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recordfg.com
Modernisation, diversifi cation
andsuccession gather pace...
Record plc Annual Report 2023
Record plcAnnual Report 2023
Our purpose
To continue to harness trends
andinnovate by collaborating
withour clients
Our vision
Diverse partnerships of fi nancial
specialists – creating unique,
opportunistic, sustainable solutions
Our mission
Independent, candid advice derived
from our 40-year legacy – as we
evolve into a global asset
management network
Our value proposition
Transparency and trust, above all.
Welisten to clients, truly understand
their needs then collaborate with
like-minded specialist partners from
awide range of asset classes to
deliver solutions
Strategic report 1 to 54
Financial highlights 1
About us 2
Chairman’s
statement
6
Chief Executive
Offi cer’sstatement 8
Business model 10
Products
and distribution
12
Products 14
Strategy 18
Key performance
indicators 22
Sustainability 26
Task Force on
Climate Related
Financial
Disclosures (“TCFD”) 33
Section 172
Companies Act 2006
– Our stakeholders 37
Operating review 40
Financial review 44
Risk management 49
Viability statement 54
Governance
Chairman’s introduction 57
Board of Directors 58
Corporate governance
report 60
Nomination Committee
report 67
Audit Committee report 70
Remuneration report 76
Directors’ report 92
Directors’
responsibilities
statement 95
Financial statements
Independent auditor’s
report 97
Financial statements 106
Notes to the fi nancial
statements 113
Additional information
Five year summary 146
Information for
shareholders 147
Defi nitions 148
Annual Report 2023
Contents
Financial highlights
Our year in numbers
Assets Under Management Equivalents
1
(“AUME”) Ordinary dividend per share
$87.7bn 4.50p
+5.5% +2 5%
2022: $83.1bn 2022: 3.60p
Earnings per share Profi t before tax
5.95p £14.6m
+31.6% +33.9%
2022: 4.52p 2022: £10.9m
Revenue Total dividend per share
£44.7m 5.18p
(including special of 0.68p)
+2 7.4% +14.6%
2022: £35.1m 2022: 4.52p (including special: 0.92p)
1. For the majority of its Currency Management and Derivative Overlay products, Record manages only the impact of foreign exchange and not the underlying assets, therefore
its “assets under management” arenotional rather than real. Conversely, for its Asset Management products, Record’s role as Investment Manager includes managing
the underlying assets in the more conventional sense of managing AUM. Consequently, when combined, to distinguish this from the AUM of conventional asset managers,
Record uses the concept of Assets Under Management Equivalents (“AUME”) and by convention this is quoted in US dollars. AUME is an alternative performance measure
and further detail on how it is defi ned is provided on page 24.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 1
About us
Record began with a spark. An idea, Currency Overlay,
which led to the signing of the world’s fi rst Currency
Overlay mandate in 1985. We’ve been harnessing trends
ever since, with curiosity, innovation and integrity.
We were one step ahead then when we began and we aren’t standing still
today – as we invite greater diversity of thought, to deliver specialist
partnerships and new solutions for our clients.
Listen
A client-focused approach
Deliver
Unique, innovative and
sustainable solutions
Understand
Using strengths and
experience developed
over40 years in business
Our approach
Our values
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 fi t. Or to dig a bit
deeper – to unearth other opportunities or create
new solutions that don’t yet exist.
Curiosity
In many ways, we can be described as empathetic
investment advisers and champions of varied
thought. Listeners fi rst, we get to know our clients
and learn what their needs are – then we create
customised solutions that fi t their specifi c needs.
Kindness
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.
People fi rst
We’ve always had a legacy of honesty and upfront
client advice during 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.
Integrity
We fi rmly believe in the power of many. Our
expanding network of like-minded specialists
globally means we can call on various strengths and
expertise. This fl exibility allows us to customise
unique solutions for our clients.
Collaboration
2 Record plc Annual Report 2023
About us
Where we operateWhere we operate
The Group’s main geographical markets, as determined by the location
of clients to whom services are provided, are the UK, North America and
Continental Europe, in particular Switzerland. The Group also has clients
elsewhere, includingAustralia.
The Group’s Head Offi ce is in Windsor, UK from where the
majority of its operations are performed and controlled.
TheGroup also has offi ces in London, New York, Zürich,
Frankfurt, Düsseldorf and Amsterdam.
In addition to these main markets, we continue to explore
new geographical markets which we believe may off er
attractive opportunities.
Global AUME and operating locations
Head Offi ce (Windsor)
Other offi ces
Client locations
Rest of the world
$3.6bn
4%
United Kingdom
$7.4bn
9%
Continental Europe
$57.9bn
66%
North
America
$18.8bn
21%
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 3
About us continued
Record Currency
Management
Record
Digital
Record Group
Services
Record Asset
Management
Registered with FCA in UK,
and SEC, CFTC in US. Provides
currency management and
derivative services and
solutions to clients and acts
as UK fund distributor.
Provides shared services
and support across Group
companies.
Invests in early stage
Financial Technology
companies including Digital
Assets.
German MiFID company
– registered with BaFiN,
provides investment
management services and,
through its subsidiary, acts
as distributor for funds
alongside selected partners
in the EU.
Record PLC
Group structure – Record Financial Group
The Group’s main trading subsidiaries are shown below with a brief
explanation of the products and services off ered by each
For details of full subsidiary
undertakings please see pages 124 to 125
4 Record plc Annual Report 2023
Our investment case
Geographical reach
Regulated asset management business and growing
team established in the EU improves geographical
reach and provides passporting opportunities for our
partners
Offi ces in UK, USA, Switzerland, Germany and
Netherlands
See page 3 for more information on the locations of our
client base
Balance Sheet and cash generation
Robust and liquid Balance Sheet provides solid
platform for continued value creation alongside cash
generative business model and no external debt
As at 31 March 2023:
Net assets:
£28.3m
Assets managed as cash (no external debt):
£14.5m
See fi nancial statements from page 106 for further
information
Partnerships
Partnerships with established and expert partners in
alternative asset classes provide additional skillsets
and strong pipeline of innovative products off ering
unique investment opportunities
See page 12 for further information on our partnerships
Client relationships and AUME
Trusted and longstanding institutional client
relationships built over 40 years in managing currency
and derivatives provides a solid foundation and strong
asset base upon which to grow
Three year annual compound growth:
AUME:
+14.4% p.a.
See page 42 for further AUME information
Dividend policy
Strong history of paying dividends with policy targeting
ordinary dividend pay-out ratio between 70% - 90% of
annual earnings, plus special dividends.
Three year annual compound growth:
Ordinary dividends:
+25.1% p.a.
Earnings per share:
+22.2% p.a.
Growth
Strategy focused on accelerated growth through
investment in diversifi cation and modernisation now
delivering increases in revenue and profi ts
Three year annual compound growth:
Revenue:
+20.4% p.a.
Profi t before tax:
+23.6% p.a.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 5
Earnings per share
5.95p
+32%
FY-22: 4.52p
Total dividends per share
5.18p
+15%
FY-22: 4.52p
Chairman’s statement
This past year
ending31March 2023
(“FY-23”) has been
another year of change
and growth at Record.
The business which I
founded 40 years ago
is beginning to look
fundamentally diff erent
from its founding
conception.
Neil Record
Chairman
Formost of the past four decades, that conception – of
ourspecialising solely in the management of currencies
andcurrency risk – held sway.
In the last three years, the fi rm has chosen, and is now
executing, an enhanced business strategy rooted in our
core strengths and values. We are using technology to
strengthen and modernise our systems across the whole
business, providing effi ciency of delivery and an enhanced
user experience for clients of our core traditional currency
management services, whilst enabling new opportunities
for off ering a more scalable and diversifi ed suite of asset
management products and services to both existing and
potential clients.
In FY-23, we received regulatory approval from the German
fi nancial regulator, BaFin, for our subsidiary Record Asset
Management GmbH (“RAM”) as an asset manager, and
are now starting to manage funds. We are developing an
infrastructure fund business which will be managed by
RAM, and which we hope will grow to provide a material
diversifi cation strand. We are engaged in agreeing
partnerships with a range of high-quality asset and fund
managers, for whom we will off er distribution services in
Europe and the UK.
Despite our historic experience of low growth in the currency
management sector, FY-23 has, somewhat surprisingly,
proved to be showing interesting signs of a new type of
growth. We have for many years now been providing passive
currency hedging services to institutional investors, mainly
pension funds. While these mandates can sometimes
be large (>$10 billion), we have experienced steady fee
compression over the past decade, only now levelling out
at very low levels. But a diff erent client type – international
asset managers – have begun to recognise that large-scale
passive currency hedging is a specialist activity, where scale
and technology infrastructure means that outsourcing to a
fi rm like Record is a cost-eff ective choice.
While we had previously seen a small cadre of our existing
asset manager clients continually increase their mandate size
as they added funds and expanded their businesses, we are
now seeing incoming enquiries from new, large international
managers. Asset manager Passive Hedging mandates are
often technically challenging, but also off er much better
fee rates than institutional clients’ mandates. We have not
seen signifi cant fee compression in this sector, and so these
mandates off er an attractive risk-adjusted return, and a new
source of potential growth. Some of these asset managers
operate in the private debt sector; this sector is experiencing
strong growth in the wake of the 2008/09 global fi nancial
crisis, supplanting banks as a signifi cant source of loan
capital. Passive Hedging mandates for this sub-sector
therefore represent a substitution for one aspect of the old
bank treasury function; and one we are well-positioned to
take advantage of.
6 Record plc Annual Report 2023
Chairman’s statement
Financial overview
For the second successive year, the Group has delivered
an exceptional set of results, reflected by material
growth in both revenue and earnings. As stated above,
the opportunities for further growth are significant and
diversified across both new and traditional products and
services, supported by a strong leadership team and a
robustsuccession plan.
I am confident that our strategy of modernisation and
diversification is the right direction for the Group, firmly
supported by the Group’s highly cash-generative business
modelaccompanied by its robust and liquid balance sheet,
with total equity of £28.3 million.
Further information on financial results can be found in
theFinancial review section on page 44.
Capital and dividend
The change in the firm’s strategy, decided and executed
in FY-21, is continuing to flow through to the financial
performance of the business.
Our capital policy aims to ensure retention of capital
assessed as required for regulatory purposes, for working
capital purposes and for investing in new opportunities for
the business. Our dividend policy targets a level of ordinary
dividend within the range of 70% to 90% of annual earnings,
and which allows for progressive and sustainable dividend
growth in line with the trend in profitability. It is also the
Board’s intention, subject to financial performance and
market conditions at the time, to return excess earnings over
ordinary dividends for the financial year and adjusted for
changes in capital requirements, to shareholders, normally
inthe form of special dividends.
The Board is recommending a final ordinary dividend of
2.45pence per share (FY-22: 1.80pence) with the full-year
ordinary dividend at 4.50 pence per share (FY-22: 3.60pence),
representing a 25% increase in the ordinary dividend and
an ordinary payout ratio of 76% of earnings. The interim
dividend of 2.05pence was paid on 30December2022, and
the final ordinary dividend of 2.45pence will be paid on
9August2023 to shareholders on the register at 14July2023,
subject to shareholder approval.
Having carefully reviewed the current level of Group
capital against its ongoing requirements for regulatory and
investment purposes and to support its continued growth,
the Board is announcing a special dividend of 0.68pence
per share to be paid simultaneously with the final ordinary
dividend. Total proposed dividends per share for the year
are 5.18pence per share (FY-22: 4.52pence) compared to
earnings per share of 5.95pence (FY-22: 4.52pence).
The Board
On 1 March 2023 I announced that I would be retiring from
the Chairmanship and the Board after 40 years at the helm.
We announced at the same time the appointment of David
Morrison as independent Non-executive Director, and
Chair-elect.
David is very well known to Record. In 1985, his then
employer, Abingworth, at the time a venture Investment
Trust, acquired 24.5% of Record from a start-up angel
investor. Abingworth also became a client at the same time.
David sat on the firm’s Board until 1992, when Abingworth
sold its stake. Then again, in 2009, David re-joined the newly
IPO’d firm as an independent Non-executive Director (“NED”),
sitting until 2018, when he reached his term limit. In his third
term as a NED, and, from July 2023, Record‘s Chairman, he will
preside over a much-changed firm, with multiple developing
strands and a new background of growth. I am confident his
deep understanding of Record, and his own long experience
in asset management, will serve our shareholders well.
I am leaving Record's Board with mixed emotions. Record has
been my life for 40 years. I founded the firm when I had just
turned 30, and I will leave it when I will have just turned 70.
It has been the most rewarding career imaginable, meeting
fascinating individuals from all walks of life, building teams
of colleagues over multiple years, and most importantly
building a business which I believe is capable of becoming
multigenerational. I have the highest confidence in the
current management under our CEO Leslie Hill and her senior
team, and I plan to remain a significant shareholder for many
years to come.
Outlook
In contrast with the optimistic tone with which I feel I can talk
about Record, I see many serious and deep challenges ahead
for the global economy in general, and for the developed
West in particular.
Across the board, Western governments have arguably over-
extended themselves both in the scope and scale of public
expenditure, and in their method of financing this expenditure
– namely through debt. Much of this debt is, in practice,
monetary financing via “Quantitative Easing”. Central banks,
and their sponsoring governments, may find this financing
becoming increasingly onerous as short rates rise. The same
issue has already hit some regional banks in the US, and may
hit more. This monetary dislocation is running concurrently
with very low or zero productivity growth in much of the
global economy. It remains to be seen whether Western
democracies can find policies to re-establish low-inflation
growth.
Record is not immune from these challenges, but structurally
we are positioned to be nimble and adaptable to client
demand as it develops and changes. While cost pressures
(particularly labour costs) will undoubtedly impact the
business, the current pace of growth and change should
allow the revenue to grow sufficiently to more than
compensate for the cost-base growth.
I leave the business in good health; vibrant, enthusiastic and
looking for new opportunities. I couldn’t have wished for
more.
Neil Record
Chairman
29 June 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 7
Revenue
£44.7m
+2 7 %
FY-22: £35.1m
Profi t before tax
£14.6m
+34%
FY-22: £10.9m
Chief Executive Offi cer’s statement
I have now been CEO
for three years and
am happy to report
encouraging progress
in each of the three
pillars of the revitalising
strategy I set out for the
business when I took on
the role.
Leslie Hill
Chief Executive Offi cer
Most of you will I hope remember the three-year target I
set out last year which aims for revenue of £60million by
this time in 2025, while improving margins and increasing
profi ts. We are on target to achieve this, with revenues of
£44.7million and pre-tax profi ts of 14.6million reported for
the fi nancial year (FY-23). Let me explain in more detail what
we have been doing and what plans we have for this coming
year (FY-24).
Our three pillars are diversifi cation, modernisation and
succession planning.
Diversifi cation
There are some key strands to this – diversifying our product
off ering, our client base and our activities. To achieve this we
have now created a number of subsidiaries whose leaders
report to me as CEO of the parent company, Record plc, but
who have their own budgets and aspirations for the future.
More details are set out below in our Succession section, but
the subsidiaries are Record Currency Management Limited,
Record Asset Management GmbH (“RAM”), Record Currency
Management (US) Inc., Record Group Services Limited and
Record Digital Asset Ventures Ltd (“Record Digital”). This
structure is not there simply to complicate things, but to give
regulatory support and oversight and create effi ciency, while
allowing for agency and autonomy for each of the subsidiary
CEOs.
Modernisation
After a few years of using a “renovating the house while we
are living in it” analogy it now feels the right time to retire
that rather tired phrase, as the house is now open for new
guests and looking very much more attractive and modern
than it did previously. We see IT under the leadership of
our CTO as central to our shared services concept and
indeed to our whole business, and will continue to develop
and invest in this area. It has been a complex journey but I
am happy, indeed amazed, to say we managed to stay on
budget and on target for deliverables, which is a real tribute
to the whole team. This is a signifi cant achievement which
has been marked by the recent launch of our new Record
platform (“R-Platform”) which went live post year-end and
the rollout of our new Reporting suite, as well as signifi cant
enhancements to the scope of our trading activities. With
this we can unlock scale, effi ciency and ensure happy clients
going forward. I am thrilled with it.
8 Record plc Annual Report 2023
Chief Executive Offi cer’s statement
Succession
New subsidiary CEOs – as my focus shifts to working closely
with our new Chairman in further building and leading the
Record Financial Group from the top, our new subsidiary
CEOs, Dr Jan Witte and Rebecca Venis, are already heading up
Record Currency Management and Record Digital respectively
and our investors will see more of them this year. I’m also
excited by the future plans we have for new leadership of
our Emerging Market Sustainable Finance family, upon which
we hope to give further information in FY-24. These changes
are a testament, not only to the talents of these individuals,
but also to my commitment with the Board to promoting,
training and off ering opportunities for leadership and share
ownership to more and more of our colleagues as we build
this 40-year-old stable and experienced currency manager
into a real multi-asset manager for the 21st century.
Financial performance
We continue our focus on growing the business through
diversifi cation and modernisation, and it’s testament to the
hard work of the management team and all of our colleagues
that we are reporting impressive growth again this year in
both revenue and profi t, of 27% and 34% respectively.
The balance between maintaining good cost control and
ensuring that the business has the appropriate level of
resource to support its growth trajectory has proved
even more challenging through this year due to the high
infl ationary environment and cost pressure seen across
thewhole of our business. Inevitably we have seen a
consequent rise in our cost base for FY-23, which will be
carried forward into the current fi nancial year (FY-24),
wherewe can expect to see the full-year impact. Whilst
this may have inhibited growth in our operating margin
somewhat this year, we remain confi dent that the current
strong pipeline of opportunities in both our currency and
higher revenue-margin and more scalable asset management
products into FY-24 will serve to counter this impact over the
next couple of years.
Outlook
The next phase of our development of Record is to reap some
of the rewards of our modernisation and diversifi cation.
The soil has been fertilised over the last few years, and
the new plants well heeled in. For quite some time they
have been putting down roots and like any young tree
more has been going on under the surface than on the top.
As was clear at our Capital Markets day recently, the next
phase should see some new revenue from our diversifying
strands at RAM and Record Digital as well as continued
work to scale our currency business. This continues our
theme of diversifi cation and modernisation, while our recent
promotions carries on our theme of succession planning for
the long-term future. We will continue to keep a close watch
on costs but drive forward with our three-year plan.
Leslie Hill
Chief Executive Offi cer
29 June 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 9
Business model
Our purpose Our resources Our strategy
Record was born of an
idea that no one else
in our industry had:
Currency Overlay,
which led to the
signing of the world’s
fi rst Currency Overlay
mandate in 1985.
Fourdecades later, we
purposefully continue
to harness trends,
ignite ideas and spark
innovation, with
intellectual, inquisitive
and diverse thinking.
And we apply this
never-standing-still
approach to all our
specialist
partnerships and
solutions.
This way, we stay
one step ahead for
our clients.
Our strategy is focused
on accelerated growth
supported by the
following three pillars:
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.
Technology and
innovation
We continually invest in the
modernisation of our systems and
technology to help us innovate and to
ensure we achieve scalable, robust and
effi cient delivery of our products and
services for our clients.
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.
Modernisation
Investing in new technology is
essential for ensuring our
business remains competitive
and innovative. It gives greater
fl exibility to adapt to changes in
markets and investor appetite,
whilst providing more effi cient
working practices and scalable
solutions.
Diversifi cation
Our expertise in collaboration
with like-minded partners
combines to provide innovative
solutions that fulfi l specifi c
investor objectives. Successful
diversifi cation spans every
aspect of our business: people,
products, client types and
geographies, specialist skill sets
and alternative markets.
Succession
As our business moves into a
new era, it remains vital for our
future success that key
individuals are retained and
encouraged to become
long-term employees and
equityholders in Record.
See more on
pages 18 to 21
10 Record plc Annual Report 2023
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 refl ects 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 fi nancial performance and progressive and
sustainable capital distributions.
Business model
See more on
pages 37 to 39
Our fi nancial model Benefi ts to our
stakeholders
The business is highly
cash-generative with a robust
balance sheet and strong capital
position. A rigorous and disciplined
approach to capital management
allows the business to reinvest for
growth and to drive shareholder
valueand returns. The Group holds
noexternal debt.
Our highly cash-generative business model
allows us to remain independent,
self-fi nancing 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.
Cash generation
Net cash infl ow (before tax) from operating activities:
£14.7
+16%
FY-22: £12.7m
Returns to shareholders – total dividends per share:
5.18p
+15%
FY-22: 4.52p
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 11
Products and distribution
We aim to forge long-term partnerships with
clients, acting as their trusted adviser to fully
understand their investment objectives in
order to develop effective solutions.
Strategic approach
Record’s strategic sales objective is to drive accelerated
revenue growth diversified by product, geography and client
type. It aims to achieve this objective with a sharp focus on
the following four areas:
• a broad range of flagship products (which are
“best-in-class” amongst their respective competitors);
• strategic partnerships with our clients, offering the
highest levels of client service, and close strong
relationships with other service providers including
third-party fund managers;
• flexible infrastructure to deliver solutions to clients in
themost efficient manner possible; and
• a regional focus by product.
Flagship products
Record has been a specialist currency manager for 40
years and continues to put tailored currency solutions at
the core of our offering. These are now complemented by
best-in-class asset management offerings, with the range
of yield products expected to grow over time.
The Record EM Sustainable Finance Fund (“EMSF”), which we
successfully launched in June 2021 in collaboration with UBS
Wealth Management, continues to substantially outperform
its peers. Our ability to actively manage the portfolio in
a variety of ways has allowed for outperformance both
through the EM sell-off following the invasion of Ukraine
and during the “risk-on” environment of the recovery in asset
prices in early 2023. The EMSF’s robust portfolio construction
makes it an attractive alternative to conventional EM Debt for
investors across the spectrum.
Dynamic Hedging has been at the heart of Record since
inception and it continues to go from strength to strength,
adding two new North American clients over the year. While
the management of the product has evolved over half a
decade from a pure systematic strategy to a one-stop FX risk
advisory service with systematic asymmetry at its core, its
appeal remains enduring as currency volatility has returned
to markets.
An increased focus on currency risk from investors in
private market assets has been a key part of the drivers
behind the surge in interest in currency risk management
from alternative asset managers. Record’s highly tailored
and differentiated offering in the space combines best-
in-class infrastructure, relationships and operational risk
management with an unparalleled depth of expertise in the
design and ongoing management of hedging programmes
where there is limited liquidity.
A new addition to the line-up in asset management,
GPStakes, recently launched in April 2023, is unquestionably
a market-leading strategy that is generating significant
interest from existing clients as well as prospects,
particularly in the family office arena. Atits core is a strategy
that allows investors to participate in the decade-long trend
of growth in private markets by participating in the high
profit margins generated by alternative asset managers
through management fees, carried interest and enterprise
growth. This is complemented by innovative product design
which mitigates the J-curve and allows for high levels of
vintage diversification, while structuring for liquidity and
rapid deployment of capital, sticking points in traditional
closed-end drawdown vehicles.
Partnership
We have made good progress in developing solutions
in partnership with our clients and selected third-party
managers in order to deliver highly tailored outcomes that
solve a specific investment objective. As before, our role can
encompass any number of initiator and structurer, distributor,
portfolio manager, and currency hedger. These opportunities
arise from the trusted partner status our clients bestow
upon us in recognition of the exceptional client service they
receive and our sales and investment teams’ flexibility and
attention to detail.
The upcoming launch, anticipated in the second quarter of
FY-24, of a Protected Equities product for a multi-family
office client provides a good example of this approach.
The strategy combines a multi-factor active global equity
approach with a tail risk hedging solution to protect against
significant drawdowns. The product was launched under
Record’s newly established Luxembourg Fund Umbrella. The
investment thesis is brought jointly by the client and Record
and relies on Record’s portfolio management expertise for
delivery. This will be complemented by joint distribution with
the family office. Expert sub-investment advice is additionally
provided by two carefully selected third-party managers,
both from the US, who will deliver to a tightly specified
mandate in order to meet the client’s goals.
12 Record plc Annual Report 2023
Products and distribution
Another example of this partnership approach has been in
digital lending where, in partnership with Fasanara Capital,
the leading specialist in the field, we have been able to win
three mandates, each with their own unique investment
objectives. These have been delivered in either commingled
funds or funds-of-one where Record has played the role of
distributor as well as adviser for the clients. In one case, this
mandate has been delivered in collaboration with a leading
UK Investment Consultant.
A contrasting example of partnership is a regional
partnership with Khalij Group, a Middle East-focused, UK
Sharia finance specialist. In collaboration, we are working
together to deliver our flagship products in Sharia compliant
forms, unlocking an underserved investor base as far as
alternative assets are concerned.
Delivery infrastructure
In line with the corporate focus on modernisation, a key part
of the sales strategy has been ensuring that Record has
cutting-edge infrastructure with which to deliver mandates.
Some of this critical work goes on behind the scenes to
ensure best-in-class operational risk management and
reporting to our clients, but certain projects are more visible.
Key amongst these is the addition this year of our own
Luxembourg SICAV-RAIF Fund Umbrella, overseen by top
tier service providers. This allows us the flexibility to deliver
investment solutions in the most effective way for clients,
whether that is as a commingled fund or a fund-of-one, an
SPV or a note. It also empowers us to bring together the best
of our in-house management capabilities with the expertise
of selected third parties to deliver products in a seamless
client experience. Finally, our clients benefit from world-
class service providers and cost-efficient implementation
due to keenly negotiated rates and effective workstreams.
Another step forward has been the addition of an outbound
sales team, casting the net more widely given the broader
appeal of Record’s new flagship products and aiming to build
the brand better amongst the smaller end of the institutional
investor community including private banks, wealth
managers and family offices.
Regional product focus
Recognising the breadth of Record’s offering across both
currency and asset management and beyond, means
that focus and discipline, as well as flexibility, is critical
for our sales team in order to bring success. Additionally,
understanding the different investment challenges facing our
clients in different regions is key to a tailored sales strategy
that focuses on products most likely to appeal in that market.
In North America, the focus over the coming year is on
active currency products, Dynamic Hedging and Currency
for Return. The former has seen inflows over the past year
of $4.2 billion and is appealing in the current uncertain
investment climate. On the other hand, the uncertainty as
well as secular trends such as deglobalisation have driven
increased currency volatility and therefore opportunity to
add uncorrelated return. This is driving interest in the asset
class higher than we have seen for almost a decade, both
amongst those currently allocated and those interested to
explore the space for the first time.
In the UK and Europe, hedging for asset managers is one
key topic that the team will be focused on. With the number
of local currencies as well as the higher currency literacy
amongst investors, European asset managers are often
interested in understanding how a specialist service can
allow them to add value, decrease risk and free them to focus
their time better. The other area of focus in Europe is the
asset management products including GP Stakes and Digital
Lending. The former is relatively new in Europe and attracting
widespread attention while the latter is more established,
breaking out of the niche and into the mainstream.
Finally, EMSF will be a key sales target in all jurisdictions,
building on the formidable track record and investors’
growing confidence in Emerging Markets further into 2023.
The approach will vary significantly by region in accordance
with cultural norms and investor preferences as we look to
establish the reputation of the product as a market leader.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 13
Record provides bespoke solutions and delivers
best-in-class services in order to meet our clients’
needs. Many of these solutions revolve around a
number of core products and services, delivered
both in-house and with select partners in order to
deliver the best results for our clients.
Products
Currency Management
With currency management experience going back four
decades to the founding of the firm, currency management
products and solutions still comprise the largest portion of
Group AUME and a key part of our offering going forward.
Passive Hedging
Passive Hedging mandates have the cost-effective reduction
of currency risk as their sole objective. This is achieved
through symmetrical and unbiased elimination of currency
exposure from clients’ international portfolios. The core
Passive Hedging product delivers execution and operational
expertise to a greater extent than investment judgement.
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
The Enhanced Passive Hedging product builds on the core
product and recognises the opportunities presented for
adding value by taking advantage of structural inefficiencies
and behavioural changes arising in FX markets. It requires
continuous monitoring, investment judgement and
specialised infrastructure to identify the opportunities and
then to take advantage of them with a structured and risk-
managed approach.
Hedging for Asset Managers
A robust and growing area of business at Record, our Hedging
for Asset Managers product is an extension of our core
Passive Hedging with specific focus on programme design
for liquidity management and performance reporting.
The former delivers value to clients, typically investment
funds, which have limited liquidity on account of the
underlying private investments, enabling them to deliver
risk management solutions to their endinvestors without
compromising on returns.
Dynamic Hedging
Record’s Dynamic Hedging product is an alternative to
Passive Hedging and has cash flow minimisation as well as
generating value as dual objectives in addition to volatility
reduction. TheDynamic Hedging product seeks to allow
our clients to benefit from foreign currency strength while
protecting them from foreign currency weakness relative to
their own base currency. Value is generated entirely through
the asymmetric reduction of pre-existing currency risk.
Currency for Return
The Currency for Return suite includes strategies such as
Carry, Emerging Markets (both Long/Short and Long-only),
Momentum, Value, Developed Market Classification,
and Short Volatility, either on a standalone basis or in
combination with one another as Currency Multi-Strategy to
meet clients’ objectives. Clientsreceive a diversified return
stream which performs well under a variety of market
conditions and reduces the correlation of their currency
programme to other asset classes.
Record EM Sustainable Finance Fund (“EMSF”)
The EMSF product can serve as an EM debt replacement
or anenhanced fixed income product for investors looking
for yield, reimagining the exposure to credit, duration and
currency risk normally seen within the asset class. EMSF
invests in emerging and frontier market currencies, and
multi-lateral development bank bonds, engaging with the
intermediary counterparties on ESG.
The EMSF product 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.
14 Record plc Annual Report 2023
The Group’s current suite of core products
andservices includes: Currency Management,
Asset Management and Other related Products
andServices.
Products
Asset Management
Record’s expansion into broader asset management space
over the past couple of years represents the latest evolution
in our client focus, offering solutions and products to help
our clients address the investment challenges they face
outside the pure FX arena. Here, Record’s approach follows
two pathways, one purely focused on distribution, the other
incorporating investment management as well.
Asset management did not generate any material revenue
reportable for FY-23. Material new revenue streams derived
from Record’s diversification into asset management
products and services will be reported separately from the
current financial year (FY-24) onwards. The products and
services available going forward have been disclosed below.
Investment Management
General Partner (“GP”) Stakes
The GP Stakes product invests in 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 out
performance 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.
Distribution
Digital Lending
The Digital Lending product exploits the disintermediation
of the banking sector by 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 100 specialist fintech platforms.
The portfolio is exceedingly granular with hundreds of
thousands of line items. Credit due diligence is performed by
AI technology overseen by an experienced investment team.
Trade/Receivables Finance
The Receivables Finance product funds the Asian supply
chains of blue chip Western corporations, offering investors
attractive yields for low credit risk. The invoices are
purchased from the manufacturers once goods are delivered
and payment comes directly from the investment grade
obligor. The short duration of invoices allows investors
liquidity on an up to weekly basis.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 15
Other Products and Services includes more bespoke
mandates tailored to individual client requirements,
plus specialist derivative overlays and other
ancillary services.
Products continued
Other Products and Services
Multi-product
Multi-product mandates are bespoke and combine two
or more elements which cannot readily be separated for
reportingpurposes. Typically, these have been Currency
Management mandates with both risk-reducing and
return-seeking objectives.
Derivative overlays
Record’s derivative overlays typically take one of two forms:
return-seeking or risk management and replication. Both build
on Record’s long-standing expertise in the derivative space
and well-established trading infrastructure. Return-seeking
derivative overlays are truly discretionary and have focused
onextracting value from alternative risk premia and mispricings
in the interest rates and infl ation markets in order to generate
uncorrelated returns. Risk management and replication
derivative overlays are typically tailored to each client,
addressing a specifi c challenge that the client faces, and
mosttypically use equity, credit and interest rates derivatives.
Cash and other
Record also provides services including cash and liquidity
management, and collateral management either on a
standalone basis or in support of other mandates.
Information on product investment performance is given in
theOperating review section (pages 40 to 43).
16 Record plc Annual Report 2023
The Group has set up Record Digital to
identify future opportunities for growth and
diversifi cation in the digital asset sector.
Products continued
Record Digital Asset Ventures (“Record Digital”)
Record is focused on growing a diversifi ed and sustainable
business for the long term. The world of digital assets and the
new and enabling technologies will continue to have a major
impact on all fi nancial service sectors, potentially transforming
existing sectors and creating new ones in the future. The
sector is still young but continues to grow, and we believe that
the speed of change and the rate of technological innovation
cannot and should not be ignored by any business serious in its
aim in future to provide modern and innovative products in the
fi nancial services sector.
Record Digital was set up as a separate group entity within the
Record Financial Group to track, learn and identify opportunities
for future diversifi cation and growth in this sector to help
to ensure the sustainability of the business going forward.
The strategy in this respect was to set aside capital to invest
(initially £2 million), used to establish a network of talent,
subject-matter-experts and partners to work with. In doing
so, we are able to co-invest alongside our partners and to take
advantage of their size, scale and due-diligence operations.
Whilst the project is still early-stage, at the end of FY-23
approximately 75% of the capital has been committed into
a mix of small direct investments, and investment funds
investing in start-up and early stage technology and digital
asset companies. More importantly at this stage, the strategy
has allowed us to build a growing network of expert partners
with a deep understanding of the sector. This off ers great
potential for us to work in partnership and take advantage of
existing synergies, leveraging their knowledge, expertise and
connections alongside our own knowledge, regulatory and
operational expertise in the development of future products
and services.
Our focus continues on building our knowledge and
understanding in this sector, and in developing our partnerships;
one example of which is provided below:
Block Scholes aims to be the ‘Bloomberg of Digital Assets’,
delivering institutional-grade analytics, data and a research
platform to clients including regulated digital asset banks.
Apr 21
Introduced
Jan 22
Record Digital invests in Block Scholes
Nov 22
Record becomes a client of data and research
Dec 22
FCA approved Tied Agency with Record
Jan 23
Record Digital supporting with latest investment round
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 17
Our strategy is focused on accelerated growth
achieved through our three strategic priorities:
Modernisation, Diversifi cation and Succession.
Our strategy recognises the strengths and expertise of
our business built over 40 years, and combines this with
the adoption of modern technology and diff erentiated skill
sets through collaboration with like-minded, specialist
partners. This approach allows us to off er our clients unique,
opportunistic and sustainable solutions to meet their
diff erentiated investment objectives – solutions which are
highly valued and well rewarded.
