Record : Annual Report and Accounts 2024

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Record Financial Group

A specialist currency and asset manager offering best-in-class products to large global investors

Record plc Annual Report 2024

Contents

Strategic report	1 to 57
Financial highlights	1
About us	2
Investment proposition	4
Chairman's statement	6
Chief Executive Officer's statement	8
Our markets	10
Business model	12
Our products	14
Strategic approach and distribution	20
Our strategy	22
Key performance indicators	24
Sustainability	26
Task Force on Climate-related
Financial Disclosures ("TCFD")	32
Section 172 Companies Act 2006
- Our stakeholders	35
Operating review	38
Financial review	44
Risk management	52
Viability statement	57

Governance	58 to 100
Chairman's introduction		59
Board of Directors		60
Corporate governance report		62
Nomination Committee report		69
Audit Committee report		72
Remuneration report		77
Directors' report		96
Directors' responsibilities statement	100

Financial statements	101 to 146
Independent auditor's report		102
Financial statements		110
Notes to the financial statements	117

Additional information	147 to 149
Reconciliation of Alternative
Performance Measures	147
Five year summary	147
Information for shareholders	148
Definitions	IBC

Record Financial Group

Specialist currency and asset manager offering best-in-class bespoke products to large global investors

About us

• Founded in 1983 and publicly listed on the LSE
• Group manages over $100 billion AUM for more than 100 institutional clients worldwide
• Over 90 Group employees spread across offices in London, Windsor, Zurich, Frankfurt and Amsterdam
• Regulated by the FCA in the UK, the SEC and CFTC in the US, and BaFin in Germany

Listen	Understand	Deliver
A client-focused	Using strengths and	Unique, innovative
approach	experience developed	and sustainable
	over 40 years in	solutions
	business

Record plc	Annual Report 2024	Strategic report	Governance	Financial statements	Additional information

Financial highlights

Our year in numbers

Assets Under Management1 ("AUM")

$102.2bn

+16.5%

FY-23: $87.7bn

Revenue

£45.4m

+1.6%

FY-23: £44.7m

Ordinary dividend per share

4.60p

+2.2%

FY-23: 4.50p

Total dividend per share

5.20p (including special of 0.60p)

+0.4%

FY-23: 5.18p (including special: 0.68p)

Underlying operating profit2

£14.5m

+0.0%

FY-23: £14.5m

Underlying profit before tax2

£14.8m

+1.4%

FY-23: £14.6m

Underlying earnings per share2

5.60p

-5.9%

FY-23: 5.95p

Operating profit

£12.6m

-13.1%

FY-23: £14.5m

Profit before tax

£12.9m

-11.6%

FY-23: £14.6m

Earnings per share

4.84p

-18.7%

FY-23: 5.95p

1. AUM managed by Record Financial Group as at 31 March 2024 is a combination of USD 97.5 billion based on the notional value of currency assets under management through the Group's currency products and USD 4.7 billion in total market value of other assets managed by the Group. By convention this is quoted in US dollars.
2. A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.

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Record plc Annual Report 2024

About us

Record Financial Group

By leveraging our 40+ years of experience and expertise in FX and derivatives instruments and markets, and in collaboration with our specialist partners, we are able to identify opportunities for new and innovative products in the wider asset management sector.

At the heart of our approach is a genuine commitment to our clients, ensuring individual needs are not just met, but exceeded, with unique tailored solutions crafted with care and excellence.

Our business

Currency Management

Record's family of currency products is centred on highly bespoke risk management and return-seeking solutions, trading various FX instruments globally across developed, emerging and frontier markets to best suit the evolving currency requirements of our clients.

Asset Management

Asset Management at Record provides private market, yield-enhancing strategies to institutional investors across EM debt, Digital Lending, Private Credit and Infrastructure asset classes, offering sustainable and customisable structuring and delivery infrastructure.

Total Assets Under Management ("AUM")

$102.2bn

+16.5%

FY-23: $87.7bn

Currency Management

$97.5bn

Asset Management

$4.7bn

Further details of the Group products and operating segments are provided on pages 14 to 19.

