1,070
2,177
200
3,447
2021
£’000
—
—
847
2,199
—
3,046
2022
£’000
2,069
2,019
943
—
—
Total
£’000
1,971
231
(221)
1,981
1,220
299
(221)
1,298
683
751
2021
£’000
69
1,460
2,786
—
—
During the year, the Group has embarked on a strategy to invest up to £2,000,000 in digital assets for the purpose of
researching the market.
During the year, the Group signed commitments totalling $550,000 (£417,727) relating to third‑party funds investing in the
digital assets sector. As at the year end, a total of $166,900 (£122,208) has been called up, leaving a balance of $383,100
(£295,519) which may or may not be called up in future (see note 27: contingent liabilities for further information).
5,029
4,315
Record plc
Annual Report 2022
125
Notes to the financial statements for the year ended 31 March 2022 continued
Company
Investments in subsidiaries
Investments in subsidiaries are shown at cost less impairment losses. The capitalised investment in respect of share‑based
payments offered by subsidiaries is equal to the cumulative fair value of the amounts payable to employees recognised as an
expense by the subsidiary.
Investment in subsidiaries (at cost)
Record Currency Management Limited
Record Group Services Limited
Record Portfolio Management Limited
Record Currency Management (US) Inc.
Record Currency Management (Switzerland) GmbH
Record Digital Asset Ventures Limited
Record Asset Management GmbH
Record Fund Management Limited
N P Record Trustees Limited
Total investment in subsidiaries (at cost)
Capitalised investment in respect of share‑based payments
Record Group Services Limited
Record Currency Management (US) Inc.
Record Currency Management (Switzerland) GmbH
Total capitalised investment in respect of share‑based payments
Total investment in subsidiaries
Particulars of subsidiary undertakings
2022
£’000
2021
£’000
10
10
10
—
16
2,000
23
—
—
2,069
1,801
89
129
2,019
4,088
10
10
10
—
16
—
23
—
—
69
1,341
89
30
1,460
1,529
Name
Nature of business
Record Currency Management Limited
Currency management services (FCA, SEC and CFTC registered)
Record Group Services Limited
Management services to other Group undertakings
Record Currency Management (US) Inc.
US advisory and service company (SEC and CFTC registered)
Record Currency Management (Switzerland) GmbH
Swiss advisory and service company
Record Digital Asset Ventures Limited
UK company investing in opportunities linked to innovation
and research surrounding digital assets
Record Asset Management GmbH
German advisory and service company
RAM Strategies GmbH
German consultant and distribution agent
Record Portfolio Management Limited
Record Fund Management Limited
N P Record Trustees Limited
Dormant
Dormant
Dormant trust company
The Group’s interest in the equity capital of subsidiary undertakings is 100% of the ordinary share capital in all cases. Record
Currency Management (US) Inc. is incorporated in Delaware (registered office: Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808), Record Currency Management (Switzerland) GmbH is incorporated in Zürich (registered office:
Münsterhof 14, 8001 Zürich) and Record Asset Management GmbH and RAM Strategies GmbH are incorporated Germany
(registered office: Königsallee 92a, 40212 Düsseldorf).
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
126
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
14. Investments continued
Company continued
Capitalised investment in respect of share‑based payments
The accounting treatment of capitalised investment in respect of share‑based payments can be found in note 23.
Investment in seed funds
In addition to the subsidiaries listed above, the Company previously held investments in seed funds. These funds were seed
investments, with various investment objectives and policies, and are subject to the terms and conditions of their offering
documentation. The principal activity of each is to invest capital from investors in a portfolio of assets in order to provide a
return for those investors.
The seed fund investments were presented within investments in the Company statement of financial position, and all seed
fund entities were sub‑funds of the Record Umbrella Fund, an open‑ended umbrella unit trust authorised in Ireland. The two
seed funds previously invested in by the Company are shown in the table below.
Group
Entities are consolidated on a line‑by‑line basis where the Group has determined that a controlling interest exists through an
investment holding in the entity, in accordance with IFRS 10 – “Consolidated Financial Statements”. Otherwise, investments in
entities are measured at fair value through profit or loss.
Investment in seed funds
The Group controlled the Record Currency – Strategy Development Fund and Record – Currency Multi‑Strategy Fund until
the termination of the funds in June 2021. Both funds were consolidated in full, on a line‑by‑line basis in the Group’s financial
statements until the termination date.
Investment in seed funds
Record Currency – Strategy Development Fund
Record – Currency Multi‑Strategy Fund
Total investment in seed funds
Group
2022
£’000
Company
2021
£’000
2022
£’000
—
—
—
—
—
—
—
—
—
2021
£’000
1,077
862
1,939
Investment in impact bonds
In January 2020, the Group invested £2,287,241 in impact bonds; which are measured at fair value through profit or loss.
The fair value at the year end was £2,177,372 (2021: £2,198,886).
Investment in Funds
The Group has invested £1,211,242 in investment funds, which are measured at fair value through profit or loss. The fair value
at the year end was £1,069,701 (2021: £847,081).
15. Deferred taxation – Group
Deferred tax is the future tax consequences of temporary differences between the carrying amounts and tax bases of assets
and liabilities shown on the statement of financial position. The amount of deferred tax provided is based on the expected
manner of recovery or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively
enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised. The carrying amounts of the deferred tax assets are reviewed at each statement of financial
position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the asset to be recovered.
A deferred tax liability is generally recognised for all taxable temporary differences.
Record plc
Annual Report 2022
127
Notes to the financial statements for the year ended 31 March 2022 continued
Deferred tax assets or liabilities arising on goodwill are not recognised but are however recognised on separately identifiable
intangible assets. Deferred tax arising on the initial recognition of an asset or liability, other than a business combination, that
at the time of the transaction affects neither the accounting profit or loss nor the taxable profit or loss, is not recognised.
Credit to income statement in year
Asset/(liability) brought forward
Asset/(liability) carried forward
The deferred tax asset/(liability) consists of the tax effect of temporary differences in respect of:
Deferred tax allowance on unvested share options
Excess of taxation allowances over depreciation on fixed assets
Total
2022
£’000
41
212
253
2022
£’000
393
(140)
253
2021
£’000
298
(86)
212
2021
£’000
320
(108)
212
At the year end there were share options not exercised with an intrinsic value for tax purposes of £4,287,634 (2021: £3,755,976).
