recordfg.com
Record Financial Group
A specialist currency and asset manager offering
best-in-class products to large global investors
Record plc Annual Report 2024
Strategic report
1 to 57
Financial highlights
1
About us
2
Investment proposition
4
Chairman’s statement
6
Chief Executive Officer’s statement
8
Our markets
10
Business model
12
Our products
14
Strategic approach and distribution
20
Our strategy
22
Key performance indicators
24
Sustainability
26
Task Force on Climate-related
Financial Disclosures (“TCFD”)
32
Section 172 Companies Act 2006
– Our stakeholders
35
Operating review
38
Financial review
44
Risk management
52
Viability statement
57
Governance
58 to 100
Chairman’s introduction
59
Board of Directors
60
Corporate governance report
62
Nomination Committee report
69
Audit Committee report
72
Remuneration report
77
Directors’ report
96
Directors’ responsibilities statement
100
Financial statements
101 to 146
Independent auditor’s report
102
Financial statements
110
Notes to the financial statements
117
Additional information
147 to 149
Reconciliation of Alternative
Performance Measures
147
Five year summary
147
Information for shareholders
148
Definitions
IBC
Contents
Record Financial Group
Specialist currency and asset
manager offering best-in-class
bespoke products to large
global investors
About us
• Founded in 1983 and publicly listed on
the LSE
• Group manages over $100 billion AUM
for more than 100 institutional clients
worldwide
• Over 90 Group employees spread across
offices in London, Windsor, Zurich,
Frankfurt and Amsterdam
• Regulated by the FCA in the UK, the SEC
and CFTC in the US, and BaFin in Germany
Listen
Understand
Deliver
A client-focused
approach
Using strengths and
experience developed
over 40 years in
business
Unique, innovative
and sustainable
solutions
Financial highlights
Our year
in numbers
1.
AUM managed by Record Financial Group as at 31 March 2024 is a combination of USD 97.5 billion based on the notional value of currency assets under management
through the Group’s currency products and USD 4.7 billion in total market value of other assets managed by the Group. By convention this is quoted in US dollars.
2.
A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.
Assets Under Management1 (“AUM”)
$102.2bn
+16.5%
FY-23: $87.7bn
Revenue
Underlying operating profit2
Operating profit
£45.4m
£14.5m
£12.6m
+1.6%
+0.0%
-13.1%
FY-23: £44.7m
FY-23: £14.5m
FY-23: £14.5m
Ordinary dividend per share
Underlying profit before tax2
Profit before tax
4.60p
£14.8m
£12.9m
+2.2%
+1.4%
-11.6%
FY-23: 4.50p
FY-23: £14.6m
FY-23: £14.6m
Total dividend per share
Underlying earnings per share2
Earnings per share
5.20p
(including special
of 0.60p)
5.60p
4.84p
+0.4%
-5.9%
-18.7%
FY-23: 5.18p (including special: 0.68p)
FY-23: 5.95p
FY-23: 5.95p
Record plc
Annual Report 2024
1
Additional information
Governance
Financial statements
Strategic report
About us
By leveraging our 40+ years of experience and expertise in FX and
derivatives instruments and markets, and in collaboration with our
specialist partners, we are able to identify opportunities for new and
innovative products in the wider asset management sector.
At the heart of our approach is a genuine commitment to our clients, ensuring individual needs are not just met,
but exceeded, with unique tailored solutions crafted with care and excellence.
Record Financial Group
Our business
Currency Management
Asset Management
Record’s family of currency
products is centred on highly
bespoke risk management
and return-seeking solutions,
trading various FX instruments
globally across developed,
emerging and frontier markets
to best suit the evolving
currency requirements of
our clients.
Asset Management at Record
provides private market,
yield-enhancing strategies to
institutional investors across
EM debt, Digital Lending, Private
Credit and Infrastructure asset
classes, offering sustainable
and customisable structuring
and delivery infrastructure.
Total Assets Under Management
(“AUM”)
$102.2bn
+16.5%
FY-23: $87.7bn
Currency Management
$97.5bn
Asset Management
$4.7bn
Further details of the Group products and operating segments are provided
on pages 14 to 19.
Record plc
Annual Report 2024
2
About us
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.
Where we operate
Our values
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 over our 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, premium listed
business, we are guided by the
highest levels of best practice
and ethical codes of conduct.
Collaboration
We firmly believe in the power
of many. Our expanding network
of like-minded specialists
globally 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
and innovative solutions.
Empathy
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.
The Group’s Head Office is in Windsor, UK with additional offices in London,
New York, Zürich, Frankfurt and Amsterdam.
In addition to these main markets, we continue to explore new geographical
markets which we believe may offer attractive opportunities.
Continental Europe
North America
$69.9bn $20.7bn
68%
20%
United Kingdom
Rest of the world
$6.8bn
$4.8bn
7%
5%
Global AUM and operating locations
Head Office (Windsor)
Other offices
Client locations
Record plc
Annual Report 2024
3
Additional information
Governance
Financial statements
Strategic report
Bespoke, innovative investment solutions and superior client
service drive consistent AUM growth, strong cash generation
and a robust balance sheet.
Investment proposition
Our strategic vision is aligned
with sustainable growth, which is
already materialising in the form of
year-on-year high levels of revenue.
• Prioritising sustainability
ensures longevity and resilience
of our business model, enhancing
predictability of returns over the
long term
• Embracing sustainable practices
can lead to operational
efficiencies and cost savings
through resource optimisation
and innovation
• This objective not only
safeguards shareholder
interests, but allows the Group
to capitalise on opportunities in
the rapidly expanding market for
sustainability-aligned products
A proven history of ordinary dividend
payments within the stated policy
range of 70%-90% of annual
earnings provides reassurance to
shareholders and reinforces our
investment proposition.
• Signals financial stability
and confidence in our future
performance, management’s
commitment to shareholder
and value creation, and efficient
capital allocation
• Serves as a protective measure
for investors during periods of
market volatility when capital
appreciation opportunities are
limited
• Aligns the interests of the Group
and the shareholders, fostering
a transparent and mutually
beneficial relationship
Our robust and highly liquid balance
sheet provides a solid platform for
continued value creation alongside
our cash generative business
model, and is complemented by
the absence of any external debt.
• Ensures financial flexibility
and resilience, and reduces
our exposure to any potential
economic downturns and
market volatility
• Enables the Group to capitalise
on strategic opportunities for
growth and innovation without
the constraints of debt servicing
obligations
• The avoidance of external debt
minimises any financial risk and
preserves shareholder equity
Sustainable
growth
Dividend policy
Balance sheet and
cash generation
Year-on-year growth:
Revenue:
+1.6%
Underlying profit before tax1:
+1.4%
Three-year annual
compound growth:
Revenue:
+21.3% p.a.
Profit before tax:
+27.7% p.a.
Year-on-year growth:
Ordinary dividends:
+2.2%
Underlying earnings per share1:
-5.9%
Three-year annual
compound growth:
Ordinary dividends:
+26.0% p.a.
Earnings per share
+20.7% p.a.
As at 31 March 2024:
Net assets:
£29.0m
Assets managed as cash
(no external debt):
£17.5m
1.
A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.
See financial statements
from page 110 for further
information
Record plc
Annual Report 2024
4
Shareholders are rewarded with ordinary
dividends paid within the stated range
of 70% to 90% of annual earnings.
Investment proposition
Trusted and long-standing
institutional client relationships
built over 40 years in managing
currency and derivatives provides
a solid foundation and strong asset
base upon which to grow.
• Long-standing relationships
underscore our commitment to
personalised service, trust and
satisfaction
• Our consistent growth in AUM
reflects client confidence in our
capabilities, expertise and track
record of generating competitive
returns
• Our ability to deliver long‑term
value is centred on nurturing
these relationships to
understand the unique needs
of each of our clients and
delivering tailored solutions
Partnerships with established and
expert partners provide additional
skill sets and a strong pipeline of
innovative products offering unique
investment opportunities to clients.
• These partnerships provide
us the opportunity to not
only identify promising new
investment opportunities, but
also to strengthen our existing
suite of products
• Two Luxembourg funds were
launched under the Record brand
in FY-24. For each fund, Record
has partnered with a high calibre
specialist with expertise in the
specific asset classes
• A joint undertaking with a Middle
Eastern partner is underway to
develop Islamic finance working
capital products
• These new offerings ensure
that our clients have access to
additional non-currency related
investment strategies
With offices situated in the UK,
US, and the regulated asset
management business and growing
team now established in the EU,
our improved geographical reach
provides passporting opportunities
for the Group.
• Our multi-regional footprint
strengthens our resilience
against localised risks and
economic fluctuations
• Bolsters our credibility, visibility
and accessibility for both clients
and investors
• Positions us well to capture
growth opportunities, drive
operational efficiencies and
deliver sustainable value to our
stakeholders across borders
and markets
Client relationships
and AUM
Partnerships
Geographical reach
Year-on-year growth:
AUM:
+16.5%
Three-year annual
compound growth:
AUM:
+8.5% p.a.
Partners across the globe:
Luxembourg,
US, Middle East,
Ireland and
many more
Offices in:
UK, US,
Switzerland,
Germany and
the Netherlands
See pages 41 to 43 for
further AUM information
See pages 14 to 19 for
further information on our
partnerships
See page 3 for more
information on the locations
of our client base
Record plc
Annual Report 2024
5
Additional information
Governance
Financial statements
Strategic report
There are few people who have the
desire and determination to start a
new business, who then also have
the management skills to allow it to
develop and mature and, in the greater
course of time, to set in place the
succession to take on the business from
the founding generation. Neil Record,
the founder of the Company, whom I
succeeded as Chairman after the last
Annual General Meeting, managed
all three over 40 years and I would
like to pay tribute to him for all that
he achieved in creating and building
Record plc. Not only has the business
developed from a tiny band located
in an office next to Windsor Riverside
Station in the early 1980s to one which
has AUM of over $100 billion which it
manages on behalf of an impressive
and demanding range of clients, but it
has done so in a manner that reflects
the high intellectual standards and
personal integrity of its founder.
The last year has also witnessed
the retirement of Leslie Hill as Chief
Executive Officer and the impending
retirement of Steve Cullen as Chief
Financial Officer. Leslie joined the
business in 1992 and, for many years,
led the sales and business development
activities of the Company. Record is
fortunate to have retained and served
some clients for periods measured in
decades rather than years and I believe
much of the loyalty from clients has
been driven both by the quality of the
services provided and the relationships
developed and led by Leslie over
many years.
Since taking over as Chief Executive
Officer in 2020, Leslie also widened the
eyes of the Company with regard to
new product and service opportunities,
creating opportunities for the new
generation of management to take
forward. Steve Cullen has also been a
magnificent servant of the Company.
Having joined in 2003 and taken over as
Chief Financial Officer in 2013, he has
been an undemonstrative, but calm
and sensible voice in the boardroom for
many years. To both Leslie and Steve,
gratitude is owed by shareholders,
Board members and employees alike.
Dr Jan Witte joined Record in 2012,
having completed his mathematics
doctorate at Balliol College, Oxford.
Since then, he has held various roles
in the Company including, in recent
times, leading the development of
Record Asset Management and being
Chief Executive of Record Currency
Management. I am delighted that he
has stepped up to become the Chief
Executive Officer of the Group. Jan has
now been joined by Richard Heading,
who will succeed Steve Cullen as
Chief Financial Officer. Richard has
a breadth of experience in sectors
and businesses with demands and
challenges not dissimilar to Record
and I believe that he will bring to the
business complementary skills and
external experience to support Jan’s
deep knowledge of Record and its
activities. I am confident that, between
the two of them, supported by other
senior members of the management
team, the Company is in safe hands.
Ordinary dividend per share
4.60p
+2.2%
FY-23: 4.50p
Underlying earnings per share1
5.60p
-5.9%
FY-23: 5.95p
In line with our succession planning
now materialising, I am confident
we have a new generation of senior
management in place with strong
and complementary skills to take
the business forward.
David Morrison | Chairman
Chairman’s statement
1.
A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.
Record plc
Annual Report 2024
6
Financial overview
In his short time to date as Group CEO,
Jan has brought renewed clarity to
the Group’s core product suite and, as
previously announced, has also made
changes to the IT strategy. The latter,
in particular, will underpin operational
strength and service quality, and is a
major focus for the coming year.
The Group continues to make progress
in its growth plans as evidenced by AUM
having almost doubled over the last five
years to its new high of over $100 billion,
coupled with the successful launch of
new products under its Custom Solution
suite of asset management products.
From a financial perspective, we
fully expect the impact of the above
changes, and others, to be seen over
the medium term. However, in the most
recent fiscal year, the overall increase
in revenues and underlying profitability
was more mundane, reflecting the
pricing of certain products and the
Company’s cost base. The year also
delivered challenges with some
events beyond our control having
an unavoidable financial impact; in
particular, the unexpected client-side
delays in launching some of our new
funds. In addition, the decision was
also taken to impair £1.9 million of
capitalised IT development expenditure
towards the end of the financial year.
In that context, maintaining Group
revenue and underlying profitability
at the same level as last year is a
reasonable achievement, albeit one
below our initial expectations. However,
looking ahead with a solid pipeline,
fund launches planned and AUM at
its highest ever level, the Group’s
trajectory remains positive and is
supported by a highly cash-generative
business model accompanied by
a robust and liquid balance sheet,
with total equity of £29.0 million
(FY‑23: £28.3 million).
Further information on financial results
can be found in the Financial review
section on page 44.
Capital and dividend
Our capital policy has not changed and
aims to ensure retention of capital as
required for regulatory and working
capital purposes and for investing
in new opportunities. Our dividend
policy currently targets a level of
ordinary dividend within the range of
70% to 90% of annual earnings, which
allows for progressive and sustainable
dividend growth in line with the trend in
profitability.
Previously, and subject to financial
performance and market conditions
at the time, the Board has considered
returning excess cash to shareholders,
usually in the form of special dividends.
However, the Board retains the
discretion to change these policies as
required, either in line with changes
in strategy or in response to changing
business circumstances.
In that context, the Board is
recommending a final ordinary
dividend of 2.45 pence per share
(FY‑23: 2.45 pence) with the full-year
ordinary dividend at 4.60 pence per
share (FY‑23: 4.50 pence), representing
a 2.2% increase in the ordinary dividend
and an ordinary payout ratio of 82%
of underlying earnings. The interim
dividend of 2.15 pence was paid on
22 December 2023, and the final
ordinary dividend of 2.45 pence will be
paid on 2 August 2024 to shareholders
on the register at 12 July 2024, subject
to shareholder approval.
Having reviewed the current level
of Group capital against its ongoing
requirements for regulatory and
investment purposes and to support its
continued growth and expansion, the
Board is announcing a special dividend
of 0.60 pence per share to be paid
simultaneously with the final ordinary
dividend. Total proposed dividends per
share for the year are 5.20 pence per
share (FY-23: 5.18 pence) compared
to underlying earnings per share of
5.60 pence (FY‑23: 5.95 pence).
The Board
As noted above, the past year has
witnessed substantive changes to
the Board and senior management of
the Company. Rarely, however, can
one note that the Chairman stood
down after 40 years, the CEO after
31 years with the Company and the
CFO after 21 years. Nevertheless, such
changes give rise to management
challenges and I would like to take this
opportunity to thank my colleagues on
the Board and the senior members of
the management team for their advice,
challenge and support since I took the
chair last summer.
Having expressed an inclination to do
so some time ago, but having most
helpfully agreed to remain in post to
support the process of management
change over the past few months,
Tim Edwards recently took the decision
to stand down from the Board, after six
years’ service, to give him time to focus
on the biotechnology sector.
I would like to thank Tim for the
commitment and counsel he has given
to the Board and the management team.
To succeed Tim, shortly before issuing
this report we were able to announce
the appointment of Dr Othman
Boukrami as a new Non-executive
Director with effect from 1 July 2024.
Othman is currently Chief Investment
Officer of TCX, the Currency Exchange
Fund, having earlier in his career
held senior positions in the African
Development Group and Citibank.
Othman brings highly pertinent
sector expertise to the Board and
I am delighted that he accepted the
invitation to join it.
I am also pleased that we have
appointed Kevin Ayles to the Board
in an executive capacity. Kevin has
been with Record since 2007 and, in
a company that is wholly dependent
on the calibre and commitment of its
employees, he has played a critical
role in developing the strength of the
management team in his capacity as
Head of Human Resources. Kevin’s
appointment is both recognition of the
contribution he makes to the business
and a reflection of the importance of
his role to the future of the Company.
Outlook
A new senior management team
quite rightly takes the opportunity to
review the strategic and operational
imperatives of a business as well as the
environment and markets in which a
company is operating. That is a process
that is ongoing within Record at present,
on which Jan Witte comments in his CEO
report, and which will continue during
the first half of the current financial
year. The focus, in the short term, is
on ensuring operational strength and
stability along with client satisfaction.
Taking a medium-term view, I am
confident that we have a new generation
of senior management in place able
to take the Company forward and
that we are operating in political and
economic conditions that will provide
the Company with an opportunity-rich
environment both for currency hedging
mandates and for alternative asset
investments that are not correlated with
more conventional asset classes.
David Morrison
Chairman
27 June 2024
Chairman’s statement
Record plc
Annual Report 2024
7
Additional information
Governance
Financial statements
Strategic report
Overview
I am proud to have become CEO of
Record and consider it a great privilege
to be able to both lead and evolve the
business going forward, supported by an
experienced team of senior colleagues,
many of whom have been at Record for
ten years or more.
To put things in context, it is instructive
to look back at the transformation the
business has seen over the last decade
and more specifically in the last couple
of years.
In the period after the financial crisis
of 2008/9, Record’s product set, while
profitable, became somewhat stagnant
and, in 2017, fee pressure across the
industry was becoming an increasing
concern. This highlighted the need for
change and, against a backdrop of falling
profitability, Leslie Hill, formerly Head
of Sales, was appointed CEO in 2020 to
introduce fresh thinking and to explore
new opportunities for growth.
Leslie successfully created this younger,
more dynamic senior management team
across the Group and encouraged a more
entrepreneurial mindset to take root.
As a result, over the last couple of years,
we have proactively developed and
explored a number of new possibilities,
not all of which we plan to take forward
given the need to focus on those areas
offering the greatest potential.
Strategy
Since my appointment on 1 April of this
year, the senior management team
has been working to crystallise our
long‑term strategy for growth and we
have started by setting some very clear
priorities. With a much higher level of
strategic clarity, our focus now is firmly
on execution and we must get the
details right.
One of the things that has become
very clear is that we need to define our
positioning in the industry landscape.
We now strongly identify (and reinforce
this positioning) as a specialist
asset manager focused on offering
best‑in-class products to large global
investors.
Being a specialist is a role that
is consistent with our roots, our
established product lines, and our
more recent expansion into new
products. It is also consistent with our
culture and the exceptional expertise
of many of the people we employ. We
don’t aspire to, and it is not necessary
to, excel at everything; but where
we are competing, we aim to provide
best‑in‑class solutions.
Another quality that makes us unique
is our ability to structure and deliver
large purpose-built investment
solutions. Our size here is key. We are
large enough to structure and deliver
multi-billion USD mandates, and
simultaneously small enough to be
nimble and accommodate the unique
and often complex detail required
to deliver exceptional output for our
rightly demanding clients.
In an increasingly complex world,
where rapid technological progress
competes for attention with
de-globalisation and geopolitical
tensions, these purpose-built
investment solutions of exceptional
quality and the way we can deliver
them, are in demand. As testament
to that, we now manage more than
USD 100 bn for clients worldwide.
Revenue
£45.4m
+1.6%
FY-23: £44.7m
Underlying profit before tax1
£14.8m
+1.4%
FY-23: £14.6m
Since my appointment on 1 April of
this year, as a team, we have now
crystallised our long-term strategy
for growth around some very clear
priorities.
Jan Witte | Chief Executive Officer
Chief Executive Officer’s statement
1.
A reconciliation of alternative performance
measures to their statutory equivalent is provided
on page 147.
Record plc
Annual Report 2024
8
Our client base continues to comprise
institutional investors, pension
funds, and foundations. In recent
years, we have also attracted an
increasing number of international
asset managers, which is an exciting
development and is now one of the key
areas of support and development.
With teams in London, Zurich,
Frankfurt, Amsterdam, and New York,
and around 100 employees globally,
we have our eyes firmly set on the work
that is required to build on our recent
AUM milestones and to continue our
trajectory of growth. To this end, our
energy is now directed towards six
distinct product categories where we
offer a unique value proposition, and
where we can be best in class.
Currency Management, with a renewed
focus on core products, comprises:
• Passive Hedging;
• Hedging for Asset Managers
• Dynamic Hedging; and
• FX Alpha (formerly Currency
for Return).
Asset Management, where products
require more preparatory work
and hence lead times are greater,
comprises;
• Emerging Market Debt; and
• Custom Solutions (including Private
Credit and Infrastructure Equity).
We will be heavily focused on this
envelope of six core product categories
and have created high hurdles for
ourselves when it comes to adding
new products.
Our priority is very much “bigger and
better” in the areas where we are
already strong, with the expansion
of our range a secondary aim.
Financial performance
Group revenue increased by 2% and, on
an underlying basis (excluding one-off
and exceptional costs), operating profit
margin and pre-tax profit were 32%
and £14.8 million respectively. Against a
difficult backdrop, maintaining these at
the same level as in the previous year
can be considered a respectable result.
The underlying financial performance
of the Group remains strong. We saw
material growth in AUM across both
currency and asset management
products during the year, which reflects
the time and effort of colleagues spent
both in maintaining, but also in growing
and winning client mandates.
Consequently, FY-24 saw the Group
pass some milestones of note: AUM
rose by over 16% to its highest ever
level of $102.2 billion, with FY-24 being
the fifth consecutive year of positive
net inflows. In addition, we launched
two funds under our new Custom
Solutions suite of asset management
products and maintained the high level
of performance fees of £5.8 million
earned in the previous fiscal year.
The impairment of the previously
capitalised IT-development
expenditure of £1.9 million for the
R-Platform was announced prior to
the year end.
Whilst disappointing, having
taken account of both the scale of
improvement delivered over the
previous two years plus the future
investment required over a prolonged
period, the strategic decision was
taken to cease further development
and to bring future IT infrastructure
and development teams in-house.
The Board was fully supportive of
this decision which we believe will
strengthen the Group’s ability to
develop and deliver our tailored
solutions in a more cost-effective way,
which can only be in the best interests
both of our clients and shareholders.
Further information on financial results
can be found in the Financial review
section on page 44.
Outlook
It’s a privilege to be leading the Group
and a delight to be working with
both superb colleagues and clients
who really make every day at Record
enjoyable. I am confident that the
renewed focus we have on a core
suite of six product categories, where
our offering and value-add is unique,
positions us well for growth in the
years ahead.
Jan Witte
Chief Executive Officer
27 June 2024
Chief Executive Officer’s statement
A message from the outgoing Chief Executive Officer
My time as CEO was both challenging and exciting, and I was very proud
of what we all achieved together while not losing sight of what our clients
value us for: reliable and sophisticated solutions to their currency and
interest rate issues, coupled with complete alignment with their interests.
Since I have retired and am now a shareholder and adviser, I am watching
with great enthusiasm and pleasure the strides the Company is making on
all the chosen paths of diversification. I am sure that Jan as our new CEO
will prove to be as dedicated and creative as he has been during his whole
career at Record, innovating while also taking care to keep sight of our
core values. David Morrison will no doubt support and help Jan bringing
his years of experience to the issues and challenges all asset management
businesses must face.
I must thank everyone for a most exciting and challenging career at Record
and for all the good things being there has brought me and wish everyone
all the very best for the next phase.
Leslie Hill
Record plc
Annual Report 2024
9
Additional information
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Strategic report
Our markets
With our continued
expansion into
alternative asset
management, we
recognise the
emergence of a new
market with its
associated trends.
While its impact on our operations
is currently limited, we anticipate
that as we continue to grow in
this area, the asset management
market will play a more important
role in shaping our strategies and
outcomes in the future. Nonetheless,
for the 2024 financial year our core
operations remained anchored to the
currency market, which continues
to serve as our primary operational
domain.
The currency 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.
Macro global trends
1
2
Disinflationary
trends
Subdued FX
volatility
Central banks have vigilantly
monitored ongoing inflation risks,
with the disinflation process
unfolding slowly, yet mostly
smoothly, and effectively. Developed
Market central banks are nearing
their inflation targets, though
a slowdown in services sector
disinflation remains a challenge.
Gaining confidence, policymakers
began to signal potential rate cuts
before inflation comes wholly into
full balance. The market’s calibration
of timing and depth of expected rate
cuts were a major driver of currency
fluctuations during this period.
Tentative successes in controlling
inflation, the stability of short-term
interest rates, and the attendant
expectation of reduced interest
rates have led to decreased currency
volatility. In certain instances, the
market-implied volatility levels
approached levels close to those seen
before the pandemic. This reduction
in volatility also likely mirrored
market optimism regarding a “soft
landing” in the US economy, coupled
with the possibility of a rebound in
activity in other regions, dependent
on co-ordinated cycles of monetary
policy easing.
3
4
A range-bound
US dollar
China’s economic
malaise
The US dollar fluctuated within a
narrow range, caught in a tug-of-
war between expectations of a
Federal Reserve easing cycle and an
economic exceptionalism narrative
that supported a “higher for longer”
pricing of interest rates. Most
central banks resisted the market’s
expectations for larger rate cuts,
with some adopting interventionist
strategies to bolster their currencies,
such as direct market interventions
in Switzerland and Japan, and an
FX reserve hedging programme in
Sweden. The Japanese yen was the
exception, experiencing notable
depreciation as the Bank of Japan
hiked its policy rate but maintained
its accommodative monetary stance.
The Chinese economy encountered
various obstacles, such as declining
house prices, stringent regulatory
measures and high debt levels. The
government’s fiscal measures were
perceived as constrained, possibly due
to concerns over debt sustainability
and the risk of moral hazard in
the real estate sector. Monetary
policy adjustments were similarly
constrained, with considerations for
bank profitability, currency stability
and the strategic goal of promoting
the renminbi’s internationalisation.
Consequently, elevated real interest
rates had a dampening effect on
economic activity in China.
Record plc
Annual Report 2024
10
Our markets
The anticipated rate cutting cycle
and potential divergence in economic
performance across regions can
lead to trends in the US dollar and
other currencies. Our Dynamic
Hedging strategy can help reduce
timing risk by gradually adjusting
hedge ratios in response to emerging
currency trends. The flexible
nature of Dynamic Hedging via its
implementation with FX forwards can
allow for lower implementation costs
compared to market alternatives,
and can accommodate client-specific
risk budgets, benchmarking and
market considerations. We are also
able to act on market opportunities
to capture hedge value and/or adjust
responsiveness of the hedges after
a period of base currency weakness.
For clients who want to use a
broader set of signals we are now
offering an active hedging process
allocating dynamically based on
different currency market factors
(e.g. expressions of currency carry,
volatility, trends and US dollar
cyclicality), depending on their recent
strength and relative importance in
explaining currency returns.
Increased inflation uncertainty, larger
short-term interest rate fluctuations
and diverging country fundamentals
improve the opportunity set within
currency markets and have helped
generate a pick-up in interest for
return‑generating currency products.
Record’s Currency Multi-Strategy
can systematically target these
patterns and discover inefficiencies
that emerge within currency markets.
The strategy is optimised across
multiple styles (fundamental and
quantitative), time horizons, regions
and trading frequencies, aiming to
deliver a stable return stream in
a range of environments with low
correlation to traditional asset
classes. To further capitalise on
currency fluctuations in Emerging
Markets and to complement our
existing fundamental strand, we
implemented an Emerging Market
Classification (“EMC”) strategy. The
EMC dynamically allocates to various
currency factor groups according
to their perceived ability to explain
currency returns, and the process is
systematised using a quantitative
machine learning model to make
predictions.
Our broad suite of strategies across
hedging and FX Alpha means we
are well positioned to offer both
standalone and Multi-product
solutions for clients across base
currencies and market environments.
Multi-product strategies can aim
to both reduce currency risk (e.g.
through passive or active hedging)
and improve returns by taking
cross-hedging positions that more
effectively align inherited currency
exposures with return opportunities
in the currency market.
What this means for our business
5
New geopolitical
risks
The onset of the conflict between
Israel and Hamas introduced new
geopolitical challenges, supporting
oil prices and raising concerns about
further supply chain disruptions,
especially as Houthi militants, backed
by Iran, targeted commercial vessels
in the Red Sea. After an unsuccessful
summer offensive by Ukraine, signs
of war weariness became apparent in
the West and among US lawmakers.
Meanwhile, ahead of the US election in
November, investors started to assess
the potential impact of a shift towards
Republican policies on industry and
international relations, including trade
and tariffs and a potentially more
confrontational stance towards the
Federal Reserve.
Record plc
Annual Report 2024
11
Additional information
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Strategic report
Our business model
Business Model
Our resources
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 across the asset
management universe.
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
40 years in business.
Values and culture
Strong values and a culture built
over 40 years underpin the way
we work, guiding our behaviour,
operations and communications
in everything we do.
Our business
We are a specialist currency
and asset manager offering
best-in-class products to
large global investors:
Currency
Management
With currency management
experience going back over
four decades to the founding of
the firm, currency management
products and solutions still
comprise the largest portion
of Group AUM and a key part
of our client offering.
See more on
pages 14 to 16
Asset
Management
Record has now cemented
itself into the broader asset
management space, with
access to, and collaboration
with, like-minded and
specialist partners, allowing us
to offer solutions and products
to help our clients address the
investment challenges they
face outside the pure FX arena.
See more on
pages 17 to 19
Our strategy
Our strategy is focused on
continued sustainable growth
supported by the following
three pillars:
Organic Growth
• Continue to grow core AUM by
positioning
• Grow higher-margin products
to benefit from multi-decade
trends in bank disintermediation
and private markets
• Create a foundation for a
sustainable growth rate
Quality of Earnings
• Investment in people, systems
and brand
• A refined focus on a more
balanced contribution from
the six core products and their
performance
Operational
Excellence
• Proprietary operational
framework optimised for
Record core products
• New IT leadership team
and expansion of in-house
development team
See more on
pages 22 to 23
Record plc
Annual Report 2024
12
Our business model
Benefits to our
stakeholders
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 financial
performance and capital
distributions.
See more on
pages 35 to 37
Our
approach
Listen
1
Understand
2
Deliver
3
A client-focused approach
Using strengths and
experience developed
over 40 years in business
Unique, innovative
sustainable solutions
Our value creation
Our business methodology allows us to provide tailored solutions
to all our clients, leading to value creation for all our stakeholders.
Cash generation
Our highly cash-generative business model allows us to
remain independent and 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:
Returns to shareholders
– ordinary dividend per share:
£16.3m 4.60p
+25%
+2.2%
FY-23 (restated): £13.0m
FY-23: 4.50p
Record plc
Annual Report 2024
13
Additional information
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Strategic report
Our products
Passive Hedging
Passive Hedging aims to reduce
portfolio volatility by removing
currency risk. This is achieved through
symmetrical elimination of currency
exposure from clients’ international
portfolios. Record’s approach combines
investment efficiency with operational
excellence. Clients benefit from best
execution, custom benchmarks,
optimised exposure capture,
management of cash flows and a
complete reporting suite, including
regulatory reporting.
Enhanced Passive Hedging builds
on Record’s core offering, aiming
to add value by exploiting market
inefficiencies without affecting the
consistent protection against currency
moves. Our market-leading approach
requires constant monitoring and
innovation from a specialist team, using
bespoke infrastructure to both identify
and capture opportunities within a
robust risk management framework.
Hedging for Asset Managers
Developed as an extension of Record’s
Passive Hedging experience and
expertise, Hedging for Asset Managers
now exists as a standalone product
with a dedicated team. The emphasis
of Record’s approach is on a bespoke
solution tailored specifically to
the strategy and structure of the
underlying investment with a keen
focus on liquidity management and
efficient implementation. Our clients
benefit from our expert trading team,
infrastructure and robust operational
processes allowing them to focus on
delivering uncompromised returns
to their investors with best-in-class
currency risk management seamlessly
integrated into the process.
Our products
Apr
2009
Apr
2010
Apr
2011
Apr
2012
Apr
2013
Apr
2014
Apr
2015
Apr
2016
Apr
2017
Apr
2018
Apr
2019
Apr
2020
Apr
2021
Apr
2022
Apr
2023
Mar
2024
Record Hedging Return (cum.)
Currency Return (cum.)
(30%)
(20%)
(10%)
10%
0%
20%
30%
Value added by Dynamic Hedging programme for a representative US-based account
April 2009 – March 2024
Protected Currency Return (cum.)
Assets Under Management
(“AUM”)
$97.5bn
+19.8%
FY-23: $81.4bn
Revenue
£33.9m
+3.0%
FY-23: £32.9m
Currency Management
Currency management has been at the forefront of Record’s offering for over four
decades and firmly remains a key pillar today, making up the majority of Group AUM
and being the vanguard of our reputation as a leading specialist asset manager.
The firm continues to pride itself on the depth and breadth of currency expertise
and divides its attention on four key products.
Risk disclaimer: These graphs illustrate historic returns for representative accounts. Individual client asset allocations, strategy, currencies and other criteria may
materially alter actual returns.
Record plc
Annual Report 2024
14
Dynamic Hedging
Our Dynamic Hedging product has been
at the core of Record’s offering for four
decades, aiming to reduce risk through
active management of currency
risk embedded within portfolios
while seeking to minimise cash flow
requirements and add value over a full
currency cycle. The process aims to
generate asymmetric results allowing
our clients to benefit from foreign
currency strength while offering
protection against foreign currency
weakness. The delivery of these
mandates continues to evolve but
Dynamic Hedging remains a critical tool
in the management of currency risk.
FX Alpha (formerly
Currency for Return)
Record’s FX Alpha offering
is encapsulated in Currency
Multi‑Strategy, our flagship Alpha
product, which combines multiple
return drivers into a single balanced
portfolio that targets consistent
returns in a variety of market
conditions. This is achieved due to the
diversification within the portfolio
which trades in both developed and
emerging markets and approaches
each through a fundamental and
quantitative lens. Fundamental
approaches include carry and value
which are exploited across the
currency universe while quantitative
drivers include trend, volatility, carry
and cyclicality.
The unique sources of return exploited
over multiple time horizons and risk
sensitivities aim to deliver a stable
return that is uncorrelated with risks
elsewhere in the portfolio. And the
other unique feature, as with other
currency strategies, is that it can be run
unfunded, simply adding to the returns
generated elsewhere in the portfolio.
Strategic approach
and distribution
We are seeing a high level of interest
in FX Alpha primarily due to strong,
uncorrelated returns that can be
achieved without an initial outlay of
capital. This approach is particularly
attractive in the US. While FX Alpha
programmes have typically been
implemented by large corporate and
public pension plans, there appears
to be a groundswell among non-profit
investors looking to add additional
return to their portfolios. This is further
complemented by the multi-manager
community who are mostly new to
FX Alpha and who are now identifying
that its lack of correlation can be
complementary to existing allocations
even on a funded basis.