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Record plc	Annual Report 2024	Strategic report	Governance	Financial statements	Additional information

About us

Where we operate

The Group's main geographical markets, as determined by the location of clients to whom services are provided, are the UK, North America and Continental Europe, in particular Switzerland. The Group also has clients elsewhere, including Australia.

The Group's Head Office is in Windsor, UK with additional offices in London, New York, Zürich, Frankfurt and Amsterdam.

In addition to these main markets, we continue to explore new geographical markets which we believe may offer attractive opportunities.

Our values

People first

Our clients value our understanding of how achieving long-term, sustainable investment objectives is a mindful journey, as much as an economic one. Then there's our team - championed for its intellectual diversity, passion and dynamism. It's our people that makes us great.

Integrity

Continental Europe

$69.9bn

68%

United Kingdom

$6.8bn

North America

$20.7bn

20%

Rest of the world

$4.8bn

We've always had a legacy of honesty and upfront client advice over our 40 years in existence - and that will never change. This ethos echoes throughout our people, our relationships, our products and our fees. And, as an impartial, independent, premium listed business, we are guided by the highest levels of best practice and ethical codes of conduct.

Collaboration

We firmly believe in the power of many. Our expanding network of like-minded specialists

7%5%

Global AUM and operating locations

Head Office (Windsor)  Other offices  Client locations

globally means we can call on various strengths and expertise. This flexibility allows us to customise unique solutions for our clients.

Curiosity

We are restless minds driven by curiosity, ideas and innovation. We always question, so we can give our clients excellence and value. We are not afraid to say no if it's not the right investment fit. Or to dig a bit deeper - to unearth other opportunities or create new and innovative solutions.

Empathy

In many ways, we can be described as empathetic investment advisers and champions of varied thought. Listeners first, we get to know our clients and learn what their needs are - then we create customised solutions that fit their specific needs.

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Record plc Annual Report 2024

Investment proposition

Bespoke, innovative investment solutions and superior client service drive consistent AUM growth, strong cash generation and a robust balance sheet.

Sustainable				Balance sheet and
growth		Dividend policy		cash generation

Our strategic vision is aligned with sustainable growth, which is already materialising in the form of year-on-year high levels of revenue.

• Prioritising sustainability ensures longevity and resilience of our business model, enhancing predictability of returns over the long term
• Embracing sustainable practices can lead to operational efficiencies and cost savings through resource optimisation and innovation
• This objective not only safeguards shareholder interests, but allows the Group to capitalise on opportunities in the rapidly expanding market for sustainability-aligned products

Year-on-year growth:

Revenue:

+1.6%

Underlying profit before tax1:

+1.4%

Three-year annual compound growth:

Revenue:

+21.3% p.a.

Profit before tax:

+27.7% p.a.

A proven history of ordinary dividend payments within the stated policy range of 70%-90% of annual earnings provides reassurance to shareholders and reinforces our investment proposition.

• Signals financial stability and confidence in our future performance, management's commitment to shareholder and value creation, and efficient capital allocation
• Serves as a protective measure for investors during periods of market volatility when capital appreciation opportunities are limited
• Aligns the interests of the Group and the shareholders, fostering a transparent and mutually beneficial relationship

Year-on-year growth:

Ordinary dividends:

+2.2%

Underlying earnings per share1:

-5.9%

Three-year annual compound growth:

Ordinary dividends:

+26.0% p.a.

Earnings per share

+20.7% p.a.

Our robust and highly liquid balance sheet provides a solid platform for continued value creation alongside our cash generative business model, and is complemented by the absence of any external debt.

• Ensures financial flexibility and resilience, and reduces our exposure to any potential economic downturns and market volatility
• Enables the Group to capitalise on strategic opportunities for growth and innovation without the constraints of debt servicing obligations
• The avoidance of external debt minimises any financial risk and preserves shareholder equity

As at 31 March 2024:

Net assets:

£29.0m

Assets managed as cash (no external debt):

£17.5m

See financial statements from page 110 for further information

1. A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.

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Record plc	Annual Report 2024	Strategic report	Governance	Financial statements	Additional information

Investment proposition

Shareholders are rewarded with ordinary dividends paid within the stated range of 70% to 90% of annual earnings.

