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GROWING
TOGETHER
ANNUAL REPORT 2022
FINANCIAL HIGHLIGHTS
NIGEL LE QUESNE
Chief Executive Officer
2022 was arguably our
best year ever in my 30
plus yearsat JTC. The JTC
team hasput us in touching
distance, within three years
of reaching our Galaxy goal
of doubling the business
fromthe end of 2020,
aremarkable achievement.
OUR PURPOSE
Is to help maximise the potential of
every client, colleague and partner
with whom we work.
JTC is a publicly listed, global professional
services business with deep expertise in
fund, corporate and private client services.
Every JTC person is an owner of the business
and this fundamental part of our culture
aligns us with the best interests of all
ourstakeholders.
2021
28.2%
2021
9.6%
2021
25.0%
2021
17.6%
2021
17.4%
2021
147.2%
2021
16.8%
2021
13.6%
2021
127.2%
OPERATIONAL HIGHLIGHTS
READ MORE
ON PAGE 9
Revenue
35.6%
Net organic revenue growth
12.0%
Profit before tax
29.3%
Underlying EBITDA
36.4%
Adjusted underlying EPS
30.2%
Basic earnings per share
16.7%
New business wins
17.7%
Dividend per share
30.1%
Lifetime Value Won
18.4%
2022: £35.9m
2021: £27.8m
2022: £24.6m
2021: £20.9m
2022: 23.92p
2021: 20.49p
2022: 9.98p
2021: 7.67p
2022: £200.0m
2021: £147.5m
2022: 12.0%
2021: 9.6%
2022: £66.0m
2021: £48.4m
2022: £237.7m
2021: £200.8m
2022: 33.27p
2021: 25.55p
VISIT US AT JTCGROUP.COM
WHAT’S IN THE REPORT
329
56
4
STRATEGIC REPORT
2 Our Business At A Glance
3 Our Purpose, Values And Culture Are Aligned To Our Strategy
4 Investment Case
6 Our Market Drivers
8 Our Business Model
9 Chief Executive Officer’s Review
16 Inorganic Growth Strategy
18 Key Performance Indicators
20 Chief Financial Officer’s Review
28 Institutional Client Services
30 Private Client Services
32 Sustainability
46 Risk Management
49 Risk Types
50 Principal Risks
54 Viability Statement
GOVERNANCE REPORT
56 Board Of Directors
58 Governance At A Glance
59 Activities Of The Board
60 Stakeholder Engagement
62 Nomination Committee Report
65 Board Evaluation
67 Audit Committee
71 Governance & Risk Committee
73 Remuneration Committee Report
95 Directors’ Report
95 Directors’ Responsibility Statement
FINANCIAL STATEMENTS
98 Independent Auditor’s Report
103 Consolidated Income Statement
103 Consolidated Statement Of Comprehensive Income
104 Consolidated Balance Sheet
104 Consolidated Statement Of Changes In Equity
105 Consolidated Cash Flow Statement
105 Notes To The Consolidated Financial Statements
ADDITIONAL INFORMATION
142 Glossary
145 Investor Relations Information
CEO REVIEW
GROWING TOGETHER
OUR INVESTMENT CASE
LONG-TERM SUSTAINABILITY
DRIVEN BY CULTURE
GOVERNANCE AT THE HEART
OF OUR BUSINESS
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
1 JTC Annual Report 2022
OUR HISTORY
OUR BUSINESS AT A GLANCE
1987
The business is
established inJersey
1991
CEO, Nigel Le Quesne,
joins as fifth employee
1998
Nigel creates JTC
Shared Ownership,
making every
employee anowner
2008
MBO results in the
Group becoming
independent as
wellaswholly
employee-owned
2010
JTC makes its first
acquisition
andexpands its
operations in
sixjurisdictions
2012
CBPE take a minority
stake and the Group
embarks on its
‘localtoglobal’
expansion strategy
2018
The Group lists on the
LSE with an initial
market capitalisation
of £310m
2020
Galaxy Era goal to
double the size of the
business achieved,
triggering £20m
Shared Ownership
awards to employees
2022
Exceeds £200m
ofrevenue for
thefirsttimeand
onboarded largest
everclient mandate
1,500+
employee-owners
10,000+
clients
100+
countries served
OUR VISION
Our vision is to be the very best independent
provider of institutional and private client services
across multiple jurisdictions. We have built on this
vision to create a business that is different from the
competition and provides all of our staff with the
opportunity to benefit from its success.
OUR MISSION
Our mission is to build partnerships with our clients
that enable them to focus on their core business,
whilst we manage risk, protect assets and spot
opportunities, efficiently and cost-effectively.
INSTITUTIONAL CLIENT SERVICES(ICS) DIVISION
Provides fund, corporate and banking services
toinstitutional clients, primarily fundmanagers,
listedcompanies andmultinationals.
FUND SERVICES
We are expert in a wide variety of fund
types and services across a diverse range of
asset classes and leading funds jurisdictions.
We partner with our clients and provide
support throughout the lifecycle of a fund,
including complex and ongoing reporting
and regulatory compliance.
+47.4%
ICS Division revenue growth
CORPORATE SERVICES
Working with private companies, public
companies, family offices and individuals,
we provide a sophisticated range of corporate
services and employer solutions, including
structure formation, company secretarial
andcompliance work.
PRIVATE CLIENT SERVICES (PCS) DIVISION
Provides trust, corporate and banking services
for global wealth management firms, family and
private offices and UHNWand HNW individuals.
PRIVATE CLIENT SERVICES
We specialise in a holistic approach to protecting
assets across countries and generations, including
through our dedicated JTC Private Office.
Applying a deep understanding of our clients’
needs,we support them for the long-term through
family governance, global compliance, structure
formationandmaintenance.
+15.7%
PCS Division revenue growth
OUR BUSINESS AND WHO WE SERVE
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
2 JTC Annual Report 2022
ENGAGEMENT
We engage and
motivate our
employees to ensure
we are all working
toone common goal.
Thisprovides a highly
skilled and motivated
workforce with a keen
focus on excellence.
INNOVATION
Our services are
tailoredto individual
client needs.
Wearesolutions-
driven and our
independencecreates
anentrepreneurial
environment.
COMMERCIAL
AWARENESS
We embrace and
promote technical
excellence and respond
to change to ensure
that we grow with
evolving trends and
new developments.
PERSONALITY
The business is driven
by its personality and
the energy and
enthusiasm within.
Shared Ownership for every employee lies at the heart
of our culture. It binds us together, creates a long-term
perspective and makes us Stronger Together.
100%
of permanent employees are
owners of the business through
JTC’sShared Ownership programmes
CULTURAL VALUES
MAXIMISE INDIVIDUAL POTENTIAL
MERITOCRACY
STAKEHOLDER MENTALITY
COMPANY BEFORE INDIVIDUAL
CLIENT-FACING BEHAVIOURS
ENTREPRENEURIAL OUTLOOK
‘WANT TO WIN’ MENTALITY
‘CAN DO’ ATTITUDE
‘ABOVE AND BEYOND’ SERVICE
OUR PURPOSE, VALUES AND CULTURE
ARE ALIGNED TO OUR STRATEGY
…HELPS TO FORM OUR VALUES… …WHICH SHAPES OUR CULTURE… …THAT DRIVES OUR STRATEGY FORWARDOUR PURPOSE…
ORGANIC GROWTH
We expect around one third of our growth to be organic
and aim to deliver 8% – 10% net organic revenue growth
each year. As well as winning work from new and existing
clients, we have created a sophisticated Commercial
Office ‘growth engine’ that drives constant innovation
and the development of new services. Collaboration and
cross-selling between our Divisions is also a key driver
of organic growth.
IN 2022 IN 2022
Net organic
revenuegrowth
12.0%
Lifetime value of new
work won*
£237.7m
INORGANIC GROWTH
We operate in a fragmented industry that is evolving as
a result of increasing regulation, a growing propensity
to outsource, globalisation and the opportunities
presented by technology and sustainability. JTC has deep
sector expertise and knowledge, allowing us to apply a
sophisticated and disciplined approach to M&A that drives
strong return on capital and long-term value creation. We
have successfully completed 26 acquisitions since 2010.
IN 2022 IN 2022
Acquisitions integrated
onto the JTC platform
7
New acquisitions
(NYPTC in the US)
1
ACCESSIBILITY
Our clients are
essential to the
successof our business
and we aim to exceed
expectations with
ourprofessionalism
andprecision.
INTEGRITY
It is our personal
commitment to
demonstrate our
valuesand promote
trust with all of
ourstakeholders.
Our purpose is to help
maximise the potential
ofevery client, colleague
andpartner with whom
wework.
* Lifetime Value Won (LVW) based on industry average of 10 years. LVW is
10times annualised value of work won minus value of attrition in past year.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
3 JTC Annual Report 2022
OWNERSHIP FOR
ALL CULTURE
We believe that JTC represents an
exceptional long-term growth investment
prospect. Our 35 year track record of
consistent revenue and profit growth,
including through periods of significant
macroeconomic challenge, speaks for itself.
We believe that eight key factors define
and underpin the JTC investment case and
apply both now and in the medium to
long-term.
OUR INVESTMENT CASE
1 – EXPERIENCED AND
ENTREPRENEURIAL
MANAGEMENT TEAM
We are a professional services
business operating on a global
scale in a highly regulated
environment. The quality and
experience of our management
team is second to none.
155+
Years combined
sector-specificexperience
ofseniormanagement team
3 – HIGHLY VISIBLE
RECURRING REVENUE
ANDSTRONG CASH
CONVERSION
98.3% of non end of life revenue
retained YoY and average client
lifespan now stands at 14 years
91%
Underlying cash conversion
5 – PROVEN TRACK
RECORDOFM&A
ANDINTEGRATION
Our approach to M&A has been
refined and proven for well over
adecade. We follow a disciplined
approach based on efficient
capital allocation to ensure
long-term value creation for all
stakeholders
26
Acquisitions since 2010
with14 since IPO in 2018
6 – WELL-INVESTED
SCALABLE
GLOBAL PLATFORM
Ongoing investment in the
bestpeople, technology and
operational infrastructure
creates a stable platform that
can easily and quickly scale, both
organically and through M&A.
We take the long-term view.
32
Global offices
2 – DESIGNED FOR
GROWTH,ORGANIC
ANDINORGANIC
We aim to generate
approximately one third of
ourgrowth organically and
twothirds through acquisitions.
Net organic revenue growth
istargeted at 8% – 10% pa
12.0%
Net organic
revenue
growth*
23.6%
Inorganic
revenue
growth*
4 – WELL DIVERSIFIED
ACROSS CLIENTS,
SERVICES & GEOGRAPHIES
We are well balanced between
ourtwo Divisions andthree core
service lines, withthe Commercial
Office as acentral catalyst for
innovation and organic growth.
Our geographic reach continues
toexpand.
10,000+
Clients in over 100 countries.
Top20 clients represent only
[15.3]% of revenues
7 – STRONG COMPLIANCE
AND RISK MANAGEMENT
Governance sits at the heart
ofour business and we are proud
of our exemplary track record.
R&C is also a key growth driver
for the business.
1
Paid claim (which was less
than£200k) on our Professional
Indemnity insurance in 35 years
8 – DEMAND CREATEDBY
LONG-TERM MARKET
TRENDS
Regulation, growing propensity
to outsource, technology, sector
consolidation, globalisation
andsustainability all act as
sector tailwinds.
25.2%
Revenue CAGR overlast10 years
OWNERSHIP FOR
ALL CULTURE
OUR INVESTMENT CASE
1 – EXPERIENCED AND
ENTREPRENEURIAL
MANAGEMENT TEAM
We are a professional services
business operating on a global
scale in a highly regulated
environment. The quality and
experience of our management
team is second to none.
125+
Years combined
sector-specificexperience
ofseniormanagement team
3 – HIGHLY VISIBLE
RECURRING REVENUE
ANDSTRONG CASH
CONVERSION
98.3% of non end of life revenue
retained YoY and average client
lifespan now stands at 14 years.
91%
Underlying cash conversion
5 – PROVEN TRACK
RECORDOFM&A
ANDINTEGRATION
Our approach to M&A has been
refined and proven for well over
adecade. We follow a disciplined
approach based on efficient
capital allocation to ensure
long-term value creation for
allstakeholders.
26
Acquisitions since 2010
with14 since IPO in 2018
6 – WELL-INVESTED
SCALABLE
GLOBAL PLATFORM
Ongoing investment in the
bestpeople, technology and
operational infrastructure
creates a stable platform that
can easily and quickly scale, both
organically and through M&A.
We take the long-term view.
32
Global offices
2 – DESIGNED FOR
GROWTH,ORGANIC
ANDINORGANIC
We aim to generate
approximately one third of
ourgrowth organically and
twothirds through acquisitions.
Net organic revenue growth
istargeted at 8% – 10% pa.
12.0%
Net organic
revenue growth
23.6%
Inorganic
revenue growth
4 – WELL DIVERSIFIED
ACROSS CLIENTS,
SERVICES & GEOGRAPHIES
We are well balanced between
ourtwo Divisions andthree core
service lines, withthe Commercial
Office as acentral catalyst for
innovation and organic growth.
Our geographic reach continues
toexpand.
10,000+
Clients in over 100 countries.
Top25 clients represent only 15.4%
of revenues
7 – STRONG COMPLIANCE
AND RISK MANAGEMENT
Governance sits at the heart
ofour business and we are proud
of our exemplary track record.
R&C is also a key growth driver
for the business.
1
Minor paid claim, settled >10 years
ago, on our Professional Indemnity
Insurance in 35 years
8 – DEMAND CREATEDBY
LONG-TERM MARKET
TRENDS
Regulation, growing propensity
to outsource, technology, sector
consolidation, globalisation
andsustainability all act as
sector tailwinds.
25.2%
Revenue CAGR overlast10 years
We believe that JTC represents an exceptional
long-term growth investment prospect. Our
35 year track record of consistent revenue and
profit growth, including through periods of
significant macroeconomic challenge, speaks
for itself. We believe that eight key factors
define and underpin the JTC investment case
and apply both now and inthe medium to
long-term.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
4 JTC Annual Report 2022
HOW WE ARE GROWING TOGETHER
COMMITTED TO 100% SHARED
OWNERSHIP FOR OUR PEOPLE
HOW JTC SHARED OWNERSHIP WORKS
All permanent employees are automatically part of the Shared
Ownership programme. Scores are calculated annually for
each person based on their length of service; seniority and
appraisal score. Appraisal scores are based 50:50 on achievement
of goals and behaviours.
When a multi-year business plan, or era, is completed and if
the Company has achieved or exceeded its goals, the Shared
Ownership programme will consider making an award from
the Employee Incentive Plan (EIP) to all eligible employees.
In addition – and in line with JTC’s meritocratic approach to
progression – a Deferred Bonus Share Plan (DBSP) and
Performance Share Plan (PSP) provide added incentive for
those who have taken on leadership roles.
£14m
shared
5%
initial
holding
TOTAL VALUE
£350m+
1998
A NEW WAY
Nigel Le Quesne creates JTC
Shared Ownership and
establishes it with half
of his own equity.
GOING PUBLIC
2nd Shared Ownership award
made when the Group lists on
the LSE. JTC begins its
Odyssey era business plan.
2018
In the Galaxy era, we aim
todouble the size of the
business from 2020 results.
This means revenue of
£230m+ and underlying
EBITDA of £78m+.
£20m
shared
2021
SHARED OWNERSHIP
AS A PUBLIC COMPANY
3rd Shared Ownership award
made when the business
doubles in size since IPO.
JTC begins its Galaxy era
business plan.
£12m
shared
2012
LOCAL TO GLOBAL
1st Shared Ownership award
made when a minority stake is
sold to PE firm CBPE.
JTC begins its Malbec era
business plan.
100%
OWNERSHIP
In 2019, JTC's Shared Ownership
programme became the subject
ofaHarvard Business School
MBAcasestudy
100% of permanent employees
areowners of the business through
JTC'sShared Ownership programmes
With all our people as
ownersof the business,
the interests of all our
stakeholders are aligned.
NIGEL LE QUESNE
Including direct ownership and
Shared Ownership awards, JTC
has generated £350m+ of total
value for employee-owners
since1998
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
5 JTC Annual Report 2022
PRIVATE CLIENT SERVICES
(PCS)
$2.5bn
INSTITUTIONAL CLIENT
SERVICES (ICS)
$9.5bn
OUR MARKET DRIVERS
INCREASED REGULATION
GROWING PROPENSITY
TOOUTSOURCE
For our clients, the growing complexity and scope of regulation
and compliance makes the risk of errors or omissions greater
every year. The potential for misunderstanding, or simply lack
of awareness, means taking expert advice is vital. Outsourcing
is therefore increasingly attractive, through specialists who are
constantly on top of the latest regulatory changes, and who
can both navigate them and find opportunities within them.
As complexity increases, the long-term benefits of
outsourcing increasingly outweigh having to recruit, train
and build an in-house team. For smaller clients, outsourcing
offers instant access to expertise, and for larger clients, a
leaner operating model. This model increases in relevance as
regulatory and tax environments becomes more complicated,
and a client’s core competency can readily be separated from
the associated administration.
WHAT THIS MEANS FOR JTC
As a large global operator, we have the capacity and expertise
to help clients comply with the higher standards demanded by
growing regulatory scrutiny. This also creates barriers to entry
for competitors. We are able to maintain our knowledge of
ever-evolving regulations, and expand and modify the services
we provide, bringing multiple revenue opportunities.
WHAT THIS MEANS FOR JTC
We have the scale and capabilities to offer a comprehensive,
expert service, with highly qualified, experienced staff and
appropriate technology. As such, we are in a position to help
large, complex organisations transform strategically to a lighter
operating model. In this critical role, we can offer certainty on
costs alongside increased accuracy, and allow the client to
focus on its core activities. Opportunities in the US continue to
grow, as institutional and private clients become more inclined
to outsource.
Key Fact: Key Fact:
25
Regulatory licences held by JTC
c.$4m+ pa
The Group’s largest single outsourcing mandate
Pace of change
Near-term impact
Long-term impact
KEY
High
Medium
Low
Pace of change
Near-term impact
Long-term impact
LONG-TERM TRENDS SUPPORT OUR GROWTH
We serve a variety of markets that are experiencing a
number of shared long-term trends. These trends offer
significant growth opportunities for JTC in a fragmented
global sector. We estimate our global addressable market
to be worth at least $12bn in annual revenue (ICS $9.5bn
and PCS $2.5bn).
Addressable market
$12BN
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
6 JTC Annual Report 2022
OUR MARKET DRIVERS
OPPORTUNITIES
THROUGHTECHNOLOGY
CONTINUED MARKET
CONSOLIDATION
SUSTAINABILITY, IMPACT
ANDESG
GLOBALISATION AND
RISINGGLOBAL WEALTH
Each year, advances in technology improve speed and efficiency,
mitigate risks of human error and automate mundane tasks. This
all leads to a better client experience, and increases the focus on
human expertise. It allows skilled and knowledgeable advisers, with
an understanding of the nuances of legislation and regulations,
more time to provide a more valuable service to clients.
Consolidation throughout our sector enables service providers to
offer multi-sector and multi-jurisdiction capabilities and solutions.
Increasing regulatory complexity is driving client demand for
this greater scale and breadth. While this consolidation slowed
recently for macro-economic reasons, it is likely to re-accelerate
when markets recover. With an estimated 2,000+ providers in the
UK and Europe and 1,000+ in the US, this will continue.
Sustainable, impact and ESG related funds have been steadily
increasing in scale and popularity for the past decade However,
standards evolve rapidly and are a growing element of
mainstream disclosures. This presents huge administrative
challenges for companies and funds in particular, creating
demand for credible and expert third-party providers who can
provide appropriate support.
Communication, co-operation and flow of capital is now far
easier across international borders. Corporates and Family Offices
operate and invest globally, and fund managers seek access to
international capital and both private and institutional investors
increasingly want to pursue strategies that mean operating
internationally. In addition, GDP and personal wealth continue
to grow. This all leads to increased demand for providers of
professional services that can advise and work across borders.
WHAT THIS MEANS FOR JTC
Quite simply, we combine the best people with the best
technology to get the best results. We continue to build
best-in-class technology to improve and expand our services,
training our people to maximise the benefits of our systems.
In addition, we can grow the in-depth expertise and human
insight our clients need, and focus on our client relationships.
WHAT THIS MEANS FOR JTC
We maintain a strong pipeline of M&A opportunities, to be
able to access the right deals at the right time. These span both
Divisions and all types and sizes, from bolt-ons to complex bank
carve outs and transformational deals. Having acquired 26
businesses since 2010, we have a proven process for integrating
companies efficiently onto our global platform. Our Shared
Ownership culture and reputation for being straightforward
to deal with makes us a popular acquirer.
WHAT THIS MEANS FOR JTC
We offer our technology-enabled advisory and administration
services to a wide range of clients, providing expertise on the
complex ESG regulatory and reporting frameworks. As a
business with Shared Ownership at the heart of its culture,
our approach to sustainability is also based on compelling
principles and a strong corporate purpose.
WHAT THIS MEANS FOR JTC
We have a scalable global platform with an established
presence in all key jurisdictions and develop new services
organically, as well as acquiring strategically. We are able to
offer both institutional and private clients seamless services
as they operate and expand across multiple jurisdictions. We
have built our organic business through long-term relationships
that now average 14+ years, enabling us to grow alongside our
clients and their increasing scale or wealth.
Key Fact: Key Fact:
+31.6%
Year-on-year increase on technology spend
26
Businesses acquired since 2010
100%
Employee ownership at JTC
+28.3%
Forecast growth in UHNWI by 2026*
* Source: 2022 Knight Frank Wealth Report.
KEY
High
Medium
Low
Pace of change
Near-term impact
Long-term impact
Pace of change
Near-term impact
Long-term impact
Pace of change
Near-term impact
Long-term impact
Pace of change
Near-term impact
Long-term impact
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
7 JTC Annual Report 2022
BUSINESS MODEL
Our business model is built on our SharedOwnership culture
and driven byour Purpose; to help maximise the potential of
every client, colleague andpartner with whom we work.
We create value by aligning with the interests of our stakeholders
and committing to long-term relationships.
We grow through a compounding strategy that combines
consistent organic growth, disciplined acquisitions and the
continuous pursuit of operational excellence.
CLIENTS
We partner with our clients to help
them achieve their goals and meet
theirexpectations of the highest
levelsof service delivered with
integrity,energy and dedication
OUR PEOPLE
We make every employee an owner,
creating an environment where
people can maximise their potential
and be partof creating something
meaningful and long lasting
INTERMEDIARIES
We work symbiotically with
intermediaries oncommon clients,
becoming a trustedextension of
theiroffering and they of ours
M&A OPPORTUNITIES
We provide a home and a platform
forgrowth that is compelling across
thefull range of M&Aopportunities
OUR KEY INPUTS
OUR STRATEGIC STRENGTHS WHAT WE DO AND HOW WE GENERATE VALUE VALUE WE CREATE FOR STAKEHOLDERS
FUND SERVICES
We are expert in a wide variety of
fundtypes and services across a
diverse range of asset classes and
leading funds jurisdictions.
We partner with our clients and
provide support throughout the
lifecycle of a fund, including complex
and ongoing reporting and regulatory
compliance.
PRIVATE CLIENT SERVICES
We specialise in a holistic approach
toprotecting assets across countries
andgenerations, including through
ourdedicated JTC Private Office.
Applying a deep understanding of our
clients’ needs, we support them for
the long-term through family
governance, global compliance,
structure formation andmaintenance.
CORPORATE SERVICES
Working with private companies,
public companies, family offices
and individuals, weprovide a
sophisticated range of corporate
services and employer solutions,
including structure formation,
company secretarial and
compliance work.
Provides trust,
corporate and banking
services for global wealth
management firms, family
and private offices and
UHNW and HNW
individuals.
We grow organically
by offering service
excellence and a suite
ofsolutions with
long-term relationships
With all our people
asowners the interests
of all our stakeholders
are aligned
We maintain a
well-invested and
scalable global platform
that supports consistent
long-term growth
We make strategic
acquisitions and
integrate them
seamlessly so that
inourworld 2+2=5
Provides fund,
corporate andbanking
services to institutional
clients, primarily fund
managers, listed companies
and multinationals.
CLIENTS
$200bn client assets we are trusted
toadminister
14+ years average JTC client relationship
£237.7m lifetime value of work
awarded to JTC by clients in 2022
EMPLOYEES
£350m Shared Ownership value
created since 1998
92% retention rate in 2022
100% of permanent employees
areowners of the business
SHAREHOLDERS
30% of adjusted underlying
EPSdividend
33.27p adjusted underlying EPS in 2022
Acquisitions generating
ROIC>internal WACC
within36 months
CHARITIES AND
COMMUNITIES
£225k+ donated to
goodcauses in 2022
Carbon Neutral+ status
maintainedin 2022
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8 JTC Annual Report 2022
WATCH THE INTERVIEW
2022 was arguably the best ever year in the
history of our business. We accelerated again
towards achieving our Galaxy era goal, up
to two years earlier than anticipated, with
record organic growth and new business
wins. We are now firmly on track to deliver
Galaxy well ahead of the anticipated
timeframe and by the end of 2023.
CHIEF EXECUTIVE
OFFICER’S REVIEW
Growing Together
AN EXCEPTIONAL YEAR
I am delighted to be able to start the review of 2022 by
stating that it has been arguably the best ever in my 30
years at JTC.
AHEAD OF PLAN TO DELIVER OUR GALAXY
ERAGOAL
As a business with a track record of 35 consecutive years
of revenue and profit growth, we are proud of our ability to
deliver against stretching multi-year business plans, which
we call eras. After listing in March 2018, we embarked
on our ‘Odyssey era’ business plan and doubled the size
of the Group (as measured by revenue and underlying
EBITDA) by the end of 2020. We then set ourselves the
challenge of doubling again and named this latest era
‘Galaxy’, anticipating a four to five year timeframe. 2021
saw us deliver a record seven acquisitions as well as
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9 JTC Annual Report 2022
GROWING, WHATEVER THE WEATHER
Our ability to grow consistently even through periods
of macro volatility is something I am often asked to
explain and it is always an opportunity to highlight the
strengths of our business model and global platform.
In simple terms, we like to think of it as in-built load
balancing capabilities, but to a large degree it stems from
a culture of constant improvement and an expectation of
improved financial performance year on year, with every
team member knowing that we never settle for less. When
the macro environment is buoyant, we typically benefit
from greater flows of new business, especially from new
clients, as institutions and individuals seek to establish
and launch new structures. When market conditions are
less favourable, we often observe a modest reduction
in ‘new work from new clients’ business volumes, but
this is countered by an increase in activity from existing
clients as they respond to threats and opportunities
in relation to their current structures. As a professional
services business with client contracts that now typically
span 14 years or more, the increased activity within the
existing client base generates meaningful growth. In
addition, we are constantly innovating and expanding
our range of services – both through M&A activity and
internal commercial development – to grow the scope of
engagement with existing clients and to win new ones. The
CHIEF EXECUTIVE OFFICER’S REVIEW
net organic revenue growth of 9.6% (17.5% gross). This
excellent start to the Galaxy era continued in 2022 when
we delivered a record 12.0% net organic revenue growth
(18.4% gross) and acquired NYPTC in Q4, alongside
successfully integrating the seven acquisitions from 2021.
This exceptional performance against our strategy means
that we are ahead of plan and well on way to delivering
Galaxy by the end of 2023.
FINANCIAL PERFORMANCE
Revenue grew 35.6% to reach £200.0m for the first
time (2021: £147.5m) another significant milestone
and underlying EBITDA increased 36.4% to £66.0m
(2021: £48.4m). Net organic revenue growth was a
record 12.0% (2021: 9.6%) driven by another record in
new business wins of £24.6m (2021: £20.9m). Despite
the excellent organic growth performance and associated
costs of on-boarding new business, underlying EBITDA
margin also increased by 0.2pp to 33.0% (2021: 32.8%).
Cash conversion was once again robust and above
guidance at 91% (2021: 87%) and even with the acquisition
of NYPTC in Q4, which was funded from cash, leverage
stood at 1.59x underlying EBITDA at period end, which
is towards the lower end of our guidance range of 1.5x
to 2.0x.
Revenue
£200.0m
When the macro environment is buoyant, we typically
benefit from greater flows of new business, especially from
new clients, as institutions and individuals seek to establish
and launch new structures. When market conditions are
less favourable, we often observe a modest reduction in
‘new work from new clients’ business volumes, but this is
countered by an increase in activity from existing clients as
they respond to threats andopportunities in relation to their
current structures.
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10 JTC Annual Report 2022
CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
administration, Alternative Investment Fund Manager
(AIFM), depositary and corporate services in the jurisdiction.
The RBC cees business, re-branded to JTC Employer
Solutions, remains one of our most successful acquisitions
and continued to go from strength to strength in terms of
growth and margin. We also added the innovative perfORM
Operational Due Diligence (ODD) business, which is an
excellent example of how we expand our range of services
through M&A in a way that complements our organic
growth ambitions. Crucially, we assembled the pieces that
will form the next phase of our push into the large, high-
growth US market. The SALI Fund Services, Segue Partners
and EFS acquisitions have been brought together with our
original market-entry deal (NESF, which was acquired in
2020) to create a substantial US ICS platform of scale. Our
US business now has over 130 employees across seven
offices, serving over 410 clients, including some of the
biggest global names in asset management and insurance.
Outside of those regions bolstered by recent M&A activity,
we also saw good growth in our UK and Luxembourg offices
with stable performance from the Netherlands, Channel
Islands and South Africa. At the end of the year, the Division
stood at some 900 people serving clients from 16 offices
and generating 68.3% of Group revenues. This scale and
reach, combined with our focus on providing client service
excellence enabled by best-in-class technology, stands us in
good stead to succeed in a competitive market.
most recent examples of service line expansion include a
banking platform (incorporating foreign exchange, treasury
and custody), tax compliance regulatory reporting and
strategic transformation solutions. This constant desire to
innovate and support our clients, extend our relationships
and services, supplemented by new acquisitions, ensures
JTC grows consistently year on year irrespective of the
prevailing external factors.
INSTITUTIONAL CLIENT SERVICES DIVISION
Revenue increased 47.4% to £136.7m (2021: £92.7m)
with a 53.5% increase in underlying EBITDA to £43.0m
(2021: £28.0m). Pleasingly, and in keeping with the consistent
progress seen over the past two years, the underlying EBITDA
margin increased by 1.3pp to 31.5% (2021: 30.2%) and has
increased 3.6pp since 2020. Net organic growth was strong
and increased by 3.1pp to 14.6% (2021: 11.5%) with the
annualised value of new business wins increasing by 31%
to a record £17.2m (2021: £13.1m).
In 2021 we completed a record seven acquisitions within
the Division, creating a natural focus in 2022 around
integration, organisation and value capture. The INDOS
and Ballybunion businesses contributed to our growing
platform in Ireland, which also saw us move to a new
environmentally friendly office in Dublin and secure a
fund services licence, giving us the complete set of fund
Underlying EBITDA
£66.0m
Underlying EBITDA margin
33.0%
New business wins
£24.6m
In the second half of the year, the Group Head of ICS,
Jon Jennings, left the business for a new challenge after
four successful years with the Group. Jon was replaced by
Dean Blackburn, who had been appointed the Group Chief
Commercial Officer in 2020 and after a successful tenure
working with the ICS team he was promoted to Group
Head of ICS post period end, in January 2023.
Overall, the ICS Division made exceptional progress in
2022 and has been a major component of the Group’s
accelerated progress through the Galaxy era. As the
Division continues to scale, particularly in the US, we
anticipate further strong organic growth, additional
opportunities for M&A and more service line innovation. I
know that Dean is ambitious for long-term success for the
Division and he is supported by a world-class, global team.
PRIVATE CLIENT SERVICES DIVISION
Revenue increased 15.7% to £63.4m (2021: £54.8m) with
an increase of 12.9% in underlying EBITDA to £23.0m
(2021: £20.4m). The underlying EBITDA margin decreased
slightly, as anticipated, by 0.9pp to 36.3% (2021: 37.2%)
but remains squarely within our guidance range of 33%
– 38% and is as a result of continued investment in the
PCS platform. Reflecting this investment, net organic
growth increased 1.6pp to 8.7% (2021: 7.1%) with the
annualised value of new business wins being £7.4m, which
was a strong result against a tough 2021 comparator of
£7.8m that included the Group’s largest ever single win
for ‘Project Amaro’, the provision of ‘white label’ services
to a US-based global bank and its clients. Project Amaro
is a prime example of our ability to deliver strategic
transformation services to large clients in a range
of financial services sub-sectors, including banking,
investment management, legal and trust services.
Importantly, strategic transformation spans both our
Divisions and will be actively promoted as a JTC capability
in 2023, alongside a direct to market programme that will
target specific prospective clients.
In the final quarter of the year we acquired New York
Private Trust Company (NYPTC), a high quality private
client business headquartered in Delaware.
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11 JTC Annual Report 2022
CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
This deal enabled us to become the first non-US, non-
bank firm to be licensed to provide trust company services
from Delaware, an important competitive advantage that
we will leverage as we use the acquisition to help build
out our domestic trust offering in the US. Post period end,
we also secured a licence to operate in the Bahamas to
support Project Amaro, further expanding the footprint
of the PCS business and providing greater optionality
forclients.
More broadly, the Division’s global network continued to
deliver growth across a number of key regions, including
its original nexus in the Channel Islands.
Under Iain’s consistent leadership and drive for growth
and innovation, the PCS Division continues to be regarded
as the pre-eminent trust company business and a leader
in its markets. It is now evolving to become more than
just a trust company and this is evidenced by growth in
revenues from sophisticated and enhanced services, such
as JTC Private Office, and Group wide services including
strategic transformation, treasury, custody, tax compliance
and regulatory reporting. We are successfully redefining
the parameters of a world-class PCS offering, which in
turn enlarges our addressable market. This innovative and
growth-orientated approach, coupled with our geographic
expansion, particularly in the US, and well-established
reputation for client service excellence, sets the PCS
Division on an exciting course for 2023 and beyond.
RISK
JTC continues to have an excellent record in managing
the risks associated with being a leading regulated
professional services business. In 2022 the senior risk
team once again focused a large amount of their time
and effort on developing and enhancing our Risk &
Compliance function globally to meet the ever evolving
and increasing burden of international regulation. While
this brings a number of complex challenges, it also
provides huge opportunities for growth and we are
embracing these as clients of all sizes, but especially
larger and more complex organisations, look to us for
support and recognise the value we offer in this area.
Emerging service lines such as strategic transformation,
tax compliance and regulatory reporting are all driven, in
part or in whole, by the expanding regulatory landscape.
We continue to see long-term emerging risks come into
greater focus, and in particular, transition risks associated
with the world moving to a low carbon future. In 2022,
we created an ESG Forum within the Executive arm of the
business to manage and deliver our internal sustainability
roadmap and oversee target setting and disclosures.
At Board level, the former Audit & Risk Committee
was separated into an Audit Committee and a new
Risk & Governance Committee, with the latter taking
responsibility for oversight of risk at a Group level, as
well as providing guidance on our ongoing sustainability
journey and the commercial opportunities the Group
might capture through the provision of ESG services
to clients. We were once again a Carbon Neutral+
organisation in 2022 and post period end, have set
ourselves the goal to achieve net zero by 2030 at the
latest. More detail, including our latest TCFD disclosures,
can be read in the Sustainability section starting on
page32.
At the time of writing, the conflict in Ukraine is entering
its second year and it remains unclear how or when it
will come to an end. As reported last year, as a Group, we
have virtually no exposure to Russia, Ukraine or Belarus
with no operations there and limited exposure amongst
a small number of clients to those countries. However,
we remain acutely aware of our responsibilities in relation
12.0%
Net organic revenue growth
23.6%
Inorganic revenue growth
to sanctions compliance and enforce all such measures
rigorously. The knock-on effects relating to energy prices,
inflation and interest rates have been monitored closely
at all times and successfully navigated to date.
OUTLOOK
2022 was an exceptional year for JTC and I am delighted
with the accelerated progress made towards the Galaxy
era goal of once again doubling the size of the Group. Our
ability to grow consistently through periods of volatility
is a fundamental feature of the business that has been
refined over 35 years of operations. The natural rhythm
we observe between growth contributions from new and
existing clients is supplemented by our ability to source
and secure the right acquisitions in a consolidating market
and to shape our own future through sophisticated
innovation and service expansion.
None of this would be possible without our people and
Iam more convinced than ever that our shared ownership
culture is the unique and vital glue that bonds us together
and allows us to execute our strategies with passion, energy
and commitment. This culture infuses every aspect of
our approach to growth, including our proven ability to
integrate acquisitions fully onto the JTC platform.
Our two Divisions continue to provide balance and
diversification to the Group with the added catalyst of
the Commercial Office and are generating more cross-
pollination opportunities than ever before, particularly in
the exciting area of strategic transformation.
Looking ahead, we have carried good momentum into
2023 and anticipate continued strong organic growth.
We are energised by the Galaxy era progress already
made as well as the prospect of what is possible in the
future. We will continue to ensure that our platform
remains well-invested at all times and that our talented
global team are ready and equipped to grow with the
business, maximise their individual potential and exceed
the expectations of our clients. In a sector that remains
primed for consolidation, we have a healthy pipeline of
opportunities and will maintain our disciplined approach
to M&A. JTC will continue to innovate and shape the
markets we serve in a way that supports long-term value
creation for the Group and its stakeholders.
In concluding, I once again extend my thanks to every
member of the growing, talented and market leading
JTC team for their efforts in 2022. We are both stronger
together and growing together.
NIGEL LE QUESNE
Chief Executive Officer
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12 JTC Annual Report 2022
CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
Q&A WITH NIGEL LE QUESNE
Q
The theme of this year’s report is ‘Growing
Together’, what have been the growth
highlights from your perspective?
I think the real highlight has been the ability of the
business to accelerate through the second year of
our Galaxy era business plan following such a strong
start in 2021 in the face of ongoing market turbulence.
Having been in the business for over 30 years, I’m in
the privileged position of being able to understand and
guide the business to ensure that JTC is able to grow so
consistently year after year, including through several
periods of exceptional volatility. An enormous part is
due to our unique culture and our people, but another
key highlight from 2022 has been seeing the hard work
put into the Group Commercial Office start to bear
fruit as a growth catalyst alongside and between the
two Divisions. What we’re spinning up to speed now
is powerful and we’re very excited about it.
Q
Organic growth is clearly part of the firm’s
DNA, what makes the JTC approach special?
Put simply, we expect to make the business better
every single day and those ‘inches’ that we gain each
day compound over time to drive predictable and
reliable growth. Our culture makes everyone a direct
owner and we empower our people accordingly. This
means that everyone at JTC, whatever their job title,
knows it’s part of their role to help clients grow, look
for new opportunities, innovate and build the business
carefully and thoughtfully so that it is always stable
and robust as we scale. We are fortunate to enjoy long
relationships with our clients – the average lifetime
across the Group is now over 14 years – and that means
we can really get to know and understand our clients
and partner with them to grow together. Innovation
and entrepreneurial flair are further key ingredients
and we’ve always taken pride in our ability to find a
solution. As the business has grown, including through
acquisitions, we’ve been able to industrialise these
capabilities and our growth engine is now starting
to shape markets rather than merely follow them. In
the 5 years since our IPO we’ve launched our Private
Office and Edge client portal, established a Group
banking platform, created a global tax compliance
practice, a governance practice, sustainability services
and most recently, strategic transformation services
supporting some of the biggest institutions in the
world. All of this work, combined with a sophisticated
go to market approach and consistent service delivery
excellence, is what drives our organic performance.
Q
What about inorganic growth? What have
been your observations from 2022 and how
does the near-term future look?
There’s no doubt that 2022 was a tougher year for
M&A, both in terms of market sentiment and deal
flow. Of course for JTC, having completed a record
seven acquisitions in 2021, it was relatively natural
for us to enter a period of consolidation and spend
the appropriate time integrating those businesses.
We observe other players taking a far more aggressive
approach to building scale, but as alluded to above
when talking about organic growth, businesses like
JTC are sophisticated, global and challenging to run
well year after year. We believe we know how to build
the Group responsibly over time and our discipline
manifests itself not only in selecting the right targets
and negotiating the best price, but also in the manner
and pace with which we add to our platform. We say
no to a lot more deals than we say yes to! Looking
ahead, and again thanks to our deep expertise and
experience in the sector, we have good visibility on
most opportunities and are still able to find attractive
deals, many of them off market, that meet our ‘2+2=5’
criteria to create long-term value. The NYPTC deal in
Q4 was a fantastic example of this and we have a good
pipeline going into 2023 that covers both Divisions and
our chosen target markets.
Q
With JTC rapidly closing in on delivering its
Galaxy Era goal of once again doubling the
size of the Group, what comes next?
Before answering that question, I think it’s worth
pausing to reflect on the phenomenal success our
people and the business have delivered. When we
listed in 2018 we started the Odyssey era business
plan and aimed to double the size of the Group (in
terms of revenue and underlying EBITDA) from where
we’d been prior to going public. That was achieved
by the end of 2020, despite the early impact of the
pandemic, and led to Shared Ownership awards of
£20m in JTC stock for our global team. We then set the
goal of doubling again in the Galaxy era and estimated
a four to five year timeframe due to our increased
scale. To be sitting here today, confident that we will
deliver Galaxy by the end of 2023, two years ahead
of expectation and through a period of continued
volatility is, in my view, outstanding. Looking ahead,
we already have strategic planning sessions for our
next era, Cosmos, booked for summer 2023. We
believe that our market drivers remain compelling
and provide tailwinds to our plans. Success to date
We believe that our market drivers remain
compelling and provide tailwinds to our
plans. Success to date has come from
aprocess of ‘evolution, not revolution’
and Isee no reason to deviate from that
successful formula.
has come from a process of ‘evolution, not revolution’
and I see no reason to deviate from that successful
formula. We remain hugely ambitious for JTC and
expect not only continued opportunities for organic
growth based on the high quality businesses that we
have built and integrated successfully over the years,
but also inorganic growth potential with many further
global consolidation opportunities ahead.”