The regional focus on Dynamic Hedging
remains in the US since the US dollar
exhibits significant trending behaviour,
but the team is starting to explore
the opportunity set in other markets.
Dynamic Hedging conversations and
ultimately sales are very much linked
to the path of the US dollar with some
investors considering market timing
to be key to implementing such a
programme.
Should there be a continued period of
US dollar weakness, this would likely
increase interest in such programmes.
Demand for Enhanced Passive Hedging
is likely to remain at its current level so
the primary focus is on consolidation
of the position as the incumbent
through excellent client service and
performance with further sales
opportunity diminished given the
current assets managed relative to
the market size.
Hedging for Asset Managers defies
categorisation by geography with
opportunity in the UK, Europe, Asia
and North America. It also stands
out as a product line that merits a
different sales approach. Success
in the space is most likely achieved
through partnerships with significant
alternative asset managers, regardless
of their stage of development, and
then growing in partnership with them
as they cross between investment
strategies and raise assets. Another
approach which Record is employing
is to work with select partners in the
space who service the growing needs
of the private markets community
and to work with and support those
partners to grow our reputation,
brand and ultimately assets.
Our products
Jul
2012
Mar
2013
Nov
2013
Monthly returns
Cumulative gross excess return
Composite live returns
Client returns
(4%)
0%
4%
8%
Currency Multi-Strategy composite performance since strategy inception
AUD base; 4% expected volatility; 31 July 2012 – 28 March 2024
18%
12%
Jul
2014
Mar
2015
Nov
2015
Jul
2016
Mar
2017
Nov
2017
Jul
2018
Mar
2019
Nov
2019
Jul
2020
Mar
2021
Nov
2021
Jul
2022
Mar
2023
Mar
2024
Nov
2023
16%
Risk disclaimer: These graphs illustrate historic returns for representative accounts. Individual client asset allocations, strategy, currencies and other criteria may
materially alter actual returns.
Record plc
Annual Report 2024
15
Additional information
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Strategic report
Milestones in FY-24
FY-24 performance was characterised
by strong investment performance
across the product range. Our FX Alpha
flagship, Currency Multi-Strategy,
showed exceptional performance over
the year, driven in particular by the
emerging markets (“EM”) components
which benefited from highly divergent
monetary policy across the investment
universe, which led to significant
performance fees.
This fundamental approach was
complemented by the introduction
of a quantitative strategy in emerging
markets, which has performed strongly
since inception and was quickly adopted
by a large client to complement their
existing EM allocation. The culmination
of the performance and client interest
resulted in the upgrading of the
strategy rating to the top level by
one of the leading global investment
consultants, with others considering
the strategy in more depth.
FY-24 also saw strong performance
in Enhanced Passive Hedging
making continued performance fee
contributions. A large pension fund
mandate win in Switzerland has
confirmed Record’s status as the
leading provider in the space and
we look to extend our advantage in
delivering complex mandates and
continued outperformance.
Dynamic Hedging has continued to
perform in line with expectations
and has delivered value to clients,
consolidating the two large mandate
wins at the end of FY-23 amongst
difficult market conditions with few
extended trends.
Finally, new partnerships in the private
capital and private wealth space
for our Hedging for Asset Managers
product have been at the forefront of
our evolution of the product alongside
existing clients. New prospects are able
to receive sophisticated modelling of
their portfolio under a wide variety of
conditions, bringing to life challenging,
hypothetical conversations around
exchange rate path dependence
and ensuring Record is a compelling
currency partner as the private credit
space in particular continues to gather
assets apace.
Looking forward
Into FY-25, we have expectations on
raising further assets across two
product lines. We anticipate that the
demand for FX Alpha will continue off
the back of three key factors. Firstly,
Record’s strong performance in FY-24,
both in an absolute sense and relative
to peers, has garnered some attention,
ensuring competitiveness not only
across the currency space but also in
the broader categories of Systematic
Global Macro and CTAs. Secondly and
relatedly, continued divergence in
interest rates and monetary policy
globally would be expected to continue
to drive currency movement which
Record is well positioned to exploit.
These continued trends should form
the base for further strong and
uncorrelated performance. Finally,
with interest rates elevated relative to
the last decade, the hedge fund sector
is coming under some pressure to
deliver ever-high returns to maintain
outperformance of cash, which helps to
underline the value and advantages of
our FX Alpha strategies.
Another area of expected growth is
in Hedging for Asset Managers where
the team is ever-more deeply plugged
into the space and the key players at
the same time as the larger alternative
asset managers are globalising and
looking at the wealth channel for
further asset raising. Both of these
provide significant opportunity for
Record to add value and visibility.
With currency adding an additional
dimension for previously domestic
investors, our expectation is for more
alternative managers to outsource their
FX, looking for a partner to add value
whilst reducing their own investing
burden.
Our products continued
Record plc
Annual Report 2024
16
Our products continued
Our products
EM Debt
Record EM Sustainable Finance Fund
(“EMSF”)
Record’s EMSF product is a trailblazing
FX-centric, sustainability-led
approach to emerging market debt
(“EMD”) investing. The strategy
targets the same return drivers that
investors seek within traditional EMD
allocations but re-engineered to offer
a more diversified and flexible return
stream, with better risk management
and reduced drawdowns, and as a
result appeals to investors that are
outcome minded regardless of their
sustainability leanings. The strategy
invests in emerging and frontier
market currencies and bonds, where
possible seeking to lengthen tenors
beyond market standard to enhance
yield and develop local market while
still maintaining a highly diversified
exposure tilted to their investment
attractiveness and not the market
capitalisation of their debt issuance.
The supporting cash in the portfolio is
invested in USD bonds whose duration
is actively managed to achieve the
portfolio’s aims.
Record’s EMSF Fund is categorised
as Article 8 under the European
Sustainable Financial Disclosure
Regulation for its promotion of social
characteristics. Developing 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.
Jul
2021
Jan
2022
Jul
2022
Jan
2023
Jul
2023
Jan
2024
JPM EMBIGD (EM hard currency debt)
Record EM Sustainable Finance
JPM GBI-EM GD (EM local currency debt)
-30%
-20%
-10%
0%
Record Emerging Markets Sustainable Finance vs. Emerging Market Indices
USD; June 2021 - March 2024
10%
20%
Net Returns
20.4%
20.5%
Outperformance
Assets Under Management
(“AUM”)
$4.7bn
-25.4%
FY-23: $6.3bn
Revenue
£11.5m
-2.5%
FY-23: £11.8m
Asset Management
Record’s expansion into the broader asset management space over the past couple of
years represents the latest evolution in our client focus. We now offer a range of solutions
and products to help clients tackle investment challenges beyond foreign exchange.
As a Group, we are managing funds with innovative and interesting investment strategies
and distributing these ideas to clients.
Risk disclaimer: These graphs illustrate historic returns for representative accounts. Individual client asset allocations, strategy, currencies and other criteria may
materially alter actual returns.
Record plc
Annual Report 2024
17
Additional information
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Our products continued
Custom solutions
Multi-product
Multi-product mandates are bespoke
and combine two or more elements
which cannot readily be separated
for reporting purposes. Typically,
these mandates incorporate both
risk‑reducing and return-seeking
objectives tailored to meet individual
client requirements, for which hybrid
fee rates are applicable.
General Partner (“GP”) Stakes
The GP Stakes product takes minority
equity stakes in alternative asset
managers, across private asset classes
including private equity, private credit,
infrastructure and real estate. By
investing in the GPs directly as opposed
to their funds, our clients participate
in their management fee income,
their carried interest, balance sheet
investments in the form of yield, as well
as any growth in the enterprise value of
those managers. Due to the diversified
nature of the product, investors benefit
from the broader growth trend of private
markets within the investment universe.
Protected Equities
The Protected Equity product uses a
well-tested multi‑factor approach to
select a broadly diversified portfolio of
international public equities, expected
to deliver outperformance in a variety
of market conditions. Additionally, the
strategy incorporates tail-risk hedging
positions designed to deliver strong
outperformance in extreme market
drawdowns, contributing to enhanced
long-term returns.
Liquid Credit Solutions
Record structures mandates in the liquid
credit space through digital lending
that exploits the disintermediation of
the banking sector with technology
to deliver stable yields from the real
economy. The product invests in a
diversified portfolio of short-dated
loans to corporates and consumers
originated through over 130 specialist
fintech platforms. The portfolio is
exceedingly granular with hundreds
of thousands of line items.
Strategic approach
and distribution
Record’s Asset Management business
intends to grow along three verticals
– private market solutions, alternative
investment strategies and bespoke
client mandates. The strategic
approach emphasises a blend of
internal and externally sourced return
drivers to bolster product innovation.
Record is known for understanding
overlaid return drivers in the currency
space. We believe the same know-how
can be applied to the entire spectrum
of liquid instruments and form a
risk framework that differentiates
between a notional exposure and
the corresponding funding element.
Expanding the range of overlay
strategies to other asset classes will
allow Record to uniquely position itself
in the alternative solution segment.
We continue to prioritise custom
solutions tailored to meet the
specific needs of clients. Through
collaborative partnerships and a
client-centric approach, we seek to
be a trusted adviser to our clients.
These relationships can give rise to
new opportunities, as in the case of
the anticipated Infrastructure Fund,
which leverages off client relationships
nurtured by the Currency Management
business over many years.
By integrating in-house capabilities
with third-party expertise, Record aims
to deliver unique investment solutions
that align with client objectives and
regulatory requirements. An example
of this is the development of a new
Islamic finance working capital fund.
Our portfolio management and
structuring teams are spearheading
the asset origination and investment
product design, while our partner
handles the Islamic compliance features.
Distribution efforts are being led by a
bank with excellent client relationships
in the Middle East. This dual distribution
model, using both our own sales
team and local partners, has proved
successful in ensuring our products are
getting in front of the right clients.
EMSF is a product line that defies
geographic constraints and is likely
to see two key client types. The first
of these are the sustainability and
impact‑centric investors, typically
within Europe, who appreciate the
positive contribution that the strategy
is able to make in emerging and frontier
markets at the same time as delivering
returns for investors.
The second key investor will be the
highly sophisticated investors globally,
regardless of their sustainability
leaning, who recognise the approach
for its innovation, its effective extraction
of sovereign risk premia from frontier
markets and the outcome-oriented
approach to an asset class that has
underdelivered for too long.
Although our primary focus is on
building solutions that achieve a specific
investment objective, we also go into
these projects with a view to identify
supplemental benefits we can offer to
our other clients. One advantage that
came out of building the GP Stakes fund
is the new access to the underlying
private asset managers and potential
to offer private market solutions in each
segment, geography and asset class
to Record’s institutional clients.
As a result of building out the Asset
Management business over the last
few years, client interactions come
from a place of listening first and then
advising. We can help clients with their
product structuring, distribution and
asset management needs, alongside
offering traditional currency services.
The creation (and now expansion) of
the Luxembourg fund platform affords
us the flexibility to offer investment
solutions in the most effective way for
clients, whether as a commingled fund
or a fund-of-one, an SPV or a note.
Our products continued
Record plc
Annual Report 2024
18
Our products continued
Milestones in FY-24
Record’s EM Sustainable Finance
strategy complements its exceptional
downside protection in FY‑22 and FY‑23
with solid upside capture in FY‑24,
able to maintain and even stretch its
advantage over peers and presenting a
compelling investment proposition as it
nears three years of live track record.
Following a multi-year undertaking
to obtain regulatory approval from
the German financial regulator,
BaFin, Record started providing
asset management services to
clients. The first of our clients is
a Luxembourg fund platform, to
whom Record provides investment
management services and share class
hedging services.
Two Luxembourg funds were launched
under the Record brand in FY-24.
For each fund, Record has partnered
with a high calibre specialist with
expertise in the specific asset class.
These new offerings ensure that
our clients have access to exciting,
non-currency‑related investment
strategies, as part of our strategy
to grow our business through
diversification, with the added benefit
of fostering deeper client relationships.
We are delighted that at the end of its
first full year of operation, Record is
managing over $320 million in assets
on the Luxembourg fund platform.
These funds are generating significant
interest with existing clients as well
as prospective clients.
The distribution of these funds forms
a key part of the sales strategy.
There is presently strong momentum
within the sales teams on both our
Record‑branded funds as well as those
few select external fund managers for
whom we offer distribution services in
Europe and the UK. This has been the
most profitable year yet for fund sales,
largely due to the distribution of the
liquid credit strategy.
These milestones underscore Record’s
dynamic evolution and its commitment
to providing innovative solutions in the
ever-changing investment landscape.
Looking forward
Looking ahead, Record is poised to
continue its trajectory of growth
in the asset management space.
With a strong foundation laid over
the past year, we anticipate further
expansion and diversification of our
product offerings.
A third fund focused on infrastructure
assets is currently in development.
The Infrastructure Fund takes
minority private equity stakes in core
infrastructure projects. The investment
mandate of this fund allows for both
brownfield and greenfield investments,
with an emphasis on renewable energy
and the energy transition. This fund
offers a long term revenue stream and
is expected to go live in the current
financial year, gradually increasing
revenue with each project drawdown
and ultimately enhancing the quality
of earnings.
Additionally, a joint undertaking with
a Middle Eastern partner to develop
Islamic finance working capital
products represents an exciting
opportunity. This collaboration points
to Record’s commitment to innovation
and inclusivity, as we seek to broaden
our reach and offer tailored solutions
to a diverse clientele. We anticipate this
fund to start managing assets in the
second half of FY-25.
As Record has expanded its reach, so
too has it bolstered its capabilities to
service clients. Firstly, on resourcing,
we have hired two senior investment
managers to oversee the Asset
Management business. Secondly,
we are creating a second fund umbrella
in Luxembourg that will complement
the existing fund umbrella and allow
Record to create a full range of private
markets funds and solutions.
Record plc
Annual Report 2024
19
Additional information
Governance
Financial statements
Strategic report
Strategic approach and distribution
Product performance Q&A
Q
How has Emerging Market
Long/Short performed?
A
The macroeconomic-based Emerging Market
Long/Short strategy was a standout contributor
within the Currency Multi-Strategy portfolio,
demonstrating our ability to harness the broad
opportunity set within Emerging Markets. Notable
contributions to returns came from timely investments
in higher-carry currencies in Latin America and
profitable relative value positions in Eastern
Europe. These results reflect our ongoing efforts to
understand and navigate the unique macroeconomic
and market complexities of trading Emerging Market
currencies.
Andy Bloomfield
Head of Macro Research
Q
How have rates expectations
shaped tenor management
performance?
A
The last period was marked by some fundamental
changes to the structure of funding markets across
the globe, but particularly in Switzerland. Central
banks have been attempting to remove ultra-low
interest rates and engage in balance sheet reduction
prompted by the moderation of inflation, while also
keeping reserves ample. Our active management of
relative interest rate exposure led to positive returns
for our clients.
James Nisbet
Head of Enhanced Passive Hedging and Rates
Record plc
Annual Report 2024
20
Strategic approach and distribution
Q
How has thoughtful calibration of
Dynamic Hedging resulted in a
desirable outcome for our clients?
A
Our Dynamic Currency Hedging programme aims to
deliver consistent value by creating an asymmetric
payoff profile using a systematic investment process.
At the same time, expertly implemented discretionary
adjustments help smooth the volatility of returns by
anticipating rapid turns in the behaviour of certain
currencies. During the year, we implemented a
number of adjustments in response to the challenging
environment in the Japanese yen, where prolonged
periods of currency weakness increased the risk of
interventions by Japanese monetary authorities. These
calibrations helped reduce the programme’s volatility
and delivered valuable outcomes.
Andrey Rumyantsev
Head of Risk Management Solutions
Q
How have we approached
diversification and risk allocation
during the year?
A
The last period was marked by innovation and
dynamic risk allocation across all of our products.
We launched a pilot programme, followed by a
full‑scale client mandate, using a sophisticated
machine learning approach to select long and short
positions in Emerging Market currencies. The results
have been very encouraging. Our proactive approach
to dynamic risk reallocation in the Currency
Multi‑Strategy resulted in the best annual
performance for the programme since its inception
in 2012.
Dmitri Tikhonov
Chief Investment Officer
Record plc
Annual Report 2024
21
Additional information
Governance
Financial statements
Strategic report
Our highest ever AUM at year end,
growth from both existing clients and
new product launches achieved in
FY-24 and further fund launches
planned in FY-25, all give a strong
foundation for growth across the
whole of our product range.
Organic
Growth
Leveraging off of our impressive milestone of
over USD 100bn in AUM, we will continue to grow
core AUM by positioning established products to
address institutional clients’ changing requirements
and needs, and to benefit from macroeconomic
opportunities.
New leadership of our EM and Frontier team in
addition to expansion of our US team gives further
dedicated resource aimed at maximising growth
opportunities in light of continued interest.
Our focus remains on growth across our core products
in both currency and asset management. In the latter,
we anticipate opportunities for growth arising from
multi-decade trends in bank-disintermediation and
private markets through which we hope to grow our
high-margin products.
Our position as trusted adviser and our approach
of ‘Listen, Understand, Deliver’ allows us to fully
understand the investment risks and challenges faced
by clients and to respond with tailored solutions.
Our flexibility and expertise in structuring unique
solutions allows us to respond to ever-changing
markets and client demands, which allows us to
create a strong foundation for sustained growth.
The year ahead
• Focus on the creation of a foundation for a stable
growth rate in AUM.
Our Strategy
This goal is realised
through our three
strategic priorities:
1
Organic Growth
2
Quality of Earnings
3
Operational Excellence
Our strategy recognises the
strengths and expertise of
our business built over
40 years, and combines this
with the adoption of
operational advances 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.
The evolution of our strategy now moves to more
focused implementation across a range of core products
identified as providing opportunities for sustained
growth and improved quality of earnings
Record plc
Annual Report 2024
22
Our strategy to improve the quality
of earnings is focused on investing
in our core products identified for
growth and in ensuring clearly defined
responsibility and accountability
across all areas of the business.
Quality of
Earnings
Our focus on quality in earnings aims to achieve a
more robust business through a refocusing of our
core products, allowing us to offer a unique value
proposition and where we can be best in class. To this
end, by investing in our people, systems and brand we
aim to grow the business by ensuring the sustainability
of returns, the longevity of client relationships,
continued high cash-generation and innovative
solutions to meet the demands of our clients.
Under new leadership, we have reduced the number
of new initiatives and identified six core products with
the aim of attaining a balanced contribution from each
product. Business functions are clearly organised
around products with clearly defined responsibility
and accountability to ensure maximum efficiency and
contribution from each.
Going forward, our investment focus will continue to
be in our people, systems, and our Record brand.
The year ahead
• Further development and refinement of the FX
Alpha and Hedging for Asset Managers products
as a result of the anticipated increased demand for
these products.
• The launch of a third fund under Custom Solutions,
with a focus on infrastructure investments with
an emphasis on renewable energy and the energy
transition.
Our Strategy
Record is committed to develop a proprietary
operational framework that is specifically optimised
for Record’s six core products: Dynamic Hedging,
Passive Hedging, Hedging for Asset Managers,
FX Alpha, EM Debt and Custom Solutions.
This framework will lend itself to an enhanced client
experience and allow for more personalised tailoring.
As part of this commitment, the decision was made
to change the structure of our IT team. Consequently,
a new IT leadership team has been introduced to
bring the necessary infrastructure and development
expertise in-house, which will enhance understanding
of bespoke technical requirements and will enable
greater focus and efficiency in delivering future
development and product enhancement as well
as new projects.
The year ahead
• Transition of Group’s Head Office from Windsor to
a new office in London, designed with ergonomic
workspaces to promote effective communication
and well-being.
• Research and development of improved IT
infrastructure to enhance both operational
efficiency and performance, as well as client
experience.
Achieving operational excellence is the
key to ensuring our clients receive the
best experience and the highest levels
of operational risk control as efficiently
and cost-effectively as possible.
Operational
Excellence
Record plc
Annual Report 2024
23
Additional information
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Strategic report
Financial KPIs
Key performance indicators
Measuring our
performance against
our strategy.
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.
Revenue
(£m)
Operating profit margin
(underlying)1 (%)
FY-24
FY-23
FY-22
FY-21
FY-20
45.4
44.7
35.1
25.4
25.6
FY-24
FY-23
FY-22
FY-21
FY-20
32
32
31
24
30
Link to strategy
Organic growth, Quality of earnings
Link to strategy
Organic growth, Quality of earnings
Revenue has been earned predominantly
from the provision of currency management
services, although the contribution from
asset management products continues
to grow with the launch of new products
in the year. Both product offerings earn
revenue in the form of management fees
and performance fees.
Why this is important
Revenue is a key indicator of client
experience, growth and a key driver of
profitability. A small percentage increase
in total revenue has been achieved due
to increases in both management fees
and distribution fees for the year, the
latter linked to growth in the new asset
management products. Revenue also
includes performance fees of £5.8 million,
repeating the exceptional level also
achieved last year (FY-23: £5.8 million).
Underlying operating profit margin is
an alternative performance measure,
calculated by dividing operating profit
(before exceptional items) by revenue.
Why this is important
Underlying operating margin is an indicator
of the efficiency of the business in turning
revenue into profit on an ongoing basis i.e.
excluding ad-hoc of one-off exceptional items.
Underlying operating profit margin was
consistent with FY-23 at 32%. However,
a one‑off impairment cost of £1.9 million
decreased the operating profit margin on a
statutory basis to 28% for the year.
Basic earnings per share (“EPS”)
(pence per share)
Dividends per share (“DPS”)
(pence per share)
Ordinary
Special
FY-24
FY-23
FY-22
FY-21
FY-20
4.84
5.95
4.52
2.75
3.26
FY-24
FY-23
FY-22
FY-21
FY-20
4.60
4.50
3.60
2.30
2.30
FY-24
FY-23
FY-22
FY-21
FY-20
0.6
0.68
0.92
0.45
0.41
Link to strategy
Organic growth, Quality of earnings,
Operational excellence
Link to strategy
Organic growth, Quality of earnings, Operational excellence
The Group aims to create shareholder
value over the long term, delivered through
progressive and sustainable growth in EPS.
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. Excluding the impact of
the impairment, EPS on an underlying basis
was 5.60p per share. However, similarly to
operating profit, EPS has decreased this year
as a result of the exceptional one-off cost of
impairment in addition to the increase in tax
rate from 19% to 25% for the year.
Why this is important
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.
The ordinary dividend per share has
increased by 2.2%, 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 of 0.60 pence results in a 0.4%
increase in total dividends to 5.20 pence per
share (FY-23: 5.18 pence per share).
1.
These FY-24 KPIs have been calculated using underlying values as an alternative performance measure. A reconciliation of alternative performance measures to their
statutory equivalent is provided on page 147.
Record plc
Annual Report 2024
24
Non-financial KPIs
Key performance indicators
Measuring our
performance against
our strategy.
AUM
($ billion)
Client longevity
(%)
FY-24
FY-23
FY-22
FY-21
FY-20
102.2
87.7
83.1
80.1
58.6
6-10 years:
>10 years:
3-6 years:
1-3 years:
0-1 year:
16%
11%
28%
28%
17%
Link to strategy
Organic growth, Quality of earnings,
Operational excellence
Link to strategy
Operational excellence
Assets Under Management (“AUM”) managed
by the Group is made up of a combination of
the notional value of currency assets under
management through the Group’s currency
products and the total market value of other
assets managed by the Group. By convention
this is quoted in US dollars.
Why this is important
AUM is an alternative performance
measure. AUM is a key driver of future
revenue and an indicator of business growth.
AUM increased by 17% for the year, including
net inflows of $6.8 billion diversified across
product lines.
Client longevity measures how long Record
has been providing either currency and
derivative, or asset management, services
to each client with a mandate active as at
31 March 2024.
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.
Average number of employees
Staff retention
(%)
Employees with equity interest
(%)
FY-24
FY-23
FY-22
FY-21
FY-20
96
88
82
83
82
FY-24
FY-23
FY-22
FY-21
FY-20
81
90
74
90
81
FY-24
FY-23
FY-22
FY-21
FY-20
66
63
61
68
69
Link to strategy
Organic growth, Quality of earnings,
Operational excellence
Link to strategy
Organic growth, Quality of earnings,
Operational excellence
Link to strategy
Quality of earnings
The average number of employees through
the year includes Non‑executive Directors.
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. Continued
implementation of the Group strategy has
necessitated new skill sets in the business,
which has brought additional knowledge and
experience into the Group.
Staff retention is calculated as 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.
Why this is important
Planning for generational change is key to
the Group’s strategy. FY-24 has seen the
enactment of our succession planning, in
addition to restructuring and reorganisation
plans in line with evolution of the strategy,
which has had a corresponding impact on
staff retention. The Group remains cognisant
of ensuring the continued retention and
development of key talent as well as the
factors affecting all of our employees’
wellbeing.
The percentage of employees who own
shares in Record plc at year end.
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 Group’s
remuneration structure includes schemes
with both mandatory and voluntary equity
participation, reflecting the importance the
Group places on alignment.
Record plc
Annual Report 2024
25
Additional information
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Financial statements
Strategic report
Sustainability pillars:
Responsible investment
See more on pages 28 and 29
Our people
See more on pages 30 and 31
Climate action
See more on pages 32 to 34
Sustainability
Sustainability encompasses many
aspects of our business operations,
including both strategy and investment
as well as business practice, community
engagement and our workforce.
Record plc
Annual Report 2024
26
Sustainability
Governance
Responsibility for sustained and
meaningful progress within the
area of sustainability lies with our
Sustainability Office. The Office is
constructed of the Record plc Board,
the Senior Sustainability Office (“SSO”)
and the Sustainability Committee.
The Record plc Board delegates
accountability for the Group
sustainability strategy to the SSO,
which is comprised of key senior
leaders who take responsibility for
setting the sustainability strategy and
proactively integrating sustainable
practice across the business.
The SSO meets at least quarterly to
review and make decisions on key ESG
issues and receives regular updates
and points for discussion from the
Sustainability Manager. The SSO is
in direct communication with the
Record plc Board, ensuring it has
complete oversight into key decisions
and is aware of progress towards
sustainability goals and targets.
The Sustainability Committee is a
resource group that seeks to gather
ideas and recommendations from
across seniority and teams within
the business, as well as taking
responsibility for implementing
sustainability initiatives.
The committee is comprised of officer
roles which represent key areas of
sustainability. Officers meet with
the Sustainability Manager on a
regular basis to identify opportunities
for sustainable improvement and
collaborate on sustainability goals
aligned with their respective key area.
The Sustainability Manager is
responsible for driving progress
against the sustainability strategy,
taking recommendations and proposals
to SSO and implementing actions
as approved. The Sustainability
Manager acts as conduit between the
Sustainability Committee and the SSO,
co-ordinating sustainability efforts and
aligning goals across the Group.
Responsibility for sustained and meaningful
progress within the area of sustainability lies
with our Sustainability Office.
Sustainability organisational chart
Record plc Board
Senior Sustainability Office (“SSO”)
Sustainability Committee
Chief Executive Officer
Chief Investment Officer
Head of Human Resources and Company Secretary
Chief Financial Officer
Head of Macroeconomic Research
Head of Trading
Sustainability Manager
Oversees
Advises
Reports to
Record plc
Annual Report 2024
27
Additional information
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Financial statements
Strategic report
Philosophy
Our core business has traditionally
been within the currency management
space, where Record has been a
thought leader in exploring the
integration of Environmental, Social
and Governance (“ESG”) within currency
markets. We have leveraged our
40 years of market-leading foreign
exchange expertise to develop
innovative strategies and extend
the boundaries of ESG beyond its
existing base in equity and bonds.
In our first drive to incorporate ESG
factors into active currency products,
Record worked in collaboration
with Oxford‑based researchers in
the creation of one of the first ESG
Emerging Market FX Alpha strategies in
2018. Our efforts have only continued
to evolve since, with the launch of our
flagship Record EM Sustainable Finance
(“EMSF”) strategy in 2021.
Record Currency Management Limited,
our main trading subsidiary, is proud
to have been a signatory to the United
Nations Principles for Responsible
Investment (“UN PRI”) since 2018,
having been one of the first specialist
currency asset managers to sign up.
Our Group Responsible Investment
Policy is written in line with the UN PRI
and acts as a guide to the investment
teams and committees across Record’s
subsidiaries when considering their
approach to ESG integration in their
investment activities, providing
Group‑wide clarification on definitions
and outlining our own overarching set
of principles for responsible investing.
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. 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.
Sustainability continued
Responsible investment
Record has long been a company that places sustainability and corporate responsibility
firmly at the heart of its priorities. Responsible investment is therefore a natural extension
of this corporate philosophy and forms a key pillar of our sustainability strategy.
Record plc
Annual Report 2024
28
Sustainability continued
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 EMSF 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. More directly,
it seeks out bespoke peer‑to‑peer
(“P2P”) trade opportunities to absorb
FX risk from development institutions
or other like-minded impact market
participants.
Correctly deployed, currency is
an essential tool in contributing
to sustainable development in
less‑developed economies and in
creating a lasting positive impact.
Fixed income
The fixed income strategy is a
long‑term buy‑and‑hold investment
that targets a universe of multilateral
development banks and other
development finance institutions,
through themed and sustainable
development bond instruments,
where the profile of underlying
projects aligns with the strategy’s
sustainable development mandate.
These entities play a leadership role
in supporting long‑term inclusive and
sustainable development in low and
middle‑income economies by working
alongside the public and the private
sectors of their borrowing member
countries to support investments in key
development sectors such as health,
agriculture, energy, finance, water
and other urban infrastructure and
services.
ESG Counterparty Engagement
Strategy (“ESG-CES”)
The investment approach is
complemented by a holistic ESG
Counterparty Engagement Strategy
which overlays our investments and
seeks to encourage counterparties
to engage in better ESG practices
through direct economic incentives.
The strategy standardises and
combines ESG data from leading rating
agencies and from each counterparty’s
direct public reporting to create a
proprietary ESG score which is used to
pre-screen transactions and constrain
business exposure to counterparties
where necessary.
Engagement is central to this strategy;
the team is able to form a constructive
feedback loop, highlighting areas
across the ESG verticals where
either individual counterparties, the
industry as a whole, or both, ought
to improve practices. Record works
collaboratively with counterparties
on behalf of our clients and as
signatories of global sustainability
trade codes and standards, helping
to steer best practices and make
tangible changes. Engagement with
our counterparties covers a plethora
of ESG topics, including climate
change, socio‑economic development,
controversies and breaches of
international norms to name a few.
Record plc
Annual Report 2024
29
Additional information
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Financial statements
Strategic report
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 through ongoing employee
engagement surveys.
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. We have continued
to support a hybrid working pattern
with core office working days, giving a
balance between flexibility whilst also
providing an environment which fosters
teamwork and innovation.
The office environment and culture
promote staff development and
training and the Group offers both
external and internal training
opportunities. In October 2021 we
partnered with Advancing Women
Executives (“AWE”) to offer an
accelerator programme for mid-level
women to provide the relevant training
and networking opportunities which
are critical for career advancement.
We have continued to offer this
training for all newly promoted women
Associate Directors this year. All
employees are encouraged to have a
Personal Development Plan (“PDP”)
in place, and all new joiners receive
inductions on the benefits of PDPs for
both personal and career development.
The Group provides financial and
study support to employees who
wish to pursue relevant professional
qualifications, which many of our
employees include in their PDPs.
In addition, the Group continues to
provide a number of other benefits
to employees, including pension,
private medical cover, dental cover,
life insurance, permanent health
insurance and subsidised gym
membership. Our ultra-low emission
vehicle (“ULEV”) car benefit scheme has
allowed us to continue our commitment
to sustainability through employee
benefits. All employees participate
in the Group Bonus Scheme and have
the opportunity to acquire shares
in Record plc through the scheme,
as well as through the Record plc
Share Incentive Plan. Our Employee
Assistance Programme is available
to all employees, which provides
24/7 confidential telephone support
from qualified counsellors as well
as online computerised cognitive
behavioural therapy, to support with
mental health issues. The Group also
holds regular team‑building and other
social events, enhancing interaction
between different departments within
the business and contributing to social
inclusion.
The Group has an established
internship programme for students and
during the year welcomed interns from
the University of Oxford, University
of Cardiff, King’s College London,
University of Roehampton and the
University of West England, Bristol.
Staff retention
FY-24
FY-23
FY-22
81%
90%
74%
The FY-22 reduction in staff retention
reflected the change in our business
strategy, in particular our succession
planning, which saw higher levels of
recruitment adding additional skill sets
and some changes at senior levels
within the business filled through
internal promotions wherever possible.
As expected, our staff retention has
now normalised back to prior levels.
Human rights
The Group’s policies and procedures
are in line with internationally
recognised human rights standards,
such as the guidelines issued by the
UN Global Compact, to which we are a
signatory, as well as the International
Labour Organisation’s standards and
the Universal Declaration of Human
Rights. The Group complies with
human rights standards across each
of the jurisdictions we operate in and
works to ensure that there are no
instances of modern slavery, human
trafficking, child labour or any other
form of human rights abuse within our
organisation. The Group also supports
the right to a minimum living wage and
commits to exceed the government
minimum/living wage and has had
no instances of non-compliance to
labour standards.
Each year we publish our Modern
Slavery Act statement in line with
the government guidelines under the
2015 UK Modern Slavery and Human
Trafficking Act. 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.
Sustainability continued
Our People
We believe that investing in our staff and developing
their potential is key to the success of the business.
Record plc
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30
Inclusion and diversity
The Group is committed to providing
equal opportunities and maintaining a
workplace that 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’s Inclusion
and Diversity Policy 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 FY-24, a summary
of which can be viewed in this year’s
Sustainability Report on pages 48 to 50.
Our employee-led Inclusion and
Diversity Network continues to lead
initiatives in line with our action plan
and aims to raise awareness of the
challenges faced by underrepresented
groups and celebrate individual
differences. This year the Network
organised several inclusive events,
celebrating Deaf Awareness Week,
Pride Month, Black History Month and
World Menopause Month to name a
few. The Group is also a member of the
Diversity Project, a cross-company
organisation aiming to support
inclusion and diversity in the UK
investment and savings industry.
Read more in our Sustainability Report
at recordfg.com
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 £28.1k. 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 include
The Felix Project, Thames Hospice and
The British Red Cross Society. A scheme
allowing UK employees to give to
charity through the payroll is also
offered.
Charitable donations (£’000)
FY-24
FY-23
FY-22
28.1
18.4
18.2
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.
The gender diversity within the Group is shown below:
Gender balance
As at 31 March 2024
Female
Male
number
%
number
%
Board Directors
2
29%
5
71%
Senior management
8
22%
28
78%
Other staff
24
41%
34
59%
All employees
34
34%
67
66%
See our separate Sustainability Report, on page 30, for our Gender Pay Gap and further diversity data and more information on
our diversity initiatives.
Sustainability continued
Record plc
Annual Report 2024
31
Additional information
Governance
Financial statements
Strategic report
Sustainability continued
Net zero
We are committed to taking the vital
steps to reach net-zero, reducing the
amount of greenhouse gas emissions
(“GHGs”) we produce throughout our
operations and value chain. We have
therefore set the following targets:
• Reach net-zero greenhouse gas
emissions in our operations and
value chain by 2050
• Reduce Scope 31 emissions intensity2
by 55% by 2030 against a 2019
baseline
These targets were developed using
science-based methodology and are
aligned with limiting global warming
to 1.5ºC. When we first published
this target in our FY-22 report, we
had already reduced our Scope 2
emissions significantly by becoming
100% renewable across our UK
operations. Our interim target therefore
focuses solely on our indirect Scope
3 emissions, which at the time made
up 98% of our carbon footprint.