Client relationships
and AUM	Partnerships	Geographical reach

Trusted and long-standing institutional client relationships built over 40 years in managing currency and derivatives provides a solid foundation and strong asset base upon which to grow.

• Long-standingrelationships underscore our commitment to personalised service, trust and satisfaction
• Our consistent growth in AUM reflects client confidence in our capabilities, expertise and track record of generating competitive returns
• Our ability to deliver long-term value is centred on nurturing these relationships to understand the unique needs of each of our clients and delivering tailored solutions

Year-on-year growth:

Partnerships with established and expert partners provide additional skill sets and a strong pipeline of innovative products offering unique investment opportunities to clients.

• These partnerships provide us the opportunity to not only identify promising new investment opportunities, but also to strengthen our existing suite of products
• Two Luxembourg funds were launched under the Record brand in FY-24. For each fund, Record has partnered with a high calibre specialist with expertise in the specific asset classes
• A joint undertaking with a Middle Eastern partner is underway to develop Islamic finance working capital products
• These new offerings ensure that our clients have access to additional non-currency related investment strategies

With offices situated in the UK, US, and the regulated asset management business and growing team now established in the EU, our improved geographical reach provides passporting opportunities for the Group.

• Our multi-regional footprint strengthens our resilience against localised risks and economic fluctuations
• Bolsters our credibility, visibility and accessibility for both clients and investors
• Positions us well to capture growth opportunities, drive operational efficiencies and deliver sustainable value to our stakeholders across borders and markets

AUM:

+16.5%

Three-year annual compound growth:

AUM:

+8.5% p.a.

Partners across the globe:		Offices in:
Luxembourg,		UK, US,
US, Middle East,		Switzerland,
Ireland and		Germany and
many more		the Netherlands

See pages 41 to 43 for further AUM information

See pages 14 to 19 for further information on our partnerships

See page 3 for more information on the locations of our client base

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Record plc Annual Report 2024

Chairman's statement

In line with our succession planning now materialising, I am confident we have a new generation of senior management in place with strong and complementary skills to take the business forward.

David Morrison | Chairman

Ordinary dividend per share

4.60p

+2.2%

FY-23: 4.50p

Underlying earnings per share1

5.60p

-5.9%

FY-23: 5.95p

There are few people who have the desire and determination to start a new business, who then also have the management skills to allow it to develop and mature and, in the greater course of time, to set in place the succession to take on the business from the founding generation. Neil Record, the founder of the Company, whom I succeeded as Chairman after the last Annual General Meeting, managed

all three over 40 years and I would like to pay tribute to him for all that he achieved in creating and building Record plc. Not only has the business developed from a tiny band located in an office next to Windsor Riverside Station in the early 1980s to one which has AUM of over $100 billion which it manages on behalf of an impressive and demanding range of clients, but it has done so in a manner that reflects the high intellectual standards and personal integrity of its founder.

The last year has also witnessed the retirement of Leslie Hill as Chief Executive Officer and the impending retirement of Steve Cullen as Chief Financial Officer. Leslie joined the business in 1992 and, for many years, led the sales and business development activities of the Company. Record is fortunate to have retained and served some clients for periods measured in decades rather than years and I believe much of the loyalty from clients has been driven both by the quality of the services provided and the relationships developed and led by Leslie over many years.

Since taking over as Chief Executive Officer in 2020, Leslie also widened the eyes of the Company with regard to new product and service opportunities, creating opportunities for the new generation of management to take forward. Steve Cullen has also been a magnificent servant of the Company. Having joined in 2003 and taken over as Chief Financial Officer in 2013, he has been an undemonstrative, but calm and sensible voice in the boardroom for many years. To both Leslie and Steve, gratitude is owed by shareholders, Board members and employees alike.