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13 JTC Annual Report 2022
JTC INVESTMENT CASE
INCREASING
REGULATION
GROWING PROPENSITY
TO OUTSOURCE
OPPORTUNITIES
THROUGH TECHNOLOGY
CONTINUED MARKET
CONSOLIDATION
SUSTAINABILITY,
IMPACT AND ESG
GLOBALISATION AND
RISING GLOBAL WEALTH
BLACK
MONDAY
1987
GLOBAL
FINANCIAL CRISIS
2007
COVID
PANDEMIC
2020
GLOBAL
ADDRESSABLE
MARKET
$12bn
35
YEARS OF GROWTH
EXPERIENCED AND
ENTREPRENEURIAL MANAGEMENT
TEAM
DESIGNED FOR GROWTH,
ORGANIC AND INORGANIC
HIGHLY VISIBLE RECURRING REVENUE
AND STRONG CASH CONVERSION
WELL DIVERSIFIED ACROSS CLIENTS,
SERVICES AND GEOGRAPHIES
PROVEN TRACK RECORD OF
M&A AND INTEGRATION
WELL-INVESTED SCALABLE
GLOBAL PLATFORM
FOUNDED
1987
KEY MARKET DRIVERS
STRATEGY, ORGANIC GROWTH
Our well-established guidance is to deliver 8% to 10%
net organic revenue growth each year and in 2022 we
were delighted to exceed this with 12.0%, giving a
rolling three year average of 9.8% and both Divisions
on an upward trend. This growth is supported long-term
drivers that act as tailwinds within an addressable market
of some £12bn per annum globally. In addition, the clear
and robust components of our investment case have
helped us deliver 35 years of growth and profitability,
including through global crises. The growth of the Group
throughout its history has come from an ambitious and
progressive mindset and a strong emphasis on insight and
innovation, all underpinned by our all-important Shared
Ownership culture.
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14 JTC Annual Report 2022
SHAPING MARKETS
Growth Office
– Industry experience
– Market direction
– Delivery of products and services
– Shape the future
Tax Compliance (2020)
– FATCA
– CRS
– Substance
– VAT
c.£9m
(2022 revenue)
Private Office (2019)
– UHNW individuals & families
– Proprietary Edge client portal
c.£9m
(2022 revenue)
c.£10m
(Revenue since 2019)
Strategic Transformation (formal launch 2023)
– Asset managers
– Global banks
– International law firms
– Trust companies
c.£11m
(2022 revenue)
Banking Platform (2020)
– Treasury
– FX
– Custody
– Account opening
As a result of our decades of experience, we are able to understand
the direction of travel within the industry and innovate to create
services that meet emerging client demands.
Using our ability to horizon scan and develop capabilities that are
likely future requirements of our markets, we can shape both our
future and that of the wider sector.
This work, which is Group-wide, is catalysed by our central Commercial
Growth Office, collaborating directly with the two Divisions and our
Group Operations teams to bring the services to market.
Early Stage
Governance and
Sustainability Services
Governance Services (2021)
– Governance Healthchecks
– Operational Due Diligence (ODD)
Sustainability Services (2022)
– Consultancy / vCSO
– Reporting
– ESG Investment expertise
– Assurance
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15 JTC Annual Report 2022
STRATEGY, INORGANIC GROWTH
7
acquisitions integrated
1,050+
additional clients
275+
new colleagues
6
locations added to JTC network
$75bn+
added to Group AuA
COMPANY KEY FEATURES 2022 PROGRESS
– Market leading in the Employer Solutions sector
– 30+ year client relationships
– Highly qualified and experienced team
– Blue chip client base
One of our best ever deals, the business has been fully
integrated and re-branded JTC Employer Solutions. Strong
margin enhancement and organic growth, including
cross-sales, achieved as expected. Planned technology
investments will help to further differentiate and grow
this market leading practice.
– Leading provider of depositary, AML and ESG services
– Highly expert and experienced team
– Organic growth driver through increasing range andqualityof ICS services
Fully integrated with the INDOS brand retained for the
depositary and AML business, while ESG Services have
been re-branded JTC. Now an important part of our UK
and Ireland businesses.
– Scalable US fund services business
– Expert team
– High quality client book spanning a range ofalternativeasset classes
Integrated to form part of a consolidated US ICS business
that will be leveraged for enhanced client service and
future growth.
– Leading provider of operational due diligence (ODD)services
– Offering spans key segments of ICS and PCS client base
– UK, Europe and US reach
Excellent organic growth in the UK, Europe and the US
and a developing reputation as a thought leader. Strong
cross-selling potential across both Divisions.
– Irish ManCo and fund services business
– Expert and experienced team
– High quality client book with strong margins
– Ties to the US market
A key component of our ‘full service’ ICS business in
Ireland and now part of our Global AIFM Solutions
offering. Will re-brand to JTC in Q2 2023 and has strong
growth potential from Europe and the US.
– US fund services business of scale
– Market leader for Insurance Dedicated Funds (IDFs)
– 40+ year client relationships
– Significant cross-selling opportunities
– Medium to long-term growth via IDF ecosystem participants (blue chip
insurers, asset managers, brokersandUHNWI)
Smooth integration into the Group with particularly
strong cultural alignment. Strong margins and very good
organic growth, including the successful cross-selling of
JTC Fund Accounting solutions to SALI clients. A leading
component of the ICS US business.
– US fund services business
– Boutique with high degree of expertise in IDFs
– Strong legacy relationship as preferred partner to SALI
Rapid and seamless integration onto the JTC platform,
aided by relatively small size and strong existing
relationships with the SALI business.
With a record seven acquisitions in 2021, it was
natural for a large part of our focus in 2022
to be on the thorough integration of those
businesses onto the JTC global platform.
A YEAR OF CONSOLIDATION
Our Galaxy era plan calls for approximately two-thirds
of our growth to be inorganic. With a record seven
acquisitions in 2021, it was natural for a large part of our
focus in 2022 to be on the thorough integration of those
businesses onto the JTC global platform.
JTC’s sophisticated and disciplined approach to M&A has
been refined over more than a decade. Since our fist deal
in 2010, we have completed 26 acquisitions, including 14
since our IPO and the latest of which was NYPTC in Q4.
Our process has five interrelated components, from
origination, execution and integration through to
operational enhancement and long-term value creation.
Fundamentally we look to do deals that make JTC a
better business for our clients and which support high
quality growth through the addition of new service lines,
deepening our presence in key markets and creating cross-
selling opportunities within the Group.
JTC’s ability to capture the commercial opportunities we
see in the businesses that we acquire has been a particular
focus over the past two years since the creation of our
Group Commercial Office, working closely with both
Divisions and the Group Operations teams.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
16 JTC Annual Report 2022
STRATEGY, INORGANIC GROWTH CONTINUED
WENDY HOLLEY
GROUP CHIEF OPERATING OFFICER
WILLIAM BYRNE
CHIEF GROUP COUNSEL
BECKY HENWOOD-DARTS
GROUP DIRECTOR –
FINANCE
TRACEY MCFARLANE
COO – PCS DIVISION
MIRANDA LANSDOWNE
GROUP COMPANY
SECRETARY
SARAH KITTLESON
GROUP DIRECTOR –
RISK&COMPLIANCE
RICHARD INGLE
CHIEF RISK OFFICER
KENNY RAE
COO – ICS DIVISION
ZACH MUELLER
GROUP DIRECTOR –
HEAD OF M&A
LESLEY BASSFORD
SENIOR DIRECTOR,
GROUPFINANCE
CAROL GRAHAM
GROUP DIRECTOR – GROUP
HUMAN RESOURCES
ADAM JEFFRIES
CHIEF INFORMATION
OFFICER
DAVID VIEIRA
CHIEF COMMUNICATIONS
OFFICER
We believe that consolidation in our industry
has a long way to go and that M&A activity
will accelerate again when market conditions
stabilise and are more supportive.
The Group Operations teams form the backbone of
our expert integration capabilities, bringing decades of
sector and operational experience, as well as the latest
best practice in programme and project management,
including the use of relevant technology. We believe
that our approach to integration is a core competence
of the Group and as well as technical expertise, we place
a particular emphasis on welcoming all who join JTC to
our unique culture.
NYPTC OPENS US DOMESTIC TRUST MARKET
In August, we were delighted to announce the proposed
acquisition of NYPTC, based in Wilmington, Delaware,
and to complete the deal, including formal regulatory
approval, in November.
With over 1.6m entities and 50% of US listed companies
registered there, Delware is a key location for corporate
services in the US market. This acquisition, which was
paid for using cash held in the business and completed
at an attractive multiple, has resulted in JTC becoming
one of the first non-US, non-Bank firms to hold a trust
licence in Delaware. This is an important strategic and
competitive advantage that we will leverage as we work
to build out our US domestic trust offering as part of the
global PCS Division.
Over time, we expect the NYPTC deal to help move us
into a position where we become recognised among
the top independent trust company groups in the US.
When combined with our well-established presence in
South Dakota, the other leading centre for trustee and
corporate services in the US, this leaves us well positioned
to serve both the US domestic and international private
clientmarkets.
Integration of the business, post period end, is progressing
smoothly and we are pleased to welcome new colleagues
and clients to the Group.
PIPELINE
As noted in the Q&A with CEO, Nigel Le Quesne, 2022
was a year of consolidation for M&A activity in terms of
both market sentiment and volume of deals completed.
However, thanks to our deep sector experience and
reputation as fair to deal with and a good home for the
businesses we acquire, we have good visibility of most
deals in the market and maintain a healthy pipeline of
active opportunities spanning both Divisions and all our
key target markets.
OUTLOOK
Given the long-term drivers that act as tailwinds for
our sector, including increasing regulation, the growing
propensity to outsource, globalisation and increasing
global wealth and the opportunities presented by
technology and the sustainability agenda, we believe
that consolidation in our industry has a long way to go
and that M&A activity levels will accelerate again when
market conditions stabilise and are more supportive.
For our part, we have both the capacity and appetite to
pursue further acquisitions at our historic run rate, as
well as to consider larger deals as we ourselves continue
to scale. We will maintain our disciplined approach and
use our experience and expertise to find those businesses
that align with our culture and support long-term value
creation for all our stakeholders.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
17 JTC Annual Report 2022
KEY PERFORMANCE INDICATORS
FINANCIAL REVENUE
UNDERLYING EBITDA MARGIN UNDERLYING CASH CONVERSION LEVERAGE
DEFINITION
Revenue is defined as income arising in the course
of an entity’s ordinary activities.
EBITDA margin of the business excluding
non-underlying items.
Underlying cash generated from operating
activities dividedbyunderlying EBITDA.
Third party debt less cash, divided by
underlyingEBITDA.
WHY IT’S
IMPORTANT
Revenue is a reflection of the work we do for
clients. Weseek to deliver a high quality service,
do more workfor existing clients and attract
newclients.
Underlying EBITDA margin is our key measure
ofhowwell our business is performing, including
relativeto the wider industry.
Collecting cash from the profits we generate
allows us to service our debts andinvest in the
business (both organically andthrough
acquisitions) and to pay dividends toshareholders.
We need to manage the business without
holdingexcessive levels of debt and with
sufficientheadroom inour banking covenants.
2022
PERFORMANCE
Revenue growth of 35.6% which comprised 12.0%
netorganic revenue growth and inorganic revenue
growth of23.6%.
Increase of 0.2pp to 33.0%. 91% underlying cash conversion (2021: 87%). 1.59x underlying EBITDA (2021: 2.34x).
COMMENTARY
The PCS Division achieved 15.7% growth and net
organicrevenue growth of 8.7%. The ICS Division
achieved 47.4% growth and net organic revenue
growth of 14.6%.
The ICS Division achieved 31.5% (+1.3pp)
continuing the positive trend seen in recent years.
The PCS Division achieved 36.3% (-0.9pp)
remaining at the top end ofourguidance range
and reflecting investment forfuture growth.
Underlying performance ahead of guidance and
this reflects on the continuing strong focus on
working capital management.
We anticipated that this would reduce during the
year given our cash collection expectations.
TARGET
We aim to achieve net organic revenue growth
of8%–10% every year.
We aim to deliver an underlying EBITDA margin
intherange of 33% – 38%.
We aim to achieve 85% – 90% cash conversion
each year.
We aim to stay within 1.5 – 2.0x leverage.
Wewillexceptionally increase this to 2.5x
whensupported by clear visibility of incoming
cashflowand rapid reduction to below our target.
TARGET
12.0%
9.6%
7.9%
2
022
TARGET
2
021
2
020
8% – 10%
33.0%
32.8%
33.6%
2
022
TARGET
2
021
2
020
33% – 38%
2
022
TARGET
2
021
2
020
91%
87%
91%
85% – 90%
1.59x
2.34x
1.96x
2
022
TARGET
2
021
2
020
1.5x – 2.0x
The JTC Board uses the following KPIs to measure the performance of the Group
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
18 JTC Annual Report 2022
KEY PERFORMANCE INDICATORS CONTINUED
FINANCIAL NEW BUSINESS WINS CLIENT ATTRITION STAFF TURNOVER SHARED OWNERSHIP
DEFINITION
Annualised value of new work won from clients
where we have a signed contract.
Work lost that was not end of life. Number of staff who leave in the year that we did
not want to leave divided by average number of
staff in the year.
The proportion of permanent employees who are
direct owners of the business through our Shared
Ownership programmes.
WHY IT’S
IMPORTANT
Our industry has good growth fundamentals.
Winning new business is an important component
in the delivery of our organic growth targets.
We have a high proportion of annuity business.
Minimising the number of clients that leave JTC
isa key indicator of customer satisfaction.
We deliver a high touch service to clients.
Maintaining continuity of staff ensures that
wearebest able to meet client needs.
Shared Ownership is our key differentiator. It is
important that staff have a direct stake in our
business to promote a stakeholder mentality and
ensure that their interests are aligned with
external shareholders.
2022
PERFORMANCE
Another record year for new business wins
withanincrease by value of 17.7% to £24.6m.
Total client attrition was 6.4% (2021: 7.9%)
withregretted attrition (not end of life) of 1.7%
(2021: 2.6%).
Turnover of 8.0% at Group level (2021: 9.3%). 100% of permanent employees are owners
ofthebusiness with staff holding c. 15% of
issuedshare capital.
COMMENTARY
The ICS Division won new business with a total
annualised value of £17.2m and the PCS Division
won new business with an annualised value of
£7.4m.
98.3% (2021: 97.4%) of revenues that were
notend of life were retained in the period.
Our attrition rate fell in 2022.
Our people are highly regarded in the industry and
therefore this is a very good performance.
All new staff awarded shares at the end of
probation as well as being enrolled in EBT.
TARGET
We aim to achieve at least a 10% increase in
theannualised value of new business wins year
onyear.
We aim to keep regretted client attrition at less
than 2.5% p.a.
We aim to keep annual staff turnover, as defined,
at less than 10%.
100% of permanent employees to be owners
ofthe business.
TARGET
2
022
TARGET
2
021
2
020
>10%
17.7%
16.8%
20.1%
2.6%
3.4%
1.7%
2
022
TARGET
2
021
2
020
<2.5%
2
022
TARGET
2
021
2
020
8.0%
9.3%
5.7%
<10%
100%
100%
100%
2
022
TARGET
2
021
2
020
100%
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
19 JTC Annual Report 2022
CHIEF FINANCIAL
OFFICER’S REVIEW
Record revenue growth and profits
MARTIN FOTHERINGHAM
Chief Financial Officer
We are delighted to report that in keeping with
the past 35 years, JTC has continued to invest
in the business whilst delivering growth in
revenues and profits.
£200.0m
2022 Revenue
30.2%
Adjusted underlying EPS increase
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
20 JTC Annual Report 2022
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
FINANCIAL HIGHLIGHTS
As reported Underlying*
2022 2021 Change 2022 2021 Change
Revenue (£m) 200.0 147.5 +35.6% 200.0 147.5 +35.6%
EBITDA (£m) 56.1 26.6 +110.9% 66.0 48.4 +36.4%
EBITDA margin 28.0% 18.0% +10.0pp 33.0% 32.8% +0.2pp
Operating profit/EBIT (£m) 33.8 9.0 +275.9% 43.8 30.8 +42.1%
Profit before tax (£m) 35.9 27.8 +29.3% 34.1 24.9 +36.7%
Earnings per share (p)** 23.92 20.49 +16.7% 33.27 25.55 +30.2%
Cash conversion 91% 79% +12pp 91% 87% +4pp
Net debt (£m) 120.4 117.2 +3.2 104.8 113.3 -8.5
Dividend per share (p) 9.98 7.67 +30.1% 9.98 7.67 +30.1%
* For further information on our alternative performance measures (APM) see the appendix to the CFO Review.
** Average number of shares (thousands) for 2022: 145,137 (2021: 130,044).
REVENUE
In 2022, revenue was £200.0m, an increase of £52.5m
(+35.6%) from 2021. Revenue growth on a constant
currency basis was +32.0% (2021: +30.9%).
Net organic growth was a record high 12.0% and above our
medium-term guidance range of 8% - 10%. The three year
average stands at 9.8% and the outstanding performance
across both these metrics provides continued evidence
and assurance of our ability to deliver tangible revenue
growth from our capital allocation choices.
Gross new revenue for the year was 18.4% (2021: 17.5%),
driven by new business wins of £24.6m (2021: £20.9m),
with £14.4m recognised in the year (2021: £9.8m).
Additional revenue contributed from acquisitions in 2022
was £32.8m (2021: £24.7m). This was offset by attrition of
6.4% (2021: 7.9%), with the three year average now 7.7%
(2021: 7.9%). We have seen the longevity of our client
relationships increase and this is driving the reduction
in attrition rates.
The retention of revenues that were not end of life
increased to 98.3% (2021: 97.4%). The rolling three year
average improved to 97.4%.
We have seen strong growth in the UK & Channel
Islands, and particularly strong growth in the US where
we continue to expand our capabilities whilst integrating
numerous acquisitions.
As our business has grown, our revenues have become
less concentrated by region. The table below illustrates
clearly that the US is an increasingly large component
of our business. Given the organic and inorganic growth
opportunities in that region, we anticipate that we will
see a continuance of that trend.
£200.0m
2022 Revenue
Geographical growth is summarised as follows:
2022
Revenue
2021
Revenue £ +/- % +/-
UK & Channel Islands £107.8m £87.0m +£20.8m +23.8%
US £38.0m £15.7m +£22.3m +142.9%
Rest of Europe £34.3m £29.9m +£4.4m +14.9%
Rest of the World £19.9m £14.9m +£5.0m +33.2%
Total £200.0m £147.5m +£52.5m +35.6%
Off the back of a strong year for new business, we continue to report a healthy pipeline of £45.8m at 31 December
2022 (2021: £47.9m).
Revenue growth, on a constant currency basis, is summarised as follows:
REVENUE GROWTH
2021
Revenue
Lost – JTC
decision
Lost –
Moved
service
provider
Lost –
End of life/
no longer
required
Net more
from
existing
clients
New
clients
Acquisitions* 2022
Revenue
£151.6m
(£0.3m)
Lost Won
(£2.0m)
(£6.0m)
£13.5m
£10.4m
£32.8m
£200.0m
* When JTC acquires a business, the acquired book of clients are defined as inorganic for the first two years of JTC ownership. Acquired clients contributed
an additional £32.8m in 2022 and is broken down as follows: NYPTC £1.0m, EFS £1.5m, SALI £13.3m, Ballybunion £1.7m, perfORM £0.2m, Segue £1.3m,
INDOS £1.5m, and RBC cees £12.3m.
Management re-iterates its medium-term guidance range of 8% - 10% net organic growth, albeit with the
expectation that short-term growth will be in excess of this guidance range.
UNDERLYING EBITDA AND MARGINPERFORMANCE
Underlying EBITDA in 2022 was £66.0m, an increase of £17.6m (36.4%) from 2021.
The underlying EBITDA margin improved to 33.0% (2021: 32.8%) and now sits at the beginning of our medium-term
guidance range. Despite a challenging global economic and political backdrop, the business delivered on the anticipated
margin improvement alongside record revenue growth and the continued integration of acquisitions.
Whilst we have been pleased with achieving an underlying EBITDA margin within our guidance range, we have noted
that this margin has been impacted by inflationary cost increases and the continued upfront investment in human
capital that is required to deliver record levels of growth.
This investment can inherently slow margin progression. Experience tells us that it can take time and upfront costs
before we are delivering optimal margins on the new business that we win. However, we believe that this initial
investment is key to ensuring the continuing longevity of our client relationships.
Management re-iterates its medium-term guidance range of 33% - 38%.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
21 JTC Annual Report 2022
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
INSTITUTIONAL CLIENT SERVICES
Revenue increased by 47.4% when compared with 2021.
Net organic growth improved significantly to 14.6% (2021: 11.5%), with a rolling three year average of 11.0% and
strong growth in the US, UK and Luxembourg. Attrition for the Division was lower at 7.5% (2021: 8.7%), 5.6% of
which were end of life losses.
Revenue growth, on a constant currency basis, is summarised below.
The Division’s underlying EBITDA margin increased from 30.2% in 2021 to 31.5% in 2022. This continued improvement
is the result of delivering the revised operating model alongside the ongoing, and successful, integration of the
businesses acquired in 2021.
The volume of acquisitions (11) in the last three years has meant that the Division has required continuous investment
and we are pleased that margins have improved.
PRIVATE CLIENT SERVICES
Revenue increased by 15.7% from 2021.
Net organic growth was 8.7% (2021: 7.1%) with a rolling three year average of 8.3% (2021: 7.8%). Attrition for the
Division was also lower at 4.8% (2021: 6.9%), 3.3% of which was for end of life losses.
Organic growth for the Division had been lower than normal whilst we onboarded the Amaro mandate. This was a
complex mandate to fulfil and the solution required 15 months of investment with the client before we could recognise
any revenue. The solution was delivered on time and we started recognising revenues from 1 October 2022. This
mandate will generate a minimum of $4m of annual revenues.
Revenue growth, on a constant currency basis, is summarised below.
The Division’s underlying EBITDA margin decreased from 37.2% in 2021 to 36.3% in 2022. The Division continues to
perform very well and is comfortably within our medium-term guidance range. This reduction in margin is explained
in large part by the above upfront investment required to deliver the Amaro solution.
Lost Won
REVENUE GROWTH PCS
£57.4m
(£0.1m) (£0.8m)
(£1.9m)
£4.4m
£3.3m
£1.0m £63.4m
2021
Revenue
Lost – JTC
decision
Lost –
Moved
service
provider
Lost –
End of life/
no longer
required
Net more
from
existing
clients
New
clients
Acquisitions* 2022
Revenue
* Acquired clients contributed an additional £1.0m in 2022 and is broken down as follows: NYPTC £1.0m.
REVENUE GROWTH ICS
2021
Revenue
Lost – JTC
decision
Lost –
Moved
service
provider
Lost –
End of life/
no longer
required
Net more
from
existing
clients
New
clients
Acquisitions* 2022
Revenue
£94.2m
(£0.2m)
Lost Won
(£1.2m)
(£4.1m)
£9.1m
£7.1m
£31.8m
£136.7m
* Acquired clients contributed an additional £31.8m in 2022 and is broken down as follows: EFS £1.5m, SALI £13.3m, Ballybunion £1.7m, perfORM £0.2m,
Segue £1.3m, INDOS £1.5m, and RBC cees £12.3m.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
22 JTC Annual Report 2022
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
PROFIT BEFORE TAX
The reported profit before tax was £35.9m (2021: £27.8m).
The depreciation and amortisation charge increased
to £22.3m in 2022 from £17.6m in 2021. £3.5m of this
increase was as a result of acquired intangible assets,
£0.7m as a result of an increased charge for right-of-use
assets reflecting the increased global footprint of the
business, and £0.4m for the increased use of software
reflecting the increased importance of technology in
thebusiness.
The increase in amortisation for acquired intangible
assets (£3.5m) is significant but the direct result of the
acquisitions we made in 2021.
Adjusting for non-underlying items, the underlying profit
before tax for 2022 was £34.1m (2021: £24.9m).
NON-UNDERLYING ITEMS
Non-underlying items incurred in the period totalled a £1.9m credit (2021: £2.9m credit) and comprised the following:
2022
£m
2021
£m
EBITDA
Employee Incentive Plan (EIP) 5.2 14.5
Acquisition and integration costs 3.4 6.6
Revision of ICS operating model 0.4 0.4
Office start-up costs 0.8 –
Other costs 0.2 0.3
Total non-underlying items within EBITDA 10.0 21.8
Profit before tax
Items impacting EBITDA 10.0 21.8
Loss/(gain) on revaluation of contingent consideration 0.1 (20.9)
Loss on settlement of contingent consideration – 0.7
(Gain) on bargain purchase of RBC cees – (5.4)
Foreign exchange (gains)/losses (11.9) 0.9
Total non-underlying items within profit before tax (1.9) (2.9)
We announced the distribution of the EIP awards in 2021
and the £5.2m charge in the current period relates to the
second tranche of the awards that vested in July 2022.
Acquisition and integration costs were significantly lower
(£3.4m) than the prior period and this reflects the fact
that there were seven acquisitions in 2021 compared with
one in 2022.
The business incurred £0.8m of non-underlying office
start-up costs in relation to pre-trading expenses incurred
in order to establish an additional fund administration
offering in Ireland. This included significant up-front
investment in personnel in order to meet regulatory
requirements in advance of obtaining the licence to trade
and generate revenues.
The foreign exchange gain of £11.9m relates to the year
end revaluation of intercompany loans. Management
considers these foreign exchange movements to be
non-underlying items and not reflective of the underlying
performance of the business.
TAX
The net tax charge in the year was £1.2m (2021: £1.1m).
The cash tax charge was £2.8m (2021: £2.6m), but this
is reduced by significant deferred tax credits of £1.5m
(2021: £1.4m) as a result of movements in relation to the
value of acquired intangible assets held on the balance
sheet. Our effective tax rate decreased from 9.4% to
7.8% in 2022. The decrease is the result of the utilisation
ofUStax credits.
The Group regularly reviews its transfer pricing policy and
is fully committed to responsible tax practices. Given the
evolving nature and increasing complexity of the business,
JTC performed a detailed review in 2022 and our policy
continues to be fully compliant with OECD guidelines.
EARNINGS PER SHARE
Basic EPS increased by 16.7% to 23.92p. Adjusted
underlying EPS increased by 30.2% and was 33.27p
(2021: 25.55p).
Adjusted underlying basic EPS reflects the profit for the
year adjusted to remove the impact of non-underlying
items, amortisation of acquired intangible assets and
associated deferred tax, amortisation of loan arrangement
fees and unwinding of net present value discounts in
relation to contingent consideration.
Every year we issue 1% of our share capital to the JTC EBT.
This is equity that is allocated amongst all JTC staff and
we believe this promotes better client service, a higher
staff retention rate and cultivates our unique culture.
Whilst this issuance dilutes EPS, we firmly believe that
the benefits greatly outweigh the cost.
CASH FLOW AND DEBT
Underlying cash generated from operations was £60.3m
(2021: £38.4m) and the underlying cash conversion was
91% (2021: 87%). It is extremely pleasing to deliver
cash conversion better than our medium-term guidance
during a period of record high organic growth. High
levels of growth can come with short-term impacts to
cash collection, but the business continues to effectively
manage its working capital needs and management re-
iterates its medium-term guidance range of 85% - 90%.
We were pleased to reduce our pro-forma net investment
days to 110 days at the end of the year (2021: 115 days).
Underlying net debt at the period end was £104.8m
compared with £113.3m at 31 December 2021. We
financed the acquisition of NYPTC in November without
recourse to our debt facilities and by using cash we
generated during the year. Leverage at the year end
was 1.59x underlying EBITDA, a decrease of 0.75x from
the level on 31 December 2021 (2.34x). Including the
pro-forma EBITDA impact of the NYPTC acquisition, net
leverage is 1.55x.
With no additional drawdowns in 2022, there continues to
be undrawn funds of £69.3m available out of the £225m
banking facilities secured in 2021.
DIVIDEND PER SHARE
We are pleased to propose a final dividend of 6.88p,
resulting in a 2022 dividend per share of 9.98p
(2021: 7.67p) which was a 30.1% increase on prior year.
This is consistent with our dividend policy to declare at
30% of adjusted underlying EPS.
MARTIN FOTHERINGHAM
CHIEF FINANCIAL OFFICER
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
23 JTC Annual Report 2022
APPENDIX: RECONCILIATION OF REPORTED RESULTS TO ALTERNATIVE PERFORMANCE MEASURES (APMS)
In order to assist the reader’s understanding of the financial performance of the Group, APMs have been included to better reflect the underlying activities of the Group excluding specific items as set out in note 7 in the financial
statements. The Group appreciates that APMs are not considered to be a substitute for, or superior to, IFRS measures but believes that the selected use of these may provide stakeholders with additional information which will assist in
the understanding of the business.
An explanation of our key APMs and link to equivalent statutory measure has been detailed below.
ALTERNATIVE PERFORMANCE
MEASURE
CLOSEST EQUIVALENT
STATUTORY MEASURE APM DEFINITION
NET ORGANIC REVENUE
GROWTH %
Revenue Definition: Revenue growth from clients not acquired through business combinations and reported on a constant currency basis where the prior year
results are restated using current year consolidated income statement exchange rates.
Acquired clients are defined as inorganic for the first two years of JTC ownership.
Purpose and strategic link: Enables the business to monitor growth excluding acquisitions and the impact of external exchange rate factors. The
current strategy is to double the size of the business by a mix of organic and acquisition growth and the ability to monitor and set clear expectations
on organic growth is vital to the successful execution of its business strategy.
Management’s medium-term guidance range is 8% – 10%.
UNDERLYING EBITDA %
Profit/(loss) Definition: Earnings before interest, tax, depreciation and amortisation excluding non-underlying items (see note 7 of the financial statements).
Purpose and strategic link: An industry-recognised alternative measure of performance which has been at the heart of the business since its
incorporation and therefore fundamental to the performance management of all business units.
The measure enables the business to measure the relative profitability of servicing clients.
Management’s medium-term guidance range is 33% – 38%.
UNDERLYING CASH CONVERSION
%
Net cash from operating activities Definition: The conversion of underlying EBITDA into cash excluding non-underlying items.
Purpose and strategic link: Measures how effectively the business is managing its operating cash flows. It differs to net cash from operating profits
as it excludes non-underlying items and tax, the latter in order to better compare operating profitability to cash from operating activities.
Management’s medium-term guidance range is 85% – 90%.
UNDERLYING LEVERAGE
Cash and cash equivalents Definition: Leverage ratio showing the relative amount of third party debt that we have in the business in comparison to underlying EBITDA.
Purpose and strategic link: Ensures Management can measure and control exposure to reliance on third party debt in support of its inorganic growth.
Management’s medium-term guidance range is 1.5x – 2.0x.
ADJUSTED UNDERLYING EPS (P)
Basic Earnings Per Share Definition: Reflects the profit for the year adjusted to remove the impact of non-underlying items. Additionally, a number of other items relating to
the Group’s acquisition activities, including amortisation of acquired intangible assets and associated deferred tax, amortisation of loan arrangement
fees and unwinding of NPV discounts in relation to contingent consideration, are removed.
Purpose and strategic link: Presents an adjusted underlying EPS which is used more widely by external investors and analysts, and is in addition the
basis upon which the dividend is calculated.
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
24 JTC Annual Report 2022
A reconciliation of our APMs to their closest equivalent statutory measure has been provided below.
1. ORGANIC GROWTH
2022
£m
2021
£m
Reported prior year revenue 147.5 115.1
Impact of exchange rate restatement 4.1 (2.4)
Acquisition revenues (21.2) (7.2)
a. Prior year organic growth 130.4 105.5
Reported revenue 200.0 147.5
Less: acquisition revenues (54.0) (32.0)
b. Current year organic growth 146.0 115.5
Net organic growth % (b / a) -1 12.0% 9.6%
2. UNDERLYING EBITDA
2022
£m
2021
£m
Reported profit 34.7 26.6
Less:
Income tax 1.2 1.1
Finance cost 12.3 6.0
Finance income (0.2) (0.1)
Other (gains) (14.2) (24.7)
Depreciation and amortisation 22.3 17.6
Non-underlying items within EBITDA* 10.0 21.8
Underlying EBITDA 66.0 48.4
Underlying EBITDA % 33.0% 32.8%
* As set out in note 7 in the financial statements.
3. UNDERLYING CASH CONVERSION
2022
£m
2021
£m
Net cash generated from operating activities 53.3 28.9
Less:
Non-underlying cash items* 4.9 7.7
Income taxes paid 2.1 1.8
Acquisition normalisation** – 3.6
a. Underlying cash generated from operations 60.3 42.0
b. Underlying EBITDA 66.0 48.4
Underlying cash conversion (a / b) 91% 87%
* As set out in note 35.2 in the financial statements.
** Acquisition normalisation refers to the following: In 2021, £3.6m of RBC cees revenues were billed in advance and collected by the previous owners
inadvance of JTC ownership.
4. UNDERLYING LEVERAGE
2022
£m
2021
£m
Cash and cash equivalents 48.9 39.3
Bank debt (153.6) (152.6)
Other debt – –
a. Net debt – underlying (104.8) (113.3)
b. Underlying EBITDA (see 2. for reconciliation to reported profit) 66.0 48.4
Leverage (a / b) 1.59 2.34
5. ADJUSTED UNDERLYING EPS
2022
£m
2021
£m
Profit for the year as per basic EPS 34.7 26.7
Less:
Non-underlying items* (1.9) (2.9)
Amortisation of customer relationships, acquired software and brands 12.4 8.8
Amortisation of loan arrangement fees 1.1 1.5
Unwinding of NPV discounts for contingent consideration 3.5 0.6
Temporary tax differences arising on amortisation of customer relationships, acquired
software and brands (1.5) (1.4)
a. Adjusted underlying profit for the year 48.3 33.2
b. Weighted average number of shares 145.1 130.0
Adjusted underlying EPS (a / b) 33.27 25.55
* As set out in note 7 in the financial statements.
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
25 JTC Annual Report 2022
CFO SPOTLIGHT – JTC TAX STRATEGY
We are a business that is committed to sustainable and
responsible tax practices. A core component of this is full
compliance with tax legislation in every jurisdiction in
which we operate.
OVERVIEW OF OUR BUSINESS
JTC’s headquarters are in Jersey where senior decision
makers are also located. Our global business and its
growing geographical footprint follow a model of
providing services to clients within the jurisdiction of
client engagement.
Local operating companies deliver services to clients in
the jurisdictions where they are based. These companies
are staffed and managed locally, albeit we do on occasion
outsource work to other JTC offices. Where appropriate,
expertise can be provided from other jurisdictions and
supported by Group functions at head office.
Our current strategy is to double the size of the business
through a mix of organic growth and acquisition.
AIMS
This Tax Strategy aims to support:
• JTC’s global business operations
• Compliance with the applicable tax legislation in the
countries in which we operate
SCOPE
This strategy applies to all:
• Taxes (both direct and indirect) in the countries in
which we operate
• Directors, employees and third parties (including
service providers and external advisers) to the extent
their actions affect JTC’s tax affairs
APPROACH TO WORKING WITH TAX
AUTHORITIES
JTC is committed to maintaining a good working
relationship with tax authorities based upon compliance,
transparency, co-operation and proactive engagement to
minimise tax risk. Specific aspects of our approach to tax
authorities in relation to tax compliance and planning are
set out in greater detail below.
JTC is committed to maintaining a good
working relationship with tax authorities.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
26 JTC Annual Report 2022
TAX COMPLIANCE
JTC is committed to complying with the tax legislation in
the countries in which we operate ensuring tax liabilities
are settled on a timely basis.
TAX PLANNING
JTC will focus on ensuring that commercial transactions
(eg. acquisitions) which arise as part of our business
strategy are done so in a tax efficient manner. Specifically,
we will not engage in tax-motivated transactions or put in
place arrangements that are artificial or contrived.
We will discuss tax planning with external advisers to the
extent that such planning is aligned with our strategy.
However, the primary reason that we will seek external
advice is to support our commercial decision making
process where the tax position may be unclear or we do
not have the in-house expert knowledge to be able to
fully assess the tax consequences. Our business model
and market is such that we may acquire businesses in
countries with low tax rates.
When making acquisitions (or disposals) consideration
of the tax consequences is a key component of our
evaluation process, alongside the appropriate legal and
financing structuring.
JTC’s business model, comprising locally managed operating
companies supported by a group infrastructure and limited
outsourcing supports our transfer pricing policy.
RISK MANAGEMENT
JTC’s tax risks occur in the following areas:
• Transactional – the application of tax laws to
specifictransactions
• Compliance – our tax accounting arrangements
(including the recording of transactions) and
processes for making tax payments, filing tax returns
and responding to questions from tax authorities
• Operational – arising from routine, business as
usualoperations
• Financial accounting – the process whereby we
compute the tax balances included in our Annual
Report and Accounts
We do not define acceptable levels of tax risk, preferring
to operate on a low tax risk basis and not engaging in
transactions that are considered to be high risk. When
considering tax risk we take into account our corporate
and social responsibilities as well as the impact on our
relationships with tax authorities and our reputation.
Group wide risks are managed centrally. Our operating
structure is such that operational tax risks are managed
by our local operating companies supported by the Jersey
Head Office.
We hold regular meetings with our tax advisers to ensure
that we are aware of legislative changes. Advisers will also
be consulted in relation to non-routine transactions where
we do not have the knowledge or expertise in-house.
JTC has a zero tolerance policy on tax evasion and any
conduct or activities that facilitate such evasion.
GOVERNANCE
JTC’s Chief Financial Officer is ultimately responsible for
this strategy. The strategy is overseen by the JTC plc Board
which receives regular updates, either directly or through
the Audit Committee from the Chief Financial Officer.
Day to day delivery of the strategy rests with the Group
Finance Team, which supports our global business
operations in their tax matters and works closely with
external advisers.
This strategy was approved by the Board of JTC on 5 April
2023 to come into immediate effect. The Board will be
required to approve any subsequent changes.
We operate on a low tax risk basis and do not
engage in transactions that are considered to
be high risk.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
27 JTC Annual Report 2022
REVENUE (£M) UNDERLYING
EBITDA (£M)
UNDERLYING
EBITDA
MARGIN(%)
LIFETIME
VALUE
WON(£M)
2021
2022
92.7
136.7
2021
2022
28.0
43.0
2021
2022
30.2
31.5
2021
2022
126.0
166.5
+
47.4% +53.5% +1.3pp +32.1%
INSTITUTIONAL
CLIENT
SERVICES
BUSINESS REVIEW
NEW LEADERSHIP FROM WITHIN JTC
I am pleased to make my first Annual Report contribution
since taking over as Interim Group Head of ICS from Jon
Jennings in the second half of the year and assuming the
permanent role post period end in January 2023.
Having been closely involved in the evolution of the ICS
business for many years in my previous role as Group
Chief Commercial Officer, the ICS Division is not new
to me. It has been the fastest growing part of JTC in
recent years as a result of strong levels of organic growth
combined with the 12 acquisitions in the Division since
our IPO in 2018. With such activity, we are becoming
an increasingly diverse leadership team, leading an ever
broader set of capabilities and client-centric solutions
across 20 offices in 10 jurisdictions. Notwithstanding
this rapid growth, with the focus on integration last
year, it is pleasing to see that we have not only seen our
more established jurisdictions perform well, but also our
evolving platforms, which have combined to make for the
particularly positive results for the year.
A YEAR OF UNPRECEDENTED GROWTH
2022 was an especially strong year for the ICS Division,
with growth in revenues to £136.7m (2021: £92.7m), and
EBITDA of £43.0m (2021: £28.0m) at an EBITDA margin
of 31.5% (2021: 30.2%). The acceleration of previous
growth levels, combined with improved EBITDA margins
represents another important step towards completing
our Galaxy era objectives ahead of the original timelines,
as well as achieving our goal of establishing JTC as the first
choice for partner-led, technology-enabled solutions for
fund and corporate services. The new operating model
described last year has now settled down well and we have
since invested in the establishment of an ICS Operations
office. This was to ensure continued momentum in driving
through improvements in our platform and technology
investments to create greater efficiencies and consistent
service excellence across all our global offices, which has
underpinned our success this year.
OUR ‘2+2=5’ APPROACH TO M&A
If 2021 was a year of acquisitions for ICS, with a record
seven deals completed, 2022 was a year of consolidation
– with each of the businesses integrating onto the JTC
platform, both operationally and commercially. We
reported last year our excitement around each acquisition
and every one of the 330 people joining JTC given their
quality, expertise and capabilities and the solutions they
brought into the Group. I can safely say that we weren’t
disappointed with these new additions to the JTC family
HIGHLIGHTS
• Material revenue growth, underlying EBITDA margin
improvement to 31.5% and record new business
wins of £17.2m
• Successful operational and commercial integration
of the seven businesses acquired during 2021 helping
to deliver record levels of intra-group/cross sales
• Further strategic transformation new mandate win
with an international legal firm demonstrating the
Group’s ability to provide and implement innovative
solutions to large clients with complex requirements
• Established our full service Irish funds proposition
with Fund Administration licence approval by the
Central Bank of Ireland
• Continuation of operational improvements (Project
Blueprint) and technology investment with build out
of a dedicated ICS Operations team focused on
driving further efficiencies and client service
enhancements
DEAN BLACKBURN
Group Head of Institutional Client Services
having helped us deliver record levels of cross Divisional
sales and organic growth for the year.