On exercise, the Group will be entitled to a corporation tax deduction in respect of the difference between the exercise price
and the strike price. There is no unprovided deferred taxation. Deferred tax has been calculated based on the current tax rate
of 19% for differences until 31 March 2023; thereafter, deferred tax has been calculated on a tax rate of 25%, being the tax rate
from 1 April 2023. It is subject to change if tax rates change in future years.
16. Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less loss allowances. The amortised cost of trade and other receivables is stated at original invoice
value, as the interest that would be recognised from discounting future cash receipts over the short credit period is not
considered to be material.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses (“ECLs”) for trade receivables at an
amount equal to lifetime ECLs. The ECLs on trade receivables are calculated based on actual historic credit loss experience
over the preceding 25 years on the total balance of non‑credit impaired trade receivables. Accrued income relates to accrued
management and performance fees earned but not yet invoiced.
An analysis of receivables is provided below:
Trade receivables
Accrued income
Other receivables
Prepayments
Total
Group
Company
2022
£’000
8,231
25
497
1,130
9,883
2021
£’000
6,519
37
470
980
2022
£’000
3,441
—
38
43
2021
£’000
1,345
—
—
42
8,006
3,522
1,387
All amounts are short‑term. The Directors consider that the carrying amount of trade and other receivables approximates
to their fair value. The Group has not renegotiated the terms of any receivables in the year ended 31 March 2022. The Group’s
trade receivables are generally short‑term and do not contain significant financing components.
The Group applies the IFRS 9 simplified approach to measuring ECLs for trade receivables at an amount equal to lifetime ECLs.
The ECLs on trade receivables are calculated based on actual historic credit loss experience over the preceding 25 years on the
total balance of non‑credit impaired trade receivables. The Group has therefore concluded that the ECLs for trade receivables
are reasonable. The Group does not expect to incur any credit losses and has not recognised any ECLs in the current year (2021:
£nil).
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
128
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
17. Derivative financial assets and liabilities
Derivative financial instruments are initially recognised at cost on the date on which the contract is first entered into, unless
the fair value at acquisition is different to cost, in which case fair value is recognised. Subsequently they are measured at fair
value with gains and losses recognised in profit or loss. Transaction costs are immediately recognised in profit or loss. The fair
values of derivative financial instruments are determined by reference to active market transactions.
The Group holds derivative financial instruments for two purposes. The Group uses forward foreign exchange contracts to
reduce the risk associated with assets denominated in foreign currencies, and additionally uses both foreign exchange options
and forward foreign exchange contracts in order to achieve a return within the seed funds. The instruments are recognised at
fair value. The fair value of the contracts is calculated using the market rates prevailing at the period end date. The net gain or
loss on instruments is included within other income or expense.
Derivative financial assets
Forward foreign exchange contracts held for trading
Foreign exchange options held for trading
Total
Derivative financial liabilities
Forward foreign exchange contracts held to hedge non‑sterling‑based assets
Forward foreign exchange contracts held for trading
Total
2022
£’000
—
—
—
2022
£’000
(15)
(109)
(124)
2021
£’000
215
45
260
2021
£’000
—
(16)
(16)
Derivative financial instruments held to hedge non‑sterling‑based assets
At 31 March 2022 there were outstanding contracts with a principal value of £9,085,804 (31 March 2021: £9,076,940) for the
sale of foreign currencies in the normal course of business. The fair value of the contracts is calculated using the market
forward contract rates prevailing at 31 March 2022. The Group does not apply hedge accounting.
The net gain or loss on forward foreign exchange contracts held to hedge non‑sterling‑based assets is as follows:
Derivative financial instruments held to hedge non‑sterling‑based assets
Net loss on forward foreign exchange contracts at fair value through profit or loss
2022
£’000
467
2021
£’000
673
Derivative financial instruments held for trading
The Record – Currency Multi‑Strategy Fund and the Record Currency – Strategy Development Fund may use a variety of
instruments including forward foreign exchange contracts, options and futures in order to achieve a return.
All derivative financial instruments held by the Record – Currency Multi‑Strategy Fund and the Record Currency – Strategy
Development Fund were classified as held for trading until termination in June 2021.
At 31 March 2022 there were outstanding contracts with a principal value of £nil (31 March 2021: £10,383,964).
The net gain or loss on derivative financial instruments held for trading for the year was as follows:
Derivative financial instruments held to hedge non‑sterling‑based assets
Net loss on forward foreign exchange contracts and foreign exchange options
at fair value through profit or loss
2022
£’000
42
2021
£’000
53
Record plc
Annual Report 2022
129
Notes to the financial statements for the year ended 31 March 2022 continued
18. Cash management
The Group’s cash management strategy employs a variety of treasury management instruments including cash, money market
deposits and treasury bills. Whilst the Group manages and considers all of these instruments as cash, which are subject to its
own internal cash management process, not all of these instruments are classified as cash or cash equivalents under IFRS.
IFRS defines cash and cash equivalents as cash in hand, on demand and collateral deposits held with banks, and other
short‑term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant
risk of changes in value. Moreover, instruments can only generally be classified as cash and cash equivalents where they are
held for the purpose of meeting short‑term cash commitments rather than for investment or other purposes.
In the Group’s judgement, bank deposits and treasury bills with maturities in excess of three months do not meet the definition
of short‑term or highly liquid and are held for purposes other than meeting short‑term commitments. In accordance with
IFRS, these instruments are not categorised as cash or cash equivalents and are disclosed as money market instruments with
maturities >3 months from origination.