We use our long-standing and trusted adviser relationships
with current clients as an opportunity to collaborate
and develop new ideas alongside willing participants.
Collaboration with our partners gives further opportunity
to expand our client base and relationships. The ability for
us to connect to modern, third-party systems as opposed to
using in-house systems development has both strengthened
and diversifi ed our business, leading to more robust and
effi cient processes. Technology continues to evolve at pace
and our investment in technology and modernisation will
continue to evolve alongside, ensuring our aim of remaining
ahigh-quality, innovative, client and technology-led business
continues to adapt accordingly.
Strategy
Modernisation Diversifi cation Succession
The continued modernisation of
our business is key to our future
security and commercial success.
Investing in new technology
is essential for ensuring our
business remains competitive in
the fundamental areas of product
innovation, client servicing and
productivity. It allows us greater
fl exibility to adapt in response to
changes in markets and investor
appetite, whilst providing more
effi cient working practices and
scalable solutions.
Diversifi cation of our business is
critical to our growth strategy as
we move from a niche currency
and derivatives manager
to becoming an alternative
asset manager. Our expertise
in currency and derivatives,
married with that of our
specialist partners, allows for
the development of innovative
and structured solutions that
fulfi l specifi c investor and
market requirements, including
impactful and sustainable
investment products. The
key to achieving successful
diversifi cation includes achieving
diversity across all aspects of our
business, including our people,
products, client types and
geographies, specialist skill sets
and alternative markets.
We are fundamentally a
people business with a focus
on nurturing and developing
existing members of our team,
whilst attracting future talent
to bring new and diverse skills
and ideas to the business. As
our business moves into a new
era, more opportunities arise
for developing the future talent
and senior management of the
Group and it is vital for our future
success that these individuals
are retained and encouraged to
take more responsibility, add
value and become long-term
employees and equity holders
inRecord.
18 Record plc Annual Report 2023
Modernisation
We invest in technology
to enhance client
experience, support
scalable, secure and
effi cient solutions,
and to diff erentiate
our business.
Client experience
Record platform (“R-platform”)
R-platform is a client and business-facing portal, initially
focused on the automation of FX trade order execution,
and ultimately aimed at the provision of an automated
passive hedging service and an enhanced client reporting
experience.
Investment in technology and solutions to enhance
scalability andsecurity
Innovation and investment in technology is fundamental
to the continued growth and success of the business.
Technology is an enabler of new ideas, provides scalability
of products and services, and security of data and systems.
Record acknowledges the transformative power of
technology as a driver of business growth, and embraces
technological change. Recent examples of technology
solutions used to enhance the business are given below.
Microsoft Azure
• Scalable & secure data storage
• Cloud computing platform,
enabling scalable build,
deployment and management of
services and applications
• Access to latest services and
technologies
Microsoft Power BI
• Connect and transform
data sources with custom
visualisations
• Enable self-service, and Client’s
access to own data, enhanced
service off ering
• Scalable, cost eff ective solutions
Xceptor
• Data transformation and
automation platform
• Integration with application and
services to create end-to-end
automated workfl ows
• Enable scale and drive ROI
Strategy
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 19
Diversifi cation
Product diversifi cation
is one of the three
strategic priorities
for the Group.
Key to the Group’s aim of growing its asset management
products and services is the building of partnerships
with product experts and other specialist providers in the
fi nancial services sector, to collaborate on new products
and services to suit current and future clients’ needs.
The development of the GP Stakes and Protected Equities
products are two recent examples of where Record’s
collaboration with third-party specialist providers has
resulted in new products, and the business is focused
on growing these funds and building new products for
launch in the current fi nancial year (FY-24).
Our Partners
Siegfried
CapitalPartners
• AUM: USD 2.4 billion
• Specialisation:
tradefi nance strategies
Fasanara
Capital
• AUM: USD 3.7 billion
• Specialisation: multi-
asset niche products
including alternative
credit digital lending
and digital assets
AGL Credit
ManagementL.P
• AUM: USD 12 billion
• Specialisation: bank
loan-based investment
o ff e r i n g s
CAZ
Investments
• AUM: USD 4 billion
• Specialisation:
private equity and
private credit
Avantis
Investors
• AUM: USD 13 billion
• Specialisation:
systematic equity
investing
Universa
Investments L.P
• AUM: USD 18 billion
• Specialisation:
options strategies
andrisk mitigation
Strategy continued
20 Record plc Annual Report 2023
Succession
Succession planning
and continuity remain
a key focus for the Group.
Succession planning a key strategic priority for the
business. Record has built strong, long-term and trusted
relationships with clients over its forty-year history,
with a reputation for professionalism, innovation and for
caring about its clients and employees. This culture has
been at the core of our success and longevity, which is
why the correct succession plan is fundamental to the
future and to our next forty years in business.
David Morrison
Chair-elect – Record plc
Forty years after founding the business in 1983,
current Chair, Neil Record, announced his retirement in
March2023, and will step down from the Board at the
AGM in July. Neil’s successor, and current Chair-elect
and Non-executive Director, is David Morrison. David
has previously served on the Record Board, including
as Senior Independent Director, and therefore brings
extensive knowledge of the business alongside his
expertise in leadership and in delivering strategic growth
throughout his career both in venture capital and at Board
level in several private and public companies.
Jan Witte
Group Global Head of Sales and subsidiary CEO
ofRecordCurrency Management Limited
Jan joined Record in 2012, and quickly moved through
the ranks to become Head of Quantitative Research and
Head of Sales for Europe, followed by promotion in 2021
to become Group Global Head of Sales. With his extensive
knowledge and expertise built over 11 years at Record,
Jan was promoted to the role of CEO of Record Currency
Management Limited, with eff ect from 1 May 2023.
Jantakes this responsibility from Leslie Hill, allowing
Leslie’s full focus to be concentrated on delivering the
Group strategy at Record plc Board level.
Rebecca Venis
Group CTO and subsidiary CEO of Record Digital
Becky joined Record in 2016, and as CTO is responsible for
the running and modernisation of Record’s technology
systems and controls. Becky has a natural curiosity and
enthusiasm with respect to the opportunities off ered
through growth in the digital assets sector and the
associated technological innovation. Consequently, Becky
was the perfect choice to take responsibility for running
Record Digital as appointedCEO.
Strategy continued
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 21
Measuring our performance
against our strategy.
Key performance indicators
Financial KPIs
Revenue
(£m)
Operating profi t margin
(%)
Basic earnings per share
(“EPS”) (pence per share)
Dividends per share (“DPS”) (pence per share)
For the fi nancial years up to and
including FY-23, revenue has been
earned predominantly from the
provision of currency management
services in the form of management
fees and performance fees. From FY-24
onwards, revenue will include the new
revenue streams arising as part of the
diversifi cation into asset management
products and services.
Operating profi t margin is an
alternative performance measure,
calculated by dividing operating profi t
by revenue.
The Group aims to create shareholder
value over the long term, delivered
through progressive and sustainable
growth in EPS.
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 profi tability.
Ordinary Special
2022 35.1
2023 44.7
2021 25.4
2020 25.6
2019 25.0
2022 31
2023 32
2021
24
2020 30
2019 32
2022 4.52
2023 5.95
2021 2.75
2020 3.26
2019 3.27
2022 3.60
2023 4.50
2021 2.30
2020 2.30
2019 2.30
2022 0.92
2023 0.68
2021 0.45
2020 0.41
2019 0.69
Why this is important
Revenue is a key indicator of client
experience, growth and a key driver
of profi tability. Growth in AUME,
especially into Record’s higher
revenue-margin products, resulted in
a 12% increase in management fees.
Revenue also includes performance
fees, which increased by £5.3 million to
£5.8 million (2022: £0.5 million).
Why this is important
Operating profi t margin is an indicator
of the effi ciency of the business in
turning revenue into profi t. Infl ows
into higher revenue-margin products
in addition to effi ciencies seen from the
adoption of technology in operational
areas both contributed to the increase
in operating margin to 32% for the year.
The Group aims to increase the
operating profi t margin over time
through investment in resources and
technology to maintain its premium
products and services, whilst
increasing operating effi ciency and
developing more diversifi ed revenue
streams in higher-margin products.
Why this is important
EPS measures the overall
eff ectivenessof the business model
and drives both our dividend policy and
the value generated for shareholders.
Similarly to operating profi t, EPS has
increased this year as the benefi ts
from the implementation of the new
strategy begin to deliver results in
fi nancialterms.
Why this is important
Progressive and sustainable dividends illustrate the cash-generative nature of
Record’s business, and its strength in converting profi ts into cash and providing
a suitable return to shareholders. The ordinary dividend per share has increased
by 25%, refl ecting the Board’s confi dence in the ability of the business to deliver
its strategy and to achieve sustainable growth. The special dividend pershare
of 0.68pence, results in a 15% increase in total dividends to 5.18 pence per share
(2022: 4.52 pence per share).
Link to strategy
Diversifi cation
Modernisation
Link to strategy
Diversifi cation
Modernisation
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Diversifi cation
Modernisation
Succession
22 Record plc Annual Report 2023
Key performance indicators
Revenue
(£m)
Operating profi t margin
(%)
Basic earnings per share
(“EPS”) (pence per share)
Dividends per share (“DPS”) (pence per share)
For the fi nancial years up to and
including FY-23, revenue has been
earned predominantly from the
provision of currency management
services in the form of management
fees and performance fees. From FY-24
onwards, revenue will include the new
revenue streams arising as part of the
diversifi cation into asset management
products and services.
Operating profi t margin is an
alternative performance measure,
calculated by dividing operating profi t
by revenue.
The Group aims to create shareholder
value over the long term, delivered
through progressive and sustainable
growth in EPS.
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 profi tability.
Ordinary Special
2022 35.1
2023 44.7
2021 25.4
2020 25.6
2019 25.0
2022 31
2023 32
2021
24
2020 30
2019 32
2022 4.52
2023 5.95
2021 2.75
2020 3.26
2019 3.27
2022 3.60
2023 4.50
2021 2.30
2020 2.30
2019 2.30
2022 0.92
2023 0.68
2021 0.45
2020 0.41
2019 0.69
Why this is important
Revenue is a key indicator of client
experience, growth and a key driver
of profi tability. Growth in AUME,
especially into Record’s higher
revenue-margin products, resulted in
a 12% increase in management fees.
Revenue also includes performance
fees, which increased by £5.3 million to
£5.8 million (2022: £0.5 million).
Why this is important
Operating profi t margin is an indicator
of the effi ciency of the business in
turning revenue into profi t. Infl ows
into higher revenue-margin products
in addition to effi ciencies seen from the
adoption of technology in operational
areas both contributed to the increase
in operating margin to 32% for the year.
The Group aims to increase the
operating profi t margin over time
through investment in resources and
technology to maintain its premium
products and services, whilst
increasing operating effi ciency and
developing more diversifi ed revenue
streams in higher-margin products.
Why this is important
EPS measures the overall
eff ectivenessof the business model
and drives both our dividend policy and
the value generated for shareholders.
Similarly to operating profi t, EPS has
increased this year as the benefi ts
from the implementation of the new
strategy begin to deliver results in
fi nancialterms.
Why this is important
Progressive and sustainable dividends illustrate the cash-generative nature of
Record’s business, and its strength in converting profi ts into cash and providing
a suitable return to shareholders. The ordinary dividend per share has increased
by 25%, refl ecting the Board’s confi dence in the ability of the business to deliver
its strategy and to achieve sustainable growth. The special dividend pershare
of 0.68pence, results in a 15% increase in total dividends to 5.18 pence per share
(2022: 4.52 pence per share).
Link to strategy
Diversifi cation
Modernisation
Link to strategy
Diversifi cation
Modernisation
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Diversifi cation
Modernisation
Succession
The Board uses both fi nancial and
non-fi nancial key performance
indicators (“KPIs”) to monitor and
measure the performance of the
Group against its strategic priorities.
Some KPIs link to specifi c strategic
areas as noted below, whilst others
represent higher-level key metrics in
terms of the Group’s business and
fi nancial performance.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 23
Key performance indicators continued
Measuring our performance
against our strategy.
Non-fi nancial KPIs
AUME
($ billion)
Client longevity
(%)
Average number
ofemployees
Staff retention
(%)
Employees with equity
interest (%)
As a currency and derivatives manager,
Record manages only the impact
of foreign exchange and not the
underlying assets, therefore its “assets
under management” arenotional
rather than real. To distinguish this
from the AUM of conventional asset
managers, Record uses the concept of
Assets Under Management Equivalents
(“AUME”) and by convention this is
quoted in US dollars.
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
2023.
The average number of employees
through the year includes
Non-executive Directors.
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.
The percentage of employees who own
shares in Record plc at year end.
2022 83.1
2023 87.7
2021 80.1
2020 58.6
2019 57.3
6-10 years: 11%
>10 years: 20%
3-6 years: 22%
1-3 years: 23%
0-1 year: 24%
2022 82
2023 88
2021 83
2020 82
2019 85
2022 74
2023 90
2021 90
2020 81
2019 84
2022 61
2023 63
2021 68
2020 69
2019 70
Why this is important
AUME is an alternative performance
measure and further detail on how it is
defi ned is provided on page 42.
AUME is a key driver of future revenue
and an indicator of business growth.
AUME increased by 5.5% for the year,
including net infl ows of $9.1 billion
diversifi ed across product lines.
Why this is important
Client longevity is both an indicator of
recent client growth, and also of the
Group’s success in sustaining quality
client relationships through investment
cycles. Building long-standing and
trusted adviser relationships with
clients provides opportunities for
collaboration and partnerships on new
and innovative investment products.
Why this is important
Average employee numbers is an
indicator of business growth and
also of how eff ectively the Group is
using technology to make processes
more effi cient. Implementing the new
strategy has necessitated new skill
sets in the business, which has brought
additional knowledge and experience
into the Group required to drive
innovation and the diversifi cation into
new products and technology.
Why this is important
Planning for generational change is key
to the Group’s strategy. A decrease in
staff retention in the prior year refl ects
the focus on rebalancing the skill sets
required by the business to drive the
innovation and growth required to
deliver the strategy. FY-23 has seen
a return to retention more aligned
with historical trends, refl ecting the
successful restructure as part of the
Group’s succession plans. The Group
remains cognisant of ensuring the
retention and development of key
talent as well as the factors aff ecting
all of our employees’ wellbeing.
Why this is important
The alignment of employee interests
with those of our shareholders is
an important factor in ensuring the
longer-term success of our business
and is an important tool in managing
generational change. The decrease
last year was linked to changes made
under the new strategy resulting
in a higher turnover of staff and
consequently a short-term decrease
in employees holding shares. The
Group’s remuneration structure
includes schemes with both mandatory
and voluntary equity participation,
refl ecting the importance the Group
places on alignment.
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Diversifi cation
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Succession
24 Record plc Annual Report 2023
Key performance indicators continued
AUME
($ billion)
Client longevity
(%)
Average number
ofemployees
Staff retention
(%)
Employees with equity
interest (%)
As a currency and derivatives manager,
Record manages only the impact
of foreign exchange and not the
underlying assets, therefore its “assets
under management” arenotional
rather than real. To distinguish this
from the AUM of conventional asset
managers, Record uses the concept of
Assets Under Management Equivalents
(“AUME”) and by convention this is
quoted in US dollars.
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
2023.
The average number of employees
through the year includes
Non-executive Directors.
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.
The percentage of employees who own
shares in Record plc at year end.
2022 83.1
2023 87.7
2021 80.1
2020 58.6
2019 57.3
6-10 years: 11%
>10 years: 20%
3-6 years: 22%
1-3 years: 23%
0-1 year: 24%
2022 82
2023 88
2021 83
2020 82
2019 85
2022 74
2023 90
2021 90
2020 81
2019 84
2022 61
2023 63
2021 68
2020 69
2019 70
Why this is important
AUME is an alternative performance
measure and further detail on how it is
defi ned is provided on page 42.
AUME is a key driver of future revenue
and an indicator of business growth.
AUME increased by 5.5% for the year,
including net infl ows of $9.1 billion
diversifi ed across product lines.
Why this is important
Client longevity is both an indicator of
recent client growth, and also of the
Group’s success in sustaining quality
client relationships through investment
cycles. Building long-standing and
trusted adviser relationships with
clients provides opportunities for
collaboration and partnerships on new
and innovative investment products.
Why this is important
Average employee numbers is an
indicator of business growth and
also of how eff ectively the Group is
using technology to make processes
more effi cient. Implementing the new
strategy has necessitated new skill
sets in the business, which has brought
additional knowledge and experience
into the Group required to drive
innovation and the diversifi cation into
new products and technology.
Why this is important
Planning for generational change is key
to the Group’s strategy. A decrease in
staff retention in the prior year refl ects
the focus on rebalancing the skill sets
required by the business to drive the
innovation and growth required to
deliver the strategy. FY-23 has seen
a return to retention more aligned
with historical trends, refl ecting the
successful restructure as part of the
Group’s succession plans. The Group
remains cognisant of ensuring the
retention and development of key
talent as well as the factors aff ecting
all of our employees’ wellbeing.
Why this is important
The alignment of employee interests
with those of our shareholders is
an important factor in ensuring the
longer-term success of our business
and is an important tool in managing
generational change. The decrease
last year was linked to changes made
under the new strategy resulting
in a higher turnover of staff and
consequently a short-term decrease
in employees holding shares. The
Group’s remuneration structure
includes schemes with both mandatory
and voluntary equity participation,
refl ecting the importance the Group
places on alignment.
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Diversifi cation
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Diversifi cation
Modernisation
Succession
Link to strategy
Succession
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 25
Sustainability
Sustainability encompasses many aspects of
business operations, including both strategy
and investment as well as business practice,
community engagement and our workforce.
In conducting its business
operations, theGroup hasa
responsibility to itsstakeholders
and theenvironment.
Sustainability pillars:
Responsible investment
See more
on pages 28 to 29
Our people
See more
on pages 30 to 32
Climate action
See more
on pages 33 to 36
26 Record plc Annual Report 2023
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
every two months to review and make decisions on key ESG
issues and receives regular updates and points for discussion
from the Sustainability Manager and the Sustainability
Committee. 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. This year we provided a two-part training
programme for our Board members to better equip them to
oversee the adoption of our sustainability strategy.
The Sustainability Committee is a broader committee that
seeks to gather ideas and recommendations from across
seniority and teams within the business, as well as taking
responsibility for implementing sustainability initiatives.
The committee is comprised of officer roles which represent
key areas of sustainability. The officers work closely with
the Sustainability Manager to make progress on defined ESG
objectives and to provide updates on progress in committee
meetings.
The Sustainability Manager is responsible for driving
progress against the sustainability strategy, taking
recommendations and proposals to the 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
Global Head of Sales
Head of Macroeconomic Research
Head of Trading
Sustainability Manager
Oversees
Advises
Reports to
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 27
Record has identified responsible investment
as an essential prerequisite to successful,
resilient and prudent investment management.
Philosophy
Record has identified responsible investment as an
essential prerequisite to successful, resilient and prudent
investment management. Our Responsible Investment
policy communicates our approach and is embedded into
our portfolio management and monitoring processes (see
our Responsible Investment policy for more detail). As part
of our drive to incorporate ESG factors into active currency
products, Record has worked in collaboration with Oxford-
based researchers to extend the boundaries of ESG beyond
its existing base in equities and bonds, to encompass the
currency markets. This manifested in the creation of one of
the first ESG Emerging Market Currency for Return strategies
in 2018, and has continued to evolve since into a focus on
sustainable investment with impact.
Record is proud to have been a signatory since 2018 to
the United Nations Principles for Responsible Investment
(“UN PRI”), the world’s leading proponent of responsible
investment, having been one of the first specialist currency
asset managers to sign up. We have committed to their six
principles for responsible investment, aimed at integrating
ESG into investment decisions and reporting on progress.
Collaboration
Record is actively exploring ways to collaborate with
external parties, including clients who might wish to apply
the methodology to reflect their own specific preferences
and views on various elements of sustainable finance.
Record’s research is ongoing, responding to improvements
in available data, as well as developing and improving on its
own strategies and building and innovating new approaches
to maintain its place at the forefront of research in such a
fast-developing space. We purposefully seek to diversify our
product offering through working with third parties. Our aim
is to develop and identify unique investment opportunities
both within currency and potentially across other asset
classes, as we did in the development of the Record Emerging
Market Sustainable Finance Fund.
Record Emerging Market Sustainable Finance Fund
(“EMSF”)
During 2020, Record continued to pioneer research in this
space, developing an Emerging Market Sustainable Finance
product that combines strategic investment in currencies,
impact bond collateral and counterparty engagement to
nurture and enhance development in the currency universe
countries. This research culminated in the successful launch
of the EMSF in June 2021, in collaboration with one of our
partners, UBS Global Wealth Management in Switzerland.
Currency
The 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.
Sustainability continued
Responsible
investment
28 Record plc Annual Report 2023
Correctly deployed, currency is an essential tool in
contributing to sustainable development in less-developed
economies and in creating a lasting positive impact. This is
achieved via two channels: the Stabilisation Factor and the
Capital Incentive Factor. The fund also seeks to widen the
universe of currencies, extending to more illiquid currencies
in order to broaden the scope of impact.
Fixed income
In 2019 Record began using its own capital to invest
in Impact Bonds, organised through international and
regional multilateral organisations which align with the UN
Sustainable Development Goals (“SDGs”). Record believed
this would not only aid development and achieve impact, but
also presented an opportunity to gain experience in dealing,
holding and reporting on Impact Bonds which underscored
the fi xed income component of the EMSF.
The fi xed income strategy is a long-term buy-and-
hold investment that targets a universe of multilateral
development banks and other development fi nance
institutions, through themed and sustainable development
bond instruments, where the profi le 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, fi nance, 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. This year we had
engagement meetings with 83% of counterparty banks that
we traded with.
Sustainability continued
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 29
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, giving a
balance between flexibility and 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. We partnered with Alpha Development,
a talent development company we have worked with
previously, to run a sales training programme for our
junior sales team to support their progression. An internal
management training programme was also implemented and
included six important modules: Profiles and Personalities,
Personal Development Plans, Team Building, Remuneration
and Recognition, Inclusion and Diversity, and Team
Wellbeing. 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, life insurance, permanent health insurance,
maternity and shared parental benefits, 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 this
scheme, as well as through the Record plc Share Incentive
Plan. All employees are also offered the Employee Assistance
Programme, which provides 24/7 confidential telephone
support from qualified counsellors as well as online
computerised cognitive behavioural therapy, to support with
mental health issues. This year the Group hired an events
manager to organise 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
London School of Economics and Political Science, University
College of London, Balliol College – University of Oxford,
University of Warwick, Exeter University, University of
Cambridge, and the University of Bath.
FY-23
FY-22
FY-21
74%
90%
90%
Staff retention %
Last year’s reduction in staff retention reflects the change in
our business strategy, in particular our succession planning,
which saw higher levels of recruitment adding additional 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.
Sustainability continued
We believe that investing in our staff
and developing their potential is key
to the success of the business.
Our people
30 Record plc Annual Report 2023
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 therefore complies with human
rights standards across each of the countries we operate in
and works to ensure that there are no instances of modern
slavery, human traffi cking, 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.
In April 2022 we published our fi rst Modern Slavery Act
statement in line with the government guidelines under
the 2015 UK Modern Slavery and Human Traffi cking 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.
Inclusion and diversity
The Group’s aims include ensuring that all staff are provided
with equal opportunities and that the workplace is free of
discrimination. It also aims to ensure that all recruitment
processes are fair and are carried out objectively,
systematically and in line with the requirements of
employment law. The Group ensures that all staff are aware
that it is not acceptable to discriminate, harass or victimise
anyone, and also that any such unlawful behaviour is not
tolerated under any circumstance.
The Group believes that valuing what is unique about
individuals and drawing on their diff erent 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 diff erent markets and better support client
needs through producing innovative and sustainable
investment products. The Group aims to create a productive
environment, representative of diff erent cultures and groups,
where everyone has an equal chance to succeed.
The Group has made signifi cant progress towards its
Inclusion and Diversity Action Plan, a summary of which
can be viewed in this year’s Sustainability report on pages
32 to 34. 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 diff erences. This
year the Network organised several inclusive events,
celebrating Pride Month, Black History Month, International
Women’s Day, Ramadan and more. The Group also became
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
Sustainability continued
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 31
Inclusion and diversity continued
The gender diversity within the Group is shown below:
Gender balance Female Male
As at 31 March 2023 number % number %
Board Directors 2 29% 5 71%
Senior management 7 26% 20 74%
O t h e r s t a ff 26 41% 37 59%
All employees 35 36% 62 64%
See our separate Sustainability report, on page 36, for our Gender Pay Gap and further diversity data and more information on
our diversity initiatives.
Community
Record recognises its obligations and responsibility to
contribute to the wider community outside of the fi rm. Over
the course of the year, the Group made charitable donations
totalling £18.4k. Our charitable giving is focused on employee
choice, with the Group matching employee donations and
sponsorship. The Group continues to encourage employees
to participate in fundraising activities for charitable causes
and this year employees participated in a variety of events,
including charity lunches and fundraising competitions.
Examples of supported charities and causes included World
Wide Fund for Nature, Islamic Relief, UA Victory, and the
Disaster Emergency Committee. A scheme allowing UK
employees to give to charity through the payroll is also
off ered.
FY-23
FY-22
FY-21
18.2
19.2
18.4
Charitable donations (£’000)
We also provide fi nancial assistance to students studying
at Balliol College, Oxford through a bursary scheme, which
provides grants to students who aim to pursue ambitions
which will benefi t the wider community, for example in
medical or charitable fi elds.
Sustainability continued
Our people continued
32 Record plc Annual Report 2023
Sustainability continued
Net zero
The Group has always considered the impacts our operations
have on our community and the environment. Each year, we
collect the relevant data and work with a carbon accounting
company to measure, verify and assess our carbon footprint.
We have been certifi ed as CarbonNeutral® in accordance
with the CarbonNeutral® Protocol, the leading framework
for carbon neutrality, since 2007. This means that we have
been purchasing carbon off sets for over 15 years which
deliver immediate emissions reductions through sustainable
development and renewable energy projects around the
world. The projects are independently verifi ed by standards
such as the Gold Standard to ensure environmental integrity
in our work to take climate action.
However, we know that there is a need for further climate
action. Whilst our off setting practices have had a positive
impact in neutralising the carbon we have emitted over the
years, we recognise that being carbon neutral is not enough.
It is now vital that we take additional steps to become
netzero, reducing the greenhouse gas emissions we
produce throughout our operations and value chain. The
Groupis therefore committed to the following targets:
• reach net zero greenhouse gas emissions in our
operations and value chain by 2050; and
• reduce Scope 3 emissions intensity by 55% by 2030
against a 2019 baseline.
We have been certifi ed as CarbonNeutral® in
accordance with the CarbonNeutral® Protocol, the
leading framework for carbon neutrality, since 2007.
Read more in our Climate report
recordfg.com
Climate action
Governance
Recommendations Current status Key areas of progress Page
Describe Board-level oversight
of climate-related risks and
opportunities.
Compliant
• Enhanced the Group’s governance
framework to embed oversight of climate
risk at Record plc Board and accountability
at Senior Sustainability Offi ce
• Upskilling Record plc Board through
sustainability and ESG training which
included a focus on climate risk
• Senior Sustainability Offi ce changed to a
Group level committee
See more
onpages 6 to 8
Describe management’s role
in assessing and managing
climate-related risks and
opportunities.
Compliant
TCFD
The Group publicly supports the Task Force on Climate-related
Financial Disclosures (“TCFD”). The following table provides a
summary of our response to the TCFD recommendations.
We provide supplemental detail in our Climate report in order
to provide a more comprehensive assessment of how the
Group incorporates climate-related risks and opportunities
into our governance, strategy, risk management, and metrics
and targets.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 33
TCFD 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
• Completed the annual strategic
assessmentof climate-related risks and
opportunities to help inform strategy
• Completed a sustainability materiality
assessment which included a section
on environmental issues to help inform
strategy
• Completed a qualitative climate-scenario
analysis for the first time
See more
onpages
10to21
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 2ºC or lower
scenario.
Compliant
Additional recommendations
included in the supplemental
guidance for asset managers.
Partially
compliant
Risk management
Recommendations Current status Key areas of progress Page
Describe the organisation’s
processes for identifying and
assessing climate-related risks.
Compliant
• Approved climate-related risk appetite
within our Group-wide risk management
framework
• Improved climate-related risk disclosures
and better defined our risk management
process
See more
onpages
25to26
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
Additional recommendations
included in the supplemental
guidance for asset managers.
Partially
compliant
Sustainability continued
Climate action continued
34 Record plc Annual Report 2023
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
• Measured carbon footprint of the
EMSFstrategy
• Improved disclosure on climate metrics
• Achieved all but one of our climate-related
targets set out in last year’s report
See more
onpages
28to31
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
Additional recommendations
included in the supplemental
guidance for asset managers.
Partially
compliant
Sustainability continued
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 35
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 page 28 in our climate report for Group level
emissions..
Energy effi ciency actions taken
This year saw an increase in our total UK GHG emissions
compared to the previous reporting year. This was foreseen,
as the Company continues to move back to ‘normal’
working practices post-pandemic. The increase in Scope
3 emissions was predominantly driven by two factors.
Firstly, we increased core working days in the offi ce from
two to three days to encourage collaboration and face-time
between teams, which signifi cantly impacted our commuting
emissions. Secondly, we have been growing our teams and
partnerships outside of the UK, which has seen the need
for increased business travel abroad as we build these
relationships. Despite this, we have managed to keep our
Scope 3 emissions below what they were pre-pandemic.
We have maintained 100% renewable energy consumption
across our UK offi ces which has kept our market-based Scope
2 emissions at 0 tCO
2
e. Further, our decision to down-size
the offi ce space we rent in Windsor has led to reduced
location-based Scope 2 emissions compared to last year. This
reduction was maintained despite the fact we increased the
offi ce space we rent in London.
Whilst we expected our GHG emissions to increase this year,
we are aiming for signifi cant emissions reductions by 2030
and net-zero 2050. In achieving this, we will be aided by both
our emissions reduction principles (outlined on page 12 of
our climate report) as well as government intervention and
technology innovation.
FY-23
FY-22
222 91
174
20 408
Energy consumption (kWh 000)
1,3,4
Scope 2
Scope 1 Scope 3
FY-23
FY-22
10147
4
34 193
Location-based methodology (tonnes of CO
2
e)
1,3,4
Scope 2
Scope 1 Scope 3
FY-23
FY-22
101
1934
Market-based methodology (tonnes of CO
2
e)
1,3,4
Scope 2
Scope 1 Scope 3
Energy and GHG emissions annual % change
2,3
Reporting category
Energy
consumption
UK & off shore
Location-based
methodology
UK & off shore
Market-based
methodology
UK & off shore
Scope 1 — — —
Scope 2 -22 -28 0
Scope 3 347% 91% 91%
Total 92% 55% 94%
Scope 1, 2 & 3 CO
2
e intensity ratio:
tonnes CO
2
e/FTE 41% 76%
1. Scope 1 covers combustion of gas and combustion of fuel for transport 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. The total CO
2
e intensity ratio is calculated as the total
CO
2
e tonnes divided by total fi rm FTE.
2. Please note annual % change was calculated using only comparable activities from the previous reporting year. There were no Scope 1 energy and GHG emissions in the
previous reporting year, so annual % change has not been included this year.
3. Please note that rounding diff erences may exist.
4. Scope 2 and scope 3 energy and GHG emissions for FY-22 were incorrect in last year’s Annual Report and have been updated to refl ect the correct data and percentage
changes in this report.
UK emissions data relates to the year ended 31 March 2023.
Sustainability continued
Climate action continued
36 Record plc Annual Report 2023
Section 172 Companies Act 2006 – Ourstakeholders
We believe that all stakeholders are benefi ciaries 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 fi rmly
at the centre of priorities.
Section 172 Companies Act 2006
We set out on pages 38 and 39 our key stakeholder groups,
their material issues and how we engage with them. Each
stakeholder group requires a tailored engagement approach
to foster eff ective and mutually benefi cial 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 eff ectively 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 diff erent 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
• Closure of the Muni Fund for the reallocation of resources
• Development and ultimate launch of R-Platform for
improved client user experience and effi ciency
Interests of employees – decisions
• Cost of living payment provided to all employees to help
with the consequences of high infl ation
• Moving to a larger offi ce space in London
Interests of shareholders – decisions
• Capital Markets event held to improve investor
understanding of the Group’s investment case and
focuson growth
• The appointment of David Morrison as new independent
Non-executive Director and Chair-elect
• Deployment of capital through establishment of the
newInvestment of Record plc Capital 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 benefi t 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
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 37
Section 172 Companies Act 2006 – Our stakeholders continued
Clients Shareholders People
Environment
andcommunity External suppliers Regulators
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.
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.
Across the Group there are multiple regulators
that dictate requirements on the relevant Group
entity and, 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
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.
During the year, we engaged with several
clients to collect feedback for our Sustainability
Materiality Assessment.
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.
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
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.
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.
2023 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.
The year also saw increased interest from our
clients in our ESG Counterparty Engagement
Strategy with some clients poised to adopt this
over the coming year.
2023 highlights and future changes
The Company held a Capital Markets Teach-In
as an opportunity for analysts and investors
to gain greater insight into Record’s evolving
market positioning and growth drivers. The
event introduced the investment case and
prospects of Record Asset Management GmbH
and Record Digital, Record’s two newest
subsidiaries.
2023 highlights and future changes
Employee engagement pulse survey questions
have been sent out weekly since January,
gathering employee feedback on various topics
including wellbeing, workload, inclusion and
diversity, technology and communication to name
a few. Actions will be taken to address resulting
themes from the survey.
Line manager support is key to helping individuals
progress. The Company ran a manager training
programme which included six important
modules: Profiles and Personalities, Personal
Development Plans, Team Building, Remuneration
and Recognition, Inclusion and Diversity, and
Team Wellbeing.
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
increased core working days in the office from 2
to 3 to promote collaboration and team building.
In order to provide a productive work
environment for our growing London-based
headcount we have moved to a larger office
space in London, allowing employees to have
more space, more meeting rooms and an efficient
working environment.
2023 highlights and future changes
Employees helped to raise £18.4k for local
and national charities during the year. Record
also held a corporate volunteering day at a
homeless shelter in London where employees
cooked and served breakfast for those in need.