TCFD
We are pleased to report our
climate‑related financial disclosures
in accordance with guidance from the
Taskforce on Climate-related Financial
Disclosures (“TCFD”) as part of the
Group’s Annual Report and Accounts.
The following table provides a
summary of our response to the
TCFD recommendations. We publish
supplemental detail in our separate
Climate Report 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 at
recordfg.com
Governance
Recommendations
Current status
Key areas of progress
Page
Describe Board-level oversight of
climate‑related risks and opportunities.
Compliant
• Record plc Board is responsible
for governing and overseeing the
Group’s business strategy, and
providing oversight, control and
monitoring of its operations and
risks. As part of this function, the
Board oversees climate‑related
risks and opportunities.
• Other Board-level committees
have oversight responsibilities
for climate-related risks and
opportunities.
• The Board has delegated
responsibility for the delivery
of the Group’s climate
change strategy to the Senior
Sustainability Office.
See more
on pages
7 to 10 of
the Climate
Report
Describe management’s role in assessing
and managing climate-related risks and
opportunities.
Compliant
Climate action
We have been certified as CarbonNeutral® in accordance with the CarbonNeutral®
Protocol, the leading framework for carbon neutrality, since 2007.
1.
Scope 3 emissions: business travel; premises waste, water and transmission and distribution losses; outbound deliveries; commuting; other upstream emissions;
and home working.
2.
Scope 3 emissions intensity is calculated as an absolute value of emissions divided by revenue.
Record plc
Annual Report 2024
32
Sustainability continued
Strategy
Recommendations
Current status
Key areas of progress
Page
Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium and long term.
Compliant
• We have identified potential
climate-related risks and
opportunities which may arise
over the short, medium and long
term, and use this assessment to
inform our strategy.
• We have undertaken a qualitative
climate-scenario analysis using
the globally recognised Network
for Greening the Financial System
(“NGFS”) – “Current Policies”,
“Net Zero 2050” and “Delayed
Transition”.
See more
on pages
12 to 22 of
the Climate
Report
Describe the impact of these climate‑related
risks and opportunities on the organisation’s
business, strategy and financial planning.
Compliant
Describe the resilience of the organisation’s
strategy, taking into account different
climate‑related scenarios, including a 2°C
or lower scenario.
Compliant
Risk management
Recommendations
Current status
Key areas of progress
Page
Describe the organisation’s processes for
identifying and assessing climate-related risks.
Compliant
• The process of identifying,
assessing and managing
climate‑related risks is
embedded into our Group-wide
Business Risk Framework, which
operates a three lines of defence
approach.
• Climate-related risks are
considered within our existing
principal risk categories.
See more
on pages
23 to 25 of
the Climate
Report
Describe the organisation’s processes for
managing climate-related risks strategy and
financial planning.
Compliant
Describe how processes for identifying,
assessing and managing climate‑related risks
are integrated into the organisation’s overall
risk management.
Compliant
Metrics and targets
Recommendations
Current status
Key areas of progress
Page
Disclose the metrics used by the organisation
to assess climate-related risks and
opportunities in line with its strategy
and risk management process.
Partially
compliant
• We report Scope 1, 2 and 3 GHG
emissions.
• We report progress against
emissions reduction targets.
See more
on pages
26 to 29 of
the Climate
Report
Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 greenhouse gas (“GHG”) emissions,
and the related risks.
Compliant
Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets.
Compliant
Record plc
Annual Report 2024
33
Additional information
Governance
Financial statements
Strategic report
Streamlined Energy and Carbon
Reporting
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. The reported GHG emissions
are for our UK operations only. Please
refer to pages 31 to 32 in our Climate
Report for Group-level emissions.
Energy efficiency actions taken
Our absolute GHG emissions footprint
has experienced a slight increase
compared to our baseline year,
attributable to the expansion of our
workforce and the establishment
of new offices in London. The uptick
in Scope 3 emissions reflects our
growing presence outside of the UK,
which involved the recruitment of new
employees and forming international
partnerships in key locations including
New York, Switzerland and Germany.
This has led to increased business
travel as we integrate our new
colleagues into the business and
support face-to-face meetings with
our partners. However, despite the
establishment of new offices, we have
made significant strides in reducing
our Scope 2 emissions compared to
our baseline by transitioning to 100%
renewable energy across all our offices
through the utilisation of Energy
Attribute Certificates (“EACs”). The
remaining direct emissions, classified
as Scope 1 emissions, primarily stem
from the consumption of fuel for office
heating purposes.
Energy and GHG emissions annual % change2,3
Reporting category
Energy
consumption
UK & offshore
Location-based
methodology
UK & offshore
Market-based
methodology
UK & offshore
Scope 1
170
168
168
Scope 2
(1)
6
—
Scope 3
(48)
103
103
Total
(27)
90
105
Scope 1, 2 & 3 CO2e intensity ratio: tonnes
CO2e/FTE
87
101
1.
Scope 1 covers combustion of gas and combustion of fuel for heating purposes. Scope 2 covers purchased
electricity. Scope 3 covers premises waste, transmission and distribution losses; business travel; outbound
deliveries; commuting; other upstream emissions; and homeworking.
2.
Please note that rounding differences may exist.
3.
UK emissions data relates to the financial year ending 31 March 2024.
Sustainability continued
Climate action continued
Energy consumption
(kWh 000)1,2,3
Scope 1 FY-24: 54 | FY-23: 20
Scope 2 FY-24: 172 | FY-23: 174
Scope 3 FY-24: 211 | FY-23: 408
Location-based methodology
(tonnes of CO2e)1,2,3
Scope 1 FY-24: 10 | FY-23: 4
Scope 2 FY-24: 36 | FY-23: 34
Scope 3 FY-24: 392 | FY-23: 193
Market-based methodology
(tonnes of CO2e)1,2,3
Scope 1 FY-24: 10 | FY-23: 4
Scope 3 FY-24: 392 | FY-23: 193
Record plc
Annual Report 2024
34
Section 172 Companies Act 2006 – Our stakeholders
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 36 and 37 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 – decisions
• Launch of two Luxembourg funds
under the Record brand
• Significant performance fees as
a result of our high-performing
FX Alpha flagship
• Development of Islamic finance
working capital products
Interests of employees – decisions
• Continued cost-of-living payment
provided to all employees to help
with the consequences of high
inflation
• Increased presence in and
consolidation of our London office
Interests of shareholders – decisions
• Completion of succession planning
with the appointment of Jan Witte
as the new Chief Executive Officer
and Richard Heading as the new
incoming Chief Financial Officer
• Change in the Chair of the
Remuneration Committee
Our stakeholders, with whom we maintain an ongoing
dialogue, are detailed below.
Under section 172 of the Companies
Act 2006 a director of a company
must act in the way they consider,
in good faith, would be most likely
to promote the success of 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
The duties of
the Directors –
section 172
Record plc
Annual Report 2024
35
Additional information
Governance
Financial statements
Strategic report
Section 172 Companies Act 2006 – Our stakeholders continued
Clients
Shareholders
People
We are a client-led business. Our ethos
is to “Listen” to clients, “Understand”
their investment objectives, and “Deliver”
sustainable solutions.
We rely on the support and engagement of
our shareholders to deliver our strategic
objectives and grow the business.
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.
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.
2024 highlights and future changes
In line with the evolving Sustainable
Financial Disclosure Regulation under which
our Emerging Market Sustainable Finance
Fund is categorised as Article 8 for its
promotion of social characteristics, we filed
our Annex 2 disclosures, committing to a
minimum level of sustainable investments
in the Fund and to the measures used
to determine the sustainability of those
investments.
FY-24 saw the successful launch of
two Luxembourg funds, with a third
Infrastructure fund targeting investments
with an emphasis on renewable energy and
the energy transition.
2024 highlights and future changes
The Company saw the completion of our
succession planning in the form of Leslie
Hill’s retirement on 31 March 2024, and the
appointment of Jan Witte to take over the
role as CEO from 1 April 2024.
We have also seen some additional
Board changes in the form a change in
Remuneration Committee Chair, as well as
the appointment of Richard Heading to take
over as CFO from 1 July 2024.
2024 highlights and future changes
Record has continued to offer 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. This year we continued
to commit to three core working days to
promote collaboration and team-building.
The Company remained committed to
investment into its people through continued
quarterly cost-of-living payments provided
to all employees to help with the lasting
consequences of high inflation.
Record plc
Annual Report 2024
36
Section 172 Companies Act 2006 – Our stakeholders continued
Environment
and community
External suppliers
Regulators
We recognise the responsibility we have to
the environment, local community and wider
society.
We rely on external suppliers and service
providers to supplement the Group’s own
infrastructure, benefiting from the expertise
these suppliers provide.
As a global business, we seek to have
transparent and open relationships with our
regulators around the world. Regulators
provide oversight to ensure the subsidiary
businesses are operated within regulatory
parameters, thereby giving valuable
assurance to clients and other stakeholders.
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.
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.
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
The Group uses a combination of the
following:
• an experienced Head of Compliance;
• local legal advisers to call upon for
new activities;
• engages directly and through
membership of various industry bodies
with regulators and policymakers across
the Group as appropriate to ensure that
our regulated businesses understand
and contribute to their respective
evolving regulatory requirements; and
• the Record plc Board has set up reporting
criteria from each subsidiary based on its
requirements and this would include risk,
compliance, operational and IT.
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 regulated
subsidiaries are 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.
2024 highlights and future changes
Employees helped to raise £28.1k for local
and national charities during the year.
Record also held a corporate volunteering
day at a soup kitchen in London where
employees cooked and served soup for
those in need.
This year’s Climate Report includes
disclosure against the TCFD’s
recommendations and outlines Record’s
commitment and action towards the Group’s
net zero and emissions reduction targets.
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
2024 highlights and future changes
The Supplier Code of Conduct is in place to
align suppliers and service providers with
Record’s own standards on human rights,
diversity and inclusion, environmental policy
and ethical practice.
In line with the UK Modern Slavery Act 2015,
Record’s current modern slavery policy
has been updated to reflect policies and
practices across the Group as opposed to
entity level.
2024 highlights and future changes
Record’s German subsidiary, approved by
BaFin as a MiFID firm, has begun to see
growth in revenue inflows materialise.
A Group subsidiary launched two
Luxembourg funds during the period.
Record plc
Annual Report 2024
37
Additional information
Governance
Financial statements
Strategic report
AUM closed the year at its highest ever level
of $102.2 billion, including net AUM inflows of
$6.8 billion for the year.
Operating review
Product investment performance
Currency Management
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. 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 saw interest rates remain elevated in the first half of FY-24, stemming from hawkish central bank policy to
curb the persistent inflationary pressures. Towards the second half of FY-24, inflation prints across major economies showed
signs of moderation, alongside slowing GDP growth and employment data. These have had the effect of introducing increased
volatility into short-term interest rate markets, from which FX forward pricing is determined. The heightened volatility
increased the opportunity set for our clients’ portfolios, and as such, we positioned client portfolios appropriately to net add
value from this volatility, achieving positive performance. Additionally, the team’s management of the portfolio around key
market events such as the acquisition of Credit Suisse by UBS, and the consequential liquidity issues, have minimised downside
risks versus the fixed-tenor benchmark.
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.
Return for
year to
31 March 2024
Return
since
inception1
Value added by enhanced Passive Hedging programme relative to a fixed‑tenor benchmark
0.07%
0.10% p.a.
1.
Since inception in October 2014.
Record plc
Annual Report 2024
38
Operating review
Dynamic Hedging
The performance of our Dynamic Hedging product is a function of foreign currency fluctuations relative to the base currency
of specific clients. 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 international exposures. Positive hedging performance was largely due
to gains made from the Japanese yen hedge, which weakened substantially against the US dollar.
For non-US accounts, i.e. those where US exposures were hedged to other base currencies, the performance of Dynamic
Hedging was opposing over the period given broad US dollar strength and reflected the mandates’ specific objectives and/or
benchmarks.
Return for
year to
31 March 2024
Return
since
inception1
Value added by Dynamic Hedging programme for a representative US-based account
0.67%
0.67% p.a.
1.
Since inception in April 2009.
FX Alpha (formerly Currency for Return)
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, or the tendency for high interest rate currencies to outperform low interest
rate currencies.
• Value which purchases undervalued currencies and sells overvalued currencies relative currency fair value.
• EM Long/Short which captures returns from relative growth, value and carry opportunities within Emerging Market and
Developed Market currencies.
• Developed Market Classification (“DMC”) which dynamically allocate to various currency factor groups.
Record’s Multi-Strategy mandates delivered positive returns over the period which was driven by outperformance in the EM
Long/Short, Carry and DMC strategies, offsetting underperformance in the Value strand. Carry benefited from the low FX
volatility environment and stable interest rate differentials. DMC performed positively as its factors were able to pick up some
stronger US dollar. The EM strategy saw strong performance on the back of high real interest rates dispersion, resilient domestic
economies, and the supportive macro environment, comprising of a continued disinflation trend in major economies. In Value,
underperformance was mainly driven by short US dollar and long Japanese yen positions where the Federal Reserve’s “higher for
longer” narrative and continued monetary accommodation in Japan led to depreciation of the yen versus the US dollar.
Return for
year to
31 March 2024
Return since
inception
Volatility since
inception
Record Multi‑Strategy composite1
4.65%
1.15% p.a.
3.10% p.a.
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.
Record plc
Annual Report 2024
39
Additional information
Governance
Financial statements
Strategic report
Operating review continued
Product investment performance continued
Asset Management
EM Debt
Record EM Sustainable Finance (“EMSF”) Fund
The Record EMSF Fund USD class A returned 12.6% from inception (28 June 2021) to 31 March 2024, outperforming the relevant
emerging market local debt benchmarks by 20.43%-21.02% (see table below).
The currency portfolio delivered positive returns during the period on the back of continued outperformance of high carry EM
selections despite elevated US treasury yield volatility. Central banks in developed markets progressed with their tightening
cycles during FY-24 and adopted a prudent policy tone even after pressures had eased somewhat given second-round inflation
risks. Major EM central banks embarked on rate cutting cycles whilst remaining cautious, which supported the asset class
through elevated real rate pickup and real currency appreciation, especially in Latin American markets, where local assets
also outperformed on the back of US exceptionalism and nearshoring. Valuations were a key driver in the period, particularly in
Central and Eastern Europe currency recovery as well due to reduced regional risk premia. The DM funding basket performed
positively despite a weaker US dollar on the back of tactical management of the funding basket.
Bond investments performed positively as well despite notable volatility in global rate markets. Performance was driven
by lower rates as the tightening cycle matured and inflationary pressures started to ease. Bond returns benefited from
duration extension, as well as diversification into local currency denominated bonds in markets where local rates offered
attractive ex-ante risk/return. The peer-to-peer (“P2P”) portfolio continued to grow in the period as a result of a closer
collaboration with the multilateral development banks to support development loans that are denominated in local currency.
These innovative and bespoke transactions aim to deliver targeted positive impact that support the development of local
currency markets, benefit local communities and mitigate exposure to hard currency by end-borrowers. P2P trade highlights
in the period include gender bond transactions denominated in Mongolian tugrik, Azerbaijani manat and Kazakhstani tenge;
sustainability bonds to finance green and social projects in Colombia in local currency; and green bonds denominated in Indian
rupee to support climate resilience and transition in India.
The table below shows the performance of the EMSF Fund USD class A and the relevant benchmarks, being the JP Morgan
GBI-EM Global Diversified and JP Morgan EMBI Global Diversified. The performance is since inception of the EMSF Fund on
28 June 2021 to 31 March 2024.
Return for
year to
31 March 2024
Return
since
inception
EMSF Fund USD Share Class A
7.59%
12.60%
JP Morgan GBI-EM Global Diversified
4.91%
(8.42)%
Custom solutions
Record Diversified GP Stakes
The first of our Luxembourg funds launched offers access to a portfolio of equity stakes in privately-held asset managers who
specialise in private markets – private debt, private equity, private real estate and private infrastructure.
The fund delivered positive returns to investors in the period. This investment strategy has four key return drivers. The largest
contributor to the positive performance was the earned management fees on the GP’s existing funds. The other three drivers
were either neutral (in the case of enterprise value) or negative (in the case of the crystallise performance fees and the
GP-commit). For these last two return drivers to start contributing positively again to the overall fund performance we would
need the planned asset exits of the underlying portfolio assets to resume and normalise.
The fund performed better than industry returns, mainly due to diversification (over 70 GP stakes at the end of March 2024)
and the poor correlation of the return drivers to the typical private market returns.
The table below shows the performance of the Record Diversified GP Stakes class USD A. The performance is since inception of
the Record Diversified GP Stakes Fund on 3 April 2023 to 29 December 2023 (the most recent available data).
Return
since
inception
Record Diversified GP Stakes – USD Share Class A
6.07%
Record plc
Annual Report 2024
40
Operating review continued
Record Protected Equities
The second fund we launched combines a multi-factor active global equity approach with a tail risk hedging solution to protect
against significant drawdowns. By packaging the strategies of two US-based investment specialists, Record was able to bring
to the European market an investment product that wasn’t previously available.
The fund delivered positive returns to investors in the period driven by an overall outperformance of the factor equity strategy
(over the passive benchmark). The strong performance of the long global equity strategy fully covered the expense of buying
downside protection and still returned over 75bps after fees to investors above the passive benchmark. In general, the period
August 2023 to March 2024 was a good period for global equity markets, returning over 10% to investors.
The table below shows the performance of the Record Protected Equities class USD F and the relevant benchmark, being the
MSCI ACWI IMI. The performance is since inception of the Record Protected Equities Fund on 1 August 2023 to 31 March 2024.
Return for
period to
31 March 2024
Return
since
inception
Record Protected Equities – USD Share Class F
11.03%
11.03%
MSCI ACWI IMI
10.25%
10.25%
AUM development
AUM expressed in US dollar terms finished the year at $102.2 billion, an increase of 17% (FY-23: $87.7 billion). When expressed
in sterling, AUM increased by 14% to £80.9 billion (FY-23: £71.0 billion).
AUM development bridges – year to 31 March 2024 ($bn)
FX &
scaling
adjustment
Equity &
other
markets
Net
flows
AUM at
1 April
2023
AUM at
31 March
2024
60
70
80
100
110
90
0.4
6.7
9.0
81.4
97.5
0
2
4
8
10
6
FX &
scaling
adjustment
Equity &
other
markets
Net
flows
AUM at
1 April
2023
AUM at
31 March
2024
0.4
0.2
-2.2
6.3
4.7
Currency Management
Asset Management
Record plc
Annual Report 2024
41
Additional information
Governance
Financial statements
Strategic report
Operating review continued
AUM development continued
Currency Management AUM movements
Passive Hedging increased by 20% to $66.0 billion (FY-23: $54.5 billion) driven by net inflows of $7.4 billion for the year
from new and existing clients. The impact from market movements and exchange rates was also positive at $3.6 billion and
$0.5 billion respectively.
Hedging for Asset Managers AUM increased to $10.4 billion (FY-23: $9.3 billion) as a result of net inflows of $1.3 billion being
partially offset by adverse exchange movements ($0.2 billion).
Dynamic Hedging AUM increased by 12%, ending the year at $16.5 billion (FY-23: $14.7 billion). The majority of the $1.8 billion
increase is attributable to positive market movements of $1.5 billion with net inflows of $0.3 billion.
FX Alpha AUM increased to $4.5 billion (FY-23: $2.8 billion) by the end of the year, represented predominantly by positive
market movements of $1.5 billion.
Asset Management AUM movements
Custom Solutions AUM decreased to $3.7 billion (FY-23: $5.2 billion). Net outflows of $2.1 billion are attributable to a $2.4 billion
outflow from Multi-product which has been offset by a $0.3 billion inflow following the launch of the two Luxembourg funds.
A further partial offset is as a result of favourable exchange rates ($0.4 billion) and market movements ($0.1 billion).
EM Debt remained broadly level at $1.0 billion (FY-23: $1.1 billion) due to net outflows ($0.1 billion).
Market performance
Record’s AUM is affected by movements in market levels because substantially all the Passive and Dynamic Hedging, and some
of the Multi-product (within Custom Solutions) mandates, are linked to equity, fixed income and other market levels. Market
movements increased AUM by $6.9 billion in the year ended 31 March 2024 (FY-23: decrease of $3.8 billion).
Forex
Approximately 75% of the Group’s AUM is non-US dollar denominated. Therefore, foreign exchange movements may have an
impact on AUM when expressing non-US dollar denominated AUM in US dollars. Foreign exchange movements increased AUM
by $0.8 billion over the year. This movement does not have an equivalent impact on the sterling value of fee income.
At 31 March 2024, the split of AUM by base currency was 8% in sterling, 55% in Swiss francs, 25% in US dollars, 8% in euros and
4% in other currencies.
Record plc
Annual Report 2024
42
Operating review continued
AUM composition by base currency
Base currency
31 March
2024
31 March
2023
Sterling
GBP 6.6bn
GBP 7.4bn
US dollar
USD 25.4bn
USD 20.8bn
Swiss franc
CHF 50.9bn
CHF 38.3bn
Euro
EUR 7.3bn
EUR 11.7bn
Australian dollar
AUD 5.8bn
AUD 3.0bn
Canadian dollar
CAD 0.1bn
CAD 3.3bn
Japanese yen
JPY 42.6bn
JPY 27.2bn
Product mix
AUM composition by product
31 March 2024
31 March 2023
US $bn
US $bn
Currency Management
Passive Hedging
66.0
65%
54.5
64%
Dynamic Hedging
16.5
16%
14.7
17%
Hedging for Asset Managers
10.4
10%
9.3
11%
FX Alpha
4.5
4%
2.8
3%
Cash
0.1
0%
0.1
0%
Total Currency Management AUM
97.5
95%
81.4
93%
Asset Management
Custom Solutions
3.7
4%
5.2
6%
EM Debt
1.0
1%
1.1
1%
Total Asset Management AUM
4.7
5%
6.3
7%
Total AUM
102.2
100%
87.7
100%
The product mix has remained broadly consistent with the prior year. With the exception of a switch of mandate by one client
from Multi-Product (within Custom Solutions) to Passive Hedging, growth can be seen across the product range predominantly
due to a mixture of net inflows of $6.8 billion and market movements of $6.9 billion.
Record plc
Annual Report 2024
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Additional information
Governance
Financial statements
Strategic report
Revenue
£45.4m
+2%
FY-23: £44.7m
Management fees
£38.7m
+1%
FY-23: £38.3m
Underlying operating profit margin1
32%
FY-23: 32%
Overview
FY-24 has been a busy, somewhat
challenging, but productive year for the
Group. Changes in the leadership team
in line with succession planning, new
product launches delivered and further
launches expected in FY-25, and the
highest ever level of AUM achieved at
year end combine to form a robust base
upon which the business can continue
to grow.
Strong net AUM inflows of $6.8 billion
and solid investment performance,
as evidenced by another year of
exceptional performance fees, have
helped to underpin revenues, albeit set
against higher costs associated with
investment in technology projects and
resources, and the full-year impact
from continued inflationary and
cost‑of-living pressures.
The underlying performance of the
business remains strong. An analysis
of the IT strategy linked to the change
in Record’s leadership prompted
the decision to cease any further
work with external consultants on
the development of the IT platform
(“R-Platform”), to instead focus
on bringing IT development and
infrastructure expertise in-house.
This will be more efficient and
cost‑effective in enabling greater
focus on near-term projects and
enhancements aligned with Record’s
approach of offering purpose-built
investment solutions of exceptional
quality. However, as previously
announced just prior to the year end,
this decision resulted in the impairment
of the R-Platform project and the
consequent write down of previously
capitalised development costs of £1.9
million and associated reorganisation
costs and professional fees of
approximately £0.5 million.
A renewed focus on best-in-class
core products and good cost
control is expected to deliver an
improved quality of earnings over
the medium term.
Steve Cullen | Chief Financial Officer
Financial review
Record plc
Annual Report 2024
44
1.
A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.
Financial review
Notwithstanding the strong performance on an underlying basis, the Board exercised its discretion by decreasing the size of
the bonus pool linked directly to the Group’s financial performance overall, resulting in a reduction to variable remuneration of
42% versus the prior year.
Whilst the business continues its focus on offering best-in-class products and service across all of its product range, the
evolution into a specialist asset manager offering bespoke investment solutions has prompted a change to its reporting
structure going forward. Consequently, it has taken the opportunity to re-categorise its revenue streams to more clearly
define and differentiate flows between the more traditional currency management business and those new revenue streams
associated with the asset management business. This allows for a better understanding of the investment case and the
overall value and strength of the business, both for current shareholders and potential investors in future.
The Group remains independent, cash generative and profitable, supported by its strong and liquid balance sheet.
Profit and loss (£m)
2024
2023
Revenue
45.4
44.7
Cost of sales
(0.1)
—
Gross profit
45.3
44.7
Personnel (excluding bonus)
(14.9)
(12.8)
Non‑personnel costs
(11.4)
(9.5)
Other income or expense
(0.1)
(0.3)
Total expenditure (excluding bonus)
(26.4)
(22.6)
Group Bonus Scheme
(4.4)
(7.6)
Operating profit (pre impairment of intangible assets)
14.5
14.5
Operating profit margin (underlying)
32%
32%
Impairment of intangible assets
(1.9)
—
Operating profit
12.6
14.5
Net interest received
0.3
0.1
Profit before tax
12.9
14.6
Tax
(3.6)
(3.3)
Profit after tax
9.3
11.3
Record plc
Annual Report 2024
45
Additional information
Governance
Financial statements
Strategic report
Revenue – Currency Management
Record’s traditional core currency management 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.
Management fee only mandates are charged based upon the AUM of the product, and management plus performance fee
structures include a lower percentage fee applied to AUM, 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.
Revenue – Asset Management
Asset management revenue has been classified into two categories, being Emerging Market Debt (“EM Debt”) and Custom
Solutions. EM Debt includes the Emerging Market Sustainable Finance (“EMSF”) strategy, incorporating the EMSF Fund
launched back in June 2021. The Custom Solutions revenue category includes management fees from either segregated
accounts or funds built to suit client demand, for example the Protected Equity and GP Stakes funds launched in the year.
Distribution fees are also received for the introduction of clients into these and other third-party funds. Revenue from future
product launches, such as the Infrastructure and Islamic finance products, will also be reported within the Custom Solutions
category. The Multi-product strategy, previously included under Currency Management, has been re-categorised under
Custom Solutions, reflecting its bespoke nature in combining two or more investment objectives (e.g. both risk-reducing and
return-seeking) and hybrid fee rates.
Similarly to currency management revenue, management fees for Custom Solutions can be charged either monthly or
quarterly depending on the structure through which the programme is run. Distribution fees are earned as a percentage of
the value invested for the duration of the investment lifecycle.
Revenue – FY-24
Total management fees earned during the year increased marginally to £38.7 million (FY-23: £38.3 million). Performance fees
were again reported at £5.8 million, in line with FY-23, although now linked to performance both from FX Alpha (formerly
Currency for Return) mandates (£2.9 million, FY-23: £nil) and certain Enhanced Passive Hedging mandates (£2.9 million, FY-23:
£5.8 million). Revenue earned from the new asset management products and services totalled £0.5 million (FY-23: £nil).
Revenue analysis (£m)
Year ended
31 March 2024
Year ended
31 March 2023
Management fees
Currency Management
Passive Hedging
9.7
10.5
Hedging for Asset Managers
2.9
2.4
Dynamic Hedging
13.7
12.0
FX Alpha
1.3
1.6
Total
27.6
26.5
Asset Management
EM Debt – EMSF
4.8
5.2
Custom Solutions – Multi-product
6.2
6.6
Custom Solutions – Fund management
0.1
—
Total
11.1
11.8
Total management fees
38.7
38.3
Currency Management – Performance fees
5.8
5.8
Asset Management – Distribution fees
0.4
—
Other income
0.5
0.6
Total other services income
0.9
0.6
Total revenue
45.4
44.7
Financial review continued
Record plc
Annual Report 2024
46
Financial review continued
Currency Management fees
Passive Hedging management fees
(including Hedging for Asset Managers)
decreased by 2% to £12.6 million
(FY‑23: £12.9 million). Total net inflows
for FY-24 were reported at +$8.7 billion,
however the impact from the timing
of net flows over the last 18 months
(i.e. net outflows of $3.6 billion for
the four quarters to H1-24 were only
offset by net inflows of $10 billion in
H2-24) resulted in a small decrease to
management fees for FY-24. However,
we expect this to reverse with the
full‑year impact from the latter
inflows in the current financial year
(FY-25). Importantly, 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, institutional
client base, which itself provides
potential synergies to the Group in
the form of future partnerships and
product innovation. More recently,
the extension of our core Passive
Hedging product for Asset Managers,
which provides programmes designed
to fit specific liquidity and reporting
requirements, has seen growth which
we expect to continue in the current
financial year (FY-25) and consequently
Hedging for Asset Managers revenue
will now be reported as a separate
Currency Management category.
Dynamic Hedging management fees
increased by 14% to £13.7 million
(FY‑23: £12.0 million) predominantly as
a result of the full‑year impact of the
$2.5 billion of net inflows seen in the
second half of FY-24, combined with
the total net inflows of $0.3 billion in
FY-24 from existing clients.
Management fees from FX Alpha
(formerly Currency for Return)
mandates decreased by 19% to
£1.3 million (FY-23: £1.6 million) broadly
arising as a result of the full‑year
impact from the net outflows of
$0.3 billion in the second half of FY-24.
Asset Management fees
EM Debt – EMSF
Management fees arising from the
Record EM Sustainable Finance
Fund (“EMSF”) decreased by 8% to
£4.8 million (FY-23: £5.2 million).
Notwithstanding positive performance
for the year, net outflows of $0.1 billion
for FY-24 linked to the client’s decision
to rebalance the portfolio resulted in
the reduction to revenue. The EMSF,
launched in June 2021, reached its
three-year live track record in June
2024 and it is anticipated that this,
when combined with its exceptional
performance to date and the recent
appointment of Andreas Koester to lead
Record’s EMSF team (as announced in
April 2024), will deliver further revenue
growth over the next three to five
years.
Custom Solutions – Multi-product
Multi-product management fees
decreased by 6% to £6.2 million
(FY-23: £6.6 million). As previously
announced in January 2024, one of
Record’s long-standing clients made
the strategic decision towards the
end of the third quarter to switch
approximately $4 billion of assets
under its Multi‑product mandate into
the lower-margin Passive Hedging
product. However, other net inflows
of $1.6 billion in H2-24 will offset
a proportion of the reduction to
Multi‑product revenue for FY-25
although the net full-year impact
for FY-25 revenue on a like-for-like
basis is expected to be a reduction of
approximately 50%.
Custom Solutions
– Fund management
In partnership with other specialist
asset managers, Record launched two
funds on its Luxembourg fund platform
in FY-24: Protected Equities and GP
Stakes, which reached an aggregate
NAV of $321 million by the end of the
year. As expected during the start-up
phase, management fees for FY-24
remained fairly low at £0.1 million.
However, the launches provide a
solid platform from which to expand,
and the pipeline of opportunities
remains strong both from existing
and prospective clients.
Distribution fees
Custom Solutions
– Liquid Credit Solutions
In addition to distributing Record’s own
branded funds, we also work closely
with selected external fund managers
in the distribution of their funds in
Europe and the UK. Distribution fees
of $0.4 million were earned in FY-24.
Performance fees
Performance fees can be derived
from a combination of hedging and
return‑seeking products. Record’s
Enhanced Passive Hedging benefited
from opportunities to add value
arising from continued interest rate
differentials, which helped to deliver
performance fees of £2.9 million
(FY‑23: £5.8 million). Record’s FX Alpha
product also delivered £2.9 million of
performance fees in the year (FY‑23:
£nil). Such opportunities for added
value on both products are, to a certain
extent, market dependent and can
therefore be episodic in nature.
Consequently, the occurrence and
scale of future performance fees is
dependent on market developments
through the current financial year
(FY‑25).
Other income
Other income totalled £0.5 million
(FY-23: £0.6 million) and consists
predominantly 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 AUM.
Record plc
Annual Report 2024
47
Additional information
Governance
Financial statements
Strategic report
Expenditure
Cost of sales
Cost of sales of £0.1 million (FY-23: £nil)
represents third-party commission due
on a proportion of revenue earned for
certain bespoke mandates utilising AI
technology to assist with calculating
optimal asset allocations. Due to recent
growth in these mandates, we would
anticipate a doubling in the commission
costs for FY-25.
Operating expenditure
The Group operating expenditure
(excluding variable remuneration and
other expenses) increased by 18%
to £26.3 million for the year (FY-23:
£22.3 million).
As expected, the Group has seen
increases in personnel costs
(excluding bonuses) for the year of
approximately 16% linked to a number
of factors, including an increase in
average headcount of 9% and the
continuation of the higher inflationary
environment through the year, albeit
on the slow downward trajectory. The
continuation of a heightened cost of
living for our employees has again
added pressure for the business to
provide support in the form of pay
increases, either through one‑off
cost‑of-living allowances or in
general pay increases to keep up with
market rates of pay. Consequently,
cost‑of‑living payments were made
in FY-24 of £2,000 per employee
(excluding Executive Directors and
Board members), amounting to a total
cost of approximately £0.2 million.
The Group continues to monitor the
situation closely by benchmarking
rates of pay in the market to ensure
our employees receive the appropriate
rate of pay linked to their role and
responsibilities.
Whilst we do not expect to make
any further cost-of-living payments,
changes made to bring certain roles in
line with market rates have been made
with effect from April 2024, at a total
additional cost in FY-25 of £0.5 million.
Against this backdrop, salaries and
related on-costs (including pensions)
increased by 17% to £13.0 million
(FY-23: £11.1 million), whilst other
employment-related costs associated
with the Group’s share schemes,
including the full-year impact of the
new LTIP scheme launched last year,
increased by 22% to £1.1 million (FY-23:
£0.9 million). Commission paid under
the scheme aimed at generating new
business remained flat at £0.8 million,
broadly in line with the change in
year‑on-year revenues.
Similarly, and also as expected, we
have seen an increase in non-personnel
costs due to the full-year impact of
inflationary increases seen throughout
FY-23 as well as those incurred in
FY-24, albeit at a reduced rate. The
continuation of Record’s investment
into IT systems contributed to the
increase, particularly in using external
consultants for the development of
the R-Platform until the end of FY-24,
when the decision to stop the project
was taken. As previously announced, a
reorganisation programme has already
been implemented to restructure the
technology team by bringing both
development and infrastructure
expertise in-house. Whilst this will
be additive to FY-25 personnel costs,
we anticipate this to be offset by the
decrease in non-personnel costs with
the advantage of having greater focus
for development in key areas identified
for near-term and sustainable growth.