All recent acquisitions have contributed to our growth,
but the combination of our enlarged US platform and
the continuing success of the Employer Solutions service
offering (formerly RBC cees) were particular highlights.
The increased scale and capabilities in each case,
combined with the existing JTC expertise and culture
of collaboration and client focus, created a particularly
compelling story given the respective markets they serve
and their opportunity for further long-term growth.
The Employer Solutions team worked closely with our
funds and corporate teams as well as the PCS Division to
identify synergies in terms of operational efficiencies and
business development opportunities. This, together with
an enhanced marketing program, contributed to a greater
rate of new business wins.
To evolve the client experience and to accelerate and
drive organic growth in the Employer Solutions business,
we are investing in a three year platform enhancement
programme. The central objectives being to re-imagine the
online experience for our plan members, and drive greater
efficiency by automating previously manual processes.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
28 JTC Annual Report 2022
BUSINESS REVIEW: INSTITUTIONAL CLIENT SERVICES
Although 2022 focused on laying the groundwork for
implementation (during 2023/2024), we delivered a
number of early changes, one of which was to broaden
the financial education available on our platform, helping
members rationalise the need for long-term retirement
savings against the day-to-day financial pressures they
might experience.
The programme is due to complete in 2024 once all the
main deliverables launch and the business is committed
to rolling technology enhancements on an ongoing basis.
Our Irish service offering of AIFM, Depositary and
Corporate Services was complemented by our Fund
Administration licence being granted by the Central
Bank of Ireland, which added a strategically important
jurisdiction to our funds offering. I am pleased to report
that the full service Irish offering saw new clients on-
boarded as well as efficiencies and capabilities between
Ireland, the UK and Luxembourg starting to be realised.
Our Irish solutions are particularly interesting to our
US colleagues where they are creating important
opportunities within the US market for clients needing
a European structure, and who feel closely connected to
Ireland historically and culturally. The teams operate from
Enniscorthy as well as the newly established Dublin office,
which was opened in the summer.
2022 was also a year of reflection, evaluating the growth
in the breadth and depth of our new capabilities and
service offerings from both M&A activity and more recent
internal innovation, and what it means for our business.
We experienced an increase in – and understanding of the
power of – cross-selling and collaboration across the ICS
Division itself, and the wider JTC Group, helping serve more
of our clients’ global needs at the same time as supporting
our growth ambitions. Looking back at the larger mandates
that we have won in ICS in recent years, there has also
been a realisation that our success in winning these more
complex opportunities lies in the fact that we have gone
beyond the role of a traditional service provider. We have
transitioned, from an external perspective, to a trusted
adviser role and can play an important role in realising
strategic transformation for our clients.
EXCEPTIONAL NEW BUSINESS WINS
Even with ongoing adverse market conditions, new
business development was particularly strong, with
an annualised value of £17.2m business won. This was
up 31% on 2021. Our win rate also hit an all-time high
of 52%, with for the first time in our history, the team
now winning one in every two mandates we engaged
in for new clients. Despite such a successful year for
new business wins, our pipeline remains strong and we
continued to make further investments in our business
development and marketing capabilities and capacity to
support further growth in this area.
It was also the first year since the Covid pandemic where
our business development teams were able to fully
engage again in external, in person activity, including
travel to other jurisdictions to participate in joint client
presentations and events, which had a significant
impact on our profile building of the ICS business. SALI
was able to host its annual IDF conference for the first
time since 2019, which firmly cemented their position
once again as the market-leader in the IDF space. Our
technical experts were in demand, with over 30 insights
pieces published in leading journals in the jurisdictions in
which we operate. This, with the enhanced collaboration
between the business development teams across the
Group, contributed significantly to our success in 2022
and has firmly set the tone for the year ahead.
CONTINUED FOCUS ON OPERATIONAL
EFFICIENCY
Our operational framework continued to be enhanced
with additional focussed resources being deployed in
several key strategic regions in order to support future
growth. A centralised client on-boarding team was
established and is following a phased roll-out across the
Division to deliver a more streamlined process as well as
improved client experience.
A number of technology focussed initiatives were delivered
in order to ensure the Division maximises the benefits
arising from use of its specialist systems. Our core funds
platform underwent an upgrade and training programme
to provide further automation and enhanced capability,
including further enhancements to the client online portal.
In addition, a programme of automation focussed
on our open-ended funds clients continued to deliver
time savings in relation to core processes such as NAV
production. These developments brought efficiencies
and also the ability to build further scale and deliver
against a growing trend of larger and more complex
clientmandates.
Further governance improvements were delivered in
order to ensure appropriate structure and discipline
in relation to the management of our core business
platforms – ensuring that the benefits arising from the
initiatives mentioned above remain, and continue to be
fit for purpose.
OUR PEOPLE
We are blessed to have some of the most talented,
collaborative and client-centric people in our industry
who take pride in being a part of JTC and our ICS business.
However, we realised that was not enough if we were
to meet future and ongoing growth objectives. This
year we put specific emphasis on talent management
and development, facilitated through the JTC Academy,
and international mobility, delivered via JTC Gateway
programmes. These initiatives help us to identify and
boost future talent growth and facilitate moves around
our global offices to support personal development
plans as well as meet business needs. We were pleased
to see our team grow organically from such programmes
being implemented with some of our most senior people
participating, as well as the recruitment of further top
talent into roles across ICS. Together, this helped to keep
our employee retention levels well below industry norms,
and we believe will continue to do so in the future.
LOOKING AHEAD
As a people business, and with ICS having now grown to
over 900 professionals servicing our extensive client base,
our focus in 2023 will be on further supporting our teams’
personal growth so that they can serve our clients even
better through selective investment in our employees,
technology and infrastructure. We will continue to build
out and develop our US platform, both organically and
inorganically, while also selectively investing in Europe and
the UK where suitable opportunities arise. Operationally,
we will continue to use technology and process
improvements to make the business more efficient and
support consistently high levels of client experience as we
grow further and close out our Galaxy era.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
29 JTC Annual Report 2022
REVENUE (£M) UNDERLYING
EBITDA (£M)
UNDERLYING
EBITDA
MARGIN(%)
LIFETIME
VALUE
WON(£M)
2021
2022
54.8
63.4
2021
2022
20.4
23.0
2021
2022
37.2
36.3
2021
2022
74.8
71.2
+15.7%
+12.9% -0.9pp -4.8%
PRIVATE
CLIENT
SERVICES
BUSINESS REVIEW CONTINUED
IAIN JOHNS
Group Head of
Private Client Services
& Group Managing
Director
HIGHLIGHTS
• 8.7% net organic growth
andmargin of 36.3%
• Onboarding of Project Amaro –
JTC’s biggest ever client win
• Continuing our journey to
become more than just a trust
company – revenue growth from
progressive services, including
strategic transformation
solutions, JTC Private Office,
treasury, custody and tax
compliance/regulatory reporting
• Acquisition of NYPTC based
inDelaware and integration
isproceeding well – opening
thedoor to the domestic US
trust market
• Continued investment in talent
and infrastructure to drive
futuregrowth
A SOLID YEAR’S PERFORMANCE
The Division had a strong year, with growth in revenues
to £63.4m (2021: £54.8m) and delivering EBITDA of
£23.0m (2021: £20.4m) with an underlying EBITDA
margin of 36.3% (2021: 37.2%). The slight reduction
in margin came from scaling up resource whilst on-
boarding Project Amaro.
Importantly, we delivered 8.7% net organic revenue
growth (2021: 7.1%). New business wins were a solid
£7.4m, exceeding our internal targets. This performance
remains ahead of peers and general sector expectation,
and it demonstrates the stability of the business, even
during times of general economic downturn.
Our regional approach to business development continues
to bring strong growth, as we are expanding our innovative
range of client solutions as well as growing our traditional
services, creating a springboard into 2023.
EXPANDING OUR SERVICE OFFERING –
BECOMING MORE THAN JUST A TRUST
COMPANY
JTC’s ability to outperform the market consistently is
driven by its service excellence, significant in-house
We are proud of our reputation in the
market and aim to set the benchmark
for excellence. Another year of growth
and innovation has created strong
momentum going into 2023.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
30 JTC Annual Report 2022
BUSINESS REVIEW: PRIVATE CLIENT SERVICES
In our South Dakota office we continue to deliver organic
growth through our international services, which we
expect to continue in 2023 and beyond.
Additional growth will come from harnessing our global
expertise and proposition – this is enabling us to expand
our services in the US and develop a unique proposition
across both the international and domestic markets.
TECHNOLOGY FOR GROWTH
To provide efficient new services to major institutions,
we need the right technology. We’ve always invested in
our platform to enable growth, and we continue to do so.
In 2022 we developed a bespoke platform for the on-
boarding and delivery of Project Amaro, which is now
in place and working efficiently. New technology is also
in late development phases for another financial client
solution; we expect this to be fully in place before the
middle of the year.
OUR PEOPLE
Our collaborative spirit remains strong, which is a key
contributing factor to our success, and staff turnover in
the Division remains low. This is testimony to our shared
ownership culture, which drives positive behaviours. We
have remained active in succession planning, developing
an appropriately managed talent pool to make sure that
we can deliver the same premium quality service well
into the future.
LOOKING AHEAD
Our continued development within the US market will
be an important focus as we recognise the scale of this
opportunity. We will retain focus on growing our other
established regions: the Channel Islands, Caribbean,
Europe and AMEA. We have developed strategies for each
of our markets to continue to drive growth organically and
through potential acquisitions. We always look ahead,
considering regulatory changes, technology requirements
and anticipating what our clients are likely to need in the
future and where they will want services delivered from.
This enables our progressive approach.
Our ongoing development of JTC Private Office will
continue to grow the number of larger mandates we
win; we are increasingly becoming known for working
with high value and complex clients from all around the
world. Interest in our Family Governance services has
also increased, both in Europe and in the US. We will be
expanding this further during 2023.
JTC’s brand really sets us apart in the market – we are
positioned as leaders in the industry and the gold service
standard in private client work, the hallmark of quality.
READ MORE ABOUT OUR STRATEGY
ON PAGE 14
expertise and aptitude for innovation. By understanding
clients’ changing needs, we are able to draw on our expert
teams to develop progressive solutions. These include
strategic transformation solutions, expert outsourcing
services, treasury and custody services, as well as our
growing JTC Private Office and tax compliance and
regulatory reporting offerings.
COMMITTED TO EXCELLENCE
Our reputation for guaranteed premium quality service
and our collaborative approach has helped us to win a
number of significant new mandates in 2022. We also
won 24 team and individual industry awards during
the year, which again reflects the standard of service
delivered by our global private client team. These awards
back up our belief that we are the world’s pre-eminent
trust company. Our focus on continued delivery of client
service excellence is an ongoing part of our strategy.
PARTNER OF CHOICE FOR GLOBAL BANKS
In 2022 we on-boarded Project Amaro, which is our
biggest ever client win. This involves us delivering
outsourced accounting and regulatory reporting services
to one of the world’s largest financial institutions. Our
strong relationship with this client has led to further
projects that we are working on in 2023.
In addition to Project Amaro, we have also been working
with a well known European bank across a number of
our offices, helping them to deliver strategic change.
This is in addition to our partnership with a Cayman
based bank and a number of other financial institutions,
demonstrating the value we can bring to these clients.
US MARKET
EXPANDING IN THE US
We have made a strategic commitment to the
development of the US market as we see the scale of the
opportunity in this region. Our acquisition of New York
Private Trust Company in Delaware gave us instant access
to the US domestic trust market. The integration of this
business is going well and we are already seeing higher
than expected new business wins in 2023.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
31 JTC Annual Report 2022
ENVIRONMENTAL
SOCIAL
GOVERNANCE
-9.7%
YoY reduction in CO
2
emissions per employee
132
employees voted for
carbon offset projects
& provided feedback
7
hybrid/electric
vehiclesleased under
the Luxembourg
officecar allowance
8%
employee turnover rate
57%
of employees are female
112
employees participated
inmanagementtraining
276
employee promotions
£225k
donated, fundraised
andcontributed
28,000
training hours logged on
JTCAcademy
1
JTC announces Wendy
Holley as its first CSO
38%
of board members female
63%
of Board members are
Non-Executive Directors
SUSTAINABILITY
We will continue to evolve our Sustainability
strategy and framework to build on the
progress made to date.
WENDY HOLLEY
Chief Operating Officer and
Chief Sustainability Officer
INTRODUCTION
In 2022, we made considerable progress towards our
sustainability goals and objectives, with an emphasis on
strengthening our governance framework. In addition to
appointing Wendy Holley as Chief Sustainability Officer
we added a new non-executive director, Kate Beauchamp,
to our Board. We formally updated our Terms of Reference
and all Board Committees to ensure that ESG permeates
our strategy throughout the Group. In addition, a decision
was taken to split the Audit & Risk Committee into an Audit
Committee and a Risk & Governance Committee with the
latter having responsibility for ESG considerations. From
2023, the ESG Forum, our sustainability working group, will
report progress on JTC’s ESG roadmap directly to the Risk
& Governance Committee. We remain a Carbon Neutral+
organisation and have strengthened our commitment to
transparency regarding climate risk by reporting to Carbon
Disclosure Project (CDP) for the first time. We launched
our inaugural employee survey and conducted a detailed
review of employee benefits, resulting in a number of
enhancements to family friendly policies. We continue to
evolve our ESG roadmap to ensure we are making iterative
progress towards our goals, with an eye towards establishing
additional metrics and targets in the coming year, with our
first milestone being a commitment to net zero emissions
before 2030. We will continue to evolve our ESG strategy
and framework to build on the progress made to date.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
32 JTC Annual Report 2022
OUR ESG FRAMEWORK
SUSTAINABILITY CONTINUED
SDGs* STRATEGIC OBJECTIVES SUPPORTING TARGETS PROGRESS MADE IN 2022
ENVIRONMENTAL
CLIMATE RISK, NATURAL CAPITAL,
CARBON EMISSIONS, ENERGY
EFFICIENCY, WASTE MANAGEMENT
• Assess the impact of JTC’sbusiness
operationsontheenvironment
• Reduce our carbon footprint
• Contribute towards initiatives and projects
thatsupport the natural environment
• Support our clients in ESG matters including
therapidly evolving regulatory landscape on
thepath towards net zero
• Measure our carbon footprint and pursue ways
to reduce it
• Commit to becoming carbon neutral by purchase
of validated carbonoffsets
• Expand internal expertise andcapacity to service
clientson ESG issues
• Measurably increase employee awareness of
environmental strategic objectives
• Reported under TCFD for the first time
• Maintained Carbon Neutral+ status
and reduced CO
2
emissions per
employee by -9.7% YoY
• Reported to Carbon Disclosure Project
(CDP) for the first time
• Became a signatory of the UN
Principles of Responsible Investment
across the Group
• Established a Net Zero by 2030 target
(post period close)
SOCIAL
DIVERSITY, EQUITY AND
INCLUSION, HUMAN RIGHTS,
COMMUNITY RELATIONS
SHARED OWNERSHIP, JTC ACADEMY,
JTC GATEWAY, JTC WELLBEING,
EMPLOYEE ENGAGEMENT
• Apply our culture of Shared Ownership
tobestservice theneeds of our clients
• Hire, develop and retain the best people,
helpingthem tomaximise their potential
• Help our people achieve balanced wellness
through ourJTC Wellbeing and JTC
Academyprogrammes
• Contribute towards the wellbeing of local
communities where we live and work
• Hire, develop and retain the best talent in the
industry tosupport ourclients
• Support employee growth and development
with targeted training and career development
opportunities
• Invest in meaningful charitable causes and
carbon offset projects that enhance overall
social wellbeing
• Launched inaugural Employee Survey
• Conducted global benefits review
• Focus and investment in training
anddevelopment
• Internal promotions andsector-
leadingretention
• Enhanced employee wellbeing and
wellness initiatives including
formalisation ofremote workpolicy
• Polled employees on carbon offset
selection & sustainability ideas
GOVERNANCE
DATA MANAGEMENT AND SECURITY,
ETHICS RISKS, SUCCESSION,
STAKEHOLDER ENGAGEMENT,
PURPOSE AND CULTURE, BOARD
COMPOSITION, EXECUTIVE
COMPENSATION, AUDIT AND RISK
• Expand Board level oversight ofESG strategy
• Formalise Board level review ofkey ESG priorities
• Prioritise Board composition toensure diversity
of thought, background, and experience
• Maintain robust risk frameworks and best-in-
class controls
• Enhance Board level oversight of strategic
ESGmatters
• Improve Board level diversity and ESG expertise
• Update Terms of Reference to formally bring ESG
matters into the direct remit of the Board and its
sub-committees
• Appointment of Wendy Holley as CSO
• Appointment of a new Independent
NED, Kate Beauchamp
• Audit & Risk Committee split into an
Audit Committee and a Risk &
Governance Committee
• Updates made to Terms of Reference
to provide Board level consideration
onESG risks andopportunities
• IT & Cyber Security strategy ‘deep
dive’ presentation to the Board
* UN Sustainable Development Goals
Over time, we fully expect our ESG framework to evolve and
newelementswillbe added for us to define, measure, and track.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
33 JTC Annual Report 2022
ENVIRONMENTAL SOCIAL GOVERNANCE
2023
Established a Net Zero by
2030 target (post period end)
1987
2023
2022
2022
JTC launches its
ESG Services
product offerings
2022
JTC becomes a signatory
of the UN Principles of
Responsible Investment
1987
JTC is founded
2020
JTC acquires Indos
Financial
2022
Kate Beauchamp is
appointed as a
Non-Executive
Director
2022
Wendy Holley
appointed JTC’s first
Chief Sustainability
Officer
2022
Updates made to
Terms of Reference to
provide Board level
consideration on ESG
risks and opportunities
2022
JTC reports
under TCFD for
the first time
2018
2nd Shared Ownership
award of £14m is made
when the Group lists
on the London Stock
Exchange
JTC Wellbeing launched
2017
JTC Gateway launched
Stronger Together
branding launch
1998
Nigel Le Quesne
creates JTC Shared
Ownership and
establishes it with
half of his own
equity
2012
1st Shared
Ownership award
of £12m is made
when a minority
stake is sold to PE
firm CBPE
2015
JTC
Academy
launched
2021
JTC reports under SASB
for the first time
‘Maximising Potential’
– global educational
charity support
programme – is launched
JTC becomes a Carbon
Neutral+ company
2022
JTC discloses under
CDP for the first time
OUR SUSTAINABILITY TIMELINE
SUSTAINABILITY CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
34 JTC Annual Report 2022
THE
EMPLOYEE
SURVEY
SECTION 1: SHARED OWNERSHIP
Table below contains the text of the questions asked in each of the four Employee Survey sections, along with the scores, out of 5.0 for each question.
SECTION 3: FEELING RECOGNISED
SECTION 2: UNDERSTANDING THE STRATEGY
SECTION 4: LIFE AT JTC
“ Being part of JTC’s shared ownership
scheme gives JTC an attractive
advantage over other employers.”
“ The best culture I have ever
experienced, combined with the
best people I have ever worked
with. Open, transparent, respectful
of each other no matter which
office one deals with and at all
levels. Very unique in thisindustry.”
“ JTC is a valued service provider
in the market and people
really care about providing
excellent service to clients.”
“A forward thinking and supportive
organisation, whichIam immensely
proud to be part of.”
4.2/5.0
Average
3.5/5.0
Average
78%
4.0/5.0
Average
4.0/5.0
Average
average score across all four survey sections
60%
voluntary response rate
from global team
SUSTAINABILITY CONTINUED
In 2022, JTC launched its inaugural Employee Survey,
a commitment to ensure the voices of all our global
employees are heard.
The purpose of the survey was to ensure, as a business
where all employees are owners, that there is an
understanding of how people feel about life at JTC,
what works well, and where we can improve. We were
delighted that the entirely voluntary survey generated a
60% response rate from our global team, a figure which
we hope will only increase with future surveys. The survey
consisted of four sections, with 12 questions scored on
a 1-5 scale with 1 representing ‘Strongly Disagree’ and 5
being ‘Strongly Agree’.
With the support of a third party specialist to ensure
independence, we compiled a detailed report and are
happy to share some key themes.
I understand what Shared Ownership at JTC means
JTC’s Shared Ownership culture provides the business with a key
differentiator in the market
I value being an employee owner at JTC
4.3
4.0
4.2
I understand JTC’s plans for future growth and success
I understand how my role contributes to JTC’s goals and objectives
I am proud of the service JTC provides to its clients
3.8
4.1
4.1
When I contribute to JTC’s success, I feel recognised by the company
I feel that the overall compensation package offered by JTC
is fair for the work I do
I value the additional benefits offered by JTC
3.5 4.0
I believe I have opportunities for a long-term career at JTC
3.3 4.1
3.6 4.0
JTC has a positive culture
I believe that JTC’s values reflect my own
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
35 JTC Annual Report 2022
DISCLOSURE UNDER SUSTAINABILITY ACCOUNTING STANDARDS BOARD STANDARDS
ACCOUNTING
METRIC&CODE
CATEGORY UNIT OF
MEASURE
DISCLOSURE
DATA SECURITY
Description of approach to
identifying and addressing
securityrisks
Code: SV-PS-230a.1
Discussion
&analysis
N/a At JTC, we understand the importance of all of our information assets as well as retaining the trust of our existing and future clients. To support the JTC vision, and help
the business meet its objectives, we are proudly committed to building the protection of assets from the foundations up. We operate a variety of best-in-class systems to
deliver and maintain an impeccable standard of administration and use technology to innovate in both service delivery and efficiency.
Globally there are many different regulatory and compliance requirements as well as Information Security and Risk frameworks. Each one of them has its own set of
requirements and/or recommendations. For JTC we have adopted the National Institute of Standards & Technology (NIST) Cyber Security Framework and aligned our
Policies, Standards and Procedures to the ‘Information Organisation of Standardisation’ (ISO 27001) suite of Standards. By adopting both the NIST Framework and ISO
27001 Standards, we meet the regulatory and compliance requirements applicable to JTC and the expectations of clients and investors. Annually we are subject to various
regulatory reviews and audits, including a NIST Assessment and an ISAE 3402 IT general controls testing and assurance audit. Additionally, employees undertake Data
Protection training and have access to the Data Protection policy via the intranet.
We have a dedicated Information Security Team. Our Group Information Security Officer leads the team and is responsible for defining and delivery of the Group’s Information
Security strategy and approach. The team hold a number of advanced industry recognised certifications and qualifications such as Certified Information Systems Security
Professional (CISSP), Certified In Information Security Management (CISM), Certified in Risk and Information System Control (CRISC), Certified Information Systems Auditor
(CISA), Certified Data Privacy Solution Engineer (CDPSE), ISO 27001 certified ISMS Lead Auditor (CIS LA) and ISO 27001 Certified ISMS Lead Implementer (CIS LI).
JTC will always implement the necessary controls to protect all information assets from unauthorised access, assure the confidentiality of information and maintain its integrity.
Description of policies and practices
relating to collection, usage, and
retention of customer information
Code: SV-PS-230a.2
Discussion
&analysis
JTC is fully committed to both the spirit and the letter of all of the data protection/data privacy frameworks that apply to it globally. As an award winning, market-leading
provider ofprivate and institutional client services, client confidentiality sits at the heart of our business. We build on this foundation with respect for all of our data
subjects’ statutory dataprotection and data privacy rights. We continually seek to enhance our data protection practices.
Number of data breaches
Code: SV-PS-230a.3
Quantitative Number,
percentage (%)
No personal data breaches requiring formal notification to an Information Commissioner or a data subject were recorded for the period.
WORKPLACE DIVERSITY & ENGAGEMENT
Percentage of gender and racial/
ethnic group representation.
Code: SV-PS-330a.1
Quantitative Number,
percentage (%)
Executive management (Group Holdings Board & Group Directors) – 76% male and 24% female
All other employees – 41% male and 59% female
U.S. employees – Senior Management 83% White, 17% Not disclosed
All U.S. employees – 8.7% Asian, 7.7% Black, 12.6% Hispanic, 0.5% Native Hawaiian or Pacific Islander, 4.9% Two or More Races, 9.3% Not Disclosed, 56.3% White
Voluntary and involuntary
turnoverratefor employees.
Code: SV-PS-330a.2
Quantitative Number,
percentage (%)
8% voluntary, 7% involuntary.
Employee engagement Code:
SV-PS-330a.3
Quantitative Number,
percentage (%)
60% participation.
SUSTAINABILITY CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
36 JTC Annual Report 2022
DISCLOSURE UNDER SUSTAINABILITY ACCOUNTING STANDARDS BOARD STANDARDS CONTINUED
ACCOUNTING
METRIC&CODE
CATEGORY UNIT OF
MEASURE
DISCLOSURE
PROFESSIONAL INTEGRITY
Description of approach
toensuringprofessional
integrity
Code: SV-PS-510a.1
Discussion
&analysis
N/a The Group has a set of Guiding Principles and core value behaviours that are designed to establish the organisational cultural tone and set the standards we expect our employees
to follow. These clear standards aim to support the Group’s policy of ensuring that business is conducted in a manner that is consistent with our reputation and conducive to
maintaining high standards of integrity in all our business dealings, whilst having the highest regard for the interests of our clients.
The Guiding Principles include the Group’s commitment to:
• full compliance with all legal, regulatory, and other requirements wherever we operate, adopting best practice whenever possible;
• maintaining monitoring and risk management systems and procedures for the effective control of our affairs; and
• open and transparent dealings with our stakeholders including our clients and regulators.
The principles are underpinned by formal Group Policies, which set expected standards in a number of areas linked to professional integrity including:
• Conduct Risk,
• Anti-Money Laundering,
• Countering of Terrorist Financing,
• Anti-Bribery and Corruption,
• Sanctions Compliance,
• Insider Trading,
• Conflicts of Interest; and
• Whistleblowing, which provides whistle-blowers protection from retaliation.
All policies are made available to employees via the Group’s intranet. Adherence to these standards is periodically tested through the Group’s ‘three lines’ model of assurance (read
more on pages 47 and 48) and further supported by an employee compliance declaration exercise undertaken each year.
On an annual basis, each employee’s adherence to the Group’s core value behaviours of accessibility, integrity, commercial awareness, personality, engagement and innovation are
assessed as key contributory factors in the annual appraisal process and employees take part in Anti-Money Laundering training.
Over and above the internal organisational processes, the Group is currently regulated in 17 different jurisdictions. It is an accepted global practice for regulators to require those
employees who take senior Board roles and responsibilities, either within the Group or on behalf of clients, to submit personal questionnaires or other confirmatory paperwork before
assuming such positions. Regulators will then examine such applications and grant licenses only upon satisfaction of local and international checks and regulatory considerations of fitness,
suitability, experience and proven integrity. As such, and in support of the integrity achieved through internal organisational processes, there is considerable and consistent external
regulatory scrutiny of integrity conducted by experienced authorities, often utilising information gateways (e.g. to law enforcement) that would not typically be available to the Group.
Total amount of monetary
losses as a result of legal
proceedings associated
with professional integrity
Code: SV-PS-510.a.2
Quantitative Reporting
currency
During the reporting period there were no monetary losses to the Group stemming from legal proceedings associated with lack of professional integrity or stemming from other
environmental, social, or governance issues.
ACTIVITY METRICS
Number of employees by:
(1) full-time and part-time,
(2) temporary, and
(3)contract
Code: SV-PS-000.A
Quantitative Number Full-time – 1291
Part-time – 146
Temporary – 48
Contract – 17
Employee hours worked,
percentage billable
Code: SV-PS-000.B
Quantitative Number For our fee earning employees, hours worked as % of contracted hours was 103%
% of billable hours by chargeable staff: 82%
SUSTAINABILITY CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
37 JTC Annual Report 2022
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
JTC is reporting for the second time under the Task Force on Climate-Related Financial Disclosures (TCFD) framework, as required
under Listing Rule 9.8.6R (8) on a comply or explain basis. We have considered our obligations under this Rule, also taking into
account the TCFD Annex (issued October 2021), and have made disclosures consistent with the 11 TCFD Recommendations
and Recommended Disclosures; noting that for Metrics and Targets, work is ongoing to establish more detailed targets that will
enable us to manage climate-related risks and opportunities.
GOVERNANCE
JTC’s ESG framework, which incorporates climate risk, is governed and
overseen by the Board of Directors, with operational responsibility sitting
with the executive team and in particular the Chief Operating Officer. In
2022, JTC enhanced board level oversight of climate and other ESG risks
by implementing the following changes:
• JTC appointed Wendy Holley as the firm’s Chief Sustainability
Officer in addition to her Group Chief Operating Officer role.
• JTC appointed an additional Non-Executive Director, Kate
Beauchamp, with specific focus/expertise in ESG, including
climaterisk. Kate is undertaking training and development
relevant to her role as the chair of the Risk & Governance
Committee and is enrolled (post period end) in the Corporate
Governance Institute’s Diploma in ESG and Corporate Governance.
• JTC amended each Board sub-committee’s terms of reference to
incorporate relevant ESG matters, including climate risk, as part of
their remit.
• The Audit & Risk committee was split into two committees, Audit
and Risk & Governance, with the latter having a specific role in the
oversight of ESG strategy and policies, supported by director(s)
with ESG specific expertise and the CSO.
• Board members Mike Liston and Nigel Le Quesne have specific
experience on climate-related matters. Mike served as CEO of
Jersey Electricity PLC (1993-2008) and serves as a Non-Executive
Director of Foresight European Solar GP Ltd and Foresight Solar
&Infrastructure VCT PLC. Nigel also served as a Director with
Foresight and is shareholder in a solar farm.
• Climate related objectives are factored into executive
remuneration. For more information, please see page 73.
The ESG Forum, chaired by the CSO, has responsibility for day to day
ESG considerations, including climate-related risks and opportunities
and JTC’s range of sustainability solutions for clients.
The ESG Forum periodically reports findings, targets, and
recommendations to the board. In 2022, the ESG Forum presented
analysis on ESG risks & opportunities, including those related to climate
change to the Board.
The strategic sessions informed not only JTC’s corporate climate risk
strategy but also decisions to invest in ESG Services and provided
an opportunity to educate the Board further on key regulatory
considerations and commercial opportunities related to climate change.
In the coming year, the ESG Forum will work with the Board to identify
additional targets, including those related to climate risk, and implement
processes to track towards these goals.
STRATEGY
Physical risks resulting from climate change (e.g. extreme weather) could
impact our global offices and our clients. For short-term events (<2 years),
business continuity and disaster recovery plans are in place to ensure that
work could be completed from a different location or remotely. Following
the pandemic, work from home has become a more established practice,
with a formal remote working policy in place. Globally dispersed teams are
well positioned to take on work from other offices if needed and permitted
under the relevant regulatory licenses. JTC has managed physical risks
successfully in practice by using backup power generation and moving
employees to our offsite disaster recovery centre when our South Africa
office was impacted by rolling power outages.
Transition and regulatory risks are another area of consideration. Medium-
term events (2-3 years), such as changes to regulation, carbon tariffs,
and the potential for stranded assets have the potential to impact JTC
and our clients. Long-term events (3+ years) including macroeconomic
impacts on global GDP and shifts in population centres could potentially
impact JTC and our clients’ revenue and profitability as they link to the
wider global economy. All of these factors, as well as the social impacts of
climate change are ones we consider in scope for a more detailed, formal
materiality assessment in the coming year.
As the climate change regulatory environment matures and becomes
clearer, we understand the need to manage transition risk for our business
and also recognise the service opportunities that exist to support our
clients. Commercial opportunities related to climate change are
considered as part of our organic/inorganic growth strategy see pages
14-17. In particular, JTC has made strategic acquisitions (INDOS, perfORM)
which have brought expertise and capabilities in servicing the growing
areas of ESG advisory and impact & socially responsible investing globally.
We are ideally placed to become a highly credible component of our
clients’ value chains. In addition, our strength in providing expertise
around complex regulatory and reporting frameworks means that we
are able to offer ESG advisory and administration services to a broad range
of clients from institutions to UHNWI and families. Please see page 28
for more details on how climate change opportunities are being factored
into JTC’s service offering.
JTC has conducted analysis of our service offering and client base to
determine risks and opportunities that apply in a number of climate-
related scenarios. Based on our business model, diversified client base,
and our assumptions that wealth preservation and collective investment
will remain robust in any scenario, we believe our business will persist, and
in some capacities, be enriched by the opportunity to provide additional
services to our client base even in the face of climate change.
RISK MANAGEMENT
JTC has had specific conversations and garnered feedback with several
key stakeholder groups: investors, clients, and employees. In each of
these conversations, the materiality of climate risk to our business and
service offerings was discussed. We have seen a general alignment across
stakeholder groups that climate risk does not pose the largest risk to
JTC as a people based, service business but we wish to further vet this
assumption through a more detailed, formal materiality assessment,
ideally in the coming year. Post period close, JTC employees were polled
on their preferences in selecting JTC’s carbon offsets and to gather their
thoughts on what we can do to better manage climate risk. As important
stakeholders in our value chain, we value the feedback of our employees
and will consider how to incorporate their preferences as we work towards
our net zero target.
JTC combines it’s more than 3 decades of industry experience with in
house ESG expertise to make informed decisions of which climate related
risks are material to our business. We have spoken to informed expert
stakeholders including institutional investors and completed an initial
carbon assessment.
JTC has established processes for assessing, documenting, and managing
business risks. We believe climate change is an emerging risk because
there is an increased regulatory focus on the role financial insinuations
and listed companies play in the path to net zero. As we conduct further
materiality assessments and analysis, we will gain a deeper understanding
of how these risks impact our business and our clients. While climate risk
is captured in our risk framework in the near term we need to balance this
risk against our other material risks.
As regulation and best practice continue to evolve, we consider it
important to continue to engage with our value chain (including investors,
clients, suppliers) and stay informed on emerging best practice. As such,
we have strengthened our commitment to external forums and pledges by
JTC PLC becoming a signatory to UN Principles for Responsible Investing
(UN PRI) and reporting climate related data to the Carbon Disclosure
Project (CDP) database in 2022.
METRICS AND TARGETS
JTC has chosen to report performance on metrics we believe appropriate
for a people-based professional services business, which we have
determined to be absolute carbon emissions and carbon intensity ratios
that allow us to assess our emissions relative to revenue and headcount,
since we are a growing business. GHG emissions were calculated in line
with the GHG Protocol methodology.
2022
Total CO
2
emissions 1,924.93 tonnes
Scope 1 440.10 tonnes
Scope 2 500.60 tonnes
Scope 3 984.23 tonnes
tCO
2
e per employee 1.34
tCO
2
e per £1m revenue 9.62
2021
Total CO
2
emissions 1,820.15 tonnes*
Scope 1 451.45 tonnes
Scope 2 461.32 tonnes
Scope 3 907.40 tonnes*
tCO
2
e per employee 1.48*
tCO
2
e per £1m revenue 12.34*
• JTC intends to use 2022 as a baseline emissions year because
webelieve that a return to ‘business as usual’ travel and office
attendance more accurately represents our carbon footprint since
westarted measuring it in 2020.
• Post period end, JTC made a commitment to become a net zero
carbon emissions organisation no later than 2030.
• In the coming year we will work with internal and external stakeholders
to ensure appropriate plans are in place to meet ourcommitment.
* In 2022 we enhanced our reporting by adopting the ‘well to tank’
(WTT) methodology for CO
2
emissions. To ensure consistency and
provide accurate year-on-year comparisons, we have re-calculated
the relevant 2021 emissions figures using the WTT method.
SUSTAINABILITY CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
38 JTC Annual Report 2022
WHAT THE TCFD IS WORKING TO ACHIEVE
In line with FCA / FRC comment following year one of
mandatory TCFD reporting, we have reviewed both our
approach and our response for year two. The TCFD is
ultimately looking for the impact climate-related change
could have on the financial performance of JTC over
time, and what the business is doing to understand and
managethis.
STRATEGIC AND PROPORTIONATE
ALTERNATIVE TO DATA MODELLING
Extensive mathematical modelling of complex scenarios
over extended periods is beyond our current capabilities
and resources, as a business of c. 1,500 people. However,
we can examine the problem by seeking to understand
the fundamental practicality of what we offer, and how
that, and the infrastructure we use to provide it, might
be affected in different climate scenarios.
The TCFD framework encourages organisations
to consider the impacts of different climate
scenarios on business risks and opportunities.
Through our analysis of such scenarios, we
argue that our core services offer strong
undeniable advantages for our clients. These
support sustained demand for our services
and stable financial performance in the face
ofpotential climate-related change.
THE IMPORTANCE OF OUR EFFECTIVENESS FOR CLIENTS
JTC has operated for 35 years, serving clients in three areas:
FUND SERVICES (FS)
FACILITATING COLLECTIVE
INVESTMENT
CORPORATE SERVICES (CS)
FACILITATING CROSS-BORDER
TRADE AND CAPITAL MOVEMENT
PRIVATE CLIENT SERVICES (PCS)
PRESERVING PERSONAL AND
FAMILY WEALTH
People will still want collective
investment opportunities. For
example, a fund will seek to attract
capital, generate a return and comply
with regulations. A fund manager that,
in the past, invested in petrochemicals
might today invest in renewable-
energy technology.
Companies will still trade
internationally. In the corporate
world, JTC’s role is not to determine
whether a company’s strategy is
viable or successful, it is to facilitate
commercial (including cross-border)
activity that is legal and compliant.
Ifa client does not have a sustainable
business model, or adapt to market
forces and regulation, it will not be
successful and will not grow to the
point where it requires our services.
Wealthy individuals and families will
still wish to preserve their wealth.
Individual and family wealth has
two main components - how it
was generated, and how it is put to
use. Market opportunities and the
constraints of regulation will govern
what private clients choose to focus
on. Our role is simply to support the
preservation, distribution or succession
of that wealth.
In the anticipated or modelled potential climate-change scenarios, +1.5C and +2C, the functionality of, and demand for, our
services will not fundamentally change, nor be materially eroded. In fact, they may expand in line with other trends in population
growth and wealth creation. Other questions remain, however, over the underlying activity within those services, how and
where JTC conducts the work, and the matter of regulation. Client behaviour tends to be neutral and unchanging for these:
REGULATION AS A LEVEL PLAYING FIELD AND
CATALYST FOR JTC GROWTH
Regulation has always proven to be a key driver for our
business, recent examples being FACTA and CRS. Regulation
affects all participants equally and can largely not be avoided
simply by using an alternative service to ours. As such, it
creates additional revenue streams for JTC, and we believe
emerging climate-related regulation will have a similar effect.
THE IMPORTANCE OF DIVERSIFICATION
The TCFD examines climate-related financial disclosures
- so how do we connect the above analysis with
financial performance? We have examined the risk of
any imbalance that could find us at the mercy of the
potential effects of climate change, as follows:
• We have clients in over 100 countries.
• We administer over 25 different entity types under
25 different regulatory regimes.
• We administer or oversee more than 20 asset types.
• We have no obvious industry or sector concentration
in our client base.
• Our top 25 clients by revenue account for only
15.4% of turnover.
We currently operate 32 offices and are licensed by 25
different regulatory bodies. While each office confers a specific
set of benefits to JTC and its client base - based on legal,
regulatory and tax frameworks, or time zone, for example –
the vast majority of locations in the JTC network have at least
one, if not several, ‘equivalent’ locations in other parts of the
world. In addition, our employees are typically internationally
mobile from an employment perspective.
CLIMATE-RELATED
RISKS
CLIMATE-RELATED
OPPORTUNITIES
FUND SERVICES
(FS)
CORPORATE SERVICES
(CS)
PRIVATE CLIENT SERVICES
(PCS)
SUSTAINABILITY CONTINUED
In reality, this means that to continue to be able to provide our
services, we are naturally hedged and flexible to relocation.
If BVI, for example, became an impractical and dangerous
location, we could use other locations that would not be
subject to the same conditions, such as the Channel Islands.
CONCLUSION
Taken together, the convenience of our core services, the
long-term neutral approach taken by clients, a lack of
concentration in the client base, the flexibility of the JTC
network, and the impact of increasing regulation all mean
that the financial risk to JTC of climate-related change
across a number of temperature increase scenarios is, we
believe, neutral at worst and quite possibly favourable
over the long term. Our focus will continue to be on
understanding climate risks as they evolve and capturing
opportunities, for example in the form of the expanded
range of Sustainability Services, such as vCSO, launched
in 2022.
This conclusion has no bearing whatsoever on our desire
to be part of the fight against climate-related change. We
work to impose and comply with the many regulations
seeking to help achieve the goals of the Paris Agreement
and secure a sustainable future for the world.
Scenario analysis is interlinked with underlying risk
assessment procedures, which include work to assess if
there are material climate-related risks and opportunities
for the Group. Informed conversations with key
stakeholders, including clients, investors and employees
help to inform management decisions regarding materiality.
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39 JTC Annual Report 2022
In 2022, we made considerable progress towards our
sustainability goals and objectives, with an emphasis
on strengthening our governance framework.
1
LUXEMBOURG
4
SOUTH AFRICA
5
MAURITIUS
2
JERSEY HQ
3
UNITED STATES OF AMERICA
SUSTAINABILITY ACROSS OUR GLOBAL OFFICES
Employees in JTC’s Luxembourg office have demonstrated a greater awareness
for their environmental impact and sustainability leadership by taking a principal
role in reducing their impact on the environment through several grassroots
campaigns. Seeing transportation as a key area for improvement the office instituted
a requirement that all new corporate car leases be hybrid or electric vehicles. This was
supported by initiatives to provide subsidies for train passes and subscriptions for
scooter and bike share memberships. When moving to a new office space, the team
thought of innovative ways to ensure they played their part in a circular economy.
