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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