Non-personnel costs, excluding
impairment write-downs, increased
by 20% during the year to £11.4 million
(FY-23: £9.5 million). Increases in
professional fees including insurance,
legal and internal and external audit
fees, reflect the costs associated with
added complexity, expansion and
regulatory requirements in the UK and
abroad, especially in Germany.
In the UK, the Group is currently based
over two sites in serviced offices in
London and a leased office in Windsor.
Due to its continued expansion plans,
the business will consolidate its UK
base to one central London-based
office during the current financial year
(FY-25). The move will enable the Group
to maintain its strong culture and focus
on collaborative working, regarded
as key for future growth, whilst
having the anticipated advantages
of improved employee retention and
wellbeing and in maintaining high
levels of productivity and efficiency.
Consequently, the inevitable overlap
of office costs during the transitional
period will result in an increase in Group
occupancy costs of approximately
£0.5 million for FY-25, dependent on
timing. Following full occupation in
the new office and vacating of the
current offices, it is expected for annual
occupancy costs for the Group to fall
back to the current level.
Financial review continued
Record plc
Annual Report 2024
48
Costs associated with the winning and
servicing of clients, such as marketing,
travel and accommodation costs,
have increased by approximately 35%
linked to a higher preference for more
in-person meetings with current and
potential clients, as opposed to virtual.
Notwithstanding more recent
decreases in headline inflation, the full
year impact of inflationary increases on
running costs announced during FY-24
is expected to be felt in the current
financial year, FY-25. However, the
Group remains conscious of the level
of cost increases seen over the last
couple of years and consequently of
the need for a closer focus on ensuring
the business receives value for money
on its day-to-day operating costs
balanced with ensuring it remains
appropriately resourced to achieve its
strategic goals.
Other expenses were £0.1 million
for the year (FY-23: £0.3 million) and
represent net losses/gains made
on derivative financial instruments
employed by the Group’s hedging
activities and other FX adjustments
or revaluations.
Group Bonus Scheme
The Board retains discretion to operate
the bonus pool between 25% to 35% of
pre‑bonus operating profit and decided
to exercise its discretion resulting in a
reduction to the bonus pool, linking the
Group’s financial performance directly
to the size of the variable remuneration
pool. Consequently, the Group bonus
cost has decreased by approximately
42% to £4.4 million (FY-23: £7.6 million),
meaning that the underlying operating
profit remains at 32%, in line with
FY-23. The Group bonus has been
calculated at 26% of pre‑bonus
operating profit (FY-23: 34%).
Further information on variable
remuneration can be found in the
Remuneration report starting on
page 77.
Operating profit and
underlying profit margin
Operating profit on an underlying basis
(i.e. before impairment write-down)
remained flat at £14.5 million (FY-23:
£14.5 million), reflecting an underlying
operating profit margin of 32%, the
same level as for FY-23. However, as a
result of the impairment write-down
of £1.9 million, on a statutory basis
the Group operating profit decreased
by 13% to £12.6 million (FY-23:
£14.5 million) with the Group operating
margin decreasing to 28% (FY-23: 32%).
Whilst in the medium term it is
anticipated that changes to the IT
strategy will bring cost efficiencies and
improved value for money alongside a
more efficient and focused approach
to future IT projects, some overlap and
the passing over of current IT projects
may lead to a short‑term decrease in
operating margin for FY-25.
The Group remains confident that,
through such cost improvements
and with the impact of growth from
higher revenue-margin products, it can
increase the operating margin over the
medium term.
Cash flow
The Group consolidated statement of
cash flows is shown on page 113 of the
financial statements.
The Group’s year‑end cash and cash
equivalents stood at £9.2 million
(FY‑23: £9.9 million) and the total
assets managed as cash were
£17.5 million (FY-23: £14.5 million).
The cash generated from
operating activities before tax
increased by 25% to £16.3 million
(FY‑23 (restated): £13.0 million).
During the year, taxation of £3.2 million
was paid (FY-23: £2.4 million) and
£10.1 million was paid in dividends
(FY-23: £9.1 million). The Group
did not purchase any of its own
shares for the EBT in the year to
set against the future vesting of
share options (FY-23: £1.8 million)
and received net proceeds on the
purchases and/or redemption of
bonds and investments of £0.8 million
(FY‑23: net purchases: £1.1 million).
At the year end, the Group held
money market instruments that
mature in excess of 30 days after
the reporting date worth £8.3 million
(FY‑23: £4.5 million). These instruments
are managed as cash by the Group
but are not classified as cash under
IFRS rules (see note 19 of the financial
statements for more details).
Dividends
The FY-24 interim ordinary
dividend of 2.15 pence per share
(FY-23: 2.05 pence) was paid to
shareholders on 22 December 2023,
equivalent to £4.1 million.
The decision to impair previously
capitalised development expenditure
and to incur a one-off cost of
£1.9 million has inevitably depleted
the level of earnings by approximately
0.76 pence per share for the year.
Notwithstanding this impact, the
underlying performance of the
business has been strong in FY-24
with a 32% underlying profit margin,
high performance fees and the launch
of new funds in the year, with further
launches anticipated for the current
financial year.
Financial review continued
Record plc
Annual Report 2024
49
Additional information
Governance
Financial statements
Strategic report
Financial review continued
Dividends continued
With this in mind, the Board remains
confident in the future trajectory
of the Group and consequently
comfortable with the current dividend
policy. As disclosed in the Chairman’s
statement on page 6, the Board is
recommending a final ordinary dividend
of 2.45 pence per share, equivalent
to approximately £4.7 million, taking
the overall ordinary dividend for the
financial year to 4.60 pence per share.
Simultaneously, the Board is also
paying a special dividend of 0.60 pence
equivalent to approximately £1.1 million,
making the total dividend in respect
of the year ended 31 March 2024 of
£9.9 million, equivalent to 93% of total
underlying earnings.
The total ordinary and special dividends
paid per share in respect of the prior
year ended 31 March 2023 were
4.50 pence and 0.68 pence respectively,
equivalent to total dividends of
£9.9 million and representing 87% of
total earnings per share of 5.95 pence.
Financial stability and
capital management
The Group’s balance sheet is strong
and liquid with total net assets of
£28.9 million (FY-23: £28.3 million)
at the end of the financial year,
including current assets managed
as cash totalling £17.5 million (FY-23:
£14.5 million). The cash generated by
the business has increased, with net
cash inflows from operating activities
after tax of £13.1 million for the year
(FY-23: £10.5 million). For further
information on cash flows, see the
consolidated statement of cash flows
on page 113 of the financial statements.
Under the Board’s capital and dividend
policies, the Group can pay up to a
maximum of 100% of adjusted earnings
for each financial year, thereby
ensuring distributions do not erode 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 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. Record
Asset Management GmbH (“RAM”) is
authorised and regulated in Germany
by BaFin. RCML, RAM and the Group
submit regular capital adequacy
returns to the respective regulators
and held significant surplus capital
resources relative to the regulatory
financial resource requirements
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.
Steve Cullen
Chief Financial Officer
27 June 2024
Record plc
Annual Report 2024
50
I am delighted to be
joining the team at
Record. It is a company
with a fantastic
reputation and track
record, now embarked
on a new phase of
strategic growth
which I am very
excited to be part of.
Richard Heading
Incoming Chief Financial Officer
Q&A with incoming CFO Richard Heading
Q
What made you join Record?
A
Record has a fantastic reputation, built on a track record of
consistently delivering for clients. It’s now leveraging its
strengths to build on its established product offering and begin
a new phase of growth. That struck me as exciting to be a part of.
But what really made an impression on me was spending time
with the people here – everyone I spoke to articulated a clear
ambition and vision, deep expertise, and in particular an intense
focus on client needs.
So I’m really looking forward to getting started and contributing
to Record’s future success.
Q
What are your priorities as you step
into your new role?
A
Steve has done a brilliant job as CFO and he’s handing things over
to me in great shape. I’m really grateful for his support and wish
him the very best for the future. The Company is in good financial
health, with well-established systems and controls.
My first priority, being new to Record, is spending time getting to
know our people, our products and our clients.
However, over the coming years, as we grow in size and
complexity over the coming years there will be more demands
on the Company’s resources, so I want to ensure we have robust,
cost-effective processes in place that can scale to support the
growth and future needs of the company.
In light of our strategic evolution, I also want to develop our
engagement with current and potential future shareholders,
to assist with understanding the opportunity that Record
represents.
Q
Where do you see Record in five
years’ time?
A
Well, a lot can happen in five years! But through the turbulent
economic conditions of the last five years, and the 35 years
before that, Record has consistently delivered, and generated
impressive, sustainable growth. So I’m very confident that
will continue. And on top of that, I expect to see the fruits of
the strategic initiatives that we are currently putting in place,
resulting in a company with higher AUM in both our currency
and asset management businesses, driving higher and stronger
revenue streams.
51
Additional information
Governance
Financial statements
Strategic report
Record plc
Annual Report 2024
The Record plc Board (the “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
Systems
Operational
Investment
People
Each of these are outlined on pages
54 to 56.
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 Boards of Record Currency
Management Limited (“RCML”)
and Record Asset Management
GmbH (“RAM”), being the regulated
entities within the Group, are the
delegated decision‑making bodies
for the day‑to‑day operations of the
respective businesses and include
the executive Board members of
Record plc and other senior personnel
within the business.
Record adopts a unified approach to risk
management which is fully embedded across
all areas of the business.
Risk management
Risk management framework – overview
The RCML Board has delegated authority to the RCML Investment Committee to approve changes to any of the Group’s
investment processes and to establish and maintain policies for these processes. The RCML Investment Committee’s members
are listed on page 68 and the committee’s formal approval is required prior to implementation of any new or amended
investment process or product.
Record plc Board
RCML Investment
Committee
RCML Board
RAM Board
Audit Committee
Record plc
Annual Report 2024
52
Risk management
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 RSM UK Risk Assurance
Services LLP (“RSM”), an independent
third party.
External independent assurance
for shareholders is achieved by
the Group commissioning RSM 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 and the flexibility retained under
the capital and dividend policy provides
an effective additional line of defence
in terms of mitigation when considering
its risks.
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.
External independent assurance activity
Embedded culture of integrity and accountability
1st line of defence:
ISAE 3402 and AT-C 320 service auditor’s report on internal controls (RSM)
2nd line of defence:
3rd line of defence:
Business operations and support
Internal audit
(independent assurance – RSM)
Control and oversight functions
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.
Record plc
Annual Report 2024
53
Additional information
Governance
Financial statements
Strategic report
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, key pillars of the CEO’s strategy are to mitigate these through a focus on quality
of earnings and operational excellence.
Other notable strategic risks are delivery of strategy, regulatory trends, product innovation, third-party products and
exogenous.
Risk
Link to
strategy
Trend
Description
Concentration
Quality of
earnings
decrease
Our clearest concentration risk comes through our historical
reliance on our core currency hedging product (both Passive and
Dynamic). Despite its acceptance as part of risk appetite, this risk
has reduced during the year and will continue to do so in FY-25 with
the change in product mix through the successful development and
marketing of new products and strategies.
Competitive
threats
Quality of
earnings
Operational
excellence
no change
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, especially Passive Hedging 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 have served us well over
40 years and will continue to do so.
Delivery of
strategy
Organic
growth
Quality of
earnings
Operational
excellence
decrease
The recent change in CEO and senior management in line with
succession planning has brought renewed focus to a core range
of six distinct product categories across both currency and asset
management. In addition, the change to our IT strategy of bringing
the infrastructure and development expertise in-house will make
the development and delivery of IT-related projects more efficient
and cost effective.
Regulatory
trends
Operational
excellence
no 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 and local advisers
during periods of regulatory transition.
Product
innovation
Organic
growth
Quality of
earnings
Operational
excellence
no change
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. We are client led, and our approach of “Listen,
Understand, Deliver” and our strong client relationships and
product diversification help to mitigate this risk.
Third-party
products
Operational
excellence
increase
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 and a strong onboarding process. Now that we are
successfully distributing third‑party strategies such as the
Diversified GP Stakes strategy, we recognise this risk has increased,
and as part of the due diligence process we have partnered with
an external research agency to conduct exhaustive fraud and
reputation checks on all managers we partner with in this way.
Exogenous
Quality of
earnings
Operational
excellence
no change
We are mindful of the risks to the business from an inflationary
backdrop, for example through increased operating costs and
interest rates, as well as the risk to asset prices that would
directly impact revenues, although this has ultimately proved to
be negligible through and following the impact of the pandemic.
Record plc
Annual Report 2024
54
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,
particularly linked to our hedging products. 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.
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, there is a risk that we make a mistake with a payment
instruction), and reporting errors.
Risk
Link to
strategy
Trend
Description
Trade
configuration
and execution
Operational
excellence
no change
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.
We continue to introduce technological solutions to increase
efficiency and reduce risk as we continue to broaden our products
and services.
RAM operational
errors
Operational
excellence
no change
For RAM operations, while operations are initially simple, we
expect this risk to emerge as the business grows. Unlike with our
currency business, where errors can be traded out of in the most
liquid market, many RAM investments are in illiquid assets or
funds, which could take an extended amount of time to trade out
of. Continued growth of the business will see adaptive changes
to operational processes to ensure operation efficiencies and
effective management of risk.
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.
Plans to enhance our systems are continuous to ensure that we are providing our customers with the best experience.
Our use of internal applications to monitor and manage risk is and will always be at the forefront of our technology strategy.
Risk
Link to
strategy
Trend
Description
Cyber and data
security
Operational
excellence
no change
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. Record Group did not experience any material client or
operational impacts, nor any data breaches, in the year.
Record plc
Annual Report 2024
55
Additional information
Governance
Financial statements
Strategic report
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 covers the research process and any potential impact on product development, which we see as low
risk given our highly qualified and experienced research colleagues, and a rigorous review process and strict scrutiny by the
Investment Committee for all related product developments.
Risk
Link to
strategy
Trend
Description
Product
underperformance
Quality of
earnings
no change
We are increasingly exposed to emerging markets and their
inherent risks, given the geopolitical environment as well as our
activity in this space. This risk is closely monitored as we expect
this risk to increase as we grow this part of the business.
Market liquidity
Operational
excellence
increase
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.
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 24 months.
Risk
Link to
strategy
Trend
Description
Key person and
succession
Operational
excellence
decrease
The Group has been in business for over 40 years and was
previously vulnerable to key person risk. The Company’s succession
strategy saw successful execution in the form of Jan Witte taking
over as CEO from 1 April 2024 as well as successfully identifying
and appointing a new chairman and CFO. By continuing to plan for
generational change and acquiring new talent, this key person and
succession risk posed to the business has become further diluted.
Talent acquisition
and retention
Organic
growth
no change
The inflationary environment has forced many firms, including
ours, to consider risks to talent acquisition and retention.
Whilst there have 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.
Record plc
Annual Report 2024
56
Risk management continued
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 for the next three years to
31 March 2027. The Board considers a
three-year horizon to be an appropriate
period to assess the Group’s strategy
and its capital requirements. This
timeframe allows for a sharper focus
and a comprehensive assessment
of the Group’s investment needs,
profitability, and the potential risks
that could impact the Group’s ability
to meet its strategic objectives.
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 20 to 23 and 52 to 56
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.
The Board has considered the
potential impact of the following
stress test scenarios, which
cumulatively represent a severe,
remote but plausible scenario:
product performance and viability,
economic downturn, cyber-attack and
operational error.
The scenarios then factor in the various
mitigating actions the Group has at
its disposal, including the potential
for non-critical cost reductions and
reassessing the dividend policy.
These mitigating actions can 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 results have confirmed that the
Group would be able to withstand
the adverse financial impact of these
scenarios occurring over the three-year
assessment period and will continue to
maintain its surplus financial resources
over and above its regulatory capital
and liquidity requirements.
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,
whilst economic uncertainty continues
linked to heightened geopolitical
instability. Through its change in
strategy and increased focus on
sustainable growth, combined with the
continued enhancement of its products
and services and in maintaining its
approach to operational excellence
and quality of earnings, the Directors
believe the Company to be capable of
meeting such challenges, as evidenced
by the maintenance of high levels of
revenue and underlying1 profits, and
the growth of AUM seen over the last
three years.
The Strategic report is set out on
pages 1 to 57 of the Annual Report
and outlines our strategic objectives,
performance and financial position,
as well as our outlook for the future.
The Strategic report was approved by
the Board on 27 June 2024 and signed
on its behalf by:
Jan Witte
Chief Executive Officer
1.
A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.
Record plc
Annual Report 2024
57
Additional information
Governance
Financial statements
Strategic report
What’s in this section
Chairman’s introduction
59
Board of Directors
60
Corporate governance report
62
Corporate governance overview
62
Board structure
63
Board activity
64
Board effectiveness
66
Corporate governance framework
67
Internal control and risk management
68
Nomination Committee report
69
Audit Committee report
72
Remuneration report
77
Chair of the Remuneration Committee’s statement
77
Remuneration Policy to be proposed to shareholders at the AGM
80
Annual report on remuneration
88
Directors’ report
96
Directors’ responsibilities statement
100
Governance
Record plc
Annual Report 2024
58
Chairman’s introduction
At Record, we remain
steadfast in our commitment
to upholding strong corporate
governance principles.
David Morrison | Chairman
Our organisational
culture is paramount to
us, as we continue our
journey of maintaining
our position as an
ethically led business
with robust leadership
underpinned by sound
corporate governance
practices.
Dear Shareholders,
I am pleased to provide an overview
of Record plc’s corporate governance
arrangements within this year’s Annual
Report and accounts. This section
outlines the structure of our Board
and its Committees, reflecting our
commitment to transparency and
effective oversight.
This year marks my first term as
Chairman of Record, having previously
served as a Non-Executive Director
and Senior Independent Director.
Following Neil Record’s retirement,
I was delighted to assume this role,
working closely with my colleagues
on the Board.
Our Board has recently experienced
some notable changes, including the
planned retirement of Leslie Hill at
the end of the 2024 financial year and
Steve Cullen’s decision to step down
upon the appointment of his successor,
as announced last year. I am proud of
the Nomination Committee’s efforts
in implementing our succession plans,
appointing Jan Witte as our new
CEO and Richard Heading as Steve’s
successor.
Further details on the Board and
Committees’ work, compliance with the
Corporate Governance Code and other
aspects of our governance framework
will be provided in the Corporate
Governance section of this report,
along with detailed Committee reports.
David Morrison
Chairman
27 June 2024
Record plc
Annual Report 2024
59
Additional information
Governance
Financial statements
Strategic report
Board of Directors
N R
A N R
Appointed:
David was appointed as
Non‑executive Director
and Chair‑elect of Record
in March 2023, becoming
Chairman in July 2023.
Appointed:
Jan joined Record in 2012 and was
appointed Head of Quantitative
Research in August 2013, Head of
Switzerland in 2017, Global Head
of Sales in October 2021, CEO of
RCML in May 2023 and Group CEO
on 1 April 2024.
Appointed:
Steve was appointed to the Board
and made Chief Financial Officer in
March 2013.
Appointed:
Tim was appointed as a
Non‑executive Director of Record
in March 2018 and as Senior
Independent Director in July 2021.
Previous appointments:
Previously, David served on the
boards of several private and
public companies, both listed on
AIM and on the main market. He
also served as a Non-executive
Director of Record in the period
from 2009 to 2018, including as
Senior Independent Director from
2016 until 2018.
Previous appointments:
After finishing his PhD at
the University of Oxford in
2011, Jan was a postdoctoral
researcher in mathematical
finance before joining Record
in the summer of 2012.
Previous appointments:
Steve qualified as a Chartered
Accountant in 1994 and gained
15 years of audit experience within
public practice before joining
Record.
Previous appointments:
Previously, Tim was a member of
the governing Board of Innovate
UK, the UK’s innovation agency,
Chair of the UK Cell and Gene
Therapy Catapult and Chair of
the UK BioIndustry Association.
Current external
appointments:
David is currently Chairman of
CPP Group plc and eConsult Health
Ltd and Trustee and Member of
the Council of Management of the
Ditchley Foundation.
Current external
appointments:
Jan has no other appointments
outside of the Record Group.
Current external
appointments:
Steve has no other appointments
outside of the Record Group.
Current external
appointments:
Tim is a biotech entrepreneur, who
is currently Chair of Schroders
Capital Global Innovation Trust
plc, as well as private companies
EndLyz Inc., Storm Therapeutics
Limited and AstronauTX Limited.
Tim is also Chair of the Institute
for Research in Schools Ltd.
Skills and experience:
Having spent his career in venture
capital, David was founder (1998)
and Chief Executive of Prospect
Investment Management,
providing venture capital
investment management to
various institutional and family
office clients. With a deep
understanding of the business
from his previous non-executive
experience and his extensive
financial expertise, David is ideally
positioned for the role.
Skills and experience:
Jan has been an integral part of
Record for twelve years, bringing
with him profound technical
expertise as the former Director
of Quantitative Research and a
wealth of practical experience as
Client Team Director and Global
Head of Sales. He has been pivotal
in advancing Record’s capabilities
in financial analytics, developing
many new investment strategies,
and fostering a client-centric
culture within the organisation.
Jan’s unique blend of technical
proficiency, strategic vision and
practical experience equips him
exceptionally well to provide
valuable insights in Board
discussions and makes him a
perfect candidate for the position
of Chief Executive Officer.
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 almost 21 years within
financial services, Steve brings
considerable accounting, financial
and risk management expertise to
the Board.
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.
David Morrison
Chairman
Jan Witte
Chief Executive Officer
Steve Cullen
Chief Financial Officer
Tim Edwards
Senior Independent
Director
until 25 June 2024
Record plc
Annual Report 2024
60
Board of Directors
A N R
A N R
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.
Appointed:
Leslie joined Record in 1992.
She was appointed Head of
Sales and Marketing in 1999
and Chief Executive Officer
from February 2020 until
31 March 2024.
Previous appointments:
Matt’s experience spans core
finance, strategy, investor
relations and business leadership
gained from Arrow Global plc,
RSA Insurance Group plc, Cable
and Wireless Worldwide plc,
Legal and General Group plc and
NatWest Bank 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.
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.
Current external
appointments:
Matt is Group CFO of Mishcon
de Reya LLP.
Current external
appointments:
Krystyna is Senior Managing
Director of the Teneo People
Advisory Board Practice and is
Non-executive Director of abrdn
Asian Income Fund Ltd.
Current external
appointments:
Leslie is a director of Trade
Record Ltd and a Trustee of
FINHUMF Charity.
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 holds degrees from
Cambridge University and The
Open University and has recently
completed a PhD in Digital
Economics.
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.
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.
Leslie Hill
Consultant
Chief Executive Officer
until 31 March 2024
Krystyna Nowak
Independent Non-executive
Director
Matt Hotson
Independent Non-executive
Director
Key:
A
Audit
Committee
R
Remuneration
Committee
N
Nomination
Committee
Chair
Record plc
Annual Report 2024
61
Additional information
Governance
Financial statements
Strategic 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
Record’s corporate culture has always
prioritised client satisfaction since day
one, and this mindset remains deeply
rooted in the business operations.
The Board has been diligent in ensuring
that the importance of client focus,
transparency and accountability
is understood by all employees,
contractors and consultants across
the Group. Additionally, the Company
leadership places a strong emphasis
on employee wellbeing. With numerous
changes within the Group, including
Board transitions, process reviews
and technological advancements,
the Board recognises the need for a
collaborative environment. To this
end, we are actively seeking new office
space, advancement in technology and
restructuring our corporate governance
framework to better facilitate
teamwork and communication.
Our ongoing efforts aim to foster a
culture of collaboration, effective
decision-making and risk management,
ensuring that Record continues to excel
while staying true to its values.
Board and corporate
governance changes
This year has marked a pivotal chapter
in Record’s corporate governance
journey. In November 2023, Leslie Hill,
a cornerstone of the organisation,
announced her retirement as Chief
Executive Officer, effective at the close
of the financial year. Earlier the same
year, Steve Cullen, our long‑serving
CFO expressed his intention to
retire upon identifying a suitable
successor for his role. Leslie and Steve
have been instrumental in shaping
the organisation’s success, their
unwavering commitment and expertise
guiding the path of the business.
Stepping into these critical roles,
Jan Witte has taken over as Leslie’s
successor as CEO, bringing a wealth of
experience and vigour to the Board.
In the CFO selection process, Richard
Heading was identified as the optimal
choice for the CFO role, boasting
extensive proficiency in financial and
capital planning, investor relations,
treasury management and global
operations.
Recognising the invaluable
contributions of Leslie and Steve,
both will remain engaged with Record,
offering consultancy support to the
newly appointed directors during
this transitional phase. Their wealth
of knowledge and experience will
undoubtedly fortify the continuity of
the implementation of our strategy.
There have been other significant
changes within Record’s structure.
Last year, the Group Management
Committee was formed, tasked with
overseeing day‑to‑day operations
across all business lines and entities.
This committee, reporting directly to
the Board, oversees the functioning of
the Group HR Committee and Senior
Sustainability Office (“SSO”) to ensure
operational cohesion.
Looking ahead
The new leadership is planning
to establish the Group Executive
Committee (“ExCom”), comprising
representatives responsible for major
products and entities. This move aims
to better align daily operations with
overall business strategies, improving
co-operation and communication.
Furthermore, the formation of
the Emerging Markets & Frontier
investment Committee is underway.
Andreas Koester, joining from
Union Investment, will oversee the
overarching strategy. This committee,
focusing on the Emerging Markets
Sustainable Finance Fund (“EMSF”),
will manage investment decisions and
review proposals for new investment
products and services or substantial
revisions to existing offerings.
Another shift towards enhancement of
the operational processes’ efficiency
will be reflected in the addition of
the Audit and Risk Committee and
the Operations Committee under
the Record Currency Management
structure. The main purpose of these
committees is to create a smooth flow
of information between the Board and
operational departments in the daily
management of operational risks,
financial performance and processes
and procedures.
Further information on the corporate
governance framework is provided on
pages 66 to 68.
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.
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 35 to 37.
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. The Board is
aware of the changes introduced in the
new version of the Code. However, the
2024 Code will apply to financial years
beginning on or after 1 January 2025.
Therefore, this report will explain the
compliance with the 2018 Corporate
Governance Code.
Corporate governance report
Record plc
Annual Report 2024
62
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.
In previous years the main areas of
non-compliance concerned Neil Record
serving in his capacity as the Chair of
the Board. Neil founded the Company
in 1983 and led the business until its
IPO in December 2007. At the time of
the IPO, it was agreed that Neil was
best placed to continue to chair the
business, a role he has undertaken
ever since. Therefore, Provisions 9
and 19 of the Code which suggest that
the chair should be independent on
appointment and that the chair should
not remain in post beyond nine years
from the date of first appointment
to the Board constituted the area of
non-compliance. This is no longer an
issue with Neil’s retirement at the 2023
AGM. The Board will therefore now be
fully compliant with both Provisions 9
and 19.
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. The Board recognises the benefit
the external evaluation may bring to
the overall efficiency and effectiveness
of the Board functioning so the option
to undertake the external evaluation is
currently being considered to be carried
out in 2025. The details of the Board
evaluation process can be found in the
Nomination Committee report.
Board structure
Board composition
As of 31 March 2024, the Record plc
Board consisted of seven members
and was headed by David Morrison
(Chairman), with the Executive
Directors Leslie Hill (Chief Executive
Officer), Jan Witte (Executive Director
and CEO-elect) and Steve Cullen
(Chief Financial Officer). There were
three independent 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 60
and 61.
At the end of March 2024 Leslie Hill
retired from the Board, and was
succeeded by Jan Witte who was
appointed as an Executive Director
and CEO-elect in January 2024. Tim
Edwards stood down from the Board
in June 2024 and will be succeeded
by Dr Othman Boukrami. Steve Cullen
will retire in June 2024, and he will be
succeeded by Richard Heading.
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;
• communication with shareholders
and the stock market; and
• overseeing the Group Company
policies, such as Code of Ethics,
Anti‑bribery and Corruption,
Anti-Money Laundering,
Conflicts of Interest, Supplier
Code of Conduct, Inclusion and
Diversity (both for the Board and
Group‑wide), Remuneration policy,
Whistleblowing and others.
Chairman
The Chairman is responsible for
the 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. His statement on FY-24 and the
outlook for the Group can be found on
pages 8 and 9.
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-24 can be found
on pages 44 to 50.
Corporate governance report
Record plc
Annual Report 2024
63
Additional information
Governance
Financial statements
Strategic report
Corporate governance report continued
Board responsibilities continued
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 71) 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.
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, Tim Edwards and David
Morrison to be independent at the
current time.
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 2024 AGM, with the
exception of Leslie Hill, Steve Cullen
and Tim Edwards, who will complete
his second three-year term.
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. Further details are set
out in the 2024 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. David
Morrison, upon joining the Board,
disclosed his additional responsibilities
and the Board was satisfied that he
can effectively fulfil his duties as
Chairman. Jan Witte has no other
appointments outside of the Record
Group and he will dedicate his time
wholly on being a leader of the
organisation. Details of other roles held
by the Non-executive Directors are
set out in their biographies on pages
60 and 61. The Board is satisfied that
all Directors continue to be effective
and demonstrate commitment to their
respective roles.
The Executive Directors work full time
exclusively for the Record Group and
have no other significant commitments
outside the Company. David Morrison,
the Independent Non-executive
Chairman, works part time.
Details of Executive Directors’ service
contracts, termination arrangements
and Non-executive Directors’ letters
of appointment are included in the
Remuneration report on page 85.
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 recognises that diversity
in its broadest sense is crucial for
driving effectiveness and includes
different perspectives, experiences,
backgrounds, psychological types and
personal attributes. Gender diversity
is considered a significant aspect of
diversity, and the Board acknowledges
that women with the right skills
and experience can bring a unique
perspective to the boardroom. The
Group’s Board Inclusion and Diversity
Policy aims to ensure that women
represent at least one-third of the
Board. The representation of women
fell to 29% with the appointment of
Jan Witte. The retirement of Leslie Hill
will reduce further gender diversity
on the Board. However, the Board
acknowledges the importance of this
matter and will make sure that future
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 31.
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.
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;
• CFO 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.
Record plc
Annual Report 2024
64
Corporate governance report continued
Updates from the respective Chairs of the Nomination Committee, Remuneration Committee and Audit Committee are
provided at each meeting.
During the year, the Board focused on the key matters detailed below:
Key matters considered by the Board in the year ended 31 March 2024
Strategic matters
• Focus on solidifying Record’s position at the FX market space and elaborating the
strategy to differentiate business from its competitors. Focusing on the current
traditional products and how their performance could be improved through sales and
scalability of the operational processes.
• Exploring new opportunities through expansion and diversification of the client base
away from the traditional pension funds towards asset management share class hedging
opportunities.
• Focus on increasing Record invested capital in digital assets area with additional injection
to Block Scholes.
• Focus on increasing the free float and trading turnover of Record’s share capital. Consult
with the broker to boost Record’s profile in the market.
• Review of the current technological state and projects and diversifying them into a new
direction following appointment of the senior tech staff.
• Transitioning the development and technology servicing from outsourced arrangements
to in-house to enhance expertise, visibility and co-ordination of efforts.
Market situation
• Discussion of the recent US banks bankruptcy and overview of the banking system,
and the merger of Credit Suisse and UBS and how this would impact the EMSF product,
which was created in partnership with UBS, and larger base of institutional clients from
Switzerland.
People
• Focus on strengthening the Sales function to align with strategic objectives, including the
US and EMSF.
• Reviewing the current human capital to identify the talent for the new generation of
leadership and identifying the current gaps to strengthen the senior management
position.
• Identifying the necessary skills needed to replace the retiring CEO, CFO and NED to find
the best candidates for the positions whose role will be aligned to current and future
needs of the business.
• Reviewing current working arrangements of the offices with the view to establish a
unique headquarters in London which can accommodate the current and future needs of
the business.
Risk
• Although risk was a standard agenda item for all the Board meetings this year, there
was a particular focus on Internal Capital Adequacy and Risk Assessment (“ICARA”), the
methodology used, how the evolution of the business should be reflected in ICARA, and
also the ownership and governance of the process.
ESG matters
• Focus on sustainability strategy to align with the range of products and initiatives,
including EMSF.
Governance
• Focus on the current corporate governance arrangements and Board reporting with the
aim to provide a holistic approach to reporting to improve visibility and clarity for a better
decision‑making process.
Operational matters
• Focus on the improvement in the operational efficiency, enhancement and automation of
the processes.
• Focusing on the technological needs and hiring experienced Head of Infrastructure and
Head of Development.
May Board Offsite
• Focus on creating the business plans for the EMSF with clear roles, responsibilities, product
development, resources and sales activities. Focus on RAM activities, including investment
management activities in private equity, protected equity and infrastructure equity.
Record plc
Annual Report 2024
65
Additional information
Governance
Financial statements
Strategic report
Corporate governance report continued
Board activity continued
Meeting frequency and attendance
The Board met seven times between
1 April 2023 and 31 March 2024 (the
scheduled meeting in March 2023 was
postponed to April 2023) 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 2024.
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: 7
David Morrison
7/7
Leslie Hill
7/7
Steve Cullen
7/7
Tim Edwards
7/7
Matt Hotson
7/7
Krystyna Nowak
7/7
Jan Witte
2/7
Neil Record
2/7
Jan Witte attended two meetings due to
his appointment in January 2024.
Neil Record attended two meetings
before his retirement at the 2023 AGM.
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 David Morrison in March 2023,
a comprehensive and tailored
induction programme was provided.
This induction included briefings with
the departing Chairman, Executive
Directors and senior management to
help him familiarise himself with his
duties and the Group’s culture and
values, strategy, business model,
operations, risk and governance
arrangements. Jan Witte has been a
long-serving employee and the CEO of
RCML since May 2023. To facilitate his
transition to the role of CEO of Record
plc, Jan attended five Board meetings
as an observer and two Board meetings
as an Executive, to ensure a smooth
introduction to this significant role. Jan
was supported by all Directors of the
Board and the Company Secretary to
facilitate this transition.
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 boards 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.
The main topics explored in the Board
evaluation were the following: Board
Structure, Information, Objectives,
Strategy and Remit, Board Committees,
Board Dynamics.
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 FY-24 was positive and all roles
were considered to be undertaken
effectively.
Corporate governance framework
The Board has established a framework
of committees and sub-committees to
ensure robust corporate governance
practices throughout the business.
However, due to the rapid expansion
of the business, the addition of
significant mandates and increase of
the operational risk, the necessity of
supporting operational committees
arose to facilitate a smooth flow of
the information and risk management.
More information on the upcoming
changes can be found on page 62.
Record plc
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66
Corporate governance report continued
The diagram below gives an overview of the Group’s core governance framework as of 31 March 2024.
Record plc
Audit Committee
Record Asset Management
Investment Management Group
Nomination Committee
Group Companies
Credit Committee
Remuneration Committee
Record Currency Management
Portfolio Management Group
Group Management Committee
Investment Committee
Senior Sustainability Office (“SSO”)
Group HR Committee
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 69 to 71;
• Audit Committee – report set out on
pages 72 to 76; and
• Remuneration Committee – report
set out on pages 77 to 95.
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.