Employees were invited to take home old office furniture in exchange for donations
towards Think Pink, a local breast cancer awareness charity. This initiative raised
¤1,054 for the charity and is a wonderful example of supporting employees and
their commitment to initiatives, such as recycling and sustainability.
JTC strengthened its commitment to Governance with several key appointments
and initiatives in 2022. Wendy Holley was named the Group’s first ever Chief
Sustainability Officer, a new female NED, Kate Beauchamp, joined the Board, the
Terms of Reference for all Board Committees were updated to further embed ESG
strategy, and the Audit & Risk Committee was split to create an Audit Committee
and a Risk & Governance committee. Read more from page 58.
The Ubuntu CSR Committee in South Africa strives to play an
active role in their community by giving back and providing
support for causes that need it most. As part of their National
Women’s Day celebrations the JTC team in South Africa
participated in the ‘Mowbray Hospital Knitting Challenge’.
Mowbray Hospital is the largest maternity hospital in South
Africa, with over 800 babies delivered there every month and the
Western Cape Department of Health estimates that over half of
the premature new-borns delivered at the hospital can be saved
by initiatives such as this. The team, family and friends knitted
beanies, baby jerseys, and blankets which they delivered to the
hospital to aid in the care of premature babies. The Ubuntu
Committee and volunteers continue to focus on doing as much
as they can in their local community, contributing to monthly
feeding schemes as well as running in office collections for
clothing, blankets, books and canned goods.
Our Mauritius team took part in the Group-wide reverse advent
calendar initiative that inspired jurisdictions to give back to
local causes during the festive period. The team partnered with
their chosen charity, Sponsor a Child Mauritius, to support
the needs of underprivileged children in their community.
The charity have around 150 children in need of support in
Mauritius and Rodrigues. CSR remains an important focus for
our Mauritius Team, they have been working with Sponsor a
Child since 2011, providing over 10 years of ongoing support.
Employees from the office got together to offer more than a
financial donation, packing over 30 gift bags that contained
socks, stationary, games and snacks to bring some joy to those
that needed it most. The Mauritius CSR team were invited to
hand out the gift bags at the Sponsor a Child Headquarters,
having the opportunity to speak directly to the recipients and
hear first-hand the impact their donations and volunteering
had made.
Strengthening their ties to the local community, the Austin team selected The
Austin Angels as their charity of choice for 2022. Austin Angels work to provide
foster children consistent support through relationship building, mentorship and
care packages. Members from the Austin office participated in the ‘Back-to-school
Bash’ supply drive to collect school supplies for children supported by the charity.
The team exceeded their goal of collecting 20 water bottles, 20 backpacks, and
two $50 Target gift cards and a total of 342 children were served at the event.
Members of the team also volunteered their time to help pack up their backpacks
and hand them out to those in attendance.
SUSTAINABILITY CONTINUED
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40 JTC Annual Report 2022
JTC ACADEMY
Developing our people and
maximising their potential
JTC Academy provides a structured development programme
which gives access to materials and training tailored to job
roles, performance, ambitions and potential. The Academy
has continued to expand the range and quantity of training
opportunities as the Group increases in size. In total,
over 3,600 industry-leading learning materials including,
Systems, Leadership and Personal Effectiveness topics were
made available for employees to access in 16 languages.
Subject categories include: – Risk & Compliance – Data &
Cyber Security. – Business Skills. – Health and Wellness.
– Leadership and Management. – Office Productivity.
– Personal Development. – Sales and Client Service. –
Technology – JTC curated content.
Over the last 12 months, the Learning and Development
team have provided a comprehensive calendar of technical
and non-technical training sessions delivered across all global
jurisdictions utilising the Academy platform located on our
‘People@JTC’ system. Throughout 2022 our people continued
to engage with various training programmes on JTC Academy,
logging over 28,000 hours alongside 361 requests for external
training. Over 1,300 mandatory Anti-Money Laundering and
Data Protection training sessions have been undertaken by
our teams across the globe. In comparison with companies
of a similar size and scope, we score higher in the areas of
self-enrolment for on-line learning modules and general
engagement with Learning and Development activities. A
continuing scheduled delivery of CPD based sessions has been
managed by the Academy team throughout 2022 with 1,606
employee sessions over the year.
Training delivery highlights for 2022 include the delivery
of a range of bespoke leadership and management
educationprogrammes:
• Managing the JTC Way – 64 delegates in 2022, with
afurther 96 due to start in Q1 2023. The programme
was reviewed and updated in 2023 to provide a more
flexible delivery structure.
• Step up to Management – delivered to 48 delegates
in2022, a further 48 due to start in 2023.
• Our custom programmes focus on our core Divisional
Balanced Scorecard (DBS) modules of Finance, Risk, and
Client & People Management.
• All new joiners continued to receive a comprehensive
induction plan – automatically communicated and
assigned to them from their start date.
• The ‘Welcome to JTC’ curriculum provided a consistent
induction for all new joiners across the Group with over
30 hours of content and live sessions.
• All activity is now trackable ensuring adherence to
policy requirements and jurisdictional specific
enhancements to our core Induction programme have
commenced and will continue into 2023.
To support our core Wellbeing pillar, Academy continues
to provide targeted development for our ‘Mental Health
First Aid’ network, which has already proved its value to
employees. This development is now being integrated into
Managing the JTC Way as a standalone module to make it a
‘requirement’ for all managers at JTC which further reinforces
our commitment to the wellbeing of our employees.
“PROJECT TALISMAN” – TALENT
ANDSUCCESSION
Project Talisman sits at the heart of JTC’s priorities for the
Galaxy era and its central aim is to gain a comprehensive
understanding of the ‘talent landscape’ across the Group
and deliver a programme of world-class development
initiatives to grow our capabilities and provide the Group
with a ‘pipeline’ of future leaders. The project also focuses
on developing strong succession plans for all senior roles
within the Group. The focus in 2022 was to establish
a framework for talent identification and succession
planning, which will then be rolled out across the business.
The framework was launched at the start of Q4 to very
positive feedback from business leaders and Talisman is
on track for completion as planned in 2023.
ESG SUPPORT
To support efficiencies and as part of our drive to reduce
the use of paper. JTC Academy has taken the lead in
supporting the move from paper based HR forms to on-line
application and approval processes. To date 16 paper forms
have been replaced by digital version, including: core new
joiner forms, change of personal details such as address
and bank accounts, benefit enrolment, approval request
for parental leave, Recommendation for Recruitment
(RfR), Recommendation for Promotion (RfP) and our
Recommendation for Development (RfD) to request
approval for eternal seminars or professional qualifications.
MAXIMISING POTENTIAL THROUGH OUR
EDINBURGH INTERNSHIP SCHEME
Following the success of last year’s ‘virtual internship’ JTC
Edinburgh once again partnered with Career Ready Scotland,
to run an internship scheme for local students. Career ready
Scotland works to ensure that every young person progresses
to a positive post-school destination and is able to prosper in
the world of work, regardless of their background.
This year, the four week internship was in-person, with the
student joining the JTC Edinburgh office working across the
Employer Solutions teams. As part of the initiative the student
is matched with a mentor within the JTC Edinburgh Team, who
enables them to progress and build their confidence within the
working world. The experience involves exposure to multiple
contacts and teams within the business, giving the student a
chance to work on the skills they will need when applying for
and starting a job after leaving education. The scheme is an
invaluable tool for students to develop their own personal and
professional confidence whilst gaining an understanding for job
roles and overall business requirements.
Working at JTC has helped me to gain confidence as I now know I can do a job
and it’s not as scary as it may seem! I have really enjoyed working at JTC and it
has been a great experience.” Craig, 2022 Intern
SUSTAINABILITY CONTINUED
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41 JTC Annual Report 2022
“It was great to see the difference in his confidence by the end
of the placement, it was a fantastic transformation.”
Rui, JTC Career Ready Mentor and member of the Edinburgh ES team
JTC GATEWAY
International experience to increase
capabilities and actively develop talent
JTC Gateway offers our people the opportunity to develop
their careers by working in Group locations around the
world in support of their personal and professional growth.
The programme allows for our people to undertake
secondments, rotations and permanent transfers across
Group locations.
As part of our Stronger Together culture the programme
not only supports individual growth but also provides an
opportunity to share our employees skills and expertise with
international colleagues, helping to facilitate cross functional
and cross jurisdictional learning.
Josie Cuff, Associate Director – Tax Compliance and Regulatory
Reporting, joined JTC in 2021 after the RBC cees acquisition
to support the policy and process integration to the Employer
Solutions business. With over 10 years’ experience in financial
services and a leader in the AEOI field, Josie was well placed
to take up a secondment to the Edinburgh office from Jersey.
The move gave Josie an opportunity to understand the product
proposition of Employer Solutions and gain exposure to a large
integration project in a post-acquisition environment.
Reflecting on her Gateway secondment, Josie remarked that:
“Gaining international experience is such a great opportunity
and what is unique from a JTC perspective is the support
and tools available to make it happen.” She highlighted that:
“The support and organisation from HR and the Business
Management team made the relocation seamless.” JTC
Gateway opportunities allow our people to learn more about
themselves and each other, being able to try new things and
adapt to change and gaining a deeper understanding of how
each jurisdiction operates.
SUSTAINABILITY CONTINUED
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42 JTC Annual Report 2022
JTC WELLBEING
Helping our people to maximise their
physical, mental and emotional health
It’s wonderful to see so many of our talented
employee-owners be rewarded through
promotion for their commitment, drive and
passion – and the proportion of the JTC global
team who have been recognised in 2022 is
equally impressive. Our employees are our
greatest asset and their commitment to both
professional and personal development through
the JTC Academy – as well as continuing
to deliver service excellence while working
collaboratively with colleagues – means that
our ‘Stronger Together’ ethos is clearly visible.
Wendy Holley, Group Chief Operating Officer
JTC stands by its long-term commitment to wellbeing,
with the impact of the pandemic still affecting our people,
they have continued to show resilience and remained
productive in spite of challenges.
The opportunity to return to our offices has allowed employees
to reconnect in important ways with their roles and colleagues,
while at the same time, JTC has continued to embrace flexibility
through its remote working policy. Similarly, JTC remains
committed to offering all permanent employees competitive
non-salary benefits. This covers pension contributions,
healthcare and dental cover.
Mental Health remained a focus in 2022 and we continued to
expand our global Employee Assistance Programme to support
our people with everyday challenges. The confidential service
is available to employees 24/7, 365 days a year for them to
ask questions across a wide range of topics including: personal
finances, parenting, work life balance and anything in between,
accessing experts who are on hand to support our people.
The JTC Mental Health First Aiders have continued to support
our people, with 33 MHFA’s located in 11 of our jurisdictions.
Volunteers are trained via MIND UK on a two day accredited
course that equips them to identify, understand and help
others developing mental health issues by learning how to
spot the signs and symptoms of mental health crisis and how
to provide help on a first aid basis.
Throughout the year wellbeing content has remained a focus
topic on Joogle, our employee intranet. We have featured
articles on wide range of topics, including loneliness, grief,
managing stress and the benefits of yoga. Alongside this
we have marked key dates throughout the year such as
Blue Monday, Random Acts of Kindness Day, National Grief
Awareness Day, World Mental Health Day, World Diabetes
Day and World Aids Day to provide our people with support
resources and insight.
Another key focus for the year was raising awareness and
providing support resources for Menopause in the workplace.
With a theme for World Menopause Day centred around
Cognition and Mood, JTC hosted two online workshops to
continue the conversation and give employees the opportunity
to provide insight and feedback.
WELLNESS WEEK
From 10 to 14 October 2022 JTC hosted its Wellness Week
with a theme of Connections. Throughout the week, employees
had access to a number of articles, online workouts and fitness
content and daily master-classes that covered topics from
mindfulness, nutrition, sleep and relaxation, creativity and
exercise. The week encouraged employees not only to tap into
physical wellbeing through exercise and healthy eating but also
to explore mental wellbeing and connecting with one another.
All our offices were invited to get involved through the virtual
sessions and the crowd pleasing Jurisdictional Juice drop where
every employee got to enjoy a refreshing and vitamin packed
juice or smoothie.
Two competitions were run as part of the week, one exploring
inner creativity and another focused on getting our bodies
moving through daily step tracking. With representatives
from all over the globe entering, our top stepper achieved
an incredible 130,000 steps to claim top prize. This was
followed by an amazing team effort from the Mauritius
office to highlight their connections and creativity at JTC.
These initiatives continued to flourish through our regularly
scheduled ‘Wellness Wednesdays’. This helped employees to
explore what wellbeing means to them whilst also sharing a
sense of connection to the communities around them and the
support network at JTC.
Promotions across the globe
At JTC we believe in meritocracy where everyone is judged
equally and rewarded for their contribution to the business.
In 2022, we were delighted to see 276 of our people
promoted within their roles, covering all levels of seniority
from Administrator to Group Director within teams across
JTC. These promotions were made in recognition of each
employee’s individual performance, commitment to structured
professional development and contribution to JTC’s ongoing
growth. The promotions span teams across JTC’s Institutional,
Private Client and Group Central Services divisions, including
Fund Services, Employer Solutions, Private Client, Corporate
Services, Finance, Human Resources, Office Services, Business
Development andMarketing, Risk and Compliance, Regulation,
and Banking and Treasury.
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43 JTC Annual Report 2022
JTC ACTIVE
Under the JTC Active banner, our global office network
undertook 26 sporting events to promote leading a healthy and
active lifestyle alongside supporting a number of charities. The
events ranged from football games, beach walks, marathons,
relays and a whole office sports day for numerous worthy
causes. In February, 32 JTC employees from Jersey, Guernsey,
London, Geneva, Amsterdam and the USA joined together
to participate in the 4th Annual ‘Virtual’ Race the Thames
Challenge. With teams of eight trying to complete 346km in
a week, our participants ran, swam and cycled over 1,634km
between them whilst also raising money for London Youth
Rowing. The Group-wide ‘Walk All Over Cancer’ initiative
continued to prove popular in its third year, raising £2,825
for Cancer Research UK with 70 of our people committed to
walking 10,000 steps a day in March. Our Mauritius Team also
participated in a company sports day, spanning three days
with events from futsal, archery, badminton to dance. They
managed to place second in the dance competition, with the
team enthusiastically dressed in JTC colours to show off their
routine. By highlighting achievements and gathering together
virtually or in person, we all shared in the collective success of
promoting and encouraging overall wellbeing, healthy living
and positive mental health internally and externally in our
communities.
JTC SOCIAL
After several years of experiencing remote working and being
away from their colleagues, our global teams were excited
to come together in 2022 for all sorts of social events and
celebrations. Company wide activities inspired many of our
jurisdictions to reconnect and get to know new colleagues
in our ever expanding global team of 1,500+. A number of
virtual events were held including musical bingo and quizzes,
as well as in-person parties and end of year gatherings.
Throughout December our teams were treated to our annual
#FestiveTogether celebrations, a month long calendar of holiday
activities that spotlighted our community and also supported
those in need through charitable giving.
Some of the most popular events were our global PRIDE
celebrations, which took place across the Group in September.
Alongside educational articles and other resources, our
employees got a chance to celebrate together with rainbow
cupcakes and sweet treats.
EMPLOYEE COMMUNICATIONS
Following seven acquisitions in 2021, JTC’s expanding global
reach has put efficient and timely communications at the
forefront of the employee engagement agenda. In the spirit of
our Stronger Together culture, JTC encourages an environment
of open communication and feedback, meaning we are
constantly providing updates on everything from PLC news,
spotlights on charitable giving, Divisional product updates or
articles on market insights. At JTC, communications build our
vibrant community.
1,500
no. of employees
JOOGLE
In 2022, we published over 500 stories on our intranet, Joogle
and the site won a ‘bronze’ accolade at the Digital Impact
Awards. The platform continues to grow its influence and
reach, clocking up 789,873 unique page views and 11,189
comment interactions over the year. Joogle provides a central
hub for disseminating Group and Divisional updates, but also
helps to spotlight the social events, charitable endeavours and
work achievements of our JTC community to bring our global
network to life. With JTC now spanning 32 global offices, the
Communications Champions forum provided another avenue
for employee connection and communication. The monthly
meetings are attended by volunteer representatives of all levels
from each jurisdiction, with members discussing the latest
Company-wide news and providing on the ground feedback in
relation to Group activity. In 2022, the forum held 12 meetings,
with 48 members in 17 Jurisdictions. We also welcomed guest
speakers from senior leadership (including COO/CSO Wendy
Holley, Group HR Director Carol Graham and Katie Zolnierz,
Director, ESG Reporting, all of whom participated in lively and
enlightening discussions.
Our ‘Ask Me Anything’ live video podcast with CEO Nigel
Le Quesne offered all employees an opportunity to hear
directly from the top about JTC’s strategic objectives, key
operational initiatives as well as an insight into his personal
career journey. Nigel was also the feature of a series of videos
titled ‘An Audience with Nigel Le Quesne’ that were shared
internally and allowed him to talk candidly about his part in
the growth of JTC over more than three decades. A second ‘Ask
Me Anything’ video podcast episode with Iain Johns, Group
Managing Director and Group Head of Private Client Services,
as the guest, was broadcast post period end.
JTC WELLBEING CONTINUED
Getting active, being social and the
power of communications
£225,000
total donated to charities
MAXIMISING POTENTIAL
Teams from across JTC’s global network helped fundraise over
the course of 2022 as part of an initiative marking the firm’s
35th anniversary that was aimed at supporting local charities
that specifically benefitted young people. Education remains
a priority, as over the last few years the impact of Covid on
education has been felt worldwide. The World Economic Forum
highlighted that over 1.5 billion students across 188 countries
faced educational disruption due to the pandemic, causing
lasting effects on the education of an entire generation. The
impact of educational disruption for young people represented
an opportunity for all of us at JTC to make a difference where
it is needed most.
Alongside a donation from JTC, employees from across
the Group’s offices organised and hosted a broad range of
fundraising events in their local communities over the year,
raising a grand total of £106,506 for 24 different charities in
more than 20 locations spanning Europe, the Americas, the
Caribbean, Africa and Asia. Fundraising highlights over the
year included Amsterdam’s Kikathlon, Cape Town’s Mandela
Day celebrations, Edinburgh’s mountain climbing, the Tough
Mudder in Fareham, a quiz night in Guernsey and a charity
raffle in Jersey.
The firm’s overall fundraising success in 2022 means that,
since the launch of Maximising Potential in 2021, more than
£190,000 has been donated to charities around the world, all
supporting young people in diverse ways.
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44 JTC Annual Report 2022
At the heart of JTC’s success is the Shared Ownership
ethos, dedication, commitment and energy of the entire
JTC team across the globe. Our talented and hard-working
employees are committed to giving their time and energy,
volunteering for local causes and supporting charities
through various fundraising activities to make a difference
where it is needed most. After a year being back in the
office, it remained important that as a company we stand
stronger together and embracing the JTC spirit of helping
and giving back to our local communities. In 2022, we
donated, fundraised and contributed £225,000 through
our charitable and employee engagement activities.
Payroll Giving Enhancement
In 2022 JTC continued to provide employees in participating
jurisdictions with the opportunity to donate to a chosen charity
through payroll giving. JTC pledged to match up to 50% of
donations. It was announced in late 2022 that from March
2023 JTC will be enhancing this pledge to match 100% of
donations up to the value of £25 a month, so that together
we can make a bigger difference.
2022 Season Greeting Charity of Choice
To celebrate the festive season JTC continued its tradition of
picking a worldwide charity to support through a donation
being made in lieu of printed and posted client Christmas
Cards. In light of the ever growing global hunger crisis, JTC
donated £5,000 in support of the UN World Food programme,
which was announced in our 2022 Christmas card video. By
supporting the UNWFP, our donation will be used to help fund
emergency relief and food assistance programmes for people
that are facing acute food insecurity due to conflict, climate
crisis and a global rise in the cost of living.
JTC SUPPORTS
Charitable giving
£5,000
donated in lieu of printed Christmas cards
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45 JTC Annual Report 2022
GROWING RESPONSIBLY
MANAGING AND EMBRACING RISK TOGETHER
RISK MANAGEMENT
Effective risk management has been at the bedrock
of JTC’s long-term growth and remains an essential
ingredient for the Group’s continued success.
As a regulated professional services firm, our clients,
regulators and other stakeholders rightly expect that the
Group delivers value whilst operating in a safe, compliant
and responsible manner within our risk appetite. We
therefore continue to place significant importance on
the application of effective and strong risk management
and compliance standards and practices. This includes
not only a thorough understanding of the risks faced by
the Group but also the those risks faced by our clients to
support the services we provide.
The Group’s Shared Ownership culture supports an
ethos where the ownership and management of risk is
understood to be the primary responsibility of those
whose activities create the risk with support from
specialists who providing expertise, insight and assurance
to the risk owners. It is this shared responsibility and
understanding of risk that helps to ensure that the
Group remains well positioned on its continuing journey
of growth and development.
During 2022, the external environment produced several
areas of attention for the Group including the impacts of
geopolitical instability, the advance of regulatory and ESG
standards/expectations, post-pandemic developments
in the workplace and an increasingly sophisticated and
challenging technological landscape.
The Group’s well-established risk management processes
have proved to be reliable mechanisms to successfully
manage these risks as they emerged. For example, the
reaction to Russia’s invasion of Ukraine in February 2022
prompted a focus upon the impact on the increasingly
stringent global sanctions and transparency measures
deployed by the international community. Whilst
the Group had very limited direct exposure to either
country, the imposition of varying sectorial sanctions
and enhanced ownership disclosure measures by the
international community posed some complex questions
for the Group to consider to ensure ongoing compliance.
The Group was able to leverage existing control
mechanisms to manage the challenges of these newly
introduced measures.
RISK MANAGEMENT FRAMEWORK
The Board has overall responsibility for setting JTC’s risk
appetite, and ensuring we identify any risks that could
affect the Group’s corporate strategies, and that we
manage them effectively.
During 2022 the Board undertook a review of its delegated
Committees with the aim of enhancing certain aspects
of the Group’s corporate governance arrangements
and aligning the skillsets and experience of the Non-
Executive Directors. Consequently, the Board determined
that the oversight of risk would move from the Audit &
Risk Committee (subsequently renamed as the “Audit
Committee”) to a newly-formed Governance and Risk
Committee. The Board therefore now delegates the
oversight of risk to the Governance and Risk Committee
consisting of four Independent Non-Executive Directors.
In addition to the oversight of risk, the Committee’s remit
includes the ongoing monitoring, management and
mitigation of principal and emerging risks and advising
From left to
right: George
Kellogg III,
Sarah Kittleson,
Tina Leslie and
Richard Ingle.
RICHARD
INGLE
Chief Risk
Officer
the Board on the Group’s overall risk appetite, tolerance
and strategy.
The Group maintains a strong risk awareness culture,
set from the very top of the organisation and with
risk ownership clearly assigned. We manage risk in a
consistent manner, aligned with the Board’s stated risk
appetite and ensuring compliance to all applicable rules
and regulations. Our risk framework enables the business
to protect value, helping us identify opportunities
and minimise threats to achieving our strategic and
operational objectives.
A specialist team of Risk and Compliance professionals
operate throughout the Group to:
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46 JTC Annual Report 2022
RISK MANAGEMENT CONTINUED
• identify and support the management of risk
• monitor and report on the effectiveness of
riskcontrols
• support the resolution of risk and
regulatorychallenges
• advise on regulation and controls
• manage regulatory relationships.
The Group-wide risk management framework is designed
to be commensurate with JTC’s evolving structure, risk
profile, complexity, activities and size. We adopt an
industry-standard, three lines model, the main features
of which are as follows:
• The Board and senior management sit above the three
lines and have collective responsibility for setting
organisational objectives, defining strategies to
achieve them and establishing the necessary
governance risk management and control frameworks
to manage the risks and their achievement.
• Our first line, our employees, have a responsibility to
manage day-to-day risk in their own areas, guided by
Group policies, procedures and control frameworks.
Local management, and ultimately the Board, ensure
risks are managed, maintained, reviewed, escalated
and actioned.
• The second line is the Risk and Compliance function.
Its role is to help to build, monitor and support the
activities of the first line. Group companies maintain
key regulatory and compliance personnel (for
example, Compliance Officers, Money Laundering
Reporting Officers and Money Laundering
Compliance Officers) in accordance with local
regulatory requirements.
• The third line is Internal Audit (“IA”), which is
responsible for providing independent assurance on
the effectiveness of governance, risk management
and control over current, systemic and evolving
risks.This is further supported by the testing of
keycontrols through the formal external audit
programme, and regular external visits and
regulatory inspections across the Group’s
regulatedbusinesses.
• The Legal function provides support to all areas
ofthe Group and is not formally part of any of
thethree lines.
APPROACH TO RISK APPETITE
The Board, via its Governance and Risk Committee,
seeks to align risk-taking with the Group’s statutory
requirements, strategic business objectives and business
planning. Our Group Risk Appetite Statement aims to
reflect the balance required between risk-taking and the
commercial and reputational implications of doing so,
promoting good customer outcomes and protecting the
Group from excessive exposure.
The Group Risk Appetite Statement provides qualitative
statements across various categories of risk that informs
strategy, targets, policies, procedures and other controls
that collectively ensure we remain within the Board
approved risk appetite.
The Board recognises that appropriate risks need to be
taken in order to meet its strategic objectives and deliver
benefits to its customers and stakeholders. However, we
aim to ensure a well-controlled actively managed and
appropriate level of risk, commensurate with a balanced
and sustainable level of return. The risk appetite levels
determined by the Board are Group-level goals, and there
is scope within a well-balanced business portfolio to have
a mixture of risk levels within certain tolerances, as long
as the overall portfolio is consistent with the Board’s
riskappetite.
The Group has a low overall appetite for risk and does
not expect to incur high levels of risk, and actively seeks
to avoid or mitigate such risks by utilising appropriate
resources, processes and technology frameworks. In line
with its approach for continuing stability the Group Risk
Appetite Statement remained unchanged during 2022.
As a general principle, the Board has a low tolerance for,
and will therefore seek to control, all risks which have
the potential to:
• cause non-compliance with law and regulation;
• compromise the Group’s ability to operate effectively;
• adversely impact the Group’s reputation;
• have severe financial consequences which may
impact on the Group’s future viability; or
• expose stakeholders to harm or loss.
LEVEL 1 RISK
CATEGORY
RISK
APPETITE
DESCRIPTION
Strategy
Delivery
OPEN
The Board has an appetite that is open to innovation and that aims to remain
competitive to avoid failing to attract new business and/or grow existing business.
It iswilling to seek inorganic growth and exposure to new markets and sectors to
allow the Group to achieve its strategic objectives.
The Board will aim to protect the Group franchise from material damage to its
reputation from strategic delivery by ensuring that business activity is satisfactorily
assessed and managed by the appropriate level of management and governance
oversight. There is tolerance to take decisions with potential to expose the Group to
higher inherent risk and additional scrutiny but only where appropriate steps have
been taken to minimise any exposure and appropriate consideration is given to the
risk/reward ratio.
Risk appetite is tempered, where appropriate, to the Board’s approach to sustainability
and the Group’s determination to be a carbon neutral organisation.
Operational MINIMAL
The Board has no tolerance for the poor delivery of client service, taking on the wrong
type of clients, failed business continuity or loss of client data and therefore has
minimal appetite for such situations. It seeks to control operational risks to ensure
that operational risks (financial and reputational) do not cause material damage to
the Group’s franchise.
The Board seeks to avoid risk and uncertainty for its critical information assets and
systems and has a minimal risk appetite for material incidents affecting these or the
wider operations and reputation of the Group.
The Board has tolerance for minor operational delays to individual projects/
milestones but not at the expense of a major work area or deliverable.
Legal CAUTIOUS
The Board has a cautious appetite for engagement in litigation and contractual
disputes. It recognises that the nature of fiduciary services carries specific legal
obligations which make exposure to involvement in legal disputes unavoidable.
Financial MINIMAL
The Board has no tolerance and minimal appetite in failing to meet its financial
forecasts, exposing earnings to currency fluctuations, incurring impairment losses,
exposure to fraud or not meeting loan covenant obligations.
Political/
Regulatory
MINIMAL
The Board has no tolerance and minimal appetite for non-compliance with regulatory
requirements including applicable listing rules, financial services legislation and
regulation and, in particular, non-compliance with anti-money laundering and
counter-terrorism legislation. It recognises that failures in compliance cannot be
entirely avoided. However the Group strives to reduce these to an absolute minimum.
Exceptionally, the Board has tolerance to provide regulatory challenge in cases of
ambiguity or where a clear difference of opinion as to compliance arises.
Human
Resources
MINIMAL The Board has a minimal appetite for decisions that could have a negative impact on
workforce development, recruitment and retention. The Board also has a minimal
appetite for risks of misconduct by employees. It has tolerance for a more cautious
approach to risk when poor performance is identified to ensure improved performance
and/or alignment of talent to work opportunities.
MINIMAL: Preference for
ultra-safe business
outcomes or options that
have a low degree of
inherent risk and only for
limited reward potential.
RISK APPETITE LEVEL DEFINITIONS
CAUTIOUS: Preference
forsafe outcomes or
options that have a low
degree of inherent risk and
may onlyhave limited
potentialfor reward.
OPEN: Willing to consider all
potential outcomes and options and
choose one that is most likely to
result in a successful outcome whilst
providing an acceptable level of
reward (or value for money)
SEEK: Eager to be
innovative and to choose
outcomes and options
offering potentially higher
business rewards despite
greater inherent risk
MATURE: Confident in
setting high levels of risk
appetite because controls,
forward scanning and
responsiveness systems
are robust
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47 JTC Annual Report 2022
JTC PLC BOARD
JTC PLC AUDIT AND RISK COMMITTEE*
GROUP RISK COMMITTEE
LEGAL – FINANCIAL – POLITICAL/REGULATORY
HUMAN RESOURCES – OPERATIONAL –
STRATEGIC – REPUTATIONAL
KEY RISK TYPES
EACH JURISDICTION
Local risk owners ensure we maintain a rigorous control environment.
Local Risk & Compliance personnel hold regulatory roles and support
local risk owners.
Monthly reporting provided to Group Risk &Compliance.
GROUP RISK OWNERS – GROUP RISK & COMPLIANCE – GROUP
INTERNAL AUDIT
THREE LINES MODEL
RISK OVERSIGHT
The Group Risk Committee comprises the Group Chief
Executive, Divisional Group Heads, Chief Risk Officer,
Chief General Counsel and Group Director – Risk &
Compliance. This Committee maintains responsibility
for considering the risk types that may affect the Group
including, but not limited to, strategic risk, operational
risk, regulatory risk, legal risk, human resources risk,
technology risk (including data security risk), client risk,
fiduciary risk and performance risk.
The Group Risk Committee meets monthly and is
responsible for overseeing the Group’s internal risk
framework. It periodically evaluates the adequacy of
systems and controls for identifying and managing
risk and regulatory compliance. It monitors trends and
reviews issues that may present material risks at Group
level, as well as considering significant or imminent
changes to the risk and regulatory environment and
available mitigants. The Committee is also mandated
under its Terms of Reference to advise the Group regularly
on the risk management and regulatory compliance
implications of its overall business strategy, culture and
risk appetite, taking account of macroeconomic as well
as operationalconditions.
The Group Risk & Compliance function provides assurance
through regular reporting of the independent compliance
monitoring programme in each jurisdiction.
The Internal Audit function provides independent
assurance that the Group’s risk management, governance
and internal control processes are operating effectively.
During 2022, the Internal Audit function has further
supported oversight of the Group’s operations and
gained further insight as it prepares to further develop
its capabilities.
.
KEY CONTROLS
As referenced earlier, developments in the external
environment tested the effectiveness of the Group’s key
controls during 2022. It was reassuring that the Group was
able to continue to operate and manage its risks without
any recalibration of risk appetite or control measures.
Nor during the year were there any significant regulatory
interventions impacting the Group. Key controls remain in
place to ensure we monitor and manage all elements of our
business activities, including fiduciary risks. These include:
• high level of jurisdictional Director control
overprocesses
• dedicated Group monitoring function
• defined authority mandates and Terms of Reference
• controls ensuring separation of transaction approval
and payment
• regularly updated cyber security policies, protections
and penetration testing
• a strong IT platform and business continuity
arrangements
• a rigorous human resource screening and on-
boarding process
• experienced and professionally qualified employees
• regular risk and compliance updates.
Many of these controls are captured by the rigorous,
bespoke JTC Recommendation for Signing (RFS) approval
process. This internal control tool ensures we document,
review and approve all business decisions and transactions
thoroughly at an appropriate level on a ‘six-eyes’ basis.
This process is supported by a formalised Group Risk
Escalation process that ensures the timely identification
and consideration of risk events aimed at supporting
timely intervention and risk mitigation. The majority
of escalated risks continue to originate from first-line
business units indicating a healthy cultural approach to
risk ownership and resolution.
The Group also holds appropriate insurances in excess
ofregulatory requirements to underpin further its
controlenvironment.
RISK MANAGEMENT CONTINUED
* On 9 December 2022 the Company announced the formation of a stand-alone Governance and Risk Committee of the Board. As a result of the
formation of the Governance and Risk Committee, the existing Audit & Risk Committee was renamed the “Audit Committee” and the Terms of
Reference, including the scope of responsibilities, amended appropriately.
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48 JTC Annual Report 2022
Very unlikely
CriticalLow
Very likelyLIKELIHOOD
IMPACT
1
2
3
4
5
6
7
8
9
10
Our principal risks are reported gross (before mitigating controls)
STRATEGIC RISK
1 Acquisition
2 Competitor & Client demand
3 Strategy
OPERATIONAL RISK
5 Client & Process
6 Data Security
LEGAL RISK
9 Fiduciary
FINANCIAL
4 Performance of Business
POLITICAL &
REGULATORY RISK
7 Political Regulation
8 Financial Crime
HUMAN RESOURCES
RISK
10 Adequate Resources
RISK TYPES
PRINCIPAL RISKS
JTC operates a Risk Register that aims to categorise its
risks across six key (Level 1) risk types and 18 (Level 2)
sub-risks. In reviewing these categories of risk, we have
identified what we believe are the principal risks.
A principal risk is a risk or combination of risks we have
assessed as having the capacity to seriously affect the
performance, future prospects or reputation of the Group.
These will include risks we consider could threaten our
business model, future performance, solvency or liquidity.
In addition, as part of our horizon-scanning activities we
also identify risks that are not yet considered to be principal
risks, but we identify as emerging risks – those that may, in
time, pose a threat to the Group’s business model. We have
outlined these at the end of the section, and they include
employee wellbeing, third-party data compromise and the
emerging global threat of climate change.
The Group’s principal risks are periodically re-examined
and reported by the Chief Risk Officer to the Governance
and Risk Committee with an assessment on (i) their
impact if they were to occur and (ii) the likelihood of
occurrence, together with a description of the controls
and mitigation in place to manage those controls and any
actions deemed necessary by the risk owner to further
reduce the assessed residual risk.
LEVEL 1 LEVEL 2
Primary, overarching risk elements,
containingSIXcomponents
Represents the cohorts of
specific risks JTC is exposed to
Principal
risk
1. STRATEGIC Acquisition
Competitor and client demand
Strategy
2. FINANCIAL Performance of business
Earnings (fx)
Impairment
Financing
3. OPERATIONAL Client & process
Business continuity
Data security
4. POLITICAL/REGULATORY Listing rules
Political/regulation
Financial crime
5. LEGAL Litigation/contractual
Fiduciary
6. HUMAN RESOURCES
Adequate resources
Retention
Key person
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49 JTC Annual Report 2022
PRINCIPAL RISKS
PRINCIPAL RISK (RISK OWNER) POTENTIAL CAUSES KEY MITIGATION MEASURES TIMESCALE
1
ACQUISITION RISK
(Group Chief Executive Officer)
The risk that acquisitions do not achieve intended objectives, give rise to ongoing
orpreviously unidentified liabilities, disrupt operations and divert senior management
time and attention.
Inorganic growth in 2022 was limited to the acquisition of New York Private
TrustCompany.
• Inadequate due diligence
• Economic misjudgement
• Lack of strategic clarity
• Ineffective or delayed integration
• Unpredicted changes to
externalenvironment
• Strict due-diligence process, including JTC subject-matter experts
andthird-party assessments by experienced external advisors
• Appropriate scrutiny and challenge from Group Development
Committee, Group Holdings Board and Non-Executive Directors
• Established and tested integration strategy agreed prior to acquisition
with robust post-acquisition governance
• Experienced management team
• Shared ownership to align interests and deferred consideration
• Insurance run-off cover
• Vendor representations and warranties (backed by insurance
whereappropriate)
This risk will diminish
over time as each
acquisition is
integrated, but current
strategic intentions are
likely to cause this risk
category to remain as
a principal risk.
2
COMPETITOR AND CLIENT DEMAND RISK
(Group Chief Executive Officer)
The risk of failing to anticipate client demand or to innovate in line with key
competitors, or advancing technology or regulatory/political change may lead to
significant loss of potential or existing business.
JTC operates in a competitive and fast-paced global market requiring a responsive
approach to client demand and behaviour, competitor activity, innovation,
economic and regulatory changes and geopolitical events.
• ‘Black swan’ events
(e.g.pandemic)
• Competitor actions
• Political trends
• Economic conditions
• Market conditions
• Regulatory changes
• Technological changes
• Chief Commercial Officer appointed to Group Holdings Board
• Group Holdings Board responsibility for identifying forthcoming
requirements in respect of digital and business systems investment and
continually considering emerging threats due to market conditions,
taking mitigating action as appropriate
• Group Holdings Board responsibility for identifying and prioritising
product innovation
• Commercial Enterprise Forum to assess, prioritise, de-risk and
commercialise opportunities
This risk is largely
influenced by external
factors andis
therefore likely to
remain acontinuous
principal risk.
3
STRATEGY RISK
(Group Chief Executive Officer)
The risk that inadequate strategic decisions or failure to execute the set strategy
has a detrimental impact on Group operations, clients and market confidence.
Alternatively, the Group’s strategy brings excessive risks to the business or does not
sufficiently align to changing market conditions or client requirements, such that
sustainable growth, market share or profitability is affected.
The Group continues to pursue its strategy of organic and inorganic growth with a
particular focus on building our presence in the United States, Ireland, Luxembourg
and the UK.
• Operation outside of
riskappetite
• Product or service failure
• Senior management or
leadership changes
• Legal or regulatory challenges
• Lack of understanding of a
newjurisdiction
• Overarching strategy is set every three to five years and progress is
periodically re-examined
• Strategy regularly reviewed and challenged by Board and, as a listed
entity, subject to investor and third-party scrutiny
• Strategy drives annual business planning process and performance-
based targets
• Risk-taking and aversion in pursuit of strategic objectives is balanced
through the setting and overseeing of the Group Risk Appetite
Strategic risk is an
ongoing risk for
anybusiness and
therefore is likely
toremain as a
continuous
principalrisk.
4
BUSINESS PERFORMANCE RISK
(Group Chief Executive Officer)
The risk that the Group does not meet its financial forecasts or does not achieve
the provided market guidance.
JTC is listed on the London Stock Exchange and subject to market consensus
expectations that can influence shareholder value.
• Inadequate budgeting and
forecasting
• Unpredicted costs or losses
• Lack of information provided to
brokers and analysts
• Budgets set annually and agreed with Divisional Heads, Jurisdictional
Managing Directors and P&L account owners
• Monthly reporting and KPIs that help monitor performance against
performance assumptions and targets. Active review by Group Holdings
Board together with PLC Board
• CEO and CFO regular engagement with analysts to inform external
market guidance
• Insurance cover for losses
Business performance
risk is an ongoing risk
for a business,
especially for a quoted
business. This risk is
therefore likely to
remain as a continuous
principal risk.
The Group’s current principal risks are the risks we are managing nowthatcould stop us achieving our strategic objectives:
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
50 JTC Annual Report 2022
PRINCIPAL RISKS CONTINUED
PRINCIPAL RISK (RISK OWNER) POTENTIAL CAUSES KEY MITIGATION MEASURES TIMESCALE
5
CLIENT AND PROCESS RISK
(Group Divisional Heads)
The risk of the Group taking on the wrong type of clients, or the Group or the client’s
actions during the client life-cycle leads to losses, failed strategic objectives, reputational
damage, poor customer service and employee frustration and potentially regulatory
censure. The risk of failing to clearly define service provision or fulfil a role expertly.
The risk that lack of relevant process or incorrect, inconsistent, or untimely execution of
processes or internal change leads to a material operational error and the consequential
adverse impact.
• Failure to apply policies and
follow procedures
• Failure to follow codes
ofconduct
• Failure of managerial oversight
• Failure to adequately train and
develop employees
• Failure to identify and remediate
identified issues promptly
• Inadequate policies
andprocedures
• Strict adherence to policy and procedures including business acceptance
and periodic reviews, with appropriate escalation for higher-risk clients
• Established Terms of Business, template customer agreements and Legal
review of tailored agreements
• Regular staff training and awareness initiatives
• Established reporting and escalation process with review by boards and
committees as appropriate
• Independent client and Compliance monitoring review programme
• Promoting a robust risk and compliance culture across the Group
• Ensuring quality administration and compliance resource in each
jurisdiction plus internal legal counsel support as appropriate
• Well established Recommendation for Signing process
• Three-lines model for assurance and controls including Internal Audit (“IA”)
• Well understood and defined Risk Escalation processes
• Accessible policy and procedure framework
Client and process risk
remains a continuous
principal risk for
thebusiness.
6
DATA SECURITY RISK
(Group Chief Executive Officer)
The risk of a security breach including cyber-attacks by destructive forces from
both internal and external sources, leading to loss of confidentiality and integrity
ofdata.