This year’s Climate report includes
improved 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
2023 highlights and future changes
Introduced a Supplier Code of Conduct 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
which Record is now within scope of for the
first time this year, we will be updating our
current modern slavery policy to reflect
policies and practices across the Group as
opposed to entity level.
2023 highlights and future changes
The Group established a German subsidiary and
this was approved by BaFiN as a MiFID firm and
is now trading for clients.
A Group subsidiary was appointed as a Tied
Agent of AHP in Germany.
A Group subsidiary launched its first
Luxembourg funds during the period.
A Group subsidiary appointed a Tied Agent
(Block Scholes) during the period.
38 Record plc Annual Report 2023
Section 172 Companies Act 2006 – Our stakeholders continued
Clients Shareholders People
Environment
andcommunity External suppliers Regulators
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.
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.
Across the Group there are multiple regulators
that dictate requirements on the relevant Group
entity and, 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
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.
During the year, we engaged with several
clients to collect feedback for our Sustainability
Materiality Assessment.
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.
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
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.
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.
2023 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.
The year also saw increased interest from our
clients in our ESG Counterparty Engagement
Strategy with some clients poised to adopt this
over the coming year.
2023 highlights and future changes
The Company held a Capital Markets Teach-In
as an opportunity for analysts and investors
to gain greater insight into Record’s evolving
market positioning and growth drivers. The
event introduced the investment case and
prospects of Record Asset Management GmbH
and Record Digital, Record’s two newest
subsidiaries.
2023 highlights and future changes
Employee engagement pulse survey questions
have been sent out weekly since January,
gathering employee feedback on various topics
including wellbeing, workload, inclusion and
diversity, technology and communication to name
a few. Actions will be taken to address resulting
themes from the survey.
Line manager support is key to helping individuals
progress. The Company ran a manager training
programme which included six important
modules: Profiles and Personalities, Personal
Development Plans, Team Building, Remuneration
and Recognition, Inclusion and Diversity, and
Team Wellbeing.
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
increased core working days in the office from 2
to 3 to promote collaboration and team building.
In order to provide a productive work
environment for our growing London-based
headcount we have moved to a larger office
space in London, allowing employees to have
more space, more meeting rooms and an efficient
working environment.
2023 highlights and future changes
Employees helped to raise £18.4k for local
and national charities during the year. Record
also held a corporate volunteering day at a
homeless shelter in London where employees
cooked and served breakfast for those in need.
This year’s Climate report includes
improved 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
2023 highlights and future changes
Introduced a Supplier Code of Conduct 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
which Record is now within scope of for the
first time this year, we will be updating our
current modern slavery policy to reflect
policies and practices across the Group as
opposed to entity level.
2023 highlights and future changes
The Group established a German subsidiary and
this was approved by BaFiN as a MiFID firm and
is now trading for clients.
A Group subsidiary was appointed as a Tied
Agent of AHP in Germany.
A Group subsidiary launched its first
Luxembourg funds during the period.
A Group subsidiary appointed a Tied Agent
(Block Scholes) during the period.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 39
Operating review
AUME closed the year at its highest ever
levelof $87.7 billion, including net inflows
of$9.1 billion for the year.
Product investment performance
Hedging
Our hedging products are predominantly systematic in nature. The effectiveness of each client mandate is assessed regularly
and adjustments are made when necessary in order to respond to changing market conditions or to bring the risk profile of the
hedging mandate in line with the client’s risk tolerance.
Passive Hedging
Record’s enhanced Passive Hedging service aims to reduce the cost of hedging by introducing flexibility into the
implementation of currency hedges without changing the hedge ratio. The episodic nature of many opportunities exploited
by the strategy means it requires a higher level of discretionary oversight than has historically been associated with Passive
Hedging. Global markets have seen steepening interest rate curves from the end of 2021, which stems from central banks
being forced to engage in more hawkish monetary policy in an attempt to keep inflationary pressures under control. This
has had the effect of introducing a high degree of volatility into short-term interest rate markets, from which FX forward
pricing is determined. The heightened volatility has increased the opportunity set for our clients’ portfolios, and as such, we
had positioned client portfolios appropriately to add value from this volatility, achieving positive performance. Additionally,
the team’s management of the portfolio around key market events such as the collapse of Silicon Valley Bank, and the UK
government’s “mini-budget”, 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 2023
Return
since
inception
1
Value added by enhanced Passive Hedging programme relative to a fixed-tenor benchmark 0.18% 0.10% p.a.
Dynamic Hedging
The performance of our Dynamic Hedging product is a function of foreign currency fluctuations relative to the base currency
of specific clients. For US-based investors, Dynamic Hedging produced gains in the first half of the period, as the dollar
appreciated against all exposure currencies and hedge ratios rose, helping to protect against underlying currency losses. The
second half of the period saw some retracement in the US dollar, which coupled with risk management interventions, resulted
in a reduction in hedge ratios limiting the product’s impact in clients’ portfolios. Overall, Dynamic Hedging performance was
positive for the year, partially offsetting currency losses on the underlying international exposures of our US clients.
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 2023
Return
since
inception
2
Value added by Dynamic Hedging programme for a representative US-based account 3.46% 0.67% p.a.
1. Since inception in October 2014.
2. Since inception in April 2009.
40 Record plc Annual Report 2023
Operating review
Currency for Return
Sustainable investing
Record EM Sustainable Finance (“EMSF”) Fund
The Record EMSF Fund USD class A returned 4.65% from inception (28 June 2021) to 31 March 2023, outperforming the relevant
emerging market local debt benchmark by 17.35% (see table below).
The currency portfolio delivered positive returns in the period following improved risk sentiment over the last two quarters
as oversold and high-yielding currencies in emerging markets recovered from depreciated levels. Sentiment was supported
by the reopening of the Chinese economy, milder weather conditions in Europe and elevated carry in developing economies as
central banks continued to deliver rate hikes to curb domestic inflationary pressures. The positive performance of the currency
overlay also benefited from gains in the diversified hard currency funding basket. The topping out of rates in developed
markets provided further support to local assets in emerging markets and at the same time contributed to improving returns in
bond markets. The performance of the US dollar bond underlay in the strategy benefited from its highly rated credit quality as
well as duration exposure following lower long-dated yields in the US over Q1 2023 as the FED neared the end of the tightening
cycle and recent turmoil in the banking sector sparked global recessionary fears.
The table below shows the performance of the EMSF Fund USD class A and the relevant benchmark, being the JP Morgan
GBI-EM Global Diversified. The performance is since inception of the EMSF Fund on 28 June 2021 to 31 March 2023.
Return for
year to
31 March 2023
Return since
inception
EMSF Fund USD Share Class A 5.64% 4.65%
JP Morgan GBI-EM Global Diversified (0.72%) (12.70%)
Currency Multi-Strategy
Record’s Currency Multi-Strategy product combines a number of diversified return streams, which include:
• Forward Rate Bias (“FRB”, also known as Carry) and Emerging Market strategies which are founded on market risk premia
and as such perform more strongly in “risk on” environments; and
• Momentum, Value, Range Trading and Developed Market Classification (“DMC”) strategies which are more behavioural in
nature, and as a result are less risk-sensitive.
Record’s Multi-Strategy mandates delivered positive overall performance over the year which was driven by the
outperformance in Value, Momentum, Range Trading and EM strategies. Value benefited from a significant reduction in euro
area risk premia. Momentum performed positively on the back of the US dollar cycle and desynchronised rate expectations.
Range Trading accrued gains mostly in commodity currency pairs due to the absence of major trends in these pairs. Positive
news surrounding China’s reopening, a compression in Russia-Ukraine geopolitical risk premia, and topping out of US rate
expectations, which enticed flows back into Emerging Market currencies, led to outperformance in the Emerging Markets
strand. For Carry, underperformance was mainly driven by short positions in low-yielding Developed Market currencies, which
appreciated due to the perceived narrowing of interest rate differentials. During the reporting period, DMC was introduced to
some mandates, and underperformed during the period due to a long position in the US dollar.
Return for
12 months to
31 March 2023
%
Return since
inception
% p.a.
Volatility since
inception
% p.a.
Record Multi-Strategy composite
1
0.78% 0.82% 3.16%
1. Record Multi-Strategy composite is since inception in July 2012, showing excess returns data gross of fees in USD base, and scaled to a 4% volatility target.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 41
Operating review continued
Product investment performance continued
Currency for Return continued
Scaling
The Multi-Strategy product allows clients to select the level of exposure they desire in their currency programmes by
selecting the required level of scaling and/or the volatility target.
It should be emphasised that in this case “scaling” refers to the multiple of the aggregate notional value of forward contracts
in the currency programme to the mandate size. This is limited by the willingness of counterparty banks to take exposure to
the client. The AUME of those mandates where scaling or a volatility target is selected is represented in Record’s AUME at the
scaled value of the mandate, as opposed to the mandate size.
AUME development
AUME expressed in US dollar terms finished the year at $87.7 billion, an increase of 6% (2022: $83.1 billion). When expressed in
sterling, AUME increased by 13% to £71.0 billion (2022: £63.1 billion).
AUME development bridge – year to 31 March 2023 ($bn)
FX & scaling
adjustment
Equity &
other markets
Net flows
AUME at
1 April
2022
AUME
at 31 March
2023
70
75
80
90
95
85
(0.7)
(3.8)
9.1
83.1
87.7
AUME movements
Passive Hedging AUME increased by 2% to $63.8 billion (2022: $62.8 billion) driven by net inflows of $4.9 billion for the year
from new and existing clients. The impact from both market movements and exchange rates was negative, at $3.3 billion and
$0.6 billion respectively.
Dynamic Hedging AUME increased by 39%, ending the year at $14.7 billion (2022: $10.6 billion). The majority of the $4.1 billion
increase is attributable to net inflows ($4.2 billion), offset slightly by negative market movements of $0.1 billion.
Currency for Return AUME decreased to $3.9 billion (2022: $5.0 billion) by the end of the year, represented by net outflows
of$0.6 billion and negative market movements and exchange rates of $0.4 billion and $0.1 billion respectively.
Multi-product AUME increased to $5.2 billion (2022: $4.5 billion). Net inflows of $0.6 billion accounted for the majority of the
movement in addition to positive market movements ($0.1 billion).
Market performance
Record’s AUME is affected by movements in market levels because substantially all the Passive and Dynamic Hedging, and
some of the Multi-product mandates, are linked to equity, fixed income and other market levels. Market movements decreased
AUME by $3.8 billion in the year ended 31 March 2023 (2022: increase of $0.3 billion).
Further detail on the composition of assets underlying our Hedging and Multi-product mandates is provided in the following
table in an attempt to illustrate more clearly the impact of equity and fixed income market movements on these mandate sizes.
42 Record plc Annual Report 2023
Operating review continued
AUME composition by underlying asset class as at 31 March 2023
Equity
%
Fixed
income
%
Other
%
Passive Hedging 23% 31% 46%
Dynamic Hedging 84% 0% 16%
Multi-product 0% 0% 100%
Forex
Approximately 76% of the Group’s AUME is non-US dollar denominated. Therefore, foreign exchange movements may have an
impact on AUME when expressing non-US dollar denominated AUME in US dollars. Foreign exchange movements decreased
AUME by $0.7billion over the year. This movement does not have an equivalent impact on the sterling value of fee income.
At 31 March 2023, the split of AUME by base currency was 10% in sterling, 47% in Swiss francs, 24% in US dollars, 14% in euros
and 5% in other currencies.
AUME composition by base currency
Base currency 31 March 2023 31 March 2022
Sterling GBP 7.4bn GBP 7.6bn
US dollar USD 20.8bn USD 17.6bn
Swiss franc CHF 38.3bn CHF 33.1bn
Euro EUR 11.7bn EUR 11.4bn
Australian dollar AUD 3.0bn AUD 2.9bn
Canadian dollar CAD 3.3bn CAD 6.1bn
Japanese yen JPY 27.2bn JPY 0.0bn
Product mix
AUME composition by product
31 March 2023 31 March 2022
US $bn % US $bn %
Passive Hedging 63.8 73% 62.8 76%
Dynamic Hedging 14.7 17% 10.6 13%
Currency for Return 3.9 4% 5.0 6%
Multi-product 5.2 6% 4.5 5%
Cash 0.1 —% 0.2 —%
Total 87.7 100% 83.1 100%
Notwithstanding hedging AUME continuing to represent approximately 90% of the total AUME, the product mix within this
figure has shifted towards the higher revenue-margin Dynamic Hedging product due primarily to net inflows of $4.2 billion
during the year. This has diversified the Group’s hedging revenue streams and further diluted the historical concentration on
the lower revenue-margin Passive Hedging product.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 43
Management fees
£38.3m
+12%
FY-22: £34.1m
Revenue
£44.7m
+2 7 %
FY-22: £35.1m
Financial review
Our second successive
year of material revenue
growth since our change
in strategy has been
driven by increases
in both management
and performance fees,
resulting in a 34%
increase to operating
profi t.
Steve Cullen
Chief Financial Offi cer
Overview
The implementation of the Group’s change in strategy
continues, focused on the diversifi cation of its products
and services and the modernisation of its systems and
processes. The pipeline of new product launches and new
revenue streams in asset management remains strong, and
we expect to see the culmination of our work over the last
three years to start making a material diff erence to revenues
in FY-24, the current fi nancial year. Our existing strong core
of hedging products remains fundamental to our growth
plans, underscored by net infl ows of $9.1 billion for the year
in addition to the $2.4 billion in FY-22. As expected, and
somewhat inevitably, our cost base has risen over the year,
linked both to our continued investment in the modernisation
of our business, and to the exceptional levels of infl ationary
pressure seen at both a personnel and non-personnel level.
The Group remains independent, cash generative and
profi table, supported by its strong and liquid balance sheet.
Revenues grew 27% to £44.7 million (2022: £35.1 million)
supported by a 12% increase in management fees and an
increase in performance fees of £5.3 million (2022: £0.5
million). Operating profi t for the year increased by 34% to
£14.5 million (2022: £10.8 million) and the operating profi t
margin increased to 32% (2022: 31%) with a 34% increase in
profi t before tax to £14.6 million (2022: £10.9 million).
44 Record plc Annual Report 2023
Financial review
Profit and loss (£m)
2023 2022
Revenue 44.7 35.1
Cost of sales — (0.2)
Gross profit 44.7 34.9
Personnel (excluding bonus) (12.8) (10.8)
Non-personnel costs (9.5) (7.2)
Other income or expense (0.3) (0.4)
Total expenditure (excluding bonus) (22.6) (18.4)
Group Bonus Scheme (7.6) (5.7)
Operating profit 14.5 10.8
Operating profit margin 32% 31%
Net interest received 0.1 0.1
Profit before tax 14.6 10.9
Tax (3.3) (2.3)
Profit after tax 11.3 8.6
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,
whichare available across Record’s product range. Management fee only mandates are charged based upon the AUME
of the product, and management plus performance fee structures include a lower percentage fee applied to AUME, and a
proportional share of the specific product performance measured over a defined period.
Management fees are typically charged on a quarterly basis, although Record may charge fees monthly for some of its
largerclients. Performance fees can be charged on quarterly, six-monthly or annual performance periods on the basis
agreedwith the particular client.
Revenue – Asset Management
Asset management did not generate any material revenue reportable for FY-23. Material new revenue streams derived
fromRecord’s diversification into asset management products and services will be reported separately from the current
financial year (FY-24) onwards.
Revenue – FY-23
Management fees earned during the year increased by 12% to £38.3 million (2022: £34.1 million) driven by net inflows of
$9.1billion into Record’s core currency hedging products, and the full-year revenue impact on Currency for Return from the
Record EM Sustainable Finance Fund, launched in June 2021. Performance fees increased by £5.3 million to £5.8 million for
theyear (2022: £0.5 million), linked to positive performance from certain Enhanced Passive Hedging mandates.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 45
Financial review continued
Revenue analysis (£m)
Year
ended
31 March
2023
Year
ended
31 March
2022
Management fees
Passive Hedging 12.9 11.8
Dynamic Hedging 12.0 10.0
Currency for Return 6.8 5.5
Multi-product 6.6 6.8
Total management fees 38.3 34.1
Performance fees 5.8 0.5
Other income 0.6 0.5
Total revenue 44.7 35.1
Management fees
Passive Hedging management fees increased by 9% to
£12.9million (2022: £11.8 million) predominantly driven by
the net inflows of $4.9 billion in the year. Whilst Passive
Hedging commands a significantly lower average feerate
than Record’s other products, it continues to provide a
robust and valuable revenue stream from a long-standing,
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-24).
Dynamic Hedging management fees increased by 20%
to£12.0 million (2022: £10.0 million) as a result of the
full-year impact of the $0.8 billion of net inflows seen in
thesecond half of FY-22, combined with the total net inflows
of $4.2billion in FY-23 from new and existing clients.
Management fees from Currency for Return mandates
increased 24% to £6.8 million (2022: £5.5 million). The
increase has been driven predominantly by the full-year
impact of revenue from the Record EM Sustainable Finance
Fund, launched in June 2021. The net outflow of $0.6 billion
announced in the final quarter of the financial year will
partially offset this increase in the current financial year
(FY-24).
Multi-product management fees decreased marginally by
3% to £6.6 million (2022: £6.8 million). However, net inflows
of $0.6 billion in the second half of FY-23 are expected to
increase revenues in the current financial year (FY-24).
Performance fees
Performance fees can be derived from a combination of
hedging and return-seeking products. Our enhanced Passive
Hedging products continued the rebound seen towards
the end of FY-22 in making up lost ground versus previous
high water marks. This was accelerated during the year by
the opportunities arising to add value linked to increases
in interest rate differentials, which helped to deliver an
exceptional level of performance fees of £5.8 million (2022:
£0.5 million). Such opportunities for added value on this
product 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-24).
Other income
Other income totalled £0.6 million (2022: £0.5million)
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 AUME.
46 Record plc Annual Report 2023
Financial review continued
Expenditure
Cost of sales
Cost of sales previously comprised of referral fees and costs
in relation to the Record Umbrella Fund, which was closed
during the previous financial year (2022: £0.2 million).
Operating expenditure
The Group operating expenditure (excluding variable
remuneration and other expenses) increased by 24% to
£22.3million for the year (2022: £18.0 million).
As expected, the Group has seen increases in personnel
costs (excluding bonuses) for the year of approximately 19%.
Average headcount increased by 7%, and the exceptional
inflationary environment over the year continued to erode
the purchasing power of our employees’ pay, adding pressure
for the business to provide support against the resultant
increase to the general cost of living. Consequently, in
order to avoid adding to recurring fixed costs in future, it
was decided to award one-off cost-of-living allowances of
£3,000 per employee (excluding Executive Directors and
Board members), amounting to a total cost of approximately
£0.3million. The Group continues to monitor the situation
closely and to provide support to ensure the continued
wellbeing of employees, and in April 2023 it was decided
tomake a further cost-of-living payment to employees of
£2,000 per employee during FY-24.
Against this backdrop, salaries and related on-costs
(including pensions) increased by 14%, whilst other
employment-related costs associated with the Group’s
share schemes, including the new LTIP scheme launched
in the year, increased by just over 60%. Commission paid
under the scheme aimed at generating new business rose by
approximately 35%, linked to the increase in revenue.
Similarly, and also as expected, non-personnel costs include
rises linked to inflation as well as those associated with
continued investment by the Group into IT resources in the
key strategic area of modernisation, and those costs linked
with increases in both growth, and ultimately complexity, of
the Group structure and of its products and services.
Consequently, non-personnel costs increased by 32% during
the year to £9.5 million (2022: £7.2 million). Increases in
professional fees of one third, including both legal and audit
fees, reflect the set-up costs and growing footprint of the
Group abroad, including expansion and regulatory approval
in Germany. As the Group’s growth plans and diversification
progress, so does the requirement for additional market
data consumed via platforms and other data sources, plus
additional software and IT-consultant resource, leading to an
increase in related costs of approximately 40% for the year.
The new office location in London was expanded halfway
through the year to accommodate growth in employee
numbers and to enable the Group to maintain its strong
culture and focus on collaborative working, regarded as key
for future growth and employee retention and wellbeing.
Whilst the increase in cost was slightly offset by downsizing
of the Windsor-based office, occupancy costs increased by
approximately 20% in the year. Alongside the increase in new
business, costs associated with travel and accommodation
doubled, linked to the resumption of more client meetings in
person as opposed to virtually.
The Group remains conscious of the need for good cost
control balanced with ensuring the business is appropriately
resourced to achieve its strategic goals of diversification,
modernisation and succession. However, it is anticipated
that the continuation of inflationary pressures in the current
environment, as well as the full-year impact of associated
rises seen in the year, will inevitably lead to an increase in its
cost base in the current year (FY-24), albeit at more muted
levels versus FY-23.
Other expenses were £0.3 million for the year (2022:
£0.4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 bonus pool has increased by 33% to £7.6 million
(2022:£5.7 million), broadly in line with, and reflecting,
the34% increase in operating profit for the year, and has
been calculated at 34.8% of pre-bonus operating profit.
Further information on variable remuneration can be found
inthe Remuneration report starting on page 76.
Operating profit and margin
Group operating profit increased by 34% to £14.5 million
(2022: £10.8 million) with the Group operating margin
increasing marginally to 32% (2022: 31%). The Group
continues its programme of investment to modernise
systems and processes and has seen increases in costs
as described further above. Alongside minor delays in
the launch of new, higher revenue-margin products this
has impacted the Group’s operating margin for the year.
TheGroup remains confident that new product launches
in the current financial year (FY-24), alongside careful
cost control, albeit still challenging in a high inflationary
environment, will deliver increases in the operating margin
over the medium term.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 47
Financial review continued
Cash flow
The Group consolidated statement of cash flows is shown
onpage 109 of the financial statements.
The Group’s year-end cash and cash equivalents stood at
£9.9million (2022: £3.3million) and the total assets managed
as cash were £14.5million (2022: £17.3million). The cash
generated from operating activities before tax increased
by 16% to £14.7 million (2022: £12.7million). Duringthe year,
taxation of £2.4 million was paid (2022: £1.4million) and £9.1
million was paid in dividends (2022: £6.5million). The Group
spent £3.6 million (2022: £4.5million) on the purchase of its
own shares for the EBT to set against the future vesting of
share options, and spent £3.6 million on investments (2022:
£1.8million).
At the year end, the Group held money market instruments
with maturities between three and twelve months worth
£4.5million (2022: £13.9million). These instruments are
managed as cash by the Group but are not classified as cash
under IFRS rules (see note 18 of the financial statements
formore details).
Dividends
An interim ordinary dividend of 2.05 pence per share (2022:
1.80 pence) was paid to shareholders on 30 December 2022,
equivalent to £3.9million.
As disclosed in the Chairman’s statement on page 7, 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 4.50pence
per share. Simultaneously, the Board is also paying a
special dividend of 0.68 pence equivalent to approximately
£1.3million, making the total dividend in respect of the year
ended 31 March 2023 of £9.9million equivalent to 87% of
total earnings.
The total ordinary and special dividends paid per share
in respect of the prior year ended 31 March 2022 were
3.60pence and 0.92 pence respectively, equivalent to total
dividends of £8.6 million and representing 100% of total
earnings per share of 4.52 pence.
Financial stability and capital management
The Group’s balance sheet is strong and liquid with total
net assets of £28.3 million (2022: £25.9million) at the end
of the financial year, including current assets managed as
cash totalling £14.5 million (2022: £17.3million). The cash
generated by the business has increased in line with the
rise in profitability, with net cash inflows from operating
activities after tax of £12.3million for the year (2022:
£11.4million). For further information on cash flows, see the
consolidated statement of cash flows on page 109 of the
financial statements.
Under the Board’s capital and dividend policies, the Group
can pay up to a maximum of 100% of earnings for 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
29 June 2023
Cautionary statement
This Annual Report contains certain forward-looking
statements with respect to the financial condition, results,
operations and business of Record. These statements
involve risk and uncertainty because they relate to events
and depend upon circumstances that will occur in the future.
There are a number of factors that could cause actual results
or developments to differ materially from those expressed or
implied in this Annual Report. Nothing in this Annual Report
should be construed as a profit forecast.
48 Record plc Annual Report 2023
Risk management
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, 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 51 to 53.
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 included 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 framework – overview
Record plc Board
RCML Board
RCML Investment
Committee
Audit CommitteeRAM Board
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 65 and the committee’s formal approval is required prior to implementation of any new or amended
investment process or product.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 49
Lines of defence
The Record culture is one of integrity and accountability;
core values that are embedded into the control environment
surrounding all areas of the business.
The overall risk management framework is underpinned by
three lines of defence and is overseen by the Board.
Within this framework, the first line of defence provides
management assurance and rests with line managers
within their specific departments and with senior managers
responsible for the implementation and maintenance of
higher-level controls to aim to ensure adherence to quality
standards and regulatory requirements.
Functions such as Front Office Risk Management, Compliance,
Business Risk and Legal provide the second line of defence
through the drafting, implementation and monitoring of
policies and procedures to align with best practice, to ensure
compliance and to provide assurance and oversight for the
Board.
The third line of defence is performed by internal audit,
which provides independent assurance on the adequacy
and effectiveness of the Group’s risk management, control
and governance processes, providing recommendations
to improve the control environment. Internal audit is
provided by 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.
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
Ukraine
We have been mindful from an early stage of the risks posed
to the business by the conflict in Ukraine. We continue to
closely monitor the ongoing situation, adapt to the changing
circumstances and to consider the best interests of our
chosen partners based in Ukraine.
We have so far anticipated and successfully mitigated these
risks, which can be summarised as follows:
• the impact on the delivery of IT projects linked the Group’s
external consulting partners being based in Ukraine;
• global recognition of the increased likelihood of
cyber-attacks; and
• our products which include investments in RUB (Russia
rouble) and UAH (Ukraine hryvnia).
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.
Risk management continued
50 Record plc Annual Report 2023
Risk management continued
Risk Link to strategy Trend Description
Concentration
Diversification
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-24 with the change in
product mix through the successful development and marketing of
new products and strategies.
Competitive threats
Diversification
Modernisation
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 and our investment in technology and
innovation have served us well over 40 years and will continue
to do so.
Delivery of strategy
Diversification
Modernisation
Succession
We continue to successfully execute the CEO’s strategy – we are
increasing revenue through both traditional and new products, and
made strides in introducing technology to streamline a number
of operational processes and have put into action a plan for
generational change.
Regulatory trends
Diversification
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 (e.g. EMIR, Brexit, IFPR, BaFin).
Product innovation
Diversification
Modernisation
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
Diversification
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
Diversification
Modernisation
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.
Strategic risks
Our top two strategic risks are concentration and competitive
threats. We consider both of these to be “high” risk and, while
we accept these as a fact of doing business, a key pillar of the
CEO’s strategy is to mitigate these through diversification.
Other notable strategic risks are delivery of strategy,
regulatory trends, product innovation, third-party products
and exogenous.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 51
Risk management continued
Risk Link to strategy Trend Description
Trade configuration
and execution
Modernisation
Configuring a trade with the wrong currency or in the wrong direction
would expose us to market risk, as we make good any trade errors
that would result in a cost to the client. To mitigate this risk, trades
are configured independently and then cross-checked while our
Front Office Risk team conduct pre and post-trade checks. We
continue to introduce technological solutions to increase efficiency
and reduce risk as we continue to broaden our products and services.
RAM operational
errors
Modernisation
New
risk
With the start of 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.
Risk Link to strategy Trend Description
Cyber and
datasecurity
Modernisation
Cyber risk represents the risk of loss from cybercrime or the
malicious disruption to networks through theft of data or
corruption of information. The Group has established cyber security
programmes which are continuously reviewed and adjusted to keep
pace with regulatory, legislative and cyber threat landscapes, the
latter heightened from the Group now operating across various
locations and more recently as a result of the war in Ukraine. Record
Group did not experience any material client or operational impact
nor any data breaches in the year.
Operational risks
System 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. In line with the strategy to plan for generational
change, several new heads of department have been
appointed using internal promotions, thereby ensuring the
knowledge and familiarity required to run bespoke mandates
remains in the business and these operational risks continue
to run within an acceptable tolerance level aligned with the
Board’s risk appetite.
Our biggest operational risks are trade configuration, the
responsibility of the Portfolio Implementation team, and
trade execution, undertaken by our Trading team. Other
notable risks include accuracy of market and portfolio data
(on which we trade), settlement risk (while we do not trade
on our own account, risk that we make a mistake with a
payment instruction), and reporting errors.
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.
52 Record plc Annual Report 2023
Risk management continued
Risk Link to strategy Trend Description
Product
underperformance
Diversification
We are increasingly exposed to emerging markets and their inherent
risks, given the geopolitical environment as well as our activity in
this space. We expect this risk to increase as we grow this part of
thebusiness.
Market liquidity
Modernisation
Market liquidity is another risk of doing business and one that asset
managers must embrace. That said, we mitigate this risk through
extensive access to, and long-standing relationships with, liquidity
sources, and have successfully navigated historic liquidity events
such as covid-19, Brexit and the SNB decision to stop supporting
the Euro-Swiss franc floor, which we see as a core competitive
advantage. More recently, through adherence to our approved
counterparty list, we maintained minimal exposure to Credit Suisse,
while our Credit Committee continuously monitored developments as
the situationunfolded.
Risk Link to strategy Trend Description
Key person
andsuccession
Succession
The Group has been in business for 40 years and was previously
vulnerable to key person risk in the executive, operational and
investment teams. As we continue to execute the CEO’s strategy by
planning for generational change and promoting from within, this key
person and succession risk posed to the business becomes further
diluted, as evidenced by the recent announcement of Dr Jan Witte as
RCML CEO and the change of Chairman announced for the AGM in July.
Talent acquisition
and retention
Succession
The inflationary environment has forced many firms, including ours,
to consider risks to talent acquisition and retention. While there
has been some turnover and internal promotions to key operational
roles, we continue to successfully attract talent into all areas of
thebusiness.
Investment risks
People risks
Any asset manager must embrace the risk of product
underperformance, whether against their benchmarks or
indeed in absolute terms; we are no different. This is our key
investment risk.
Investment risks also cover the research process and any
potential impact on product development, which we see as
low risk given our highly qualified and experienced research
colleagues and, a rigorous review process and strict scrutiny
by the RCML Investment Committee for all related product
developments.
People are our biggest asset and, as such, present various
risks. We have worked hard to mitigate both key person and
succession risks over the previous twelve months; indeed,
succession planning is a key focus of the Board.
We also monitor risks such as conduct and conflicts of interest, as well as staff engagement and wellbeing.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 53
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 2026.
The Directors review the financial forecasts and position
of the Group on an ongoing basis. The capital and dividend
policies reflect the stated objectives of maintaining a
strong balance sheet whilst allowing the Group flexibility
to adapt its products and services to market conditions, to
take advantage of emerging business opportunities, and to
make progressive and sustainable returns to shareholders.
The Group’s strategy and principal risks are assessed and
reviewed regularly at Board and Executive level, and by
operational subsidiaries within the Group. Further detail
on the Group’s strategy and principal risks is given in the
Strategic report on pages 18 to 21 and 51 to 53 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 scenarios assume mitigating actions including the
potential for non-critical cost reductions and reassessing the
dividend policy, although any mitigating actions would need
to be reassessed depending on the specific circumstances
and expected duration of the factors affecting the business
model at the time. The possibility that the impact and timing
of factors potentially affecting the viability of the Group
could be more severe than assumed plausible for the above
testing should also be noted.
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 the war in
Ukraine and a higher inflationary environment. Through its
change in strategy and increased focus on growth, combined
with the continued enhancement of its products and services
and in maintaining its approach to innovation and the use of
technology, the Directors believe the Company to be capable
of meeting such challenges, as evidenced by the growth in
revenue and profits and the diversification of AUME seen
over the last two years. The Directors consider a three-year
horizon over which to assess the viability of the Group to
be appropriate under such circumstances, since it provides
a sharper focus and any further planning horizon provides
a greater level of uncertainty to planning and financial
projections.
The Strategic report is set out on pages 1 to 54 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
29June2023 and signed on its behalf by:
Leslie Hill
Chief executive Officer
54 Record plc Annual Report 2023
Governance
Governance
Chairman’s introduction 57
Board of Directors 58
Corporate governance report 60
Corporate governance overview 60
Board structure 61
Board activity 62
Board eff ectiveness 64
Corporate governance framework 65
Internal control and risk management 66
Nomination Committee report 67
Audit Committee report 70
Remuneration report 76
Chair of the Remuneration Committee’s statement 77
Remuneration Policy 79
Annual report on remuneration 84
Directors’ report 92
Directors’ responsibilities statement 95
Record plc Annual Report 2023 55
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Meet the Chair-elect
1. What made you want to join Record?
As Neil notes in his statement on page 7, I have some
history with Record having initially been a client in the
1980s and subsequently sat on the Board, fi rstly, when
the Company was private and, secondly, subsequent to
its listing. In that context, I have followed its fortunes
for close to forty years. I was both delighted and
surprised to be considered to succeed Neil as Chairman
of the Company and my reasons for being enthusiastic
to take the role stem in no small measure from the
regard that I have for Neil personally, as well as for
the business he, supported over the years by some
outstanding colleagues, has created.
Some of the defi ning characteristics of the Company
since inception have been intellectual rigour, an
overwhelming focus on the importance of client
relationships, which is evident from the longevity of
several of those clients, and a strong corporate culture
and values which have been a guidewire since the early
days and which remain as powerful now as they were in
the past.
It is a testament to the strength of the business that
many of the Company’s products, whilst evolving, have
continued to generate revenues over a long period.
However, one of the exciting aspects of re-engaging
at this point are the new areas of business that have
come to the fore since the appointment of Leslie Hill
as CEO in 2020. Record continues to be one of the
leading independent foreign exchange managers, but
the potential of new products to broaden the business,
to deliver growth and to add diverse and uncorrelated
income streams gives me cause to be excited about
the next few years. I believe that Record has both
the benefi t of forty years of experience on which to
draw and the ambition and potential of an early-stage
company.
2. Where do you see the Group in fi ve years?
For the reasons outlined above, I see much about the
Group being similar in fi ve years’ time to what it is now.
The quality of the people, the culture of the business, the
attention to rigorous analysis and the respect for and
desire to do the best possible for our clients must remain
in place. I also believe that currency management will
continue to be central. However, looking at the initiatives
and ideas that are in train, ranging from infrastructure
funds to cryptocurrencies, we have an opportunity to
build a diversifi ed, alternative asset manager with a range
of income streams and able to off er clients investment
products that are not-yet part of the mainstream.