Dr Jan Witte joined Record in 2012, having completed his mathematics doctorate at Balliol College, Oxford. Since then, he has held various roles in the Company including, in recent times, leading the development of Record Asset Management and being Chief Executive of Record Currency Management. I am delighted that he has stepped up to become the Chief Executive Officer of the Group. Jan has now been joined by Richard Heading, who will succeed Steve Cullen as Chief Financial Officer. Richard has

a breadth of experience in sectors and businesses with demands and challenges not dissimilar to Record and I believe that he will bring to the business complementary skills and external experience to support Jan's deep knowledge of Record and its activities. I am confident that, between the two of them, supported by other senior members of the management team, the Company is in safe hands.

1. A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.

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Record plc	Annual Report 2024	Strategic report	Governance	Financial statements	Additional information

Chairman's statement

Financial overview

In his short time to date as Group CEO, Jan has brought renewed clarity to the Group's core product suite and, as previously announced, has also made changes to the IT strategy. The latter, in particular, will underpin operational strength and service quality, and is a major focus for the coming year.

The Group continues to make progress in its growth plans as evidenced by AUM having almost doubled over the last five years to its new high of over $100 billion, coupled with the successful launch of new products under its Custom Solution suite of asset management products.

From a financial perspective, we fully expect the impact of the above changes, and others, to be seen over the medium term. However, in the most recent fiscal year, the overall increase in revenues and underlying profitability was more mundane, reflecting the pricing of certain products and the Company's cost base. The year also delivered challenges with some events beyond our control having

an unavoidable financial impact; in particular, the unexpected client-side delays in launching some of our new funds. In addition, the decision was also taken to impair £1.9 million of capitalised IT development expenditure towards the end of the financial year.

In that context, maintaining Group revenue and underlying profitability at the same level as last year is a reasonable achievement, albeit one below our initial expectations. However, looking ahead with a solid pipeline, fund launches planned and AUM at

its highest ever level, the Group's trajectory remains positive and is supported by a highly cash-generative business model accompanied by

a robust and liquid balance sheet, with total equity of £29.0 million (FY-23: £28.3 million).

Further information on financial results can be found in the Financial review section on page 44.

Capital and dividend

Our capital policy has not changed and aims to ensure retention of capital as required for regulatory and working capital purposes and for investing

in new opportunities. Our dividend policy currently targets a level of ordinary dividend within the range of 70% to 90% of annual earnings, which allows for progressive and sustainable dividend growth in line with the trend in profitability.

Previously, and subject to financial performance and market conditions at the time, the Board has considered returning excess cash to shareholders, usually in the form of special dividends. However, the Board retains the discretion to change these policies as required, either in line with changes

in strategy or in response to changing business circumstances.

In that context, the Board is recommending a final ordinary dividend of 2.45 pence per share (FY-23: 2.45 pence) with the full-year ordinary dividend at 4.60 pence per share (FY-23: 4.50 pence), representing a 2.2% increase in the ordinary dividend and an ordinary payout ratio of 82% of underlying earnings. The interim dividend of 2.15 pence was paid on

22 December 2023, and the final ordinary dividend of 2.45 pence will be paid on 2 August 2024 to shareholders on the register at 12 July 2024, subject to shareholder approval.

Having reviewed the current level of Group capital against its ongoing requirements for regulatory and investment purposes and to support its continued growth and expansion, the Board is announcing a special dividend of 0.60 pence per share to be paid simultaneously with the final ordinary dividend. Total proposed dividends per share for the year are 5.20 pence per share (FY-23: 5.18 pence) compared

to underlying earnings per share of 5.60 pence (FY-23: 5.95 pence).

The Board

As noted above, the past year has witnessed substantive changes to the Board and senior management of the Company. Rarely, however, can one note that the Chairman stood down after 40 years, the CEO after

31 years with the Company and the CFO after 21 years. Nevertheless, such changes give rise to management challenges and I would like to take this opportunity to thank my colleagues on the Board and the senior members of the management team for their advice, challenge and support since I took the chair last summer.

Having expressed an inclination to do so some time ago, but having most helpfully agreed to remain in post to support the process of management change over the past few months, Tim Edwards recently took the decision to stand down from the Board, after six years' service, to give him time to focus on the biotechnology sector.

I would like to thank Tim for the commitment and counsel he has given to the Board and the management team.