The sophistication of cyber threats is constantly evolving; criminals will seek
toexploit changes in working environments e.g. remote-working practices.
Asubstantial cyber event could be detrimental to JTC’s clients as well as erode
market and regulator confidence.
• Unauthorised data transfer
• Malware
• Financial theft
• Denial-of-service attacks
• Cyber phishing attacks
• Network service failures
• Employee error
• Malicious employee intent
• Security breach of client data or
systems
• Defined and audited IT procedures
• External security assessment conducted annually
• System access controls including least privilege access model
• Dedicated Senior IT Security Manager and Team
• Training including compulsory online Security Awareness courses
forallemployees
• Alignment to industry security standards
• Review of data security procedures and controls as part of the annual
ISAE 3402 Report
• Access to group systems and data is granted on a need-to-know basis
and least privileged
• Industry-leading solutions for end-point management, anti-virus,
dataloss prevention, Privilege Access Management and secure
emailcommunications
Data security risk
remains a continuous
principal risk for
thebusiness.
7
POLITICAL/REGULATION RISK
(Group Chief Executive Officer)
The risk that the JTC business operating model is adversely affected by political or
regulatory changes which affect the markets or services we offer together with our
client base.
Risk of exposure to regulatory sanction and subsequent reputational damage given
a failure to follow regulatory laws, orders and codes of practice requirements.
As the regulatory environment continues to develop, we expect a continuing
globaltrend of increased regulatory scrutiny and intervention for all regulated
businesses including trustee, fund and corporate service providers. The Group is
well positioned to comply with relevant requirements and to be able to operate
inthis changing regulatory environment.
• Geopolitical uncertainty
• Regional or global standards
orrequirements with
disproportionate impact
• Political reaction to wide-scale
data leaks and associated
negative press coverage
• Balancing increased
transparency requirements
withincreased data
protectionlegislation
• Challenge and cost of
measuring, monitoring
anddemonstrating good
conduct aswell as meeting
newrequirements
• Keeping pace with rapid
regulatory change and
reportingrequirements
• Specialist risk and compliance staff with the skills needed to monitor
and report on strategic outlook and the impact of change
• Review by appropriate boards and committees, and scanning of horizon
for potential changes
• Comprehensive policies, procedures and processes in operation within
the Group that align to the appropriate regulatory regimes.
• Embed (and continue to promote) a robust risk and compliance culture
across the Group from PLC Board down through the organisation.
• Ensuring appropriate compliance resource in each jurisdiction
• Compliance monitoring programme in place
• Training employees to be aware of changing regulations
• Involvement with trade associations and government bodies
tounderstand direction and influence outcome
Political and
regulation risk is
expected to remain a
continuous principal
risk for the business.
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51 JTC Annual Report 2022
PRINCIPAL RISK (RISK OWNER) POTENTIAL CAUSES KEY MITIGATION MEASURES TIMESCALE
8
FINANCIAL CRIME RISK
(Group Divisional Heads)
The risk of the Group operating inadequate systems, procedures and controls that fail
toprevent the administration of client structures that are exposed to financial crime.
(NOTE: Financial Crime Risk includes money laundering, terrorist and proliferation
financing, sanctions, fraud, bribery and corruption and tax evasion risks).
This is an area where there is intense regulatory attention and scrutiny. The Group
iscommitted to the highest standards of ethical behaviour and operates in a manner
designed to deter and prevent financial crime risk. There is focused oversight and
monitoring of financial crime risks, and adherence to both internal financial crime
policies and regulatory obligations.
• Poor culture
• Inadequate awareness training
• Poor Know Your Client processes
• Inadequate record keeping
• Deficient screening processes
• Lack of a risk-based approach
• AML/CFT arrangements not
tailored to business profile/
characteristics
• Procedural failures
• Failure to report suspicious
activity on a timely basis
• Comprehensive policies, procedures and processes in operation within
the Group that are specifically drafted for AML/CFT purposes
• The hiring of capable employees in each jurisdiction that undertake the
key person roles (e.g. Compliance Officer and Money Laundering
Reporting Officer)
• Frequent mandatory staff training and awareness initiatives and
CPDrequirements
• Compliance monitoring testing programme in place
• Access to external consultants and databases to enable daily ongoing
monitoring and in depth enquiries on clients as appropriate
• Established Business Risk Assessment (BRA) process which is subject to
periodic Board review
Financial crime risk is
expected to remain a
continuous principal
risk for the business.
9
FIDUCIARY RISK
(Group Divisional Heads)
The risk of breaching fiduciary duties, including failing to safeguard client assets,
can be harmful to the Group’s reputation and could become subject to high-value
litigation. There is also the risk in failing to clearly define the Group’s role in
providing services to a client structure or service vehicle or a failure to fulfil
theroleexpertly.
JTC operates a comprehensive set of controls to prevent risk materialising in
relation to its fiduciary duties. A change in the market conditions causing lower
valuations of higher-risk investments, could change risk exposures and fiduciaries
may begin to experience increased regulatory scrutiny and litigation with regard
toresponsibilities.
• Breach of duty
• Failure to act in accordance with
constitutional documents or
service agreement
• Failing to exercise reasonable
care, skill and diligence
• Failure to declare interests of
manage conflicts
• Making impartial judgements
• Strict policies, procedures and processes in operation within the Group
(particularly risk escalation and recommendation for signing policy)
• Qualified and experienced staff operating within ‘4-eyes’ control
parameter
• Continuous training programme and CPD requirement
• JTC does not provide legal or tax advice to its clients
• Significant insurance cover
Fiduciary risk is an
endemic feature of JTC
business operations
and is expected to
remain a continuous
principal risk.
10
ADEQUATE RESOURCES RISK
(Group Chief Operating Officer)
The risk of failure to attract or retain the best people with the right capabilities
across all levels and jurisdictions.
The repercussions of the global pandemic have significantly altered the workplace
and the employment market in many jurisdictions. Remote-working practices
initiated during early lockdown measures have been embraced into business-as-
usual flexible working arrangements utilising the Group’s existing strong
technologycapabilities.
Regretted attrition is carefully monitored in view of changes in employee attitudes,
skills shortages and inflationary pressures that have the potential to be disruptive
to the Group’s workforce.
JTC continues to focus on employee satisfaction (launching an employee survey
during 2022), succession planning and personal development, including supporting
professional qualifications.
• Uncompetitive remuneration
• Unappealing working
environment and inadequate
support
• Lack of adequate succession
planning
• Failure to invest in appropriate
and timely talent development
• Failure to identify roles most
important to achieving strategic
aims
• Failure to identify the required
skills for key roles
• Insufficient focus on attitude
and motivation and alignment
with JTC’s vision and values
• Dedicated in-house human-resource recruitment capability with
detailed understanding of business needs and local market environment
• Recruitment strategy to enhance and bolster teams, succession planning
and employee value proposition
• JTC ensures that the remuneration package is competitive in the
marketplace and benchmarks with peer group
• Management monitoring of capacity and work loads
• Shared ownership scheme embedded across the business
• JTC encourages a strong management culture where talent management
and people development is a core focus
• Pre-employment screening
• Internal and PLC Remuneration committee
• Staff access to Academy (Training), Gateway (International Transfers)
and wellbeing programs
• Flexible working arrangements
Adequate resourcing
risk is expected to
beacontinuous
principalrisk.
PRINCIPAL RISKS CONTINUED
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52 JTC Annual Report 2022
EMERGING TOPICS AND RISKS
As standard procedure, we consider topics or risks on
an ongoing basis that may have unpredictable and
uncontrollable outcomes directly or indirectly (via our
clients) on the Group that we do not yet consider to be
principal risks, but may, over time, pose a threat to our
business model. Some of these topics or risks may be
interconnected and remain under review over a sustained
multi-year period whereas others may be short-lived.
GLOBAL MACROECONOMIC
Global macroeconomic developments and geopolitical
tensions heightened by the conflict in Ukraine, high
inflation, higher interest rates, the energy crisis, supply
chain shortages and the risk of a global economic
downturn all point to a greater fragility that has the
potential to slow investment and global growth. Whilst
the Group is unable to control these risks we remain
vigilant to their impact and react accordingly e.g. to
attract and retain talent in a competitive employment
market beset by wage inflation.
ENVIRONMENT AND SOCIAL
There is an increase in stakeholder expectations around the
provision of services to sensitive sectors, fair and balanced
disclosures relating to environmental targets and scrutiny
around greenwashing set amongst a fragmentation in the
pace and scale of ESG regulation around the world which
adds complexity in managing a global business. Whilst this
scenario poses business opportunities for the Group, there
are risks if the Group is required to align to new fragmented
regulations quickly. We seek to manage these risks through
our existing Group ESG Framework and the appointment
in 2022 of our first Chief Sustainability Officer.
REGULATORY DEVELOPMENTS
Regulatory scrutiny and intervention remains a continuing
feature in the markets where we are regulated. With many
regulatory regimes subject to assessment by international
standard setters, there remains a continual introduction of
new regulations and regulatory powers that are considered
necessary to meet the assessment standards causing an
inevitable increase in the cost ofcompliance.
Failure of a jurisdiction to achieve an acceptable
assessment rating can be detrimental to businesses
operating in those jurisdictions.
Additionally, during 2022, measures aimed at improving
corporate transparency were countered by a European
Court judgement reinforcing an individual’s right to
privacy creating ongoing uncertainty in this area.
The Group seeks to mitigate these risks by proactive
horizon scanning, actively engaging, where appropriate,
with regulatory consultations, providing thought
leadership to regulators/legislators and operating to the
highest regulatory standards.
DATA AND DIGITAL
Regulatory requirements and client expectations
relating to data management and quality, including
data protection and privacy, data sovereignty, the use of
Artificial Intelligence (AI) and the ethical use of data are
increasing. In some cases, regulation is also becoming
more fragmented and complex, requiring more resources
to ensure ongoing compliance.
Data protection risks are already recognised as a principal
risk but remain on the increase driven by highly organised
and sophisticated threat actors, with developments such
as ransomware as a service.
We seek to mitigate these risks by ensuring our data
protection standards are aligned to international
standards and stakeholder expectations including
specialist data protection systems and personnel, business
continuity and incident response plans.
PRINCIPAL RISKS CONTINUED
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53 JTC Annual Report 2022
ASSESSMENT OF PROSPECTS
The Group’s business model and strategy are central to an
understanding of its prospects, and details can be found on
page 8. The nature of the Group’s activities are long term
and the business model is open ended. The Group’s current
overall strategy has been in place for several years, subject to
the ongoing monitoring and development described below.
The Board continues to take a conservative approach to
the Group’s strategy in the core business and the focus is
largely on operational efficiency and cost control.
Decisions relating to major new projects and investments
are made with a low appetite for risk and are subject to an
escalating system of approvals, including short payback
periods. Similar controls are in place relation to major
new customer contracts.
The Group is well diversified with its two Divisions and
three business lines with revenues deriving from multiple
jurisdictions and clients. The Board continuously considers
the changes in the risk profile of the Group and ensures
that a thorough risk assessment is made when making
any investment decisions.
The key factors that support the Group’s future prospects
as well as its resilience are:
• Highly visible recurring revenue and strong
cashconversion;
• Diversified across clients, services and geographies;
• Well-invested scalable global platform;
• Experienced and entrepreneurial management
team;and
• Proven track record of M&A and integration.
VIABILITY STATEMENT
THE ASSESSMENT PROCESS AND KEY
ASSUMPTIONS
The Group’s prospects are assessed primarily through its
strategic planning process. This process includes an annual
review of the ongoing plan, led by the CEO and the Group
Holdings Board which ensures that all relevant functions
are involved. The Board participates fully in the annual
process. Part of the Board’s role is to consider whether the
plan continues to take appropriate account of the external
environment, including macroeconomic, political, social,
technological, legal and regulatory changes.
The business has been in existence for 35 years and has
grown every year. It has long term customer relationship
that typically last more than ten years.
Within the current five year business plan the business
focuses on strategic objectives and these are supported
by a detailed financial model for the next three years. As
a result management believe that it is appropriate to base
the Viability Statement on the three year period.
Detailed financial forecasts have been prepared for the
year to 31 December 2023, forecasts for the subsequent
two years have then been prepared leveraging off the
detailed 2023 Forecast. Two years and nine months
remain at the time of approval of this year’s Annual
Report. The first year of the financial forecasts is derived
from the Group’s operating budget and is subject to regular
review throughout the year. The second and third years
are completed with a reasonable level of detail, and are
flexed based on the actual results in year one alongside
management expectations of the next two years.
The key assumptions in the financial forecasts, reflecting
the overall strategy, include:
• Annual organic growth of 8 – 10% year on year;
• Target margin of 33 – 38% for the Group as a whole;
• No change to the current dividend policy
• Consistent business model; and
• No material change to capital structure.
ASSESSMENT OF VIABILITY
Whilst the Group’s detailed financial forecasts are based
on the Directors’ expectations for the period of viability,
the Group has also assessed the financial impact and the
impact on our loan covenants in relation to the Group’s
Principal Risks, which are set out on pages 50 to 53. A
number of other aspects of the principal risks – because of
their nature or potential impact – could also threaten the
Group’s ability to continue in business in its current form
if they were to occur. This was considered as part of the
assessment of the Group’s viability, as explained below.
The viability statement evaluates the following risks:
• Lower revenues and higher costs resulting from a
change in economic outlook that leads to: a) a higher
cost to service debt and b) a reduction in revenues
due to depressed market activity;
• Reduced cash conversion to detail the impact of
slower cash receipts from clients;
• Adverse foreign exchange movements, interest rate
and tax rate increases;
• Increasing operating costs maintained in the
Forecast period of 2024 to 2025 due to inflationary
pressure not easing and margin not recovering as
expected in the period
The Group’s assessment considered all of the above risks
occurring at the same time. Based on this assessment,
the Directors have a reasonable expectation that the
Group will be able to continue in operation and meet
its liabilities as they fall due over the three year period
ending 31 December 2025. In making this statement the
Directors have considered the current financial position
of the Group and the resilience of the Group in the event
of this severe but plausible scenario. The modelling of
these risks has taken into account the principal risks and
their impact on the business model, future performance,
solvency and liquidity over the period.
There are a number of mitigating actions available to the
Board in the event of any of the risks materialising, such
as reducing dividends, employee incentives, marketing,
business and technology development spend, which have
not been included in the assessment.
GOING CONCERN BASIS
The Directors also considered it appropriate to prepare the
consolidated financial statements on the going concern
basis, as explained in the Basis of Preparation paragraph
in note 2 to the consolidated financial statements on
page 106.
VIABILITY STATEMENT
Based on their assessment of prospects and viability
above, the Directors confirm that they have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the
three year period ending 31 December 2025.
We report in line with the Non-Financial Reporting
requirement as detailed in Sections 414CA and 414CB of
the UK Companies Act 2006.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
54 JTC Annual Report 2022
NON-FINANCIAL INFORMATION AND S172(1) STATEMENT
OUR AIMS
Our business model is set out on page 8.
NON-FINANCIAL RISKS
The Risk management and principal risks section of the
Strategic report, starting on page 46, sets out the Group’s
approach to identifying and managing our principal risks
and uncertainties. Our Three Lines of Defence model
provides a rigorous governance framework, and the list
of principal risks starting on page 50 gives details of the
policies, outcomes and due diligence processes that
control and mitigate those risks.
The key areas where non-financial adverse impacts could
arise are:
1. RESPECT FOR HUMAN RIGHTS.
As data custodians, we have a responsibility to safeguard
consumer privacy, and our global data policies guide how
we manage and use data, build products and conduct our
business around the world (see pages 33 and 37).
We are committed to ensuring that there is no modern
slavery or human trafficking in our supply chains or in
any part of our business. Our working practices reflect
our commitment to acting ethically and with integrity in
all our business relationships and to maintaining effective
systems to ensure forced labour or trafficking is not taking
place anywhere in our supply chains (see page 97).
2. EMPLOYEES
Employee engagement is a key performance indicator (see
pages 35 and 60), and we talk in the Sustainability section
of the Strategic Report about our many programmes and
initiatives that inspire our people to be their best, to bring
their whole selves to work, our commitment to diversity,
equity and inclusion, and our recruitment, retention and
succession practices that help to mitigate the risk of our
dependence on highly skilled personnel.
3. ENVIRONMENTAL MATTERS
We take our environmental responsibilities seriously,
We remain a Carbon Neutral+ organisation and have
strengthened our commitment to transparency regarding
climate risk by reporting to Carbon Disclosure Project
(CDP) for the first time. (see page 33). See also pages 38
to 39 for further actions and initiatives JTC is taking to
help protect the environment.
4. ANTI-CORRUPTION AND ANTI-BRIBERY
Our Staff Handbook sets out our zero-tolerance policy on
bribery and corruption in any form, and this message is
reinforced through mandatory annual training for employees.
5. SOCIAL MATTERS
JTC has many initiatives in place to deliver our purpose
of creating a better tomorrow for consumers, businesses,
our people and our communities. The role we play
benefits everyone: businesses grow, people prosper and
communities thrive. This happens in many ways, including
through our core business, the development of social
innovation products, employee volunteering and support
for community groups and charities.
SECTION 172(1) STATEMENT
Section 172 legislation requires that directors act in a way
they consider, in good faith, would most likely promote
the success of the Company for the benefit of its members
as a whole. Section 172 also aims to help shareholders
better understand how the directors have discharged their
duty during the year while having regard to the matters
set out in Section 172(1)(a) to (f) of the UK Companies
Act 2006 (“s172 matters”). In addition, the 2018 UK
Corporate Governance Code recommends that boards
describe how the matters set out in Section 172 have been
considered in their discussions and decision-making. JTC
is a Jersey-incorporated company nevertheless the Board
fully embraces Section 172 and supports its aims, and is
reporting in line with its requirements.
Throughout 2022, the directors continued to exercise
their duties while having regard to Section 172 matters,
and also to other relevant factors as they reviewed and
considered proposals from senior management, and as
they governed the Company on behalf of its shareholders
through the Board and its committees.
Outlined above examples of where the Board considered
specific s172 matters throughout this Annual Report.
The Strategic Report on pages 1 to 53 was approved by
the Board on 6 April 2022.
NIGEL LE QUESNE
CHIEF EXECUTIVE OFFICER
MARTIN FOTHERINGHAM
CHIEF FINANCIAL OFFICER
SECTION 172 MATTERS SPECIFIC EXAMPLES PAGES
(a) The likely consequences of any
decision in the long term
• Our dividend policy, taken together with sections of our Chief Financial Officer’s Review, explains how we
balance returns to shareholders with capital invested organically and on acquisitions
• Our governance framework shows how the Board delegates its authority
20
46, 58
(a) The interests of the company’s
employees
• Our purpose in action
• Employee engagement survey
3
35
(c) The need to foster the company’s
business relationships with
suppliers, customers and others
• Partnering with suppliers
• We comply with the requirements of ‘The Reporting on Payment Practices and Performance Regulations (2017)’
for all of our in-scope UK companies
60 - 61
(d) The impact of the company’s
operations on the community and
the environment
• Financial inclusion for all and Our communities
• Protecting the environment
32 - 45
(e) The desirability of the company
maintaining a reputation for high
standards of business
• Treating data with respect
• A Partnering with suppliers
33
(f) The need to act fairly between
members of the company
• Stakeholder engagement
• Investment proposition
60, 61
4
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
55 JTC Annual Report 2022
MIKE LISTON, OBE (71)
NON-EXECUTIVE CHAIRMAN
NIGEL LE QUESNE (62)
CHIEF EXECUTIVE OFFICER
MARTIN FOTHERINGHAM (58)
CHIEF FINANCIAL OFFICER
WENDY HOLLEY (56)
CHIEF OPERATING OFFICER
APPOINTMENT TOBOARD
8 March 2018 12 January 2018 (joined the Group in 1991) 12 January 2018 (joined the Group in 2015) 19 July 2019 joined the Group in 2008)
COMMITTEE MEMBERSHIP
Nomination, Remuneration Not applicable. Not applicable. Nomination
QUALIFICATIONS
Fellow of the Royal Academy of Engineering and
theInstitution of Engineering and Technology
Fellow of the Chartered Governance Institute Chartered Accountant Chartered FCIPD, MIAB
EXPERIENCE
Extensive experience across public and private sector
businesses. Chief Executive of Jersey Electricity plc
between 1993 and 2008, subsequently holding a
number of Non-Executive roles.
Key figure in the development of JTC over the last
32years with extensive trust, fund and corporate
administration experience.
Extensive management and corporate finance
experience.
Over 25 years’ experience in financial services
operations and HR.
RELEVANT SKILLS
Broad range of experience at Board level, including
eight years’ relevant industry experience.
Extensive experience in leadership and management.
Commercial, strategic, communication and investor
relations skills.
Experience of financial markets and fund management.
Strong financial analysis skills.
Extensive experience in financial management
andreporting.
Broad range of management experience.
Broad range of management, project and business
integration experience.
EXTERNAL APPOINTMENTS
Non-Executive Director and Chair of the Remuneration
Committee and a member of the Audit & Risk
Committee of Foresight Group Holdings PLC.
Not applicable. Not applicable. Not applicable.
BOARD OF DIRECTORS
VALUES AND LEADERSHIP
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
56 JTC Annual Report 2022
DERMOT MATHIAS (73)
SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR
MICHAEL GRAY (57)
INDEPENDENT NON-EXECUTIVE DIRECTOR
ERIKA SCHRANER (55)
INDEPENDENT NON-EXECUTIVE DIRECTOR
KATE BEAUCHAMP (48)
INDEPENDENT NON-EXECUTIVE DIRECTOR
APPOINTMENT TOBOARD
8 March 2018 8 March 2018 18 November 2019 24 March 2022
COMMITTEE MEMBERSHIP
Nomination, Audit (Chair), Governance and Risk,
Remuneration
Nomination, Audit, Governance and Risk,
Remuneration (Chair)
Nomination (Chair), Audit, Governance and Risk,
Remuneration
Nomination, Audit, Governance and Risk (Chair),
Remuneration
QUALIFICATIONS
Chartered Accountant. FCIBS, AMCT, Dip IoD. PhD in Management Science &Engineering. LLB (Hons).
EXPERIENCE
Extensive management, corporate finance
andNEDexperience.
20 years’ senior management, financial and
capitalraising expertise and relevant experience.
Executive at IBM Corp. and Symantec Corp. Partner
andAmericas Operational Transaction Services leader
(Tech Sector) at Ernst & Young (US). Partner, UK M&A
Integration Leader & TMT M&A Advisory/Delivering
Deal Value Leader at PwC LLP, London.
Qualified lawyer with more than 20 years’
experience in both private and commercial
practiceand in the provision of corporate and
legaladvisory services in both the UK and USA
RELEVANT SKILLS
Strong financial skills.
Extensive experience in leadership and management.
Communication and management skills.
Extensive experience in the banking sector.
Extensive information technology and
M&Aexperience.
Strong risk management skills.
Extensive corporate governance, M&A contract
negotiation and commercial litigation experience.
EXTERNAL APPOINTMENTS
Formerly Non-Executive Director and Chairman of
the Audit Committee of Shaftesbury PLC (retired
25 February 2021 having served over eight years
onthe Board). Governor of Activate Learning.
Non-Executive Director Jersey Finance Limited.
Non-Executive Director & member of the Audit
Committee GCP Infrastructure Investments Limited.
Non-Executive Director EPESpecial Opportunities
Limited. Non-Executive Director abrdn Latin Income
Fund Limited.
Non-Executive Director, Chair of the Audit
Committee and member of the Remuneration and
Nomination Committees Aferian plc. Non-Executive
Director Pod Point Group Holdings plc. Non-
Executive Director Bytes Technology Group Plc.
Not applicable.
BOARD OF DIRECTORS CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
57 JTC Annual Report 2022
JTC’s success depends on our continual commitment to high corporate
governance standards, as well as a healthy and responsible culture,
both in the Boardroom and across the Group Accountability to all our
stakeholders, including our clients, shareholders and employees, is at the
heart of our culture, business and Board decisions.
GOVERNANCE AT A GLANCE
2022 HIGHLIGHTS
BOARD SKILLS & DIVERSITY
Pages 56 and 57
BOARD EFFECTIVENESS
Page 65
BOARD AND COMMITTEE
OVERSIGHT
Pages 59 and 66
INDEPENDENCE
Pages 56, 57, 66 and 69
SHAREHOLDER ENGAGEMENT
Page 60
PAY-FOR-PERFORMANCE
Page 78
AUDIT, RISK AND INTERNAL
CONTROLS
Pages 46 to 53 and 67 to 72
PROMOTION OF CORPORATE
CULTURE
Pages 3 and 35
ESG Pages 32 to 45
Our full Corporate Governance
Statement is available on:
www.jtcgroup.com/investorrelations
Board and committee activity remained busy during
2022 with a number of key strategic issues taking centre
stage including the delivery of the strategic plan agreed
in February 2022. Board committees continued to play
a crucial role in our governance framework, undertaking
their complex work comprehensively and effectively
supporting the work of the Board.
Governance and regulatory compliance have been key
areas of focus and our 2022 results reflect the impact
related matters continue to have on financial and operating
performance. The Board will continue to drive growth and
deliver performance and it is essential that our governance
framework continues to evolve to support this.
During 2023, the Board will continue to focus on our key
priorities, including clients, regulatory compliance, risk
management and delivery of the strategic plan.
OUR BOARD
The Board has eight directors comprising the Chairman,
three executive directors and four independent
non-executive directors, one of whom is the Senior
Independent Director. Biographies for each director and
details of which Board Committees they are members of
can be found on pages 56 and 57.
There were no changes to the Board’s composition during
2022. On 9 December 2022 the Company announced
the formation of a stand-alone Governance and Risk
Committee of the Board. The Governance and Risk
Committee comprises all of the independent non-
executive directors. As a result of the formation of the
Governance and Risk Committee, the existing Audit & Risk
Committee was renamed the “Audit Committee” and the
Terms of Reference, including the scope of responsibilities
of the Audit Committee, amended appropriately. Further
details may be found at pages 67 to 70.
The Board is collectively responsible for the long-term
success of JTC and delivery of sustainable shareholder
value. Its role is to provide leadership of JTC within a
framework of prudent and effective controls which
enables risks to be assessed and managed.
We conducted an internal evaluation of the effectiveness
of the Board and its committees in 2022, led by the Chair
of the Governance and Risk Committee and the Group
Company Secretary. The evaluation has concluded that
the Board is operating effectively but has identified some
areas for improvement which we will focus on during
2023. Further details may be found on page 65
OUR BOARD COMMITTEES
In order to provide effective oversight and leadership, the
Board has established a number of Board committees with
particular responsibilities. The work of the Board committees
is discussed in their individual reports.
The terms of reference for each of these committees is
available on jtcgroup.com and copies are also available on
request from the Group Company Secretary.
UK CORPORATE GOVERNANCE CODE
Throughout the year ended 31 December 20222, JTC
hascomplied with all of the provisions of the UK Corporate
Governance Code issued by the Financial Reporting Council.
MIKE LISTON OBE
Chairman of the Board of directors
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
58 JTC Annual Report 2022
ACTIVITIES OF THE BOARD
2023
2022
JAN
B
• Trading Update
• CEO Update
JAN
B
• Trading Update
• CEO Update
APRIL
B
Final Results Announcement
AUGUST
B
• CEO Update
OCTOBER
B
• CEO Update
OCTOBER
B
• CEO Update
NOVEMBER
B
• CEO Update
NOVEMBER
B
• CEO Update
JUNE
B
• CEO Update
JUNE
B
• CEO Update
AUGUST
B
• CEO Update
FEB
A
• Review Chief Risk Officer’s report
• Review audit progress
N
• Review Head of HR’s Annual
Report on Group recruitment,
training and development
• Review the executive and senior
management succession policy
R
• Review the Head of HR’s annual
report on Group remuneration
• Review of Executives’ remuneration
• Review of Executives’ Annual
Bonusawards
• Review of aggregated DBSP awards
B
• Board Reports and standing
agenda items
• Deep Dive: Information Security
FEB
N
• Review Head of HR’s Annual
Report on Group recruitment,
training and development
• Review the executive and senior
management succession policy
B
• CEO Update
SEPTEMBER
A
• Review Interim Results and
allancillary matters
• Review Chief Risk Officer’s report
R
• Review and approve the Annual
Activities Report of the
Remuneration Committee
• Review of PSP awards
B
• Approval of Interim Results,
andall ancillary matters
• Approval of Interim
DividendRecommendation
• Board Reports and
standingagenda items
• Deep Dive: Information Security
SEPTEMBER
A
• Review Interim Results
andallancillary matters
• Review Chief Risk Officer’s report
R
• Review and approve the
AnnualActivities Report of
theRemuneration Committee
• Review of PSP awards
B
• Approval of Interim Results,
andall ancillary matters
• Approval of Interim Dividend
Recommendation
• Board Reports and standing
agenda items
• Deep Dive: Information Security
G
• Review and approve the Annual
Activities Report of the
Nomination Committee
• Review and approve the nomination
of the Directors standing for
re-election at the AGM
MAY
B
AGM
• Board Reports and standing
agenda items
• Deep Dive: Information Security
A
• Review and approval of
Compliance Monitoring
Programme and internal
auditfunction
• Review Chief Risk Officer’s report
MAY
B
AGM
• Board Reports and standing
agenda items
• Deep Dive: Information Security
A
• Review and approval
ofCompliance Monitoring
Programme and internal
auditfunction
• Review Chief Risk Officer’s report
N
• Review and approve the Annual
Activities Report of the
Nomination Committee
• Review and approve the
nomination of the Directors
standing for re-election at
theAGM
G
• Review and approve the Annual
Activities Report of the
Nomination Committee
• Review and approve the
nomination of the Directors
standing for re-election at
theAGM
MARCH
A
• Review draft Annual Report for
theyear ended 31 December,
andall ancillary matters
• Review Chief Risk Officer’s report
N
• Review and approve the
AnnualActivities Report of
theNomination Committee
• Review and approve the nomination
of the Directors standing for
re-election at the AGM
R
• Review and approve the Annual
Activities Report of the
Remuneration Committee
• Review of PSP awards
B
• Approval of Annual Results,
andall ancillary matters
• Approval of Final Dividend
Recommendation
• Approval of AGM Notice
APRIL
B
Final Results Announcement
• Approval of Annual Results,
andallancillary matters
• Approval of Final
DividendRecommendation
• Approval of AGM Notice
A
• Review draft Annual Report for
theyear ended 31 December, and
all ancillary matters
• Review Chief Risk Officer’s report
N
• Review and approve the
AnnualActivities Report of
theNomination Committee
• Review and approve the nomination
of the Directors standing for
re-election at the AGM
R
• Review and approve the
AnnualActivities Report of
theNomination Committee
G
• Review and approve the
AnnualActivities Report of
theNomination Committee
• Review and approve the nomination
of the Directors standing for
re-election at the AGM
MARCH
B
• CEO Update
N
• Review and approve the
AnnualActivities Report of
theNomination Committee
• Review and approve the nomination
of the Directors standing for
re-election at the AGM
R
• Review and approve the Annual
Activities Report of the
Remuneration Committee
• Review of PSP awards
JULY
N
• Review Head of HR’s Annual Report
on Group recruitment, training
anddevelopment
• Review the executive and senior
management succession policy
R
• Review the Head of HR’s annual
report on Group remuneration
• Review of Executives’ remuneration
• Review of Executives’Annual
Bonusawards
• Review of aggregated DBSP awards
B
• Trading Update
• Board Reports and standing
agenda items
• Deep Dive: HR, succession and
talent development
JULY
N
• Review Head of HR’s Annual Report
on Group recruitment, training
anddevelopment
• Review the executive and senior
management succession policy
R
• Review the Head of HR’s annual
report on Group remuneration
• Review of Executives’ remuneration
• Review of Executives’
AnnualBonus awards
• Review of aggregated DBSP awards
B
• Trading Update
• Board Reports and
standingagendaitems
• Deep Dive: HR, succession
andtalentdevelopment
G
• Review and approve the Annual
Activities Report of the
Nomination Committee
• Review and approve the
nomination of the Directors
standing for re-election at theAGM
DECEMBER
A
• Review Chief Risk Officer’s report
• Review audit progress
N
• Review and approve the
AnnualActivities Report of
theNomination Committee
B
• Trading Update
• Board Reports and standing
agenda items
• Deep Dive: Galaxy strategy
andprogress
DECEMBER
A
• Review Chief Risk Officer’s report
• Review audit progress
N
• Review and approve the
AnnualActivities Report of
theNomination Committee
B
• Trading Update
• Board Reports and standing
agendaitems
• Deep Dive: Galaxy strategy
andprogress
G
• Review and approve the
AnnualActivities Report of
theNomination Committee
• Review and approve the
nomination of the Directors
standing for re-election at
theAGM
LEGEND
Nomination Committee
N
Remuneration Committee
R
Board
B
Audit & Risk Committee
A
LEGEND Nomination Committee
N
Remuneration Committee
R
Board
B
Audit Committee
A
Governance & Risk Committee
G
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
59 JTC Annual Report 2022
HOW THE BOARD ENGAGES (STAKEHOLDER ENGAGEMENT)
OUR PEOPLE
– EVERYONE EMPLOYED BY JTC
OUR CLIENTS
– EVERY INDIVIDUAL OR ORGANISATION
WHOENGAGESORUSES JTC’S SERVICES
OUR SHAREHOLDERS
– CURRENT AND POTENTIAL HOLDERS OF JTC SHARES
What they need What they need What they need
• To be valued for their contribution
• To be supported
• To contribute to JTC’s culture
• Training, learning and development
• Career progression
• To own part of JTC
• A trusted professional services partner
• Expertise and experience
• Global reach
• Tailored solutions
• Compliance with regulatory requirements
• High-quality and accurate data
• Technology, data security and privacy
• To understand JTC’s strategic direction, financial performance
andsustainability
• To analyse structural market trends a to generate sustainable
investment returns through share price appreciation & dividends
• To understand management and incentive structures
• To ensure they are investing in businesses that are committed
toenvironmental progress, societal benefit and which have
stronggovernance
How we engage How we engage How we engage
• Executive Director responsible for workforce engagement
• Regional Board meetings
• Senior leadership meetings
• All Employee Town hall meetings
• “Ask the CEO anything” video Q&As
• Employee engagement surveys
• Employee lifecycle surveys
• Day-to-day engagement with our client administration teams
• Ambassador programme
• Engaging with clients through webinars, advisory boards
andconferences
• Marketing campaigns and media relations activities,
includingsocialmedia channels
• Interim financial updates
• Annual Report
• Meetings, roadshows, conferences and sessions
specifictoourbusiness, strategy and ESG matters
• Responding to investors’ queries on financial,
strategic and ESG topics
• Regular investor surveys and feedback
• Annual General Meeting
How we add value How we add value How we add value
We support a positive, collaborative, diverse, equitable and inclusive
culture and do all we can to make JTC a great place to work, where every
person can bring their whole selves to work. We celebrate performance
and offer employees support to learn new skills and progress their
careers, giving them a sense of purpose, an integral part of our
organisational culture that has a positive impact globally.
JTC adds value for its clients by providing them with a comprehensive
range of services, tailored to their specific needs, delivered by a team of
highly skilled professionals, supported by advanced technology and a
global network of resources.
We aim to create long-term shareholder value through organic and
inorganic investments to grow our position in our chosen markets,
balanced with shareholder returns, while ensuring we meet our wider
sustainability commitments.
1,500+
employees
4.0/5.0
Employee survey rating
100+
Countries
10,000+
Clients globally
12%
Organic revenue growth
9.98p
Full-year dividend per share
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
60 JTC Annual Report 2022
HOW THE BOARD ENGAGES (STAKEHOLDER ENGAGEMENT)
OUR REGULATORS
– REGULATORY BODIES, GOVERNMENT INSTITUTIONS
ANDPOLICY-MAKERS IN ALL OUR JURISDICTIONS.
OUR SUPPLIERS
– ALL THOSE WHO DIRECTLY SUPPLY JTC
WITHGOODSORSERVICES.
OUR COMMUNITIES
– ALL THOSE WHO LIVE AND WORK IN THE AREAS
WHEREWEOPERATE.
How we engage How we engage How we engage
• Transparent and constructive relationships with regulators
andpolicy-makers, including regular interaction with members
ofseniormanagement
• Responding to public consultations on issues relevant
to our business
• Collaboratively with regulators to ensure clients are compliant
• Procurement process
• Supplier Relationship
• Third-Party Supplier Risk Assessment processes
• Through our ESG programme
• Community investment, charity partnerships and sponsorship
• Employee volunteering
• Gifts in kind and pro-bono work
• Advice and support
How we respond How we respond How we respond
We monitor regulations and put in place policies and processes to ensure
compliance. Board and Governance and Risk Committee reporting
includes legislative and regulatory matters as well as relevant
government affairs matters. We take part in events to communicate the
role we play in supporting an innovative, regulated data industry. We
engage with policy-makers to inform the development of appropriate
legislation, and participate in multi-stakeholder engagement for policy
consultation and to provide policy-makers with a better understanding
of our industry, data processing and innovative data use. We also engage
with various organisations to address societal challenges.
We create close and collaborative relationships with key suppliers to
ensure streamlined processes and performance. This helps us uncover
and realise new value, increase savings and reduce costs and risk of
failure. We help suppliers to understand our expectations and ethical
requirements, and we conduct due diligence to ensure compliance with
critical issues such as data security, modern slavery and environmental
performance. Forging close relationships also helps us ensure we meet
our compliance obligations.
How we work is as important as what we do. Community engagement
has always been central to our corporate responsibility programme. Our
employees get involved in their local communities through volunteering
and participating in a broad range of fundraising for local projects in
Europe, the Americas, the Caribbean, Africa and Asia.
How we add value How we add value How we add value
JTC provides timely and accurate reporting to regulators on behalf of its
clients, including financial reporting, tax reporting, and regulatory filings.
This helps regulators to monitor the financial health and activities of
JTC’s clients and maintain the integrity of the financial system.
We create close and collaborative relationships with key suppliers to
ensure streamlined processes and performance. We help suppliers to
understand our expectations and ethical requirements, and we conduct
due diligence to ensure compliance with critical issues such as data
security, modern slavery and environmental performance. Forging close
relationships also helps us ensure we meet our compliance obligations.
We support local economies through employment, paying taxes and
corporate sponsorship. By helping businesses prosper, we enhance their
potential as local employers. We create close and collaborative
relationships with key suppliers, realising value, increase savings and
reduce costs and risk of failure.
39
Engagements by jurisdiction
34
Industry associations
£35m
Paid to suppliers
300+
Suppliers globally
£225k
Donated, fund raised and
contributed
85
Charities supported
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61 JTC Annual Report 2022
NOMINATION COMMITTEE
2022 MEETING ATTENDANCE
Erika Schraner
Mike Liston
Dermot Mathias
Michael Gray
Kate Beauchamp
Wendy Holley
KEY ACTIVITIES IN THE YEAR AHEAD
• All current Directors will stand for re-election
attheAGM
• Regular updates from the Group HR Director on
senior management succession will be provided
tothe Committee
• The Committee will undertake its review of skills,
composition and size of the Board
• A review the Boardroom Diversity Policy will
beundertaken
• Executive Committee succession planning and
talentmanagement updates will be provided to
theCommittee
NOMINATION COMMITTEE REPORT
Succession, diversity, talent management and future-proofing
the Board were the key focus areas for the Nomination
Committee in 2022. I am pleased with the progress made this
year and we remain committed to evolving all four areas in
2023.
INTRODUCTION FROM THE COMMITTEE CHAIR
Dear Shareholders
It is my pleasure to present the annual report of the
Nomination Committee for 2022.
The core responsibilities of the Committee include Board
succession, composition and evaluation, as well as talent
management. In 2022 the Committee further increased
its focus on equality, diversity, and inclusion, which will
be maintained in 2023.
GOVERNANCE AND RISK
At the Nomination Committee meeting in September,
the Committee discussed and recommended to the
Board to separate Risk from the Audit Committee and
that a Governance and Risk Committee be established to
ensure sufficient time and attention were being afforded
to key governance and risk matters. The Board believes
that as the business continues to increase in complexity,
as the regulatory landscape continues to evolve and as
the macroeconomic environment remains uncertain, the
added Committee will enable further focused oversight
of these areas. The Governance & Risk Committee also
has responsibility for considering the ongoing work of
the environmental, social, and governance (ESG) team,
which continues to have a Board sponsor in Wendy Holley.
The Nomination Committee will consider input on Board
diversity from the Governance & Risk Committee.
The newly formed Committee is led by Kate Beauchamp,
and was established in December 2022; its first report
can be found on pages 71 to 72. The Audit Committee
continues to be led by Dermot Mathias, the scope of its
responsibilities and activities during the year can be found
on pages 67 to 70.
SUCCESSION
The Committee has evolved its succession and talent
management discussions to include succession for key
roles at the Group Holdings Board level and reviewed the
enhanced company-wide HR development management
system to understand how it supports training,
performance management and succession planning at
all levels of the organisation.
COMPOSITION
In 2021 we undertook a selection process to identify
suitable candidates to appoint to the Board as an
additional NED. The final shortlist was of women only,
with one from an ethnic background. Kate Beauchamp
was appointed as an independent Non-Executive Director
in March 2022. The remaining of the year was focused
on on-boarding Kate and leveraging her skillsets and
experience to enable the desired evolution of the Board
structure and the formation of the new Governance &
Risk Committee.