As part of re-engaging with the business, I have spent time
with several members of the team, some of whom I knew
in the past, several of whom are recently arrived and their
calibre, commitment and desire to see the Company grow
gives me great confi dence, whilst recognising that not all
of the “frontier” activities currently being explored will
succeed. I believe strongly that the next few years will be
a period of growth for the Company, but, to achieve that
growth, we must be prepared to risk failure at times.
3. What are your priorities for the Board?
To pick up on my comment above, to grow we must be
willing to take risks. However, those risks must be taken in
a well-controlled environment. It is the responsibility of the
Board to ensure that the Company maintains the highest
governance and ethical standards, whilst also ensuring that
there is no corporate straitjacket that crushes initiative and
constrains development. In practice, that means that there
must always be full transparency and clear accountability
across all the Company’s activities and jurisdictions. Whilst
I would not wish to put words into their mouths, I feel that
my colleagues on the Board and I are aligned with regard
to our role and responsibilities and I much look forward
to working with them in the next few years. Record has
gained a reputation as a trusted, reliable and high-quality
organisation; it is the responsibility of the Board to ensure
that that mantle does not slip.
with David Morrison,
Chair-elect
Q&A
56 Record plc Annual Report 2023
Chairman’s introduction
As we celebrate Record’s
fortieth year I am proud
of our history of strong
corporate governance,
which has always been
at the centre of the
business, underpinning
its purpose, values
anddecision-making.
Neil Record
Chairman
In this section of the Annual Report we explain our corporate
governance arrangements and describe the operation of the
Record Group, the Board and its Committees during the year.
I have been involved with Record since its inception in
1983, initially as the founder and CEO and later as the
Non-executive Chairman. As I introduced in my statement,
my plan is to retire following the 2023 AGM, and I am happy
to announce that David Morrison will take over as the new
Chair of the Board. David is highly qualifi ed for the role, and
shares my belief that Record will continue to succeed by
having strong corporate governance arrangements. When I
step down, I will leave behind a well-established and united
Board that is successfully managing the implementation of
our new strategy.
Our enhanced business strategy of diversifi cation,
modernisation and succession is routed in our core strengths
and values, and our corporate governance structure is
very much part of this. The expansion of the Group into
new products and regions has been successful, and we are
committed to utilising our knowledge and expertise to create
value for our shareholders.
I can confi rm that the corporate governance arrangements
formally established in all Group companies operate
eff ectively and effi ciently supported by the senior
management and all Group employees. Although we believe
that our governance approach is eff ective, the Board
remains dedicated to enhancing governance structures that
will enable the Group to fl ourish and navigate any future
challenges.
Neil Record
Chairman
29 June 2023
Record plc Annual Report 2023 57
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Board of Directors
Neil Record
Chairman
Leslie Hill
Chief Executive Offi cer
Steve Cullen
Chief Financial Offi cer
David Morrison
Independent Non-executive
Director and Chair-elect
Tim Edwards
Senior Independent Director
Matt Hotson
Independent Non-executive
Director
Krystyna Nowak
Independent Non-executive
Director
Appointed:
Neil founded Record in 1983 and
has been its principal shareholder
and Chairman since then. Neil
also served as Record’s CEO until
October 2010. He will retire at
the 2023 AGM after a long and
successful career.
Appointed:
Leslie joined Record in 1992. She
was appointed Head of Sales
and Marketing in 1999, and Chief
Executive Offi cer in February 2020.
Appointed:
Steve was appointed to the Board
and made Chief Financial Offi cer in
March2013.
Appointed:
David was appointed as
Non-executive Director
and Chair-elect of Record in
March2023.
Appointed:
Tim was appointed as a
Non-executive Director of Record
in March 2018 and as Senior
Independent Director in July 2021.
Appointed:
Matt was appointed as an
independent Non-executive
Director of Record in July 2021.
Appointed:
Krystyna was appointed as an
independent Non-executive
Director in September 2021.
Previous appointments:
Prior to founding Record, Neil
was an economist at the Bank
of England and worked in the
commodity and currency trading
department at Mars Inc’s UK
subsidiary.
Previous appointments:
Leslie’s extensive prior experience
includes working at Lloyds
Bank and Merrill Lynch where
she was Director and Head of
Corporate Foreign Exchange Sales
worldwide.
Previous appointments:
Steve qualifi ed as a Chartered
Accountant in 1994 and gained 15
years of audit experience within
public practice before joining
Record.
Previous appointments:
Previously, David served on the
boards of several private and
public companies, including
PayPoint plc and Venture
Production plc. More recently,
hewas Chairman of Be Heard plc.
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:
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.
Previous appointments:
Matt’s experience spans core
fi nance, strategy, investor
relations and business leadership
gained from Arrow Global Finance
plc, RSA Insurance Group plc,
Cable and Wireless plc and Legal
and General Group plc.
Previous appointments:
Previously, Krystyna was a
Managing Director of Norman
Broadbent and prior to this
worked at Citigroup in a variety
of senior roles across shipping
fi nance, oil project fi nance and risk
management, in Europe and Asia.
Current external
appointments:
Neil is Chairman of the Board
of The Institute of Economic
Aff airs and a director of IEA
Forum Limited, Chairman of The
Global Warming Policy Forum
and a director of Aims of Industry
Limited, Oxford Festival of the
Arts, Circular Wave Limited,
Restore Trust Ltd and The Pharos
Foundation.
Current external
appointments:
Leslie is a director of Trade
RecordLtd and a Trustee of
FINHUMF Charity.
Current external
appointments:
Steve has no other appointments
outside of the Record Group.
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:
Tim is a biotech entrepreneur, who
is currently Chair of Schroders
Capital Global Innovation Trust
plc EndLyz UK Limited, Karus
Therapeutics Limited and Storm
Therapeutics Limited, and a
Non-executive Director of
AstronauTX Limited. Tim is also
Chair of the Institute for Research
in Schools Ltd.
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
Senior Independent Director of
abrdn Asian Income Fund Ltd.
Skills and experience:
With almost 40 years of
experience in fi nancial services,
Neil remains integral to the
development of the business
strategy. As Chairman he is a
strong fi gurehead, well-known
and well-respected within the
fi eld of currency management and
as such is an asset to the Board.
Neil is the author of numerous
books and articles on currency
and other risk management topics.
Skills and experience:
Having worked at Record for
30 years, Leslie has a deep
understanding of Record’s
products and the needs of clients.
As Head of the Client Team she
was instrumental in driving the
client-focused culture of the
business and helped to maintain
existing and develop new client
relationships. Leslie is therefore
very well placed to provide a
client perspective during Board
discussions.
This extensive experience means
that, as CEO, Leslie is ideally
suited to leading Record and
in driving the delivery of the
Board’sstrategy.
Skills and experience:
Steve joined Record in October
2003 and led Record’s Finance
team for over nine years, reporting
directly to the Chief Financial
Offi cer. 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 qualifi cation
and over 30 years’ experience,
including almost 20 years within
fi nancial services, Steve brings
considerable accounting, fi nancial
and risk management expertise to
the Board.
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 services to various
institutional and family offi ce
clients. With a deep understanding
of the business from his previous
non-executive experience and
his extensive fi nancial expertise,
David is ideally positioned for the
role.
Skills and experience:
Tim is a Chartered Accountant
(FCA) with a background in
corporate fi nance and venture
investing, and he has extensive
corporate development and
people management experience.
Tim adds insight to Board
discussions ensuring that the
Board continues to focus on mid to
long-term value development.
Skills and experience:
Matt is a highly experienced
fi nance professional, having
worked for more than 25 years
at leading FTSE 100 companies.
He has a proven track record in
leading fi nance strategy, business
improvement, and fi nancial
control for large listed companies.
He is currently studying for 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.
N N R
N R A N R A R A N
58 Record plc Annual Report 2023
Board of Directors
Neil Record
Chairman
Leslie Hill
Chief Executive Offi cer
Steve Cullen
Chief Financial Offi cer
David Morrison
Independent Non-executive
Director and Chair-elect
Tim Edwards
Senior Independent Director
Matt Hotson
Independent Non-executive
Director
Krystyna Nowak
Independent Non-executive
Director
Appointed:
Neil founded Record in 1983 and
has been its principal shareholder
and Chairman since then. Neil
also served as Record’s CEO until
October 2010. He will retire at
the 2023 AGM after a long and
successful career.
Appointed:
Leslie joined Record in 1992. She
was appointed Head of Sales
and Marketing in 1999, and Chief
Executive Offi cer in February 2020.
Appointed:
Steve was appointed to the Board
and made Chief Financial Offi cer in
March2013.
Appointed:
David was appointed as
Non-executive Director
and Chair-elect of Record in
March2023.
Appointed:
Tim was appointed as a
Non-executive Director of Record
in March 2018 and as Senior
Independent Director in July 2021.
Appointed:
Matt was appointed as an
independent Non-executive
Director of Record in July 2021.
Appointed:
Krystyna was appointed as an
independent Non-executive
Director in September 2021.
Previous appointments:
Prior to founding Record, Neil
was an economist at the Bank
of England and worked in the
commodity and currency trading
department at Mars Inc’s UK
subsidiary.
Previous appointments:
Leslie’s extensive prior experience
includes working at Lloyds
Bank and Merrill Lynch where
she was Director and Head of
Corporate Foreign Exchange Sales
worldwide.
Previous appointments:
Steve qualifi ed as a Chartered
Accountant in 1994 and gained 15
years of audit experience within
public practice before joining
Record.
Previous appointments:
Previously, David served on the
boards of several private and
public companies, including
PayPoint plc and Venture
Production plc. More recently,
hewas Chairman of Be Heard plc.
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:
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.
Previous appointments:
Matt’s experience spans core
fi nance, strategy, investor
relations and business leadership
gained from Arrow Global Finance
plc, RSA Insurance Group plc,
Cable and Wireless plc and Legal
and General Group plc.
Previous appointments:
Previously, Krystyna was a
Managing Director of Norman
Broadbent and prior to this
worked at Citigroup in a variety
of senior roles across shipping
fi nance, oil project fi nance and risk
management, in Europe and Asia.
Current external
appointments:
Neil is Chairman of the Board
of The Institute of Economic
Aff airs and a director of IEA
Forum Limited, Chairman of The
Global Warming Policy Forum
and a director of Aims of Industry
Limited, Oxford Festival of the
Arts, Circular Wave Limited,
Restore Trust Ltd and The Pharos
Foundation.
Current external
appointments:
Leslie is a director of Trade
RecordLtd and a Trustee of
FINHUMF Charity.
Current external
appointments:
Steve has no other appointments
outside of the Record Group.
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:
Tim is a biotech entrepreneur, who
is currently Chair of Schroders
Capital Global Innovation Trust
plc EndLyz UK Limited, Karus
Therapeutics Limited and Storm
Therapeutics Limited, and a
Non-executive Director of
AstronauTX Limited. Tim is also
Chair of the Institute for Research
in Schools Ltd.
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
Senior Independent Director of
abrdn Asian Income Fund Ltd.
Skills and experience:
With almost 40 years of
experience in fi nancial services,
Neil remains integral to the
development of the business
strategy. As Chairman he is a
strong fi gurehead, well-known
and well-respected within the
fi eld of currency management and
as such is an asset to the Board.
Neil is the author of numerous
books and articles on currency
and other risk management topics.
Skills and experience:
Having worked at Record for
30 years, Leslie has a deep
understanding of Record’s
products and the needs of clients.
As Head of the Client Team she
was instrumental in driving the
client-focused culture of the
business and helped to maintain
existing and develop new client
relationships. Leslie is therefore
very well placed to provide a
client perspective during Board
discussions.
This extensive experience means
that, as CEO, Leslie is ideally
suited to leading Record and
in driving the delivery of the
Board’sstrategy.
Skills and experience:
Steve joined Record in October
2003 and led Record’s Finance
team for over nine years, reporting
directly to the Chief Financial
Offi cer. 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 qualifi cation
and over 30 years’ experience,
including almost 20 years within
fi nancial services, Steve brings
considerable accounting, fi nancial
and risk management expertise to
the Board.
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 services to various
institutional and family offi ce
clients. With a deep understanding
of the business from his previous
non-executive experience and
his extensive fi nancial expertise,
David is ideally positioned for the
role.
Skills and experience:
Tim is a Chartered Accountant
(FCA) with a background in
corporate fi nance and venture
investing, and he has extensive
corporate development and
people management experience.
Tim adds insight to Board
discussions ensuring that the
Board continues to focus on mid to
long-term value development.
Skills and experience:
Matt is a highly experienced
fi nance professional, having
worked for more than 25 years
at leading FTSE 100 companies.
He has a proven track record in
leading fi nance strategy, business
improvement, and fi nancial
control for large listed companies.
He is currently studying for 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.
N N R
N R A N R A R A N
A Audit Committee
N Nomination Committee
R
Remuneration
Committee
Chair
Record plc Annual Report 2023 59
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Corporate governance report
Company purpose
Our purpose is to continue to harness trends and innovate
by collaborating with our clients, with the aim of achieving
diverse partnerships of financial specialists – creating
unique, opportunistic, sustainable solutions.
Corporate culture
Since its inception in 1983, the Group has consistently placed
the interests and needs of its clients at the forefront of
everything that it does, and this culture is deeply embedded
throughout the business. The Board has worked tirelessly
to ensure that the significance of client focus, diligence,
transparency, accountability and probity is communicated to
all employees, contractors and consultants across the Group.
The wellbeing of employees has also been a key area of
focus, with ongoing efforts to support colleagues. This year,
the Company expanded its office spaces to create a more
collaborative and inclusive environment for employees and
instigated core office working days. The Board of Directors
understands the importance of maintaining a strong
corporate culture within the business, and is committed
to ensuring that this value is instilled at every level of the
organisation.
Board and corporate governance changes
This year saw important changes to the composition of the
Board. Neil Record, our long-serving Chairman and founder
of the Company, decided to retire from the Board. We are
delighted that David Morrison will succeed Neil; David being
a former Non-executive Director who served on the Record
Board from 2009 until 2018. His deep knowledge of the
business and strong leadership skills make him the ideal
candidate for the role of the Chair of the Board.
There have also been minor changes in the corporate
governance structure with the establishment of the
Investment of Record plc Capital Committee (“ICC”),
whichis responsible for assessing and approving proposed
investments of plc capital, taking into account the
objectives of product diversification and the development
ofinvestmenttalent.
The Board is committed to ensuring the long-term
sustainability of the business, not only from an investment
perspective but also from the perspective of the entire
organisation. While a Senior Sustainability Office has already
been formally approved as a committee of the regulated
subsidiary Record Currency Management Limited (“RCML”),
sustainability has been a recurring item on the agenda
at Record plc Board meetings, with regular reports from
the Sustainability Manager on the committee’s activities.
To reflect the need for strategic oversight of high-level
sustainability activities that require management at the
Group level, a proposal to make the Senior Sustainability
Office a Group Executive Committee was approved at the
April Board meeting. Additionally, the HR Committee will
become a Group committee due to the Group’s expansion and
increasing number of employees worldwide.
Record Asset Management GmbH (“RAM”), a subsidiary of
Record Group based in Germany, was awarded a BaFin licence
in August 2022, leading to the implementation of a set of
formal corporate governance arrangements, including the
establishment of a Board of Directors. The Board held its
inaugural meeting in March 2023, during which it approved all
policies, procedures and functions necessary to ensure the
business operates smoothly, effectively and efficiently while
complying with all relevant laws and regulations.
Further information on the corporate governance framework
is provided on pages 65 and 66.
Compliance with the 2018 UK Corporate Governance Code
Throughout the year, the Company has applied the main
principles and provisions of the Code as deemed appropriate
to the Group.
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 37 to 39.
Corporate governance overview
Compliance with the UK Corporate Governance Code
(the“Code”)
The Board is supportive of the principles of the Code and has
been since its Admission to the Official List of the UK Listing
Authority in December 2007, with the Board complying as it
deems appropriate given the nature and size of the business.
The latest version of the Code was published in July 2018
andis applicable to accounting periods beginning on or after
1 January 2019.
Copies of the Code can be obtained from the FRC’s website at
www.frc.org.uk.
Listed companies are required under the Financial Conduct
Authority Listing Rules either to comply with the provisions
of the Code or explain to investors in their next Annual Report
why they have not done so.
The Board has reviewed the appropriateness of the
provisions to determine whether they should be applied
or if departure is justified. All provisions of the Code have
been applied as necessary as part of Record’s corporate
governance framework except for the following:
Provision 9 of the Code recommends that the chair should
be independent on appointment. Neil Record was deemed
to be a controlling shareholder until March 2023 and so was
not independent on appointment. However, the Board is of
the opinion that the potential issue of non-independence
is outweighed by the attributes of leadership and guidance
that Neil brings to the role and as Neil has announced his
retirement from the Board at the upcoming AGM in 2023,
there is no longer an issue.
60 Record plc Annual Report 2023
Corporate governance report
Provision 19 of the Code recommends that the chair should
not remain in post beyond nine years from the date of
first appointment to the Board. Neil Record founded the
Record Group in 1983 and led the business until its IPO in
December 2007. At the time of the IPO it was agreed Neil
was best placed to continue to chair the business, a role
he has undertaken ever since. Neil is well-known and well
respected within the field of currency management and
his long-established involvement with the business, his
ideas and character have built the business to what it is
today. Thisis no longer an issue with Neil’s retirement and
the imminent appointment of a new Chair. The Board will
therefore 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. Details of the evaluation
process previously conducted were provided in the Annual
Report and Accounts 2021.
Board structure
Board composition
The Record plc Board consists of seven members and
is headed by Neil Record (Chairman), with the Executive
Directors Leslie Hill (Chief Executive Officer) and Steve
Cullen (Chief Financial Officer). There are currently four
Non-executive Directors: Tim Edwards, being the Senior
Independent Director, Krystyna Nowak, Matt Hotson and
David Morrison. The biographical details of the Board
members are set out on pages 58 and 59.
In July 2023 Neil Record will retire from the Board and he will
be succeeded by David Morrison who was appointed as a
Non-executive Director and Chair-elect in March 2023.
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 leadership of the Board. He is also
responsible for overseeing the activities of the Chief Executive Officer
and providing advice, guidance and support to the executive team.
He works with the Board to develop Group strategy and support its
implementation. The Chairman is a principal ambassador of Record
and a guardian of the Group’s ethos and values.
Chief Executive Officer
The Chief Executive Officer is responsible for the executive
management of the Group with focus on profitable business
growth while acting in the interests of all stakeholders – clients,
shareholders, employees and industry regulators – and upholding
thecore values of Record. Her statement on FY-23 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-23 can be found on pages 44 to 48.
Senior Independent Director
The Senior Independent Director’s role is to act as a sounding board for the Chairman, oversee the evaluation of the
Chairman’s performance (see page 64) 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.
Record plc Annual Report 2023 61
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Corporate governance report continued
Board structure continued
Independence of the Non-executive Directors
In determining the independence of Non-executive Directors,
the Board has taken into consideration the guidance provided
by the Code. The Board considers Matt Hotson, Krystyna
Nowak, Tim Edwards and David Morrison to be independent
at the current time. Neil Record is a Non-executive Chairman,
although he is not considered to be independent.
Director appointments and time commitment
The rules providing for the appointment, election, re-election
and the removal of Directors are contained in the Company’s
Articles of Association.
The Company’s Articles of Association were revised in
2020 to align with the UK Corporate Governance Code
July2018, current legislation and market practice and were
subsequently approved by shareholders at the 2020 AGM.
Under the Articles, all Directors are subject to annual election
or re-election by shareholders and all of the Directors will
stand for election or re-election at the 2023 AGM, with the
exception of Neil Record.
The Board has agreed that all Directors standing for election
or re-election continue to make a valuable contribution to
the Board’s deliberations and recommends their election
or re-election. As required by the UK Listing Rules, the
appointment of independent directors must be approved by a
simple majority of all shareholders and by a simple majority
of the independent shareholders. Further details are set out
in the 2023 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. Details of
other roles held by the Non-executive Directors are set out in
their biographies on pages 58 and 59. The Board is satisfied
that all Directors continue to be effective and demonstrate
commitment to their respective roles.
The Executive Directors work full time exclusively for the
Record Group and have no other significant commitments
outside the Company. Neil Record, the 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 81.
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. Although the
representation of women fell to 28% with the appointment of
David Morrison, this will be rectified when Neil Record retires
from the Board at the 2023 AGM.
The Board’s opinion is that the current composition of
members comprises a good mixture of skills, experience,
knowledge and backgrounds and is therefore appropriate for
the business at the present time. Future 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.
Board activity
Board focus and decision-making
The regular scheduled Board meetings have a set,
strategically focused agenda and Board members are invited
in advance of each meeting to add any additional issues they
wish to be addressed.
Material circulated in advance of the meetings has included:
• minutes of the previous Board meetings;
• CEO report;
• subsidiary company reports;
• management information pack;
• KPI data pack;
• investment performance report;
• IT strategy and systems report;
• compliance report;
• risk management report;
• HR report;
• sustainability report; and
• governance report.
Updates from the respective Chairs of the Nomination
Committee, Remuneration Committee and Audit Committee
are provided at each meeting.
The Board discussed progress against strategy, focusing
on product diversification, technology modernisation and
succession planning on an ongoing basis. In addition, the
Board also discussed global regulatory developments and
the conflict between Russia and Ukraine.
62 Record plc Annual Report 2023
Corporate governance report continued
During the year, the Board focused on the key matters detailed below:
Key matters considered by the Board in the year ended 31 March 2023
June 2022
• Annual Report and Accounts, including going concern and viability statement
• Dividend review and approval
• Risk and compliance
• Geopolitical situation
• Climate and sustainability
July 2022
• Strategy
• Culture
• Focus on Record Digital Asset Ventures
September 2022
• Managing continuous change
• Investment of Record’s capital
• Sustainability Board training
November 2022
• Interim Report and Accounts, including going concern review
• Dividend review and approval
• Recent investment performance
• Talent and organisational development
• Shareholder value
• Company finances
February 2023
• Strategy
• Risk and compliance, including Group Financial Crime review
• Approval of new PDMRs and Insider lists
• Third-party products framework
• New subsidiary approval
• Capital Markets event
The meeting scheduled for March 2023 was postponed until April 2023.
Record plc Annual Report 2023 63
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Corporate governance report continued
Board activity continued
Meeting frequency and attendance
The Board met fi ve times between 1 April 2022 and
31March2023 (the scheduled meeting in March 2023 was
postponed to April 2023) to review fi nancial performance and
to follow the schedule of matters reserved for its decision
and approval. Comprehensive Board papers, comprising
an agenda and formal reports and briefi ng documents, are
sent to Directors in advance of each meeting. Directors
are regularly informed by senior executives and external
advisers on the Group’s aff airs, 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 off site strategy
meetings and additional meetings as required to address
specifi c 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 2023.
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: 5
Neil Record 5/5
Leslie Hill 5/5
Steve Cullen 5/5
Tim Edwards 5/5
Matt Hotson 5/5
Krystyna Nowak 5/5
David Morrison 0
David Morrison did not attend any meetings due to his
appointment in March 2023.
The Non-executive Directors met without the Executive
Directors on several occasions throughout the year, prior to
scheduled meetings.
Board eff ectiveness
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, a comprehensive and tailored induction programme
was provided and is ongoing. This induction includes
briefi ngs with the 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.
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
fl ow between the Board, its Committees and management
and assisting with Directors’ continuing professional
development needs.
All Directors have access to independent professional advice,
when required, at the Company’s expense as well as to the
advice and services of the Company Secretary.
Board performance evaluation
The Board is required by the Code to undertake an annual
evaluation of its performance. The Code states that “There
should be a formal and rigorous annual evaluation of the
performance of the Board, its Committees, the Chair and
individual Directors”.
The Code recommends that evaluation of the Board of FTSE
350 companies should be externally facilitated at least every
three years.
The last externally facilitated Board eff ectiveness 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 specifi cs 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 Offi cer 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 2023 was positive and all roles were considered
to be undertaken eff ectively.
64 Record plc Annual Report 2023
Corporate governance report continued
Corporate governance framework
The Board has established a framework of committees and sub-committees to ensure robust corporate governance practices
throughout the business. The Board is confi dent that this structure is appropriate and that the delegation of responsibilities
allows the business to operate in a structured manner and to respond rapidly when issues arise.
The diagram below gives an overview of the Group’s core governance framework.
Record plc – Board Committees
The Board has established three Board Committees and
delegated authority to each Committee to enable it to
execute its duties appropriately. The annual reports of the
three Committees provide a statement of each Committee’s
activities in the year with a separate report from:
• Nomination Committee – report set out on pages 67 to 69;
• Audit Committee – report set out on pages 70 to 75; and
• Remuneration Committee – report set out on pages 76
to91.
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 offi ce 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 eff ectiveness
during the year. The reviews concluded that the Committees
were operating in an eff ective manner and no concerns were
raised and these conclusions were reported to the Board
accordingly.
Record Currency Management Limited –
OperationalCommittees
The subsidiary Board has fi ve 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
Offi cer, the Chief Executive Offi cer, the Group Chairman,
the Head of FX Risk Management Solutions, the Director of
Enhanced Passive and Rates and the Head of Macro Research.
Meetings: The Committee meets as necessary, responding
both to internal developments and external events.
Reporting: Reports on the activities of the Committee
are presented at each formal Record plc and RCML Board
meeting for review and comment.
Portfolio Management Group
Role: The Group is responsible for client take-on, new and
amended products/service operational approval, business as
usual operational activities and operational incidents, errors
and breaches.
Members: The Chief Operations Offi cer, 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 Offi ce Risk Management and the Head of
Trading.
Meetings: The Group meets at least once a week and as
necessary in response to individual or specifi c events
requiring review.
Reporting: Reports on the activities of the Group are
presented to the RCML Board meeting for review and
comment.
Record Currency Management Limited Board
Operational Committees
Investment
Portfolio Management Group
HR
Sustainability
Record plc Board
Board Committees
Remuneration
Nomination
Audit
Record plc Annual Report 2023 65
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Corporate governance report continued
Corporate governance framework continued
Record Currency Management Limited –
OperationalCommittees continued
HR Committee
Role: The Committee is responsible for the development
and review of the Group Human Resources strategy,
approach to the systems for performance management,
staff remuneration and benefits, training and development
and ensures rigorous and transparent employment policies,
procedures and systems are in place and kept under review.
Members: The Chief Executive Officer, the Head of HR, the HR
Director and the Global Head of Sales.
Meetings: The Committee meets at least once a month and
as necessary in response to individual or specific events
requiring review.
Reporting: Reports on the activities of the Committee
are presented to the RCML Board meeting for review and
comment and to the Record plc Board meeting.
Senior Sustainability Office (“SSO”)
Role: The SSO is responsible for delivering on Record’s
commitment to be a sustainability leader and in ensuring
Group efforts are strategically aligned with the principles of
sustainability and that environmental, social and governance
principles are embedded in Group decision-making
processes.
Members: The Chief Executive Officer, the Chief Investment
Officer, the Global Head of Sales, the Head of Trading,
the Head of Macro Research, the Head of HR and the
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 SSO are presented
to the RCML Board meeting for review and comment and to
the Record plc Board meeting.
Internal control and risk management
The Board has overall responsibility for the Group’s systems
of internal control and the management of significant risks.
The Board sets appropriate policies on internal control, which
are reviewed annually. The authority for the operational risk
management is delegated to the RCML Board.
The Board seeks ongoing assurance from the RCML Board,
the Head of Business Risk, the Head of Compliance and
senior management about the effectiveness of the internal
controls, which include operational and compliance controls,
risk management and the Group’s high-level internal control
arrangements. Such a system of internal controls is designed
to manage, rather than eliminate, risk of failure to meet
business objectives and can only provide reasonable and not
absolute assurance against material misstatements or loss.
Further information on the Group’s risk management
framework is provided on pages 49 to 53 of the Strategic
report.
The Record plc Board has undertaken a review of the
effectiveness of internal controls for the year ended 31 March
2023 and is satisfied that the internal control environment is
appropriate (see “Internal controls and risk management” on
page 74).
Approved by the Board and signed on its behalf by:
Kevin Ayles
Company Secretary
29 June 2023
66 Record plc Annual Report 2023
Nomination Committee report
During this year, the
Nomination Committee’s
primary focus was to
implement a succession
plan for the Chair of the
Board, in light of Neil
Record’s retirement
decision at the 2023
AGM. I am confi dent that
in David Morrison we
have selected the best
candidate for the role.
Krystyna Nowak
Chair of the Nomination Committee
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 eff ectively and effi ciently.
The Committee serves both Record plc and the
Group’s FCA regulated entity, Record Currency
Management Limited.
Committee meeting attendance
Krystyna Nowak 7/7
Matt Hotson 7/7
Tim Edwards 7/7
Neil Record 7/ 7
David Morrison 0
David Morrison did not attend any Committee
meetings due to his appointment being in
March2023.
Record plc Annual Report 2023 67
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Nomination Committee report continued
I am pleased to present the Nomination Committee report for
the year ended 31 March 2023. This will be my second report
as Chair of the Nomination Committee since I joined the
Record plc Board in September 2021.
Key responsibilities
The key responsibilities of the Committee are to:
• review the structure, size and composition of the Board
and Committees including the diversity and balance of
skills and experience;
• consider succession planning for Directors and other
senior management;
• identify and nominate for the approval of the Board
candidates to fill Board vacancies; and
• review annually the time commitment required of
Non-executive Directors.
Membership of the Committee
I chair the Committee and am supported by the other
independent Directors, Matt Hotson, Tim Edwards, newly
appointed David Morrison and the Group Chairman, Neil
Record, until his retirement at the AGM 2023.
Committee meetings
The Committee met on seven occasions during the year
ended 31 March 2023 and invited the Chief Executive Officer
and the Head of Human Resources and Company Secretary to
join the meetings as the Committee considered appropriate.
Committee member meeting attendance is detailed above.
The Chair of the Nomination Committee reported regularly to
the Board on the Committee’s activities, identifying matters
where any action was deemed to be required and making
recommendations as considered appropriate.
Key areas of focus
Chair succession planning
With the forthcoming retirement of the Company’s founder,
Neil Record, as Chairman, the Committee has worked with the
Board to select a successor and we are pleased that David
Morrison has joined us as Chair-elect, to assume the role of
independent non-executive Chairman from the AGM in July.
The Committee selected a pool of potential candidates as
part of the recruitment process and each candidate was
evaluated based on their skills and experience of leading a
successful business and a diverse team.
David was the standout candidate, with extensive experience
and a proven track record of leading companies through
periods of growth and change. David previously served as
an independent Non-executive Director at Record, which has
given him a background understanding of the Company which
is very additive.
Board composition and succession plans
The Committee is committed to ensuring that the Board
has the necessary skills and expertise to facilitate the
Group’s growth plans, which involve diversifying products,
investing in technology, and implementing robust succession
plans. Leslie Hill, Group CEO, is focused on the delivery of
the Group’s three-year plan. The opportunity to lead the
subsidiary company, Record Currency Management, has
arisen, allowing Jan Witte to assume the role of CEO. This
appointment will enable him to effectively manage and
expand the subsidiary business.
Board diversity and newly introduced Listing Rules
The Group’s Board Inclusion and Diversity Policy was last
reviewed by the Committee in April 2022 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 policy outlines the Board’s
commitment to strive towards having a minimum of one-
third of women on the Board, a goal that has been upheld for
several years.
The new 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 2023, 29% of our Board are women, which will
increase to 33% on Neil Record’s retirement in July. This fulfils
the targets established in the Group’s Board Inclusion and
Diversity Policy. We have a female CEO, Leslie Hill. None of
our Board members are from a minority ethnic background.
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.
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.
68 Record plc Annual Report 2023
Nomination Committee report continued
The Board believes that an inclusive culture and one that
supports diversity is essential to the long-term success
of the business. We are fully committed to a diverse Board
which benefits from different skills, experience, background,
gender and ethnicity. We believe that the current Board
has the skills and diversity to discharge its duties and
responsibilities effectively.
Being a company with a well-established corporate
governance structure and small size, we do not believe that
we will gain any benefit from appointing additional Directors.
The Committee has committed to regularly reviewing the
Board’s composition and the Board will make efforts to
achieve the necessary diversity objectives at the earliest
possible opportunity.
The Committee is working on succession plans, covering
different time frames, including contingency planning,
medium-term planning for the orderly replacement
of current Board members and senior executives, and
long-termplanning that aligns with the Company’s
strategyand objectives.
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).
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. The Committee is aware
that Neil Record has held this position since Record’s IPO
in 2007, but as Neil has announced his retirement from the
Board at the upcoming AGM in 2023, there is no longer a non-
compliance issue.
Performance of the Directors and the Board
As per the UK Corporate Governance Code, it is required for
the Board to conduct a yearly evaluation to assess their
performance. Additionally, FTSE 350 companies are advised
to undertake an external evaluation once every three years.
Although Record is not a part of this index, an external
evaluation workshop was conducted in 2021. In 2023, the
Committee opted for a self-assessment questionnaire
to evaluate the Board’s performance. The questionnaire
covered various topics such as Board structure, information,
objectives, strategy, remit, Board Committees and Board
dynamics. The Committee was content with the results of the
evaluation and also identified certain areas for improvement.
Looking forward
The Committee’s primary concern is to continue to plan
for the future leadership of the Company and to ensure
that there is strong talent for senior positions. Leslie Hill
continues to lead the Group’s strategy, and during this
time, the Committee will concentrate on planning for a
smooth andseamless handover of the CEO position at the
appropriate time.
Approved by the Committee and signed on its behalf by:
Krystyna Nowak
Chair of the Nomination Committee
29 June 2023
Male
71.4%
Female
28.6%
0-6 years
57.1%
>6 years
42.9%
Board tenure
As at year end
Board gender
Record plc Annual Report 2023 69
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Audit Committee report
I am pleased to confi rm
the Committee has
continued to be central
to the oversight of
the Group’s fi nancial
reporting, control and
assurance processes
andinternal and
externalaudit.
Matt Hotson
Chair of the Audit Committee
Role of the Committee
The role of the Audit Committee is to encourage
and safeguard a high standard of integrity in
fi nancial reporting having regard to laws and
regulations applicable to the Group and the
provisions of the UK Corporate Governance Code.