Assets managed as cash
Bank deposits with maturities > 3 months
Money market instruments with maturities > 3 months
Cash
Bank deposits with maturities <= 3 months
Cash and cash equivalents
Total assets managed as cash
Cash and cash equivalents
Cash and cash equivalents – sterling
Cash and cash equivalents – USD
Cash and cash equivalents – CHF
Cash and cash equivalents – other currencies
Total cash and cash equivalents
Group
2022
£’000
13,913
13,913
3,345
—
3,345
17,258
2021
£’000
12,932
12,932
2,372
4,475
6,847
19,779
Company
2022
£’000
—
—
43
—
43
43
Group
Company
2022
£’000
1,169
450
318
1,408
3,345
2021
£’000
3,108
2,692
183
864
6,847
2022
£’000
43
—
—
—
43
2021
£’000
—
—
173
—
173
173
2021
£’000
173
—
—
—
173
The Group's cash and cash equivalents balance incorporates the cash and cash equivalents held by any fund deemed to be
under control of Record plc (refer to notes 1 and 4 for explanation of accounting treatment). As at 31 March 2022, the cash and
cash equivalents held by the seed funds were £nil as the funds terminated in June 2021 (31 March 2021: £3,159,533) and the
money market instruments with maturities > 3 months held by these funds were £nil (31 March 2021: £427,957).
Details of how the Group manages credit risk are provided in note 24.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
130
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
19. Current liabilities
Trade and other payables are stated at their original invoice value, as the interest that would be recognised from discounting
future cash payments over the short payment period is not considered to be material.
Trade and other payables
Trade payables
Amounts owed to Group undertaking
Other payables
Other tax and social security
Accruals
Total
Group
Company
2022
£’000
478
—
16
619
3,608
4,721
2021
£’000
384
—
16
486
2,540
3,426
2022
£’000
—
4,155
—
—
6
4,161
2021
£’000
—
10
—
—
6
16
Accruals include £2,506,656 for the Group Profit Share Scheme (31 March 2021: £1,644,761). The Directors consider that the
carrying amount of trade and other payables approximates to their fair value.
Current tax liabilities
Corporation tax
Group
Company
2022
£’000
924
2021
£’000
315
2022
£’000
—
2021
£’000
—
20. Financial liabilities
Record plc had made investments in a number of seed funds where it was in a position to be able to control those funds by
virtue of the size of its holding. When Record plc is not the only investor in such funds and the external investment instrument
does not meet the definition of an equity instrument under IAS 32 then the instrument is classified as a financial liability.
The financial liabilities are measured at cost plus movement in value of the third‑party investment in the fund.
The Record – Currency Multi‑Strategy Fund and the Record Currency – Strategy Development Fund were considered to
be under the control of the Group as the combined holding of Record plc and its Directors constituted a majority interest
throughout the prior year and through to termination of the funds in June 2021.
The mark‑to‑market value of units held by investors in these funds other than Record plc are shown as financial liabilities in
the Group financial statements, in accordance with IFRS.
Mark‑to‑market value of external holding in seed funds consolidated into the accounts of the Record Group
Record – Currency Multi‑Strategy Fund
Total financial liabilities
2022
£’000
—
—
2021
£’000
1,696
1,696
The financial liabilities relate only to the fair value of the external investors’ holding in the seed funds, and are in no sense debt.
Record plc
Annual Report 2022
131
Notes to the financial statements for the year ended 31 March 2022 continued
21. Provisions
The Group has provisions reflecting its contractual obligations connected to reaching the end of its contractual lease terms.
Provisions
Group
Company
2022
£’000
200
2021
£’000
200
2022
£’000
200
2021
£’000
200
22. Issued share capital
The share capital of Record plc consists only of fully paid ordinary shares with a par value of 0.025p each. All shares are
equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting.
Authorised
Ordinary shares of 0.025p each
Called‑up, allotted and fully paid
Ordinary shares of 0.025p each
2022
2020
£’000
Number
£’000
Number
100 400,000,000
100 400,000,000
50
199,054,325
50 199,054,325
Movement in Record plc shares held by the Record plc Employee Benefit Trust (“EBT”)
The EBT was formed to hold shares acquired under the Record plc share‑based compensation plans. Under IFRS the EBT is
considered to be under de facto control of the Group, and has therefore been consolidated into the Group financial statements.
Neither the purchase nor sale of own shares leads to a gain or loss being recognised in the Group statement of
comprehensive income.
Record plc shares held by EBT as at 31 March 2020
Adjustment for net purchases by EBT
Record plc shares held by EBT as at 31 March 2021
Adjustment for net purchases by EBT
Record plc shares held by EBT as at 31 March 2022
Number
3,219,387
3,077,270
6,296,657
3,335,374
9,632,031
The holding of the EBT comprises own shares that have not vested unconditionally to employees of the Group. Own shares are
recorded at cost and are deducted from retained earnings.
Further information regarding the Record plc share‑based compensation plans and relevant transactions made during the
year is included in note 23.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
132
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
23. Share‑based payments
During the year ended 31 March 2022 the Group has managed the following share‑based compensation plans:
• the Group Profit Share Scheme: share awards issued under the Group Profit Share Scheme are classified as share‑based
payments with cash alternatives under IFRS 2;
• the Record plc Share Scheme: share options issued under the Record plc Share Scheme are classified as equity‑settled
share‑based payments under IFRS 2;
• the Record plc Share Incentive Plan: the Group operates the Record plc Share Incentive Plan (“SIP”) to encourage more
widespread ownership of Record plc shares by employees. The SIP is a tax‑approved scheme offering attractive tax savings
for employees retaining their shares in the scheme over the medium to long term; and
• the Record plc Jointly Owned Share Plan: participants’ interests awarded under the Jointly Owned Share Plan (“JSOP”) are
classified as equity‑settled share‑based payments under IFRS 2.
All obligations arising from the four schemes have been fulfilled through purchasing shares in the market.
a. Group Profit Share Scheme
Share‑based payments with cash alternatives
These transactions are compound financial instruments, which include a debt element and a cash element. The fair value
of the debt component of the amounts payable to the employee is calculated as the cash amount alternative offered to the
employee at grant date and the fair value of the equity component of the amounts payable to the employee is calculated as the
market value of the share award at grant date less the cash forfeited in order to receive the share award. The debt component
is charged to profit or loss over the period in which the award is earned and remeasured at fair value at each reporting date.
The equity component is charged to profit or loss over the period in which the award is earned.