The Nomination Committee seeks to evolve the Board
composition in line with the evolution of the business and
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62 JTC Annual Report 2022
GENDER BALANCE
BOARD OF DIRECTORS EXECUTIVE DIRECTORS
37.5%
of Board members
are women
33.3%
of Board members
are women
NOMINATION COMMITTEE REPORT CONTINUED
2022 NOMINATION COMMITTEE ACTIVITY
MAY – AGM
JULY – COMMITTEE MEETING
• Executive Committee succession
• Talent management and leadership development (Project Talisman)
• Formation of Governance &RiskCommittee
DECEMBER – COMMITTEE MEETING
• Board update and skills matrix update
• Governance & Risk Committee proposal
• Board diversity policy review
• Nominations Committee Terms of Reference
MARCH
• Board effectiveness, balance of skills, and time commitment
• Board succession and recommendations for AGM elections
• Draft 2020 Nominations Committee Report
strives to allow the necessary time and focus to enable
Board changes to be fully embedded.
The Committee will continue to review its Board
composition in 2023 with the view to evolve it in line
with the business. The Committee is committed to
broadening diversity within the Board, leadership and
senior management teams. We are pleased with the
progress made in improving gender representation on
the Board and this will continue to be a focus, although
we recognise this is not the only means by which a board
achieves diversity. We embrace the need to improve
gender, ethnicity and other imbalances throughout our
organisation, but particularly at the Board level and senior
leadership roles. We will further embed the element of
diversity – gender, ethnicity and other imbalances in
future Board searches.
We have disclosed our Board gender and ethnicity data
within this report, and we will work with management
during 2022 to prepare for further disclosure in alignment
with the Listing Rule 9 Annex 2.1.
DIVERSITY, EQUITY AND INCLUSION
JTC is a people-led business that is inclusive, engaged
and committed to developing our people and supporting
their career progression through the business, providing
a fulfilling, fair and equitable environment in which to
work. JTC values diversity and the benefit it brings to the
success of the business.
JTC was pleased to report that we had increased the
number of women on our Board in 2022 as shown in the
chart opposite and this remains a focus for the Committee
in the future. We are also pleased to have a woman in a
senior Board and Executive position with our COO and
Chief Sustainability officer, Wendy Holley. While these are
not one of the FCA defined senior Board positions, they
are senior positions at JTC due to the criticality of the roles
in ensuring the day-to-day execution of the strategy both
in terms of organic and inorganic growth. The number
of women appointed in management roles across the
Group is shown in the table opposite. While we have made
good progress this year, we have the ambition to further
improve the diversity balance at all levels.
EVALUATION
An internal Board evaluation process was undertaken
in respect of the 2022 review. More information on the
Board evaluation process and outcomes are set out on
pages 65 and 66.
RE-ELECTION OF DIRECTORS
On the recommendation of the Committee and in
accordance with the Company’s Articles of Association
and with the Code, all Directors will retire at the
forthcoming AGM and offer themselves for re-election
by shareholders.
The Board recommends the re-election of each member
of the Board based upon their skills, experience and
contribution towards delivering the Group’s strategy and
delivering long-term value for stakeholders.
SHAREHOLDER ENGAGEMENT
The Committee welcomes questions from shareholders
on its activities throughout the year. If you wish to
discuss any aspect of this report, please contact me via
the Company Secretary. I would like to thank the other
members of the Committee, management and our
external advisers for their support during the year.
ERIKA SCHRANER,
Nomination Committee Chair
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63 JTC Annual Report 2022
NOMINATION COMMITTEE REPORT CONTINUED
SENIOR MANAGEMENT SUCCESSION
The Committee received regular updates regarding
senior management succession planning (see
Nomination Committee activity on page 63). These
updates included the planning and processes involved
with the appointment of a new Group Head of ICS.
Further detail may be found below.
The Nominations Committee will continue to work
with the CEO and Group HR Director on senior
management succession and development in 2023.
BOARD APPOINTMENTS
The Nomination Committee annually reviews the skills
and experience it requires for the Board to effectively
discharge its responsibilities. The skills matrix, which is
a key input used by the Board to inform its succession
planning discussions, is reviewed annually by the
Board,. The skills matrix, together with the collective
knowledge, experience and diversity of the Board and
the length of service of the Directors, are used by the
Committee to identify where there are opportunities
for a new Non-Executive Director to contribute to the
skillset of the Board. Where it is identified through
Board succession planning that a non-executive
appointment is required to the Board, the Nomination
Committee will engage with its external advisers
to undertake the process of recruiting a new Non-
Executive Director. The external search consultancy
is informed of our Boardroom Diversity Policy and
the Nominations Committee would specifically task
them with producing a diverse shortlist of candidates
for the position. Following longlisting and shortlisting
processes, and prior to any recommendation being
made by the Nominations Committee to the Board, the
preferred candidate meets with each existing member
of the Board
INDUCTION
Working with the Company Secretary, new Directors
undertake an induction programme tailored to the
needs of the individual. However, they will generally
include a number of meetings with members of the
Executive Committee, key employees and advisors.
New Directors will also be provided with a mixture
of documentation including Company publications,
Board materials and some formal information on
the role and responsibilities of UK-listed company
directors. The Group’s induction programme for newly
appointed Directors will continue to be centred on
familiarisation with the Group’s operations, key
individuals and external advisors.
DIVERSITY AND INCLUSION POLICY
The Board recognises the importance of ensuring
that there is diversity of perspective, background
and approach on the Board, in the management team
and throughout the Group as a whole. The principle
that everyone at JTC is treated fairly and respectfully,
has equal access to opportunities and resources,
and can contribute fully to the organization’s
success, regardless of their age, gender, ethnicity or
background, is key to our culture.
BOARD DIVERSITY POLICY
We believe it is in the interests of the Company and
of shareholders for us to build a stable, cohesive,
and representative Board and we are mindful of the
outputs and recommendations from both the FTSE
Women Leaders Review (formerly the Hampton-
Alexander Review) and the Parker Review when
making appointments to the Board. The Board
remains committed to having an inclusive culture that
recognises the importance of gender, ethnic diversity
and other imbalances, and the benefits gained from
different perspectives. Within the context of our
smaller Board, we also remain mindful to not overlook
well-qualified Board candidates.
The Nomination Committee will continue to seek
diversity of skill set and experiences as well as of
gender, race, and background when considering
new appointments in the period to 2024, and it will
continue to review this policy on an annual basis to
ensure it remains appropriate.
More widely, we are committed to developing a
long-term pipeline of executive talent that reflects
the diversity of JTC’s business and its stakeholders.
SUCCESSION PLANNING
An integral part of the work of the Nomination
Committee is to establish and maintain a stable
leadership framework and to proactively manage
changes and their impacts on the future leadership
needs of the Company, both in terms of Executive and
Non-Executive leadership. Ensuring the correct leaders
are in place enables the organisation to compete
effectively in the marketplace and therefore to meet
its various obligations to its stakeholders. As detailed
in the rest of the report, the Nominations Committee
has managed succession programmes for both the
Board and senior management, which have ensured
that the necessary skills, expertise and experience are
present in the leadership of the organisation.
BOARD SUCCESSION
The Nomination Committee regularly reviews the
skills and expertise that are present on the Board
and compares these to the expertise that it believes
to be required given the strategy, business priorities
and culture of the organisation. Since JTC listed in
2018 our strategy has remained largely unchanged,
however, the size and scope of our operations have
grown and so our Board has evolved through sensible
and well-managed succession planning that does not
compromise the stability of the Board. There were no
Director retirements and one Non-Executive Director
appointment in 2022. We continue to manage a
phased succession programme for Non-Executive
Directors and actively review and evolve succession
for Executive directors.
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64 JTC Annual Report 2022
BOARD EVALUATION 2022
We operate an annual Board evaluation using a third party to
assist the performance assessment at least every three years
in line with the UK Corporate Governance Code. The Board
continues to believe that these evaluations are a key element
of good governance to ensure that the Board, as well as its
committees and Board members, continue to operate and
perform effectively.
This year, we undertook a questionnaire-based internal
evaluation. A report on the evaluation was presented to the
Board at its April 2023 meeting when the results were
considered and discussed, and the Board reflected on potential
focus areas. In addition, the Board reviewed its performance
against the areas of focus it had agreed as part of the previous
year’s evaluation.
Overall, the Board concluded that it was operating effectively,
and identified areas of focus for the coming year.
This year’s internal evaluation was structured as follows:
• Nomination and Corporate Governance
Committee/Board
The Committee was asked to provide input into the structure
of, and topics for, the evaluation of the Board (a questionnaire-
based internal evaluation). At its April 2023 meeting, the
Board considered the responses and output from the Board
evaluation questionnaire, reviewed the prior year’s focus
areas and considered areas of focus for the year ending
31 December 2023.
• Committees
A performance evaluation discussion was included on the
agendas of the Board committees, supported by an analysis
of how each committee was performing against the key
areas in its terms of reference. Each of the Board committees
concluded that it was operating effectively.
• Individual directors
Meetings were held between each director and the Chair
during the year, in relation to each director’s performance.
The Senior Independent Director evaluated the Chair,
taking account of input from other directors.
• Implementation and monitoring of the action plan
The development areas identified were added to an action
plan designed to improve the work of the board, and these
changes included in the annual planning for the Board.
BOARD EFFECTIVENESS REVIEW FRAMEWORK
Directors were asked to consider whether the Board was fulfilling its core purpose across the three key components of Strategy, Governance and Risk and whether it was
properly leveraging the three core drivers of effectiveness: behaviour, process and talent.
Directors were also asked to assess their performance and that of the board during the year.
PROGRESS AGAINST THE FOCUS AREAS HIGHLIGHTED IN THE EXTERNAL 2021 REVIEW
Area Focus Progress
Sustainability Environmental, social, and
governance (ESG) factors
directlyaffect JTC’s
long-term performance.
The Board is fully committed to the Company’s ESG strategy, and during the year under the
Board’s direction, the business made strong progress on the key priority areas of: net zero
commitment and diversity and inclusion. As the regulatory landscape continues to evolve in
response to climate change, supply chain transparency and corporate due diligence, the Board
will develop its approach to ensure we achieve a sustainable business for all our stakeholders
Board composition To ensure the Board has the right
mix of skills, diversity and
experience going forward.
The Board is committed to providing equal opportunities to colleagues and candidates, and
during the year has reviewed its strategy on developing how JTC thinks about diversity, inclusivity
and equal opportunities across all areas of the business. We are committed to creating a Board
that has an appropriate level of diversity. The Nomination Committee keeps the composition
and diversity of the Board constantly under review to ensure the Board is sufficiently diverse
in terms of age, gender, ethnicity, experience, and educational and professional background.
Stakeholder oversight To have more insight over the
employee experience views.
We have launched an employee survey programme (the results of the inaugural survey may
be found at page 35) to enable all employees to anonymously share their honest feedback
about what it’s like to work at JTC. Survey results are shared with all staff, together with the
proposed action plans to give employees visibility as to how the Board has interpreted and
will use their feedback. The Board is committed to creating a survey experience that gives all
employees a more direct voice via annual and periodic pulse surveys and to including
employees at every step of the survey process.
Succession and
talentmanagement
To ensure appropriate succession
planning for Board and
seniormanagement.
Project Talisman sits at the heart of JTC’s priorities for the Galaxy era and its central aim is
to gain a comprehensive understanding of the ‘talent landscape’ across the Group and
deliver a programme of world-class development initiatives to grow our capabilities and
provide the Group with a ‘pipeline’ of future leaders. The project also focuses on developing
strong succession plans for all senior roles within the Group.
2023 OPPORTUNITIES FOR BOARD EXCELLENCE GROWTH AND IMPROVEMENT
• Development of Board Annual Work Plan for Cosmos Era
• Review of Board & Committee Meeting protocols
• Further Board focus of internal audit function and control framework reporting
• Board director training E.g. on governance aspects (risks/opportunities) of digital transformation for JTC
• Development of Stakeholder Map
• Deep Dive sessions on JTC’s various service lines
• Consideration to be given to adding additional skill sets and experience to the Board in the Cosmos Era
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
65 JTC Annual Report 2022
BOARD
BOARD GOVERNANCE
FRAMEWORK
BOARD SKILLS & DIVERSITY
PAGES 56 AND 57
BOARD EFFECTIVENESS
PAGE 65
BOARD AND COMMITTEE
OVERSIGHT
PAGES 59 AND 66
INDEPENDENCE
PAGES 56, 57, 66 AND 69
SHAREHOLDER ENGAGEMENT
PAGE 60
PAY-FOR-PERFORMANCE
PAGE 78
AUDIT, RISK AND INTERNAL
CONTROLS
PAGES 46 TO 53 AND 67 TO 72
PROMOTION OF
CORPORATECULTURE
PAGES 3 AND 35
ESG
PAGES 32 TO 45
Our full Corporate Governance
Statement is available on:
www.jtcgroup.com/investorrelations
Mike Liston, OBE
Non-Executive Chairman
Martin Fotheringham
Chief Financial Officer
Wendy Holley
Chief Operations Officer
Erika Schraner
Independent NED
Richard Ingle
Chief Risk Officer
Dermot Mathias
Senior independent NED
Iain Johns
Group M.D.
Nigel Le Quesne
Chief Executive Officer
EXECUTIVE DIRECTORS
BOARD OF DIRECTORS
GROUP HOLDINGS
BOARD
Michael Gray
Job title
Dean Blackburn
Group Head of ICS
Kate Beauchamp
Independent NED
Miranda Lansdowne
Company Secretary
CHAIRMAN
• Leads & responsible for
Boardeffectiveness
• Sets Board agendas in
consultation with CEO, CFO
andCompany Secretary.
• Scrutinises the performance ofthe
Executives & oversee theannual
Board Effectivenessprogramme.
• Facilitates contributions
fromallDirectors and ensures
effective relationships.
• Ensures the views of all
stakeholders are understood
&considered appropriately
indecision making.
CEO
• Represents all stakeholders,
including employees, clients,
regulators and investors.
• Develops and implements
strategy, as approved by the
BoardSets the cultural tone
oftheorganisation.
• Facilitates an effective link between
the business and the Board.
• Responsible for overall delivery of
commercial objectives of the Group.
• The CEO’s Review can be found
on pages 9 to 13.
CFO
• Manages the Group’s
financialaffairs.
• Supports the CEO in the
implementation & achievement
ofthe Group’s strategic objectives.
• The CFO’s Review can be found
on pages 20 to 25.
SID
• Acts as a NED
• Supports the Chairman in the
delivery of his objectives.
• Acts as an alternative contact
forshareholders.
• Leads the appraisal of the
Chairman’s performance with
the NEDs.
• Undertakes a key role in
succession planning for the
Board,together with the Board
Committees, Chairman and NEDs.
NEDS
• Monitor the delivery of strategy
within the risk & control
framework set by the Board.
• Ensure internal controls are
robust & that the external Audit
is undertaken properly.
• Engage with internal & external
stakeholders and feedback
insights to the Board.
• Constructively challenge & assist
in the development of strategy.
• Play a key role in succession
planning for the Board.
COO
• Develops & implements
operational strategy.
• Leads & supports post-
acquisition integration team.
• Responsible for ‘people’, culture
& remuneration.
COMPANY SECRETARY
• Ensures appropriate information
flows to the Board.
• Advises and keeps the Board
updated on legal & regulatory
requirements & best-practice
corporate governance.
• Facilitates newly appointed
Directors’ inductions, tailored
individualrequirements.
• Ensures compliance with Board
procedures & provides support
totheChairman.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
66 JTC Annual Report 2022
AUDIT COMMITTEE 2022
MEETING ATTENDANCE
Dermot Mathias
Michael Gray
Erika Schraner
Kate Beauchamp
KEY ACTIVITIES IN THE YEAR AHEAD
• Review of the Annual Report and Accounts
andpreliminary results announcements
• PWC’s appointment as auditor to be
recommendedto shareholders at the AGM
• Shareholder update by the Audit Committee
• Chair at the AGM
• Review of the 2023 interim results
• Consideration of internal audit’s annual plan,
independence, resources and findings
• Review of key controls
• Approval of the 2024 Audit Committee calendar
AUDIT COMMITTEE REPORT
The Committee plays a critical role in ensuring the accuracy
and integrity of JTC’s financial reporting. We aim to work
collaboratively with management and the auditors to
identify and mitigate financial risks, promoting transparency,
accountability, and integrity to maintain the confidence of our
investors and other stakeholders.
INTRODUCTION FROM THE COMMITTEE CHAIR
Dear Shareholders,
It is my pleasure to present the annual report of the
Audit Committee for 2022. As the Chairman of the Audit
Committee, I am pleased to provide you with an overview
of our activities during the year, as well as our assessment
of the company’s financial and governance practices.
The Audit Committee plays a critical role in ensuring the
integrity and transparency of the company’s financial
reporting, as well as overseeing the effectiveness of the
company’s internal control and risk management systems.
Our mandate is to provide independent oversight of the
company’s financial reporting and disclosure processes,
as well as to monitor compliance with laws, regulations,
and ethical standards.
Throughout the year, the Audit Committee has worked
diligently to fulfill its responsibilities, including reviewing
the company’s financial statements and ensuring
that they are prepared in accordance with generally
accepted accounting principles. We have also reviewed
the company’s internal control processes and risk
management systems to ensure they are effective and
appropriate for the company’s operations.
As part of our mandate, the Audit Committee has also
maintained regular communication with the company’s
external auditors to discuss the scope of their work and
the results of their audits. This has enabled us to obtain
an independent assessment of the company’s financial
reporting and internal control systems.
In addition, the Audit Committee has taken steps to
ensure that the company’s governance practices are
in line with best practices and are consistent with the
expectations of our shareholders. We have reviewed the
company’s policies and procedures relating to governance,
and have made recommendations for improvements
where necessary.
Overall, I am pleased to report that the company’s
financial reporting, internal control, and risk management
systems are effective and that the governance practices
are appropriate. The Audit Committee will continue
to monitor these areas closely in conjunction with
the Governance and Risk Committee to ensure that
the company remains committed to transparency,
accountability, and sound financial management.
DERMOT MATHIAS
Audit Committee Chair
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
67 JTC Annual Report 2022
AUDIT COMMITTEE REPORT CONTINUED
2022 AUDIT COMMITTEE ACTIVITY
FORMATION OF GOVERNANCE
ANDRISKCOMMITTEE
During 2022 the Board undertook a review of its
delegated Committees with the aim of enhancing
certain aspects of the Group’s corporate governance
arrangements and aligning the skill sets and experience
of the Non Executive Directors. Consequently, in
December 2022 the Board announced that the
oversight of risk would move from the Audit & Risk
Committee (subsequently renamed as the “Audit
Committee”) to a newly-formed Governance and
Risk Committee.
Given the crucial role that the Audit Committee
plays in overseeing the Company’s financial reporting
processes, internal controls over financial reporting
and audits of the Company’s financial statements,
the Committee’s ability to focus its efforts as JTC’s
business continues to grow in size and complexity, and
demands for financial disclosures increase, will enhance
the Company’s corporate governance arrangements.
The Board now delegates the oversight of risk to the
Governance and Risk Committee, which consists of
the four Independent Non-Executive Directors. In
addition to the oversight of risk, the Governance
and Risk Committee’s remit includes the ongoing
monitoring, management and mitigation of principal
and emerging risks and advising the Board on the
Group’s overall risk appetite, tolerance and strategy.
As a result of the formation of the new Governance
and Risk Committee, the Terms of Reference, including
the scope of responsibilities of the Audit Committee,
were amended appropriately. The terms of reference
for each of these committees is available on jtcgroup.
com and copies are also available on request from the
Group Company Secretary.
MAY – AGM
• Reappointment of external auditor and authority for the Directors
todetermine the auditor’s remuneration were approved by shareholders
JULY
• Key controls and compliance review
• Discussion with Head of Internal Audit (without management present)
SEPTEMBER – COMMITTEE MEETING
• 2022 half year results
• External auditor half year review
• Discussion with external auditor (without management present)
DECEMBER – COMMITTEE MEETING
• FRC review of 2021 annual report and accounts
• 2022 internal audit planning
MARCH – COMMITTEE MEETING
• 2021 draft Annual Report and Accounts and Full Year Announcement
• External audit report
• External audit policies
• External audit independence
• Going concern and viability
• Key controls project
• Discussion with external auditors (without management present)
• External audit tender requirement review
LETTER FROM THE FINANCIAL REPORTING COUNCIL
During 2022, the Group received a letter from the
FRC to advise that they had carried out a review
of the Company’s Annual Report and Accounts to
31 December 2021, in accordance with Part 2 of
the FRC Corporate Reporting Review Operating
Procedures. The principal area where they required
further information was in respect of the valuation
of shares issued as consideration.
Management’s responses to the FRC were reviewed
and approved by the Committee. We acknowledged
that the Company’s approach to the valuation of
equity instruments issued as consideration did
not adhere to the strict interpretation of IFRS 3
Business Combinations, paragraph 37 which requires
consideration transferred in a business combination to
be measured at the acquisition date fair value.
Management have reviewed all business combinations
where shares were issued as consideration. They
identified that the fair value of consideration
for the acquisition of SALI required adjustment,
increasing goodwill from £174.3m to £176.9m, with
a corresponding increase of £2.6m to share premium.
Further to discussions with the FRC and the Group
external auditor, the Company has adjusted the
31 December 2022 accounts and has not made
a prior year adjustment as the sum involved was
not considered to be qualitatively material to
theaccounts.
Details of the adjustment made to the fair value of
equity instruments issued as initial consideration may
be found in note 31.7(a)) on page 134.
The Committee is satisfied that this has been correctly
addressed and resolved and has reviewed the process
by which appropriate accounting policies are adopted.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
68 JTC Annual Report 2022
AUDIT COMMITTEE REPORT CONTINUED
FINANCIAL REPORTING
RESULTS REVIEW
The Audit Committee reviewed the Group’s 2022 Annual
Report and Accounts and the half-yearly financial report
published in September 2022. As part of these reviews,
the Committee received papers from management
on changes in accounting policy, areas of significant
judgement, the Group’s key risks, going concern
considerations and longer-term viability. The Committee
also discussed reports from PwC on their audit of the
Annual Report and Accounts and review of the half-yearly
financial report.
FAIR BALANCED AND UNDERSTANDABLE
Each year, in line with the UK Corporate Governance Code
and the Committee’s terms of reference, the Committee
is asked to consider whether or not, in its opinion, the
Annual Report is fair, balanced and understandable and
whether or not it provides the information necessary
for shareholders to assess the Group’s position and
performance, business model and strategy. There is an
established process to support the Audit Committee in
making this assessment, and we follow broadly the same
process for the Group’s half-yearly financial report.
The Committee has considered whether this Annual
Report and Accounts, taken as whole: is open and
honest about the challenges, opportunities and successes
throughout the year; provides clear explanations of our
KPIs and how they link to our strategy and remuneration;
explains our business model, strategy and accounting
policies simply and clearly; incorporates clear cross-
references to additional information where necessary; is
in line with what the Board had considered and decided
throughout the year; provides appropriate information
for shareholders to assess performance and strategy; and
has been written in clear and concise language. On this
basis the Committee recommended to the Board that the
Annual Report and Consolidated Financial Statements are
fair, balanced and understandable.
AREAS OF SIGNIFICANT FINANCIAL JUDGEMENT
The Committee exercises its judgement in deciding the
areas of accounting that are significant to the Group’s
accounts. The external auditor’s reports detailed the
results of their procedures in relation to these areas to
the Committee. The matters shown below have been
discussed with the Chief Financial Officer, Group Finance
Director and the external auditor, and the Committee is
satisfied that each of the matters have been fully and
adequately addressed by the Group Holdings Board,
appropriately tested and reviewed by the external auditor,
and the disclosures made in the 2022 Annual Report and
Accounts are appropriate.
• Recognition and recoverability of ‘work in progress’
• Impairment of goodwill and other intangibles
• Accounting for business combinations
• Risk management framework: resiliency, data and
technology and cyber risk
• Implementation of internal controls
• Regulatory developments, accounting and disclosure
trends
• Management’s assessment of Company’s TCFD
disclosures
GOVERNANCE UPDATES
Updates on the latest governance practices for Audit
Committees and changes in reporting requirements
were provided by the external auditor and the Company
Secretary.
POLICIES AND CONFLICTS
The Committee reviewed its policies in relation to
allocation of non-audit work and employment of ex-
audit firm personnel, as detailed in this report below. It
also reviewed the Directors’ conflicts of interest register.
Further information about conflicts of interest may be
found on pages 56 and 57 .
COMMITTEE MEMBERSHIP
The Committee is composed entirely of independent
Non-Executive Directors. Independence is critical for fair
assessment of the management team and the external
and internal audit functions.
COMMITTEE CHAIR
Dermot Mathias was appointed Audit Committee
Chair in March 2018. He is responsible for determining
the Committee’s agenda and for maintaining the key
relationships between the Group’s senior management,
the Company Secretary and senior representatives of the
external auditor.
RECENT AND RELEVANT FINANCIAL EXPERIENCE
The Committee is satisfied that the Committee Chairman
has the appropriate technical knowledge, industry
expertise, leadership skills, and governance experience,
as well as a commitment to ongoing education and
development to effectively carry out his role.
COMMITTEE EFFECTIVENESS
An effectiveness review was carried out of the Committee
and its members as part of the wider Board evaluation
process. The review concluded that the competence
relevant to the Group’s operations was adequately
represented within the current membership and that
the opportunities to meet with senior management
and Executives throughout the year had enhanced the
members’ working knowledge of the way the Company
operates and the sectors it spans.
EXTERNAL AUDITOR*
External auditor PwC
External auditor tenure** 5 years
Lead audit partner Karl Hairon
Lead audit partner tenure Less than 12 months
External audit appointment review Annually
Total fees paid to auditor in 2022 £1.225m
* The information above is correct as at 31 December 2022.
** From date of appointment as External Auditor of JTC PLC.
EXTERNAL AUDITOR INDEPENDENCE
The Committee reviews the independence of the external
auditor bi-annually. This includes consideration of the
potential for conflicts of interest as well as the auditor’s
internal procedures to ensure independence of its staff.
EXTERNAL AUDITOR EFFECTIVENESS
At its September 2022 meeting, the Audit Committee
reviewed and discussed PwC’s audit strategy for the
year ended 31 December 2022. In December 2022 the
Committee received detailed updates on the audit’s
progress, which included details of the external auditor’s
actions, such as the audit procedures undertaken, the
audit’s coverage, the segregation of duties and the status
of any significant findings, as well as details of key matters
arising from the audit and assessments of management’s
judgments on them; and reviewed the content of the
independence letter and the management representation
letter, as well as engagement terms.
The Committee formally reviews the effectiveness of
the external auditor at its May meeting. The Company
Secretary supports the Committee with this by issuing
questionnaires to Board members and senior financial
management leadership. As part of the evaluation, the
UK FRC’s Guidance on Audit Committees was reviewed
to ensure that best practice was being followed. The
Committee also reflected on the assurance on financial
statements, the audit teams and communication, as well
as considering external regulatory updates on the external
auditor received during the year. The overall results of the
evaluation were positive. There were no concerns regarding
the independence of the audit team. The Committee
concluded, based on feedback and information obtained
during its other work, that the external auditor had
performed effectively, and that the Group and the auditor
had complied with relevant guidance.
EXTERNAL AUDITOR FEES
All relevant fees proposed by the external auditor must
be reported to and approved by the Audit Committee.
Details of the fees paid during the year to PwC may be
found in note 6 to the consolidated financial statements
(page 110).
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
69 JTC Annual Report 2022
AUDIT COMMITTEE REPORT CONTINUED
POLICY FOR NON-AUDIT SERVICES PROVIDED
BY THE EXTERNAL AUDITOR
The main aims of this policy are to:
• Ensure the independence of the auditor in
performing the statutory audit; and
• Avoid any conflict of interest by clearly detailing
thetypes of work that the auditor can and
cannotundertake.
The Audit Committee has reviewed and updated the
policy for non-audit services to ensure that it is in line
with the FRC’s Revised Ethical Standards 2019 (which took
effect from 15 March 2020) and the FRC’s Audit Quality
Practice Aid 2019. The policy, in line with regulation,
substantially limits the nonaudit services which can be
provided by the external auditor. The policy provides:
• A 70% cap of the value of the audit fee for
allnon-audit services calculated on a rolling
three-year basis.
• Categories of service that are prohibited from being
carried out by the auditor.
The policy specifies a de minimis limit as well as the
type of non-audit work that the auditor may be engaged
in without the matter first being referred to the Audit
Committee, which considers each referral on a case-
by-case basis. The policy ensures that the auditor does
not audit its own work or make management decisions
for the Company or any of its subsidiaries. The policy
also clarifies responsibilities for the agreement of fees
payable for non-audit work. The only non-audit services
provided by PwC in the year was their review of the half-
yearly financial report and services relating to the ISAE
3402 controls report and review of the loan covenants.
No advisory work has been requested from the auditor
during the previous five years.
INTERNAL CONTROL FRAMEWORK
The Group has an established framework of internal
controls, which includes the following key elements:
• The Audit Committee meets regularly and its
responsibilities are set out in the Audit Committee Terms
of Reference.
• It receives reports from the Internal Audit function on
the results of work carried out under an annually
agreed audit programme. Operational and
compliance controls are considered when the
Committee reviews the annual Internal Audit
programme. TheAudit Committee has full
andunfettered access to the internal and
externalauditors.
• The Audit Committee annually assesses the
effectiveness of the assurance provided by the
internal and external auditors.
In line with the Code, the Audit Committee monitors the
risk management and internal control systems, robustly
assesses the principal risks identified by management’s
risk assessment processes (including those that would
threaten the business model, future performance,
solvency or liquidity), and monitors actions taken to
mitigate them. For certain joint arrangements, the Board
relies on the systems of internal control operating within
JTC’s infrastructure. The Code requires companies to
review the effectiveness of their risk management and
internal control systems, at least annually. The Board
performs this review and considers that the information
it received enabled it to review the effectiveness of the
Group’s system of internal control in accordance with the
FRC’s ‘Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting’ and that
the system has no significant failings or weaknesses.
FORMATION OF GOVERNANCE AND
RISKCOMMITTEE
As a result of the formation of the new Governance and
Risk Committee in December 2022, the Audit & Risk
Committee was renamed the “Audit Committee” and the
Terms of Reference, including the scope of responsibilities
of the Audit Committee, amended appropriately.
SHAREHOLDER ENGAGEMENT
I welcome questions from shareholders on the
Committee’s activities. If you wish to discuss any aspect
of this report, please contact me via the Company
Secretary. I would like to thank the other members of
the Committee, management and our External Auditors
for their support during the year
By order of the Board
DERMOT MATHIAS,
Audit Committee Chair
6 April 2023
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
70 JTC Annual Report 2022
COMMITTEE COMPOSITION
Kate Beauchamp (Chair)
Dermot Mathias
Michael Gray
Erika Schraner
MEETING ATTENDANCE 2022
The Committee was formed by
the Board in December 2022. The
inaugural Committee meeting was
held on 6 April 2023.
KEY ACTIVITIES IN THE YEAR AHEAD
• Review and approve the significant risk management
policies and associated risk management frameworks;
• Review and approve the risk appetite statement
• Review significant risk exposures and the steps that
management has taken to identify, measure, monitor,
control and report such exposures, including risks such
as cyber, information security credit, market, liquidity,
operational (which includes fiduciary and technology
risks), strategic, and model and risks associated with
incentive compensation plans;
• Evaluate risk exposure and tolerance;
• Review significant issues identified by Risk and
Compliance and the Internal Audit Department
withrespect to the risk management and
compliance activities, togetherwith management’s
responses and follow-up to these reports; and
• Review significant examination reports and
associated matters identified by regulatory
authorities relating to risk management and
compliance issues, and management’s responses.
GOVERNANCE & RISK
COMMITTEEREPORT
Having built my career around managing risk, protecting assets
and advocating for good corporate governance, I look forward
to working with my new Governance and Risk Committee
colleagues to support JTC’s unique culture, commitment to
excellence and sustainable growth ambitions.
INTRODUCTION FROM THE COMMITTEE CHAIR
DEAR SHAREHOLDERS
It is my pleasure to present the first report of the Governance
and Risk Committee. The Committee was formed as a new
standalone committee in December 2022 in recognition of
JTC’s continued commitment to operating to the highest
standards of governance and risk management.
The Committee members comprise all of the independent
non-executive directors. The Chief Risk Officer, head of
internal audit and external audit lead partner will be invited
to attend and address meetings of the Committee on a
regular basis and other non-members may be invited to
attend all or part of any meetings as and when appropriate.
As a result of the formation of the Governance and Risk
Committee, the Audit & Risk Committee was renamed the
“Audit Committee” and the Terms of Reference, including
the scope of responsibilities of the Audit Committee,
amended appropriately.
This year’s report aims to provide an overview of the role
of the Committee and of JTC’s corporate governance
framework and risk management processes, however,
it should be read in the context of the Annual Report as
a whole and with particular with reference to the Risk
Management Report (pages 46 to 53) and Sustainability
Report (pages 32 to 45), which serve as important tools
for stakeholders to assess JTC’s current governance and
risk practices during the year.
In future years it is intended that the Committee’s report
will highlight the progress the Company has made over
the year and identify areas where the Committee
intends to focus its efforts to ensure that the Group
further strengthens and enhances its policies, procedures
andpractices.
COMMITTEE’S PURPOSE
The Directors believe that sound corporate governance
practices are essential to the well-being of the Company
and the promotion and protection of its shareholders’
interests. The Board will oversee the functioning of JTC’s
governance and risk framework, in part, through the work
of the Committee. The Committee will be responsible
for assisting the Board in its oversight of risk, including
the ongoing monitoring, management and mitigation of
principal and emerging risks, and advising the Board on
the Group’s overall risk appetite, tolerance and strategy.
In advance of the Committee’s inaugural meeting in
April 2023 I met with the CEO, Chief Sustainability
Officer, the Chief Risk Officer, the Chief Group Counsel,
the Head of Risk and Compliance, the Head of Internal
Audit and the Group Company Secretary to discuss the
Committee’s objectives and priorities, and to ensure that
the Committee is equipped with the necessary resources
and support to fulfil its mandate.
KATE BEAUCHAMP,
Governance & Risk Committee Chair
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
71 JTC Annual Report 2022
GOVERNANCE & RISK COMMITTEEREPORT CONTINUED
2023 COMMITTEE ACTIVITY
MAY – AGM
MAY – COMMITTEE MEETING
JULY – COMMITTEE MEETING
DECEMBER – COMMITTEE MEETING
APRIL – COMMITTEE MEETING
At the Committee’s inaugural meeting in April 2023
the risk management framework and plans to further
develop a strategy for addressing key risk management
priorities were discussed in detail, together with the
whistle-blowing and escalation mechanism and the
Committee’s work plan for 2023.
In 2023, the Committee will focus on several key
areas, including enhancing the Group’s internal control
framework, reviewing our cyber and data protection
measures, and ensuring compliance with relevant
regulations and legislation. We will also continue
to monitor the impact of climate change on our
business and recommend proactive steps to mitigate
the associated risks.
RISK MANAGEMENT
The Committee will consider and advise the Board
concerning the appropriate risk appetite for the
Company and the principal and emerging risks that
the Company is willing to take across all major
activities, taking into account the long-term strategy
of the Company, its future plans and other internal
information, as well as the external environment,
including economic, political and industry information.
On an annual basis, the Committee will carry out an
assessment of the emerging and principal risks facing
the Company has been undertaken (including those
risks that would threaten its business model, future
performance, solvency or liquidity and reputation) and
provide advice on the management and mitigation
of those risks.
RISK FRAMEWORK
The Committee will continuously review the
effectiveness of the Company’s overall risk
management framework and processes and ensure
corrective action is taken where necessary.
INFORMATION SECURITY
In 2022 the Board attended two ‘deep dive’ presentations
with the Chief Information Officer and Group Information
Security Officer updating them on the development and
implementation of JTC’s IS and cyber security strategy,
policies and standards. The Committee will continuously
review the effectiveness of the Company’s overall IS
strategy, systems and processes and ensure corrective
action is taken where necessary.
INTERNAL AUDIT
The Committee will continuously review the quality
and effectiveness of the Group’s internal audit
processes. The Committee will work with the Chief
Risk Officer and Head of Internal Audit to develop
further and implement JTC’s internal audit strategy,
policies and standards.
COMPLIANCE, WHISTLEBLOWING AND FRAUD
The Committee will review the Company’s whistleblowing
procedures and escalation mechanisms.
SUSTAINABILITY AND ESG
An integral part of the work of the Committee is
to oversee and advise the board on the Company’s
strategies, goals and commitments related to
sustainability and ESG to promote the long-term
sustainable success of the Company and Group,
generating value for shareholders, our varied
stakeholders and contributing to wider society.
The Sustainability Report (pages 32 to 45) provides
an overview of our approach to incorporating non-
financial ESG factors as part of the Committee’s
analysis process to identify material risks and growth
opportunities. We believe that effective governance
and risk management practices are essential for
ensuring the long-term success of our business,
and we remain committed to upholding the highest
standards in these areas
SHAREHOLDER ENGAGEMENT
JTC is committed to having regular and constructive
engagement directly with its shareholders to allow
and encourage shareholders to express their views
on governance matters directly to the Board of
Directors outside of the annual meeting. The Board
of Directors will annually communicate information
about the Board of Directors and individual directors,
the Company’s corporate governance and executive
compensation practices through the Directors’
Remuneration Report.
The Board of Directors encourages shareholder
participation at the Company’s annual shareholder
meetings as well as through informal meetings
throughout the year as necessary. Each director will
attend the annual meeting, absent a compelling
reason. At each annual meeting, the chairs of each
board committee will be available to respond to
shareholder questions. The Board of Directors
encourages shareholders to attend the Company’s
annual meeting as it provides a valuable opportunity
to discuss the Company, its corporate governance and
other important matters.
Our website also provides extensive information
about the Board of Directors, its mandate, the board
committees and their mandates, and our directors.
Finally, I would like to take the opportunity to
express the Board’s appreciation to management
and all employees for their continued support of
JTC’s governance and risk practices. The Committee
looks forward to building on the Group’s proven track
record of strong risk management and compliance and
supporting the ongoing efforts to further strengthen
JTC’s governance and risk management practices in
the years to come.
By order of the Board
KATE BEAUCHAMP,
Committee Chair
6 April 2023
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
72 JTC Annual Report 2022
COMMITTEE MEETINGS IN 2022
The Committee met formally 3
times during the year. Attendance
by the Committee members at
these meetings is shown below:
Michael Gray (Chair)
Mike Liston
Dermot Mathias
Erika Schraner
Kate Beauchamp
MEMBERSHIP OF THE COMMITTEE
All Committee members are independent Non-Executive
Directors, as defined under the Code, with the exception
of the Group Chairman who was independent on his
appointment. Full biographies of the Committee members
can be found on pages 56 to 57. The Committee members
have no personal financial interest, other than as
shareholders, in the matters considered by the Committee.
There were no changes in the Committee during the
year. JTC (Jersey) Limited, the corporate Company
Secretary, acts as secretary to the Committee.
COMMITTEE MEMBERS
Michael Gray
Committee Chairman, Independent Non-Executive Director
Mike Liston
Non-Executive Chairman
Dermot Mathias
Audit Committee Chair, Senior Independent Non-Executive Director
Erika Schraner
Nomination Committee Chair, Independent Non-Executive Director
Kate Beauchamp
Governance and Risk Committee Chair, Independent Non-Executive Director
REMUNERATION REPORT
DEAR SHAREHOLDER,
INTRODUCTION FROM THE COMMITTEE CHAIR
I am pleased to present the JTC PLC Remuneration
Committee report for 2022.
Details of the Committee members’ experience and
expertise may be found on pages 56 and 57. Details
concerning the Committee’s role and the Board’s
governance framework are on page 66 and the results of
the assessment of the Committee’s performance as part
of the annual Board evaluation may be found on page 65.
In line with the reporting requirements, the report is split
into three sections:
1. This introduction;
2. A summary of the current Directors’ Remuneration
Policy (as approved by shareholders at the 2022
AGM); and
3. The Directors’ Remuneration Report
REMUNERATION DECISIONS AND OUTCOMES
IN 2022
PENSIONS
We reported in 2021 that the Committee had agreed
and implemented a plan to ensure that the Executive
Directors’ pensions align with the average percentage
contribution or entitlement available to staff in the
relevant market by the end of 2022. In 2022 this was
5% (in Jersey and UK) with Executive Director pensions
being fully aligned by the end of 2022 as planned. The
Committee will periodically review the average workforce
entitlement to ensure that Executive Directors continue
to be aligned. Pension benefits for future Executive
Directors will also be aligned with the average percentage
contribution or entitlement available to staff in the
relevant market.
2022 REMUNERATION COMMITTEE ACTIVITY
MAY – AGM
• Remuneration Policy approved by shareholders
• Directors’ Report on Remuneration approved by
Shareholders
SEPTEMBER – COMMITTEE MEETING
• 2023 incentive considerations (including Senior
Manager workforce reward,shareholder alignment,
CEO pay ratio and gender pay gap)
• Governance update
• Directors’ Remuneration Policy planning
DECEMBER – COMMITTEE MEETING
• Update on Directors’ and Senior Managers’
Remuneration review
• Update on outstanding awards
• Risk and rewards consideration
• 2023 Remuneration Committee calendar
• Review of Committee’s terms of reference
MARCH – COMMITTEE MEETING
• 2021 Outcomes
• 2022 Annual Bonus operation
• 2022 PSP measures
• Pension changes impact analysis
• Implement the Directors’ Remuneration Policy in
respect of incentives for 2023 (both annual bonus
and PSP).
• Engage with shareholders on the draft ‘Cosmos
Era’ Directors’ Remuneration Policy for
presentation and approval at the 2024 AGM.