The Committee serves both Record plc and the
Group’s FCA regulated entity, Record Currency
Management Limited (“RCML”).
Committee meeting attendance
Tim Edwards 6/6
Matt Hotson 6/6
Krystyna Nowak 5/6
Krystyna Nowak was unable to attend the
November meeting due to a prior commitment.
70 Record plc Annual Report 2023
Audit Committee report
I am pleased to present the Audit Committee report for the
year ended 31 March 2023 (“FY-23”). This will be my second
report since I joined Record in 2021 and I am happy to confirm
that the Audit Committee proved to be efficient in delivering
its main purpose to the Board – the oversight of the financial
reporting process of the Group’s financial performance –
while remaining focused on continuing improvement of the
internal control environment.
Committee duties
In early 2022, the responsibility for supervising both the
main and developing risks was given to the Board of Record
plc. This move was beneficial for the Audit Committee as it
allowed the Committee members to concentrate on crucial
matters related to financial reporting and internal control
efficiency during a time when the Group was expanding into
new business areas.
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.
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 2023. 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.
Record plc Annual Report 2023 71
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Audit Committee report continued
Key areas of focus
Change of the internal audit provider
Since 2010, Deloitte has been our partner in supplying
internal audit services. However, there was a growing sense
at all levels of the organisation that a new perspective on
the internal audit process was needed. The Head of Risk
presented the Committee with various proposals for how
to approach the third line of defence in managing risks, and
after considering these proposals, the decision was made to
appoint RSM UK Risk Assurance Services LLP (“RSM”) as the
new internal auditor. The Committee selected RSM because
of their proven diligence and expertise in conducting internal
controls testing for Record and the strength of their skills
and expertise to conduct the proposed internal audit plan.
The Committee is content that the internal audit function has
sufficient independence to perform its duties effectively and
efficiently.
Review of the regulatory landscape
Throughout the year, the Committee was updated on new
developments in the regulatory landscape, including two
significant changes in IFPR: regulatory risk capital and
Internal Capital Adequacy and Risk Assessment (“ICARA”).
TheCommittee reviewed and successfully complied with
both regulatory requirements, with reports being produced
and assessed by the Committee before being presented to
the Board for approval.
Third-party assurance services
RSM was appointed in January 2020 to conduct the Reporting
Accountant and Independent Service Auditor (ISAE 3402/
AT-C 320) reports on internal controls on an annual basis.
Their report for 2023 is scheduled to be completed on 30 June
2023 and reviewed by the Committee at the earliest meeting
scheduled for July 2023.
Option valuations
One key finding during the audit was a discrepancy arising in
the option valuations for the new LTIP scheme linked to the
use of slightly different methodologies between valuation
models. Although the valuation difference was not material
for FY-23, the Committee recognised the importance of
further aligning the two methodologies to prevent the
divergence in the accumulated valuation difference over
time. The valuation methodology was changed to include
additional measurement points and an amended holding
period to reflect the recommendations made by the auditor
and to align the input assumptions with the aim of minimising
the potential for material findings in the future. Consequently,
no adjustments to the financial statements were deemed
necessary.
Software development cycle and capitalisation
oftheexpenses
As part of our modernisation strategy, Record carried
out several major projects, including the creation and
implementation of the new Record Platform and other
significant business infrastructure and development
initiatives. To maintain appropriate control and financial
reporting standards, both the internal and external audit
functions focused on various aspects of the software
development cycle and associated internal controls. The
Committee oversaw and reviewed both audits to ensure
that they complemented each other and added value to
the projects. The internal audit report showed that Record
had adequate controls, processes and resources in place to
manage software development projects, but noted that the
documentation of project roles and responsibilities could be
improved. The external audit reviewed the capitalisation of
expenses related to the Record Platform development and
was satisfied with the results.
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 58 and 59.
The composition of the Committee complies with the Code
provision for smaller companies requiring at least two
independent Non-executive Directors throughout the year.
72 Record plc Annual Report 2023
Audit Committee report continued
Committee meetings
The Committee met six times during the year ended
31March2023. The meetings were attended by the 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 Deloitte internal
audit partner attended two meetings and the subsequently
appointed RSM internal audit partner attended one meeting.
Minutes of the meetings were documented by the Company
Secretary and retained on file.
Committee member meeting attendance for the year ended
31 March 2023 is detailed on page 64.
The Committee also separately met the Group’s external
auditor on one occasion and the internal auditor on one
occasion, providing an opportunity for them, privately and
inconfidence, to raise matters of concern.
The Chair of the Committee reported regularly to the Board
on the Committee’s activities, identifying any matters on
which the Committee considered that action was required,
and made recommendations on the steps to be taken.
Committee Chair meetings
During the year the Chair of the Committee has had
separate discussions with the key people involved in the
Company’s governance, including the Board Chairman, the
Chief Executive Officer, the Chief Financial Officer, the Head
of Compliance, the Head of Business Risk, the Company
Secretary and also the external audit partner and the internal
audit partner to obtain updates and insights into business
activities.
Committee evaluation
An internal review of Committee effectiveness was overseen
as part of the Board evaluation process in March 2023. 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;
• considering the Pillar 3 disclosures prior to their
recommendation for acceptance by the Board;
• reviewing the ISAE 3402 internal controls year-end testing
results;
• discussion of the regulatory risk capital and Internal
Capital Adequacy and Risk Assessment (“ICARA”) prior
totheir recommendation for acceptance by the Board;
• receiving and reviewing internal audit updates and
reports;
• evaluating the performance and independence of the
internal auditor during the engagement period;
• reviewing the independence of the Group’s external
auditor and the nature of non-audit services supplied by
the auditor;
• reviewing the external auditor’s audit strategy for the
interim review and the final audit;
• assessing the external auditor’s concluding report for the
interim review and the year-end financial statements;
• evaluating the performance of the external auditor over
the period; 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.
During the year, the Committee also considered the
significant financial and regulatory reporting issues and
judgements made in connection with the financial statements
and the appropriateness of accounting policies. In particular,
the Committee considered management reports providing
assessments of the internal controls environment, future
cash flows, going concern and ongoing viability, capitalisation
of the software expenses and option valuations.
Record plc Annual Report 2023 73
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Audit Committee report continued
Financial reporting continued
The Committee was satisfied that all judgements made by
management which affect financial reporting have been
made in accordance with the Group’s accounting policies and
made a recommendation to the Board that it was appropriate
for the Group to adopt the going concern basis of accounting
in preparing the half-year and annual financial statements
for the year ended 31 March 2023.
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 2022 the Committee undertook a detailed review of the
Group’s Controls Assurance report which had been prepared
in accordance with ISAE 3402. The Committee members
agreed they were satisfied with the internal controls testing
conducted and observations and disclosures made in the
document.
The Committee has reviewed and evaluated the system of
internal controls and risk management operated within the
Group, and is satisfied that the internal control environment
is appropriate. More information on the Group’s risk
management framework is given in the Strategic report on
pages 49 and 50.
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 was provided by Deloitte LLP
(“Deloitte”) under an outsourcing contract which commenced
in May 2010 and terminated in July 2022, being replaced by
RSM. The objectives and responsibilities of internal audit
are set out in a charter reviewed and approved on an annual
basis. The charter was last reviewed and approved by the
Committee in October 2022. RSM reports directly to the
Committee and the relationship is subject to periodic review.
Jed Turnbull was appointed as the RSM internal audit partner,
succeeding Russell Davis from Deloitte.
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.
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.
74 Record plc Annual Report 2023
Audit Committee report continued
External audit
A tender process was last conducted in 2020, when BDO LLP
(“BDO”) was approved by shareholders at the AGM as the
Company’s external auditor. Orla Reilly, who had previously
worked on the external audit, was appointed as statutory
auditor in January 2022, succeeding Neil Fung-On. The
Committee approved BDO’s fees and the terms of the audit
engagement letter for the year ended 31 March 2023 in
January 2023.
The Committee has reviewed reports from the external
auditor on the audit plan (including the proposed materiality
level for the performance of the annual audit), the status of
its audit work and issues arising. The Committee discussed
the findings with the auditor and was satisfied with the
conclusion reached by the auditor that there was no evidence
of material misstatements. The Committee has confirmed
that no material items remained unadjusted in the financial
statements.
An assessment of the quality and effectiveness of BDO as
the Group’s external auditor was considered by way of a
review completed by the Committee with the assistance of
senior members of the Finance team and with reference to
the FRC’s practice aid on assessing audit quality, published in
December 2019. The Committee evaluated the judgements;
mindset and culture; skills, character, and knowledge; and
quality control demonstrated by BDO throughout the audit
process and concluded that BDO had provided a quality
external audit service which was appropriate for the Group
given its size and structure.
External auditor independence
Policy on provision of non-audit services by the
externalauditor
During the year the Committee operated a policy covering
the provision of non-audit services by the external auditor to
ensure that the ongoing independence and objectivity of the
external auditor was not compromised. The policy adheres
to the Financial Reporting Council’s revised Ethical Standard
issued in December 2019. Under the Ethical Standard the
aggregate of fees for all non-audit services, excluding
audit-related assurance services required under regulation,
may not exceed 70% of the average of the audit fees for the
preceding three-year period. The Committee considers it
best practice to adhere to the fee cap on an annual basis and
monitors fees accordingly.
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 4.5% (2022: 7%) 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
29 June 2023
Record plc Annual Report 2023 75
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Remuneration report
Our remuneration
policy is designed to
align the interests of
our employees and
executives with those
of our key stakeholders,
including our clients,
shareholders and
regulators.
Tim Edwards
Chair of the Remuneration Committee
Role of the Committee
The role of the Remuneration Committee is to
review and approve the remuneration strategies
of the Group, encompassing the Chair, the
Executive Directors, and the staff as a whole.
The Remuneration Committee also reviews and
advises on the remuneration policy, ensuring
that it complies with regulatory requirements,
itpromotes good conduct consistent with sound
and eff ective risk management, and is properly
disclosed to stakeholders.
Committee meeting attendance
Tim Edwards 6/6
Matt Hotson 6/6
Krystyna Nowak 6/6
76 Record plc Annual Report 2023
Remuneration report
Chair of the Remuneration Committee’s
statement
Introduction
I am pleased to present our Remuneration report for
the year ended 31 March 2023. We believe that our
Remuneration Policy, as approved by shareholders at our
2022 AGM, remains appropriate and we are focusing on
the implementation of our policy with no further changes.
Ourreport is split into three sections:
• the Remuneration Policy tables;
• the annual report on remuneration for 2022-23; and
• the role and activity of the Remuneration Committee.
We have not reproduced the full Remuneration Policy in
thisreport but have provided a summary in the tables
produced on pages 79 to 81. A copy of our full Directors’
Remuneration Policy, as approved by shareholders in
July2022, is available in the Remuneration section of the
2022 Annual Report andAccounts, which is available on our
website www.recordfg.com.
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.
Implementation of our Remuneration Policy
In last year’s Remuneration Policy we outlined a number of
priorities that the Remuneration Committee was focusing on
and I would like to summarise progress in these areas:
• motivate and retain our CEO to deliver our three-year
strategy:
The remuneration structure that we put in place for our
CEOwas designed to ensure that Leslie Hill is motivated
andincentivised to drive our 2022-25 three-year strategy,
while acknowledging that she is a significant shareholder
and therefore fully aligned with shareholders over the
long term. The business has outperformed the first year
of our three-year strategy, delivering higher revenue
and operating profit than was targeted. Leslie will
therefore receive her salary and full bonus in recognition
of both these excellent financial results as well as the
progress made in each of our three strategic priorities of
diversification, modernisation and succession.
• create a remuneration structure that aligns with and
supports our succession plans:
The implementation of our LTIP scheme in line with our
Remuneration Policy has created alignment, incentive
and retention of key Executive Directors and members
of senior management to support our succession plans.
Participants in the LTIP scheme forfeited part of their
bonus to participate in the scheme, and any vesting of
awards will be in shares, subject to the satisfaction of
three-year targets and continued employment.
• use robust performance metrics to ensure payment
forsuccess:
Our Executive Directors’ Bonus Scheme has been
implemented, based on paying for performance.
TheRemuneration Committee believes there is a balance
between a formulaic and a discretionary approach, and
has ensured that the measures and targets used to
determine variable pay for Executive Directors are aligned
with our three-year strategy, being based both on the
delivery of annual profits and the progress in key strategic
areas. In addition, our LTIP scheme includes both EPS and
TSR performance conditions and our Staff Bonus Scheme
recognises Company, department and individual levels of
performance.
• align the interests of our Executive Directors with those of
our shareholders:
The alignment of our three-year strategy to deliver
long-term sustainable business growth with the design
of our remuneration schemes means that remuneration
outcomes will be delivered fully in shares through the
LTIP and partly in shares in our bonus scheme. All awards
in shares have further holding periods, aligning interests
with shareholders.
Total remuneration spend
Over the medium term, the Board has set a target ratio of
total remuneration costs to be up to 50% of revenue. This
includes all remuneration costs for Directors and staff. For
this financial year, total remuneration costs represented 46%
of revenue and were managed well within the target ratio.
In total, the Executive Director Bonus Scheme and Staff
Bonus Scheme are capped at 35% of operating profit
pre-bonuses and this year variable remuneration totalled
34.7% of operating profit.
Group performance for 2022-23
The year to 31 March 2023 has seen revenues increase by
27.4% compared with last year, an increase in operating profit
of 33.6% and our AUME reached $87.7 billion. Our bonus pool
was 34.8% of pre-bonus underlying operating profit, which
represented £7.6million, directly linking the Group’s financial
performance to the size of the variable remuneration pool.
The payments made under the bonus scheme increased by
33.2% compared to the previous period.
Record plc Annual Report 2023 77
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Remuneration report continued
Chair of the Remuneration Committee’s
statement continued
Executive Director remuneration outcomes 2022-23
A cost-of-living allowance of £3,000 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.
No changes were made to Leslie Hill’s salary. Leslie’s variable
remuneration was determined by the criteria outlined in the
Executive Directors’ Bonus Scheme. Leslie’s bonus was paid
in full, with 75% of her bonus relating to the outperformance
of annual profit targets and 25% of her bonus relating to
strong strategic progress made in the areas of diversification,
modernisation and succession. Further details are provided
on page 85.
To reflect the increasing breadth of Steve Cullen’s role with
the expansion of the Record Group, his salary was increased
to £160,000 from 1 April 2023. Steve’s bonus was paid in full,
with 75% of his bonus relating to the outperformance of
annual profit targets and 25% of his bonus relating to strong
strategic progress made in the areas of diversification,
modernisation and succession. Further details are provided
on page 85.
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 150% of his base salary, granted in line with the LTIP
scheme rules.
Alignment with shareholders
As at 31 March 2023, 39% of the Group’s shares were held
by the Chairman and the Directors, and each of the current
Executive Directors has a shareholding significantly greater
than 150% of their base salary. In addition, 63% of the Group’s
employees are shareholders.
Engaging with employees
The Remuneration Committee takes an active involvement in
remuneration for the whole Group. Record staff participate
in all of the remuneration arrangements, including the
Staff Bonus Scheme, LTIP, JSOP 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.
In my role as Employee Engagement Director, leading our
workforce engagement initiatives, I have been working
closely with Kevin Ayles, Head of HR and Company Secretary.
We have been able to seek the views of the wider workforce
on a range of topics including strategy, remuneration and
working arrangements, through our employee engagement
pulse surveys and conversations with staff.
Shareholder consultation
It remains our policy to discuss any substantive proposed
changes to the Group’s remuneration structures with key
external shareholders in advance of any implementation.
TheRemuneration Committee takes into account shareholder
views received in relation to resolutions to be considered at
the AGM each year, and values shareholder feedback when
forming remuneration policy.
Tim Edwards
Chair of the Remuneration Committee
29 June 2023
78 Record plc Annual Report 2023
Remuneration report continued
Remuneration Policy
Remuneration Policy summary tables
This section of the Remuneration report starts with a table illustrating the remuneration structures that we have in place for
Executive Directors and then provides an overview of the key remuneration elements in place for all staff, including Executive
Directors, the Chairman and Non-executive Directors.
We have not made any changes to our Remuneration Policy for Directors and the tables summarise the policy approved by
shareholders at the 2022 AGM.
Summary remuneration structure
The table below illustrates the remuneration structures thatwe have in place for Executive Directors.
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 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 prescribed maximum salary. However,
increases are normally expected to be in line with
the typical level of increase awarded across the
Group.
Not applicable, though individual
performance will be considered
when reviewing base salary levels.
Benefits
To provide a benefits package
that provides for the wellbeing
of our colleagues.
Benefits include, but are not limited to, private
medical insurance, dental insurance, permanent
health insurance, life assurance and annual holiday.
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 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
Year 0
EPS and TSR performance conditions
LTIP
SharesBonus Scheme
CashBonus Scheme
Cash
Pension and
benefits
CashSalary
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
Record plc Annual Report 2023 79
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Remuneration report continued
Element, purpose and
link to strategy Operation Performance metrics
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 subject to lock-up
conditions of one to three years and in addition are
offered the opportunity for up to a further third
of the bonus to be paid in shares. The remaining
amount is paid in cash.
Up to 35% of operating profits (pre-bonus) are
allocated in total to the Executive Directors’ Bonus
Scheme and the Staff Bonus Scheme.
Malus and clawback provisions apply to all awards.
Further details are set out below.
Bonus will be based on the
achievement of Group financial
operating profit targets (75%) and
delivery of strategic objectives
(25%).
Individual awards are based on role,
responsibilities and delivery and
determined by the Remuneration
Committee.
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 150% of base salary.
Any awards will be delivered in Company shares.
Awards vest at the end of a three-year performance
period, after which any shares must be held for a
two-year post-vesting holding period.
Malus and clawback provisions apply to all awards.
Further details are set out below.
The Committee has discretion in the treatment
of leavers as set out below and in respect of the
assessment of performance and vesting levels
(including to amend performance conditions and
measures).
Vesting is based two-thirds on EPS
growth and one-third on relative
TSR compared with the FTSE Small
Cap index.
The Remuneration Committee has
discretion to set other performance
conditions for the future operation
of the LTIP.
Share Incentive Plan
A share saving plan to
encourage long-term equity
ownership.
The Group has an approved Share Incentive Plan
(“SIP”). All staff are able to buy shares from pre-tax
salary up to an HMRC-approved limit (£1,800 for
the financial year ended 31 March 2023), which is
matched at a rate of 50%.
Not applicable
Remuneration Policy continued
Directors’ Remuneration Policy table continued
80 Record plc Annual Report 2023
Remuneration report continued
Remuneration Policy table for the Chairman and the Non-executive Directors
The table below sets out the Remuneration Policy for the Chairman and the Non-executive Directors.
Element, purpose and
link to strategy
Current operation for Chairman and
Non-executive Directors Further information
Fees
Fixed remuneration that reflects
the role, skills and experience
The Chairman’s fees are determined by the
Remuneration Committee.
The Non-executive Directors’ fees are approved by
the Board.
Increases are normally expected to be in line with
the typical level of salary increase awarded across
the Group.
Fees are reviewed annually.
Anyreview will take into account
market rates, business performance
and individual contribution.
Pension and benefits
To enable the Chairman and
Non-executive Directors to
carry out their roles.
The current Chairman receives benefits on the same
basis as the Executive Directors, including pension,
private medical insurance, dental insurance,
permanent health insurance and life assurance.
When David Morrison assumes the role of Chairman
he will not receive any additional benefits.
The Non-executive Directors
receive expenses but do not receive
any additional benefits.
Service contracts and loss of office payment policy
All Executive Directors have service agreements with the
Company. None of the service agreements are for a fixed
term and all include provisions for termination on six months’
notice by either party. Service agreements do not contain any
contractual entitlement to receive bonuses, nor to participate
in the LTIP, nor to receive any fixed provision for termination
compensation.
Non-executive Directors are appointed for an initial
three-year period and are required to provide at least six
months’ notice of their intention to resign. Their continued
engagement is subject to annual re-election by shareholders
at the 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.
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.
Record plc Annual Report 2023 81
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Remuneration report continued
Remuneration Policy continued
Other matters
Engaging with employees and shareholders,
decision-making processes and general employee pay
and conditions
The Group’s approach to engaging with employees and
shareholders is detailed in the Chair of the Remuneration
Committee’s statement. The Group’s remuneration
decision-making processes are also summarised in that
statement and detailed further above in the Remuneration
Policy tables, as well as the general approach to employee
pay and conditions.
Malus and clawback
Malus and clawback provisions under all of the Company’s
incentive schemes (including the Executive Director and Staff
Bonus Scheme, LTIP, Share Scheme, Commission Scheme
and JSOP) are in line with regulatory requirements. Under
the relevant rules, the Remuneration Committee may apply
malus and/or clawback where:
• the relevant individual participated in, or was responsible
for, conduct which resulted in significant losses to the
Company or relevant business unit;
• the relevant individual failed to meet appropriate
standards of fitness and propriety;
• there is reasonable evidence of misbehaviour or material
error by the individual;
• the 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 Executive Directors’ Bonus Scheme
and Staff Bonus Scheme are covered wherever possible
through market purchases by the Company’s Employee
Benefit Trust (“EBT”) rather than through the issue of new
shares, and this has been the case since the inception of
the previous Group Profit Share Scheme in 2007. It remains
our intention to continue to operate in this manner in order
to minimise potential dilution of shareholders’ interests.
Similarly, grants under the LTIP and the Share Scheme are
not normally satisfied by the issue of new shares, in order to
minimise potential dilution. The JSOP uses market purchase
shares only. The Company provides funds to the EBT to allow
it to purchase shares in the market with which to satisfy the
exercise of options. The number of shares purchased by the
Group to hedge the satisfaction of options is based on an
appropriate hedge ratio at each grant date, as calculated by
management and approved by the Remuneration Committee.
Implementation of Remuneration Policy
The Group has implemented the Remuneration Policy, as
approved by shareholders previously. The Remuneration
Committee has approved variable remuneration payments
for the CEO and CFO based on 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. New Executive Directors would be eligible
to join the Executive Directors’ Bonus Scheme and would
be eligible to be considered for participation in the LTIP as
deemed appropriate by the Remuneration Committee, subject
to the applicable policy at the time.
The Remuneration Committee recognises that a new
Executive Director may forfeit remuneration as a result of
leaving a previous employer and the Committee will consider
mitigating that loss or part of that loss by making a buyout
award in addition to the remuneration outlined above. The
Committee will consider any relevant factors including any
performance conditions attached to any previous incentive
arrangements and the likelihood of these conditions being
met and will take reasonable steps to ensure that any
payment is at an appropriate level.
When recruiting a new Non-executive Director, fees will be
in line with the prevailing fee schedule paid to other Board
members and Non-executive Directors at that time.
Executive shareholding policy
Any new Executive Director will be encouraged to build a
shareholding with a value of at least 150% of base salary,
forexample through the use of the Executive Directors’
Bonus Scheme and LTIP scheme, within a reasonable time
ofbeing appointed.
At the end of the appointment, an Executive Director would
need to retain a shareholding with a value of at least 150%
of base salary previously built up through awards under the
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.
In particular, we have reviewed our Remuneration Policy in
line with the Investment Firms Prudential Regulation and
as a non-SNI firm have implemented the basic and standard
remuneration requirements.
82 Record plc Annual Report 2023
Remuneration report continued
Remuneration Policy – illustrations
The charts below show the lowest, highest and average remuneration for the CEO and CFO 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 options.
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 the 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 options granted to Directors.
£1,270,178
3-year
low
Minimum
3-year
high
3-year
average
41%
100%
25%
30%
59%
75%
70%
£760,924
£3,001,957
£2,222,439
Leslie Hill (as CEO)
0 500k 1,000k 1,500k 3,500k2,500k 3,000k2,000k£
£214,527
3-year
low
Minimum
3-year
high
3-year
average
70%
100%
41%
53%
30%
59%
47%
£179,124
£407,528
£293,405
Steve Cullen (as CFO)
0 100k 450k400k350k300k250k200k150k50k£
Key:
Fixed
Variable
Record plc Annual Report 2023 83
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
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
84 to 90 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 2023 is detailed below together with their remuneration for the
previous year.
Leslie Hill Steve Cullen
Executive Directors
2023
£
2022
£
2023
£
2022
£
Salaries and fees 682,500 650,000 150,147 136,496
Benefits
1
3,349 2,974 1,524 1,397
Pensions
2
75,075 71,500 16,516 15,015
Total fixed pay 760,924 724,474 168,187 152,908
Short-term incentive (Bonus – cash) 1,469,174 1,113,806 148,325 70,167
Short-term incentive (Bonus – shares)
3
734,586 556,903 74,162 35,084
Share option gains 37,273 — 16,854 —
Total variable pay 2,241,033 1,670,709 239,341 105,251
Total 3,001,957 2,395,183 407,528 258,159
Neil Record
David Morrison
(appointed
1 March 2023) Tim Edwards
Matt Hotson
(appointed
30 July 2021)
Krystyna Nowak
(appointed
16 September 2021)
Non-executive Directors
2023
£
2022
£
2023
£
2022
£
2023
£
2022
£
2023
£
2022
£
2023
£
2022
£
Salaries and fees 85,357 81,293 10,000 — 57,750 53,287 52,500 33,526 52,500 27,115
Benefits
1
3,876 3,453 — — — 59 — — — —
Pensions
2
9,389 8,942 — — — — — — — —
Total 98,622 93,688 10,000 — 57,750 53,346 52,500 33,526 52,500 27,115
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 £46,738 in the year to 31 March 2023 (31 March 2022: £357,044).
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 2023, the Group made contributions of 11% of each Director’s salary, which could either be paid
into the Group Personal Pension Scheme, taken as cash or a combination of the two.
All Directors who make personal contributions into the Company pension scheme via salary sacrifice receive an amount
equivalent to the employer’s national insurance saved by the Company into their pension as an additional contribution.
The employer pension contributions for the financial years ended 31 March 2022 and 31 March 2023 are detailed in the tables
on page 117.
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 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.
84 Record plc Annual Report 2023
Remuneration report continued
Leslie Hill
Objectives Outcomes
Financial
Operating profit
Deliver operating profit, pre-bonuses, of £21.5 million.
Operating profit, pre-bonuses, was £22.1 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.
As well as growing the currency hedging side of the business, this
year has seen significant progress with Record Asset Management.
We have gained our BaFin licence and have launched our Luxembourg
fund structure, partnering with specialist asset managers to provide
multi-asset funds for clients.
Progress is being made with Record Digital and partnerships are
being built to deliver diversifying strategies to our clients. In addition,
we have invested in some early-stage ventures.
Our Emerging Market Sustainable Finance Fund has ambitious
growth plans and a dedicated team.
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 Group infrastructure has been improved, with a move to
hybridcloud and on-premises infrastructure and improved
securityand control.
Microsoft Azure, Power BI and Xceptor have all been implemented
toimprove our processes and efficiency.
The R-Platform has been developed and launched shortly following
the year end.
Our new Reporting suite has been designed and is being rolled out.
Succession
Put in place robust succession plans for plc Board
level roles.
Neil Record is stepping down at the 2023 AGM and his successor,
David Morrison, has been appointed. David has joined the Board as
Chair-elect and will assume Chair responsibilities in August 2023.
Leslie Hill has been succeeded by Jan Witte as CEO of the UK
regulated subsidiary, Record Currency Management Limited,
effective from 1 May 2023.
New partnerships are being developed with potential future
businessleaders.
Steve Cullen
Objectives Outcomes
Financial
Operating profit
Deliver operating profit, pre-bonuses, of £21.5 million
Operating profit, pre-bonuses, was £22.1 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
Growth of the currency business alongside significant progress with
Record Asset Management, Record Digital Asset Ventures and the
Emerging Markets Sustainable Finance Fund
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 team and increased
responsibilities of team members
Award:
The full Executive Directors’ bonus pool was agreed by the Remuneration Committee for the delivery of both financial and
non-financial metrics. The pool was distributed to Leslie Hill and Steve Cullen based on their contribution.
Record plc Annual Report 2023 85
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Remuneration report continued
Annual report on remuneration continued
Directors’ share options and share awards (audited information)
During the financial year ended 31 March 2023 no option awards were made to the Executive Directors.
All of the Executive Directors have previously been awarded share options and the table below sets out details of Executive
Directors’ outstanding share option awards, which may vest on an annual basis over three, four and five years subject to
continued service and performance conditions. The table also sets out any options that have lapsed or been exercised.
Name Date of grant
Total
options at
1 April
2022
Options
granted
in period
Options
lapsed
in period
Options
exercised
in period
Total
options at
31 March
2023
Exercise
price
Earliest
exercise
Latest
exercise
Leslie Hill 26/01/18 93,334 — (93,334) — — 43.5p 26/01/2022 25/01/2023
21/08/19 575,000 — (95,833) (95,834) 383,333 31.1p 21/08/2022 20/08/2025
Steve Cullen 26/01/18 41,668 — (41,668) — — 43.5p 26/01/2022 25/01/2023
21/08/19 260,000 — (43,333) (43,334) 173,333 31.1p 21/08/2022 20/08/2025
The outstanding share options above vest subject to performance conditions, which are detailed on page 133.
Leslie Hill had a gain on share options of £37,273 and Steve Cullen had a gain on share options of £16,854 in the year ended
31March 2023.
Options granted to Executive Directors vest on an annual basis (in years three, four and five) and vesting is subject to
Record’saverage annualised EPS growth over the relevant period since grant as follows:
Record’s annualised EPS growth over the period from grant to vesting
Percentage
of shares
subject to the
award which vest
>RPI growth + 13% 100%
>RPI growth + 10%, =<RPI growth + 13% 75%
>RPI growth + 7%, =<RPI growth + 10% 50%
>RPI growth + 4%, =<RPI growth + 7% 25%
=<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 26 January 2018 vest in three equal tranches and the third of these
vesting dates was 26 January 2023. In accordance with the performance conditions, 100% of this tranche of options lapsed,
which was 93,334 shares for Leslie Hill and 41,668 shares for Steve Cullen.
Share option awards made to Leslie Hill and Steve Cullen on 21 August 2019 vest in three equal tranches and the first of these
vesting dates was 21 August 2022. 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 2023 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.
Name Date of grant
Total LTIP
awards at
1 April
2022
LTIP awards
granted
in period
LTIP awards
lapsed
in period
LTIP awards
exercised
in period
Total
LTIP awards at
31 March
2023
Vesting
date
Leslie Hill — — — — — — —
Steve Cullen 08/09/22 — 325,000 — — 325,000 31/03/25
The outstanding share options above vest subject to performance conditions, which are detailed on page 133.
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 is 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.
86 Record plc Annual Report 2023
Remuneration report continued
One-third of the vesting is 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.
Interest in
restricted
shares
at 1 April
2022
Restricted
awards
during year
Restrictions
released
during year
Interest in
restricted
shares at
31 March
2023
Leslie Hill 467,296 339,968 (215,980) 591,284
Steve Cullen 57,422 19,455 (31,981) 44,896
Directors’ share interests (audited information)
The tables below show Directors’ share interests for the last two financial years, including shares held by connected persons.
2023
Shares held
without
restrictions
Bonus shares
subject to
restrictions
Total
shares
held
2
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 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
2022
Shares held
without
restrictions
GPS shares
subject to
restrictions
1
Total
shares
held
Share options
(subject to
performance)
Total share
interests
Executive Directors
Leslie Hill 15,480,457 467,296 15,947,753 668,334 16,616,087
Steve Cullen 1,390,602 57,422 1,448,024 301,668 1,749,692
Non‑executive Directors and Chairman
Neil Record 56,396,541 — 56,396,541 — 56,396,541
Jane Tufnell (resigned 27 July 2021) 150,000 — 150,000 — 150,000
Rosemary Hilary (resigned 16 September 2021) — — — — —
Tim Edwards 60,000 — 60,000 — 60,000
Matt Hotson (appointed 30 July 2021) — — — — —
Krystyna Nowak (appointed 16 September 2021) 29,500 — 29,500 — 29,500
Total 73,507,100 524,718 74,031,818 970,002 75,001,820
1. Under the rules of the Bonus scheme (previously the Group Profit Share Scheme), shares awarded to Directors are subject to lock-up restrictions for between one and three
years from the award date.
2. Directors’ share interests have remained unchanged to 30 June 2023.
Record plc Annual Report 2023 87
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Remuneration report continued
Annual report on remuneration continued
Salary review for the Board
No Company-wide salary increases were made. Some discretionary salary increases were made to staff and the CFO based
onthe widening remit and responsibilities of their role.
The table below confirms the current salaries for Executive Directors and Non-executive Directors:
Salary at
1 April 2022
£
Salary at
1 April 2023
(current
salary)
£
Increase
£
Executive Directors
Leslie Hill 682,500 682,500 0%
Steve Cullen 150,147 160,000 7%
Non‑executive Directors and Chairman
Neil Record 85,357 85,357 0%
David Morrison (appointed 1 March 2023) — 120,000 —
Tim Edwards 57,750 57,750 0%
Matt Hotson 52,500 52,500 0%
Krystyna Nowak 52,500 52,500 0%
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 ending 31 March
2014
£
2015
£
2016
£
2017
£
2018
£
2019
£
2020
£
2021
£
2022
£
2023
£
Leslie Hill
1
— — — — — — 123,241 1,270,178 2,395,183 3,001,957
James
Wood-Collins
2
678,604 641,623 642,865 678,054 655,723 689,019 582,620 — — —
1. Appointed 13 February 2020.
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 2023 and the previous financial years compared to the average for all employees ofthe Group.
Year ending 31 March
2017 2018 2019 2020 2021 2022 2023
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 3% 3% 0% 3% 0% 3% 57% 6% 0% 9% 44% 18% 5% 13%
Benefits — — — — — — — — (2%) — (3%) 1% — —
Total annual
profit share/
Bonus 9% 17% (8%) 10% 20% 10% (2%) 4% 96% 1% 121% 117% 32% 44%
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 2023 and the previous financial years compared to the average for all employees of the
Group, for all Board Directors.