The Group Profit Share Scheme allocates a proportion of operating profits to a profit share pool to be distributed between all
employees of the Group. The Remuneration Committee has the discretion to vary the proportion allocated to the profit share
pool between 25% and 35% of operating profits. Directors and senior employees receive one‑third of their profit share in
cash, one‑third in shares (“Earned Shares”) and may elect to receive the final third as cash only or to allocate some, or all, of
the amount for the purchase of Additional Shares. The charge to profit or loss in respect of Earned Shares in the period was
£1,463,802 (2021: £765,606). Other employees receive two‑thirds of their profit share in cash and may elect to receive the final
third as cash only or to allocate some, or all, of the amount for the purchase of Additional Shares.
All shares which are the subject of share awards vest immediately and are transferred to a nominee, allowing the employee, as
beneficial owner, to retain full rights in respect of the shares purchased. Shares awarded under the Group Profit Share Scheme
are subject to restrictions over subsequent sale and transfer and these restrictions are automatically lifted over one‑third
on each anniversary of the profit share payment date for the next three years. In the meantime, these shares cannot be sold,
transferred or otherwise disposed of without the consent of the Remuneration Committee.
The Group Profit Share Scheme rules contain clawback provisions allowing for the repayment of profit share payments under
certain circumstances, including a material breach of contract, an error in performance of duties or a restatement of accounts
which leads to a change in any prior award under the scheme.
Record plc
Annual Report 2022
133
Notes to the financial statements for the year ended 31 March 2022 continued
b. The Record plc Share Scheme
Equity‑settled share‑based payments
The fair value of the amounts payable to employees under these awards is recognised as an expense over the vesting period
of the award, with a corresponding increase in equity. All such awards made by the Group involve the parent company granting
rights to its equity instruments to employees of its subsidiary. Consequently, the subsidiary measures the services received
from its employees in accordance with the above classification under IFRS 2 and recognises a corresponding increase in equity
as a contribution from the parent. The parent has the obligation to settle the transaction with the subsidiary’s employees and
therefore recognises an increase in its investment in the subsidiary and a corresponding increase in equity.
The fair value of options granted is measured at grant date using an appropriate valuation model, taking into account the terms
and conditions upon which the instruments were granted including any market or performance conditions, and using quoted
share prices.
The Record plc Share Scheme allows deferred share awards to be granted to employees and Directors in the Record Group.
Part 1 of the scheme allows the grant of tax‑unapproved (“Unapproved”) options to employees and Directors and Part 2 allows
the grant of HMRC tax‑approved (“Approved”) options to employees and Directors. Each participant may be granted Approved
options over shares with a total market value of up to £30,000 on the date of grant. There is no such limit on the value of grant
for Unapproved options, which have historically been granted with a market value exercise price in the same way as for the
Approved options.
Options over an aggregate of 3,747,500 shares were granted under the Share Scheme during the year (2021: 3,850,000), of
which options over 195,000 shares were granted as Approved options and options over 3,552,500 shares were granted as
Unapproved options (2021: all granted as Unapproved options). All Approved options and 952,500 Unapproved options were
granted with an exercise price per share equal to the share price prevailing at the time of grant, the remaining 2,600,000
Unapproved options were granted with an exercise price below the share price prevailing at the time of grant.
The 195,000 Approved options issued to employees on 13 August 2021 all become exercisable on the fourth anniversary of
the date of grant, subject to the employee being in employment with the Group at the relevant vesting date and to the extent
performance conditions have been satisfied.
The 3,552,500 Unapproved options issued to employees on 13 August 2021 each become exercisable in four equal tranches
on the first, second, third and fourth anniversary of the date of grant, subject to the employee being in employment with the
Group at the relevant vesting date and to the extent performance conditions have been satisfied.
The fair value of the services provided by employees has been calculated indirectly by reference to the fair value of the equity
instruments granted. Fair value amounts for the options granted in the year ended 31 March 2022, and for which a charge
to profit or loss was made in the year, were determined using a Black‑Scholes option‑pricing method and the following
assumptions:
Model input
Share price
Dividend yield
Exercise price
Expected volatility
Option life
Risk‑free interest rate (%)
Weighted
average value
85.7p
2.89%
54.0p
40%
2.6 years
52%
Expected volatility is based on historical volatility.
The Group share‑based payment expense in respect of the Share Scheme was £530,779 for the year ended 31 March 2022
(2021: £181,095).
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
134
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
23. Share‑based payments continued
b. The Record plc Share Scheme continued
Outstanding share options
At 31 March 2022, the total number of ordinary shares of 0.025p outstanding under Record plc share compensation schemes
was 11,605,545 (2021: 11,844,421). These deferred share awards and options are over issued shares, a proportion of which are
hedged by shares held in an EBT. Details of outstanding share options awarded to employees are set out below:
Date of grant
30/11/16
30/11/16
30/11/16
26/01/18
26/01/18
26/01/18
26/01/18
29/03/19
29/03/19
21/08/19
18/03/20
21/09/20
25/01/21
09/03/21
13/08/21
13/08/21
13/08/21
At 1 April
2021
90,000
62,500
733,336
1,267,500
127,750
34,667
1,288,668
460,000
277,500
1,985,000
1,667,500
3,425,000
300,000
125,000
Granted
Exercised
Lapsed/
forfeited
At 31 March
2022
Earliest vesting
date
Latest vesting
date1
Exercise
price
—
—
—
(90,000)
(62,500)
—
—
—
(733,336)
—
—
—
30/11/20
30/11/20
£0.34072
30/11/19
30/11/20
£0.34072
30/11/20
30/11/21
£0.34072
— (1,078,000)
(34,500)
155,000
26/01/22
26/01/22
£0.4350
—
—
—
—
—
—
—
—
—
—
(122,625)
—
5,125
26/01/20
26/01/22
£0.4350
—
—
—
(92,500)
(17,333)
17,334
26/01/21
26/01/23
£0.4350
(644,332)
644,336
26/01/21
26/01/23
£0.4350
—
—
460,000
29/03/23
29/03/23
£0.2830
185,000
29/03/20
29/03/23
£0.2830
—
— 1,985,000
21/08/22
21/08/24
£0.3110
(405,000)
(25,000)
1,237,500
18/03/21
18/03/24
£0.28902
(606,250)
(75,000)
—
—
—
—
—
—
—
—
2,818,750
21/09/21
21/09/24
£0.3730
225,000
25/01/22
25/01/25
£0.49425
125,000
09/03/22
09/03/25
£0.63986
195,000
13/08/25
13/08/25
£0.85713
— 2,600,000
13/08/22
13/08/25
£0.4000
—
952,500
13/08/22
13/08/25
£0.85713
—
195,000
— 2,600,000
—
952,500
Total options
11,844,421
3,747,500
(2,531,875)
(1,454,501)
11,605,545
Weighted average
exercise price of
options
£0.36
£0.54
£0.39
£0.38
£0.41
1. Under the terms of the deeds of grants, options are exercisable for twelve months following the vesting date.
During the year 2,531,875 options were exercised. The weighted average share price at date of exercise was £0.77.