To succeed Tim, shortly before issuing this report we were able to announce the appointment of Dr Othman Boukrami as a new Non-executive Director with effect from 1 July 2024. Othman is currently Chief Investment Officer of TCX, the Currency Exchange Fund, having earlier in his career held senior positions in the African Development Group and Citibank. Othman brings highly pertinent sector expertise to the Board and

I am delighted that he accepted the invitation to join it.

I am also pleased that we have appointed Kevin Ayles to the Board in an executive capacity. Kevin has been with Record since 2007 and, in a company that is wholly dependent on the calibre and commitment of its employees, he has played a critical role in developing the strength of the management team in his capacity as Head of Human Resources. Kevin's appointment is both recognition of the contribution he makes to the business and a reflection of the importance of his role to the future of the Company.

Outlook

A new senior management team quite rightly takes the opportunity to review the strategic and operational imperatives of a business as well as the environment and markets in which a company is operating. That is a process that is ongoing within Record at present, on which Jan Witte comments in his CEO report, and which will continue during the first half of the current financial year. The focus, in the short term, is

on ensuring operational strength and stability along with client satisfaction.

Taking a medium-term view, I am confident that we have a new generation of senior management in place able

to take the Company forward and that we are operating in political and economic conditions that will provide the Company with an opportunity-rich environment both for currency hedging mandates and for alternative asset investments that are not correlated with more conventional asset classes.

David Morrison

Chairman

27 June 2024

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Record plc Annual Report 2024

Chief Executive Officer's statement

Since my appointment on 1 April of this year, as a team, we have now crystallised our long-term strategy for growth around some very clear priorities.

Jan Witte | Chief Executive Officer

Revenue

£45.4m

+1.6%

FY-23: £44.7m

Underlying profit before tax1

£14.8m

+1.4%

FY-23: £14.6m

1. A reconciliation of alternative performance measures to their statutory equivalent is provided on page 147.

Overview

I am proud to have become CEO of Record and consider it a great privilege to be able to both lead and evolve the business going forward, supported by an experienced team of senior colleagues, many of whom have been at Record for ten years or more.

To put things in context, it is instructive to look back at the transformation the business has seen over the last decade and more specifically in the last couple of years.

In the period after the financial crisis of 2008/9, Record's product set, while profitable, became somewhat stagnant and, in 2017, fee pressure across the industry was becoming an increasing concern. This highlighted the need for change and, against a backdrop of falling profitability, Leslie Hill, formerly Head of Sales, was appointed CEO in 2020 to introduce fresh thinking and to explore new opportunities for growth.

Leslie successfully created this younger, more dynamic senior management team across the Group and encouraged a more entrepreneurial mindset to take root.

As a result, over the last couple of years, we have proactively developed and explored a number of new possibilities, not all of which we plan to take forward given the need to focus on those areas offering the greatest potential.

Strategy

Since my appointment on 1 April of this year, the senior management team has been working to crystallise our long-term strategy for growth and we have started by setting some very clear priorities. With a much higher level of strategic clarity, our focus now is firmly on execution and we must get the details right.

One of the things that has become very clear is that we need to define our positioning in the industry landscape. We now strongly identify (and reinforce this positioning) as a specialist

asset manager focused on offering best-in-class products to large global investors.

Being a specialist is a role that is consistent with our roots, our established product lines, and our more recent expansion into new products. It is also consistent with our culture and the exceptional expertise of many of the people we employ. We don't aspire to, and it is not necessary to, excel at everything; but where we are competing, we aim to provide best-in-class solutions.

Another quality that makes us unique is our ability to structure and deliver large purpose-built investment solutions. Our size here is key. We are large enough to structure and deliver multi-billion USD mandates, and simultaneously small enough to be nimble and accommodate the unique and often complex detail required to deliver exceptional output for our rightly demanding clients.

In an increasingly complex world, where rapid technological progress competes for attention with de-globalisation and geopolitical tensions, these purpose-built investment solutions of exceptional quality and the way we can deliver them, are in demand. As testament to that, we now manage more than USD 100 bn for clients worldwide.

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