Year ending 31 March 2021 Year ending 31 March 2022 Year ending 31 March 2023
% change in: Base salary Benefits Total Bonus Base salary Benefits Total Bonus Base salary Benefits Total Bonus
Leslie Hill 0% (2)% 96% 44% (3)% 121% 5% — 32%
Steve Cullen 0% (2)% (25)% 5% (3)% 61% 10% — 112%
Neil Record — — — 3% (3)% — 5% — —
Tim Edwards — — — 26% — — 5% — —
Matt Hotson — — — — — — 5% — —
Krystyna Nowak — — — — — — 5% — —
Employees of Record Group 9% — 1% 18% 1% 117% 13% — 39%
88 Record plc Annual Report 2023
Remuneration report continued
Total Shareholder Return performance graph
Mar
2022
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2019
Mar
2020
Mar
2023
Mar
2021
Record plc FTSE 350 – General Financial Index
0
100
200
300
400
500
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 2013 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 2023 was 78.4 pence. The highest closing share price during the
financial year was 98.0 pence. The lowest closing share price during the financial year was 61.0 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
5.7
12 .8
10.8
7.2
9.6
2.3
3.3
8.6
11.3
1.8
6.8
8.6
1.3
£m
0
2
4
6
8
10
14
12
22
20
18
16
FY-23
FY-22
Dividends
FY-23
FY-22
Profit
FY-23
FY-22
Tax
FY-23
FY-22
Non-remuneration
costs
FY-23
FY-22
Remuneration
costs
Variable/special
Fixed/ordinary
Dividends are represented in the chart above as follows:
2023: interim dividend paid in December 2022 of 2.05 pence per share, final dividend proposed of 2.45 pence per share and
specialdividend of 0.68 pence per share.
2022: interim dividend paid in December 2021 of 1.80 pence per share, final dividend paid of 1.80 pence per share and special
dividend of 0.92 pence per share.
Record plc Annual Report 2023 89
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Remuneration report continued
Annual report on remuneration continued
Directors’ service contracts
All Executive Directors have service agreements with effect from 15 November 2007, with the exception of Steve Cullen
who has a service agreement dated 15 March 2013, reflecting his promotion to Chief Financial Officer. 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, 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, and the Directors’ Remuneration Policy, at the AGM held on 29 July 2022.
For Against Votes withheld
number % number % number %
Annual report on remuneration 101,461,225 85.45% 11,389,408 9.59% 5,885,158 4.96%
Directors’ Remuneration Policy 108,405,754 91.30% 4,405,865 3.71% 5,924,172 4.99%
Governance: role of the Remuneration Committee
Membership of the Remuneration Committee
The Remuneration Committee is chaired by Tim Edwards, who is supported by two independent Non-executive Directors,
MattHotson and Krystyna Nowak.
The Chief Financial Officer, Chief Executive Officer, Head of Compliance and Chairman 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 who acts
as Secretary to the Committee.
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;
• determining the framework and policy for the remuneration of all staff and ensuring alignment with succession planning
and the Group’s three-year plan;
• 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.
90 Record plc Annual Report 2023
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.
Six Committee meetings were held during the year.
Date Key issues considered
April 2022
• Salary reviews for Executive Directors and the Chairman
• Bonus pool and units for the period October 2021 to March 2022 (previous scheme)
• Review Remuneration Policy to be proposed to shareholders at July 2022 AGM, including
introduction of total remuneration ratio spend, Executive Directors’ Bonus Scheme and LTIP
• IFPR update, with a discussion about Material Risk Takers (“MRTs”), control functions and malus
and clawback changes toremuneration schemes
May 2022
• Agreed approach to discuss proposed Remuneration Policy with certain major shareholders
• Further review of the new Remuneration Policy
June 2022
• Approve Bonus payments for the period October 2021 to March 2022 (previous scheme)
• Approve commission payments to staff below Executive Director level
• Discussion with Head of Compliance about proposed Remuneration Policy
• Review LTIP scheme rules and performance conditions
• Approve letter to major shareholders regarding proposed Remuneration Policy
July 2022
• Cost of living and salary review discussion for staff and Executive Directors
• Review shareholder advisory group reports
October 2022
• Bonus pool and bonus units review
• Formal approval of Bonus Scheme, Share Option Scheme and LTIP Scheme rules, following
shareholder approval of the new Remuneration Policy
November 2022
• Bonus payment approval for MRTs and an upfront payment to Executive Directors for the FY-23
bonus
• Approve commission payments to staff below Executive Director
• Annual review of MIFIDPRU Remuneration Code policy
External advisers
The Group participated in a survey conducted by McLagan and paid for information regarding market rates of pay for staff
during the year. McLagan did not provide any direct advice to the Remuneration Committee. The Committee also received
advice from Macfarlanes during the year, and received specialist advice from Ellason LLP in connection with the introduction of
the LTIP.
Committee evaluation
An internal review of Committee effectiveness was carried out as part of the Board evaluation process in April 2023 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:
Tim Edwards
Chair of the Remuneration Committee
29 June 2023
Record plc Annual Report 2023 91
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Directors’ 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 54;
• Board of Directors on pages 58 and 59;
• Corporate governance report on pages 60 to 66;
• Nomination Committee report on pages 67 to 69;
• Audit Committee report on pages 70 to 75;
• Remuneration report on pages 76 to 91;
• Directors’ statement of responsibilities on page 95; and
• S172 Companies Act 2006 on pages 37 to 39.
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 carries 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 21 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 2023, the number of shares in issue of the
Company was 199,054,325 (2022: 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 21 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 2023:
Name
Number of
ordinary 0.025p
shares held
Percentage
interest
Neil Record 54,646,541 27.45%
Leslie Hill 16,383,555 8.23%
Schroders plc 10,345,312 5.20%
Interactive Investor 9,928,282 4.99%
Premier Miton Investors 8,767,396 4.40%
Hargreaves Lansdown Asset Mgt 8,018,209 4.03%
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 2022 to April 2023
the Company received two notifications in accordance with DTR 5 disclosing changes to voting interests in its ordinary share
capital as follows: Schroders plc acquired additional shares on 15 December 2022, reporting a shareholding increase from
4.51% to 5.07%, and Mr Neil Record disposed of shares on 15 March 2023 with their further transferral to The Record Charitable
Trust, reporting a shareholding decreasing from 28.33% to 27.45%.
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 27.5% 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.
92 Record plc Annual Report 2023
Directors’ report
The Board is satisfied that the Company has complied with
the independence provisions included in the relationship
agreement during the year ended 31 March 2023, 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 22 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 2022 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 2023 AGM. If approved, this
authority will expire on 27 October 2024 or, ifearlier, at the
conclusion of the AGM in 2024.
At the AGM in 2022, 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 2023 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 27 October 2024, or,
if earlier, at the conclusion of the AGM in 2024.
Results and dividends
The results of the Group for the year are set out in the
consolidated statement of comprehensive income on
page106.
The Company paid an interim ordinary dividend of 2.05 pence
per share on 30 December 2022 to shareholders on the
register on 9 December 2022.
The Directors recommend a final ordinary dividend
of 2.45pence per ordinary share for the year ended
31March2023, making a total ordinary dividend of 4.50 pence
per share. Subject to shareholder approval at the Annual
General Meeting, the final dividend will be paid on 9 August
2023 to shareholders on the register at the close of business
on 14July 2023. The shares will be quoted ex-dividend from
13July 2023.
The Board has declared a special dividend of 0.68pence
per share to be paid simultaneously with the final ordinary
dividend on 9 August 2023. This equates to a total distribution
of 5.18 pence per share, equivalent to 87% of 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 8,735,002 shares
as at 31 March 2023 (2022: 9,632,031 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 23
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.
Record plc Annual Report 2023 93
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Directors’ report continued
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 25 to
the financial statements.
Post-reporting date events
As set out in note 29 to the financial statements, there were
no 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.
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 33 to 35.
Modern Slavery statement
The Group’s Modern Slavery statement can be found in the
Sustainability report on page 31.
Corporate responsibility
Details of the Company’s employment practices, including
diversity and employee engagement, can be found in the
Sustainability report on page 31. We are committed to
minimising the environmental impact of our operations and
to delivering continuous improvement in our environmental
performance. See page 36 for more details on our total CO
2
emissions data.
Directors
The Directors of the Company who held office at the year
end and to date are listed on pages 58 and 59. 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 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.
2023 Annual General Meeting
The 2023 Annual General Meeting of the Company will be
held at 10.00am on 27 July 2023 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 2023 Annual General
Meeting.
By order of the Board:
Kevin Ayles
Company Secretary
29 June 2023
94 Record plc Annual Report 2023
Directors’ responsibilities statement
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.
Neil Record
Chairman
Steve Cullen
Chief Financial Officer
29 June 2023
Record plc Annual Report 2023 95
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Financial statements
Financial statements
Independent auditor’s report 97
Consolidated statement of comprehensive income 106
Consolidated statement of fi nancial position 107
Consolidated statement of changes in equity 108
Consolidated statement of cash fl ows 109
Company statement of fi nancial position 110
Company statement of changes in equity 111
Company statement of cash fl ows 112
Notes to the fi nancial statements 113
96 Record plc Annual Report 2023
Independent auditor’s report to the members of Record plc
Opinion on the fi nancial statements
In our opinion:
• the fi nancial statements give a true and fair view of the
state of the Group’s and of the Parent Company’s aff airs
as at 31March 2023 and of the Group’s profi t for the year
then ended;
• the Group fi nancial statements have been properly
prepared in accordance with UK adopted international
accounting standards;
• the Parent Company fi nancial 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 fi nancial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
We have audited the fi nancial statements of Record plc
(the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 March 2023 which comprise the
consolidated and company statements of fi nancial position,
the consolidated statement of comprehensive income,
the consolidated and company statements of cash fl ows,
consolidated and company statements of changes in equity
and notes to the fi nancial statements, including a summary
of signifi cant accounting policies. The fi nancial reporting
framework that has been applied in their preparation is
applicable law and UK adopted international accounting
standards and as regards the Parent Company fi nancial
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 fi nancial
statements section of our report. We believe that the audit
evidence we have obtained is suffi cient 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 fi nancial statements
for the year ended 31 March 2021 and subsequent fi nancial
periods. The period of total uninterrupted engagement
including retenders and reappointments is 3 years, covering
the years ended 31March 2021 to 31 March 2023. We remain
independent of the Group and the Parent Company in
accordance with the ethical requirements that are relevant
to our audit of the fi nancial statements in the UK, including
the FRC’s Ethical Standard as applied to listed public
interest entities, and we have fulfi lled 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 fi nancial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the fi nancial 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 fl ow forecast and reverse stress test
and tested for arithmetical accuracy. We considered
whether there is a risk that could plausibly aff ect the
liquidity or ability of the Group and 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 fi nancial resources indicated by the Group’s
fi nancial forecasts;
• Holding discussions with Directors on whether events
or conditions exist that, individually or collectively, may
cast signifi cant doubt on the Group’s ability to continue
as a going concern; corroborating those discussions by
agreeing information acquired to supporting documents
such as budgets, cash fl ow forecasts and minutes of
meetings;
• Assessing the assumptions such as revenue growth rates,
future overheads and regulatory capital requirements
that were used in the going concern assessment prepared
by Directors and considering whether the budgeting and
cash fl ow forecast models utilised were appropriate for
the Group. We reviewed the outcome of the Group’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, infl ation rates and cost pressures as
well as the Russia/Ukraine crisis on the Group’s fi nancial
performance, business activities and operations,
regulatory capital and liquidity. Assessing the potential
impact of reduced Assets Under Management Equivalent
‘AUME’ and revenues on the Group’s profi tability and
liquidity including available cash resources; and
• Reviewing the going concern disclosures included in
the Financial Statements in order to assess that the
disclosures were consistent with the Directors’ going
concern assessment and in conformity with the reporting
standards.
Based on the work we have performed, we have not identifi ed
any material uncertainties relating to events or conditions
that, individually or collectively, may cast signifi cant 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 fi nancial 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 fi nancial statements about
whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Record plc Annual Report 2023 97
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Independent auditor’s report to the members of Record plc continued
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, Record Group Services Limited, Record Currency Management
Limited and Record Digital Asset Ventures Ltd which together with the Parent Company were subject to full scope audits
performed by the Group engagement team.
For the non-significant components, the Group engagement team performed desktop reviews and specific procedures on
areas where there was considered to be a risk of material misstatement.
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 meeting 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 in the Climate report on page 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 page 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.
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.
Conclusions relating to going concern continued
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Overview
Coverage
95% (2022: 98%) of Group profit before tax
100% (2022: 100%) of Group revenue
99% (2022: 99%) of Group total assets
Key audit matters
2023 2022
Revenue recognition
Materiality
Group financial statements as a whole
£730,000 (2022: £543,000) based on 5% (2022: 5%) of Profit before tax.
98 Record plc Annual Report 2023
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
Revenue
recognition
The Group’s
associated accounting
policies are detailed
in note 4 on page
115-116.
Management fees:
£38.3m (2022: £34.1m)
Performance fees:
£5.8m (2022: £0.5m)
The Group’s revenue
arises from the provision
of currency management
services. Revenue comprises
of mainly management fees
(86%) 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 in the
system. There is also a risk
that revenue is 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
involved in determining the
weighted average exposure
including identification of
applicable Assets Under
Management Equivalents
(“AUMEs”).
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.
For performance fees, there
are a number of 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.
We therefore considered
revenue recognition to be a
key audit matter.
Our audit testing included the following:
• We reviewed the appropriateness of revenue recognition policy
against the applicable accounting standards.
• For a sample of days, we tested the operating effectiveness of
the controls over the receipt and input of customer data into the
underlying system for AUME through inspection of daily checklists
and emails confirming that the Front Office Risk Management
(“FORM”) and Portfolio implementation teams performed the daily
monitoring checks over the rebalancing process and that exceptions
have been resolved
• We tested design, implementation and operating effectiveness
of the IT general controls (“ITGC”) of the key IT applications used
in the revenue reporting process, and furthermore, we tested
the key automated controls within the IT applications for the full
period. The key automated controls tested included the client
static data changes validation control where the system’s ability
to automatically match AUME data captured and its ability to flag
errors is tested and secondly test the system’s automated client
static data maker/checker functionality. Further to this, we tested
the internal reporting systems ability to accurately compute
weighted average days and weighted average AUME 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 agreements.
For management fees, 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.
• Agreed key inputs used in the management fee calculation such as
hedge ratios and fee rates to the IMAs.
• We obtained an understanding of client’s process related to
identification of applicable AUMEs and tested a sample of the AUME
identified to supporting documentation.
• Recalculated the management fees by applying the fee rates to the
weighted average AUMEs, compared our results to management
calculations, and where differences were identified we investigated
these.
• Agreed a sample of management fees per invoices to the general ledger
and fee calculation, and agreed cash receipts to bank statements.
• For a sample of clients, determined the invoicing basis of the client
through inspection of the IMA and reviewed the completeness of
the management fee revenue charged in the financial year and
investigated any unexpected differences noted.
• Selected and reviewed a sample of post year-end sales invoices
issued to check the management fee revenue is recognised in the
correct period.
Record plc Annual Report 2023 99
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
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 on a sample basis we:
• Agreed 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 completeness of the performance fee revenue by
reviewing a sample of other client IMAs for the existence of any
performance fee clauses.
• For each of the clients from which performance fees were earned,
through inspection of the signed IMA’s the audit team determined
the client’s performance period and with the performance periods
in mind, verified the crystallisation of all performance fees
recognised in the current financial year.
• With the assistance of our internal valuation experts, we
independently 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 and applying the fee rates as per the IMA to
the computed value added, and compared our results to that of
managements with any differences noted being investigated.
• Agreed a sample of performance fees per invoices to the general
ledger and fee calculation, and 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.
100 Record plc Annual Report 2023
Independent auditor’s report to the members of Record plc continued
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
2023
£
2022
£
2023
£
2022
£
Materiality
730,000 543,000 127,000 98,000
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
475,000 352,950 82,600 42,250
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 2023 101
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Independent auditor’s report to the members of Record plc continued
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 3% and 73% (2022: 18% and 72%)
of Group materiality dependent on the size and our assessment of the risk of material misstatement of that component.
Component materiality ranged from £20,000 to £530,000 (2022: £98,000 to £394,000). In the audit of each component, we
further applied performance materiality levels of 65% (2022: 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 £14,600
(2022:£10,860) for the Group and £1,500 (2022: £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.
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
54 & 94; 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 54 & 94.
Other Code provisions
• Directors’ statement on fair, balanced and understandable set out on page 95;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 49 to 53;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on page 49, 50 & 66; and
• The section describing the work of the audit committee set out on page 70 to 75.
102 Record plc Annual Report 2023
Independent auditor’s report to the members of Record plc continued
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.
Record plc Annual Report 2023 103
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
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.
Non-compliance with laws and regulation
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 the Group’s policies and procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be in compliance with UK Adopted IFRS, UK tax legislation, and the
ListingRules.
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 gained an understanding of the legal and regulatory framework applicable to the Group and the Parent Company and the
industry in which it operates and considered the risk of acts which would be contrary to applicable laws and regulations,
including fraud. These included but were not limited to compliance with the Companies Act 2006, UK tax legislation, UK Listing
Rules, the principles of the UK Corporate Governance Code, UK adopted IFRS, and in addition other laws and regulations
that may have a material effect on the financial statements including the permissions and supervisory requirements of the
Financial Conduct Authority (‘FCA’).
Our procedures in respect of the above included:
• Review of minutes of meetings 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
• The review of legal expenditure accounts to review 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 or
allegations of fraudulent financial reporting affecting the Group and Parent Company, and non-compliance with relevant
laws and regulations;
• 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 meetings 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
Independent auditor’s report to the members of Record plc continued
104 Record plc Annual Report 2023
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted
by these.
• inspecting correspondence with regulators for instances of non-compliance with relevant laws and regulations.
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 payments.
Our procedures in respect of the above included:
• agreement of the financial statement disclosures to underlying supporting documentation;
• addressing the risk of fraud through management override of controls by testing the appropriateness of journal entries
andother adjustments; on a sample basis we determined journals with key risk characteristics such as postings made by
non-finance staff, debit postings to revenue, identification of least used accounts or round sum values and material journals
and we agreed these to supporting documents;
• assessing whether the judgements made in making accounting estimates could be indicative of a potential bias; evaluating
the business rationale of any significant transactions that are unusual or outside the normal course of business; challenging
management of key judgements and estimates related to the valuation of share-based payments, reviewing management’s
impairment assessment of the investments and the impact of the current challenging economic environment characterised
by the cost of living crisis, high inflation and interest rates and Russia/Ukraine crisis over going concern;
• obtaining an understanding of the effectiveness of the control environment in monitoring compliance with laws and
regulations;
• challenging management on judgemental areas, in particular the valuation of share-based payments; 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.
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
29 June 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent auditor’s report to the members of Record plc continued
Record plc Annual Report 2023 105
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Consolidated statement of comprehensive income
Year ended 31 March 2023
Note
2023
£’000
2022
£’000
Revenue 4 4 4,689 3 5 ,1 5 2
Cost of sales (37) (2 1 9)
Gross profit 4 4,65 2 3 4,93 3
Administrative expenses 5 (29,888) (2 3 ,7 2 6)
Other expense 5 (2 9 3) (3 7 2)
Operating profit 5 14 ,47 1 10,835
Finance income 182 44
Finance expense (55) (2 3)
Profit before tax 14,59 8 10, 856
Taxation 7 (3 , 2 59) (2,225)
Profit after tax 11,339 8,631
Total comprehensive income for the year 11,339 8,63 1
Profit and total comprehensive income for the year attributable to
Owners of the parent 11, 339 8,631
Total comprehensive income for the year 11,339 8,63 1
Earnings per share for profit attributable to the equity holders of the parent during the year
Basic earnings per share (pence per share) 8 5 .95 4.52
Diluted earnings per share (pence per share) 8 5.81 4.3 7
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
106 Record plc Annual Report 2023
Consolidated statement of financial position
As at 31 March 2023
Note
2023
£’000
Restated
1
2022
£’000
Non‑current assets
Intangible assets 11 1, 390 562
Right-of-use assets 12 1,01 1 1,42 1
Property, plant and equipment 13 377 401
Investments 14 4,901 3 ,4 47
Deferred tax assets 15 13 4 2 53
Total non‑current assets 7, 8 1 3 6 ,08 4
Current assets
Trade and other receivables 16 14,373 9, 883
Derivative financial assets 17 54 —
Money market instruments with maturities > 3 months 18 4 ,5 49 13,9 13
Cash and cash equivalents 18 9,9 4 8 3 , 3 45
Total current assets 28,924 2 7,14 1
Total assets 3 6 ,7 3 7 33 ,225
Current liabilities
Trade and other payables 19 (6 ,01 1) (4 ,7 2 1)
Corporation tax liabilities 19 (1 , 3 2 9) (9 24)
Provisions — (7 5)
Lease liabilities 12 (285) (3 66)
Derivative financial liabilities 17 (5) (1 2 4)
Total current liabilities (7, 63 0) (6, 2 10)
Non‑current liabilities
Provisions 20 (12 2) (1 2 5)
Lease liabilities 12 (6 9 4) (9 6 0)
Total non‑current liabilities (8 1 6) (1, 0 85)
Total net assets 28, 291 25 ,930
Equity
Issued share capital 21 50 50
Share premium account 1,809 1,809
Capital redemption reserve 26 26
Retained earnings 26,4 0 6 24 ,0 45
Total equity 28, 291 25 ,930
1. See note 30 for details of the reclassification resulting in the restatement of prior year.
Approved by the Board on 29 June 2023 and signed on its behalf by:
Neil Record Steve Cullen
Chairman Chief Financial Officer
Company registered number: 1927640
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
Record plc Annual Report 2023 107
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Consolidated statement of changes in equity
Year ended 31 March 2023
Note
Called‑up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Retained
earnings
£’000
Equity
attributable to
equity holders
of the parent
£’000
Total
equity
£’000
As at 1 April 2022 50 1,809 26 24,04 5 25,930 25,93 0
Profit and total comprehensive
income for the year — — — 11, 339 11,339 11, 339
Dividends paid 9 — — — (9 , 0 9 5) (9 , 0 9 5) (9, 0 9 5)
Own shares acquired by EBT — — — (3 , 5 7 2) (3, 57 2) (3 , 5 7 2)
Release of shares held by EBT — — — 2 ,26 8 2 ,26 8 2 ,26 8
Tax on share-based payments — — — 300 30 0 300
Share-based payment reserve
movement — — — 1 ,1 2 1 1 ,1 2 1 1 ,1 2 1
Transactions with shareholders — — — (8 , 9 7 8) (8, 97 8) (8 ,9 78)
As at 31 March 2023 50 1,809 26 26,4 06 28,29 1 28, 291
Year ended 31 March 2022
Note
Called‑up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Retained
earnings
£’000
Equity
attributable to
equity holders
of the parent
£’000
Total
equity
£’000
As at 1 April 2021 50 2,41 8 26 24 , 3 0 5 2 6 ,7 9 9 2 6 ,7 9 9
Restatement of release of shares
heldby EBT 30 — (609) — 609 — —
Restated balance asat1 April 2021 50 1,809 26 24, 9 14 2 6 ,7 9 9 2 6 ,7 9 9
Profit and total comprehensive
income for the year — — — 8,631 8,631 8,63 1
Dividends paid 9 — — — (6 , 5 1 2) (6 , 5 1 2) (6 , 5 1 2)
Own shares acquired by EBT — — — (5 , 80 7) (5, 80 7) (5, 8 0 7)
Restatement of release of shares
held by EBT 30 — — — 1,838 1,838 1,838
Restatement of share-based
payment reserve movement 30 — — — 981 981 98 1
Transactions with shareholders — — — (9,500) (9,500) (9,500)
Restated balance as at 31 March 2022
50 1,80 9 26 24 , 0 4 5 2 5 ,930 2 5 ,930
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
108 Record plc Annual Report 2023
Consolidated statement of cash flows
Year ended 31 March 2023
Note
2023
£’000
2022
£’000
Profit after tax 11,339 8,631
Adjustments for:
Depreciation of right-of-use assets 12 375 489
Depreciation of property, plant and equipment 13 285 357
Amortisation of intangible assets 11 135 192
Loss on asset disposals 11 —
Share-based payments 916 559
Decrease in other non-cash items
1
1 ,7 8 0 87 7
Finance income (18 1) (4 4)
Finance expense 55 23
Tax expense 7 3, 259 2,225
Changes in working capital
(Increase) in receivables (4,49 0) (1 , 87 7)
Increase in payables 1,290 1,296
(Decrease) in provisions (7 8) —
Cash inflow from operating activities 14,696 1 2 ,7 2 8
Corporation tax paid (2 ,4 3 3) (1 , 3 7 3)
Net cash inflow from operating activities 12 , 26 3 1 1,355
Purchase of intangible assets 11 (9 6 4) (3 3 4)
Purchase of property, plant and equipment 13 (2 7 2) (7 5)
Purchase of investments (3 , 5 7 0) (1 ,7 7 3)
Payment to seed fund holders — (1 ,808)
Redemption of bonds 1,607 1 ,4 6 2
Redemption of investments 881 —
Purchase/(disposal) of money market instruments with maturity > 3 months 9,36 3 (9 8 3)
Interest received 18 1 44
Net cash inflow/(outflow) from investing activities 7, 22 6 (3 ,4 6 7)
Cash flow from financing activities
Lease principal payments 12 (3 15) (5 4 0)
Lease interest payments 12 (5 5) (1 7)
Purchase of own shares (3, 57 2) (4 , 4 6 2)
Dividends paid to equity shareholders 9 (9,095) (6 , 5 1 2)
Net cash outflow from financing activities (13,03 7) (11,53 1)
Net increase/(decrease) in cash and cash equivalents in the year 6 ,45 2 (3 ,6 43)
Exchange gains 151 141
Cash and cash equivalents at the beginning of the year 3,3 45 6 , 8 47
Cash and cash equivalents at the end of the year 9,94 8 3, 3 45
Closing cash and cash equivalents consist of:
Cash 6,4 05 3, 3 45
Cash equivalents 3, 543 —
Cash and cash equivalents 18 9,9 4 8 3 , 3 45
1. Other non-cash items include £2 ,47 3k release of shares held by Employee Benefit Trust and other share movements (2022: £624k), £1 75k unrealised gains in derivatives
(2022: £3 4 0k loss), £147k foreign exchange gains (2022: £137k gain) and £3 7 1k unrealised gains in investments (2022: £50k loss).
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
Record plc Annual Report 2023 109
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Company statement of financial position
As at 31 March 2023
Note
2023
£’000
2022
£’000
Non‑current assets
Right-of-use assets 12 871 1,232
Property, plant and equipment 99 —
Investments 14 9,062 5,029
Deferred tax — 1
Total non‑current assets 10,032 6,262
Current assets
Corporation tax 16 3
Trade and other receivables 16 2,428 3,522
Cash and cash equivalents 18 213 43
Total current assets 2,657 3,568
Total assets 12,689 9,830
Current liabilities
Trade and other payables 19 (4,955) (4,161)
Lease liabilities 12 (251) (326)
Provisions — (75)
Total current liabilities (5,206) (4,562)
Non‑current liabilities
Lease liabilities 12 (583) (812)
Deferred tax liabilities (11) —
Provisions 20 (122) (125)
Total non‑current liabilities (716) (937)
Total net assets 6,767 4,331
Equity
Issued share capital 21 50 50
Share premium account 1,809 1,809
Capital redemption reserve 26 26
Retained earnings 4,882 2,446
Total equity 6,767 4,331
The Company’s total comprehensive income for the year (which is principally derived from intra-group dividends) was
£10,614,915 (2022: £4,558,705).
Approved by the Board on 29 June 2023 and signed on its behalf by:
Neil Record Steve Cullen
Chairman Chief Financial Officer
Company registered number: 1927640
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
110 Record plc Annual Report 2023
Company statement of changes in equity
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
Year ended 31 March 2022
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 2021 50 1,809 26 3,843 5,728
Profit and total comprehensive income for the year — — — 4,559 4,559
Dividends paid 9 — — — (6,512) (6,512)
Share option reserve movement — — — 556 556
Transactions with shareholders — — — (5,956) (5,956)
As at 31 March 2022 50 1,809 26 2,446 4,331
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
Record plc Annual Report 2023 111
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Company statement of cash flows
Year ended 31 March 2023
Note
2023
£’000
Restated
1
2022
£’000
Profit after tax 10,615 4,559
Adjustments for:
Depreciation of right-of-use assets 12 338 453
Depreciation of property, plant and equipment 17 —
Decrease/(Increase) in other non-cash items
2
(155) 45
Finance income (1) —
Finance expense 43 16
Tax expense/(income) 5 (19)
Dividends received from subsidiaries (10,500) (4,600)
Changes in working capital
Decrease/(Increase) in receivables 1,094 (2,134)
Increase in payables 794 2,470
(Decrease) in provisions (78) —
Cash inflow from operating activities 2,172 790
Corporation taxes (paid)/received (6) 37
Net cash inflow from operating activities 2,166 827
Cash flow from investing activities
Dividends received 10,500 4,600
Purchase of property, plant and equipment (116) —
Investment in subsidiaries — (325)
Investment in equity reserve of subsidiary (1,095) —
Purchase of investments (1,869) —
Payments to seed fund holders — 1,798
Interest received 1 —
Net cash inflow from investing activities 7,421 6,073
Net cash flow from financing activities
Lease principal payments 12 (280) (502)
Lease interest payments 12 (43) (16)
Dividends paid to equity shareholders (9,095) (6,512)
Net cash outflow from financing activities (9,418) (7,030)
Net increase/(decrease) in cash and cash equivalents in the year 170 (130)
FX revaluation — —
Cash and cash equivalents at the beginning of the year 43 173
Cash and cash equivalents at the end of the year 213 43
Closing cash and cash equivalents consist of:
Cash 213 43
Cash and cash equivalents 18 213 43
1. See note 31 for details of the presentational adjustment resulting in the restatement of prior year.
2. Other non-cash items include unrealised movements in investments and other foreign exchange movements.
The notes on pages 113 to 145 are an integral part of these consolidated financial statements.
112 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023
These financial statements exclude disclosures that are both
immaterial and judged to be unnecessary to understand our
results and financial position.
1. Accounting policies
In order to provide more clarity to the notes to the financial
statements, accounting policy descriptions appear at the
beginning of the note to which they relate.
The principal accounting policies adopted in the preparation
of these consolidated financial statements are set out in the
notes below. These policies have been consistently applied to
all periods presented unless otherwise stated.
a. Accounting convention
Basis of preparation
The Group financial statements have been prepared in
accordance with UK adopted international accounting
standards and the Company and other Group entities’
financial statements have also been prepared in accordance
with UK adopted international accounting standards.
The financial statements have been prepared on a historical
cost basis, modified to include fair valuation of derivative
financial instruments. Investments are measured at fair value
through profit or loss.
The Directors are satisfied that the Company and the Group
have adequate resources with which to continue to operate
for the foreseeable future. In arriving at this conclusion, the
Directors have considered various assessments including
both the impact of the war in Ukraine, and that of the current
high inflationary environment on the Group, the market it
operates in 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 12 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 12 months from the date of signing
the report, and therefore have continued to adopt the going
concern basis in preparing the financial statements.
The preparation of financial statements in accordance with
the recognition and measurement principles set out in IFRSs
requires management to make judgements, estimates and
assumptions that affect the application of policies and
reported amounts of assets and liabilities, income and
expenses. The bases for management judgements, estimates
and assumptions are discussed further in note 2.
Changes to international accounting policies
There were no new interpretations or standards which
became applicable during the year that were adopted by the
Group.
Additionally, 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.
b. Basis of consolidation
The consolidated financial information contained within the
financial statements incorporates financial statements of
the Company and its subsidiaries drawn up to 31 March 2023.
Subsidiaries are entities controlled by the Company and are
included from the date that control commences until the date
that control ceases. Control is achieved where the Company
is exposed to or has rights over variable returns from its
involvement with the entity and it has the power to affect
returns. The Group has applied UK adopted IFRSs for periods
commencing on or after January 2022.
An Employee Benefit Trust has been established for the
purposes of satisfying certain share-based awards. As the
Group has “de facto” control over this special purpose entity,
the trust is fully consolidated within the financial statements.
Where the Group controls an entity, but does not own all
the share capital of that entity, the interest of the other
shareholders’ non-controlling interests is stated within
equity at the non-controlling interests’ proportion of the
fair value of the recognised assets and liabilities. In the case
of the funds controlled by the Group, the interests of any
external investors in such funds are recognised as a financial
liability as investments in the fund are not considered to be
equity instruments.
The financial statements of subsidiary undertakings,
which are prepared using uniform accounting policies, are
coterminous with those of Record plc, referred to as the
“Company”.
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 £10,614,915 attributable to the Company (2022:
£4,558,705). The Company’s principal activity is that of a
holding company.
All intra-group transactions, balances, income, expenses and
dividends are eliminated on consolidation.
Record plc Annual Report 2023 113
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
1. Accounting policies continued
c. Foreign currencies
The financial statements are presented in sterling (£), which
is the functional currency of the parent company. Foreign
currency transactions are translated into the functional
currency of the parent company using prevailing exchange
rates which are updated on a monthly basis. Foreign
exchange gains and losses resulting from the settlement of
such transactions and from the remeasurement of monetary
items at year-end exchange rates are recognised in the
statement of comprehensive income under “other income
or expense”.
d. Administrative expenses
Administrative expense includes staff costs, marketing and IT
costs, which are recognised on an accruals basis as services
are provided to the Group.
e. Financial instruments
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of
the financial instrument. Financial assets are derecognised
when the contractual rights to the cash flows from the
financial assets expire, or when the financial asset and all
substantial risks and rewards are transferred. A financial
liability is derecognised when it is extinguished, discharged,
cancelled or expires.
f. Impairment of assets
The Group assesses whether there is any indication that any
of its assets have been impaired at least annually. If such
an indication exists, the asset’s recoverable amount is
estimated and compared to its carrying value.
An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount.
Impairment losses are recognised in profit or loss.
g. Provisions and contingent liabilities
Provisions are recognised when present obligations as a
result of a past event will probably lead to an outflow of
economic resources from the Group and amounts can be
estimated reliably. Timing or amount of the outflow may still
be uncertain. A present obligation arises from the presence
of a legal or constructive commitment that has resulted from
past events.
Provisions are measured at the estimated expenditure
required to settle the present obligation, based on the most
reliable evidence available at the reporting date, including
the risks and uncertainties associated with the present
obligation. Provisions are discounted to their present
values, where the time value of money is material. Any
reimbursement that the Group can be virtually certain to
collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not
exceed the amount of the related provision.