At 31 March 2022, a total of 946,375 options had vested and were exercisable (2021: 701,375). At 31 March 2022, the weighted
average exercise price of the options vested and exercisable was £0.35 (2021: £0.31) and the weighted average contractual
life was two years (2021: two years).
The Directors’ interests in the combined share schemes are as follows:
Record plc Group Profit Share Scheme (interest in restricted share awards)
Leslie Hill
Steve Cullen
Record plc Share Scheme (interest in unvested share options)
Leslie Hill
Steve Cullen
Ordinary shares held as at
31 March
2022
31 March
2021
467,296
379,841
57,422
75,849
668,334
945,001
301,668
526,668
Record plc
Annual Report 2022
135
Notes to the financial statements for the year ended 31 March 2022 continued
Performance measures
Performance conditions attached to all options granted to Board Directors differ to those granted for all other staff. All
Executive Director option awards are subject to a performance condition and vest on each of the third, fourth and fifth
anniversaries of the date of grant subject to an earnings per share (“EPS”) hurdle linked to the annualised EPS growth for the
respective three, four and five‑year periods from grant. Vesting is on a stepped basis, with 25% of each tranche vesting if EPS
growth over the relevant period is at least RPI plus 4% per annum, increasing through 50%, 75% and with 100% vesting if EPS
growth exceeds RPI plus 13%, as shown in the table below. Options awarded subject to EPS performance conditions are valued
using a Black‑Scholes model, adjusted for the impact of the performance conditions.
Record’s average EPS growth
>RPI growth + 13%
>RPI growth + 10%, =RPI growth + 7%, =RPI growth + 4%, = 3 months
Cash and cash equivalents
Total financial assets
2022
£’000
8,231
25
497
—
13,913
3,345
26,011
2021
£’000
6,519
37
470
260
13,613
6,166
27,065
The debtors’ age analysis is also evaluated on a regular basis for expected credit losses. It is management’s opinion that there
is no requirement to provide for any expected credit losses. The table below is an analysis of trade receivables and accrued
income by due date:
At 31 March 2022
Trade receivables
Accrued income
Total
At 31 March 2021
Trade receivables
Accrued income
Total
Carrying
amount
£’000
8,231
25
8,256
Carrying
amount
£’000
6,519
37
6,556
Neither
impaired nor
past due
£’000
0‑3 months
past due
£’000
More than
3 months
past due
£’000
8,231
25
8,256
100%
—
—
—
0%
—
—
—
0%
Neither
impaired nor
past due
£’000
0‑3 months
past due
£’000
More than
3 months
past due
£’000
6,519
37
6,556
100%
—
—
—
0%
—
—
—
0%
The Group offers standard credit terms of 30 days from invoice date. It is the Group’s policy to assess debtors for expected loss
on an individual basis and to make a provision where it is considered necessary. In assessing recoverability, the Group takes
into account any indicators of impairment up to the reporting date. The application of this policy generally results in debts that
are past due not being provided for unless individual circumstances indicate that a debt is impaired.
Trade receivables are made up of 91 debtors’ balances (2021: 82). The largest individual debtor corresponds to 16% of the total
balance (2021: 15%). Debtor days, based on the generally accepted calculation of debtor days, is 85 days (2021: 94 days). This
reflects the quarterly billing cycle used by the Group for the vast majority of its fees. As at 31 March 2022, 0% of debt was
overdue (2021: 0%). No debtors’ balances have been renegotiated during the year or in the prior year.
Record plc
Annual Report 2022
139
Notes to the financial statements for the year ended 31 March 2022 continued
Liquidity risk
The Group is exposed to liquidity risk, namely that it may be unable to meet its payment obligations as they fall due. The Group
maintains sufficient cash and marketable securities to be able to meet all such obligations. Management review cash flow
forecasts on a regular basis to determine whether the Group has sufficient cash reserves to meet the future working capital
requirements and to take advantage of business opportunities. The average creditor payment period is 28 days (2021: 29 days).
The impact of covid‑19 and the Russia/Ukraine crisis has been considered, and management believe that the Group’s ability to
meet its obligations is unaffected.
Contractual maturity analysis for financial liabilities
At 31 March 2022
Trade payables
Accruals
Derivative financial liabilities
Total
At 31 March 2021
Trade payables
Accruals
Derivative financial liabilities
Total
Carrying
amount
£’000
478
3,608
124
4,210
Carrying
amount
£’000
384
2,538
16
2,938
Due or due
in less than
1 month
£’000
Due between
1 and
3 months
£’000
Due between
3 months
and 1 year
£’000
318
302
7
627
29
1,503
117
1,649
131
1,803
—
1,934
Due or due
in less than
1 month
£’000
Due between
1 and
3 months
£’000
Due between
3 months
and 1 year
£’000
191
420
6
617
30
809
10
849
163
1,309
—
1,472
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate
due to changes in market interest rates. Interest rate risk arises from interest‑bearing financial assets and liabilities held by
the Group. Interest‑bearing assets comprise money market instruments and cash and cash equivalents which are considered
to be short‑term liquid assets. It is the Group’s policy to settle trade payables within the credit terms allowed and the Group
does not therefore incur interest on overdue balances.