Group Management Committee
Role: The Committee has the
delegated authority of the Record
plc Board, including responsibility
for implementation of the strategy,
managing the shared service function,
managing the implementation of
compliance, risk and internal control
processes, and implementing a
co-operative and collaborative culture
across the entities and business
functions.
Members: The Committee consists
of the Chief Executive Officer, the
Chief Financial Officer, the Chief
Technology Officer and the Head of HR
and Company Secretary and the Chief
Executive Officer of RCML.
Meetings: The Committee meets twice
a month and as necessary in response
to individual or specific events requiring
review.
Reporting: The Committee formally
reports to the Record plc Board.
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 Company Secretary
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 Record plc Board meetings,
RCML Board meetings and the Group
Management Committee.
Senior Sustainability Office (“SSO”)
Role: The SSO is responsible for
delivering on Record’s commitment to
be a sustainability leader and 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 Company Secretary
and the Senior Sustainability Manager.
Meetings: The Office meets bi-monthly
and as necessary in response to
individual or specific events requiring
review.
Reporting: Reports on the activities
of the Committee are presented
to the Record plc Board meetings,
RCML Board meetings and the Group
Management Committee.
Record plc
Annual Report 2024
67
Additional information
Governance
Financial statements
Strategic report
Corporate governance report continued
Corporate governance framework
continued
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. The Committee delegated
its responsibilities for oversight
and management of all aspects of
client counterparty credit risk and
associated policies to the Credit Risk
Committee and day-to-day investment
decision‑making to the Investment
Management Groups.
Members: The Committee consists of
the Chief Investment Officer, the Chief
Executive Officer, 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.
Credit Committee
Role: The Committee has a delegated
responsibility from the Investment
Committee for monitoring and
responding to appropriate credit risk
reports, monitoring the credit risk
of counterparties and clients and
highlighting credit risk issues.
Members: The Committee consists
of the Chief Investment Officer, the
Director of Enhanced Passive and
Rates, the Head of Trading and the
Head of Front Office Risk Management.
Meetings: The Credit Committee meets
at least quarterly and as required to
respond to issues arising.
Reporting: Reports on the activities
of the Committee are presented at the
Investment Committee meetings.
Investment Management Group
Role: The Group has a delegated
authority from the Investment
Committee and is responsible for
daily oversight of portfolios, review of
product performance, discretionary
decisions and interventions and
monitoring market conditions and
instigating research.
Members: The Chief Investment Officer,
the Head of FX Risk Management
Solutions, the Director of FX Risk
Management Solutions, the Head of
Trading, the Head of Macro Research,
the Director of Micro Research, the
Director of Fixed Income and the two
Directors of Enhanced Passive and
Rates.
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
Investment Committee for review
and comment.
Portfolio Management Group
Role: The Group has a delegated
authority from the Investment
Committee and 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
Investment Committee for review
and comment.
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 52 to 56 of the Strategic report.
The Record plc Board has undertaken
a review of the effectiveness of
internal controls for the year ended
31 March 2024 and is satisfied that
the internal control environment is
appropriate (see “Internal controls and
risk management” on page 75).
Approved by the Board and signed on
its behalf by:
Kevin Ayles
Company Secretary
27 June 2024
Record plc
Annual Report 2024
68
Nomination Committee report
Committee meeting attendance
Krystyna Nowak
Matt Hotson
Tim Edwards
Neil Record
David Morrison
David Morrison did not attend the Committee meeting in April due to
his previous commitments.
Neil Record attended two meetings held in April and June prior to his
retirement at the 2023 AGM.
Role of the Committee
The Nomination Committee is
responsible for ensuring that the Board
and senior management possess
the appropriate skills and expertise
necessary to facilitate the Company’s
growth, sustain competition in its
markets, and manage risks effectively
and efficiently.
The Committee serves both Record plc
and all the Group’s entities.
I am pleased to present the
Nomination Committee report for
the year ended 31 March 2024.
This will be my third report as Chair
of the Nomination Committee since
I joined the Record plc Board in
September 2021.
Krystyna Nowak | Chair of the Nomination Committee
The Nomination Committee’s priority
this year has been to develop and
implement a succession plan for both
the CEO and CFO of the Board, following
Leslie Hill’s and Steve Cullen’s decisions
to retire. The Committee has full
confidence in the appointment of Jan
Witte to serve as Record’s CEO and the
appointment of Richard Heading, who
will join to become the new CFO.
I am pleased to present the Nomination
Committee report for the year ended
31 March 2024. This will be my third
report as Chair of the Nomination
Committee since I joined the Record
plc Board in September 2021. Since
I have now taken over as Chair of
the Remuneration Committee, David
Morrison has taken over as Chair of
the Nomination 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 with the support
of the other independent Directors,
namely Matt Hotson, Tim Edwards and
the Group Chairman, David Morrison.
Committee meetings
The Committee met on seven occasions
during the year ended 31 March 2024
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.
Record plc
Annual Report 2024
69
Additional information
Governance
Financial statements
Strategic report
Nomination Committee report continued
Key areas of focus
CEO succession planning
and implementation
The Nomination Committee’s priority
has been CEO succession planning,
engaging in thorough discussions and
evaluations of internal candidates over
an extended period. In anticipation of
Leslie Hill’s retirement, the Committee
prepared for the transition by
identifying Jan Witte as the person
to succeed Leslie, giving him the
opportunity to be the CEO of Record
Currency Management and Record
Asset Management and reviewing his
management and leadership style
in these roles. Having demonstrated
the necessary skills, Jan was made
a plc Board member in January 2024
as CEO‑elect and has received some
training and support as part of his
transition to plc CEO.
Jan, a long-serving employee of Record,
holds a Diploma in mathematics from
RWTH Aachen University in Germany
and a DPhil in numerical analysis
from Oxford University in the UK.
After completing his PhD in 2011, Jan
served as a postdoctoral researcher
in mathematical finance at Oxford
before joining Record in the summer of
2012. Since August 2013, Jan has been
at the helm of Record’s quantitative
research efforts. His previous team
plays a vital role in supporting all of
Record’s services and products through
quantitative and systematic analysis.
With his extensive background and
expertise, Jan transitioned to become
the Global Head of Sales before
ultimately being appointed as CEO of
the RCML Board.
CFO succession planning
and implementation
CFO succession planning began when
Steve Cullen announced his retirement
plans in early 2023, prompting the
initiation of a thorough external search
for a suitable candidate by partnering
with the executive search company,
Spencer Stuart.
The process involved several stages,
including identifying key criteria for the
role, conducting extensive research
and outreach to potential candidates,
evaluating qualifications and
experiences, and ultimately selecting
the most qualified individual to fill
the position. After a comprehensive
assessment, Richard Heading was
selected to succeed Steve as the
CFO, bringing with him extensive
experience from senior finance roles
within financial services. Most recently,
Richard served as Group Finance
Director for IG Group plc, a FTSE 250
listed online trading provider. His
background encompasses diverse
expertise in areas such as financial and
capital planning, investor relations,
treasury, and international operations.
This rigorous selection process will
enable a seamless transition and
continuity of financial leadership
within Record.
Employee engagement plans
and enhancement
The Nomination Committee focused
on enhancing employee engagement
through targeted discussions and
initiatives. By assessing current
satisfaction levels and gathering
feedback via pulse surveys, the
Committee aimed to develop strategies
fostering a culture of empowerment
and motivation.
Director skills matrix
The Nomination Committee conducted
a thorough review of the Directors’
skill matrix to evaluate current
skills and identify gaps essential for
succession planning covering different
time horizons, including contingency,
medium-term and long-term planning.
The Committee members were satisfied
with the results of the assessment
confirming that the current skills
are sufficient to ensure an effective
leadership of the business. The gaps
identified helped to start developing
succession plans for the replacement
of Tim Edwards who completed his
second three-year term and will not
stand for re-election at the 2024 AGM.
A particular focus will be directed to
increase the diversity of the current
Board set-up to bring new skills,
perspectives and experience, paying
attention to the recommendation of the
Corporate Governance Code and the
Listing Rules.
Board diversity and Listing Rules
The Group’s Board Inclusion and
Diversity Policy was last reviewed by
the Committee in April 2024 and was
updated to ensure that the Board was
championing inclusion and diversity
through a clear tone from the top and
that it aligns with the many inclusion
and diversity initiatives for the broader
staff group.
The Board is satisfied that the Group’s
Board Inclusion and Diversity Policy
is applied to its Remuneration, Audit
and Nomination Committees and it
covers aspects such as ethnicity,
sexual orientation, disability and
socio‑economic background (in
addition to the aspects of age, gender
or educational and professional
backgrounds).
The Listing Rule requirements detail
three targets for the Board: that 40%
of the individuals on the Board are
women; that at least one senior Board
position is held by a woman; and that
at least one individual on the Board is
from a minority ethnic background.
As of 31 March 2024, women constitute
29% of our Board. The Board
acknowledges that the targets outlined
in the Group’s Inclusion and Diversity
policy have not been met. Therefore,
the Nomination Committee is diligently
striving to achieve these goals through
periodical review of the current
membership and creation of succession
plans, recognising the substantial
benefits that Board diversity can bring.
The approaches to the data collection
for the purpose of this disclosure were
the following:
• Self-identification: the Board
Directors were given the opportunity
to self-identify their gender and
ethnic diversity through a diversity
questionnaire.
• HR records: the data on gender was
collected through HR records.
Record plc
Annual Report 2024
70
Nomination Committee report continued
Gender
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage
of executive
management
Men
5
71.4%
3
4
66.7%
Women
2
28.6%
1
2
33.3%
Ethnic group
White British or other White (including minority-white groups)
7
100%
4
6
100%
Mixed/Multiple ethnic groups
—
—
—
—
—
Note – Executive management includes the Record Currency Management Limited Board members and members of the Management Committee.
Board gender
Female 28.6%
Male 71.4%
Board tenure
as at year end
0-6 years 57.1%
> 6 years 42.9%
Tenure and effectiveness of
the Chairman
According to the UK Corporate
Governance Code, it is recommended
that the Chair of a company’s Board
should step down from their position
after serving for a maximum of nine
years since their appointment. Neil
Record stepped down from his position
at the AGM in 2023, succeeded by
David Morrison who was independent
on joining the Board and proved
to be effective in facilitating the
effectiveness of the Board processes.
Performance of the Directors and
the Board
In compliance with the UK Corporate
Governance Code, the Board is required
to conduct an annual evaluation to
assess its performance. Whilst Record
plc is not part of the FTSE 350 index,
which advises external evaluations
every three years for listed companies,
an external evaluation workshop
was conducted in 2021. In 2024, the
Committee opted for a self-assessment
questionnaire to evaluate the Board’s
effectiveness, covering topics such as
Board structure, objectives, strategy,
remit, Board Committees and Board
dynamics. The Committee found the
evaluation results satisfactory but also
identified areas for improvement.
Recognising the critical importance
of Board effectiveness amidst
recent changes, the Nomination
Committee is actively considering the
possibility of conducting an external
review and evaluation in 2025. This
initiative aims to identify any gaps
and weaknesses, facilitating further
improvements and strengthening
our governance processes.
Looking forward
The Committee’s primary focus is
supporting the succession plans that
have now been put in place while
ensuring that there continues to be a
strong talent pool for senior positions.
Additionally, the search for a new
Non-executive Directors has just been
concluded with the announcement
that Dr Othman Boukrami will replace
Tim Edwards who completed his
second three-year term and will not
stand for re-election at the 2024 AGM.
Approved by the Committee and signed
on its behalf by:
Krystyna Nowak
Chair of the Nomination Committee
27 June 2024
Record plc
Annual Report 2024
71
Additional information
Governance
Financial statements
Strategic report
Committee meeting attendance
Matt Hotson
Tim Edwards
Krystyna Nowak
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 entities including
FCA regulated entity, Record Currency
Management Limited (“RCML”) and
BaFin regulated entity Record Asset
Management GmbH (“RAM”).
I’m happy to confirm that the
Committee continues to play a
key role in overseeing the Group’s
financial reporting, control and
assurance processes, including
both internal and external audits.
Matt Hotson | Chair of the Audit Committee
Audit Committee report
I am happy to present the Audit
Committee report for the year ended
31 March 2024 (“FY-24”). This will be
my third report since I joined Record in
2021, and I am pleased to confirm that
the Audit Committee has proven its
efficiency in fulfilling its primary role
to the Board: overseeing the financial
reporting process of the Group’s
financial performance while remaining
focused on improving the internal
control environment.
Committee duties
In light of the expansion of the Group
and its growing complexity, it is crucial
for the Audit Committee to sharpen its
focus. With the Board now overseeing
risk supervision, this shift allows the
Committee to dedicate itself more fully
to financial reporting and auditing in
this complex environment.
Under its terms of reference, the
Committee is tasked with the following:
Internal controls and operational
conflicts of interest:
• monitoring and reviewing the
Group’s internal controls; and
• reviewing 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.
Record plc
Annual Report 2024
72
Audit Committee report
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.
Financial reporting:
• 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 2024.
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.
Key areas of focus
Option valuations
Additional attention was directed
towards options valuations,
particularly in understanding the
processes involved in option-based
payments and valuations. This effort
aimed to reconcile any variances
between the methodologies presented
by Record consultants and BDO,
ensuring alignment and minimising
discrepancies in the accumulated
valuation differences, which currently
fall below the trivial threshold.
Internal Audit of Record Asset
Management (“RAM”)
The Audit Committee placed particular
emphasis on scrutinising RAM’s
internal audit of MaRisk to confirm
the presence of appropriate policies,
procedures and operational controls,
given the Company’s early-stage
status. Although several findings were
identified, management promptly took
corrective action, resulting in an overall
“satisfactory” outcome in alignment
with BaFin regulation requirements.
Whistleblowing arrangements
Recognising the importance of
transparency and accountability,
Record has established a mechanism
to enable anonymous whistleblowing
reporting. This initiative, prompted by
the expectations of key stakeholders,
ensures that employees feel
empowered to raise concerns about
unethical behaviour, fraud or other
misconduct without fear of reprisal.
By partnering with an external
provider for this service, Record aims
to enhance trust and confidence in
its governance practices, fostering a
culture of integrity and ethical conduct
throughout the Company.
Focus on subsidiaries’ financial
reporting
There was a focused discussion on
financial statements overview and
monitoring of projections from RAM
and Dair Record. It was considered
crucial to ensure adherence to timelines
and the delivery of accurate reporting,
reflecting the current status of projects
as communicated to the market.
Oversight involves receiving assurance
on projected numbers from key
projects undertaken by Dair Record and
RAM, thereby maintaining transparency
and integrity in financial reporting.
Investment Valuation policy
A priority discussion was placed on
developing a suitable approach for
valuing unquoted investments held by
Record. This initiative aimed to craft
an approach that accurately reflects
the market value of these investments,
ensuring transparency and alignment
with regulatory standards.
Control assessment in funds and
application of IFRS standard
With the inclusion of additional entities
and newly added funds, questions
arose regarding the approach
to consolidating the accounts of
these entities. The Finance team
conducted a thorough analysis and
generated results to determine
whether consolidation was necessary
and presented the findings to the
Committee. BDO has expressed
satisfaction with the outcome of this
assessment.
Record plc
Annual Report 2024
73
Additional information
Governance
Financial statements
Strategic report
Audit Committee report continued
Membership of the Committee
The Committee is composed solely of
independent Non‑executive Directors.
Matt Hotson was appointed as Chair
of the Committee in July 2021, and he
is supported by the other independent
Directors: Krystyna Nowak and Tim
Edwards.
Matt has been deemed by the Board as
the most suitable independent Director
to serve as the Chair of the Audit
Committee, given his experience in
financial services as a CFO of different
listed companies. The other members
of the Committee share this view. Tim
Edwards is a Chartered Accountant
(FCA) with a background in corporate
finance and venture investing and
Krystyna Nowak has a wealth of City
experience in banking. The Board is
content that, through their experience
in other organisations, the Committee
members have the relevant skills and
financial expertise needed for the
sector in which the Group operates.
The biographical information of the
Committee members is available on
pages 60 and 61.
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 2024.
The meetings were attended by the
Chair of the Board, Chief Executive
Officer, the Head of Compliance,
the Head of Business Risk and the
Chief Financial Officer.
Representatives from BDO LLP
attended four meetings as the
incumbent external auditor. The
representatives of RSM, an internal
audit partner, attended two 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 2024 is detailed on page 72.
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 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.
Committee evaluation
An internal review of Committee
effectiveness was overseen as part
of the Board evaluation process in
March 2024. 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 ISAE 3402 internal
controls year-end testing results;
• 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; and
• reviewing and approving the
Group Whistleblowing Policy, its
appropriateness and whether the
relevant procedures are efficient.
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.
Throughout the year, the Committee
examined significant financial and
regulatory reporting matters and
the decisions underlying the financial
statements, as well as the suitability
of accounting policies. The Committee
reviewed management reports
providing evaluations of the internal
control environment, future cash flows,
going concern status, ongoing viability,
capitalisation of software expenses,
and option valuations.
Having thoroughly assessed
management’s judgements impacting
financial reporting against the Group’s
accounting policies, the Committee
endorsed a recommendation to the
Board, affirming the appropriateness
of adopting the going concern basis
for preparing the half-year and annual
financial statements for the fiscal year
ended 31 March 2024.
Record plc
Annual Report 2024
74
Audit Committee report continued
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
The Committee provides an oversight
and independent challenge to the
internal controls of the Group.
In July 2023, the Committee conducted
an exhaustive examination of the
Group’s Controls Assurance report,
which was prepared in adherence
to ISAE 3402 standards. Although
there was one finding deemed not
significant, management promptly
rectified the issue. The Committee
members expressed their satisfaction
with the thoroughness of internal
controls testing and the accuracy
of observations and disclosures
presented in the document.
The Committee extensively reviewed
and assessed the Group’s system of
internal controls and risk management,
ultimately concluding that the internal
control environment is deemed
appropriate. Further details regarding
the Group’s risk management
framework can be found in the
Strategic report on pages 52 and 53.
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 RSM UK Risk
Assurance Services LLP. The objectives
and responsibilities of internal audit
are set out in a charter reviewed and
approved regularly. The charter was
last reviewed and approved by the
Committee in October 2022. RSM
reports directly to the Committee and
the relationship is subject to periodic
review. Jed Turnbull presently holds the
position of RSM internal audit partner.
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, RSM 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. An updated internal audit plan
was presented to the Committee in
April 2023.
During FY-24, internal audit placed
particular emphasis on key areas
within the business, including
Software Development Lifecycle,
Trade Configuration and Execution,
Senior Managers and Certification
Regime, and Investment Operations
and Governance. Each of these projects
underwent thorough examination,
revealing adherence to appropriate
processes, policies and practices.
As a result, RSM awarded high grades
ranging from reasonable assurance to
substantial assurance for all assessed
areas.
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 RSM’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
BDO LLP (“BDO”) has served as the
external auditor for Record Group
since shareholders approved their
appointment at the 2020 Annual
General Meeting (“AGM”). Orla Reilly
has been the Group’s statutory auditor
since January 2022. The Committee
reviewed and approved BDO’s fees
and the terms specified in the audit
engagement letter for the financial year
ending 31 March 2024, in January 2024.
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.
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Additional information
Governance
Financial statements
Strategic report
Audit Committee report continued
External audit continued
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.
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 3.5%
(FY-23: 4.5%) 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. The Company
is committed to the regular rotation of
the external auditor and external audit
partners and the last tender process
was conducted in 2020.
Approved by the Committee and signed
on its behalf by:
Matt Hotson
Chair of the Audit Committee
27 June 2024
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76
Remuneration report
Committee meeting attendance
Krystyna Nowak
Tim Edwards
Matt Hotson
David Morrison
Role of the Committee
The role of the Remuneration
Committee is to review and approve
the remuneration strategies of the
Group, encompassing the Chairman,
the Executive Directors and the
staff as a whole. The Remuneration
Committee also reviews and advises
on the remuneration policy, ensuring
that it complies with regulatory
requirements, it promotes good conduct
consistent with sound and effective risk
management, and is properly disclosed
to stakeholders.
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.
Krystyna Nowak | Chair of the Remuneration Committee
Chair of the Remuneration
Committee’s statement
Introduction
I have assumed the responsibility
of Remuneration Committee Chair
from 26 June 2024 and am pleased to
present our new Remuneration Policy
for shareholder approval and our
remuneration report for the year ended
31 March 2024. I would like to thank
Tim Edwards for his chairing of the
Committee for the past six years.
Our previous Remuneration Policy
was predominantly designed to
incentivise our CEO, Leslie Hill, for the
implementation of her three-year plan.
Following Leslie’s retirement, and also
that of our CFO, Steve Cullen, we have
designed a new Remuneration Policy,
for shareholder approval, to incentivise
our new Executive Director team to
deliver long-term success.
Our report is split into three sections:
• the new proposed Remuneration
Policy;
• the annual report on remuneration
for FY-24; and
• the role and activity of the
Remuneration Committee.
New Remuneration Policy
Remuneration principles
Our approach to remuneration remains
unchanged and 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 Group performance;
and iii) longer-term incentives based
primarily on Group performance; and
• Executive Directors’ remuneration
should include a deferred element,
which is satisfied by paying it in the
form of equity.
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Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Chair of the Remuneration
Committee’s statement continued
New Remuneration Policy continued
Priorities for the new Remuneration
Policy 2024
A new Remuneration Policy is being
put forward to our shareholders for
approval at our AGM in July 2024.
In setting this policy, the priorities for
the Remuneration Committee have
been to ensure that remuneration
structures and performance measures:
• motivate and retain our Executive
Directors to deliver our long-term
growth strategy;
• create a remuneration structure that
incentivises and fairly rewards our
Executive Director team to deliver
our 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
The Group has now established its new
leadership team for the future and
our Remuneration Policy is designed
to reward success and delivery of
long‑term growth.
CEO and Executive Director
remuneration structure
The Board’s succession plans
have focused on Jan Witte’s path
to becoming Group CEO. It is now
imperative that Jan drives forward his
long-term vision for the business and
our new Remuneration Policy for our
CEO is therefore designed to incentivise
and reward long-term success.
The structure of remuneration for the
CEO is weighted heavily on long-term
rewards, with a significant part of
his remuneration paid in the form of
equity. The proposed CEO remuneration
structure is therefore a base salary and
benefits, bonus and an LTIP. To align
with shareholders and the long‑term
strategy of the business, one‑third of
any bonus and all LTIP payments will
be made in shares.
The CEO’s remuneration structure will
be viewed on a Group basis, and he will
be incentivised to deliver the vision for
the Group.
The remuneration structure for other
Executive Directors will be base salary
and benefits, bonus and LTIP, with the
same weighting on long-term reward
and payment in equity.
Bonus Scheme
Our Group Bonus Scheme, in which
Executive Directors and all staff will
participate, has been updated. The
purpose of making changes has been to
simplify how bonuses are determined
and to ensure that bonus outcomes
are structured to pay for performance,
both at a Company level and an
individual level.
For Executive Directors, there
continues to be a balance between
a formulaic and discretionary
approach to assessing performance
and determining bonus awards.
The Committee will ensure that
the measures and targets used
to determine a bonus will be
aligned to both the short‑term and
long‑term business priorities and key
performance indicators. 75% of any
Executive Director bonus will directly
relate to the delivery of operating
profits against agreed targets and 25%
will be focused on progress against
strategic objectives.
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 is taken as cash.
LTIP
The LTIP scheme, as approved
previously by shareholders, has
been updated, and is designed to
incentivise and retain Executive
Directors and senior managers over
the long term. LTIP awards can now
be granted up to 200% of base salary
and a third performance condition has
been introduced to directly align the
delivery of strategic objectives with
long-term incentives. The vesting of
awards continues to be subject to the
satisfaction of three-year performance
conditions and continued employment
and any shares awarded will be subject
to a two-year post-vesting holding
period.
Executive Directors’ salaries,
Chair and NED fees for FY-25
A review of Executive Directors’
salaries took place on the appointment
of Jan Witte and Richard Heading. Jan’s
salary was increased to £550,000 on
his appointment as Group CEO and
Richard’s salary is £300,000 on his
appointment as Group CFO.
A review of the Chair and NED fees
was also carried out, which included
using market benchmarking data.
The Board agreed that the Chair and
NED fees should reflect market rates
for a FTSE Small Cap firm and so the
Chair fees were increased to £175,000
to reflect the market and also the
responsibility of the role. NED fees
remain unchanged at £52,500 but, in
line with market practice, a premium
has been introduced for the additional
responsibilities of SID of £5,000,
and £10,000 for the responsibilities
of Audit Committee Chair and
Remuneration Committee Chair.
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Remuneration report continued
Group performance for FY-24
The year to 31 March 2024 has seen
revenues increase by 2% compared
with last year, a decrease in operating
profit of 13% (including the exceptional
impairment of intangible assets) and
our AUM reached $102.2 billion.
The bonus pool can vary between
25% and 35% of pre-tax profits and
the Committee decided to use its
discretion, resulting in a final bonus
pool of 25.9% of pre-bonus underlying
operating profit, which represented
£4.4 million, directly linking the Group’s
financial performance to the size
of the variable remuneration pool.
The payments made under the bonus
scheme decreased by 42% compared
to the previous period.
Executive Director remuneration
outcomes FY-24
Executive Director remuneration
outcomes reflected the performance
of the business for the year and were
made in line with our Remuneration
Policy.
No changes were made to Leslie Hill’s
salary during the year. Leslie’s variable
remuneration was determined by
the criteria outlined in the Executive
Directors’ Bonus Scheme. With financial
performance being below annual profit
targets and progress made on strategic
objectives being behind expectations,
her bonus was awarded at 25%. Further
details are provided on page 89.
Steve Cullen had a salary increase on
1 April 2023 to recognise the increased
breadth of his role with the expansion
of the Group, but no further increases
were made since he announced his
intention to retire. Steve’s bonus was
paid at 110% to reflect the demands of
the CFO role during the year. Further
details are provided on page 89.
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 bonus payments. Payments
were made in accordance with the
Executive Directors’ Bonus Scheme
rules and were approved by the
Committee.
No option or LTIP awards were made
to Leslie Hill during the year, in line
with the CEO remuneration structure
outlined in the Remuneration Policy.
Steve Cullen received an LTIP award of
75% of his base salary, granted in line
with the LTIP scheme rules.
A cost-of-living allowance of £2,000
was paid to all staff during the
year. This was not paid to Executive
Directors or Board members.
In addition, a discretionary salary
review was undertaken to recognise
promotions and increases to roles and
responsibilities.
Total remuneration spend
Over the medium term, the Board has
previously set a target ratio of total
remuneration costs to be up to 50% of
revenue. This includes all remuneration
costs for Directors and staff. For this
financial year, total remuneration costs
represented 43% of revenue and were
managed well within the target ratio.
In total, the Executive Directors’ Bonus
Scheme and Staff Bonus Scheme are
capped at 35% of operating profit
pre‑bonuses and this year variable
remuneration totalled 25.9% of
operating profit.
Alignment with shareholders
Each of the current Executive Directors
has a shareholding significantly
greater than 150% of their base
salary. In addition, 66% of the Group’s
employees are shareholders.
Engaging with employees
and shareholders
The Remuneration Committee takes
an active involvement in remuneration
for the whole Group and takes into
account employee and shareholder
views in determining remuneration
arrangements. Full details are set out
in the Remuneration Policy.
Krystyna Nowak
Chair of the Remuneration
Committee
27 June 2024
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Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Remuneration Policy to be proposed to shareholders at the AGM
The Directors’ Remuneration Policy (the “Policy”), modified as described in the Remuneration Committee Chair’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 2024 AGM on 30 July 2024. 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 to awards
and entitlements granted under it.
In summary, the proposed Policy includes an updated bonus scheme to ensure that variable pay is aligned with business and
individual contribution, and an updated long-term performance share plan to incentivise long-term business growth. These
changes are designed to motivate and retain our CEO and Executive team to deliver our long-term growth plans and to create
a remuneration structure that aligns with this.
Summary remuneration structure
The table below illustrates the remuneration structures that we have in place for Executive Directors.
Year 0
EPS, TSR and strategic measures
performance conditions
LTIP
Shares
Cash
Bonus Scheme
Bonus Scheme
Cash
Pension and
benefits
Cash
Salary
Year 1
1/3 shares
released from
lock up
Year 2
1/3 shares
released from
lock up
Year 3
Vesting
1/3 shares
released from
lock up
Year 4
Year 5
Held until 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.
Directors’ Remuneration Policy table
The following table summarises the key features of each element of the Policy, their purpose and link to strategy.
Element, purpose
and link to strategy
Operation and maximum
Performance metrics
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 defined maximum base salary. Executive
Directors’ salary increases will normally be in line
with the typical level of increase awarded to other
employees. Increases may be above this level in certain
circumstances, including:
• where a new Executive Director has been appointed
to the Board at a lower than typical market salary to
allow for growth in the role;
• where an Executive Director has been promoted or
has had a change in responsibilities;
• where there has been a significant change in market
practice; and
• other exceptional circumstances.
Not applicable, though
individual performance will be
considered when reviewing base
salary levels.
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Remuneration report continued
Element, purpose
and link to strategy
Operation and maximum
Performance metrics
Benefits
To provide a benefits package
that provides for the wellbeing
of our colleagues.
Benefits include, but are not limited to, private medical
insurance (or a healthcare allowance), dental insurance,
permanent health insurance, life assurance and annual
holiday.
Executive Directors receive benefits on the same basis
as all other employees, at the prevailing rates.
Not applicable
Pension
To provide an appropriate
retirement income, to aid
attraction and retention of
high‑calibre executives.
Executive Directors receive an employer pension
contribution of up to 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).
Not applicable
Bonus Scheme
To motivate Executive
Directors to achieve
sustainable financial
performance and strategic
objectives aligned with the
Group strategy.
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, which vest immediately
but are 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.
The minimum bonus payment to an Executive Director
is zero and the maximum bonus payment, in exceptional
circumstances, is 400% of base salary.
The Bonus Scheme includes threshold, target and
maximum performance levels, at a Company level and
individual level, based on Company operating profit
targets for the year and strategic objectives.
Malus and clawback provisions apply to all awards.
Further details are set out below.
Bonus payments will be based
on the achievement of Group
financial operating profit targets
(75%) and delivery of strategic
objectives (25%).
Individual awards are also
based on role, responsibilities
and delivery and determined by
the Remuneration Committee.
The Remuneration Committee
has discretion when setting
bonus levels and making
payments to Executive
Directors.
Long-Term Incentive Plan
(“LTIP”)
A performance share plan
to incentivise delivery of
long‑term performance and
strategy delivery, aligning
interests with shareholders.
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 200% 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).
Vesting is based one-third
on EPS growth, one-third on
relative TRS compared with
the FTSE Small Cap Index
and one‑third on strategic
measures.
The Remuneration Committee
has discretion to vary the
targets and to set other
performance conditions for the
future operation of the LTIP.
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Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Element, purpose
and link to strategy
Operation and maximum
Performance metrics
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 a HMRC-approved limit (£1,800 for the financial
year ended 31 March 2024), which is matched at a rate
of 50%.
Not applicable
Notes to the Remuneration Policy table
Executive Directors can participate in the Bonus Scheme and the LTIP. Staff remuneration schemes have also been included
in the Remuneration Policy, to provide shareholders with full transparency of remuneration.
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.
Bonus Scheme
The Bonus Scheme is our short-term variable remuneration structure that the Executive Directors and staff all participate in.
Bonus payments relate to the Company’s financial performance against annual plans and individual contribution.
For Executive Directors’ bonuses, the Remuneration Committee will ensure that the measures and targets used to determine
the bonus are aligned with strategic growth plans and key performance indicators. The purpose is to ensure that there is a
transparent link between our business strategy and the Executive Directors’ contribution to delivering it, that the assessment
of individual performance is clear and that variable remuneration rewards high levels of Company performance. The Scheme is
discretionary and there is no contractual right to receive a bonus.
The Bonus Scheme includes threshold, target and maximum performance levels, at a Company level based on Company
operating profit targets for the year and at an individual level based on the delivery of strategic objectives. These levels are
reviewed annually by the Remuneration Committee.
An Executive Director’s bonus is 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. Performance of each Executive
Director against agreed objectives will also be considered.
Bonus payments are made in cash and 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 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.
Remuneration Policy to be proposed to shareholders at the AGM continued
Directors’ Remuneration Policy table continued
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Remuneration report continued
LTIP
It is of great importance for the
long‑term success of the business
that the Group retains and motivates
its Executive Directors and leadership
teams, and that they are incentivised
over the longer term in a manner that
aligns their interests with those of
shareholders. The LTIP aligns senior
management remuneration with
the Company’s long-term business
success.
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 200% of base salary.
Any awards will be delivered in shares
and 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 (1/3 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 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 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.
• Strategic measures (1/3 of
award) The strategic objectives of
operational excellence, improved
quality of earnings, and organic
growth will be measured by the
Remuneration Committee against
KPIs over the three year period.
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. Any shares awarded will be
subject to a two-year post-vesting
holding period. The Remuneration
Committee will have discretion to
adjust the vesting level where it is
determined appropriate.
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.
Bonus Scheme
Individual bonus awards relate to
Company financial performance
and individual performance 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 size of the bonus pool is calculated
based on the Company financial
performance against the target for
the year and individual performance
against objectives. Each member of
staff will have an on-target bonus,
based on Company and individual
performance targets being met,
expressed as a percentage of salary,
and a maximum bonus, based on
Company and individual performance
targets being exceeded.
Bonus payments are made in cash
and 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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Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Remuneration Policy to be
proposed to shareholders at
the AGM continued
Staff remuneration schemes continued
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 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 £60,000
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 Options
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 Executive Director level.
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 participant’s own 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.
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.
As Jan Witte can no longer participate
in the commission scheme from
1 January 2024, it was agreed in
June 2024 that he would receive
a one‑off buy out payment for
outstanding commission of £250,648.
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.
The Chairman’s fees are £175,000.
The basic NED fee is £52,500 with additional premiums
as follows:
• Senior Independent Director £5,000
(if also Chair of another Committee)
• Audit Committee Chair £10,000
• Remuneration Committee Chair £10,000
Fees are reviewed annually.
Any review will take into
account market rates, business
performance and individual
contribution.
Increases are unlikely to be out
of line with the typical level of
salary increase awarded across
the Group.
Pension and benefits
To enable the Chairman and
Non‑executive Directors to
carry out their roles.
The Chairman and Non-executive Directors receive
expenses but do not receive any additional benefits.
Record plc
Annual Report 2024
84
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. The CEO, Jan Witte
has a service agreement with Record
Currency Management (Switzerland)
GmbH and is seconded to the UK.
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 Group’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 Directors’ 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. The
Company has the discretion to pay legal
expenses and outplacement fees if it
considers this to be appropriate.
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 Remuneration Committee takes
an active involvement in remuneration
for the whole Group. Record staff
participate in all the remuneration
arrangements, including the Staff
Bonus Scheme, LTIP and share
schemes. The Remuneration Committee
reviews all bonus, LTIP 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.
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.
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 Directors’
Bonus Scheme, 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 Group, or business unit for
which the relevant individual is
responsible, suffers a material
downturn in its financial
performance; and/or
• the Group, 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 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.