• Monitor reward performance and ensure
theincorporation of risk in the Company’s
incentivestructure
KEY ACTIVITIES IN THE YEAR AHEAD
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
73 JTC Annual Report 2022
VARIABLE INCENTIVES
2022 was arguably the best performing year in JTC’s
history and I am pleased that remuneration outcomes
for 2022 reflect both the exemplary performance of the
business and the significant contribution made by the
Executive Directors’ during the year.
Under the Remuneration Policy, each Executive Director
is eligible for a maximum annual bonus opportunity
of 100% of salary with performance assessed based
on a balanced scorecard of financial and non-financial
measures that support the Group strategy. For 2022,
consistent with the desire to align Executive Directors’
bonuses with the remuneration framework in place for
the wider Group and the approach taken in recent years,
the Executive Directors’ elected to cap their maximum
opportunities to 50% of salary. 2022 bonus outturns
based on performance ranged between 25% and 40% of
salary for the Executive Directors’.
Vesting of the 2020 PSP awards for the CEO and CFO
depended on the achievement of stretching targets
against two metrics: TSR and EPS. The COO had an
additional metric of the Group business plan which was
also weighted equally. JTC’s TSR was at the 97th percentile
against the FTSE Small Cap Index comparator group for
this award; as a result the TSR element fully vested. JTC
achieved an adjusted underlying EPS of 33.27p within
the three year period, as a result of which 100% of this
element vested. The Committee also determined that
the Group business plan achieved 100% vesting (further
details are provided later in this report). Consequently,
the 2020PSPaward vested at 100% of maximum for all
Executive Directors’.
APPLICATION OF DISCRETION
During the year, the Committee did not apply any
discretion to the 2022 annual bonus outturn or the vesting
of the 2020 PSP award. The Committee agreed that the
final pay-out of the annual bonus and vesting of the 2020
PSP award were reflective of the respective performance
periods and that the Policy operated asintended.
Full details of the 2022 outcomes are provided in the ‘at
a glance table’ on page 76.
PAY ARRANGEMENTS FOR 2023
During the year the Committee received updates on the
employee benefits review and all employee and Senior
Managers’ remuneration related policies in order to
provide the context for, and to ensure alignment with,
the policy on Executive Director remuneration.
SALARY
When determining the executive salary increases for 2023,
the Committee was mindful of the external environment,
the wider workforce, the individual contributions of the
Executive Director’s, JTC’s outstanding growth and
shareholder returns since the IPO (23.1% CAGR) and
significant remuneration compression across the business,
including at the management and executive levels during
the same period.
In response to the employment environment and the
inflationary pressures faced by JTC’s employees, the
Company, with advice from management, has put in
place measures to target remuneration spend for 2023,
including average salary adjustments of approximately
11% for the wider workforce which is higher than recent
years and an increased annual bonus pool to enable the
Company to fairly recognise JTC’s strongest contributors.
The focus on rewarding JTC’s employees competitively,
fairly, and consistently has been especially important
given the heightened competition for talent, with
JTC staff being strongly in demand across all markets
anddisciplines.
This focus extended to the Committee’s review of the
executive salary increases for 2023. The Committee
considered the Executive Directors’ track record of
performance since the IPO (and leading to the Company
entering the prestigious FTSE250), the average salary
increases for the wider workforce and reviewed updated
benchmark data that reflected the current talent
environment. The Committee is cognisant of the risks of
an undue reliance on benchmark data and its approach
has been to refer to benchmark data for Executive
Directors sparingly. As a result, whilst the salary levels for
the Executive Directors have generally been at or below
wider workforce salary increases, they have not been
meaningfully adjusted since the IPO in 2018. Since that
time the performance and development of the Executive
Directors has been demonstrated through the success
that JTC has achieved with the business having doubled in
size within three years of an IPO and despite challenging
economic conditions resulting from the Covid pandemic
and the war in Ukraine, the Company remains on track
to double in size again. Given the Executive Directors’
track record of success, the Committee believes they have
demonstrated skills and experience that are highly sought
after in the market and it is appropriate to now reposition
their salaries to ensure that they are appropriate
compared to similar companies in the FTSE250 Index.
In this context, the Committee approved salary increases
for 2023 of 10% for the CEO, 8.1% for the CFO, and
9.9% for the COO. These salary increases are below
the workforce average salary increase of approximately
11%. This is the first significant salary adjustment for
the Executive Directors’ since the IPO in 2018. The
Committee considers these increases to be critical to
ensuring that remuneration is set at levels which are
competitive externally and fair compared to other senior
management roles within the Company.
The Committee will keep executive remuneration
arrangements under review to ensure that they remain
market competitive internally and externally and
commensurate with the growth in scale and complexity
of the business.
VARIABLE INCENTIVES
JTC’s unique ‘shared ownership’ culture is supported by a
consistent variable incentive framework across the Group
which includes an annual bonus that rewards annual
delivery together with performance shares that are tied
to the long-term performance of the Company to foster
a strong ownership culture.
As previously described, 2022 was an exceptional year
and these results, achieved against a very challenging
economic backdrop, demonstrating the resilience,
robustness, and effectiveness of JTC’s strategy and
business model. Consistent with the overarching
philosophy of rewarding for performance, the Committee
felt it was important to provide the Executive Team with
due recognition and incentive to build on this success
in the next business plan cycle (the Cosmos Era). The
Committee also wanted to ensure that management
REMUNERATION REPORT CONTINUED
is appropriately incentivised through the PSP over the
same period, particularly in the context of the heightened
competition for talent. The Remuneration Committee has
therefore decided that an exceptional PSP award of 200%
of salary should be granted in 2023 (normally 150% of
salary) This is intended to increase the alignment of the
Executives with the shareholder experience by ensuring
that vesting, if any, is subject to very stretching levels
of performance linked to JTC’s TSR performance (which
for this award will be relative to the FTSE 250 Index,
excluding real estate and investment trusts) and adjusted
underlying EPS performance from 2023 to 2025. This
award will be granted within the exceptional limit of up
to 250% of salary contained in JTC’s Remuneration Policy,
which Shareholders approved last year. The Committee
believes that an award at 200% of salary is appropriate
given the exceptional performance and growth and in the
scale of the business, the stretching targets reflecting the
goal of doubling again the size of the business, as well as
the exceptional market dynamics and competition for our
most valuable asset – our people.
For 2023, the annual bonus will continue to be measured
against a balanced scorecard of financial and non-financial
measures aligned to the Group’s strategy, including ESG
measures which the Committee has undertaken to
monitor over the course of 2023.
Full details of the maximum 2023 opportunities are
provided in the ‘at a glance table’ on page 76 and 2023
implementation details are further described from
page93.
REMUNERATION POLICY REVIEW
(FORAPPROVAL IN 2024)
The Committee recognises the role that remuneration
plays in the global competition for professionals across
our industry, and the retention and incentivisation of the
leadership team to deliver a demanding business plan for
sustained growth and value creation. As JTC perpetuates
its growth, our executives who have proven their ability to
continue to deliver against their challenging targets in an
exceptional external environment, are in great demand.
Whilst our existing remuneration policy was approved by
shareholders at the 2022 AGM, the global competition
for talent has intensified with increasing compensation
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
74 JTC Annual Report 2022
REMUNERATION REPORT CONTINUED
compression between the Executives and other senior
leaders across the business.
Ensuring that JTC’s remuneration approach, practices,
and outcomes fully support the company’s strategy is the
Committee’s overarching priority for 2023 and beyond.
Therefore, the Committee has undertaken to accelerate
the review of the Remuneration Policy over the course of
2023. This will ensure that remuneration arrangements,
including salaries and incentive opportunities, are
competitive in a dynamic sector with a rapidly evolving
talent landscape to support JTC’s growth and that it
continues to be aligned with the interests of JTC and
its shareholders and is consistent with the needs and
priorities of the forthcoming business strategy cycle being
the Cosmos Era.
While the overall structure of the remuneration
arrangements will be retained, changes may be required
to provide greater flexibility to ensure remuneration
alignment within the industry in which we operate and for
senior management across the organisation as a whole.
The Committee will engage with its principal shareholders
and shareholder representative groups to consult on
proposals to update the Directors’ Remuneration Policy
in 2023. Any changes to the policy will be presented for
shareholder approval at the 2024 AGM.
MICHAEL GRAY,
Remuneration Committee Chair
6 April 2023
WHO SUPPORTS THE COMMITTEE?
The Committee appointed Mercer in October 2020 as independent external remuneration advisers following a
competitive process. Mercer is a founder member of the Remuneration Consultants Group and, as such, voluntarily
operates under the Code of Conduct in relation to executive remuneration consulting in the UK
(www.remunerationconsultantsgroup.com). Neither Mercer (nor its parent, Mercer Limited) has any other
remuneration or unrelated connection with the Group and is considered to be independent by the Committee.
Fees paid to Mercer totalled £50,370 (excluding expenses and VAT) for the 2022 financial year in their capacity as
advisers to the Committee.
AGM SHAREHOLDER VOTING
RESOLUTION VOTES FOR VOTES AGAINST VOTES WITHHELD
Approve Directors’ Remuneration Report
(2022 AGM)
122,812,080 5,366,206 4,171
95.81% 4.19%
Approve Remuneration Policy (2022 AGM) 122,812,080 5,366,206 4,171
95.81% 4.19%
2022 was an exceptional year for JTC, with
the successful integration of the 7 acquisitions
from 2021 and the further development of the
Commercial Office providing material benefits
to the Group, including the growth ourbanking
platform and global tax compliance team,
bothadding additional revenues from the
existing client base and as service lines in their
own right.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
75 JTC Annual Report 2022
This section provides a summary of the remuneration policy approved in 2022 and our approach to implementing this for our Executive Directors in 2023.
PAY ELEMENT POLICY 2023 IMPLEMENTATION LINK TO JTC’S STRATEGY
BASE SALARY Reviewed annually with increases effective 1 January; reflects the
individual’s role andcontribution.
Increases take account of those applied across the wider workforce; the
Committee retains discretion toaward higher increases where
appropriate to take into account market conditions, performance and/or
development of the individual, a change in the responsibility and/or
complexity of the role, newchallenges or a new strategic direction
fortheCompany.
CEO: £492,377 (10.0% increase)
CFO: £352,531 (8.1% increase)
COO: £273,106 (9.9% increase)
Creating long-term value for our
• shareholders
• employees
Being a responsible business
BENEFITS Executives are entitled to receive life assurance, pension contributions,
private medical insurance andother de minimis benefits in kind.
Unchanged from Policy.
PENSION Pension benefits for the incumbent Executive Directors will be aligned
with the average percentage contribution or entitlement available to
staff in the relevant market (5% in Jersey and UK) by the end of 2022.
Prevailing contribution rates shall apply from the effective date of this
policy through to the end of2022.
Pension benefits for future Executive Directors will be aligned with the
average percentage contribution or entitlement available to staff in the
relevant market.
JTC conducted a global pension review in late 2022
following which certain adjustments were made
toincrease contributions for the wider workforce.
JTC has undertaken to continue this review over
thecourse of 2023 to ensure that the pension
contributions for incumbent Executive Directors
continue to be aligned with the average of the
widerworkforce.
Employer of choice
ANNUAL BONUS Maximum opportunity: 100% of salary.
Performance measures, targets and weightings are set at the start of the
year. Performance is measured on financial, operational and individual goals.
Malus and clawback provisions apply.
Unchanged from Policy.
Performance will be measured based on tailored
scorecards comprised of shared financial goals and
strategic goals linked to the successful execution of
JTC’s business plan.
Creating long-term value for our
• shareholders
• employees
• clients
• intermediary partners
• communities
Being a responsible business
DEFERRED BONUS SHARE
PLAN (“DBSP”)
All employees are eligible to participate; it is intended that Executive
Directors, Senior Managers and certain managers below Senior Manager
willparticipate.
For Executive Directors, any bonus earned over 50% of salary is deferred
into shares for 3 years.
The Committee may include further financial and non-financial
performance.
Unchanged from Policy. A unique culture based on Shared Ownership
OUR REMUNERATION AT A GLANCE
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
76 JTC Annual Report 2022
PAY ELEMENT POLICY 2023 IMPLEMENTATION LINK TO JTC’S STRATEGY
PERFORMANCE SHARE PLAN
(“PSP”)
Normal maximum opportunity: 150% of salary (exceptional maximum
of 250%).
Performance is measured over TSR and adjusted underlying EPS.
An additional 2-year holding period applies post-vesting.
Malus and clawback provisions apply.
Award of 200% of salary for all Executive Directors.
Whilst this is above the normal maximum
opportunity of 150% of salary it remains within the
limits approved by shareholders within the past
12 months.
Performance will be measured by TSR and EPS over a
period of 3 years.
Creating long-term value for our
• shareholders
• employees
• clients
• intermediary partners
• communities
Efficient capital deployment
Being a responsible business
A unique culture based on Shared Ownership
EMPLOYEES INCENTIVE
PLAN (“EIP”)
All employees are eligible to be granted an award except for Executive
Directors
It is designed to incentivise high performance and may include performance
measures – these will be reviewed by the Committee each year.
Executive Directors are not eligible to participate. A unique culture based on Shared Ownership
SHAREHOLDING
GUIDELINES
Executive Directors are required to build or maintain a shareholding
requirement equivalent to 150% of their base salary.
Post-cessation, Executives are required to hold on to the lower of (1)
their share ownership at departure or (2) their in-post share ownership
guideline (i.e. 150% of annual base salary) for a period of 2 years.
In-post guidelines unchanged from Policy, post-
cessation guidelines introduced.
A unique culture based on Shared Ownership
Being a responsible business
MALUS AND CLAWBACK
PROVISIONS
Recovery provisions may be applied to the annual bonus, DBSP and PSP
in certain circumstances including:
• materially inaccurate information
• material breach of employment contract which would include,
without limitation, any event or omission by the Executive that
contributes to a material loss or reputational damage to the Company
• material breach of any compromise agreement
• material breach of fiduciary duties
Cash bonuses will be subject to clawback, with deferred shares being
subject to malus, over the deferral period. PSP awards will be subject to
malus over the vesting period and clawback from the vesting date to the
third anniversary of the relevant vesting date.
Unchanged from Policy. Being a responsible business
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
77 JTC Annual Report 2022
2022 PERFORMANCE AT A GLANCE & REMUNERATION OUTCOMES
2022 SINGLE FIGURE REMUNERATION
BASE SALARY BENEFITS PENSION ANNUAL BONUS
Base salary Benefits
0 £300 £600 £900 £1,200 £1,500
Nigel Le Quesne
Martin Fotheringham
Wendy Holley
Thousands
Pension Annual bonus PSP
2022 Annual bonus award (further details on pages 80 to 82)
FINANCIAL METRICS:
The above charts are based on the following assumptions:
EBITDA margin
33.0%
38.0%
35.0%
33.0%
Actual
Exceptional
Exceeds
Meets
Cash Conversion
91.0%
90.0%
87.5%
85.0%
Actual
Exceptional
Exceeds
Meets
Group Net Organic Growth
12.0%
10.0%
9.0%
8.0%
Actual
Exceptional
Exceeds
Meets
NON-FINANCIAL METRICS:
The Non-Financial metrics includes Strategic Execution and Growth, Investor Relations, Risk and Compliance
and ESG, People and Culture targets. The Committee reviewed these targets holistically; a description of the
performance achieved against this metric is detailed on page 82.
The above charts are based on the following assumptions:
Max.
opportunity
% of salary
Capped max.
opportunity
%ofsalary
Outturn
£
Outturn
(% of salary)
1
Nigel Le Quesne 100% 50% £179,046 40%
Martin Fotheringham 100% 50% £107,618 33%
Wendy Holley 100% 50% £62,126 25%
1 The Executive Directors elected to cap their 2022 annual bonus opportunity to 50% of salary to promote alignment with the wider workforce in
regards to annual bonus payouts and the balance between short- and long-term incentives as part of the overall pay mix.
PSP (further details on page 86)
The 2020 PSP award was subject to performance conditions for a period ending on 31 December 2022. Final
vesting of the TSR, EPS and Group Plan objectives are shown below:
100%
80%
60%
40%
20%
0%
20%0% 40% 60% 80% 100%
TSR
TSR threshold performance begins at median
rankingagainst the FTSE Small Cap with 25% of
theelement vesting rising to full vesting for upper
quartile performance.
JTC at 31 December 2022 ranked 97th percentile
and therefore the TSR element has fully vested.
Actual
Maximum
Threshold
33.3p
29.8p
23.8p
EPS
EPS threshold performance begins at 23.8p with
25%of the element vesting rising to full vesting
for29.75p.
JTC at 31 December 2022 achieved an adjusted
underlying EPS of 33.27pand therefore 100% of the
EPS element ofthe awardvests.
WENDY HOLLEY: GROUP BUSINESS PLAN
The Group Business Plan incorporates Group, Divisional (ICS and PCS), Development, Finance and Operational
targets. The Committee reviewed all targets holistically and determined that this element would vest at 100%
of maximum. A description of the performance achieved against this metric is detailed on page 83.
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
78 JTC Annual Report 2022
ANNUAL REPORT ON REMUNERATION
The Annual Report on Remuneration and the Annual Statement will be put to a Shareholder vote at the AGM on 23 May 2023. Sections of the report are subject to audit and these have been flagged where applicable.
SINGLE TOTAL FIGURE OF REMUNERATION FOR EXECUTIVE DIRECTORS (UNAUDITED)
The table below sets out the total remuneration payable to each Executive Director for the years ended 31 December 2022 and 31 December 2021.
Single Total Figure of Remuneration
Base
Salary
1
Benefits
2
Pension
3
Annual
Bonus
4
PSP
5
Other
6
Total
Total
Fixed Total Variable
Nigel Le Quesne
2022 £447,615 £2,913 £44,762 £179,046 £744,255 N/A £1,418,560 £495,290 £923,271
2021 £435,000 £2,913 £43,500 £130,500 £713,273 N/A £1,325,186 £481,413 £843,773
Martin Fotheringham
2022 £326,116 £2,913 £32,612 £107,618 £542,223 N/A £1,011,481 £361,641 £649,841
2021 £316,925 £2,976 £31,693 £95,078 £545,316 N/A £991,988 £351,594 £640,394
Wendy Holley
2022 £248,504 £2,973 £12,425 £62,126 £101,889 N/A £427,917 £263,902 £164,015
2021 £241,500 £2,954 £12,075 £48,300 £114,510 £59,740 £479,079 £256,529 £222,550
1 Base Salaries were increased effective 1 January 2022; the figures above represent the increased salaries for the year as disclosed in the prior year remuneration report.
2 Benefits provided to Executive Directors include healthcare and annual membership provisions.
3 Executives receive contributions to the Group Occupational Retirement Plan which is a defined contribution plan. Contributions reflected in the table are actual pension contributions in 2022. Executive pensions were aligned to the workforce average at a rate of 5% of salary at the end of 2022.
4 In 2022, the Executive Directors elected to cap their 2022 annual bonus opportunity to 50% of salary to promote alignment with the wider workforce and to provide additional funding for the bonus pool to the rest of employees. In 2021, the Executive Directors elected to cap their 2021 annual bonus opportunity
to 40% of salary to promote alignment with the wider workforce in regards to annual bonus payouts and to support a desired balance between short and long-term incentives as part of the overall pay mix.
5 Estimated value of 2020 PSP award at 746 pence per share being the average of the closing mid-market share price in the 3 day period ending 31/12/2022. 2019 PSP values have been restated to reflect actual vesting of awards based on a share price of 843p on the date of vesting. The share price on the date of
grant was 425p, therefore £353,675, £270,394 and £56,779 of the CEO, CFO and COO’s 2019 awards were due to share price appreciation. PSP participants are not entitled to any dividends (or any other distribution) and do not have the right to vote in respect of Shares subject to an Award until the Award vests.
6 In 2021, the COO received a distribution from the Employee Incentive Plan for her contributions to JTC as an employee prior to her appointment as an Executive Director and appointment to the Board.
2022 ANNUAL BONUS (UNAUDITED)
The table below summarises our annual bonus framework for 2022 and includes measures that the Committee believes provide a fair balance of reward for financial and non-financial performance. Each Executive has a personal
scorecard with shared financial and non-financial objectives.
ANNUAL BONUS SCORECARD
Performance is assessed against performance ranges that are defined at the beginning of each performance year, in line with the business plan and investor guidance, as applicable.
FINANCIAL MEASURES STRATEGIC MEASURES ADJUSTED UNDERLYING EPS STRATEGIC EXECUTION AND GROWTH
GROUP NET ORGANIC GROWTH INVESTOR RELATIONS EBITDA MARGIN RISK AND COMPLIANCE
CASH CONVERSION ESG, PEOPLE AND CULTURE EFFICIENT CAPITAL ALLOCATION COMMERCIAL & OPERATIONAL EFFICIENCY
IMPROVEMENTS
The detail of the measures, targets and weightings may be varied by the Committee year-on-year based on the Company’s strategic priorities. The achievement of the objectives is measured on a point’s basis against determination of
whether goals were met and where performance exceeded expectations or was deemed exceptional.
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
79 JTC Annual Report 2022
BONUS SCORECARD – FINANCIAL MEASURES
The table below sets out performance against the financial targets under the annual bonus scorecard which comprise a weighting of 50% for the COO and 60% for the CEO and CFO on a combination of the following measures, with
performance ranges set based on a sliding scale of challenging targets.
GROUP FINANCIAL METRICS THRESHOLD TARGET MAXIMUM 2022 PERFORMANCE
UNDERLYING ADJUSTED EPS
PERFORMANCE VERSUS
FINANCIAL CONSENSUS
Lower quartile
ofaverage
consensus range
Median ofaverage
consensus range
Upper quartile
ofaverage
consensus range
Adjusted underlying EPS of 33.27p.
NET ORGANIC REVENUE
GROWTH
8% 9% 10% Achieved net organic revenue growth of 12%, above exceeding maximum performance expectations
EBITDA MARGIN 33% 35% 38% Achieved overall EBITDA margin of 33.0%, at the bottom of the threshold
CASH CONVERSION (IN
LINE WITH GUIDANCE)
85% 87.5% 90% 91% cash conversion, above maximum target
EFFICIENT CAPITAL
ALLOCATION
ROIC / WACC <
1.25
ROIC / WACC
1.25
ROIC / WACC 1.5 ROIC / WACC of 1.58, exceeding maximum performance
COMMERCIAL &
OPERATIONAL EFFICIENCY
IMPROVEMENTS
Demonstrate sound strategic and commercial judgement in
theacquisition selection process and effect swift integration
strategies with demonstrable attention to individual workstream
delivery and minimal impact to Business as Usual
Following the seven acquisitions that were successfully completed in 2021 (i.e. SALI, Segue Partners, EFS, Ballybunion,
Indos, perFORM) and integrated into the JTC Group in 2022, incremental revenue totalling £31.8m was recorded in
2022.
In line with JTC’s commitment towards disciplined capital allocation, considered in excess of 40 acquisition and other
transaction opportunities to ensure they pass JTC’s investment criteria and deliver value to our shareholders
Demonstrate revenue uplifts / cross sales which supports
organicgrowth
Achieved a record level of new business wins in 2022 amounting to over £24m, a testament to JTC’s market-leading
delivery capabilities and strong reputation in the market
Continued to create opportunities for new revenue streams, including over £10m generated from taxation, banking and
treasury revenues (up from £3m in 2021), which now accounts for more than 5% of Group revenues
For the second consecutive year, cross sales in line with JTC’s strategy has more than doubled year-over-year to c.£5m
(2021: £2.5m). This was achieved through the deployment and focus on “Alchemy” as a priority of JTC’s Galaxy business plan.
Demonstrate technology enabled solutions effecting
commercial improvements
Continued to drive delivery innovation and efficiency through technology enabled solutions.
In 2022, JTC won a transformational mandate with Amaro, a US-based global bank, worth $4.0m which is the largest
ever new mandate win. This strategic deal provides delivery of an innovative outsourcing and technology solution that is
highly automated, digitally centric, and work-flow driven to deliver services to 2,500+ new entities on JTC’s platform.
JTC also continued to advance the implementation of Blueprint to drive operating efficiencies (c. 75%) in core processes
of the Fund Administration and Fund Accounting teams.
In 2022, JTC also created an innovative cash management work-flow prototype that was implemented in the Cayman
office and subsequently integrated into the wider Alteryx data integration platform that is forecasted to generate
significant new revenues in 2023.
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
80 JTC Annual Report 2022
BONUS SCORECARD – NON-FINANCIAL MEASURES
The table below sets out performance against the non-financial targets under the annual bonus scorecard, which comprise a weighting of 40% for the CEO and CFO and 50% for the COO. Non-financial performance categories
reflectshort-term operational and strategic priorities of the business that are critical to our continued success and are assessed based on key milestones or performance in line with our business plan on a combination of the
followingmeasures.
NON-FINANCIAL METRICS 2022 GROUP OBJECTIVES
STRATEGIC EXECUTION
AND GROWTH
In accordance with our Jurisdictional Strength Index (JSI), a proprietary system that grades both the current JTC internal strength and overall market attractiveness of a given jurisdiction,
weachieved overall improvements of 7% and 3% for the ICS and PCS divisions, respectively, across all jurisdictions. This resulted in an overall improvement of 4.3% across both divisions.
Successfully completed acquisition of New York Private Trust Company (NYPTC), a Delaware-chartered non-deposit trust company, in line with JTC’s strategy to continue its growth in the US
market and in particular, to develop its US domestic trust services offering in what is a large and growing market. Significant commercial opportunities have been identified to provide a wider
range of discretionary trust services.
Successful integration of Segue Partners and Ballybunion Capital in the year, with both businesses trading above expectations and delivering incremental revenue growth through being part of
the broader JTC Group.
INVESTOR RELATIONS
JTC continued to establish deep relationships with institutional investors and other relevant capital markets participants, completing Investor Roadshows in April and September, with over
120 meetings conducted, to reinforce JTC’s strategic vision and long-term investment case, as well as to promote an active and constructive dialogue about the business.
During 2022, JTC retained their shareholders (majority of top 20 shareholders are long-term owners) and expanded the geographic diversity of their register most notably with new significant
investors from Europe and the U.S., which is a reflection of JTC’s success and growth across these regions. New analyst coverage was initiated in 2022, which is a further positive reflection of
JTC’s reputation and the strong relationships established with the investment community.
JTC continued to strengthen the quality of its financial reporting and communications and enhanced accessibility whilst reducing the carbon footprint of such reporting by making disclosures
digitally accessible.
RISK AND COMPLIANCE
There were no material risk events or losses during 2022 despite a marked increase in the external risk environment predominantly related to geopolitical conflict and increased volumes of
cybercrime. This is reflective of the robust risk management protocols that are in place to mitigate material adverse risks (including commercial, regulatory, legal, reputation, and operational) so that
they are appropriately identified and managed.
The Group Risk Register has continued to evolve with the introduction of a revised Risk Escalation Policy and Procedure in 2022 that has been embedded across the organisation including
through training for employees and for newly acquired businesses.
JTC further evolved its enterprise risk management framework across the organisation. In 2022, risk ownership priorities were embedded as performance goals in divisional balanced scorecards
for the wider workforce to establish clearer risk ownership accountabilities. There was focused effort on vulnerability management and on improving, enhancing, and configuring JTC’s
information security and governance controls. Furthermore, JTC has continued to enhance the employee security awareness training and provide tools and communications to ensure its
workforce is aligned to the Information Security strategy. This provides a good foundation for the evolution of a target operating model for the Group’s approach to regulatory compliance,
enterprise risk management, and internal audit.
JTC has continued to build upon strong regulatory relationships in all jurisdictions and received good outcomes from routine regulatory inspections – a strong foundation and performance in
light of the increased regulatory scrutiny across the industry during 2022. Additionally, proactive relationship management ensured more measured regulatory amendments in key markets.
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
81 JTC Annual Report 2022
NON-FINANCIAL METRICS 2022 GROUP OBJECTIVES
ESG, PEOPLE AND CULTURE
During the year and under the leadership of the Chief Sustainability Officer, JTC continued to embed its ESG framework across the business, including the creation of an ESG Committee at the
Board and the formation of an ESG Forum which is a senior management team that oversees and drives all aspects of JTC’s corporate ESG roadmap and delivery programme.
In Q2 2022 and in line with JTC’s commitment to ESG leadership, JTC launched an innovative virtual Chief Sustainability Officer (vCSO) service to provide clients with off-the-shelf support on
ESG risk assessments, reporting and compliance.
JTC also continued to demonstrate its commitment to transparent ESG reporting by aligning ESG-related disclosures with the SASB standard and, for the first time in 2022, with TCFD.
JTC maintained its Carbon Neutral+ status, became a UN PRI member, and made a voluntary submission to participate in the Carbon Disclosure Project to further demonstrate its
commitment to ESG leadership.
Completed the second phase of a comprehensive talent and succession planning exercise across the organisation to enable better and more targeted ways to address talent risks in response to
a hyper competitive talent market.
JTC conducted an inaugural global employee survey to collect feedback on JTC’s shared ownership culture, workplace, strategy, and culture of recognition. The overall global average score was
54.4 out of a possible 70.
Employee turnover (for regretted leavers) was below the self-imposed benchmark of 10%, demonstrating JTC’s strong employee retention across all jurisdictions.
Continued to reinforce distinctive ‘Ownership for All’ culture. All measures in relation to JTC’s shared ownership culture were met, including achieving 100% employee share ownership.
Continued to enhance core management and leadership programmes to develop employees and embedded the Divisional Balanced Scorecard across the organisation to drive focus on
continuous improvement and high performance.
2022 ANNUAL BONUS OUTCOMES FOR EXECUTIVE DIRECTORS
The Committee conducted a comprehensive analysis in respect of the progress achieved against the financial and non-financial measures. Overall, it was concluded that 2022 was a successful year, marked by strong performance
financially and execution against four strategic areas. During a period of increased economic volatility and macroeconomic pressure, the strength of the business and continued resilience has been particularly admirable.
The Committee assesses the performance delivered for each financial and non-financial metric against pre-established targets to derive an overall holistic performance grade for the total scorecard, in line with JTC’s 10-point range
which is used throughout the organisation which incorporates expected behaviours. The Committee awarded a score of 9.0 out of 10 for the CEO, 8.5 out of 10 for the CFO and 8.0 out of 10 for the COO.
Each Executive Director is eligible for a maximum annual bonus opportunity of 100% of salary. For 2022, consistent with the ‘stakeholder mentality’ and a desire to promote a shared alignment with the remuneration framework in
place for the wider Group, the Executive Directors elected to cap their maximum opportunities to 50% of salary. The table below sets out the basis on which the potential 2022 annual bonus award is calculated as a % of maximum
opportunity and also the outturns with the self-nominated cap of 50% of salary.
BONUS SCORECARD – NON-FINANCIAL MEASURES (CONTINUED)
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
82 JTC Annual Report 2022
Total scorecard performance grade
Bonus % Award 6 7 8 9 10
All Executives based on Policy Maximum 30% 50% 67% 83% 100 %
Self-elected cap at 50% for 2022 10% 20% 25% 40% 50%
The following table sets out the outcome of the 2022 annual bonus, based on the total scorecard performance grade and reflecting the elected 50% of salary cap for each Executive Director:
Max
Opportunity
(% of Salary)
2022 Capped
Opportunity
(% of Salary)
Outturn
(% of Salary)
Outturn
£
Nigel Le Quesne 100% 50% 40% £179,046
Martin Fotheringham 100% 50% 33% £107,618
Wendy Holley 100% 50% 25% £62,126
The Remuneration Policy states that any bonus earnt in excess of 50% of salary should be deferred into shares on a net of tax basis for 3 years. As such, this will not apply for the 2022 bonus outturn.
PSP AWARDS VESTING IN 2022 (UNAUDITED)
The 2020 PSP award is subject to financial and business plan performance conditions, as applicable, ending on 31 December 2022. We have set out the final vesting details and related performance assessment considerations of the
award below.
All Executive Directors are subject to the financial vesting conditions, including relative TSR and adjusted underlying EPS performance. For the Chief Executive Officer and the Chief Financial Officer, 100% of vesting is subject to
relative TSR and adjusted underlying EPS performance. For the Chief Operating Officer, 67% of vesting is relative to TSR and adjusted underlying EPS performance and the balance is linked to a Group business plan condition. Please
see the section below for further details.
• The relative TSR performance condition underscores our commitment to share price out performance. Median TSR performance versus the FTSE Small Cap Index results for threshold vesting (i.e. 25% of maximum), rising to full
vesting for upper quartile performance versus the FTSE Small Cap Index. This relative TSR benchmark was the relevant FTSE Index at the time the PSP awards were granted in 2020, which was prior to JTC’s ascent to the FTSE 250
Index. JTC’s TSR performance to 31 December 2022 was positioned at 97th percentile against the FTSE Small Cap Index. As such, there is full vesting of the relative TSR element.
• The adjusted underlying EPS performance condition was originally set with reference to available analyst forecasts. Adjusted underlying EPS of 23.8p results in threshold vesting (i.e. 25% of maximum) and adjusted underlying EPS
of 29.75p qualifies for full vesting. For the year ended 31 December 2022, JTC’s adjusted underlying EPS was 33.09p and as such this element of the award qualified for 100% vesting.
For the Chief Operating Officer, 33% of vesting is tied to the Group business plan performance condition, further described below.
The Group business plan performance condition was assessed against JTC’s delivery against its current Galaxy Era business plan which commenced in 2021 and growth delivered since the completion of the Odyssey Era plan in 2020.
The Group business plan performance condition includes five business plan pillars (Financial, Risk, Management, Organic Growth and Inorganic Growth) and 12 business plan elements; each element was assigned a potential value of
10 as part of the performance assessment. The details of the Galaxy Era business plan are not disclosed in full as they are considered to be commercially sensitive; however, the salient highlights are described below.
The Committee reviewed JTC’s performance against the business plan over the past three years and was satisfied that vesting of 100% was warranted on account of the early progress and delivery against the Galaxy Era business plan,
as well as shareholder value of 94.7% created over the three-year period.
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83 JTC Annual Report 2022
PILLARS HIGHLIGHTS OVER THE 3-YEAR PERFORMANCE PERIOD
FINANCIAL
Becoming a $1bn+ business
(bymarket capitalization)
toachieve the scale required
toenable capital raising and
additional growth funding;
delivering a margin of at least
33%, organic growth of c. 8
–10% per annum at a Group
level, and a long-term cash
conversion rate of c. 85 – 90%
3-year average performance:
• Underlying EBITDA margin: 33.1%, within the medium term guidance range of 33 – 38%
• Organic growth: 9.8% which is at the top end of the medium-term guidance range of 8 – 10%. Organic growth was driven by record new business wins of £24.6m in 2022, a c. 17.7%
increase over the £20.9m recorded in 2021
• Cash conversion: 90%, in excess of the top of the guidance range of 85 – 90%
• As at 31 December 2022, JTC’s market capitalization was c.$1.3bn, which has exceeded the Galaxy Era business plan goal of becoming a $1bn+ business ahead of expectations
• Continued long-term investments in technology to support the evolution of JTC’s Future of Banking Strategy which aims to simplify the processing of legacy banking platforms to remove
inefficiencies, reduce operating costs, and reduce risk through automation while also capitalising on new opportunities such as the provision of foreign exchange services
Organic growth: Capturing
market share, expanding JTC’s
core service and product
offerings, and expanding JTC’s
global network and platform
Organic growth highlights include:
• Record new business wins of £24.6m in 2022 and double digit growth in new business wins delivered in each of the 3 years, exceeding business plan expectations
• JTC has been consistently recognised as a trusted leader in trust and fund administration in Jersey, the UK, and MENA over the past 3 years, including recognition as a ‘Tier 1’ trust company
for the fifth consecutive year by ePrivateClient and ‘ESG Fund Administrator’ of the year by Drawdown Awards
• Material product and service offering expansion, including registrars services, depositary and operational due diligence services in the UK, new employee retirement and reward services,
new corporate services in Ireland, new Manco services in Luxembourg, and specialised fund administration, IDF structuring, and domestic trust services in the U.S. market
Inorganic growth: Successfully
completing and integrating
acquisitions; increasing the scale
in existing markets through
external growth opportunities;
and entry into new markets
Inorganic growth highlights include:
• Completed 11 deals over the 3-year performance period in line with JTC’s commercial investment criteria: Anson Gsy, Sanne PCS, NESF, RBC cees, Indos, Segue, Ballybunion, perFORM, SALI,
EFS, and NYPTC; integration is ongoing for acquisitions that were completed or announced in 2022
• Successfully increased scale in strategically important markets, including developing JTC’s footprint in the U.S., UK, and Ireland. Added new capabilities and new service markets, including
administration of insurance dedicated funds in the U.S., as well as depositary, operational due diligence, and insurance dedicated funds
RISK
Maturing JTC’s cyber security
framework to ensure that the
Company meets the regulatory
and compliance requirements
applicable to JTC and the
expectations of its clients
andinvestors
• Continued to evolve JTC’s cyber strategy, including the adoption of the National Standards & Technology (NIST) Cyber Security Framework; the alignment of JTC’s Policies, Standards, and
Procedures to ISO 27001 Standards; and the achievement of advanced industry certifications and qualifications related to cyber security and risk management.
• Significant efforts in 2022 to enhance risk ownership and definition; driving employee security awareness; focusing on vulnerability management; and increasing due diligence for third
parties and the vendor supply chain
• No major findings from JTC’s 2nd NIST external assessment reflecting the robustness and continued evolution of JTC’s risk management framework
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84 JTC Annual Report 2022
PILLARS HIGHLIGHTS OVER THE 3-YEAR PERFORMANCE PERIOD
MANAGEMENT
Becoming an employer of choice
and achieving carbon neutral
status by 2022
• 3-year average labour turnover for regretted employees remains well below the self-imposed benchmark of 10%, demonstrating a culture of high engagement at JTC
• Continued evolution of the JTC Academy over the past 3 years, including investment in key initiatives such as leadership and management development programmes (“Step-Up to
Management” and “Managing the JTC Way”); induction and skills development; Group-wide talent development activities; and sponsorship of professional education opportunities to
support the lifelong learning and growth of employees around the world
• Comprehensive succession and talent management tools developed for all Regional Heads and their leadership teams, and progress underway for all other employees
• JTC was also recognised by ProShare for its distinctive shared ownership culture in 2021
• Through engagement and enhancements to shared ownership, all new joiners now receive a contingent share award upon successful completion of probation in order to enable all
permanent employees to have a direct shareholding
• Successfully maintained Carbon Neutral+ accreditation which certifies that JTC has offset more than its calculated carbon emissions each year
• Building out the ESG Forum to focus on key pillars which incorporates DEI review and delivery of global benefit roll out; revisions and introductions to family friendly policies and to
introduce and act on the output of the first global employee opinion survey
• Demonstrated tech-enabled solutions for transformational deal providing delivery of innovative outsourcing solutions and creating cost and time efficiencies for cash management and
within the ICS operating platform
• New and innovative solutions delivered to drive M&A integration, operational efficiencies, and margin improvement, including the establishment of a new Operations Committee (OpsCo),
a management team that was set up to ensure efficiencies and projects are integrated in line with JTC’s operations governance framework and that operational changes are evaluated
against the project criteria so that change management plans are fit for purpose and are delivered on time/budget
The table below summarises the vesting outcomes based on performance assessed for each measure over the performance period ended 31 December 2022.
Performance Measures
Measure Weighting
Indicative Vesting
(% of Element)
Total Indicative Vesting
(% of Maximum)
Total Indicative Vesting
(No. Shares)
Nigel Le Quesne TSR 50% 100%
100% 99,762
EPS
1
50% 100%
Martin Fotheringham TSR 50% 100%
100% 72,684
EPS
1
50% 100%
Wendy Holley TSR 33% 100%
100% 13,658
EPS
1
33% 100%
Group Business Plan 33% 100%
1 Adjusted underlying EPS.
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85 JTC Annual Report 2022
2022 PSP AWARDS (UNAUDITED)
During the year ended 31 December 2022, Executive Directors received a conditional award of shares which may vest after a three year performance period ending on 31 December 2024, based on the achievement of stretching
performance conditions. The maximum levels achievable under these awards are set out in the table below:
Performance Measures
Max. Award
(% of salary)
Max. Award
1
(£) No. Shares Measure Weighting
Vesting
date
Holding
period
2
Nigel Le Quesne
150% £671,423 83,062 TSR 50%
01.01.2025 2 Years
EPS
3
50%
Martin Fotheringham
150% £489,174 60,516 TSR 50%
01.01.2025 2 Years
EPS
3
50%
Wendy Holley
150% £372,756 46,114 TSR 50%
01.01.2025 2 Years
EPS
3
50%
1 Face value of award based on the 3-day average share price to 19 April 2022 being £8.08.
2 Executive Directors are required to hold vested awards for a period of two years following vesting so as to further strengthen the long-term alignment of Executives’ remuneration packages with shareholders’ interests and, if required, to facilitate the implementation of provisions related to clawback.
3 Adjusted underlying EPS.
The targets for the 2022 PSP award are outlined below. Adjusted underlying EPS targets are set with reference to available analyst forecasts and projected in line with expected organic growth.
Performance over the period % of element vesting Performance over the period % of element vesting
TSR vs. FTSE 250 index
(excluding real estate and
investment trusts))
Below median 0% Straight-line vesting occurs
between points
Adjusted underlying EPS Below 31p per share 0% Straight-line vesting occurs
between points
Equal to median 25% 31p per share 25%
Equal or exceeds upper
quartile
100% equal to exceeds 38.7p per
share
100%
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86 JTC Annual Report 2022
STATEMENT OF DIRECTORS’ SHAREHOLDINGS AND INTERESTS IN SHARES (UNAUDITED)
As at 31 December 2022, the Directors have significant shareholdings in the Company, as follows:
Unvested shares
With
performance
conditions
Without
performance
conditions Shareholding
Shares legally
owned as at
31 December
2022
4
PSP
awards
DBSP
awards
% Interest in
voting rights
Requirement
(% of salary)
Share-holding as at
31 December 2022
(% of salary)
5
Requirement met?