A sensitivity analysis has not been disclosed for the impact of interest rate changes as any reasonable range of change in
interest rate would not directly have a material impact on profit or equity.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
140
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
24. Financial risk management continued
Interest rate profiles
At 31 March 2022
Financial assets
Trade receivables
Accrued income
Other receivables
Money market instruments with maturities > 3 months
Cash and cash equivalents
Total financial assets
Financial liabilities
Trade payables
Accruals
Lease liability
Derivative financial liabilities at fair value through profit or loss
Total financial liabilities
At 31 March 2021
Financial assets
Trade receivables
Accrued income
Other receivables
Derivative financial assets at fair value through profit or loss
Money market instruments with maturities > 3 months
Cash and cash equivalents
Total financial assets
Financial liabilities
Trade payables
Accruals
Lease liability
Derivative financial liabilities at fair value through profit or loss
Financial liabilities
Total financial liabilities
Fixed rate
£’000
Floating rate
£’000
No
interest rate
£’000
Total
£’000
—
—
—
13,913
3,345
17,258
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,231
8,231
25
497
—
—
8,753
(478)
(3,608)
(1,326)
(124)
25
497
13,913
3,345
26,011
(478)
(3,608)
(1,326)
(124)
(5,536)
(5,536)
Fixed rate
£’000
Floating rate
£’000
No
interest rate
£’000
Total
£’000
—
—
—
—
12,932
682
13,614
—
—
—
—
—
—
—
—
—
—
—
6,165
6,165
—
—
—
—
—
—
6,519
6,519
37
470
260
—
—
7,286
37
470
260
12,932
6,847
27,065
(384)
(384)
(2,538)
(2,538)
(539)
(16)
(1,696)
(5,173)
(539)
(16)
(1,696)
(5,173)
Record plc
Annual Report 2022
141
Notes to the financial statements for the year ended 31 March 2022 continued
Foreign currency risk
Foreign currency risk refers to the risk that the value of a financial commitment or recognised asset or liability will fluctuate
due to changes in foreign currency rates. The Group makes use of forward foreign exchange contracts to manage the risk
relating to future transactions in accordance with the Group’s risk management policy.
The Group is exposed to foreign currency risk on revenue invoices and cash holdings that are denominated in a currency
other than sterling, and also on assets and liabilities held by the Record Currency – Strategy Development Fund. The principal
currencies giving rise to this risk are the US dollar, the Swiss franc, the euro and the Canadian dollar.
During the year ended 31 March 2022, the Group invoiced the following amounts in currencies other than sterling:
US dollar (USD)
Swiss franc (CHF)
Euro (EUR)
Canadian dollar (CAD)
Australian dollar (AUD)
Japanese yen (JPY)
Swedish krona (SEK)
Singapore dollar (SGD)
2022
2021
Local
currency
value
£’000
23,949
12,460
4,135
1,626
1,029
4,824
36
4
Value in
reporting
currency
£’000
17,742
10,010
3,498
960
563
31
3
2
Local
currency
value
£’000
13,185
13,375
3,185
1,238
838
—
672
14
Value in
reporting
currency
£’000
9,912
11,072
3,828
719
467
—
49
8
The value of revenues for the year ended 31 March 2022 that were denominated in currencies other than sterling was
£32.8 million (31 March 2021: £24.7 million).
Record’s policy is to reduce the risk associated with the Group’s revenues denominated in foreign currencies by using forward
fixed rate currency sales contracts, taking into account any forecast foreign currency cash flows.
The settlement of these forward foreign exchange contracts is expected to occur within the following three months.
Changes in the fair values of forward foreign exchange contracts are recognised directly in profit or loss.
The cash denominated in currencies other than sterling (refer to note 18) is covered by the Group’s hedging process,
therefore the Directors consider that the foreign currency risk on cash balances is not material.
Foreign currency risk – sensitivity analysis
The Group has considered the sensitivity to exchange rate movements by considering the impact on those revenues, costs,
assets and liabilities denominated in foreign currencies as experienced in the given period.
Sterling weakening by 10% against the dollar
Sterling strengthening by 10% against the dollar
Sterling weakening by 10% against the Swiss franc
Sterling strengthening by 10% against the Swiss franc
Impact on profit after tax
for the year ended 31 March
Impact on total equity
as at 31 March
2022
£’000
871
(871)
445
(445)
2021
£’000
489
(489)
551
(551)
2022
£’000
871
(871)
445
(445)
2021
£’000
489
(489)
551
(551)
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
142
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
24. Financial risk management continued
Sterling/US dollar exchange rate
The impact of a change of 10% has been selected as this is considered reasonable given the current level of exchange rates
and the volatility observed on a historical basis and market expectations for future movement. When applied to the average
sterling/USD exchange rate of £1 = $1.35 this would result in sterling weakening to £1 = $1.23 and sterling strengthening
to £1 = $1.50.
Sterling/Swiss franc exchange rate
The impact of a change of 10% has been selected as this is considered reasonable given the current level of exchange rates
and the volatility observed on a historical basis and market expectations for future movement. When applied to the average
sterling/CHF exchange rate of £1 = CHF 1.24 this would result in sterling weakening to £1 = CHF 1.13 and sterling strengthening
to £1 = CHF 1.38.
Sensitivity analyses have not been disclosed for other currencies as any reasonable range of change in exchange rate would
not have a material impact on profit or equity.
Concentration risk
The Group is exposed to concentration risk in respect of product, client type and geographical location, which could lead to
over‑reliance on any one category of revenue. Note 4 provides detail on clients contributing greater than 10% of revenue.
Mitigating activities are detailed in the Risk management section on page 52.
Concentration risk – sensitivity analysis
The Group has considered the impact of losing the Group’s largest client, assuming that only variable remuneration costs
can be reduced in the short term.