All provisions are reviewed at each reporting date and
adjusted to reflect the current best estimate. In those cases
where the possible outflow of economic resources as a result
of present obligations is considered improbable or remote, no
liability is recognised.
h. Equity
Share capital represents the nominal (par) value of shares
that have been issued. Share premium includes any premium
received on issue of share capital. From time to time, the
Group has bought in ordinary shares for cancellation. The
cost of the buy-ins was taken directly to retained earnings.
The nominal value of the shares was taken to a capital
redemption reserve. Retained earnings includes all current
and prior period retained profits and share-based employee
remuneration. All transactions with owners of the parent are
recorded separately within equity .
2. Critical accounting estimates and judgements
In order to prepare the financial statements in accordance
with IFRS, management make certain critical accounting
estimates. Management are also required to exercise
judgement in the process of applying the Group’s accounting
policies and in determining the reported amount of certain
assets and liabilities.
The estimates and associated assumptions are based on
historical experience and various other factors including
expectations of future events that are believed to be
reasonable under the circumstances, the results of which
form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent
from other sources. As a consequence, actual results may
differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the
revision affects both current and future periods.
Sources of estimation uncertainty
Management recognise that the use of estimates is
important in calculating both the fair value of share options
offered by the Group to its employees (see note 22) and
deferred tax (see note 15), however the sources of estimation
uncertainty do not present a significant risk of material
adjustment to the carrying amounts of assets or liabilities
within the next financial year in either case .
114 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
Calculation of leased assets and liabilities requires the
use of both estimation and judgement. The identification
of an appropriate discount rate to use in the calculation of
the lease liability involves both estimation and judgement.
Where the lease’s implicit rate is not readily determinable, an
incremental borrowing rate must be calculated by the Group.
The discount rate used has a direct effect on the size of the
lease liability capitalised and although this has been included
as an area where the use of estimation and judgement in
note 12 is important, it is unlikely to materially impact the
Group. Intangible assets are written down in accordance with
the Group’s amortisation policy on page 119. The assets are
reviewed by management to ensure the amortisation period
is appropriate. Investments are revalued monthly at market
value as far as possible. Inputs used in determining fair value
measurements are categorised into different levels based
on how observable the inputs used in the valuation are, as
disclosed in note 24. Any potential impairments would be
written down as and when the Group is notified .
3. Segmental analysis
The Directors, who together are the entity’s Chief Operating
Decision Maker, consider that its services for FY-23 and prior
years comprise one operating segment (being the provision
of currency and derivatives management services) and that
it operates in a market that is not bound by geographical
constraints. The Group provides Directors with revenue
information disaggregated by product, whilst operating
costs, assets and liabilities are presented on an aggregated
basis. This reflects the unified basis on which the products
are marketed, delivered and supported. Further information
on the Group’s operations and principal activities is provided
in the Business model section from page 10. Revenue
analysed by product is provided in note 4.
Looking ahead to the current financial year (FY-24), the Group
expects its diversification into asset management will result
in an alternative revenue stream (i.e. Asset Management as
opposed to Currency Management). This will represent a
different operating segment and will be reported separately
from FY-24.
4. Revenue
Revenue recognition
Revenue comprises the fair value of the consideration
received or receivable for the provision of currency
management services. Our revenues typically arise
from charging management fees, performance fees and
other currency services income and are accounted for in
accordance with IFRS 15 – “Revenue from Contracts with
Customers”.
Management fees and other currency services income are
recorded on a monthly basis as the service occurs; there are
no other performance obligations (excluding standard duty
of care requirements). Management fees are calculated as
an agreed percentage of the Assets Under Management
Equivalents (“AUME”) denominated in the client’s chosen base
currency. The percentage varies depending on the nature
of services and the level of AUME. Management fees are
typically invoiced to the customer quarterly with receivables
recognised for unpaid invoices. Fees are recognised on a
monthly based on the agreed fee rate and AUME over the
period.
The Group is entitled to earn performance fees from some
clients where the performance of the clients’ mandates
exceeds defined benchmarks over a set time period, and
are recognised when the fee amount can be estimated
reliably and it is highly probable that it will not be subject to
significant reversal.
Performance fee revenues are not considered to be highly
probable until the end of a contractual performance period
and therefore are not recognised until they crystallise, at
which time they are payable by the client and cannot be
clawed back. There are no other performance obligations
or services provided which suggest these have been earned
either before or after crystallisation date.
a. Revenue from contracts with customers
The following table provides a breakdown of revenue from contracts with customers, with management fees analysed by
product. Other currency services income includes fees from signal hedging and fiduciary execution.
Revenue by product type
2023
£’000
2022
£’000
Management fees
Passive Hedging 12,912 11,768
Dynamic Hedging 12,013 10,020
Currency for Return 6,789 5,513
Multi-product 6,584 6,782
Total management fee income 38,298 34,083
Performance fee income 5,805 499
Other services income 586 570
Total revenue from contracts with customers 44,689 35,152
Management fees are recognised at a point in time and are invoiced typically on a quarterly basis, although Record may
invoice fees monthly for some of its larger clients. Performance fees are recognised at a point in time and can be invoiced on
a quarterly, six-monthly or annual basis, as agreed with our clients .
Record plc Annual Report 2023 115
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
4. Revenue continued
Revenue recognition continued
b. Geographical analysis
The geographical analysis of revenue is based on the destination i.e. the location of the client to whom the services are
provided. All revenue originated in the UK. Other relates to a number of regions that are individually immaterial.
Revenue by geographical region
2023
£’000
2022
£’000
Management and performance fee income
UK 2,545 2,775
US 14,179 13,049
Switzerland 16,985 10,877
Europe (excluding UK and Switzerland) 9,339 6,926
Other 1,641 1,525
Total revenue 44,689 35,152
c. Major clients
During the year ended 31 March 2023, four clients individually accounted for more than 10% of the Group’s revenue. The four
largest clients generated revenues of £6.6 million, £6.3 million, £5.2 million and £4.9million in the year (2022: two clients
generated revenues of more than 10% totalling £4.9 million and £4.8 million in the year).
5. Operating profit
Operating profit for the year is stated after charging/(crediting):
2023
£’000
2022
£’000
Staff costs 20,412 16,479
Other staff-related costs 1,545 1,352
IT and technology 3,582 2,380
Professional fees 1,775 1,139
Occupancy 1,111 668
Depreciation of property, plant and equipment 285 357
Depreciation of leased property 375 489
Amortisation of intangibles 135 192
Auditor fees:
Fees payable to the Group’s auditor for the audit of the Company’s annual accounts 134 72
Fees payable to the Group’s auditor for the audit of subsidiary undertakings 191 103
Auditor fees total 325 175
Fees payable to the Group’s auditor and its associates for other services:
Audit-related assurance services required by law or regulation 6 5
Other non-audit services 15 12
Loss on forward FX contracts held to hedge cash flow 800 467
Loss on derivative financial instruments held by seed funds — 42
Other exchange losses/(gains) (289) (141)
Investment losses/(gains) (218) 4
116 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
6. Staff costs
The average number of employees, including Directors, employed by the Group during the year was:
2023 2022
Corporate 6 6
Client relationships 13 14
Investment research 18 16
Operations 31 24
Risk management 5 5
Support 15 17
Annual average 88 82
The aggregate costs of the above employees, including Directors, were as follows:
2023
£’000
2022
£’000
Wages and salaries 14,540 11,931
Social security costs 2,295 1,758
Pension costs 686 635
Other employment benefit costs 2,891 2,155
Aggregate staff costs 20,412 16,479
Other employment benefit costs include share-based payments, share option costs, and costs relating to the Record plc Share
Incentive Plan.
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 .
2023
£’000
2022
£’000
UK current year charge 2,961 2,006
Overseas taxes 64 56
Prior year adjustments 175 (88)
Current tax charge 3,200 1,974
Origination and reversal of temporary differences 76 (12)
Prior year adjustment (17) 240
Impact of change in tax rate for deferred tax — 23
Total deferred tax 59 251
Tax on profit on ordinary activities 3,259 2,225
Record plc Annual Report 2023 117
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
7. Taxation – Group continued
The total charge for the year can be reconciled to the accounting profit as follows:
2023
£’000
2022
£’000
Profit before taxation 14,598 10,856
Taxation at the standard rate of tax in the UK of 19% (2022: 19%) 2,774 2,062
Tax effects of:
Other disallowable expenses and non-taxable income 164 (37)
Deferred tax asset not recognised on start-up entities 146 —
Higher tax rates on subsidiary undertakings 15 15
Prior year adjustment 160 162
Change in tax rates — 23
Total tax expense 3,259 2,225
The tax expense comprises:
Current tax expense 3,200 1,974
Deferred tax expense 59 251
Total tax expense 3,259 2,225
The standard rate of UK corporation tax for the year is 19% (2022: 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 2023 was 22% of profit before tax (2022: 20%). Other temporary differences for the
year ended 31 March 2023 include the impact of deferred tax expense of £59k (2022: expense of £251k) .
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.
2023
£’000
2022
£’000
Weighted average number of shares used in calculation of basic earnings per share 190,483,365 191,068,307
Effect of potential dilutive ordinary shares – share options 4,830,186 6,230,794
Weighted average number of shares used in calculation of diluted earnings per share 195,313,551 197,299,101
pence pence
Basic earnings per share 5.95 4.52
Diluted earnings per share 5.81 4.37
The potential dilutive shares relate to the share options, JSOP and LTIP awards granted in respect of the Group’s Share Scheme
(see note 22). There were share options and JSOP awards in place at the beginning of the year over 13,513,045 shares. During
the year 3,607,836 share options were exercised, 633,125 JSOP awards vested and a further 1,247,502 options lapsed or were
forfeited. The Group granted 3,810,000 share options and LTIP awards over 2,890,000 shares with a potentially dilutive effect
during the year. Of the 14,724,582 share options, JSOP and LTIP awards in place at the end of the period, 11,878,815 have a
dilutive impact at the year end.
118 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
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 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).
The dividends paid by the Group during the year ended 31 March 2022 totalled £6,511,887 (3.40 pence per share), which
comprised a final dividend in respect of the year ended 31 March 2021 of £2,220,404 (1.15 pence per share), a special dividend
in respect of the year ended 31 March 2021 of £868,854 (0.45 pence per share) and an interim dividend for the year ended
31 March 2022 of £3,422,629 (1.80 pence per share).
For the year ended 31 March 2023, a final ordinary dividend of 2.45 pence per share has been proposed and a special dividend of
0.68 pence per share has been declared, totalling approximately £4.7 million and £1.3 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.
11. Intangible assets
Intangible assets are shown at historical cost less accumulated amortisation and impairment losses. Amortisation is charged
to profit or loss on a straight-line basis over the estimated useful lives of the intangible assets unless such lives are indefinite.
Amortisation is included within operating expenses in the statement of comprehensive income. Intangible assets are
measured from the date they are available for use. Useful lives are as follows:
• Software – 2 to 5 years.
Amortisation periods and methods are reviewed annually and adjusted if appropriate.
The Group’s intangible assets comprise both purchased software and the capitalised cost of software deployment. No internal
costs of software development are capitalised. Internal software costs, which would represent attributable employee costs,
would be capitalised if they meet the IAS 38 criteria. The carrying amounts can be analysed as follows:
2023
Software
£’000
Total
£’000
Cost
At 1 April 2022 1,475 1,475
Additions 964 964
Disposals (119) (119)
At 31 March 2023 2,320 2,320
Amortisation
At 1 April 2022 913 913
Charge for the year 135 135
Disposals (118) (118)
At 31 March 2023 930 930
Net book amounts
At 31 March 2023 1,390 1,390
At 1 April 2022 562 562
Record plc Annual Report 2023 119
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
11. Intangible assets continued
2022
Software
£’000
Total
£’000
Cost
At 1 April 2021 1,141 1,141
Additions 334 334
At 31 March 2022 1,475 1,475
Amortisation
At 1 April 2021 721 721
Charge for the year 192 192
At 31 March 2022 913 913
Net book amounts
At 31 March 2022 562 562
At 1 April 2021 420 420
The annual contractual commitment for the maintenance and support of the above software is £207,253 (2022: £396,710).
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 but they may have extension and/or modification options. Lease terms are negotiated
on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any
covenants, but leased assets cannot be used as security for borrowing purposes.
New and modified leases have been recognised as a right-of-use asset and a corresponding liability at the date at which
the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful
life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Right-of-use assets include the net
present value of the lease payments less any lease incentives receivable.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group’s
incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions. As the Group has no borrowings
it has estimated the incremental borrowing rate based on interest rate data available in the market, adjusted to reflect
Record’s creditworthiness, the leased asset in question and the terms and conditions of the lease. For those leases which
existed prior to the IFRS 16 transition date on 1 April 2019, a discount rate of 4% was used in calculating the lease liability on
transition.
The leases relevant to the twelve months ended 31 March 2023, and the comparative period, are as described below:
On 7 September 2016, the Group signed a new lease on premises at Second and Third Floors, Morgan House, Madeira Walk,
Windsor, at an annual commitment of £507,603, expiring on 1 September 2022. On 11 February 2022, the Group signed a lease
on premises at Second Floor, Morgan House, Madeira Walk, Windsor, at an annual commitment of £267,900, expiring on
1 September 2026. The 1 September 2022 lease modification has been capitalised and discounted at a rate of 3.95%.
On 1 June 2017, the Group signed a five-year lease on premises in Zürich, at an annual commitment of CHF 49,680. On 12 August
2021, the Group extended the lease to 1 June 2027, at an annual commitment of CHF 49,680.
Record assesses whether a contract is, or contains, a lease at the inception of the contract.
Right-of-use (“ROU”) assets
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date, less any lease incentives received;
• any initial direct costs; and
• an estimate of costs to be incurred to restore the assets to the condition required by the terms and conditions of the lease .
120 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
Depreciation is calculated on a straight-line basis over the lease term and included within administration costs (note 5).
Net book value of right-of-use assets
Year ended 31 March 2023
Group
£’000
Company
£’000
Net book value on transition at 1 April 2022 1,421 1,232
Valuation adjustment on lease modification (35) (23)
Depreciation (375) (338)
Net book value at 31 March 2023 1,011 871
Year ended 31 March 2022
Group
£’000
Company
£’000
Net book value at 1 April 2021 684 642
Addition 1,226 1,043
Depreciation (489) (453)
Net book value at 31 March 2022 1,421 1,232
Lease liabilities
Year ended 31 March 2023
Group
£’000
Company
£’000
Current 285 251
Non-current 694 583
Total lease liabilities 979 834
Group
£’000
Company
£’000
At 1 April 2022 1,326 1,138
Additions — —
Interest expense 55 41
Lease - principal payments (315) (280)
Lease - interest payments (55) (43)
Valuation adjustment on lease modification (35) (22)
Foreign exchange movements 3 —
At 31 March 2023 979 834
Year ended 31 March 2022
Group
£’000
Company
£’000
Current 366 326
Non-current 960 812
Total lease liabilities 1,326 1,138
Group
£’000
Company
£’000
At 1 April 2021 638 597
Additions 1,226 1,042
Interest expense 17 16
Lease payments (540) (501)
Lease interest payments (17) (16)
Foreign exchange movements 2 —
At 31 March 2022 1,326 1,138
Record plc Annual Report 2023 121
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
12. Leases continued
Lease payments
At 31 March 2023, the undiscounted operating lease payments on an annual basis are as follows:
Maturity of lease liability at 31 March 2023
Group
£’000
Company
£’000
Within 1 year 320 280
1-2 years 320 280
2-3 years 320 280
After 3 years 85 47
Total lease liability before discounting 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.
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:
2023
Leasehold
improvements
£’000
Computer
equipment
£’000
Fixtures
and fittings
£’000
Total
£’000
Cost
At 1 April 2022 693 1,056 293 2,042
Additions 116 148 8 272
Disposals (33) (181) (70) (284)
At 31 March 2023 776 1,023 231 2,030
Depreciation
At 1 April 2022 642 718 281 1,641
Charge for the year 68 204 13 285
Disposals (33) (170) (70) (273)
At 31 March 2023 677 752 224 1,653
Net book amounts
At 31 March 2023 99 271 7 377
At 1 April 2022 51 338 12 401
122 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
2022
Leasehold
improvements
£’000
Computer
equipment
£’000
Fixtures
and fittings
£’000
Total
£’000
Cost
At 1 April 2021 693 983 305 1,981
Additions — 73 2 75
Disposals — — (14) (14)
At 31 March 2022 693 1,056 293 2,042
Depreciation
At 1 April 2021 520 515 263 1,298
Charge for the year 122 203 32 357
Disposals — — (14) (14)
At 31 March 2022 642 718 281 1,641
Net book amounts
At 31 March 2022 51 338 12 401
At 1 April 2021 173 468 42 683
The Group’s tangible non-current assets are located predominantly in the UK.
14. Investments
Group Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Investment in subsidiaries at cost — — 2,069 2,069
Capitalised investment in respect of share-based payments — — 2,932 2,018
Investment in equity reserve of subsidiary — — 1,095 —
Investment in funds 2,530 1,070 1,965 942
Investment in impact bonds 770 2,177 — —
Other investments 1,601 200 1,001 —
Total direct investments 4,901 3,447 9,062 5,029
Other investments includes £600k invested directly in the share capital of start-up companies in the digital asset sector
(2022: £200k) through Record Digital. Also included is £1 million invested into a separate investment strategy to test the
viability of a potential new product offering in a diverse set of alternative assets.
During the year, the Group signed commitments totalling $823,507 (£804,384), which were fully called up in the year. At the
beginning of the year, the Group had existing commitments of $383,100 (£309,839) of which $78,100 (£63,165) was called up
in the year, leaving a balance of $305,000 (£246,674) which may or may not be called up in future (see note 26: contingent
liabilities for further information) .
Record plc Annual Report 2023 123
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
14. Investments 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.
2023
£’000
2022
£’000
Investment in subsidiaries (at cost)
Record Currency Management Limited 10 10
Record Group Services Limited 10 10
Record Portfolio Management Limited 10 10
Record Currency Management (US) Inc. — —
Record Currency Management (Switzerland) GmbH 16 16
Record Digital Asset Ventures Limited 2,000 2,000
Record Asset Management GmbH 23 23
Record Fund Management Limited — —
N P Record Trustees Limited — —
Total investment in subsidiaries (at cost) 2,069 2,069
Capitalised investment in respect of share‑based payments
Record Group Services Limited 2,530 1,801
Record Currency Management (US) Inc. 89 89
Record Currency Management (Switzerland) GmbH 316 129
Total capitalised investment in respect of share‑based payments 2,935 2,019
Total investment in subsidiaries 5,004 4,088
Particulars of subsidiary undertakings
Name Nature of business
Record Currency Management Limited Currency management services (FCA, SEC and CFTC registered)
Record Group Services Limited Management services to other Group undertakings
Record Currency Management (US) Inc. US advisory and service company (SEC and CFTC registered)
Record Currency Management (Switzerland) GmbH Swiss advisory and service company
Record Digital Asset Ventures Limited UK company investing in opportunities linked to innovation
and research surrounding digital assets
Record Asset Management GmbH German advisory and service company
RAM Strategies GmbH German consultant and distribution agent
Record Portfolio Management Limited Dormant
Record Fund Management Limited Dormant
N P Record Trustees Limited Dormant trust company
The Group’s interest in the equity capital of subsidiary undertakings is 100% of the ordinary share capital in all cases. Record
Currency Management (US) Inc. is incorporated in Delaware (registered office: Corporation Service Company, 251 Little Falls
Drive, Wilmington, DE 19808), Record Currency Management (Switzerland) GmbH is incorporated in Zürich (registered office:
Münsterhof 14, 8001 Zürich) and Record Asset Management GmbH and RAM Strategies GmbH are incorporated in Germany
(registered office: Königsallee 92a, 40212 Düsseldorf). All other subsidiaries are incorporated in the UK and have the registered
office at Morgan House , Madeira Walk, Windsor, Berkshire, SL4 1EP. All investments in subsidiaries are directly held with the
exception of RAM Strategies which is held 100% indirectly through the Company’s 100% holding in Record Asset Management
GmbH .
124 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 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 22.
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. Deferred taxation – Group
Deferred tax is the future tax consequences of temporary differences between the carrying amounts and tax bases of assets
and liabilities shown on the statement of financial position. The amount of deferred tax provided is based on the expected
manner of recovery or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively
enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilised. The carrying amounts of the deferred tax assets are reviewed at each statement of financial
position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the asset to be recovered.
A deferred tax liability is generally recognised for all taxable temporary differences.
Deferred tax assets or liabilities arising on goodwill are not recognised but are however recognised on separately identifiable
intangible assets. Deferred tax arising on the initial recognition of an asset or liability, other than a business combination, that
at the time of the transaction affects neither the accounting profit or loss nor the taxable profit or loss, is not recognised.
2023
£’000
2022
£’000
Opening balance deferred tax asset/(liability) 253 212
Current year movement (72) (251)
Prior year adjustment 14
Deferred tax in Equity (61) 292
Closing balance deferred tax asset/(liability) 134 253
The deferred tax asset consists of the tax effect of temporary differences in respect of:
2023
£’000
2022
£’000
Deferred tax allowance on unvested share options and LTIP awards 366 393
Excess of taxation allowances over depreciation on fixed assets (232) (140)
Total 134 253
At the year end there were share options and LTIP awards not exercised with an intrinsic value for tax purposes of £1,937,599
(2022: £4,287,634). 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 £766k (2022: £438k) 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 2023. It is subject to change if tax rates change in future years.
Record plc Annual Report 2023 125
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
16. Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less loss allowances. The amortised cost of trade and other receivables is stated at original invoice
value, as the interest that would be recognised from discounting future cash receipts over the short credit period is not
considered to be material.
An analysis of receivables is provided below:
Group Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Trade receivables 10,185 8,231 1,538 3,441
Accrued income 1,743 25 — —
Other receivables 685 497 26 38
Prepayments 1,760 1,130 864 43
Total 14,373 9,883 2,428 3,522
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 2023. 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 (2022: £nil).
Accrued income relates to accrued management and performance fees earned but not yet invoiced .
17. Derivative financial assets and liabilities
Derivative financial instruments are initially recognised at cost on the date on which the contract is first entered into, unless
the fair value at acquisition is different to cost, in which case fair value is recognised. Subsequently they are measured at fair
value with gains and losses recognised in profit or loss. Transaction costs are immediately recognised in profit or loss. The fair
values of derivative financial instruments are determined by reference to active market transactions.
The Group holds derivative financial instruments for two purposes. The Group uses forward foreign exchange contracts to
reduce the risk associated with assets denominated in foreign currencies, and additionally uses both foreign exchange options
and forward foreign exchange contracts in order to achieve a return within the seed funds. The instruments are recognised at
fair value. The fair value of the contracts is calculated using the market rates prevailing at the period end date. The net gain or
loss on instruments is included within other income or expense.
Derivative financial assets
2023
£’000
2022
£’000
Forward foreign exchange contracts held to hedge non-sterling-based assets 31 —
Forward foreign exchange contracts held for trading 23 —
Total 54 —
Derivative financial liabilities
2023
£’000
2022
£’000
Forward foreign exchange contracts held to hedge non-sterling-based assets (5) (15)
Forward foreign exchange contracts held for trading — (109)
Total (5) (124)
126 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
Derivative financial instruments held to hedge non-sterling-based assets
At 31 March 2023 there were outstanding contracts with a principal value of £8,647,055 (31 March 2022: £9,085,804) 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 2023. 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
2023
£’000
2022
£’000
Net loss on forward foreign exchange contracts at fair value through profit or loss 800 467
Derivative financial instruments held for trading
The Record – Currency Multi-Strategy Fund may use a variety of instruments including forward foreign exchange contracts,
options and futures in order to achieve a return.
All derivative financial instruments held by the Record – Currency Multi-Strategy Fund were classified as held for trading until
termination in June 2021.
At 31 March 2023 there were outstanding contracts with a principal value of £nil (31 March 2022: £nil).
The net gain or loss on derivative financial instruments held for trading for the year was as follows:
Derivative financial instruments held to hedge non‑sterling‑based assets
2023
£’000
2022
£’000
Net loss on forward foreign exchange contracts and foreign exchange options at fair value
through profit or loss — 42
18. Cash management
The Group’s cash management strategy employs a variety of treasury management instruments including cash, money market
deposits and treasury bills. Whilst the Group manages and considers all of these instruments as cash, which are subject to its
own internal cash management process, not all of these instruments are classified as cash or cash equivalents under IFRS.
IFRS defines cash and cash equivalents as cash in hand, on demand and collateral deposits held with banks, and other
short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant
risk of changes in value. Moreover, instruments can only generally be classified as cash and cash equivalents where they are
held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.
In the Group’s judgement, bank deposits and treasury bills with maturities in excess of three months do not meet the definition
of short-term or highly liquid and are held for purposes other than meeting short-term commitments. In accordance with
IFRS, these instruments are not categorised as cash or cash equivalents and are disclosed as money market instruments with
maturities >3 months from origination.
Group Company
Assets managed as cash
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Bank deposits with maturities > 3 months 4,549 13,913 — —
Money market instruments with maturities > 3 months 4,549 13,913 — —
Cash 6,405 3,345 213 43
Cash equivalents 3,543 — — —
Cash and cash equivalents 9,948 3,345 213 43
Total assets managed as cash 14,497 17,258 213 43
Record plc Annual Report 2023 127
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
18. Cash management continued
Group Company
Cash and cash equivalents
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Cash and cash equivalents – sterling 6,632 1,169 212 43
Cash and cash equivalents – USD 821 450 1 —
Cash and cash equivalents – CHF 748 318 — —
Cash and cash equivalents – other currencies 1,747 1,408 — —
Total cash and cash equivalents 9,948 3,345 213 43
Details of how the Group manages credit risk are provided in note 23.
19. Current liabilities
Trade and other payables are stated at their original invoice value, as the interest that would be recognised from discounting
future cash payments over the short payment period is not considered to be material.
Group Company
Trade and other payables
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Trade payables 221 478 — —
Amounts owed to Group undertakings — — 4,953 4,155
Other payables — 16 — —
Other tax and social security 716 619 — —
Accruals 5,074 3,608 2 6
Total 6,011 4,721 4,955 4,161
Accruals include £3,637,640 for the Group Bonus Scheme (31 March 2022: £2,506,656). The Directors consider that the carrying
amount of trade and other payables approximates to their fair value.
Group Company
Current tax liabilities
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Corporation tax 1,329 924 — —
20. Provisions
The Group has provisions reflecting its contractual obligations connected to reaching the end of its contractual lease terms.
Group Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Provisions 122 200 122 200
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.
128 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
21. 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.
2023 2022
£’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 2021 6,296,657
Adjustment for net purchases by EBT 3,335,374
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
The holding of the EBT comprises own shares that have not vested unconditionally to employees of the Group. Own shares are
recorded at cost and are deducted from retained earnings.
Further information regarding the Record plc share-based compensation plans and relevant transactions made during the
year is included in note 22.
22. Share-based payments
During the year ended 31 March 2023 the Group has managed the following share-based compensation plans:
• the Record plc Bonus Scheme (previously the Group Profit Share Scheme): share awards issued under the Bonus Scheme are
classified as share-based payments with cash alternatives under IFRS 2;
• the Record plc Share Scheme: share options issued under the Record plc Share Scheme are classified as equity-settled
share-based payments under IFRS 2;
• the Record plc Share Incentive Plan: the Group operates the Record plc Share Incentive Plan (“SIP”) to encourage more
widespread ownership of Record plc shares by employees. The SIP is a tax-approved scheme offering attractive tax savings
for employees retaining their shares in the scheme over the medium to long term;
• 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
• the Record 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 2023 129
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
22. Share-based payments continued
a. 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 £2,047,328 (2022:
£1,463,802). 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
Equity-settled share-based payments
The fair value of the amounts payable to employees under these awards is recognised as an expense over the vesting period
of the award, with a corresponding increase in equity. All such awards made by the Group involve the parent company granting
rights to its equity instruments to employees of its subsidiary. Consequently, the subsidiary measures the services received
from its employees in accordance with the above classification under IFRS 2 and recognises a corresponding increase in equity
as a contribution from the parent. The parent has the obligation to settle the transaction with the subsidiary’s employees and
therefore recognises an increase in its investment in the subsidiary and a corresponding increase in equity.
The fair value of options granted is measured at grant date using an appropriate valuation model, taking into account the terms
and conditions upon which the instruments were granted including any market or performance conditions, and using quoted
share prices.
The Record plc Share Scheme allows deferred share awards to be granted to employees and Directors in the Record Group.
Part 1 of the scheme allows the grant of tax-unapproved (“Unapproved”) options to employees and Directors and Part 2 allows
the grant of HMRC tax-approved (“Approved”) options to employees and Directors. Each participant may be granted Approved
options over shares with a total market value of up to £30,000 on the date of grant. There is no such limit on the value of grant
for Unapproved options, which have historically been granted with a market value exercise price in the same way as for the
Approved options.
Options over an aggregate of 3,810,000 shares were granted under the Share Scheme during the year (2022: 3,747,500), of
which options over 814,000 shares were granted as Approved options and options over 2,996,000 shares were granted as
Unapproved options (2022: 195,000 granted as Approved options and 3,552,500 granted as Unapproved options). All Approved
and Unapproved options were granted with an exercise price per share equal to the share price prevailing at the time of grant.
130 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
The 588,000 Approved options issued to employees on 13 May 2022 all become exercisable on the fourth anniversary of the
date of grant, subject to the employee being in employment with the Group at the relevant vesting date and to the extent
performance conditions have been satisfied.
The 2,052,000 Unapproved options issued to employees on 13 May 2022 each become exercisable in four equal tranches on the
first, second, third and fourth anniversary of the date of grant, subject to the employee being in employment with the Group at
the relevant vesting date and to the extent performance conditions have been satisfied.
The 26,000 Approved options issued to employees on 29 June 2022 all become exercisable on the fourth anniversary of the
date of grant, subject to the employee being in employment with the Group at the relevant vesting date and to the extent
performance conditions have been satisfied.
The 199,000 Unapproved options issued to employees on 29 June 2022 each become exercisable in four equal tranches on the
first, second, third and fourth anniversary of the date of grant, subject to the employee being in employment with the Group at
the relevant vesting date and to the extent performance conditions have been satisfied.
The 50,000 Approved options issued to employees on 2 August 2022 all become exercisable on the fourth anniversary of the
date of grant, subject to the employee being in employment with the Group at the relevant vesting date and to the extent
performance conditions have been satisfied.
The 70,000 Unapproved options issued to employees on 3 August 2022 each become exercisable in four equal tranches on the
first, second, third and fourth anniversary of the date of grant, subject to the employee being in employment with the Group at
the relevant vesting date and to the extent performance conditions have been satisfied.
The 150,000 Approved options issued to employees on 27 January 2023 all become exercisable on the fourth anniversary of
the date of grant, subject to the employee being in employment with the Group at the relevant vesting date and to the extent
performance conditions have been satisfied.
The 675,000 Unapproved options issued to employees on 27 January 2023 each become exercisable in four equal tranches
on the first, second, third and fourth anniversary of the date of grant, subject to the employee being in employment with the
Group at the relevant vesting date and to the extent performance conditions have been satisfied.
The fair value of the services provided by employees has been calculated indirectly by reference to the fair value of the equity
instruments granted. Fair value amounts for the options granted in the year ended 31 March 2023, 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 76.0p
Dividend yield 7.21%
Exercise price 76.0p
Expected volatility 48%
Option life 3 years
Risk-free interest rate (%) 2.7%
Expected volatility is based on historical volatility.
The Group share-based payment expense in respect of the Share Scheme was £569,136 for the year ended 31 March 2023
(2022: £530,779).
Record plc Annual Report 2023 131
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
22. Share-based payments continued
b. The Record plc Share Scheme continued
Outstanding share options
At 31 March 2023, the total number of ordinary shares of 0.025p outstanding under Record plc share compensation schemes
was 10,560,207 (2022: 11,605,545). These deferred share awards and options are over issued shares, a proportion of which are
hedged by shares held in an EBT. Details of outstanding share options awarded to employees are set out below:
Date of grant
At 1 April
2022 Granted Exercised
Lapsed/
forfeited
At 31 March
2023
Earliest vesting
date
Latest vesting
date
1
Exercise
price
26/01/18 155,000 — (155,000) — — 26/01/22 26/01/22 £0.4350
26/01/18 5,125 — (5,125) — — 26/01/20 26/01/22 £0.4350
26/01/18 17,334 — — (17,334) — 26/01/21 26/01/23 £0.4350
26/01/18 644,336 — — (644,336) — 26/01/21 26/01/23 £0.4350
29/03/19 460,000 — (460,000) — — 29/03/23 29/03/23 £0.2830
29/03/19 185,000 — (92,500) — 92,500 29/03/20 29/03/23 £0.2830
21/08/19 1,985,000 — (330,836) (330,832) 1,323,332 21/08/22 21/08/24 £0.3110
18/03/20 1,237,500 — (475,000) — 762,500 18/03/21 18/03/24 £0.28902
21/09/20 2,818,750 — (1,106,250) — 1,712,500 21/09/21 21/09/24 £0.3730
25/01/21 225,000 — (75,000) — 150,000 25/01/22 25/01/25 £0.49425
09/03/21 125,000 — (31,250) — 93,750 09/03/22 09/03/25 £0.63986
13/08/21 195,000 — — (35,000) 160,000 13/08/25 13/08/25 £0.85713
13/08/21 2,600,000 — (650,000) — 1,950,000 13/08/22 13/08/25 £0.4000
13/08/21 952,500 — (226,875) (45,000) 680,625 13/08/22 13/08/25 £0.85713
13/05/22 — 588,000 — — 588,000 13/05/26 13/05/26 £0.698708
13/05/22 — 2,052,000 — (75,000) 1,977,000 13/05/23 13/05/26 £0.698708
29/06/22 — 26,000 — — 26,000 29/06/26 29/06/26 £0.729609
29/06/22 — 199,000 — — 199,000 29/06/23 29/06/26 £0.729609
02/08/22 — 50,000 — (50,000) — 02/08/26 02/08/26 £0.717197
03/08/22 — 70,000 — (50,000) 20,000 03/08/23 03/08/26 £0.717197
27/01/23 — 150,000 — — 150,000 27/01/27 27/01/27 £0.972835
27/01/23 — 675,000 — — 675,000 27/01/24 27/01/27 £0.972835
Total options 11,605,545 3,810,000 (3,607,836) (1,247,502) 10,560,207
Weighted average
exercise price of
options £0.41 £0.76 £0.39 £0.47 £0.54
1. Under the terms of the deeds of grants, options are exercisable for twelve months following the vesting date.
During the year 3,607,836 options were exercised. The weighted average share price at date of exercise was £0.81. At
31 March 2023, a total of 473,750 options had vested and were exercisable (2022: 946,375). At 31 March 2023, the weighted
average exercise price of the options vested and exercisable was £0.31 (2022: £0.35) and the weighted average contractual
life was three years (2022: two years).