Record plc
Annual Report 2024
85
Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Remuneration Policy to be
proposed to shareholders at
the AGM continued
Other matters continued
Source and funding of shares continued
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 the Executive
Directors’ Bonus Scheme and the CFO is
a participant in the LTIP scheme.
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. The components and level
of remuneration for any new Executive
Directors will be in line with those
of existing Executive Directors, with
the exception of any buyout award.
New Executive Directors would be
eligible to join the 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,
subject to malus and clawback. 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 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 Group’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.
Record plc
Annual Report 2024
86
Remuneration report continued
Remuneration Policy – illustrations
The charts below show the lowest, highest and average remuneration for the Executive Directors over the past three
years. Fixed remuneration is comprised of salary, pension contributions, other benefits and any cash alternative. Variable
remuneration comprises bonus, including cash and share payments, as well as any gains on share schemes.
As variable remuneration is not capped at the individual level, we have used the three-year average, highest and lowest
remuneration as an indication of each Executive Director’s earnings potential. Future remuneration will be determined based
on profitability and performance as described in the Remuneration Policy.
The above charts exclude the value of share scheme awards granted to Directors.
3-year
low
3-year
high
3-year
average
25%
35%
75%
17%
83%
65%
£1,019,771
£3,001,957
£2,138,970
Leslie Hill (as CEO)
0
500k
1,000k
1,500k
3,500k
2,500k
3,000k
2,000k
£
£258,160
3-year
low
Minimum
3-year
high
3-year
average
59%
100%
41%
53%
41%
59%
47%
£45,505
£407,528
£315,762
Steve Cullen (as CFO, resigning 30 June 2024)
0
100k
450k
400k
350k
300k
250k
200k
150k
50k
£
Minimum
1 January –
31 March 2024
42%
100%
58%
£623,445
£319,306
Jan Witte (Executive Director from 1 January 2024)
0
1000k
7000k
3000k
4000k
5000k
6000k
2000k
£
Key:
Fixed
Variable
Record plc
Annual Report 2024
87
Additional information
Governance
Financial statements
Strategic report
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 information on pages
88 to 94 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 2024 is detailed below together with their remuneration for the
previous year.
Leslie Hill
(retired on 31 March 2024)
Jan Witte
(Remuneration
since
appointment
to the Board on
1 January 2024)
Steve Cullen
Executive Directors
2024
£
2023
£
2024
£
2024
£
2023
£
Salaries and fees
682,500
682,500
121,190
162,400
150,147
Benefits1
3,974
3,349
3,236
1,755
1,524
Pensions2
75,075
75,075
9,678
18,721
16,516
Payment in lieu of notice
86,625
—
—
—
—
Total fixed pay
848,174
760,924
134,104
182,876
168,187
Short-term incentive (Bonus – cash)
84,484
1,469,174
123,468
52,287
148,325
Short‑term incentive (Bonus – shares)3
42,242
734,586
61,734
26,144
74,162
Share option gains
44,871
37,273
—
20,290
16,854
Total variable pay
171,597
2,241,033
185,202
98,721
239,341
Total
1,019,771
3,001,957
319,306
281,597
407,528
Neil Record
(retired on 27 July 2023)
David Morrison
(appointed 1 March 2023)
Tim Edwards
Matt Hotson
Krystyna Nowak
Non-executive Directors
2024
£
2023
£
2024
£
2023
£
2024
£
2023
£
2024
£
2023
£
2024
£
2023
£
Salaries and fees
27,577
85,357
120,000
10,000
57,750
57,750
52,500
52,500
52,500
52,500
Benefits1
1,484
3,876
—
—
—
—
—
—
—
—
Pensions2
3,033
9,389
—
—
—
—
—
—
—
—
Total
32,094
98,622
120,000
10,000
57,750
57,750
52,500
52,500
52,500
52,500
1.
This value includes 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.
3.
Short-term incentive payments are subject to individual performance conditions summarised in the objectives table. The shares vest immediately but are subject to lock-up
restrictions and are calculated based on the overall profitability of the Group.
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 Group. Payments in respect of this
consultancy support totalled £1,200 in the year to 31 March 2024 (31 March 2023: £46,738).
Leslie Hill left the Board of Directors and employment on 31 March 2024. A payment in lieu of notice of £86,625, was made to
her, being salary to the end of her notice period from 1 April 2024 to 15 May 2024 and no other payments were made for loss of
office. Leslie was treated as a good leaver under the Group Bonus Scheme and Share Scheme rules and Remuneration Policy.
To assist with the transition and maintenance of client relationships, Leslie agreed to provide consultancy support to the
Company over a six-month period, commencing on 1 April 2024.
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 ended 31 March 2024, the Group made contributions of 11% of each Executive 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 ended 31 March 2023 and 31 March 2024 are detailed in the tables
on page 121.
Record plc
Annual Report 2024
88
Remuneration report continued
Executive Directors’ Bonus Scheme payments
The Executive Directors’ Bonus Scheme is the annual short-term variable remuneration structure that the CEO and CFO
participate in. The Executive Directors’ bonus pool is determined as follows:
• Financial 75%. The Remuneration Committee will consider the firm’s financial performance and, specifically, delivery of
operating profit targets for the year under the Group’s three-year plan.
• Non-financial 25%. The Remuneration Committee will assess strategic progress made during the year and will focus
specifically on progress in product diversification, technology modernisation and succession planning.
The overall performance against these criteria for the year is summarised in the tables for Leslie Hill and Steve Cullen 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
Outcomes
Financial
Operating profit
Deliver operating profit, pre-bonuses, of £26.8 million.
Operating profit, pre-bonuses, was £17.0 million.
Non-financial
Product diversification
Diversify the Group’s products from reliance on Passive
and Dynamic Hedging to a broader set of non‑correlated
investment products.
Diversification progress has been slow and projects have run
behind schedule. Management has decided to move forward
with more passive investments in Block Scholes and Dair but
this is no longer part of the diversification strategy.
Modernisation
Continue to improve our infrastructure and have the
technology tools to support the growth in business,
while producing more secure and efficient systems.
The technology programme has not produced the scale of
improvement targeted, and the decision was taken to focus on
building internal IT development expertise.
Work was discontinued on R-Platform, resulting in the
impairment of the development costs capitalised to date of
approximately £1.9 million.
Succession
Put in place robust succession plans for plc Board level roles.
David Morrison assumed Chair responsibilities in July 2023,
taking over from the founder, Neil Record.
Jan Witte assumed Group CEO responsibilities from
1 April 2024, taking over from Leslie Hill.
New CFO, Richard Heading, appointed and taking over role and
responsibilities from Steve Cullen in the summer of 2024.
Steve Cullen
Objectives
Outcomes
Financial
Operating profit
Deliver operating profit, pre-bonuses, of £26.8 million.
Operating profit, pre-bonuses, was £17.0 million.
Non-financial
Product diversification
Diversify the Group’s products from reliance on Passive
and Dynamic Hedging to a broader set of non‑correlated
investment products.
Diversification progress has been slow and projects have run
behind schedule. Management has decided to move forward
with more passive investments in Block Scholes and Dair but
this is no longer part of the diversification strategy.
Modernisation
Modernise accounting systems to support business growth.
Developed accounting systems for the wider Group, designed
processes for the re-charging of central costs.
Succession
Strengthen the finance team.
Grown a robust team culture, hired talent into the team and
increased responsibilities of team members. Now focused on
succession to the new CFO.
Awards:
The bonus pool for Executive Directors (including employer on-costs) was significantly reduced to £234,493, which was 11.9%
of the total maximum Executive Director pool that could have been paid for full delivery. The actual bonus pool was based
on financial performance being below target and strategic progress on technology and product diversification being behind
expectations. Succession planning was managed well.
Bonus outcomes were that Leslie Hill was awarded a bonus of £126,726 and Steve Cullen was awarded a bonus of £78,431.
Record plc
Annual Report 2024
89
Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Annual report on remuneration continued
Directors’ share options and share awards (audited information)
During the financial year ended 31 March 2024 no option awards were made to the Executive Directors, in accordance with the
Remuneration Policy.
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.
No option awards have been made to Jan Witte since his appointment to the Board on 1 January 2024, therefore his awards
have not been included in the table below.
Name
Date of grant
Total
options at
1 April
2023
Options
granted
in period
Options
lapsed
in period
Options
exercised
in period
Total
options at
31 March
2024
Exercise
price
Earliest
exercise
Latest
exercise
Leslie Hill
(retired 31 March 2024)
21/08/19
383,333
—
(95,833)
(95,834)
191,666
31.1p 21/08/2022 20/08/2025
Steve Cullen
21/08/19
173,333
—
(43,333)
(43,334)
86,666
31.1p 21/08/2022 20/08/2025
The outstanding share options above vest subject to performance conditions, which are detailed on page 134.
Leslie Hill had a gain on share options of £44,871 and Steve Cullen had a gain on share options of £20,290 in the year ended
31 March 2024.
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 grant as follows:
Record’s annualised EPS growth over the period from grant to vesting
Percentage of
shares subject
to the award
which vest
>RPI growth + 13%
100%
>RPI growth + 10%, =RPI growth + 7%, =RPI growth + 4%, =RPI growth + 4 %
0%
A principal strategic objective of the business is to create shareholder value for our investors over the long term. The Board
considers this to be delivered by consistent growth in earnings of the business, and the chosen performance conditions and
the EPS outcome which determine the number of options that ultimately vest under the scheme rules reflect this.
Share option awards made to Leslie Hill and Steve Cullen on 21 August 2019 vest in three equal tranches and the second of
these vesting dates was 21 August 2023. In accordance with the performance conditions, 50% of this tranche of options
vested, which was 95,834 shares for Leslie Hill and 43,334 shares for Steve Cullen, and the other 50% lapsed.
Directors’ Long-Term Incentive Plan (“LTIP”) awards
During the financial year ended 31 March 2024 an LTIP award was made to Steve Cullen in accordance with the scheme rules.
The table below sets out details of Executive Directors’ outstanding LTIP awards, which may vest in full after three years
subject to continued service and performance conditions. The table also sets out any LTIP awards that have lapsed or been
exercised. No LTIP awards have been made to Jan Witte since his appointment to the Board on 1 January 2024, therefore his
awards have not been included in the table below.
Name
Date of grant
Total LTIP
awards at
1 April
2023
LTIP awards
granted
in period
LTIP awards
lapsed
in period
LTIP awards
exercised
in period
Total
LTIP awards at
31 March
2024
Vesting
date
Leslie Hill (retired 31 March 2024)
—
—
—
—
—
—
—
Steve Cullen
08/09/22
325,000
—
—
—
325,000
31/03/25
21/11/23
—
185,000
—
—
185,000
21/11/26
The outstanding LTIP awards above vest subject to performance conditions, which are detailed on page 137.
LTIP awards granted to Executive Directors vest after three years and vesting is subject to Record’s average annualised EPS
growth and Total Shareholder Return (“TSR”) over the relevant period since grant as follows:
Two-thirds of the vesting of the LTIP grants awarded on 8 September 2022 and 21 November 2023 are subject to a three-year
cumulative EPS threshold target of 15 pence, resulting in the EPS portion 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.
Record plc
Annual Report 2024
90
Remuneration report continued
One-third of the vesting of the LTIP grants awarded on 8 September 2022 and 21 November 2023 are subject to a relative
TSR using a benchmark of the FTSE Small Cap index. The threshold target for the TSR portion is a TSR outcome in the 25th
percentile of the index at which 25% of the TSR portion will vest, rising on a straight-line basis to 100% of the TSR portion at
a TSR outcome in the 75% percentile of the index.
A principal strategic objective of the business is to create shareholder value for our investors over the long term. The Board
considers this to be delivered by consistent growth in earnings of the business, and the chosen performance conditions and
the EPS and TSR outcome which determine the number of LTIP awards that ultimately vest under the scheme rules reflect this.
Bonus shares in lock up (audited information)
The table below shows Directors’ interests in ordinary shares arising from the deferred element of annual Bonus awards.
No Bonus share awards have been made to Jan Witte since his appointment to the Board on 1 January 2024, therefore his
awards have not been included in the table below.
Interested in
restricted
shares
at 1 April
2023
Restricted
awards
during year
Restrictions
released
during year
Interested in
restricted
shares at
31 March
2024
Leslie Hill (retired 31 March 2024)
591,284
291,368
(274,926)
607,726
Steve Cullen
44,896
26,316
(25,140)
46,072
Directors’ share interests (audited information)
The tables below show Directors’ interests in ordinary shares arising from the deferred element of annual Bonus awards.
2024
Shares held
without
restrictions
Bonus shares
subject to
restrictions1
Total
shares
held2
Share options
& LTIP
Total
share
interests
Executive Directors
Leslie Hill (retired 31 March 2024)
16,163,031
607,726
16,770,757
191,666
16,962,423
Steve Cullen
1,473,802
46,072
1,519,874
596,666
2,116,540
Jan Witte (appointed 1 January 2024)
638,499
652,451
1,290,950
2,893,000
4,183,950
Non-Executive Directors and Chairman
Neil Record (retired 27 July 2023)
52,896,541
—
52,896,541
—
52,896,541
David Morrison (appointed 1 March 2023)
—
—
—
—
—
Tim Edwards
60,000
—
60,000
—
60,000
Matt Hotson
—
—
—
—
—
Krystyna Nowak
50,000
—
50,000
—
50,000
Total
71,281,873
1,306,249
72,588,122
3,681,332
76,269,454
2023
Shares held
without
restrictions
Bonus shares
subject to
restrictions1
Total shares
held
Share options
& LTIP
Total share
interests
Executive Directors
Leslie Hill
15,792,271
591,284
16,383,555
383,333
16,766,888
Steve Cullen
1,434,948
44,896
1,479,844
498,333
1,978,177
Non-Executive Directors and Chairman
Neil Record (retired 27 July 2023)
54,646,541
—
54,646,541
—
54,646,541
David Morrison (appointed 1 March 2023)
—
—
—
—
—
Tim Edwards
60,000
—
60,000
—
60,000
Matt Hotson
—
—
—
—
—
Krystyna Nowak
50,000
—
50,000
—
50,000
Total
71,983,760
636,180
72,619,940
881,666
73,501,606
1.
Under the rules of the Bonus scheme, shares awarded to Directors are subject to lock-up restrictions between one and three years from the award date.
2.
Directors’ share interests have remained unchanged to 30 June 2024.
Record plc
Annual Report 2024
91
Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Annual report on remuneration continued
CEO shareholding in Record Asset Management GmbH
Prior to Jan Witte becoming a director of the Group, it had been agreed that he would acquire a 10% shareholding in
Record Asset Management GmbH (“RAM”), a German subsidiary of Record plc.
To ensure that Jan’s RAM shareholding does not create any shareholder misalignment, for the duration of Jan’s tenure as
CEO, all voting rights pertaining to the shareholding will be exercised solely by Record plc. In addition, any dividends or other
shareholder distributions to which Jan may become entitled by virtue of his holding will be paid to Record plc which will
procure that any such dividends or distributions are used to acquire shares in Record plc, on Jan’s behalf. Any relevant shares
acquired will then be subject to a three-year lock-up period during which they cannot be sold or otherwise disposed of.
The arrangement in respect of Jan’s RAM shareholding is not deemed to be remuneration for services provided to the Group
and so will not form part of the Directors Remuneration Policy or otherwise be disclosed in the Company’s annual report on
remuneration (except that any shares acquired by Jan will form part of the Directors share interests).
Salary review for the Board
Company-wide salary increases were made during the year and in addition some discretionary salary increases were made
to staff. The CEO did not receive any salary increase during the year. The CFO received salary increases in April 2023 and
October 2023 to reflect the widening remit and responsibilities of his role.
The table below confirms the current salaries for Executive Directors and Non-executive Directors:
Salary at
1 April 2023
£
Salary at
1 April 2024
(current salary)
£
Increase
Executive Directors
Leslie Hill (retired on 31 March 2024)
682,500
—
—
Steve Cullen
160,000
164,800
3%
Jan Witte (appointed on 1 January 2024)
—
550,000
—
Non-executive Directors and Chairman
Neil Record (retired on 27 July 2023)
85,357
—
—
David Morrison (appointed 1 March 2023)
120,000
175,000
46%
Tim Edwards
57,750
67,500
17%
Matt Hotson
52,500
62,500
19%
Krystyna Nowak
52,500
52,500
—
Total remuneration of Chief Executive Officer (audited information)
The total remuneration of the Chief Executive Officer over the last ten years is shown in the following table. The total
remuneration figure includes the annual profit share payment. There is no maximum value that could be paid during each year.
Year ended 31 March
2015
£
2016
£
2017
£
2018
£
2019
£
2020
£
2021
£
2022
£
2023
£
2024
£
Leslie Hill1
—
—
—
—
—
123,241 1,270,178 2,395,183 3,001,957 1,019,771
James Wood-Collins2
641,623
642,865
678,054
655,723
689,019
582,620
—
—
—
—
1.
Appointed 13 February 2020, retired 31 March 2024.
2.
Resigned 13 February 2020.
Percentage change in the remuneration of the Chief Executive Officer (audited information)
The following table shows the percentage change in the base salary, benefits and annual bonus of the Chief Executive Officer
between the years ended 31 March 2024 and the previous financial years compared to the average for all employees of the
Group.
Year ended 31 March
2018
2019
2020
2021
2022
2023
2024
Chief
Executive
Average
for all
employees
Chief
Executive
Average
for all
employees
Chief
Executive
Average
for all
employees
Chief
Executive
Average
for all
employees
Chief
Executive
Average
for all
employees
Chief
Executive
Average
for all
employees
Chief
Executive
Average
for all
employees
Base salary
0%
3%
0%
3%
57%
6%
0%
9%
44%
18%
5%
13%
0%
8%
Benefits
—
—
—
—
—
—
(2%)
—
(3%)
—
—
—
—
—
Total annual profit
share/Bonus
(8%)
10%
20%
10%
(2%)
4%
96%
1%
121%
117%
32%
44%
(94%) (54%)
Record plc
Annual Report 2024
92
Remuneration report continued
Percentage change in the remuneration of the Board Directors (audited information)
The following table shows the percentage change in the base salary, benefits and annual bonus of the Board Directors
between the year ended 31 March 2024 and the previous financial years compared to the average for all employees of the
Group, for all Board Directors.
Year ended 31 March 2021
Year ended 31 March 2022
Year ended 31 March 2023
Year ended 31 March 2024
% change in:
Base
salary
Benefits
Total
bonus
Base
salary
Benefits
Total
bonus
Base
salary
Benefits
Total
bonus
Base
salary
Benefits
Total
bonus
Leslie Hill
(retired on 31 March 2024)
0%
(2%)
96%
44%
(3%)
121%
5%
—
32%
0%
—
(94%)
Steve Cullen
0%
(2%)
(25%)
5%
(3%)
61%
10%
—
112%
10%
—
(65%)
Neil Record
(retired on 27 July 2023)
—
—
—
3%
(3%)
—
5%
—
—
—
—
—
David Morrison
(appointed 1 March 2023)
—
—
—
—
—
—
—
—
—
0%
—
—
Tim Edwards
—
—
—
26%
—
—
5%
—
—
0%
—
—
Matt Hotson
—
—
—
—
—
—
5%
—
—
0%
—
—
Krystyna Nowak
—
—
—
—
—
—
5%
—
—
0%
—
—
Employees of Record Group
9%
—
1%
18%
1%
117%
13%
—
39%
8%
—
(54%)
Total Shareholder Return performance graph
Mar
2022
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2024
Mar
2023
Mar
2021
Record plc
FTSE 350 – General Financial Index
0
100
200
300
400
The above graph shows the Group’s Total Shareholder Return compared with the FTSE 350 – General Financial Index, and
shows the change in the theoretical value of £100 invested in Record plc on 31 March 2014 compared to £100 invested in the
FTSE 350 – General Financial Index. The FTSE 350 – General Financial Index has been chosen because the index is a widely
accepted performance comparison for UK small quoted financial services companies.
The market price of the Company’s shares as at 31 March 2024 was 63.9 pence. The highest closing share price during the
financial year was 98.0 pence. The lowest closing share price during the financial year was 62.1 pence.
Relative importance of the spend on pay
The following chart shows the year‑on‑year movement in total remuneration costs, non-remuneration costs and corporation
tax compared to the profit attributable to ordinary shareholders and the level of dividends paid and declared on ordinary
shares. The factors chosen to compare remuneration against are considered to be the most relevant as they take into account
all of the different stakeholders.
7.6
4.4
12.8
14.9
11.4
—
9.5
1.9
3.3
3.6
11.3
8.6
8.8
1.1
9.3
1.3
£m
0
4
8
12
20
16
FY-24
FY-23
Dividends
FY-24
FY-23
FY-23
Profit
FY-24
FY-24
FY-23
Tax
FY-24
FY-23
Non-remuneration
costs
Exceptional
items
FY-24
FY-23
Remuneration
costs
Variable/special
Fixed/ordinary
Record plc
Annual Report 2024
93
Additional information
Governance
Financial statements
Strategic report
Remuneration report continued
Annual report on remuneration continued
Relative importance of the spend on pay continued
Dividends are represented in the chart above as follows:
2024: interim dividend paid in December 2023 of 2.15 pence per share, final dividend proposed of 2.45 pence per share and
special dividend of 0.60 pence per share.
2023: interim dividend paid in December 2022 of 2.05 pence per share, final dividend paid of 2.45 pence per share and special
dividend of 0.68 pence per share.
Directors’ service contracts
Steve Cullen has a service agreement dated 15 March 2013, reflecting his promotion to Chief Financial Officer, and Jan Witte
has a service agreement dated 1 April 2024, when he took over as Group CEO. 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, LTIP, Group Share Scheme awards, nor to receive any fixed provision for
termination compensation.
Non‑executive Directors are appointed for an initial three‑year period. Their continued engagement is subject to annual
re-election by shareholders at the Group’s AGM.
External directorships and fees
With the approval of the Board in each case, and subject to the requirements of the Group, Executive Directors may accept a
limited number of external appointments. No Executive Directors receive any fees in respect of their external appointments.
Other matters
No Director had any material interest in any contract with the Group, either during the year or at the year end. There are no
outstanding loans to any Director.
Statement of voting at the Annual General Meeting
The following table sets out the voting outcomes in respect of the most recent AGM votes on the annual report on
remuneration, at the AGM held on 27 July 2023.
For
Against
Votes withheld
number
%
number
%
number
%
Annual report on remuneration
116,658,015
98.46%
1,828,494
1.54%
6,000
0%
Governance: role of the Remuneration Committee
Membership of the Remuneration Committee
The Remuneration Committee is chaired by Krystyna Nowak, who took over from Tim Edwards on 26 June 2024 and is
supported by the Chairman, David Morrison, and an independent Non‑executive Director, Matt Hotson.
The Chief Financial Officer, Chief Executive Officer and Head of Compliance may attend meetings by invitation and assist the
Committee in its deliberations, except when their personal remuneration is discussed. No Directors are involved in deciding
their own remuneration. The Committee also received advice from the Head of HR and Company Secretary and the HR Director.
The Committee operates under formal terms of reference, which are summarised below and reviewed annually.
Responsibilities of the Committee
The responsibilities of the Committee include the following:
• determining the framework and policy for the remuneration of the Chairman and Executive Directors and approving all
payments;
• determining the framework and policy for the remuneration of all staff and ensuring alignment with the Group’s plans;;
• reviewing and advising on the Group’s remuneration strategy, which includes the design of the Bonus Schemes, LTIP, Share
Scheme, Joint Share Ownership Plan and any other new initiatives;
• ensuring that the Remuneration Policy promotes sound and effective risk management as well as good conduct and does
not encourage risk-taking above the risk appetite of the firm; and
• reviewing remuneration disclosures and ensuring compliance with relevant regulation and legislation.
Record plc
Annual Report 2024
94
Remuneration report continued
Key areas of focus during the year
The table below summarises the areas that the Remuneration Committee focused on at each of its meetings during the year.
Ten Committee meetings were held during the year.
Date
Key issues considered
April 2023 (two meetings)
• Review of Executive Director salaries
• Total remuneration spend review
• Discussion of Executive Director bonus payments and bonus pool
• Market update from Macfarlanes
• Review of terms of reference and review of Committee performance
June 2023
• Review of bonus payments with Head of Compliance
• Approval of bonus payments for Executive Directors, MRTs and staff
• Approval of commission payments
July 2023
• Review of shareholder reports
• LTIP discussion
October 2023
(two meetings)
• Review of Executive Director salaries
• Bonus pool discussion
• LTIP awards
• RAM shareholding discussion for Jan Witte
November 2023
• Review of bonus payments with Head of Compliance
• Approval of bonus payments for MRTs and staff
• Approval of commission payments
December 2023
• Discussion of remuneration package for new CFO, to be recommended to the Board
• RAM shareholding agreement for Jan Witte
February 2024
• FY-24 bonus approach
• New bonus scheme proposal
• New CEO remuneration package
March 2024
• FY-24 bonus outcomes for Executive Directors
• New bonus scheme approval
• New CEO remuneration package
• NED and Chair fees discussion
External advisers
The Committee received advice from Macfarlanes during the year, and received specialist advice from Ellason LLP in
connection with the introduction of a new bonus scheme.
Committee evaluation
An internal review of Committee effectiveness was carried out as part of the Board evaluation process in April 2024 and was based
on discussions with Committee members. The review considered the information that the Committee received, the frequency of
meetings and the topics that were covered. The conclusion was that the Committee was effective in carrying out its duties.
Approval
This Directors’ Remuneration report, including both the Directors’ Remuneration Policy and the annual report on remuneration,
has been approved by the Board of Directors.
Approved by the Committee and signed on its behalf by:
Krystyna Nowak
Chair of the Remuneration Committee
27 June 2024
Record plc
Annual Report 2024
95
Additional information
Governance
Financial statements
Strategic report
The information contained in the
sections of this Annual Report and
Accounts identified below forms part
of this Directors’ report:
• Strategic report on pages 1 to 57;
• Board of Directors on pages 60
and 61;
• Corporate governance report on
pages 62 to 68;
• Nomination Committee report on
pages 69 to 71;
• Audit Committee report on pages
72 to 76;
• Remuneration report on pages 77
to 95;
• Directors’ statement of
responsibilities on page 100; and
• S172 Companies Act 2006 on
pages 35 to 37.
Disclosures required under
Listing Rule 9.8.4
The information required to be
disclosed by Listing Rule 9.8.4 is
located within this Directors’ report.
The majority of the disclosures required
under LR 9.8.4 are not applicable to
Record. The applicable sub-paragraphs
within LR 9.8.4 and related disclosure
areas are as follows:
• LR 9.8.4 (12) Shareholder waivers of
dividends;
• LR 9.8.4 (13) Shareholder waivers of
future dividends; and
• LR 9.8.4 (14) and LR 9.8.4R (10)
Agreements with controlling
shareholders and details of any
contract of significance.
Share capital
The Company has a single class of
share capital consisting of ordinary
shares of 0.025p each. Each ordinary
share is equally eligible to receive
dividends and the repayment of
capital and represents one vote at a
shareholders’ meeting.
None of the ordinary shares carry any
special rights with regard to control of
the Company.
The ordinary shares have a premium
listing on the London Stock Exchange.
Details of structure and changes in
share capital are set out in note 22 to
the financial statements.
The Company has not exercised the
right to allot, buy back or purchase
ordinary shares in its capital (including
treasury shares) during the year.
As at 31 March 2024, the number of
shares in issue of the Company was
199,054,325 (FY-23: 199,054,325).
The Record Employee Benefit Trust
(“EBT”) periodically purchases shares
in the market to satisfy requirements
for shares vesting under the Group’s
various share schemes. Further
information is provided in note 22 to
the accounts.
Substantial shareholdings
The table below sets out the names of those persons or investors who, insofar as the Company is aware, are interested
directly or indirectly in 3% or more of the issued share capital of the Company as at 31 March 2024:
Name
Number of
ordinary 0.025p
shares held
Percentage
interest
Neil Record
52,896,541
26.57%
Leslie Hill
16,770,757
8.43%
Interactive Investor
10,925,903
5.49%
Premier Miton Investors
9,390,087
4.72%
Schroders plc
7,252,603
3.64%
Hargreaves Lansdown Asset Mgt
6,611,026
3.32%
Information provided to the Company pursuant to Rule 5 of the Disclosure and Transparency Rules (“DTR”) is published via
RNS, a regulatory information service, and also on the Company’s website. During the period from April 2023 to April 2024
the Company received two notifications in accordance with DTR 5 disclosing changes to voting interests in its ordinary share
capital as follows: Schroders plc disposed of shares on 22 August 2023, reporting a shareholding decrease from 5.07% to
3.51%, and Mr Neil Record disposed of shares on 15 February 2024 with their further transferral to The Record Charitable Trust,
reporting a shareholding decreasing from 27.45% to 26.57%. There have been no further changes in shareholding between
31 March 2024 and the date of signing of this report, 27 June 2024.
Directors’ report
Record plc
Annual Report 2024
96
Relationship agreement
Under LR 9.2.2, listed companies must
establish a legally binding relationship
agreement to govern interactions
between the Company and a controlling
shareholder. Neil Record was deemed
to be a controlling shareholder when
the Company became listed in 2007,
and a relationship agreement has
remained in place since then. Following
a series of share transfers to the
Record Charitable Trust, Neil Record
holds 26.6% of the voting rights, and
consequently is no longer deemed to
be a controlling shareholder under the
Listing Rules. However, the terms of
the current relationship agreement
state that it shall remain in place as
long as the shareholder holds a legal
or beneficial interest (whether direct
or indirect) in shares representing
25% or more of the entire issued share
capital of the Company. Consequently,
this relationship agreement remains
effective and will continue to do so
whilst Neil Record continues to hold
at least 25% of the voting rights of the
Company.
The Board is satisfied that the Company
has complied with the independence
provisions included in the relationship
agreement during the year ended
31 March 2024, which stipulate that
the shareholder agrees to, and shall
procure that his Associates shall:
• Conduct all transactions and
arrangements with any Group
company on an arm’s length basis
and on normal commercial terms.
• Not take any action which would
have the effect of preventing the
Company from complying with its
obligations under the Listing Rules.
• Not propose or procure the proposal
of a shareholder resolution which is
intended or appears to be intended
to circumvent the proper application
of the Listing Rules.
• Exercise the voting rights attaching
to the shares in his or his Associates’
control and any other powers of
control in such a manner so as to
procure (to the extent that they are
able by the exercise of such voting
rights) that each Group company is
capable of carrying on its business
independently of the shareholder
and his Associates.
• Not exercise any of the voting
rights attaching to the shares in
his or his Associates’ control or
any other powers of control in
such a manner so as to procure
any amendment to the Company’s
Articles of Association which would
be inconsistent with, undermine or
breach any of the provisions of this
agreement.
Restrictions on transfers of shares
Under the terms of the Record plc
Bonus (“Bonus”) Scheme rules, certain
senior employees and Directors of
the Company are required to receive
a proportion of any Bonus award
in shares, and may elect to receive
a further proportion of their profit
share in the form of a share award
and receive a final proportion in cash.
All ordinary shares which are the
subject of these share awards are
transferred immediately to a nominee.
These shares are not subject to any
vesting conditions but are subject to
“lock-up” arrangements and clawback
provisions. The individual is entitled to
full rights in respect of these shares.
No such shares can be sold, transferred
or otherwise disposed of without
the consent of the Remuneration
Committee unless specified
anniversary dates have been reached.
Further details are disclosed in note 23
to the financial statements.
Dealings in the Company’s ordinary
shares by persons discharging
managerial responsibilities, employees
of the Company and, in each case, their
connected persons, are subject to the
Group’s dealing code which complies
with the EU Market Abuse Regulation
(“EU MAR”) which came into force on
3 July 2016, and was onshored into UK
MAR following the expiry of the Brexit
transition period on 31 December 2020.
Certain restrictions, customary for a
listed company, apply to transfers of
ordinary shares in the Company.
Power of the Company to issue,
buy back and purchase shares
The Directors manage the Company
under the powers set out in the
Company’s Articles of Association.
These powers include the Directors’
ability to issue or buy back shares.
An ordinary resolution was passed
at the 2023 AGM, authorising the
Directors to allot new ordinary shares
up to an aggregate nominal amount of
£16,588, representing approximately
one‑third of the Company’s issued
share capital.
The Directors intend to seek
shareholders’ approval for the renewal
of this authority at the 2024 AGM.
If approved, this authority will expire
on 30 October 2025 or, if earlier, at
the conclusion of the AGM in 2025.
At the AGM in 2023, shareholders
approved a resolution authorising the
Company to make purchases of its own
shares. No purchases of own shares
were made during the reported period.
A special resolution will be proposed at
the 2024 AGM to renew the Company’s
limited authority to purchase its own
ordinary shares. This authority will
be limited to a maximum of 10% of
the Company’s issued share capital
and will set out the minimum and
maximum prices which the Company
may pay for any such purchase.
If approved, this authority will expire
on 30 October 2025, or, if earlier,
at the conclusion of the AGM in 2025.
Directors’ report
Record plc
Annual Report 2024
97
Additional information
Governance
Financial statements
Strategic report
Directors’ report continued
Results and dividends
The results of the Group for the
year are set out in the consolidated
statement of comprehensive income
on page 110.
The Company paid an interim ordinary
dividend of 2.15 pence per share on
22 December 2023 to shareholders
on the register on 1 December 2023.
The Directors recommend a final
ordinary dividend of 2.45 pence per
ordinary share for the year ended
31 March 2024, making a total ordinary
dividend of 4.60 pence per share.
Subject to shareholder approval at
the Annual General Meeting, the final
dividend will be paid on 2 August 2024
to shareholders on the register at
the close of business on 12 July 2024.
The shares will be quoted ex-dividend
from 11 July 2024.
The Board has declared a special
dividend of 0.60 pence per share to
be paid simultaneously with the final
ordinary dividend on 2 August 2024.
This equates to a total distribution of
5.20 pence per share, equivalent to
93% of underlying earnings.
Shareholder waiver of dividends
The Record Employee Benefit Trust
has waived its rights to dividends paid
on the ordinary shares held in respect
of the Group Share Scheme, the Group
Bonus Scheme and the Group Joint
Share Ownership Plan. The trust held
6,700,467 shares as at 31 March 2024
(FY-23: 8,735,002 shares).
Financial risk factors
The Group’s activities expose it to a
variety of financial risks: credit risk,
liquidity risk, foreign currency risk
(managed using financial instruments)
and interest rate risk. The Group seeks
to minimise potential adverse effects
on its financial performance. Further
information is contained in note 24 to
the financial statements.
Financial reporting controls
The Chief Financial Officer is
responsible for managing the financial
controls framework. The framework
requires control owners to perform key
preventative and detective controls
and follow documented processes to
ensure that proper accounting records
are maintained and that financial
information used by the business
is reliable and free from material
misstatement.
Statement of disclosure of
information to auditors
Each of the persons who is a Director
at the date of approval of this report
confirms that:
• so far as the Director is aware,
there is no relevant audit
information of which the Company’s
external auditors are unaware; and
• the Director has taken all the steps
that they ought to have taken as a
Director in order to make themselves
aware of any relevant audit
information and to establish that
the Company’s auditors are aware
of that information.