Loss of largest client
Impact on profit after tax
for the year ended 31 March
Impact on total equity
as at 31 March
2022
£’000
2,594
2021
£’000
2,352
2022
£’000
2,594
2021
£’000
2,352
25. Fair value measurement
The following table presents financial assets and liabilities measured at fair value in the consolidated statement of financial
position in accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based
on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has
the following levels:
• level 1: quoted prices (unadjusted) in active markets for identical financial assets or liabilities;
• level 2: inputs other than quoted prices included within level 1 that are observable for the financial asset or liability,
indirectly (i.e. derived from prices); and
• level 3: inputs for the financial asset or liability that are not based on observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is determined based on the lowest level of input to the
fair value measurement. The financial assets and liabilities measured at fair value in the statement of financial position are
grouped into the fair value hierarchy as follows:
Financial assets at fair value through profit or loss
Impact bonds
Investment in funds
Other investments
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts held to hedge non‑sterling assets
Other investments
Total
2022
£’000
2,177
1,070
200
(15)
(110)
Level 1
£’000
2,177
944
—
—
—
3,322
3,121
Level 2
£’000
Level 3
£’000
—
—
—
(15)
(110)
(125)
—
126
200
—
—
326
Record plc
Annual Report 2022
143
Notes to the financial statements for the year ended 31 March 2022 continued
Financial assets at fair value through profit or loss
Impact bonds
Forward foreign exchange contracts used by seed funds
Foreign exchange options used by seed funds
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts used by seed funds
Total
2021
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
2,199
2,199
215
45
(16)
—
—
—
2,443
2,199
—
215
45
(16)
244
—
—
—
—
—
There have been no transfers between levels in the reporting period (2021: none).
Basis for classification of financial instruments classified as level 1 within the fair value hierarchy
Impact bonds are classified as level 1. These bonds are valued using the market price and coupon rate.
Basis for classification of financial instruments classified as level 2 within the fair value hierarchy
Forward foreign exchange contracts and options are both classified as level 2. Both of these instruments are traded on an
active market. Options are valued using an industry standard model with inputs based on observable market data whilst the
fair value of forward foreign exchange contracts may be established using interpolation of observable market data rather
than from a quoted price.
Classes and fair value of financial instruments
It is the Directors’ opinion that the carrying value of all financial instruments approximates to their fair value.
Categories of financial instrument
At 31 March 2022
Impact bonds
Investment in funds
Other investments
Trade and other receivables (excludes prepayments)
Money market instruments with maturities > 3 months
Cash and cash equivalents
Trade payables
Accruals
Derivative financial liabilities at fair value through profit or loss
Total
At 31 March 2021
Impact bonds
Trade and other receivables (excludes prepayments)
Money market instruments with maturities > 3 months
Cash and cash equivalents
Derivative financial assets at fair value through profit or loss
Trade payables
Accruals
Derivative financial liabilities at fair value through profit or loss
Note
14
14
14
16
18
18
19
19
17
Note
14
16
18
18
17
19
19
17
Assets at
amortised
cost
£’000
Financial
liabilities
measured at
amortised cost
£’000
Assets at
fair value
through
profit or loss
£’000
Liabilities at
fair value
through profit
or loss
£’000
—
—
—
8,753
13,913
3,345
—
—
—
—
—
—
—
—
—
(478)
(3,608)
—
2,177
1,070
200
—
—
—
—
—
—
26,011
4,086
3,447
Assets at
amortised
cost
£’000
—
7,027
12,932
6,847
—
—
—
—
Financial
liabilities
measured at
amortised cost
£’000
—
—
—
—
—
(384)
(2,540)
—
Assets at
fair value
through
profit or loss
£’000
2,199
—
—
—
260
—
—
—
—
—
—
—
—
—
—
—
(124)
(124)
Liabilities at
fair value
through profit
or loss
£’000
—
—
—
—
—
—
—
(16)
(16)
Total
26,806
(2,924)
2,459
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
144
Record plc
Annual Report 2022
Notes to the financial statements for the year ended 31 March 2022 continued
26. Related parties transactions
Company
Details of transactions between the Company and other Group undertakings, which are related parties of the Company, are
shown below:
Transactions with subsidiaries
The Company’s subsidiary undertakings are listed in note 14, which includes a description of the nature of their business.
Amounts due (to)/from subsidiaries
Net dividends received from subsidiaries
2022
£’000
(714)
4,600
2021
£’000
1,265
5,270
Amounts owed to and by related parties will be settled in cash. No guarantees have been given or received. No provisions for
expected credit losses have been raised against amounts outstanding (2021: £nil). No expense has been recognised during the
year in respect of expected credit losses due from related parties.
Group
Transactions or balances between Group entities have been eliminated on consolidation, and in accordance with IAS 24, are not
disclosed in this note.
Key management personnel compensation
Short‑term employee benefits
Post‑employment benefits
Share‑based payments
Total
2022
£’000
8,457
330
2,467
11,254
Key management personnel dividends
The dividends paid to key management personnel in the year ended 31 March 2022 totalled £3,056,662 (2021: £3,028,563).
Directors’ remuneration
Emoluments (excluding pension contribution)
Pension contribution (including payments made in lieu of pension contributions)
Total
2022
£’000
2,809
96
2,905
2021
£’000
6,214
309
949
7,472
2021
£’000
2,015
125
2,140
During the year, no Directors of the Company (2021: one) participated in the Group Personal Pension Plan, a defined
contribution scheme. Further detail on Directors’ remuneration is provided in the Remuneration report on page 85.
Transactions with seed funds
From time to time, the Group injects capital into funds operated by the Group to trial new products (seed capital). If the Group
is able to exercise control over such a seed fund by holding a majority interest (whether the majority interest is held by Record
plc alone, or by combining the interests of Record plc and its Directors), then the fund is considered to be a related party.
Record Currency – Strategy Development Fund and Record – Currency Multi‑Strategy Fund were related parties on this basis
until June 2021, when the funds were closed.
During the year, Record plc Director Leslie Hill redeemed £605,217 from the Record – Currency Multi‑Strategy Fund.
Record plc
Annual Report 2022
145
Notes to the financial statements for the year ended 31 March 2022 continued
27. Contingent liabilities and commitments
The Group has committed to subscriptions to equity capital of $550,000, of which $166,900 has been called.
On 1 October 2021, the Group committed to a licence to use an office in London. The commitment is to 31 October 2023 and
the outstanding amount to be paid at 31 March 2022 was £558,600. £352,800 is payable within 12 months and £205,800
the following 12 months.
28. Capital management
The Group’s objectives when managing capital are (i) to safeguard the Group’s ability to continue as a going concern;
(ii) to provide an adequate return to shareholders; and (iii) to meet regulatory capital requirements set by the UK Financial
Conduct Authority.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to
it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders,
or issue new shares. The Group had no debt in the current or prior financial year and consequently does not calculate a
debt‑to‑adjusted capital ratio.