132 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
Performance measures
Performance conditions attached to all options granted to Board Directors differ to those granted for all other staff. All
Executive Director option awards are subject to a performance condition and vest on each of the third, fourth and fifth
anniversaries of the date of grant subject to an earnings per share (“EPS”) hurdle linked to the annualised EPS growth for the
respective three, four and five-year periods from grant. Vesting is on a stepped basis, with 25% of each tranche vesting if EPS
growth over the relevant period is at least RPI plus 4% per annum, increasing through 50%, 75% and with 100% vesting if EPS
growth exceeds RPI plus 13%, as shown in the table below. Options awarded subject to EPS performance conditions are valued
using a Black-Scholes model, adjusted for the impact of the performance conditions.
Record’s average EPS growth
Percentage of
shares subject
to the award
which vest
>RPI growth + 13% 100%
>RPI growth + 10%, =<RPI growth + 13% 75%
>RPI growth + 7%, =<RPI growth + 10% 50%
>RPI growth + 4%, =<RPI growth + 7% 25%
=<RPI growth + 4% 0%
Approved and Unapproved options issued to all other staff are not subject to a Group performance measure.
Approved options issued to all other staff vest in full on the fourth anniversary of the date of grant, subject to the employee being
employed with the Group at the relevant vesting date and to the extent personal performance conditions have been satisfied.
Unapproved options issued to all other staff vest in four equal tranches on the first, second, third and fourth anniversaries
of the date of grant, subject to the employee being employed with the Group at the relevant vesting date and to the extent
personal performance conditions have been satisfied.
Clawback provisions
In addition to the performance measures above, both Approved and Unapproved options granted to Executive Directors
under the Share Scheme are subject to clawback provisions. These provisions allow the Remuneration Committee to adjust
the number of shares that may be, or were, acquired to be decreased if the Committee considers that either a material breach
of contract has arisen or in respect of retrospective amendments required to calculations of the Group’s performance upon
which vesting calculations were originally based. The clawback provisions allow the Group to take various steps until the
clawback obligation is satisfied, including reduction of future share option awards, transfer of shares back to the Group
for nil consideration, reduction of future payments under the Group Bonus Scheme or payment of sales proceeds back to
the Group.
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.
As an incentive to employees, the Group matches every two shares bought by employees with a free matching share. During
the year, the Group awarded 31,039 matching shares (2022: 23,309 matching shares) to employees. The expense charged in
respect of the SIP was £24,950 in the year ended 31 March 2023 (2022: £18,310).
There are no restrictions over shares issued under the Record plc Share Incentive Plan.
Record plc Annual Report 2023 133
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
22. Share-based payments continued
d. The Record plc Jointly Owned Share Plan (“JSOP”)
Equity-settled share-based payments
At inception the employee is required to pay the Employee Benefit Trust (“EBT”) for the market value of the participation
interest, and the employing subsidiary has agreed to bear the expense of 50% of the amount due. The participation interest
paid over at inception is non-refundable, regardless of whether the hurdle is reached. Therefore the amount paid by the
employing subsidiary is expensed at inception.
The fair value of the amounts payable to employees under JSOP 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 JSOP scheme allows a set number of ordinary shares to be held jointly by the participant and the EBT. Under the terms of
the JSOP agreement, the participant holds the beneficial interest in the future growth of the shares above the hurdle, whilst
the trustee is entitled to the value up to the hurdle; the hurdle being the market price upon grant date. Upon vesting, the
participant is entitled to receive the growth in value of the shares above the hurdle, which is settled in shares priced at market
value on the vesting date.
The fair value of the JSOP award is measured at grant date using an appropriate valuation model, taking into account the terms
and conditions upon which the instruments were granted including any performance conditions, and using quoted share prices.
No JSOP agreements were entered into during the year.
The Group share-based payment expense in respect of the JSOP scheme was £2,384 for the year ended 31 March 2023
(2022: £28,438).
At 31 March 2023, the total number of ordinary shares of 0.025p outstanding under the Record plc JSOP was 1,274,375.
These shares are jointly owned and are ring-fenced within the EBT. The JSOP award vests immediately on the vesting date,
and the participant is entitled to any value over the hurdle; the trustee is then entitled to the value up to the hurdle.
Date of grant
At 1 April
2022 Granted Vested
Lapsed/
forfeited
At 31 March
2023
Earliest vesting
date
Latest vesting
date Hurdle
21/09/20 1,781,250 — (593,750) — 1,187,500 21/09/21 21/09/24 £0.37300
09/03/21 93,750 — (31,250) — 62,500 09/03/21 09/03/25 £0.63986
13/08/21 32,500 — (8,125) — 24,375 13/08/22 13/08/25 £0.85713
Total JSOP awards 1,907,500 — (633,125) — 1,274,375
Weighted average
exercise price of
options £0.39 — £0.39 — £0.40
There are no Directors’ interests in the JSOP scheme. No performance measures are attached to the JSOP.
During the year 633,125 shares over which a JSOP agreement had been granted vested. The weighted average share price at the
vesting date was £0.75.
The JSOP scheme rules contain clawback provisions allowing re-transfer of the participant’s interest and/or any vested shares
for nil consideration under certain circumstances including a material breach of contract or an error in performance of duties.
134 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
e. The Record plc Long-Term Incentive Plan (“LTIP”)
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 LTIP awards granted is measured at grant date using an appropriate valuation model, taking into account the
terms and conditions upon which the instruments were granted including any market or performance conditions, and using
quoted share prices.
The Record plc LTIP scheme started in April 2022, and allows nil-cost options to be granted to employees and Directors in the
Record Group.
LTIP awards over an aggregate of 2,890,000 shares were granted under the LTIP scheme during the year (2022: nil). All will vest
on 31 March 2025, 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 LTIP awards granted in the year ended 31 March 2023, 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 68.7p
Dividend yield 6.58%
Expected volatility 42.7%
LTIP award life 3 years
Risk-free interest rate (%) 3%
Expected volatility is based on historical volatility.
The Group share-based payment expense in respect of the LTIP scheme was £344,231 for the year ended 31 March 2023
(2022: £nil).
Outstanding LTIP awards
At 31 March 2023, the total number of LTIP awards outstanding under Record plc share compensation schemes was 2,890,000
(2022: nil). These LTIP awards are over issued shares, a proportion of which are hedged by shares held in an EBT. Details of
outstanding LTIP awards to employees are set out below:
Date of grant
At 1 April
2022 Granted Vested
Lapsed/
forfeited
At 31 March
2023
Earliest vesting
date
Latest vesting
date
08/09/22 — 2,890,000 — — 2,890,000 31/03/25 31/03/25
Total LTIP awards — 2,890,000 — — 2,890,000
Record plc Annual Report 2023 135
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
22. Share-based payments continued
e. The Record plc Long-Term Incentive Plan (“LTIP”) continued
Performance measures
Performance conditions attached to all LTIP awards granted to Board Directors are the same as to those granted for all other
staff. LTIP awards granted to Executive Directors and all other staff 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 for LTIP awards granted in September 2022 is 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.
One-third of the vesting for LTIP awards granted in September 2022 is 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.
The Directors’ interests in the combined share schemes are as follows:
Ordinary shares held as at
31 March
2023
31 March
2022
Record plc Group Bonus Scheme (interest in restricted share awards)
Leslie Hill 591,284 467,296
Steve Cullen 44,896 57,422
Record plc Share Scheme (interest in unvested share options)
Leslie Hill 383,333 668,334
Steve Cullen 173,333 301,668
Record plc LTIP Scheme (interest in unvested LTIP awards)
Steve Cullen 325,000 —
Clawback provisions
In addition to the performance measures above, LTIP awards granted to Executive Directors under the Share Scheme are
subject to clawback provisions. These provisions allow the Remuneration Committee to adjust the number of shares that
may be, or were, acquired to be decreased if the Committee considers that either a material breach of contract has arisen or
in respect of retrospective amendments required to calculations of the Group’s performance upon which vesting calculations
were originally based. The clawback provisions allow the Group to take various steps until the clawback obligation is satisfied,
including reduction of future share option awards, transfer of shares back to the Group for nil consideration, reduction of
future payments under the Bonus Scheme or payment of sales proceeds back to the Group .
136 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
23. Financial risk management
The Group’s current activities result in the following financial risks and management responses to those risks in order to
minimise any resulting adverse effects on the Group’s financial performance.
Objectives, policies and processes for managing risk and the methods used to measure the risk
Financial assets principally comprise trade receivables, accrued income, other receivables, money market instruments, cash
and cash equivalents and derivative financial assets. Financial liabilities comprise trade and other payables, financial liabilities
relating to investment in seed funds, lease liabilities and derivative financial liabilities. The main risks arising from financial
instruments are credit risk, liquidity risk, foreign currency risk, interest rate risk and concentration risk, each of which is
discussed in further detail below.
The Group monitors and mitigates financial risk on a consolidated basis. The Group has implemented a framework to manage
the risks of its business and to ensure that the Directors have in place risk management practices appropriate to a listed
company. The management of risk is directed by the Board and controlled and reviewed by the Head of Business Risk.
The Company’s material financial instruments are investments in the seed funds, cash and cash equivalents, and balances due
to/from Group undertakings. Intercompany balances are classified as loans and receivables and are repayable on demand.
No interest is charged on these balances. The Group has sufficient cash resources and hence management does not believe
that the Company has a material exposure to credit risk. The Company’s financial risk is managed as part of the Group financial
risk management process and therefore separate disclosures for the Company have not been provided. Market risk is not
considered to have a material impact on financial instruments, neither is it one of the Group’s principal risks; however, the
second order effects of market movements are discussed on page 53.
Credit risk
The Group has established a cash management team to manage Group cash in accordance with an approved cash management
policy. The policy stipulates exposure limits by instruments, counterparty, tenor and duration. Counterparty exposures are
measured against ratings published by credit-rating agencies and are monitored daily. The maximum single exposure to any
counterparty under the policy is 20% of total assets managed as cash.
The primary objective of the cash management team is to diversify and manage counterparty risk within the risk appetite of
the Group and the limits set by the policy. The secondary objective is to maintain yield given the constraints under the policy
whilst ensuring sufficient liquidity to meet future cash flow commitments as instructed by the Finance team.
The Chief Financial Officer is responsible for reviewing the Group’s credit exposure and ensuring that any credit concerns are
raised to the Risk Management Committee and that action is taken to mitigate these risks.
The quality of our clients and banking counterparties is reflected in the business having not suffered from any credit default
for over 20 years through various market crises and cycles, and we do not anticipate this changing under the current
circumstances.
The Group’s maximum exposure to credit risk is as follows:
Financial assets at 31 March
2023
£’000
2022
£’000
Trade receivables 10,185 8,231
Accrued income 1,743 25
Other receivables 685 497
Derivative financial assets 54 —
Money market instruments with maturities > 3 months 4,549 13,913
Cash and cash equivalents 9,948 3,345
Total financial assets 27,164 26,011
Record plc Annual Report 2023 137
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
23. Financial risk management continued
Credit risk continued
The debtors’ age analysis is also evaluated on a regular basis for expected credit losses. It is management’s opinion that there
is no requirement to provide for any expected credit losses. The table below is an analysis of trade receivables and accrued
income by due date:
At 31 March 2023
Carrying
amount
£’000
Neither
impaired nor
past due
£’000
0‑3 months
past due
£’000
More than
3 months
past due
£’000
Trade receivables 10,185 9,775 309 101
Accrued income 1,743 1,743 — —
Total 11,928 11,518 309 101
97% 2% 1%
At 31 March 2022
Carrying
amount
£’000
Neither
impaired nor
past due
£’000
0‑3 months
past due
£’000
More than
3 months
past due
£’000
Trade receivables 8,231 8,231 — —
Accrued income 25 25 — —
Total 8,256 8,256 — —
100% 0% 0%
The Group offers standard credit terms of 30 days from invoice date. It is the Group’s policy to assess debtors for expected
loss on an individual basis and to make a provision where it is considered necessary. In assessing recoverability, the Group
takes into account any indicators of impairment up to the reporting date, adjusting to incorporate any relevant forward looking
information. The application of this policy generally results in debts that are past due not being provided for unless individual
circumstances indicate that a debt is impaired.
Trade receivables are made up of 113 debtors’ balances (2022: 91). The largest individual debtor corresponds to 16% of the
total balance (2022: 16%). Debtor days, based on the generally accepted calculation of debtor days, is 83 days (2022: 85 days).
This reflects the quarterly billing cycle used by the Group for the vast majority of its fees. As at 31 March 2023, 3% of debt was
overdue (2022: 0%). No debtors’ balances have been renegotiated during the year or in the prior year.
Liquidity risk
The Group is exposed to liquidity risk, namely that it may be unable to meet its payment obligations as they fall due. The Group
maintains sufficient cash and marketable securities to be able to meet all such obligations. Management review cash flow
forecasts on a regular basis to determine whether the Group has sufficient cash reserves to meet the future working capital
requirements and to take advantage of business opportunities. The average creditor payment period is 9 days (2022: 28 days).
138 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
Contractual maturity analysis for financial liabilities
At 31 March 2023
Carrying
amount
£’000
Due or due
in less than
1 month
£’000
Due between
1 and
3 months
£’000
Due between
3 months
and 1 year
£’000
Trade payables 221 221 — —
Accruals 5,074 486 2,001 2,587
Derivative financial liabilities 5 — 5 —
Total 5,300 707 2,006 2,587
At 31 March 2022
Carrying
amount
£’000
Due or due
in less than
1 month
£’000
Due between
1 and
3 months
£’000
Due between
3 months
and 1 year
£’000
Trade payables 478 318 29 131
Accruals 3,608 302 1,503 1,803
Derivative financial liabilities 124 7 117 —
Total 4,210 627 1,649 1,934
Lease liabilities are not included within the table below, please see note 12 for further details.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate
due to changes in market interest rates. Interest rate risk arises from interest-bearing financial assets and liabilities held by
the Group. Interest-bearing assets comprise money market instruments and cash and cash equivalents which are considered
to be short-term liquid assets. It is the Group’s policy to settle trade payables within the credit terms allowed and the Group
does not therefore incur interest on overdue balances.
A sensitivity analysis has not been disclosed for the impact of interest rate changes as any reasonable range of change in
interest rate would not directly have a material impact on profit or equity.
Interest rate profiles
At 31 March 2023
Fixed rate
£’000
No
interest rate
£’000
Total
£’000
Financial assets
Trade receivables — 10,185 10,185
Accrued income — 1,743 1,743
Other receivables — 685 685
Derivative financial assets at fair value through profit or loss — 54 54
Money market instruments with maturities > 3 months 4,549 — 4,549
Cash and cash equivalents 9,948 — 9,948
Total financial assets 14,497 12,667 27,164
Financial liabilities
Trade payables — (221) (221)
Accruals — (5,074) (5,074)
Lease liability — (979) (979)
Derivative financial liabilities at fair value through profit or loss — (5) (5)
Total financial liabilities — (6,279) (6,279)
Record plc Annual Report 2023 139
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
23. Financial risk management continued
Interest rate profiles continued
At 31 March 2022
Fixed rate
£’000
No
interest rate
£’000
Total
£’000
Financial assets
Trade receivables — 8,231 8,231
Accrued income — 25 25
Other receivables — 497 497
Money market instruments with maturities > 3 months 13,913 — 13,913
Cash and cash equivalents 3,345 — 3,345
Total financial assets 17,258 8,753 26,011
Financial liabilities
Trade payables — (478) (478)
Accruals — (3,608) (3,608)
Lease liability — (1,326) (1,326)
Derivative financial liabilities at fair value through profit or loss — (124) (124)
Total financial liabilities — (5,536) (5,536)
Foreign currency risk
Foreign currency risk refers to the risk that the value of a financial commitment or recognised asset or liability will fluctuate
due to changes in foreign currency rates. The Group makes use of forward foreign exchange contracts to manage the risk
relating to future transactions in accordance with the Group’s risk management policy.
The Group is exposed to foreign currency risk on revenue invoices and cash holdings that are denominated in a currency
other than sterling, and also on assets and liabilities held by the Record Currency – Strategy Development Fund. The principal
currencies giving rise to this risk are the US dollar, the Swiss franc, the euro and the Canadian dollar.
During the year ended 31 March 2023, the Group invoiced the following amounts in currencies other than sterling:
2023 2022
Local
currency
value
£’000
Value in
reporting
currency
£’000
Local
currency
value
£’000
Value in
reporting
currency
£’000
US dollar (USD) 24,978 20,869 23,949 17,742
Swiss franc (CHF) 16,138 14,223 12,460 10,010
Euro (EUR) 4,293 3,748 4,135 3,498
Canadian dollar (CAD) 1,618 1,014 1,626 960
Australian dollar (AUD) 1,089 612 1,029 563
Japanese yen (JPY) 8,795 54 4,824 31
Swedish krona (SEK) — — 36 3
Singapore dollar (SGD) — — 4 2
The value of revenues for the year ended 31 March 2023 that were denominated in currencies other than sterling was
£40.2 million (31 March 2022: £32.8 million).
Record’s policy is to reduce the risk associated with the Group’s revenues denominated in foreign currencies by using
forward fixed rate currency sales contracts, taking into account any forecast foreign currency cash flows.
140 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
The settlement of these forward foreign exchange contracts is expected to occur within the following three months.
Changes in the fair values of forward foreign exchange contracts are recognised directly in profit or loss.
The cash denominated in currencies other than sterling (refer to note 18) is covered by the Group’s hedging process,
therefore the Directors consider that the foreign currency risk on cash balances is not material.
Foreign currency risk – sensitivity analysis
The Group has considered the sensitivity to exchange rate movements by considering the impact on those revenues,
costs, assets and liabilities denominated in foreign currencies as experienced in the given period.
Impact on profit after tax
for the year ended 31 March
Impact on total equity
as at 31 March
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Sterling weakening by 10% against the dollar 1,000 871 1,000 871
Sterling strengthening by 10% against the dollar (1,000) (871) (1,000) (871)
Sterling weakening by 10% against the Swiss franc 755 445 755 445
Sterling strengthening by 10% against the Swiss franc (755) (445) (755) (445)
Sterling/US dollar exchange rate
The impact of a change of 10% has been selected as this is considered reasonable given the current level of exchange rates
and the volatility observed on a historical basis and market expectations for future movement. When applied to the average
sterling/USD exchange rate of £1 = $1.20 this would result in sterling weakening to £1 = $1.09 and sterling strengthening to
£1 = $1.33.
Sterling/Swiss franc exchange rate
The impact of a change of 10% has been selected as this is considered reasonable given the current level of exchange
rates and the volatility observed on a historical basis and market expectations for future movement. When applied to the
average sterling/CHF exchange rate of £1 = CHF 1.13 this would result in sterling weakening to £1 = CHF 1.03 and sterling
strengthening to £1 = CHF 1.26.
Sensitivity analyses have not been disclosed for other currencies as any reasonable range of change in exchange rate
would not have a material impact on profit or equity.
Concentration risk
The Group is exposed to concentration risk in respect of product, client type and geographical location, which could lead to
over-reliance on any one category of revenue. Note 4 provides detail on clients contributing greater than 10% of revenue.
Mitigating activities are detailed in the Risk management section on page 51.
Concentration risk – sensitivity analysis
The Group has considered the impact of losing the Group’s largest client, assuming that only variable remuneration costs can
be reduced in the short term.
Impact on profit after tax
for the year ended 31 March
Impact on total equity
as at 31 March
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Loss of largest client 3,486 2,594 3,486 2,594
Record plc Annual Report 2023 141
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
24. Fair value measurement
The following table presents financial assets and liabilities measured at fair value in the consolidated statement of financial
position in accordance with the fair value hierarchy. This hierarchy groups financial assets and liabilities into three levels based
on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has
the following levels:
• level 1: quoted prices (unadjusted) in active markets for identical financial assets or liabilities;
• level 2: inputs other than quoted prices included within level 1 that are observable for the financial asset or liability,
indirectly (i.e. derived from prices); and
• level 3: inputs for the financial asset or liability that are not based on observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is determined based on the lowest level of input to the
fair value measurement. The financial assets and liabilities measured at fair value in the statement of financial position
are grouped into the fair value hierarchy as follows:
2023
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Financial assets at fair value through profit or loss
Impact bonds 770 770 — —
Investment in funds 2,530 1,077 — 1,453
Other investments 1,601 1,001 — 600
Forward foreign exchange contracts held to hedge non-sterling assets 54 — 54 —
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts held to hedge non-sterling assets (5) — (5) —
Total 4,950 2,848 49 2,053
2022
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Financial assets at fair value through profit or loss
Impact bonds 2,177 2,177 — —
Investment in funds 1,070 944 — 126
Other investments 200 — — 200
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts used by seed funds (15) — (15) —
Other investments (110) — (110) —
Total 3,322 3,121 (125) 326
There have been no transfers between levels in the reporting period (2022: none).
Basis for classification of financial instruments classified as level 1 within the fair value hierarchy
Impact bonds, listed funds and other listed investments are classified as level 1. These investments are valued using market
prices and coupon rates as applicable.
Basis for classification of financial instruments classified as level 2 within the fair value hierarchy
Forward foreign exchange contracts and options are both classified as level 2. Both of these instruments are traded on an
active market. Options are valued using an industry standard model with inputs based on observable market data whilst the
fair value of forward foreign exchange contracts may be established using interpolation of observable market data rather
than from a quoted price.
Basis for classification of financial instruments classified as level 3 within the fair value hierarchy
Direct investments in private funds and share capital of start-up companies in the digital sector have been classified as level 3.
There is no observable market for these investments, therefore fair value measurements have been derived from valuation
techniques that include inputs that are not based on observable market data. The private funds are valued at net asset value
in accordance with independent professional valuation reports or International Private Equity and Venture Capital Valuation
Guidelines where relevant. The direct investments in capital of the start-up companies are valued at cost.
142 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
Classes and fair value of financial instruments
It is the Directors’ opinion that the carrying value of all financial instruments approximates to their fair value.
Categories of financial instrument
At 31 March 2023 Note
Assets at
amortised
cost
£’000
Financial
liabilities
measured at
amortised cost
£’000
Assets at
fair value
through
profit or loss
£’000
Liabilities at
fair value
through profit
or loss
£’000
Impact bonds 14 — — 770 —
Investment in funds 14 — — 2,530 —
Other investments 14 — — 1,601 —
Trade and other receivables (excludes prepayments) 16 12,613 — — —
Money market instruments with maturities > 3 months 18 4,549 — — —
Cash and cash equivalents 18 10,757 — — —
Derivative financial assets at fair value through profit or loss 17 — — 54 —
Trade payables 19 — (221) — —
Accruals 19 — (5,074) — —
Derivative financial liabilities at fair value through profit or loss 17 — — — (5)
Total 27,919 (5,295) 4,955 (5)
At 31 March 2022 Note
Assets at
amortised
cost
£’000
Financial
liabilities
measured at
amortised cost
£’000
Assets at
fair value
through
profit or loss
£’000
Liabilities at
fair value
through profit
or loss
£’000
Impact bonds 14 — — 2,177 —
Investment in funds 14 — — 1,070 —
Other investments 14 — — 200 —
Trade and other receivables (excludes prepayments) 16 8,753 — — —
Money market instruments with maturities > 3 months 18 13,913 — — —
Cash and cash equivalents 18 3,345 — — —
Trade payables 19 — (478) — —
Accruals 19 — (3,608) — —
Derivative financial liabilities at fair value through profit or loss 17 — — — (124)
Total 26,011 (4,086) 3,447 (124)
Record plc Annual Report 2023 143
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Notes to the financial statements for the year ended 31 March 2023 continued
25. Related parties transactions
Company
Details of transactions between the Company and other Group undertakings, which are related parties of the Company, are
shown below:
Transactions with subsidiaries
The Company’s subsidiary undertakings are listed in note 14, which includes a description of the nature of their business.
2023
£’000
2022
£’000
Amounts due to subsidiaries (3,415) (714)
Dividends received from subsidiaries 10,500 4,600
Amounts due to subsidiaries consist of funds lent by the subsidiaries to the Company to facilitate the Company’s investing
activities. Amounts due to subsidiaries are disclosed as a net amount, and consist of amounts owed to Group undertakings in
note 19 and trade receivables in note 16. All amounts owed to and by related parties will be settled in cash. No guarantees have
been given or received. No provisions for expected credit losses have been raised against amounts outstanding (2022: £nil). No
expense has been recognised during the year in respect of expected credit losses due from related parties.
Group
Transactions or balances between Group entities have been eliminated on consolidation, and in accordance with IAS 24, are not
disclosed in this note.
Key management personnel compensation
2023
£’000
2022
£’000
Short-term employee benefits 10,311 8,457
Post-employment benefits 327 330
Share-based payments 3,539 2,467
Total 14,177 11,254
Key management personnel dividends
The dividends paid to key management personnel in the year ended 31 March 2023 totalled £4,073,511 (2022: £3,056,662).
Directors’ remuneration
2023
£’000
2022
£’000
Emoluments (excluding pension contribution) 3,580 2,809
Pension contribution (including payments made in lieu of pension contributions) 101 96
Total 3,681 2,905
During the year, no Directors of the Company (2022: none) participated in the Group Personal Pension Plan, a defined
contribution scheme. Further detail on Directors’ remuneration is provided in the Remuneration report on page 79.
144 Record plc Annual Report 2023
Notes to the financial statements for the year ended 31 March 2023 continued
26. Contingent liabilities and commitments
The Group has committed to subscriptions to equity capital of $1,791,870, of which $1,486,870 has been called.
On 20 January 2023, the Group committed to a licence to use an office in London. The commitment is to 28 February 2025 and
the outstanding amount to be paid at 31 March 2023 was £1,628,225. £836,060 is payable within twelve months and £864,180
within the following twelve months.
A previous commitment on an office in London had been made on 1 October 2021, with the commitment being to 31 October
2023 and the original outstanding amount to be paid between 1 April 2023 and 31 October 2023 being £352,800. However, this
commitment ended on 28 February 2023, when it was replaced and superseded by the commitment made on 20 January 2023.
27. Capital management
The Group’s objectives when managing capital are (i) to safeguard the Group’s ability to continue as a going concern;
(ii) to provide an adequate return to shareholders; and (iii) to meet regulatory capital requirements under the relevant
jurisdictions (FCA and BaFin).
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments
to it in light of changes in economic conditions and the risk characteristics of the underlying assets, while also continuing to
ensure that the minimum required regulatory capital is maintained. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, or issue new shares. The Group
had no debt in the current or prior financial year and consequently does not calculate a debt-to-adjusted capital ratio.
The Group’s total capital is equal to the net assets of the Group, and is managed within the categories set out below:
2023
£m
2022
£m
Required regulatory capital 7.1 5.4
Other operating capital 21.2 20.5
Total capital 28.3 25.9
Total capital covers the Group’s regulatory capital requirements plus capital required for day-to-day operational purposes and
other investment purposes. The Directors consider that the other operating capital significantly exceeds the actual day-to-day
operational requirements.
28. Ultimate controlling party
As at 31 March 2023 the Company had no ultimate controlling party, nor at 31 March 2022.
29. Post-reporting date events
No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation .
30. Restatement of the share premium account and retained earnings
Gains prior to 31 March 2022 on the release of shares from the Employee Benefit Trust have been reclassified from share
premium to retained earnings as there was no issue of new shares. The prior cumulative movements to 31 March 2021 and for
the year ended 31 March 2022 of £609,000 and £820,000 respectively, resulting in a total reclassification of £1,429,000 to the
retained earnings balance as at 31 March 2022.
In addition to this, a reclassified of £1,240,000 between the release of shares held by EBT and share based payment reserve
movement in the statement of changes in equity was made to correct the classification of consolidation adjustments
necessary to remove internal gains and losses arising when shares are transferred within the Group, and recognise it
separately from the IFRS 2 charges.
The restatement does not impact the current or previous years’ profit or loss .
31. Restatement of profit after tax in the Company statement of cash flows
For the prior year ended 31 March 2022, the Company statement of cash flows previously showed the loss after tax of £41,000
excluding dividends received of £4,600,000. In order for the profit after tax figure to reconcile to the Company statement
of changes in equity, this figure has now been updated in the FY-22 comparative figure to a profit after tax of £4,599,000
including dividends. A corresponding line to remove the dividends received from subsidiaries from cash flows from operating
activities was also added, as this is recognised in investing activities inline with the company policy. Since this represents a
presentational adjustment only, the restatement does not impact the totals reported for cash inflow from operating activities
nor the net decrease in, or closing balance for, cash and cash equivalents for the year.
Record plc Annual Report 2023 145
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Five year summary
Audited
Year ended 31 March
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
Management fees 22,308 23,133 24,878 34,083 38,298
Performance fees 2,333 1,819 81 499 5,805
Other revenue 332 611 453 570 586
Revenue 24,973 25,563 25,412 35,152 44,689
Cost of sales (385) (255) (399) (219) (37)
Gross profit 24,588 25,308 25,013 34,933 44,652
Operating expenses (16,704) (17,741) (18,934) (23,726) (29,888)
Other income/(expenditure) (8) 82 41 (372) (293)
Operating profit 7,876 7,649 6,120 10,835 14,471
Net interest 113 88 33 21 127
Profit before taxation 7,989 7,737 6,153 10,856 14,598
Taxation (1,559) (1,365) (802) (2,225) (3,259)
Profit after taxation 6,430 6,372 5,351 8,631 11,339
Basic EPS (pence) 3.27 3.26 2.75 4.52 5.95
Ordinary dividend (pence) 2.30 2.30 2.30 3.60 4.50
Special dividend (pence) 0.69 0.41 0.45 0.92 0.68
146 Record plc Annual Report 2023
Information for shareholders
Record plc
Record plc is a public limited company incorporated in the UK.
Registered in England and Wales
Company No. 1927640
Registered office
Morgan House
Madeira Walk
Windsor
Berkshire
SL4 1EP
United Kingdom
Tel: +44 (0)1753 852 222
Fax: +44 (0)1753 852 224
Principal UK trading subsidiaries
Record Currency Management Limited
Registered in England and Wales
Company No. 1710736
Record Group Services Limited
Registered in England and Wales
Company No. 1927639
Both principal UK trading subsidiaries are based in Windsor.
Further information on Record plc can be found on the
Group’s website: www.recordfg.com
Dates for 2023 dividend
Ex-dividend date 13 July 2023
Record date 14 July 2023
Annual General Meeting 29 July 2023
Final dividend payment date 9 August 2023
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Further information about the Registrar is available on their
website www.linkgroup.eu
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
Record plc Annual Report 2023 147
Definitions
“AIFMD” Alternative Investment Fund Managers Directive
“Articles” The Articles of Association of the Company
“AUME” Assets Under Management Equivalents
“Board” Company’s Board of Directors
“bps” Basis point = 100th of a per cent
“Companies Act” Every statute (including any orders, regulations or other subordinate legislation made under it)
from time to time in force concerning companies in so far as it applies to the Company
“Company” Record plc
“$” or “dollars” All references to dollars or $ symbol are to the currency of the US unless stated otherwise
“EBT” Employee Benefit Trust
“EM” Emerging Markets
“EPS” Earnings per share
“ESG” Environmental, social and governance
“ETF” Exchange traded fund
“EU” European Union
“FRB” Forward Rate Bias
“Group” or “Record” The Company and/or any one of its subsidiary undertakings
“IAS” International Accounting Standards
“IFRS” or “IFRSs” International Financial Reporting Standards
“IPO” Initial Public Offering
“KPI” Key Performance Indicator
“KRI” Key Risk Indicator
“LGPS” Local Government Pension Schemes
“London Stock Exchange” London Stock Exchange plc
“MiFID” Markets in Financial Instruments Directive
“Official List” The official list of the Financial Conduct Authority
“TIPS” US government treasury inflation protected securities
“US” United States of America
AUME definition
The basis for measuring AUME differs for each product and is detailed below:
• Dynamic Hedging mandates – total amount of clients’ investment portfolios denominated in liquid foreign currencies,
andhence capable (under the terms of the relevant mandate) of being hedged.
• Passive Hedging mandates – the aggregate nominal amount of passive hedges actually outstanding in respect of
eachclient.
• Currency for Return mandates – the maximum aggregate nominal amount of outstanding forward contracts for each client.
• Multi-product mandates – the chargeable mandate size for each client.
• Cash – the total set aside by clients and managed and/or “equitised” using futures by Record.
148 Record plc Annual Report 2023
The Group’s commitment to the environment is refl ected in this report, which has been printed on
Munken Polar Smooth, anFSC® certifi ed material. It also has EU Ecolabel, EMAS, ISO-14001 and PEFCTM
(PEFC/05-33-99) certifi cation. ArcticPaper Munkedals ABisone of the most environmentally-friendly
paper mills in the world and meets the requirements for FSC® Chain-of-Custody (“CoC”) certifi cation.
FSC® CoC certifi cation assures that products sold with an FSC® claim originate from well-managed
forests, controlled sources, and/or reclaimed materials in their supply chain. It confi rms that
throughout theproduction process there is: respect for human rights, adherence to all local applicable
timber legislation and no involvement in thedestruction of high conservation areas. Arctic Paper
Munkedals’ Munkedal mill is committed to reducing its long-term environmental impact and hasthe
lowest water consumption per kilogram of paper in the entire industry, whilst the company’s energy
usage is within or belowthe EU’s Best Available Techniques.
This document was printed by Pureprint Group using its environmental print technology, with 100% of
dry waste diverted from landfi ll, minimising the impact of printing on the environment. The printer is a
CarbonNeutral® company and ISO 14001 registered.
Designed and produced by
www.lyonsbennett.com
Record plc
Morgan House
Madeira Walk
Windsor
Berkshire SL4 1EP
T: +44 (0)1753 852 222
marketing@recordfg.com
www.recordfg.com
Record plcAnnual Report 2023
Record plcAnnual Report 2023