Related party transactions
Details of related party transactions
are set out in note 27 to the financial
statements.
Post-reporting date events
As set out in note 32 to the financial
statements, in June 2024 Record
plc reduced its investment in the
start-up joint venture Dair Record
Limited to the extent that it will no
longer be recognised as a joint venture
by the Group. There were no other
post‑reporting date events.
Going concern
The Strategic report explains the
Group’s business activities together
with the factors likely to affect its
future development, performance
and position and the financial
statements include information on
the Group’s financial position, cash
flows and liquidity. In addition, the
financial risk management note to
the financial statements sets out the
objectives, policies and processes
for the management of the risks to
which the business is exposed in order
to minimise any adverse effects on
the Group’s financial performance.
The Group has considerable financial
and liquid resources and performs
regular financial forecasts and cash
flow projections. The Group holds
no debt.
The Directors have a reasonable
expectation that the Company and
the Group have adequate resources to
continue operations for the foreseeable
future and therefore continue to adopt
the going concern basis in preparing the
Annual Report and Accounts.
In accordance with provision 31 of the
UK Corporate Governance Code, the
Directors have assessed the prospects
of the Group over a longer period than
the twelve months required by the
going concern provision.
Political donations
It is the Group’s policy not to make
political donations and accordingly no
such donations have been made during
the period under review.
Record plc
Annual Report 2024
98
Directors’ report continued
Environment
The Group’s environmental policies and
the disclosures required by SI 2008/410
Sch7.15-20 and LR 9.8.6R on TCFD
recommendations and disclosures are
provided in the Sustainability report on
pages 26 to 34.
Modern Slavery statement
The Group’s Modern Slavery statement
can be found in the Sustainability
report on page 30.
Corporate responsibility
Details of the Company’s employment
practices, including diversity and
employee engagement, can be found in
the Sustainability report on pages 30
and 31. We are committed to minimising
the environmental impact of our
operations and to delivering continuous
improvement in our environmental
performance. See page 34 for more
details on our total CO2 emissions data.
Directors
The Directors of the Company who held
office at the year end and to date are
listed on pages 60 and 61. Directors’
remuneration and Directors’ interests
in Record plc shares are disclosed in the
Remuneration report.
Directors’ indemnities
As at the date of this report,
indemnities are in force under which
the Company has agreed to indemnify
the Directors, to the extent permitted
by law and the Company’s Articles of
Association, in respect of all losses,
liabilities or expenses incurred by them
in relation to the Company or any of its
subsidiaries. The Group has appropriate
Directors’ and Officers’ insurance in
place.
Directors’ conflicts of interest
The Company has procedures in place
to identify, authorise and manage
conflicts of interest, including those
of Directors of the Company, and
they have operated effectively during
the year. In circumstances where a
potential conflict arises, the Board
(excluding the Director concerned)
will consider the situation and
either authorise the arrangement in
accordance with the Companies Act
2006 and the Company’s Articles of
Association or take other appropriate
action.
All potential conflicts authorised by
the Board are recorded in a conflicts
register which is maintained by the
Company Secretary and reviewed by
the Board on an annual basis. Directors
have a continuing duty to update
the Board with any changes to their
conflicts of interest.
Change of control
Directors’ and employees’ employment
contracts do not provide for
compensation for loss of office or
employment as a result of a change of
control. However, the provisions of the
Group’s employee share schemes may
cause awards granted to employees
under such schemes to vest on a
change of control.
The Group is not party to any significant
agreements that would take effect,
alter or terminate on a change of
control of the Company.
2024 Annual General Meeting
The 2024 Annual General Meeting
of the Company will be held at 10am
on 30 July 2024 at the following
address: Liberty House, 222 Regent
Street, London W1B 5TR. Details of
the ordinary and special resolutions
to be proposed at the Annual General
Meeting, together with details on the
meeting format and voting procedures,
are given in a Chairman’s letter to
shareholders and the attached Notice
of Annual General Meeting.
The Board and the Chair of each of the
Board Committees will be available
to answer questions put to them by
shareholders of the Company at the
2024 Annual General Meeting.
By order of the Board:
Kevin Ayles
Company Secretary
27 June 2024
Record plc
Annual Report 2024
99
Additional information
Governance
Financial statements
Strategic report
Directors’ responsibilities
The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance with
UK adopted international accounting
standards and applicable law and
regulations.
Company law requires the Directors
to prepare financial statements for
each financial year. Under that law
the Directors are required to prepare
the Group financial statements and
have elected to prepare the Company
financial statements in accordance with
UK adopted international accounting
standards. Under Company law
the Directors must not approve the
financial statements unless they are
satisfied that they give a true and fair
view of the state of affairs of the Group
and Company and of the profit or loss
for the Group for that period.
In preparing these financial statements,
the Directors are required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;
• state whether they have been
prepared in accordance with UK
adopted international accounting
standards, subject to any material
departures disclosed and explained
in the financial statements;
• prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Group and the Company will
continue in business; and
• prepare a Directors’ report, a
Strategic report and Directors’
Remuneration report which comply
with the requirements of the
Companies Act 2006.
The Directors are responsible for
keeping adequate accounting records
that are sufficient to show and explain
the Company’s transactions and
disclose with reasonable accuracy at
any time the financial position of the
Company and enable them to ensure
that the financial statements comply
with the Companies Act 2006.
They are also responsible for
safeguarding the assets of the
Company and hence for taking
reasonable steps for the prevention
and detection of fraud and other
irregularities. The Directors are
responsible for ensuring that the
Annual Report and Accounts, taken
as a whole, are fair, balanced and
understandable and provide the
information necessary for shareholders
to assess the Group’s performance,
business model and strategy.
Website publication
The Directors are responsible for
ensuring the Annual Report and
the financial statements are made
available on a website. Financial
statements are published on the
Company’s website in accordance
with legislation in the United Kingdom
governing the preparation and
dissemination of financial statements,
which may vary from legislation in
other jurisdictions. The maintenance
and integrity of the Company’s website
is the responsibility of the Directors.
The Directors’ responsibility also
extends to the ongoing integrity of the
financial statements contained therein.
Directors’ responsibilities
pursuant to DTR4
The Directors confirm to the best of
their knowledge:
• the financial statements have
been prepared in accordance with
the applicable set of accounting
standards, give a true and fair view
of the assets, liabilities, financial
position and profit and loss of the
Group and Company; and
• the Annual Report includes a fair
review of the development and
performance of the business and
the financial position of the Group
and Company, together with a
description of the principal risks and
uncertainties that they face.
David Morrison
Chairman
Steve Cullen
Chief Financial Officer
27 June 2024
Directors’ responsibilities statement
Record plc
Annual Report 2024
100
What’s in this section
Independent auditor’s report
102
Consolidated statement of comprehensive income
110
Consolidated statement of financial position
111
Consolidated statement of changes in equity
112
Consolidated statement of cash flows
113
Company statement of financial position
114
Company statement of changes in equity
115
Company statement of cash flows
116
Notes to the financial statements
117
Financial
statements
Record plc
Annual Report 2024
101
Additional information
Governance
Financial statements
Strategic report
Opinion on the financial statements
In our opinion:
• the financial statements give a true
and fair view of the state of the
Group’s and of the Parent Company’s
affairs as at 31 March 2024 and of
the Group’s profit for the year then
ended;
• the Group financial statements
have been properly prepared
in accordance with UK adopted
international accounting standards;
• the Parent Company financial
statements have been properly
prepared in accordance with UK
adopted international accounting
standards and as applied in
accordance with the provisions of
the Companies Act 2006; and
• the financial statements have been
prepared in accordance with the
requirements of the Companies
Act 2006.
We have audited the financial
statements of Record Plc (the ‘Parent
Company’) and its subsidiaries
(the ‘Group’) for the year ended
31 March 2024 which comprise
the consolidated statement
of comprehensive income, the
consolidated and company statements
of financial position, the consolidated
and company statements of changes in
equity, the consolidated and company
statements of cash flows, and notes
to the financial statements, including
a summary of material accounting
policies. The financial reporting
framework that has been applied in
their preparation is applicable law and
UK adopted international accounting
standards and as regards the Parent
Company financial statements,
as applied in accordance with the
provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance
with International Standards on
Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those
standards are further described in the
Auditor’s responsibilities for the audit
of the financial statements section of
our report. We believe that the audit
evidence we have obtained is sufficient
and appropriate to provide a basis
for our opinion. Our audit opinion is
consistent with the additional report
to the audit committee.
Independence
Following the recommendation of the
audit committee, we were appointed by
the shareholders at the annual general
meeting on 4 August 2020 to audit
the financial statements for the year
ended 31 March 2021 and subsequent
financial periods. The period of total
uninterrupted engagement including
retenders and reappointments is
4 years, covering the years ended
31 March 2021 to 31 March 2024.
We remain independent of the Group
and the Parent Company in accordance
with the ethical requirements that are
relevant to our audit of the financial
statements in the UK, including the
FRC’s Ethical Standard as applied to
listed public interest entities, and
we have fulfilled our other ethical
responsibilities in accordance with
these requirements. The non-audit
services prohibited by that standard
were not provided to the Group or the
Parent Company.
Conclusions relating to
going concern
In auditing the financial statements,
we have concluded that the Directors’
use of the going concern basis of
accounting in the preparation of the
financial statements is appropriate. Our
evaluation of the Directors’ assessment
of the Group and the Parent Company’s
ability to continue to adopt the going
concern basis of accounting included:
• Obtaining the Directors’ going
concern assessment which
comprised a cash flow forecast
and reverse stress test and we
tested for arithmetical accuracy.
We considered whether there is a
risk that could plausibly affect the
liquidity or ability of the Group and
the Parent Company to continue to
operate in the going concern period
by comparing severe, but plausible
downside scenarios that could arise
individually and collectively against
the level of available financial
resources indicated by the Group’s
financial forecasts;
• Holding discussions with Directors
on whether events or conditions
exist that, individually or collectively,
may cast significant doubt on the
Group’s and the Parent Company’s
ability to continue as going concerns;
corroborating those discussions
by agreeing information obtained
to supporting documents such as
budgets, cash flow forecasts and
minutes of meetings;
• Assessing the assumptions in the
cash flow forecasts such as revenue
growth rates, future overheads and
regulatory capital requirements and
considering whether the budgeting
and cash flow forecast models
utilised were appropriate. We
reviewed the outcome of the Group
and Company’s prior year budgets
against the actual outcomes
to assess the reasonability of
assumptions applied;
• Considering the impact of
the current challenging and
volatile economic environment
characterised by high interest rates,
inflation rates and cost pressures
on the Group’s and the Company’s
financial performance, business
activities and operations, regulatory
capital, and liquidity. Assessing
the potential impact of reduced
Assets Under Management “AUM”
and revenues on the Group’s and
Company’s profitability and liquidity
including available cash resources;
and
• Reviewing the going concern
disclosures included in the Financial
Statements in order to assess if
the disclosures are consistent
with the Directors’ going concern
assessment and in conformity with
the applicable reporting standards.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events
or conditions that, individually or
collectively, may cast significant doubt
on the Group and the Parent Company’s
ability to continue as a going concern
for a period of at least twelve months
from when the financial statements are
authorised for issue.
In relation to the Parent Company’s
reporting on how it has applied the
UK Corporate Governance Code, we
have nothing material to add or draw
attention to in relation to the Directors’
statement in the financial statements
about whether the Directors considered
it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the
responsibilities of the Directors with
respect to going concern are described
in the relevant sections of this report.
Independent auditor’s report to the members of Record plc
Record plc
Annual Report 2024
102
Overview
Coverage
94% (2023: 95%) of Group profit before tax
100% (2023: 100%) of Group revenue
99% (2023: 99%) of Group total assets
Key audit matters
2024
2023
Revenue Recognition
Materiality
Group financial statements as a whole
£646,000 (2023: £730,000) based on 5% (2023: 5%) of Profit before tax.
Independent auditor’s report to the members of Record plc
An overview of the scope of our audit
Our Group audit was scoped by
obtaining an understanding of the
Group and its environment, including
the Group’s system of internal
control, and assessing the risks of
material misstatement in the financial
statements. We also addressed the risk
of management override of internal
controls, including assessing whether
there was evidence of bias by the
Directors that may have represented a
risk of material misstatement.
We determined there to be three
significant components which
are UK based to be Record Group
Services Limited, Record Currency
Management Limited and the Parent
Company which were subject to full
scope audits performed by the Group
engagement team.
For the non-significant components,
we performed desktop reviews and
specific procedures on areas where
there was considered to be a risk
of material misstatement and on
material balances.
Climate change
Our work on the assessment of
potential impacts on climate-related
risks on the Group’s operations and
financial statements included:
• Enquiries and challenge of
management to understand the
actions they have taken to identify
climate-related risks and their
potential impacts on the financial
statements and adequately disclose
climate-related risks within the
annual report;
• Our own qualitative risk assessment
taking into consideration the sector
in which the Group operates and how
climate change affects this particular
sector; and
• Review of the minutes of Board and
Audit Committee meetings and other
papers related to climate change
and performed a risk assessment
as to how the impact of the Group’s
commitment as set out on pages
32 and 33 may affect the financial
statements and our audit.
We challenged the extent to which
climate-related considerations,
including the expected cash flows from
the initiatives and commitments have
been reflected, where appropriate,
in management’s going concern
assessment and viability assessment.
We also assessed the consistency of
managements disclosures included as
Statutory Other Information on pages
32 and 33 with the financial statements
and with our knowledge obtained from
the audit. Based on our risk assessment
procedures, we did not identify there
to be any Key Audit Matters materially
impacted by climate-related risks and
related commitments.
Key audit matters
Key audit matters are those matters
that, in our professional judgement,
were of most significance in our audit
of the financial statements of the
current period and include the most
significant assessed risks of material
misstatement (whether or not due
to fraud) that we identified, including
those which had the greatest effect on:
the overall audit strategy, the allocation
of resources in the audit, and directing
the efforts of the engagement team.
These matters were addressed in the
context of our audit of the financial
statements as a whole, and in forming
our opinion thereon, and we do not
provide a separate opinion on these
matters.
Record plc
Annual Report 2024
103
Additional information
Governance
Financial statements
Strategic report
Independent auditor’s report to the members of Record plc continued
An overview of the scope of our audit continued
Key audit matters continued
Key audit matter
How the scope of our audit addressed the key audit matter
Revenue recognition
The Group’s associated
accounting policies are detailed
in note 4 on page 120.
Management fees:
£38.7m (2023: £38.3m)
Performance fees:
£5.8m (2023: £5.8m)
Our audit testing included the following:
• We obtained management’s paper on the revenue recognition policy and assessed
the revenue recognition policy for both management fees and performance fees
against the requirements of the applicable accounting standards.
• For a sample of days, we tested the operating effectiveness of relevant controls
over the receipt and input of customer data into the underlying system for AUM to
assess the daily monitoring checks over the rebalancing process and if exceptions
are resolved.
• With the assistance from our IT specialists, the design, implementation and
operating effectiveness of the IT general controls (“ITGC”) of the key IT applications
used in the revenue reporting process, including the key automated controls within
the IT applications for the full period was tested. Further to this, we tested the
internal reporting systems ability to accurately compute weighted average days and
weighted average AUM exposure levels (running totals) as such information is relied
upon for the calculation of management fee revenue.
• For a sample of new clients onboarded during the year, we tested the existence,
accuracy and completeness of new client static data captured in the internal
reporting system and invoices raised to new client by agreeing inputs to
supporting IMA.
On a sample basis we:
• Obtained management’s fee calculation, discussed the methodology used in the
calculation with management, and agreed the calculation methodology to the
relevant IMAs to assess the reasonableness of the methodology used.
• Agreed the key inputs used in the management fee calculation such as hedge ratios
and fee rates to the IMAs to assess the accuracy of the inputs in the calculation.
• We obtained an understanding of client’s process related to identification
of applicable AUMs and tested a sample of the AUM identified to supporting
documentation to assess the reasonableness of the AUMs used in the calculation
of management fees.
• Recalculated the management fees by applying the fee rates specified in the IMAs
to the weighted average AUMs which were tested by way of controls. We compared
our results to management calculations, and where differences were identified we
investigated these. We did this to assess the reasonableness of amount recognised
as management fees.
For performance fees on a sample basis we:
• Assessed the accuracy of the input in the calculation by agreeing the key inputs,
including estimated valuations, relevant hurdles and performance obligations and
other terms to supporting documentation such as contracts/IMAs and third party/
custodian supporting documentation.
• Assessed the client’s performance period in the calculation by agreeing to the IMA
and we also assessed the crystallisation of all performance fees recognised.
The Group’s revenue arises from
currency management services
through the provision of currency
and asset management products
as disclosed in Note 4. Revenue
comprises mainly management
fees (85%) and performance
fees (13%).
Revenue recognition in relation
to management fees and
performance fees is a significant
audit risk as it is a key driver of
return to investors and there
is a risk that there could be
manipulation or omission of
amounts recorded.
There is also a risk that
performance fees are not
recognised appropriately
in accordance with the
accounting framework adopted.
For management fees, which are
calculated as weighted average
exposures at the fee rates
specified in the Management
Agreements (“IMAs”), there are
a number of manual procedures,
including identification of
applicable Assets Under
Management (“AUM”).
There is a risk that the data
used in the fee calculation is
manipulated during the manual
process, leading to material
risk of misstatements in
management fees.
Record plc
Annual Report 2024
104
Independent auditor’s report to the members of Record plc continued
Key audit matter
How the scope of our audit addressed the key audit matter
For performance fees, there are
several bespoke and complex
agreements and due to the
manual nature of the calculation
and recognition process, there
is an increased risk in error in
relation to performance fees.
There is also an increased risk
for premature recognition of
performance fees before they
crystallise.
We therefore considered revenue
recognition of management and
performance fees to be a key
audit matter.
• With the assistance of our internal valuation experts, we recalculated the
benchmark performance which was compared to management’s calculations, and
investigated differences, where identified.
• Recalculated the performance fees by recalculating the performance/value-added
of each client’s mandate to that of the benchmark portfolio in the IMA and applying
the fee rates as per the IMA to the computed value added. We compared our results
to that of managements with any differences noted being investigated.
• Agreed performance fees to the customer invoices fee calculation and we also
agreed cash receipts to bank statements.
Key observations:
Based on our procedures performed, we did not identify any matters which would
indicate that revenue arising in respect of management fees and performance fees
has not been recognised appropriately.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below
these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements,
and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements
Parent company financial statements
Materiality
2024
£
2023
£
646,000
730,000
2024
£
2023
£
117,000
127,000
Basis for
determining
materiality
5% of Profit before tax
1% of Total assets
Rationale for the
benchmark applied
As the entity is listed, profit before tax was
considered to be the most appropriate benchmark
for users of the financial statements as it is a
primary measure of performance.
Total assets were considered to be the most
appropriate benchmark as the entity is a holding
company and it is the key financial measure for
users of the financial statements.
Performance
materiality
2024
£
2023
£
419,900
475,000
2024
£
2023
£
76,050
82,600
Rationale for the
percentage applied
for performance
materiality
On the basis of our risk assessments, together with our assessment of the Group’s and Parent
Company’s overall control environment, our judgement was that a performance materiality of 65%
of materiality was appropriate.
Record plc
Annual Report 2024
105
Additional information
Governance
Financial statements
Strategic report
Our application of materiality
continued
Component materiality
For the purposes of our Group audit
opinion, we set materiality for each
significant component of the Group,
apart from the Parent Company
whose materiality is set out above,
based on a percentage of between
39% and 99% (2023: 3% and 73%)
of Group materiality dependent on
the size and our assessment of the
risk of material misstatement of that
component. Component materiality
ranged from £117,000 to £640,000
(2023: £20,000 to £530,000). In the
audit of each component, we further
applied performance materiality levels
of 65% (2023: 65%) of the component
materiality to our testing to ensure that
the risk of errors exceeding component
materiality was appropriately
mitigated.
Reporting threshold
We agreed with the Audit Committee
that we would report to them all
individual audit differences in excess
of £12,920 (2023: £14,600) for the
group and £2,340 (2023: £1,500) for
the parent company. We also agreed to
report differences below this threshold
that, in our view, warranted reporting
on qualitative grounds.
Other information
The directors are responsible for
the other information. The other
information comprises the information
included in the annual report other
than the financial statements and our
auditor’s report thereon. Our opinion on
the financial statements does not cover
the other information and, except to the
extent otherwise explicitly stated in
our report, we do not express any form
of assurance conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is
materially inconsistent with the
financial statements or our knowledge
obtained in the course of the audit, or
otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required to
determine whether this gives rise to a
material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude
that there is a material misstatement of
this other information, we are required
to report that fact.
We have nothing to report in this
regard.
Independent auditor’s report to the members of Record plc continued
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the parent company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and
longer‑term viability
• The Directors’ statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set out on page 98;
and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period
this assessment covers and why the period is appropriate set out on page 57 and 98.
Other Code provisions
• Directors’ statement on fair, balanced and understandable set out on page 75;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 52;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on pages 52, 53 and 75; and
• The section describing the work of the audit committee set out on pages 72 to 76.
Record plc
Annual Report 2024
106
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and
its environment obtained in the course of the audit, we have not identified material
misstatements in the strategic report or the Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Corporate governance
statement
In our opinion, based on the work undertaken in the course of the audit the information
about internal control and risk management systems in relation to financial reporting
processes and about share capital structures, given in compliance with rules 7.2.5 and
7.2.6 in the Disclosure Guidance and Transparency Rules sourcebook made by the Financial
Conduct Authority (the FCA Rules), is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company
and its environment obtained in the course of the audit, we have not identified material
misstatements in this information.
In our opinion, based on the work undertaken in the course of the audit information
about the Parent Company’s corporate governance code and practices and about its
administrative, management and supervisory bodies and their committees complies with
rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
We have nothing to report arising from our responsibility to report if a corporate governance
statement has not been prepared by the Parent Company.
Matters on which we
are required to report by
exception
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ remuneration
report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Independent auditor’s report to the members of Record plc continued
Record plc
Annual Report 2024
107
Additional information
Governance
Financial statements
Strategic report
Responsibilities of Directors
As explained more fully in the
Directors’ responsibilities statement,
the Directors are responsible for the
preparation of the financial statements
and for being satisfied that they give a
true and fair view, and for such internal
control as the Directors determine is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error.
In preparing the financial statements,
the Directors are responsible for
assessing the Group’s and the Parent
Company’s ability to continue as a
going concern, disclosing, as applicable,
matters related to going concern
and using the going concern basis of
accounting unless the Directors either
intend to liquidate the Group or the
Parent Company or to cease operations,
or have no realistic alternative but to
do so.
Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of these
financial statements.
Extent to which the audit was
capable of detecting irregularities,
including fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. We design procedures
in line with our responsibilities,
outlined above, to detect material
misstatements in respect of
irregularities, including fraud.
The extent to which our procedures
are capable of detecting irregularities,
including fraud is detailed below:
Non-compliance with laws and
regulations
Based on:
• Our understanding of the Group and
the industry in which it operates;
• Discussion with management and
those charged with governance; and
• Obtaining and understanding of the
Group’s policies and procedures
regarding compliance with laws and
regulations;
we considered the significant laws and
regulations to be the UK Adopted IFRS,
UK tax legislation, Listing Rules and the
Companies Act 2006.
The Group is also subject to laws and
regulations where the consequence of
non-compliance could have a material
effect on the amount or disclosures in
the financial statements, for example
through the imposition of fines or
litigations. We identified such laws
and regulations to be permissions
and supervisory requirements of the
Financial Conduct Authority (‘FCA’).
Our procedures in respect of the above
included:
• Review of minutes of meeting of
those charged with governance for
any instances of non-compliance
with laws and regulations;
• Review of correspondence with
regulatory and tax authorities for
any instances of non-compliance
with laws and regulations;
• Review of financial statement
disclosures and agreeing to
supporting documentation;
• Involvement of tax specialists
in the audit; and
• Review of legal expenditure
accounts to understand the nature
of expenditure incurred.
Fraud
We assessed the susceptibility of
the financial statements to material
misstatement, including fraud. Our risk
assessment procedures included:
• Enquiry with management and those
charged with governance regarding
any known or suspected instances
of fraud;
• Obtaining an understanding of the
Group’s policies and procedures
relating to:
• Detecting and responding to the
risks of fraud; and
• Internal controls established to
mitigate risks related to fraud.
• Review of minutes of meeting of
those charged with governance for
any known or suspected instances
of fraud;
• Discussion amongst the engagement
team as to how and where fraud
might occur in the financial
statements;
• Performing analytical procedures to
identify any unusual or unexpected
relationships that may indicate risks
of material misstatement due to
fraud; and
• Considering remuneration incentive
schemes and performance targets
and the related financial statement
areas impacted by these.
Based on our risk assessment, we
considered the areas most susceptible
to fraud to be management override
of controls, revenue recognition
and management bias in accounting
estimates including the valuation of
share-based payments.
Independent auditor’s report to the members of Record plc continued
Record plc
Annual Report 2024
108
Independent auditor’s report to the members of Record plc continued
Our procedures in respect of the above
included:
• Testing a sample of journal
entries throughout the year,
which met a defined risk criteria
such as least used accounts,
transactions containing key
words like error, unusual revenue
journals by agreeing to supporting
documentation and assessing
whether the journals processed
had a valid business reason, are
appropriate for the nature of the
business, are recorded in correct
account and correct accounting
period and, whether they were
appropriately authorised;
• Assessing significant estimates
made by management for bias in
valuation of share options and
performance fees open trades
valuation;
• Engaging audit experts to provide
an independent valuation of the
share options and open trades and
challenging management on the
judgemental areas; and
• The procedures set out in the Key
Audit Matters section above.
We also communicated relevant
identified laws and regulations and
potential fraud risks to all engagement
team members who were all deemed
to have appropriate competence and
capabilities and remained alert to any
indications of fraud or non-compliance
with laws and regulations throughout
the audit.
Our audit procedures were designed
to respond to risks of material
misstatement in the financial
statements, recognising that the risk of
not detecting a material misstatement
due to fraud is higher than the risk
of not detecting one resulting from
error, as fraud may involve deliberate
concealment by, for example, forgery,
misrepresentations or through
collusion. There are inherent limitations
in the audit procedures performed and
the further removed non-compliance
with laws and regulations is from the
events and transactions reflected in
the financial statements, the less likely
we are to become aware of it.
A further description of our
responsibilities is available on
the Financial Reporting Council’s
website at: www.frc.org.uk/
auditorsresponsibilities. This
description forms part of our
auditor’s report.
Use of our report
This report is made solely to the Parent
Company’s members, as a body, in
accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit
work has been undertaken so that we
might state to the Parent Company’s
members those matters we are
required to state to them in an auditor’s
report and for no other purpose. To the
fullest extent permitted by law, we do
not accept or assume responsibility to
anyone other than the Parent Company
and the Parent Company’s members
as a body, for our audit work, for this
report, or for the opinions we have
formed.
Orla Reilly (Senior Statutory Auditor)
For and on behalf of BDO LLP,
Statutory Auditor
London, UK
27 June 2024
BDO LLP is a limited liability partnership
registered in England and Wales (with
registered number OC305127).
Record plc
Annual Report 2024
109
Additional information
Governance
Financial statements
Strategic report
Consolidated statement of comprehensive income
Year ended 31 March 2024
Note
2024
£’000
2023
£’000
Revenue
4
45,378
44,689
Cost of sales
(82)
(37)
Gross profit
45,296
44,652
Administrative expenses
5
(30,746)
(29,888)
Other expense
5
(15)
(293)
Operating profit prior to impairment of intangible assets
14,535
14,471
Impairment of intangible assets
11
(1,937)
—
Operating profit
12,598
14,471
Finance income
394
182
Finance expense
(81)
(55)
Profit before tax
12,911
14,598
Taxation
7
(3,658)
(3,259)
Profit after tax
9,253
11,339
Foreign exchange gains on translation of foreign operations
13
—
Other comprehensive income that may be reclassified subsequently to profit and loss
13
—
Total comprehensive income for the year net of tax
9,266
11,339
Profit and total comprehensive income for the year attributable to
Equity holders of the parent
9,271
11,339
Non-controlling interest
(5)
—
9,266
11,339
Earnings per share for profit attributable to the equity holders of the parent during
the year
Basic earnings per share (pence per share)
8
4.84
5.95
Diluted earnings per share (pence per share)
8
4.78
5.81
The notes on pages 117 to 146 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2024
110
Consolidated statement of financial position
As at 31 March 2024
Note
2024
£’000
2023
£’000
Non‑current assets
Intangible assets
11
11
1,390
Right‑of‑use assets
12
174
1,011
Property, plant and equipment
13
193
377
Investments
14
4,949
4,901
Deferred tax assets
16
168
134
Total non‑current assets
5,495
7,813
Current assets
Trade and other receivables
17
13,022
14,373
Derivative financial assets
18
63
54
Money market instruments
19
8,264
4,549
Cash and cash equivalents
19
9,221
9,948
Total current assets
30,570
28,924
Total assets
36,065
36,737
Current liabilities
Trade and other payables
20
(4,930)
(6,011)
Corporation tax liabilities
20
(1,865)
(1,329)
Provisions
21
(122)
—
Lease liabilities
12
(106)
(285)
Derivative financial liabilities
18
(9)
(5)
Total current liabilities
(7,032)
(7,630)
Non-current liabilities
Provisions
21
—
(122)
Lease liabilities
12
(79)
(694)
Total non-current liabilities
(79)
(816)
Total net assets
28,954
28,291
Equity
Issued share capital
22
50
50
Share premium account
1,809
1,809
Capital redemption reserve
26
26
Foreign currency translation reserve
13
—
Retained earnings
27,051
26,406
Equity attributable to the equity holders of the parent
28,949
28,291
Non-controlling interests
5
—
Total equity
28,954
28,291
Approved by the Board on 27 June 2024 and signed on its behalf by:
David Morrison
Steve Cullen
Chairman
Chief Financial Officer
Company registered number: 1927640
The notes on pages 117 to 146 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2024
111
Additional information
Governance
Financial statements
Strategic report
Consolidated statement of changes in equity
Year ended 31 March 2024
Note
Called‑up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Foreign
currency
translation
reserve
£’000
Retained
earnings
£’000
Equity
attributable to
equity holders
of the parent
£’000
Non-
controlling
interest
£’000
Total
equity
£’000
As at 1 April 2023
50
1,809
26
—
26,406
28,291
—
28,291
Profit and total comprehensive
income for the year
—
—
—
13
9,258
9,271
(5)
9,266
Non-controlling interest
acquired in subsidiaries
—
—
—
—
—
—
10
10
Dividends paid
9
—
—
—
—
(10,113)
(10,113)
—
(10,113)
Own shares acquired by EBT
—
—
—
—
(1,266)
(1,266)
—
(1,266)
Release of shares held by EBT
—
—
—
—
2,584
2,584
—
2,584
Tax on share-based payments
—
—
—
—
(86)
(86)
—
(86)
Other share-based payment
reserve movements
—
—
—
—
268
268
—
268
Transactions with shareholders
—
—
—
—
(8,613)
(8,613)
10
(8,603)
As at 31 March 2024
50
1,809
26
13
27,051
28,949
5
28,954
Year ended 31 March 2023
Note
Called‑up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Foreign
currency
translation
reserve
£’000
Retained
earnings
£’000
Equity
attributable to
equity holders
of the parent
£’000
Non-
controlling
interest
£’000
Total
equity
£’000
As at 1 April 2022
50
1,809
26
—
24,045
25,930
—
25,930
Profit and total comprehensive
income for the year
—
—
—
—
11,339
11,339
—
11,339
Dividends paid
9
—
—
—
—
(9,095)
(9,095)
—
(9,095)
Own shares acquired by EBT
—
—
—
—
(3,572)
(3,572)
—
(3,572)
Release of shares held by EBT
—
—
—
—
2,268
2,268
—
2,268
Tax on share-based payments
—
—
—
—
300
300
—
300
Other share-based payment
reserve movements
—
—
—
—
1,121
1,121
—
1,121
Transactions with shareholders
—
—
—
—
(8,978)
(8,978)
—
(8,978)
As at 31 March 2023
50
1,809
26
—
26,406
28,291
—
28,291
The notes on pages 117 to 146 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2024
112
Consolidated statement of cash flows
Year ended 31 March 2024
Note
2024
£’000
Restated1
2023
£’000
Net cash inflow from operating activities
26
13,055
10,541
Cash flows from investing activities
Purchase of intangible assets
11
(789)
(964)
Purchase of property, plant and equipment
13
(29)
(272)
Purchase of investments
14
(1,080)
(3,570)
Redemption of bonds
14
753
1,607
Redemption of other investments
14
1,144
881
(Purchase)/disposal of money market instruments
(3,715)
9,363
Interest received
360
181
Net cash (outflow)/inflow from investing activities
(3,356)
7,226
Cash flows from financing activities
Lease principal payments
12
(288)
(315)
Lease interest payments
12
(33)
(55)
Purchase of own shares1
33
—
(1,850)
Dividends paid to equity shareholders
9
(10,113)
(9,095)
Net cash outflow from financing activities
(10,434)
(11,315)
Net increase/(decrease) in cash and cash equivalents in the year
(735)
6,452
Exchange gains
8
151
Cash and cash equivalents at the beginning of the year
9,948
3,345
Cash and cash equivalents at the end of the year
9,221
9,948
Closing cash and cash equivalents consist of:
Cash
4,954
6,405
Cash equivalents
4,267
3,543
Cash and cash equivalents
19
9,221
9,948
1.
See note 33 for details of the presentational adjustment resulting in the restatement of prior year amounts.
The notes on pages 117 to 146 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2024
113
Additional information
Governance
Financial statements
Strategic report
Company statement of financial position
As at 31 March 2024
Note
2024
£’000
2023
£’000
Non‑current assets
Right‑of‑use assets
12
68
871
Property, plant and equipment
70
99
Investments
14
10,843
9,062
Total non‑current assets
10,981
10,032
Current assets
Corporation tax
195
16
Trade and other receivables
17
711
2,428
Cash and cash equivalents
19
214
213
Total current assets
1,120
2,657
Total assets
12,101
12,689
Current liabilities
Trade and other payables
20
(7,176)
(4,955)
Lease liabilities
12
(71)
(251)
Provisions
21
(122)
—
Total current liabilities
(7,369)
(5,206)
Non-current liabilities
Lease liabilities
12
—
(583)
Deferred tax liabilities
(124)
(11)
Provisions
21
—
(122)
Total non-current liabilities
(124)
(716)
Total net assets
4,608
6,767
Equity
Issued share capital
22
50
50
Share premium account
1,809
1,809
Capital redemption reserve
26
26
Retained earnings
2,723
4,882
Total equity
4,608
6,767
The Company’s total comprehensive income for the year (which is principally derived from intra-group dividends) was
£6,809,523 (2023: £10,614,915).