The Group’s capital is managed within the categories set out below:
Required regulatory capital
Other operating capital
Total capital
2022
£m
5.4
20.5
25.9
2021
£m
9.4
17.4
26.8
Total capital covers the Group's regulatory capital requirements plus capital required for day‑to‑day operational purposes and
other investment purposes. The Directors consider that the other operating capital significantly exceeds the actual day‑to‑day
operational requirements.
29. Ultimate controlling party
As at 31 March 2022 the Company had no ultimate controlling party, nor at 31 March 2021.
30. Post‑reporting date events
No adjusting or significant non‑adjusting events have occurred between the reporting date and the date of authorisation.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
146
Record plc
Annual Report 2022
Five year summary
Year ended 31 March
Management fees
Performance fees
Other revenue
Revenue
Cost of sales
Gross profit
Operating expenses
Other income/(expenditure)
Operating profit
Net interest
Profit before taxation
Taxation
Profit after taxation
Basic EPS (pence)
Ordinary dividend (pence)
Special dividend (pence)
Restated
2018
£’000
23,497
—
337
2019
£’000
Audited
2020
£’000
2021
£’000
2022
£’000
22,308
23,133
24,878
34,083
2,333
332
1,819
611
81
453
499
570
23,834
24,973
25,563
25,412
35,152
(311)
23,523
(16,424)
173
7,272
56
7,328
(1,182)
6,146
3.03
2.30
0.50
(385)
(255)
(399)
(219)
24,588
25,308
25,013
34,933
(16,704)
(17,741)
(18,934)
(23,726)
(8)
7,876
113
7,989
(1,559)
6,430
3.27
2.30
0.69
82
7,649
88
7,737
(1,365)
6,372
3.26
2.30
0.41
41
6,120
33
6,153
(802)
5,351
2.75
2.30
0.45
(372)
10,835
21
10,856
(2,225)
8,631
4.52
3.60
0.92
Record plc
Annual Report 2022
147
Information for shareholders
30 June 2022
1 July 2022
29 July 2022
9 August 2022
Annual General Meeting
Final dividend payment date
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Further information about the Registrar is available on their
website www.linkgroup.eu
Record plc
Record plc is a public limited company incorporated in the UK.
Registered in England and Wales
Company No. 1927640
Dates for 2022 dividend
Ex‑dividend date
Record date
Registered office
Morgan House
Madeira Walk
Windsor
Berkshire
SL4 1EP
United Kingdom
Tel: +44 (0)1753 852 222
Fax: +44 (0)1753 852 224
Principal UK trading subsidiaries
Record Currency Management Limited
Registered in England and Wales
Company No. 1710736
Record Group Services Limited
Registered in England and Wales
Company No. 1927639
Both principal UK trading subsidiaries are based in Windsor.
Further information on Record plc can be found on the
Group’s website: www.recordfg.com
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSADDITIONAL INFORMATION
148
Record plc
Annual Report 2022
Definitions
“AIFMD”
“Articles”
“AUME”
“Board”
“bps”
“Companies Act”
“Company”
“$” or “dollars”
“EBT”
“EM”
“EPS”
“ESG”
“ETF”
“EU”
“FRB”
Alternative Investment Fund Managers Directive
The Articles of Association of the Company
Assets Under Management Equivalents
Company’s Board of Directors
Basis point = 100th of a per cent
Every statute (including any orders, regulations or other subordinate legislation
made under it) from time to time in force concerning companies in so far as it applies to
the Company
Record plc
All references to dollars or $ symbol are to the currency of the US unless stated otherwise
Employee Benefit Trust
Emerging Markets
Earnings per share
Environmental, social and governance
Exchange traded fund
European Union
Forward Rate Bias
“Group” or “Record”
The Company and/or any one of its subsidiary undertakings
“IAS”
International Accounting Standards
“IFRS” or “IFRSs”
International Financial Reporting Standards
“IPO”
“KPI”
“KRI”
“LGPS”
Initial Public Offering
Key Performance Indicator
Key Risk Indicator
Local Government Pension Schemes
“London Stock Exchange”
London Stock Exchange plc
“MiFID”
“Official List”
“TIPS”
“US”
Markets in Financial Instruments Directive
The official list of the Financial Conduct Authority
US government treasury inflation protected securities
United States of America
AUME definition
The basis for measuring AUME differs for each product and is detailed below:
• Dynamic Hedging mandates – total amount of clients’ investment portfolios denominated in liquid foreign currencies,
and hence capable (under the terms of the relevant mandate) of being hedged.
• Passive Hedging mandates – the aggregate nominal amount of passive hedges actually outstanding in respect of each
client.
• Currency for Return mandates – the maximum aggregate nominal amount of outstanding forward contracts for each client.
• Multi‑product mandates – the chargeable mandate size for each client.
• Cash – the total set aside by clients and managed and/or “equitised” using futures by Record.
The Group’s commitment to the environment is reflected in this report, which has been printed on
Munken Polar Smooth, an FSC® certified material. It also has EU Ecolabel, EMAS, ISO-14001 and PEFCTM
(PEFC/05-33-99) certification. Arctic Paper Munkedals AB is one of the most environmentally-friendly
paper mills in the world and meets the requirements for FSC® Chain-of-Custody (“CoC”) certification.
FSC® CoC certification assures that products sold with an FSC® claim originate from well-managed
forests, controlled sources, and/or reclaimed materials in their supply chain. It confirms that
throughout the production process there is: respect for human rights, adherence to all local applicable
timber legislation and no involvement in the destruction of high conservation areas. Arctic Paper
Munkedals’ Munkedal mill is committed to reducing its long-term environmental impact and has the
lowest water consumption per kilogram of paper in the entire industry, whilst the company’s energy
usage is within or below the EU’s Best Available Techniques.
This document was printed by Pureprint Group using its environmental print technology, with 100% of
dry waste diverted from landfill, minimising the impact of printing on the environment. The printer is a
CarbonNeutral® company and ISO 14001 registered.
Designed and produced by
www.lyonsbennett.com
Record plc
Morgan House
Madeira Walk
Windsor
Berkshire SL4 1EP
T: +44 (0)1753 852 222
marketing@recordfg.com
www.recordfg.com
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