Approved by the Board on 27 June 2024 and signed on its behalf by:
David Morrison
Steve Cullen
Chairman
Chief Financial Officer
Company registered number: 1927640
The notes on pages 117 to 146 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2024
114
Company statement of changes in equity
Year ended 31 March 2024
Note
Called‑up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Retained
earnings
£’000
Total
shareholders’
equity
£’000
As at 1 April 2023
50
1,809
26
4,882
6,767
Profit and total comprehensive income for the year
—
—
—
6,810
6,810
Dividends paid
9
—
—
—
(10,113)
(10,113)
Share option reserve movement
—
—
—
1,144
1,144
Transactions with shareholders
—
—
—
(8,969)
(8,969)
As at 31 March 2024
50
1,809
26
2,723
4,608
Year ended 31 March 2023
Note
Called‑up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Retained
earnings
£’000
Total
shareholders’
equity
£’000
As at 1 April 2022
50
1,809
26
2,446
4,331
Profit and total comprehensive income for the year
—
—
—
10,615
10,615
Dividends paid
9
—
—
—
(9,095)
(9,095)
Share option reserve movement
—
—
—
916
916
Transactions with shareholders
—
—
—
(8,179)
(8,179)
As at 31 March 2023
50
1,809
26
4,882
6,767
The notes on pages 117 to 146 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2024
115
Additional information
Governance
Financial statements
Strategic report
Company statement of cash flows
Year ended 31 March 2024
Note
2024
£’000
2023
£’000
Net cash inflow from operating activities
26
1,555
2,166
Cash flows from investing activities
Dividends received
7,700
10,500
Purchase of property, plant and equipment
—
(116)
Investment in equity reserve of subsidiary
—
(1,095)
Purchase of investments
(13)
(1,869)
Redemption of investments
1,144
—
Interest received
8
1
Net cash inflow from investing activities
8,839
7,421
Cash flows from financing activities
Lease principal payments
12
(253)
(280)
Lease interest payments
12
(27)
(43)
Dividends paid to equity shareholders
9
(10,113)
(9,095)
Net cash outflow from financing activities
(10,393)
(9,418)
Net increase in cash and cash equivalents in the year
1
170
Exchange losses
—
—
Cash and cash equivalents at the beginning of the year
213
43
Cash and cash equivalents at the end of the year
214
213
Closing cash and cash equivalents consist of:
Cash
214
213
Cash equivalents
—
—
Cash and cash equivalents
19
214
213
The notes on pages 117 to 146 are an integral part of these consolidated financial statements.
Record plc
Annual Report 2024
116
Notes to the financial statements for the year ended 31 March 2024
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 material 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.
1.1 Basis of preparation
The Group financial statements have been prepared in accordance with UK adopted international accounting standards and
the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial
statements have been prepared on a going concern basis.
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 accounting policies have been applied consistently to all periods presented in these financial statements and by all Group
entities, unless otherwise stated. The financial statements of subsidiary undertakings are coterminous with those of Record
plc, referred to as the “Company”.
1.2 Changes to international accounting policies
The following amendments and interpretations became effective during the year. Their adoption has not had any significant
impact on the Group.
Effective from
IAS 1
Presentation of Financial Statements (Amendments)
1 January 2023
IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors (Amendments)
1 January 2023
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective
at the year-end date.
1.3 Basis of consolidation
The consolidated financial information contained within the financial statements incorporates financial statements of the
Company, its subsidiaries and share in the results of its joint ventures drawn up to 31 March 2024.
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 those returns.
The Record plc Employee Benefit Trust (“EBT”) has been established for the purpose 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. The movements in the EBT are disclosed in the statement of changes in equity as own shares acquired and
released by the EBT. This includes net settlements, through which employees have the option to sell back shares to cover
the exercise price and tax liabilities arising as a result of exercising share awards. As the amounts are netted off, there are
no cash movements.
Joint ventures are entities in which the Group has an investment where it has contractually agreed to share control of
the business and where the major decisions require the unanimous consent of the joint partners. The results, as well
as the assets and liabilities of joint ventures, are incorporated in the consolidated financial statements using the equity
method of accounting. The Group’s share of post-tax profits or losses is recognised in the consolidated statement of
comprehensive income.
All intra‑group transactions, balances, income, expenses and dividends are eliminated on consolidation.
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 £6,809,523 attributable to the Company (FY-23: £10,614,915). The Company’s principal activity is that of a holding company.
1.4 Going concern
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 various assessments including capital
and liquidity positions, the current economic and geopolitical environment and the market in which the Group operates, and
its stakeholders. These assessments show that the Group should be able to operate at adequate levels of both liquidity and
capital for at least twelve months from the date of signing this report.
Consequently, the Directors have reasonable expectation that the Group has adequate financial resources to continue
operations for at least twelve months from the date of signing the report, and therefore have continued to adopt the going
concern basis in preparing the financial statements.
Record plc
Annual Report 2024
117
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 continued
1. Accounting policies continued
1.5 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”.
The functional currency of Record Asset Management GmbH and RAM Strategies GmbH has changed from sterling to euro,
due to changes in their economic environment as they begin to generate revenue. The change in functional currency of these
subsidiaries has been applied prospectively from 1 January 2024. On consolidation, the results of foreign operations are
translated into sterling at rates approximating to those when the transactions took place. The assets and liabilities of foreign
operations are translated at the period-end spot rate. Exchange differences arising on translating the opening net assets at
opening rate and the results of overseas operations at monthly average rate are recognised in other comprehensive income,
and accumulated in the foreign currency translation reserve.
1.6 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.
1.7 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.
1.8 Segmental reporting
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed
by the Group’s Chief Operating Decision Maker (“CODM”) in order to allocate resources to the segments and to assess their
performance. The CODM is considered to be the Board of Directors.
As a result of the diversification and growth of the Group’s operations into asset management, the Group has identified two
reportable segments: Currency Management and Asset Management.
2. Critical accounting estimates and judgements
The preparation of the financial statements in accordance with IFRS requires management to make accounting estimates and
judgements that affect the application of the Group’s accounting policies and reported amounts.
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
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.
The key areas involving estimates and judgements have been set out below, and detailed further within the respective notes:
Area
Note
Related estimates and judgements
Impairment of assets
1.7, 11
Impairment indicators and recoverable amounts
Intangible assets
11
Qualifying expenditure and amortisation
Leases
12
Discount rate
Provisions
21
Consideration required to settle future obligations
Share-based payments
16, 23
Fair value of share options and related deferred tax
Fair value of investments
25
Valuation methodology and inputs, and input level allocation
Basis of consolidation
28
Interests in unconsolidated structured entities
Record plc
Annual Report 2024
118
Notes to the financial statements for the year ended 31 March 2024 continued
3. Segmental analysis
The Board and management team of the Group are beginning to organise and report on the performance of the business by
Currency Management and Asset Management segments. This will recognise both the current and anticipated future growth
in revenues as well as the difference in contribution and risk levels across both segments.
The Currency Management segment comprises bespoke solutions to clients including Passive Hedging, Dynamic Hedging,
Hedging for Asset Managers, and FX Alpha products.
The Asset Management segment principally comprises investment management services for products including EM debt
and Custom Solutions.
3.1 Operating segments
The majority of activities and revenues in FY-24 are derived from operations within the Currency Management segment.
However, with further product launches and continued interest from clients anticipated in the Asset Management segment,
the expectation is for this segment to become more significant in the future.
Operating profit per segment is not presented, as such information is not presented on a regular basis to the Group’s CODM.
Therefore, for FY-24, these are not yet considered to be operating segments. The operating segmental information will,
however, be presented to the Group’s CODM from FY-25 onwards, thus transitioning these segments into operating segments.
For FY-24, only revenue is reviewed by the CODM. Currency Management revenue totalled £33.9 million for the period, and
Asset Management revenue totalled £11.5 million for the period. Note 4 provides further detail on this.
3.2 Segment assets and liabilities
Segment assets and liabilities are not presented, as such information is not presented on a regular basis to the Group’s CODM.
4. Revenue
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 (“AUM”) denominated in the client’s chosen base currency. The percentage varies
depending on the nature of services and the level of AUM. Management fees are typically invoiced to the customer quarterly
with receivables recognised for unpaid invoices. Fees are recognised on a monthly basis, based on the agreed fee rate and AUM
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.
Record plc
Annual Report 2024
119
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 continued
4. Revenue continued
4.1 Revenue by product type
2024
2023
Currency
Management
£’000
Asset
Management
£’000
Total
£’000
Currency
Management
£’000
Asset
Management
£’000
Total
£’000
Dynamic Hedging
13,719
—
13,719
12,013
—
12,013
Passive Hedging
9,720
—
9,720
10,464
—
10,464
Hedging for asset managers
2,886
—
2,886
2,448
—
2,448
FX Alpha
1,250
—
1,250
1,628
—
1,628
EM Debt
—
4,793
4,793
—
5,161
5,161
Custom solutions
—
6,327
6,327
—
6,584
6,584
Management fees
27,575
11,120
38,695
26,553
11,745
38,298
Passive Hedging
2,898
—
2,898
5,805
—
5,805
FX Alpha
2,942
—
2,942
—
—
—
Performance fees
5,840
—
5,840
5,805
—
5,805
Other services income
439
404
843
520
66
586
Total revenue
33,854
11,524
45,378
32,878
11,811
44,689
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 when they crystallise and can be invoiced on a
quarterly, six-monthly or annual basis, as agreed with our clients. Other services income includes Currency Management fees
from signal hedging and fiduciary execution, as well as Asset Management distribution fees.
4.2 Revenue by geographical analysis
All revenue received during the period was for services provided by Group companies situated in the UK and Germany.
The following geographical analysis of revenue is based on the destination i.e. the location of the client to whom the services
are provided. Other relates to a number of regions that are individually immaterial.
Revenue by geographical region
2024
£’000
2023
£’000
Management and performance fee income
UK
2,593
2,545
US
15,652
14,179
Switzerland
15,281
16,985
Europe (excluding UK and Switzerland)
8,049
9,339
Other
3,803
1,641
Total revenue
45,378
44,689
4.3 Major clients
During the year ended 31 March 2024, two Currency Management clients individually accounted for more than 10% of the
Group’s revenue. The two largest clients generated revenues of £6.7 million and £4.8 million in the year (FY-23: four clients
generated revenues of more than 10% totalling £6.6 million, £6.3 million, £5.2 million, and £4.9 million in the year).
Record plc
Annual Report 2024
120
Notes to the financial statements for the year ended 31 March 2024 continued
5. Operating profit
Operating profit for the year is stated after charging/(crediting):
2024
£’000
2023
£’000
Administrative expenses
Staff costs
19,404
20,412
Other staff-related costs
1,778
1,545
IT and technology
4,584
3,582
Auditor’s remuneration
Fees payable to the Group’s auditor for the audit of the Company’s annual accounts
188
134
Fees payable to the Group’s auditor for the audit of subsidiary undertakings
268
191
Audit-related assurance services required by law or regulation
9
6
Other non-audit services
16
15
Other professional fees
1,888
1,775
Occupancy
989
1,111
Travel and marketing
899
668
Depreciation of right-of-use assets
278
375
Depreciation of property, plant and equipment
213
285
Amortisation of intangibles
232
135
Impairment of intangible assets
1,937
—
Other income or expense
(Gain)/loss on forward FX contracts held to hedge cash flow
(252)
800
Other exchange losses/(gains)
360
(289)
Investment gains
(93)
(218)
Of the above auditor’s remuneration, audit-related services for the year totalled £455,500 (FY-23: £325,000).
6. Staff costs
The average number of employees, including Directors, employed by the Group during the year was:
2024
2023
Corporate
6
6
Client relationships
13
13
Investment research
20
18
Operations
34
31
Risk management
6
5
Support
17
15
Annual average
96
88
The aggregate costs of the above employees, including Directors, were as follows:
2024
£’000
2023
£’000
Wages and salaries
14,792
14,540
Social security costs
2,007
2,295
Pension costs
817
686
Other employment benefit costs
1,788
2,891
Aggregate staff costs
19,404
20,412
Other employment benefit costs include share‑based payments, share option costs, and costs relating to the Record plc Share
Incentive Plan.
There are no Company staff costs.
Record plc
Annual Report 2024
121
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 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.
2024
£’000
2023
£’000
UK current year charge
3,723
2,961
Overseas taxes
66
64
Prior year adjustments
48
175
Current tax charge
3,837
3,200
Origination and reversal of temporary differences
(151)
76
Prior year adjustment
(28)
(17)
Total deferred tax
(179)
59
Tax on profit on ordinary activities
3,658
3,259
The total charge for the year can be reconciled to the accounting profit as follows:
2024
£’000
2023
£’000
Profit before taxation
12,911
14,598
Taxation at the standard rate of tax in the UK of 25% (2023: 19%)
3,228
2,774
Tax effects of:
Other disallowable expenses and non‑taxable income
106
164
Deferred tax asset not recognised on start-up entities
199
146
Different tax rates on subsidiary undertakings
104
15
Prior year adjustment
21
160
Total tax expense
3,658
3,259
The tax expense comprises:
Current tax expense
3,837
3,200
Deferred tax (credit)/expense
(179)
59
Total tax expense
3,658
3,259
The standard rate of UK corporation tax for the year is 25% (FY-23: 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 increased to 25% from 1 April 2023.
The tax charge for the year ended 31 March 2024 was 28% of profit before tax (FY-23: 22%). Other temporary differences for
the year ended 31 March 2024 include the impact of deferred tax credit of £179k (FY-23: expense of £59k).
Record plc
Annual Report 2024
122
Notes to the financial statements for the year ended 31 March 2024 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.
2024
2023
Weighted average number of shares used in calculation of basic earnings per share
191,509,539 190,483,365
Effect of potential dilutive ordinary shares – share options
2,174,866
4,830,186
Weighted average number of shares used in calculation of diluted earnings per share
193,684,405
195,313,551
pence
pence
Basic earnings per share
4.84
5.95
Diluted earnings per share
4.78
5.81
The potential dilutive shares relate to the share options, JSOP and LTIP awards granted in respect of the Group’s Share Scheme
(see note 23). There were share options, JSOP and LTIP awards in place at the beginning of the year over 14,724,582 shares.
During the year 1,915,336 share options were exercised, 633,125 JSOP awards vested and a further 1,319,230 share options and
LTIP awards lapsed or were forfeited. The Group granted 3,335,000 share options and LTIP awards over 1,641,000 shares with
a potentially dilutive effect during the year. Of the 15,832,891 share options, JSOP and LTIP awards in place at the end of the
period, 13,331,655 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 2024 totalled £10,113,174 (5.28 pence per share), which
comprised a final dividend in respect of the year ended 31 March 2023 of £4,678,947 (2.45 pence per share), a special dividend
in respect of the year ended 31 March 2023 of £1,298,647 (0.68 pence per share) and an interim dividend for the year ended
31 March 2024 of £4,135,580 (2.15 pence per share).
The dividends paid by the Group during the year ended 31 March 2023 totalled £9,095,232 (4.77 pence per share), which
comprised a final dividend in respect of the year ended 31 March 2022 of £3,420,850 (1.8 pence per share), a special dividend
in respect of the year ended 31 March 2022 of £1,748,435 (0.92 pence per share) and an interim dividend for the year ended
31 March 2023 of £3,925,947 (2.05 pence per share).
For the year ended 31 March 2024, a final ordinary dividend of 2.45 pence per share has been proposed and a special dividend
of 0.60 pence per share has been declared, totalling approximately £4.7 million and £1.1 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.
Record plc
Annual Report 2024
123
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 continued
11. Intangible assets
The Group’s intangible assets comprise both purchased software and the capitalised costs of software development. Internal
software development costs, which represent attributable employee costs, are capitalised if they meet the IAS 38 criteria.
The amount recognised for an internally generated intangible asset is the sum of qualifying expenditure incurred from the date
when the asset first meets the recognition criteria.
Intangible assets are shown at historical cost less accumulated amortisation and impairment losses. Amortisation is charged
from the date an intangible asset is available for use, on a straight‑line basis, over the estimated useful life of the intangible
asset. Amortisation is included within administration expenses in the statement of comprehensive income. Useful lives are as
follows:
• Software – 2 to 5 years.
Amortisation periods and methods are reviewed annually and adjusted if appropriate.
The carrying amounts of intangible assets can be analysed as follows:
2024
2023
Software
£’000
Total
£’000
Software
£’000
Total
£’000
Cost
At 1 April
2,320
2,320
1,475
1,475
Additions
789
789
964
964
Impairment
(2,088)
(2,088)
(119)
(119)
At 31 March
1,021
1,021
2,320
2,320
Amortisation
At 1 April
930
930
913
913
Charge for the year
232
232
135
135
Impairment
(152)
(152)
(118)
(118)
At 31 March
1,010
1,010
930
930
Net book value
At 31 March
11
11
1,390
1,390
At 1 April
1,390
1,390
562
562
The above impairments relate to the Board’s decision to cease the development of our internally generated R-Platform and
Smart Reports software. Following a thorough analysis, the Board concluded that these projects did not produce the scale of
improvement targeted and would require further meaningful investment over a prolonged period to reach the level required,
and that focus of the Group’s resources will instead be shifted to building out our internal IT development expertise. This has
resulted in the impairment of these two projects to a recoverable amount of zero, their value in use, the net effect of which has
been reflected as an impairment expense of £1,936,893 in the statement of comprehensive income.
The annual contractual commitment for the maintenance and support of the above software is £231,068 (FY-23: £207,253).
All amortisation charges are included within administrative expenses.
12. Leases
The Group’s lease arrangements consist of business premises property leases. Rental contracts are typically made for
fixed periods between three to six years and 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.
At the commencement date of a lease, a lease liability and a corresponding right-of-use (“ROU”) asset are recognised.
The lease liability is initially measured at the present value of expected future lease payments discounted at 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.
Subsequently the lease liability decreases by the lease payments made, offset by interest on the liability, and may be
remeasured to reflect any reassessment of expected payments or to reflect any lease modifications.
The right-of-use asset is initially measured at the amount of the initial lease liability, adjusted for any lease incentives received,
any lease payments made at or before the commencement date, any initial direct costs, and the costs of decommissioning the
asset and any restoration work to return the asset to the condition required under the terms of the lease.
Record plc
Annual Report 2024
124
Notes to the financial statements for the year ended 31 March 2024 continued
Subsequently the right-of-use asset is valued using the cost model. The asset is depreciated on a straight-line basis over the
shorter of the asset’s useful life and expected term of the lease, adjusted for any remeasurement of the lease liability, and is
shown net of the accumulated depreciation and any impairment provisions.
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 leases relevant to the twelve months ended 31 March 2024, and the comparative period, are as described below:
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. On 19 February 2024, the Group enacted the right to early
termination of this lease which resulted in a modification of lease term, now expiring on 2 September 2024. The modified lease
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.
Net book value of right‑of‑use assets
2024
2023
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Net book value at 1 April
1,011
871
1,421
1,232
Valuation adjustment on lease modification
(559)
(559)
(35)
(23)
Depreciation
(278)
(244)
(375)
(338)
Net book value at 31 March
174
68
1,011
871
Lease liabilities
2024
2023
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Current
106
71
285
251
Non-current
79
—
694
583
Total lease liabilities
185
71
979
834
2024
2023
Group
£’000
Company
£’000
Group
£’000
Company
£’000
At 1 April
979
834
1,326
1,138
Interest expense
33
27
55
41
Lease – principal payments
(288)
(253)
(315)
(280)
Lease – interest payments
(33)
(27)
(55)
(43)
Valuation adjustment on lease modification
(510)
(510)
(35)
(22)
Foreign exchange movements
4
—
3
—
At 31 March
185
71
979
834
Lease payments
At 31 March, the undiscounted operating lease payments on an annual basis are as follows:
Maturity of lease liability at 31 March:
2024
2023
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Within 1 year
111
72
320
280
1-2 years
39
—
320
280
2-3 years
39
—
320
280
After 3 years
—
—
85
47
Total lease liability before discounting
189
72
1,045
887
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.
Record plc
Annual Report 2024
125
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 continued
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; and
• 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:
2024
2023
Leasehold
improvements
£’000
Computer
equipment
£’000
Fixtures
and fittings
£’000
Total
£’000
Leasehold
improvements
£’000
Computer
equipment
£’000
Fixtures
and fittings
£’000
Total
£’000
Cost
At 1 April
776
1,023
231
2,030
693
1,056
293
2,042
Additions
—
27
2
29
116
148
8
272
Disposals
—
—
—
—
(33)
(181)
(70)
(284)
At 31 March
776
1,050
233
2,059
776
1,023
231
2,030
Depreciation
At 1 April
677
752
224
1,653
642
718
281
1,641
Charge for the year
29
179
5
213
68
204
13
285
Disposals
—
—
—
—
(33)
(170)
(70)
(273)
At 31 March
706
931
229
1,866
677
752
224
1,653
Net book value
At 31 March
70
119
4
193
99
271
7
377
At 1 April
99
271
7
377
51
338
12
401
The Group’s tangible non-current assets are located predominantly in the UK.
14. Investments
2024
2023
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Investment in subsidiaries at cost
—
59
—
2,069
Capitalised investment in respect of share-based payments
—
4,078
—
2,932
Investment in equity reserve of subsidiary
—
1,625
—
1,095
Investment in funds
3,412
3,544
2,530
1,965
Investment in impact bonds
—
—
770
—
Other investments
1,537
1,537
1,601
1,001
Total direct investments
4,949
10,843
4,901
9,062
Details on the fair value measurement of investments can be found in note 25.
During the period, the Record Digital Asset Ventures (“RDAV”) portfolio of investments was transferred to the parent company,
Record plc, via a dividend in specie.
At year end, this portfolio consists of investments in funds of £597k, and other investments of £1,537k invested directly in the
share capital of start-up companies in the digital asset sector through Record plc (FY-23: investments in funds of £555k, and
other investments of £600k through RDAV).
At the beginning of the year, the Group had existing commitments of $305,000 (£246,674) of which $84,950 (£68,095) was
called up in the year, leaving a balance of $220,050 (£178,579) which may or may not be called up in future (see note 29:
contingent liabilities for further information).
Record plc
Annual Report 2024
126
Notes to the financial statements for the year ended 31 March 2024 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.
2024
£’000
2023
£’000
Investment in subsidiaries (at cost)
Record Currency Management Limited
10
10
Record Group Services Limited
10
10
Record Portfolio Management Limited
—
10
Record Currency Management (US) Inc.
—
—
Record Currency Management (Switzerland) GmbH
16
16
Record Digital Asset Ventures Limited
—
2,000
Record Asset Management GmbH
23
23
Record Fund Management Limited
—
—
N P Record Trustees Limited
—
—
Total investment in subsidiaries (at cost)
59
2,069
Capitalised investment in respect of share‑based payments
Record Group Services Limited
3,495
2,530
Record Currency Management (US) Inc.
88
89
Record Currency Management (Switzerland) GmbH
495
316
Total capitalised investment in respect of share‑based payments
4,078
2,935
Total investment in subsidiaries
4,137
5,004
During the year, the Company completed the sale of Record Digital Asset Ventures (“RDAV”). The disposal transaction consisted
of a dividend in specie from RDAV to the Company and an intercompany capital write off by the Company, resulting in a net loss
on disposal of £210,000.
Particulars of subsidiary undertakings
Information about the subsidiaries held by the Group at 31 March is shown below. The companies are unlisted.
Name of entity
Nature of business
2024
Percentage
owned by the
Group
2023
Percentage
owned by the
Group
Record Currency Management Limited
Currency management services (FCA, SEC and CFTC registered)
100
100
Record Group Services Limited
Management services to other Group undertakings
100
100
Record Currency Management (US) Inc.
US advisory and service company (SEC and CFTC registered)
100
100
Record Currency Management
(Switzerland) GmbH
Swiss advisory and service company
100
100
Record Asset Management GmbH
German advisory and service company
100
100
RAM Strategies GmbH
German consultant and distribution agent
100
100
OWI-RAMS GmbH
German advisory company
51
—
Record Digital Asset Ventures Limited
UK company investing in opportunities linked to innovation and
research surrounding digital assets – sold during the period
—
100
Record Portfolio Management Limited
Dormant – closed during the period
—
100
Record Fund Management Limited
Dormant – closed during the period
—
100
N P Record Trustees Limited
Dormant trust company – closed during the period
—
100
The Group’s interest in the equity capital of subsidiaries is through the holding of ordinary share capital in all cases.
All investments in subsidiaries are directly held with the exception of RAM Strategies GmbH, which is held 100% indirectly
through the Company’s 100% holding in Record Asset Management GmbH, and OWI-RAMS GmbH, which is held 51% indirectly
through RAM Strategies GmbH.
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, RAM Strategies GmbH and OWI-RAMS
are incorporated in Germany (registered office: Bockenheimer Anlage 46, 60322 Frankfurt am Main). All other subsidiaries are
incorporated in the UK and have the registered office at Morgan House, Madeira Walk, Windsor, Berkshire SL4 1EP.
Record plc
Annual Report 2024
127
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 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.
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.
15. Interests in joint ventures
The financial and operating activities of the Group’s joint ventures are jointly controlled by the participating shareholders.
The participating shareholders have rights to the net assets of the joint ventures through their equity shareholdings.
Unless otherwise stated, the Company’s principal joint ventures all have share capital consisting solely of ordinary shares.
The country of incorporation of all joint ventures is also their principal place of operation.
Particulars of joint venture undertakings
Information about the joint ventures held by the Group at 31 March is shown below. The company is unlisted.
Name of entity
Nature of business
2024
Percentage
owned by the
Group
2023
Percentage
owned by the
Group
Dair Record Limited
UK advisory and service company
50.1
—
Dair Record Limited is a joint venture, held by Record plc incorporated in the UK (registered office: Morgan House, Madeira Walk,
Windsor, Berkshire SL4 1EP).
As at 31 March 2024, the Group holds no material joint ventures, therefore additional summarised financial information for
the above joint ventures has not been presented.
16. 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.
Record plc
Annual Report 2024
128
Notes to the financial statements for the year ended 31 March 2024 continued
A deferred tax liability is generally recognised for all taxable temporary differences. 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.
2024
£’000
2023
£’000
Opening balance deferred tax asset
134
253
Current year movement
151
(72)
Prior year adjustment
28
14
Deferred tax in equity
(145)
(61)
Closing balance deferred tax asset
168
134
The deferred tax asset consists of the tax effect of temporary differences in respect of:
2024
£’000
2023
£’000
Deferred tax allowance on unvested share options and LTIP awards
145
366
Excess of taxation allowances over depreciation on fixed assets
23
(232)
Total
168
134
At the year end there were share options and LTIP awards not exercised with an intrinsic value for tax purposes of £629,489
(FY-23: £1,937,599). 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. The Group has losses in relation to overseas entities totalling £2,436k (FY-23: £1,205k)
which are available to carry forward against future profits. No deferred tax asset has been recognised in respect of these in
the current or prior year as there is uncertainty as to when these losses will be reversed. Deferred tax has been calculated
based on the future tax rate of 25% for differences from 1 April 2024. It is subject to change if tax rates change in future years.
17. 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.
An analysis of receivables is provided below:
2024
2023
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Trade receivables
9,149
610
10,185
1,538
Accrued income
1,505
—
1,743
—
Other receivables
1,125
41
685
26
Prepayments
1,243
60
1,760
864
Total
13,022
711
14,373
2,428
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 2024. 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, adjusted to incorporate any relevant forward-looking information.
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 (FY-23: £nil).
Accrued income relates to accrued management and performance fees earned but not yet invoiced.
2024
2023
Current tax
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Corporation tax asset
—
195
—
16
Record plc
Annual Report 2024
129
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 continued
18. 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
2024
£’000
2023
£’000
Forward foreign exchange contracts held to hedge non-sterling-based assets
19
31
Forward foreign exchange contracts held for trading
44
23
Total
63
54
Derivative financial liabilities
2024
£’000
2023
£’000
Forward foreign exchange contracts held to hedge non-sterling-based assets
(9)
(5)
Total
(9)
(5)
Derivative financial instruments held to hedge non-sterling-based assets
At 31 March 2024 there were outstanding contracts with a principal value of £7,243,998 (31 March 2023: £8,647,055) 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 2024. 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
2024
£’000
2023
£’000
Net (gain)/loss on forward foreign exchange contracts at fair value through profit or loss
(252)
800
19. 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 that mature in excess of 30 days after the reporting date 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.
2024
2023
Assets managed as cash
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Money market instruments
8,264
—
4,549
—
Cash
4,954
214
6,405
213
Cash equivalents
4,267
—
3,543
—
Cash and cash equivalents
9,221
214
9,948
213
Total assets managed as cash
17,485
214
14,497
213
Record plc
Annual Report 2024
130
Notes to the financial statements for the year ended 31 March 2024 continued
2024
2023
Cash and cash equivalents
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Cash and cash equivalents – sterling
7,887
196
6,632
212
Cash and cash equivalents – USD
277
17
821
1
Cash and cash equivalents – CHF
316
—
748
—
Cash and cash equivalents – other currencies
741
1
1,747
—
Total cash and cash equivalents
9,221
214
9,948
213
Details of how the Group manages credit risk are provided in note 24.
20. 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.
2024
2023
Trade and other payables
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Trade payables
212
—
221
—
Amounts owed to Group undertakings
—
7,176
—
4,953
Other payables
43
—
—
—
Other taxes and social security
678
—
716
—
Accruals
3,997
—
5,074
2
Total
4,930
7,176
6,011
4,955
Accruals include £2,385,865 for the Group Bonus Scheme (FY-23: £3,637,640). The Directors consider that the carrying amount
of trade and other payables approximates to their fair value.
2024
2023
Current tax
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Corporation tax liability/(asset)
1,865
—
1,329
—
21. Provisions
Provisions are liabilities where there is uncertainty over the timing or amount of settlement and therefore require the use of
estimates. Provisions are recognised when there is a present obligation as a result of a past event, and it is probable that the
Group will be required to settle that obligation. The amount recognised as a provision is the best estimate of the consideration
required to settle that obligation at the reporting date.
The Group has provisions reflecting its contractual obligations connected to reaching the end of its contractual lease terms.
2024
2023
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Provisions
122
122
122
122
The provision relates to an obligation to pay for dilapidations in connection with the Group’s office lease on the second floor
of Morgan House, Windsor, further information for which is included in note 12.
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.
Record plc
Annual Report 2024
131
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 continued
22. 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.
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.
2024
2023
£’000
Number
£’000
Number
Authorised
Ordinary shares of 0.025p each
100 400,000,000
100 400,000,000
Called‑up, allotted and fully paid
Ordinary shares of 0.025p each
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.
Number
Record plc shares held by EBT as at 31 March 2022
9,632,031
Adjustment for net purchases by EBT
(897,029)
Record plc shares held by EBT as at 31 March 2023
8,735,002
Adjustment for net purchases by EBT
(2,034,535)
Record plc shares held by EBT as at 31 March 2024
6,700,467
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.
During FY-24, the EBT did not acquire any shares directly from the market (FY-23: the EBT acquired 2,000,000 shares directly
from the market at a monetary value of £1,850,533).
Further information regarding the Record plc share‑based compensation plans and relevant transactions made during the
year is included in note 23.
23. Share-based payments
During the year ended 31 March 2024 the Group has managed the following share‑based compensation plans:
a. the Record plc Bonus Scheme: share awards issued under the Record plc Bonus Scheme (“Bonus Scheme”) are classified as
share‑based payments with cash alternatives under IFRS 2;
b. the Record plc Share Scheme: share options issued under the Record plc Share Scheme (“Share Scheme”) are classified as
equity‑settled share‑based payments under IFRS 2;
c. 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;
d. 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; and
e. the Record plc Long-Term Incentive Plan: participants’ interests awarded under the Long-Term Incentive Plan (“LTIP”) are
classified as equity-settled share-based payments under IFRS 2.
All obligations arising from the five schemes have been fulfilled through purchasing shares in the market.
Record plc
Annual Report 2024
132
Notes to the financial statements for the year ended 31 March 2024 continued
a. The Record plc Bonus Scheme (“Bonus 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 amount 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 Bonus 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 Bonus pool between
25% and 35% of operating profits. Directors and senior employees receive one-third of their Bonus 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 £1,081,804
(FY‑23: £2,047,328). 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 Bonus 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 Bonus Scheme rules contain clawback provisions allowing for the repayment of Bonus 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.
b. The Record plc Share Scheme (“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 the Black-Scholes 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 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 £60,000 on the date of grant. There is no such limit on the value of grant for
Unapproved options. All Approved and Unapproved options granted in the year were granted with an exercise price per share
equal to the share price prevailing at the time of grant.
Share Scheme options granted during the period
The following table summarises the Share Scheme options that were granted during the period:
Option type
Grant
date
Option life
(years)
Earliest
vesting date
Latest
vesting date1
Number
of shares
Exercise
price
Approved
24 May 23
4
24 May 27
24 May 27
855,000
0.877093
Unapproved
24 May 23
4
24 May 24
24 May 27
1,510,000
0.877093
Approved
12 Sep 23
4
27 Mar 24
12 Sep 27
270,000
0.756836
Unapproved
12 Sep 23
4
27 Mar 24
12 Sep 27
640,000
0.756836
Approved
25 Sep 23
4
25 Sep 27
25 Sep 27
60,000
0.784656
Total Approved shares granted
1,185,000
Total Unapproved shared granted
2,150,000
Total shares granted during the period
3,335,000
1.
Under the terms of the deeds of grants, options are exercisable for twelve months following the vesting date.
Record plc
Annual Report 2024
133
Additional information
Governance
Financial statements
Strategic report
Notes to the financial statements for the year ended 31 March 2024 continued
23. Share-based payments continued
b. The Record plc Share Scheme (“Share Scheme”) continued
Share Scheme options granted during the period continued
All options granted are 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 2024, 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
Weighted
average value
Share price
84.26p
Dividend yield
6.05%
Exercise price
84.26p
Expected volatility
45.46%
Option life
4 years
Risk-free interest rate (%)
4.54%
Expected volatility is based on historical volatility.
The Group share‑based payment expense in respect of the Share Scheme was £655,090 for the year ended 31 March 2024
(FY‑23: £569,136).
Outstanding Share Scheme options
At 31 March 2024, the total number of ordinary shares of 0.025p outstanding under Record plc share compensation schemes
was 11,398,039 (FY-23: 10,560,207). These deferred share awards and options are over issued shares, a proportion of which are
hedged by shares held in an EBT.
The following table summarises the outstanding options for the Share Scheme as at 31 March 2024:
2024
2023
Number
Weighted
average
exercise price
£
Number
Weighted
average
exercise price
£
Outstanding at 1 April
10,560,207
0.58
11,605,545
0.41
Granted
3,335,000
0.84
3,810,000
0.76
Exercised
(1,915,336)
0.44
(3,607,836)
0.39
Forfeited/lapsed
(581,832)
0.48
(1,247,502)
0.47
Outstanding at 31 March
11,398,039
0.65
10,560,207
0.58
Exercisable at 31 March
2,774,707
0.51
473,750
0.31
Weighted average share price on date of exercise
0.78
0.81
Weighted average contractual life
3 years
3 years
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, as shown in the table below.
Record’s average EPS growth
Percentage of
shares subject
to the award
which vest
>RPI growth + 13%
100%
>RPI growth + 10%, =RPI growth + 7%, =RPI growth + 4%, =