Executive Directors
Nigel Le Quesne
1
10,691,983 182,528 – 7.17% 150% 17,867.15% Yes
Martin Fotheringham
2
766,247 132,983 – 0.51% 150% 1,757.51% Yes
Wendy Holley
3
393,779 101,335 – 0.26% 150% 1,185.28% Yes
Non-Executive Directors
Mike Liston 45,452 n/a n/a 0.03% n/a n/a n/a
Dermot Mathias 25,863 n/a n/a 0.01% n/a n/a n/a
Michael Gray 17,242 n/a n/a 0.01% n/a n/a n/a
Erika Schraner 16,129 n/a n/a 0.01% n/a n/a n/a
Kate Beauchamp 0 n/a n/a 0.00% n/a n/a n/a
1 Includes Ordinary Shares held by Ocean Drive Holdings Limited, a company in which Nigel Le Quesne is beneficially interested. On 20 April 2022, he received 84,611 shares which vested under the PSP. On 13 June he purchased 30,062 shares on the open market.
2 On 20 April 2022 Martin Fotheringham received 64,687 shares which vested under the PSP. On 13 June 2022, he purchased 11,651 shares on the open market. On 8 July 2022 he purchased 12,437 shares on the open market.
3 On 19 April 2022 that Wendy Holley purchased 13,088 shares on the open market. On 20 April 2022 she received 13,584 shares which vested under the PSP.
4 In accordance with LR 9.8.6. there have been no further changes in the interests of each director during the period, nor in the period from 1 January 2022 to the date of this Report.
5 Share price as of 31 December 2022 was £7.48.
6 On 6 April 2023 the vesting of awards of granted to Directors under the PSP in April 2020 was confirmed as follows: Nigel Le Quesne 99,762, Martin Fotheringham 72,684 and Wendy Holley 13,658. The vested shares remains subject to a 2 year holding period from vesting.
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87 JTC Annual Report 2022
TOTAL SHARE AWARDS GRANTED (UNAUDITED)
The table below sets out details of the Executive Directors’ outstanding share awards as at 31 December 2022.
Award
No.
shares
1,2
Max.
award as %
of salary
Value
at date
of grant
% Vesting
at threshold
performance Vest date
3
Hold
4
Nigel Le Quesne
PSP 2020 99,762 100% £420,000 25% 31.03.2023 2 Years
PSP 2021 99,466 150% £652,500 25% 01.01.2024 2 Years
PSP 2022 83,062 150% £671,423 25% 01.01.2025 2 Years
Total 282,290
Martin Fotheringham
PSP 2020 72,684 100% £306,000 25% 31.03.2023 2 Years
PSP 2021 72,467 150% £475,388 25% 01.01.2024 2 Years
PSP 2022 60,516 150% £489,174 25% 01.01.2025 2 Years
Total 205,667
Wendy Holley
PSP 2020 13,658 25% £57,500 25% 31.03.2023 2 Years
PSP 2021 55,221 150% £362,250 25% 01.01.2024 2 Years
PSP 2022 46,114 150% £372,756 25% 01.01.2025 2 Years
Total 114,993
Total 602,950
1 PSP Share awards are nil cost (in the case of existing shares) or the nominal value of the Shares if newly issued. All PSP awards made to date are nil cost.
2 Number of shares awarded calculated based on the average of the middle market quotations in the 3 immediately preceding days prior to the date of Grant (2020: £4.21, 2021: £6.56, 2022: £8.08).
3 The end of the performance period for all PSP awards is on the third anniversary of the date of Grant. Awards granted from 2021 will vest the day after the performance period ends; i.e. the date on which the Committee determines the extent to which the performance conditions have been satisfied.
4 Executive Directors are required to hold vested awards for a period of two years following vesting so as to further strengthen the long-term alignment of Executives’ remuneration packages with shareholders’ interests and, if required, to facilitate the implementation of provisions related to clawback.
LOSS OF OFFICE PAYMENTS (UNAUDITED)
No loss of office payments were made during the year.
PAYMENTS TO PAST DIRECTORS (UNAUDITED)
No payments to past Directors were made during the year.
FEES RETAINED FOR EXTERNAL NON-EXECUTIVE DIRECTORSHIPS
Executive Directors may hold positions in other companies as Non-Executive Directors subject to the prior approval of the Chairman. Executive Directors are also permitted to retain fees for these appointments subject to Board
approval. None of the Executive Directors currently hold positions in other companies.
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88 JTC Annual Report 2022
RELATIVE SPEND ON PAY
The table below shows the relative 2022 expenditure of dividends against employee costs compared to 2021. These figures are underpinned by amounts
from the Notes to the Financial Statements.
Year-on-year increases 2022
1
2021
Annual
Increase
%
Dividends Paid In Financial Year £11.8m £9.1m 30%
Total Employee Costs £105.8m £89.5m 18%
1 Total employee costs for the financial year include £4.8m (2021: £13.9m) in relation to the EIP award granted by the Board in July 2021. Excluding this accounting-related expense, the annual increase in
employee costs of 34% would be in line with the increase in dividends.
ALIGNMENT BETWEEN PAY AND PERFORMANCE
TOTAL SHAREHOLDER RETURN (“TSR”) PERFORMANCE
The following graph shows, for the financial year period ended 31 December 2022 and for each of the financial year ends since JTC Group’s IPO, the TSR
on a holding of JTC’s ordinary shares of the same kind and number as those by reference to which the FTSE 250 is calculated. The Committee feels that
the FTSE 250 is the appropriate comparator index given JTC’s ascent to the FTSE 250 on 16 November 2020. However, we note that our 2020 PSP award
measures performance over the FTSE Small Cap in line with our prior position within that index.
The TSR graph represents the daily value of £100 invested in JTC Group on 14 March 2018, compared with the value of £100 invested in the FTSE 250
Index over the same period. JTC’s TSR since IPO has grown by 171% which is significantly more than both the FTSE 250 (6% growth) and FTSE Small Cap
(24% growth). This strong growth continues to reinforce JTC’s solid investment case since JTC’s admission to the FTSE 250 Index in November 2020.
The Committee believes that the Policy and the supporting reward structure provide a clear alignment with the strategic objectives and performance of
the Company. The table below shows the CEO’s total remuneration since IPO and the achieved annual variable and long-term incentive pay awards as a
percentage of the plan maxima.
2022 2021 2020 2019 2018
Single total figure of remuneration £1,418,560 £1,325,186 £1,018,684 £630,697 £538,239
Annual bonus award against maximum % 40%
1
30%
1
42%
2
67%
2
80%
PSP vesting rates against maximum opportunity % 100%
3
86%
3
100%
3
n/a n/a
1 The Executive Directors elected to cap their 2022 and 2021 annual bonus opportunity to 50% and 40% of salary, respectively. The bonus outturn for the CEO in 2022 was 40% of salary and in 2021 was
30% of salary; the maximum shown here reflects the outturn against the policy maximum of up to 100%.
2 Represents the value of the annual bonus following the voluntary reduction by the CEO. In 2020 and 2019, the CEO waived part of his bonus (representing c.38% and 15% of salary in each of the respective
years) in order to better align with the remuneration outcomes for the wider workforce; the funds waived were reinvested in the wider bonus pot for employees.
3 Reflects the final PSP vesting of the 2018, 2019 and 2020 PSP awards.
Relative importance of spend on pay
2021
Dividends Paid In Financial Year Total Employee Costs
2022 2021 2022
0
£20
£40
£60
£80
£100
£120
£89.5m
£105.8m
£9.1m
£11.8m
Dec 2018Mar 2018 Dec 2019 Dec 2020 Dec 2021 Dec 2022
50
100
150
200
250
300
350
JTC's TSR vs. FTSE Small Cap and FTSE 250
JTC FTSE 250 FTSE SmallCap
TSR rebased to 100 on 12 March 2018
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89 JTC Annual Report 2022
PERCENTAGE CHANGE IN DIRECTOR REMUNERATION
The table below shows the percentage year-on-year change in salary, benefits and annual bonus for all Directors compared to the average of all employees in the UK, which JTC believes is the most appropriate peer group as it provides
consistency with the CEO pay ratio methodology.
The number of JTC employees in the UK has more than quadrupled since 2020. As such, the data set of UK employees is sensitive to year-over-year changes given that historically the number of employees in the UK has been relatively
small.
Increases in benefits costs reflects this volatile sample set and the year on year change in the running costs of providing these benefits. Annual bonuses for the workforce have increased year-on-year as have salary increases which
reflected cost of living, inflation, and other critical adjustments made throughout the year to aid talent attraction and retention in response to a competitive labour market.
The Executive Directors received salary increases within the year, changes in benefits were minimal and reflect the year-on-year changes in the cost for the same benefits. The Executives’ elected to cap their 2022 annual bonus
opportunity to 50% of salary to promote alignment with the wider workforce which was higher compared to 2021 where it was capped at 40%, with year-on-year performance also reflected in the higher bonus outturn.
2022
Salary
%
Benefits
%
Annual Bonus
%
Executive Directors
Nigel Le Quesne 2.9% 0.0% 37.2%
Martin Fotheringham 2.9% -2.1% 13.2%
Wendy Holley 2.9% 0.6% 28.6%
Non-Executive Directors
Mike Liston 20% N/A N/A
Dermot Mathias 7% N/A N/A
Michael Gray 0% N/A N/A
Erika Schraner 8% N/A N/A
Kate Beauchamp
1
N/A N/A N/A
Average pay for UK employees 7.2% 3.4% 10.6%
1 Kate Beauchamp joined the Board as a Non-Executive Director on 24 March 2022; as such no comparative year on year data is available.
CEO PAY RATIO
As a non-UK incorporated company with fewer than 250 UK employees, JTC is not required to adhere to the CEO pay reporting regulations. The Committee is keen; however, to ensure that disclosure in relation to executive pay is
transparent and has chosen to make a voluntary disclosure of CEO pay ratios.
JTC has adopted ‘Option A’ as its methodology to calculate the pay ratio as it believes it is the most comparable and relevant methodology:
• Determine the total FTE remuneration for all the Company’s UK employees for the relevant financial year
• Rank those employees from low to high, based on their total FTE remuneration
• Identify the employees whose remuneration places them at the 25th, 50th (median) and 75th percentile points. These employees were identified as of 31 December 2022.
Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2022 Total FTE remuneration for all UK employees 40 29 16
2021
1
Total FTE remuneration for all UK employees 42 29 17
1 Figures have been restated to account for changes to the single figure in 2020 in relation to the calculation of benefits and PSP.
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90 JTC Annual Report 2022
Due to the small subset of employees included within the analysis for calculating the pay ratios, the Committee is aware of the data sensitivity in publishing the salary and bonuses of the employees at each quartile. As such, the
Committee has decided not to disclose this data publicly but will review this in future as the number of JTC working in the UK grows.
This analysis shows that the CEO’s pay is 29x greater than the median average of JTC’s UK employees, which is consistent with the median pay ratio assessed for 2021. The small subset of employees in the UK which make up the pay
quartiles are sensitive to changes in incumbents and potential future volatility in the ratios due to changes in JTC’s financial and share price performance.
SINGLE TOTAL FIGURE OF REMUNERATION FOR NON-EXECUTIVE DIRECTORS (UNAUDITED)
The table below sets out the total remuneration payable to each Non-Executive Director for the year ended 31 December 2022.
Single Total Figure ofRemuneration Chairman Base SID
Audit & Risk
Committee
Chair
Remuneration
Committee
Chair
Nomination
Committee
Chair
Governance & Risk
Committee
Chair Total
Mike Liston
2022 £120,000 N/A N/A N/A N/A N/A N/A £120,000
2021 £100,000 N/A N/A N/A N/A N/A N/A £100,000
Dermot Mathias
2022 N/A £60,000 £10,000 £10,000 N/A N/A N/A £80,000
2021 N/A £60,000 £10,000 £5,000 N/A N/A N/A £75,000
Michael Gray
2022 N/A £60,000 N/A N/A £10,000 N/A N/A £70,000
2021 N/A £60,000 N/A N/A £10,000 N/A N/A £70,000
Erika Schraner
2022 N/A £60,000 N/A N/A N/A £5,000 N/A £65,000
2021 N/A £60,000 N/A N/A N/A N/A N/A £60,000
Kate Beauchamp
1
2022 N/A £46,521 N/A N/A N/A N/A £329 £46,850
2021 N/A N/A N/A N/A N/A N/A N/A N/A
1. Kate Beauchamp was appointed as Non-Executive Director on 24 March 2022 and fees have been prorated accordingly. The Governance and Risk Committee was established on 9 December 2022 and Kate Beauchamp’s fees as the Chair of the Governance and Risk Committee have been prorated accordingly.
Kate’s total fees will be £65,000 for the full year in 2023.
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91 JTC Annual Report 2022
IMPLEMENTATION OF THE REMUNERATION POLICY DURING 2023
This section provides details of how the Remuneration Policy will be implemented for 2023.
The Committee recognises the role that remuneration plays in the global competition for talent, and the retention and incentivisation of the leadership team to deliver a demanding business plan for continued growth and value
creation. As JTC continues to expand its business our Executives’ who have proven their ability to continue to deliver the transformation needed against an exceptional external environment’ are in great demand. Whilst our existing
remuneration policy was approved by shareholders at the 2022 AGM, the global competition for talent has intensified with increasing compensation compression between the Executives and other senior leaders within our business.
The Committee has undertaken to accelerate the review of the Remuneration Policy over the course of 2023 to ensure that remuneration arrangements are globally competitive in a rapidly evolving talent landscape to support JTC’s
continued growth and continue to be aligned with the interests of JTC and its shareholders.
The decision to accelerate the Remuneration Policy review is also intended to ensure better alignment of JTC’s remuneration strategy with the needs and priorities of the business. While we intend to maintain the overall structure of
our remuneration arrangements, changes may be required to provide greater flexibility to ensure alignment on remuneration with industry, senior management and across the organisation as a whole.
The Committee will engage with its principal shareholders and shareholder representative groups to consult on proposals to update the Directors’ Remuneration Policy in 2023. Any changes to the policy to take effect for 2024 will be
presented for shareholder approval at the 2024 AGM.
BASE SALARY
When determining the executive salary increases for 2023, the Committee was mindful of the external environment, the wider workforce, the individual contributions of the Executive Director’s, JTC’s outstanding growth and
shareholder returns since the IPO (23.1% CAGR) and significant remuneration compression across the business, including at the management and executive levels.
In response to the talent environment and the inflationary pressures faced by JTC’s employees, the Company, with advice from management, has put in place measures to target remuneration spend for 2023, including average salary
adjustments of approximately 11% for the wider workforce which is higher than recent years and an increased annual bonus pool to enable the Company to fairly recognise JTC’s strongest contributors. The focus on rewarding JTC’s
employees competitively, fairly and consistently has been particularly important given the heightened competition for talent, with JTC staff being particularly in demand.
This focus extended to the Committee’s review of the executive salary increases for 2023. The Committee considered the Executive Directors’ track record of performance since the IPO, the average salary increases for the wider
workforce and reviewed updated benchmark data that reflected the current talent environment. The Committee is cognisant of the risks of an undue reliance on benchmark data and its approach has been to refer to benchmark data
for Executive Directors sparingly. As a result, whilst the salary levels for the Executive Directors have generally been at or below wider workforce salary increases, they have not been meaningfully adjusted since the IPO in 2018. Since
that time the performance and development of the Executive Directors has been demonstrated through the success that JTC has achieved with JTC having doubled in size within 3 years of an IPO and despite challenging economic
conditions resulting from the Covid pandemic and the war in Ukraine, the Company being on track to double in size again. Given the Executive Directors’ track record of success, the Committee believes they have demonstrated skills
and experience that are highly sought after in the market and it is appropriate to now reposition their salaries to ensure that they are appropriate compared to similar companies in the FTSE250 Index.
In this context, the Committee approved salary increases for 2023 of 10% for the CEO, 8.1% for the CFO, and 9.9% for the COO. These salary increases are below the workforce average salary increase of approximately 11%. This is
the first significant salary adjustment for the Executive Directors since JTC’s IPO in 2018. The Committee considers these increases to be critical to ensuring that remuneration is set at levels which are competitive externally and fair
compared to other senior management roles within the Company taking account of internal relativities.
The Committee will keep executive remuneration arrangements under review to ensure that they remain market competitive internally and externally and commensurate with the growth in scale and complexity of the business.
Executive Director Base salary Effective date Increase Reason
Nigel Le Quesne £492,377 1 January 2023 10.0% Below that of the wider workforce
Martin Fotheringham £352,531 1 January 2023 8.1% Below that of the wider workforce
Wendy Holley £273,106 1 January 2023 9.9% Below that of the wider workforce
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92 JTC Annual Report 2022
BENEFITS AND PENSION
In line with the Policy, Executive Directors’ will continue to receive life assurance, pension contributions, private medical insurance and other de minimis benefits in kind. The average employer contribution rate in the UK and Jersey for
employees was 5% at the end of 2022 and Group-wide pension arrangements, including those for the Executive Directors, are being reviewed following the outcomes of JTC’s global pension review which was undertaken in the last
quarter of 2022. JTC remains committed to ensuring alignment of pension contributions for incumbent Executives, future Executive Directors, and the wider workforce.
ANNUAL BONUS
As noted Executive Directors will have a maximum annual bonus opportunity for 2023 of up to 100% of salary as per the Policy. The maximum annual bonus opportunity, which, in all cases will be no more than the maximum
permitted by the Policy, will be agreed annually with input from the Executive Directors taking into consideration factors such as, but not limited to, the alignment of payout outcomes and pay mix with the wider workforce.
A combination of financial and non-financial weightings will be retained for Executive Directors’, with financial measures comprising at least 50% of the total weighting. Annual bonus performance measures will be aligned with JTC’s
Group business plan to incentivise the achievement of annual delivery targets. All Executive Directors’ have shared financial measures to reinforce a common focus on creating shareholder value and to align with best practice. To
reinforce its ESG commitment, JTC will also keep ESG-related measures under review to ensure that they remain strategically relevant for the business. The Executive Directors’ specific objectives under each theme are considered
commercially sensitive and as such will be reported in the following financial period.
Group Financial Metrics Nigel Le Quesne Martin Fotheringham Wendy Holley
Financial Metrics 60% 60% 50%
Adjusted underlying EPS
Group Net Organic Growth
EBITDA Margin
Cash Conversion
Efficient Capital Allocation
Deliver Commercial and Operational Efficiency Improvements
Non-Financial Metrics 40% 40% 50%
Strategic Execution and Growth
Investor Relations
Risk and Compliance
ESG, People and Culture
PERFORMANCE SHARE PLAN
As previously described, 2022 was an exceptional year and these results, achieved against a very challenging economic backdrop, demonstrate the resilience, robustness and effectiveness of JTC’s strategy and business model.
Consistent with the overarching philosophy of rewarding for performance, the Committee felt it was important to provide the Executive Directors with due recognition and incentive to build on this success in the Cosmos Era. The
Committee also wanted to ensure that management is appropriately incentivised through the PSP over the same period, particularly in the context of the heightened competition for talent. The Remuneration Committee has
therefore decided that an exceptional PSP award of 200% of salary should be granted in 2023. This is intended to increase the alignment of the Executives with the shareholder experience by ensuring that vesting, if any, is subject to
very stretching levels of performance linked to JTC’s TSR performance (which for this award will be relative to the FTSE 250 Index, excluding real estate and investment trusts) and adjusted underlying EPS performance from 2023 to
2025. This award will be granted using the exceptional limit of up to 250% of salary contained in JTC’s Remuneration Policy. The Committee believes that an award at 200% of salary is appropriate given the exceptional performance
and growth in the scale of the business, the stretching target of doubling again the size of the business, as well as the exceptional market dynamics and competition of talent.
Under the PSP, performance share awards will be made in April 2023, in line with our shareholder approved policy. The number of shares over which awards will be made is determined by the 3-day average share price prior to date of
award. The Committee intends to make PSP grants to each of the Executive Directors as set out below, subject to shareholder approval, with values based on salaries effective 1 January 2023 as set out below. Actual award values and
shares granted will be disclosed in next year’s Annual Report.
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
93 JTC Annual Report 2022
Group Financial Metrics
%
of Salary
PSP
Value
£ TSR EPS
Nigel Le Quesne 200% £984,753 50% 50%
Martin Fotheringham 200% £705,063 50% 50%
Wendy Holley 200% £546,212 50% 50%
These performance share awards will be subject to three-year targets for the following measures: relative TSR and adjusted underlying EPS. The targets for the 2023 PSP award are outlined below:
Performance over
the period % of element vesting
Performance over
the period % of element vesting
TSR vs. FTSE 250 Index (excluding
realestateandinvestment trusts) Below Median 0%
Straight-line vesting
occurs between points adjusted underlying EPS Below 34.7p per share 0%
Straight-line vesting
occurs between points
Equal to Median 25% 34.7p per share 25%
Equal or Exceeds
Upper Quartile 100%
Equal to or exceeds
43.4p per share 100%
SHAREHOLDING REQUIREMENTS
Executive Directors are required to build or maintain a shareholding requirement equivalent to 150% of their base salary. All the Executive Directors comply with this requirement. To align with the requirements of the UK Corporate
Governance Code and emerging best practices, the Committee has adopted post-employment guidelines whereby Executives are required to hold the lower of the in-post shareholding requirement and the incumbent’s level of holding
on exiting the business for a period of 2 years. These guidelines are compliant with the IA’s guidelines and echo our ethos of shared ownership and wealth creation for all employees.
NON-EXECUTIVE DIRECTORS’ FEES FOR 2023
The Committee were last reviewed Non-Executive Director fees in 2021. The table below summarises fees for 2023 which are unchanged from 2022:
Fees
With Effect From
1 January 2023
Chairman £120,000
Base £60,000
SID £10,000
Audit Committee Chair £10,000
Remuneration Committee Chair £10,000
Nomination Committee Chair £10,000
Governance and Risk Committee Chair £5,000
SERVICE CONTRACTS
In accordance with general market practice, Executive Directors have a rolling service contract. The Executives have service contracts with JTC (copies of which are available to view at the Company’s registered office) that are
terminable on 6 months’ notice from the Group and 6 months’ notice from the Executive Director. This practice will also apply for any new Executive Directors. The Non-Executive Directors’ letters of appointment do not contain
provision for notice periods or for compensation if their appointments are terminated.
The Directors’ Remuneration Report has been approved by the Board and signed on its behalf by:
MICHAEL GRAY
Remuneration Committee Chairman
6 April 2023
REMUNERATION REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
94 JTC Annual Report 2022
DIRECTORS’ REPORT
The directors present their report and the audited
financial statements for the year ended 31 December
2022. The report has been prepared in line with the UK
Companies Act 2006, and the Corporate governance
report and the Shareholder and corporate information
section form part of this Directors’ report. The Strategic
report contains certain information equivalent to that
required in a report of the directors.
COMPANY STATUS
JTC PLC is public company incorporated in Jersey. It is
listed on the London Stock Exchange main market with
a premium listing.
COMPLIANCE WITH THE UK CORPORATE
GOVERNANCE CODE
It is a requirement of Listing Rule 9.8.7R that as an overseas
company with a premium listing the Company must
comply with the Code or explain in its Annual Report and
accounts any areas of non-compliance and the Company’s
reasons for this. As at the date of this Report, the Company
complies with the UK Corporate Governance Code
published by the Financial Reporting Council.
SUBSIDIARY COMPANIES
JTC operates through a number of subsidiaries in various
different countries. The list of subsidiaries is available at
note 33 to the Consolidated financial statements.
FORWARD-LOOKING STATEMENTS
Where this Annual Report contains forward-looking
statements, these are based on current expectations
and assumptions, and speak only as of the date they are
made. These statements should be treated with caution
due to the inherent risks, uncertainties and assumptions
underlying any such forward-looking information.
The Company cautions investors that a number of factors,
including matters referred to in this document, could cause
actual results to differ materially from those expressed or
implied in any forward-looking statement. Such factors
include, but are not limited to, those discussed under
principal risks and uncertainties on pages 50 to 53.
Forward-looking statements can be identified by the
use of relevant terminology including the words: ‘may’,
‘will’, ‘seek’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’,
‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or other words
of similar meaning and include all matters that are
not historical facts. They appear in a number of places
throughout this Annual Report and include statements
regarding the intentions, beliefs or current expectations of
our officers, Directors and employees concerning, among
other things, the Group’s results of operations, financial
condition, liquidity, prospects, growth, strategies and
thebusiness.
Neither the Group, nor any of its officers, Directors or
employees, provides any representation, assurance or
guarantee that the occurrence of the events expressed or
implied in any forward-looking statements in this Annual
Report will actually occur. Undue reliance should not be
placed on these forward looking statements. Other than
in accordance with our legal and regulatory obligations,
the Group undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result
of new information, future events or otherwise.
FINANCIAL AND OPERATIONAL INFORMATION
RESULTS AND DIVIDENDS
The Group income statement shows a profit for the year
ended 31 December 2022 of 200m (2021: 147.5m). The
directors have announced the payment of a final dividend,
of 6.88 pence per ordinary share (2021: 5.07 pence) to
be paid on 1 July 2023 to shareholders on the register of
members on 2 June 2023. An interim dividend of 3.1 pence
per ordinary share was paid on 21 October 2022, giving
a total dividend for the year of 9.98 pence per ordinary
share (2021: 7.67p).
INNOVATION
Innovation, supported by our talented people, and by
research and development, plays a key role in supporting
JTC’s business performance. Details of such activities are
given in the Strategic report.
ACQUISITIONS AND DISPOSALS
Information on acquisitions made during the year is
contained in note 31 to the Group financial statements.
POST BALANCE SHEET EVENTS
Details of events occurring after the end of the
reporting period are contained in note 41 to the Group
financialstatements.
SHARE CAPITAL
Details of the Company’s share capital and changes during
the year ended 31 March 2022 are set out in note 26 to
the Company financial statements.
FINANCIAL RISK MANAGEMENT, OBJECTIVES
AND POLICIES
Descriptions of the use of financial instruments and JTC’s
treasury and risk management objectives and policies are
set out in the Financial review within the Strategic report,
and also in note 29 to the Group financial statements.
POLITICAL DONATIONS
JTC did not make any political donations during the year
ended 31 December 2022.
GOING CONCERN
Details of the adoption of the going concern basis in
preparing the Group financial statements are set out
in note 2 to the Group financial statements, and are
incorporated into this report by reference. For details
of the adoption of the going concern basis in preparing
the Company financial statements, see also the Viability
Statement at page 54.
DIRECTORS
INFORMATION ON DIRECTORS HOLDING
OFFICE IN THE YEAR
The directors’ names, biographical details, and skills and
experience are shown in the Board of directors section
(pages 56 and 57).
Particulars of directors’ remuneration, service contracts
and interests in the Company’s ordinary shares are shown
in the Report on directors’ remuneration (pages 73 to 94).
There were no changes in the directors’ interests (as at
31 December 2022) in the ordinary shares between the
end of the financial year and 5 April 2023.
In line with the UK Corporate Governance Code, as at the
date of this report, all directors, being eligible, will offer
themselves for re-election at the 2023 AGM. An evaluation
of the performance of the Board, its committees and
individual directors was carried out during the financial
year. The Board is satisfied that all directors seeking
re-election contribute effectively and demonstrate
commitment to their roles. The Corporate governance
report contains further details of the evaluation process.
INSURANCE AND THIRD-PARTY
INDEMNIFICATION
During the year and up to the date of approval of this
Annual Report, the Company maintained liability
insurance and third-party indemnification provisions for
its directors and officers.
APPOINTMENT AND REMOVAL OF DIRECTORS
Both the Company, by ordinary resolution, and the
directors, may elect any person to be a director. The
number of directors shall not exceed the maximum number
fixed by the Company’s articles of association. Any person
appointed by the directors shall hold office only until the
next AGM and shall then be eligible for election. The office
of a director shall be vacated on the occurrence of any of
the events listed in article 141 of the Company’s articles
of association. The Company may, in accordance with its
articles of association, remove any director from office and
elect another person in theirplace.
ANNUAL GENERAL MEETING
The Company’s 2023 AGM will be held at the Registered
Office: JTC House, 28 Esplanade, St. Helier, Jersey, JE2 3QA
at 9.30am on Tuesday 23 May 2023. Shareholders who
are unable to attend may submit questions beforehand
via email to agm@jtcgroup.com. The questions will be
addressed at the meeting, via the Company’s website
at www.jtcgroup.com or individually as appropriate.
The notice of meeting will be circulated or made
available to shareholders and will also be viewed on the
Company’swebsite.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
95 JTC Annual Report 2022
SHARE CAPITAL INFORMATION
RIGHTS AND OBLIGATIONS
The rights and obligations attaching to the ordinary
shares are set out in note 26 to the Company financial
statements and in the Company’s articles of association.
Copies of the Articles of Association are available upon
request from the Group Company Secretary, and at
JTC’sAGM.
SUBSTANTIAL SHAREHOLDINGS
The Company’s articles of association oblige shareholders
to comply with the notification obligations contained
in the UK Disclosure Guidance and Transparency
Rulessourcebook. As at 5 April 2023, the Company had
not been notified of any interests in its issued ordinary
share capital or voting rights in respect of the year. of the
following interests in its total voting rights of 5% or more
Shareholder
% Interest in
voting rights
Liontrust Asset Management 9.37
abrdn 8.29
Nigel Le Quesne 7.17
Invesco 5.93
Aegon NV 5.05
RESTRICTIONS ON TRANSFERS OF SHARES
AND/OR VOTING RIGHTS
The Company is not aware of any agreements between
shareholders that may result in restrictions on the transfer
of securities and/or voting rights and, apart from the matters
described below, there are no restrictions on the transfer of
the Company’s ordinary shares and/or voting rights:
• Certain restrictions on transfers of shares may
fromtime to time be imposed by, for example,
sharedealing regulations. In certain situations,
directors and certain employees must seek the
Company’s approval to deal in its shares.
• As described in the Report on directors’
remuneration, non-executive directors must hold
aproportion of their fees in shares, equal to their
annual fee. These shares may not normally be
transferred during their period of office.
• Certain nominee companies representing our
Employee Benefit Trust hold shares in the Company
in connection with the operation and vesting of
awards granted under of the Company’s share plans.
• Shares held by the Trustees of the Employee Benefit
Trust rank pari passu with the shares in issue and
have no special rights. Voting rights and rights of
acceptance of any offer relating to the shares held
inthe EBT rests with the Trustees, who may take
account of any recommendation from the Company.
The Trustees of the EBT may vote in respect of
shares held by them as nominees for participants,
but only as instructed by participants in respect of
their fully vested share awards. The Trustees will not
otherwise vote in respect of shares held in the EBT.
• Shares carry no voting rights while they are held
intreasury.
• Unless the directors determine otherwise, members
are not entitled to vote personally or by proxy at
ashareholders’ meeting, or to exercise any other
member’s right in relation to shareholders’ meetings,
in respect of any share for which any call or other
sum payable to the Company remains unpaid.
• Unless the directors determine otherwise, members
are not entitled to vote personally or by proxy at
ashareholders’ meeting, or to exercise any other
member’s right in relation to shareholders’ meetings,
if the member fails to provide the Company with the
required information concerning interests in those
shares, within the prescribed period after being
served with a notice under the Company’s articles
ofassociation.
Details of deadlines for voting at the 2023 AGM are
contained in the notice of meeting that will be circulated
or made available to shareholders, and which will also be
viewed at the Company’s website.
PURCHASE, CANCELLATION AND HOLDINGS OF
OWN SHARES
The Company was authorised by shareholders at the 31 May
2022 AGM to replace the existing authority (as granted by
Shareholders at the 2021 AGM) to purchase its own shares
in the market up to a maximum of approximately 10% of
its issued share capital. No shares were purchased under
that authority during the financial year. As at the date of
approval of this Annual Report, the Company does not hold
any of its own shares as treasury shares.
The Company is seeking to renew the authority at the
forthcoming AGM, within the limits set out in the notice
of that meeting and in line with the recommendations
of the Pre-emption Group. This power will only be
exercised if the Directors are satisfied that any purchase
will increase the Earning Per Share of the Ordinary Share
capital in issue after the purchase and accordingly, that
the purchase is in the interest of Shareholders
The Shareholders approved the further authority to allot
Equity Securities for cash without application of the pre-
emption rights contained in Article 10 of the Articles
equivalent to approximately 10% of the issued Ordinary
Share capital of the Company until the conclusion of the
AGM to be held this year. The Directors will seek to renew
this extra authority consistent with the provisions of the
Pre-Emption Group’s updated Statement of Principles to:
(i) disapply pre-emption rights on up to 10 per cent of the
issued share capital; and (ii) disapply pre-emption rights for
an additional 10 per cent for transactions which the board
determines to be either an acquisition or a specified capital
investment as defined by the Statement of Principles.
Details of the new authorities being requested at the 2023
AGM are contained in the circular to shareholders, which
either accompanies this Annual Report or is available on
the Company’s website www.jtcgroup.com.
SIGNIFICANT AGREEMENTS – CHANGE
OFCONTROL
The Group is party to a number of agreements that take
effect, alter, terminate, or have the potential to do so,
upon a change of control of the Company following a
takeover bid. These agreements are as follows:
• The Group’s banking facilities contain provisions
which, in the event of a change of control, could
result in their renegotiation or withdrawal.
• All of JTC’s share-based employee incentive plans
contain provisions relating to a change of control.
Outstanding awards and options would normally
vest and become exercisable, subject to satisfaction
of any performance conditions at that time.
• The Company does not have agreements with any
Director or officer that would provide compensation
for loss of office or employment resulting from a
takeover, except that provisions of the Company’s
share plans may cause options and awards granted
under such plans to vest on a takeover.
• The Group is party to a limited number of
• Operational arrangements that can be terminated or
altered upon a change of control of the Company,
but these are not considered to be individually
significant to the Group’s business as a whole. In
certain cases, it is considered that their disclosure
could be prejudicial to the Company
EMPLOYMENT INFORMATION
EMPLOYMENT OF PEOPLE WITH DISABILITIES
People with disabilities have equal opportunities when
applying for vacancies. In addition to complying with
legislative requirements, the Group has procedures to
ensure it treats disabled employees fairly and manages
their training and career development needs carefully.
The policies are considered to operate effectively. The
Group supports employees who become disabled during
the course of their employment, by offering re-training or
re-deployment, to enable them to remain with the Group
whenever possible.
EMPLOYEE INVOLVEMENT
JTC is committed to employee involvement throughout
the business. The Group is intent on motivating staff,
keeping them informed on matters that concern them
in the context of their employment, and involving them
through consultative procedures.
Employees are kept well informed on matters of interest
and the financial and economic factors affecting the
Group’s performance. This is done through management
channels, meetings, publications and intranet sites.
More detail on employee engagement, together with
information on corporate responsibility, diversity,
succession planning and talent development, can be
found in the Sustainability section of the Strategic report.
JTC supports employee share ownership by providing,
whenever possible, employee share plan arrangements
that are intended to align employees’ interests with those
of shareholders.
DIRECTORS’ REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
96 JTC Annual Report 2022
MODERN SLAVERY ACT
As per Section 54(1) of the Modern Slavery Act 2015,
our Modern Slavery Statement is reviewed and approved
by the Board on an annual basis and published on our
Group website. The statement covers the activities of
the Company and its subsidiaries and details policies,
processes and actions we have taken to ensure that slavery
and human trafficking are not taking place in our supply
chains or any part of our business. More information on
our statement can be found on our website.
ANTI-BRIBERY MATTERS
We have a zero-tolerance approach to bribery. Our
anti-bribery programme operates around the Group.
The programme is built around a clear understanding
of how and where bribery risks affect our business and
comprises key controls such as: policies (anti-bribery,
gifts and entertainment, conflicts of interest, charitable
donations); procedures such as conducting due diligence
on suppliers (in particular those who will engage public
officials on our behalf); training colleagues on bribery risks
every year; and ongoing assurance programmes to test
that the controls are functioning effectively. Bribery risk
management is discussed at senior leadership groups in
each business unit, including at the Group level, and also
once a year with the Group Risk Committee.
AUDITOR INFORMATION
RELEVANT AUDIT INFORMATION
As at 6 April 2023, so far as each director is aware, there
is no relevant information needed by the auditor in
connection with preparing the audit report, of which the
auditor is unaware, and all directors have taken all steps
they ought to have taken as directors to make themselves
aware of any relevant audit information and to establish
that the auditor is aware of it.
INDEPENDENT AUDITOR
The auditor, PricewaterhouseCoopers CI LLP, has indicated
its willingness to continue in office and a resolution that
it be re-appointed as the Company’s auditor will be
proposed at the AGM.
MIRANDA LANSDOWNE
Joint Company Secretary,
JTC (Jersey) Limited, CompanySecretary
6 April 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual
Report and the Group financial statements in accordance
with applicable laws and regulations.
Company law requires the Directors to prepare Group
financial statements for each financial year. Under that
law they are required to prepare the financial statements
in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and
applicable law.
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 of their profit or loss for that period.
The Directors are responsible for:
• Preparing the Annual Report, the Group and
Company financial statements in accordance with
applicable law and regulations.
• Preparing financial statements which give a true and
fair view of the state of affairs at the balance sheet
date, and the profit or loss for the period then ended
of (a) the Group.
• Keeping sufficient accounting records that disclose,
with reasonable accuracy, at any time, the financial
position of the Group and the Company and enable
them to ensure the Group financial statements
comply with applicable laws.
• Maintaining such internal control as they determine
is necessary to enable the preparation of financial
statements free from material misstatement,
whether due to fraud or error, and have general
responsibility for taking the steps reasonably open
tothem to safeguard the assets of the Group and
the Company and to prevent and detect fraud and
other irregularities.
• The maintenance and integrity of the statutory
andaudited information on the Company’s website.
Jersey legislation and UK regulations governing
thepreparation and dissemination of financial
statements may differ from requirements in
otherjurisdictions.
In addition, the directors consider that, in preparing the
financial statements:
• suitable accounting policies have been selected and
applied consistently;
• judgments and estimates made have been
reasonable, relevant and reliable;
• the Group financial statements comply with IFRS as
adopted by the European Union;
• the Group’s and Company’s ability to continue as a
going concern has been assessed and, as applicable,
matters related to going concern have been
disclosed; and
• it is appropriate that the Group and Company
financial statements have been prepared on the going
concern basis, unless it is intended to liquidate the
Company or any Group company, or to cease
operations or there is no realistic alternative to do so.
The directors also confirm that, to the best of their
knowledge, the financial statements are prepared
in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Company and the
undertakings included in the consolidation taken as a
whole; and the Strategic report contains a fair review
of the development and performance of the business
and the position of the Company and the undertakings
included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties
they face.
In addition, each of the directors considers that the
Annual Report and financial statements, taken as a whole,
is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the
Group’s position and performance, business model
andstrategy.
By order of the Board
Approved by the Board on 6 April 2023 and signed on
its behalf by:
MIRANDA LANSDOWNE
Joint Company Secretary,
JTC (Jersey) Limited, CompanySecretary
DIRECTORS’ REPORT CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
97 JTC Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JTC PLC
REPORT ON THE AUDIT OF THE CONSOLIDATED
FINANCIAL STATEMENTS
OUR OPINION
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of
JTC PLC (the “company”) and its subsidiaries (together “the group”) as at 31 December 2022, and of their consolidated
financial performance and their consolidated cash flows for the year then ended in accordance with International
Financial Reporting Standards as adopted by the European Union and have been properly prepared in accordance with
the requirements of the Companies (Jersey) Law 1991.
WHAT WE HAVE AUDITED
The group’s consolidated financial statements comprise:
• the consolidated balance sheet as at 31 December 2022;
• the consolidated income statement for the year then ended;
• the consolidated statement of comprehensive income for the year then ended;
• the consolidated statement of changes in equity for the year then ended;
• the consolidated cash flow statement for the year then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies and other
explanatory information.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the
consolidated financial statements of the group, as required by the Crown Dependencies’ Audit Rules and Guidance.
We have fulfilled our other ethical responsibilities in accordance with these requirements.
OUR AUDIT APPROACH
OVERVIEW
AUDIT SCOPE
• Group audit scoping was performed based on profit before tax which identified fifteen significant components
covering at least 80% of group’s profit before tax.
• In determining the significant components, we also considered revenue and work in progress (“WIP”) as
secondary benchmarks, ensuring that the fifteen significant components also covered at least 75% of these
financial statement line items. Additional factors were also considered, including common reporting processes
and regulatory requirements to identify whether any additional components should be scoped in.
• The group is headquartered in Jersey, where the group financial reporting functions are located. Trading
subsidiaries are based in Africa, Americas, Caribbean, Middle East, Asia and Europe.
• We conducted the majority of our audit work in Jersey, with audit work also undertaken by component auditors
in Luxembourg, South Africa, the Netherlands and the United States of America.
KEY AUDIT MATTERS
• Recoverability of work in progress (“WIP”)
• Impairment of goodwill
• Accounting for business combinations
MATERIALITY,
• Overall group materiality: £2,100,000 (2021: £1,070,000) based on 5% of the group‘s profit before tax adjusted
for the Employee Incentive Plan (“EIP”) share award expense.
• Performance materiality: £1,500,000 (2021: £802,500).
THE SCOPE OF OUR AUDIT
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
consolidated financial statements. In particular, we considered where the directors made subjective judgements; for
example, in respect of significant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal
controls, including among other matters, consideration of whether there was evidence of bias that represented a risk
of material misstatement due to fraud.
KEY AUDIT MATTERS
Key audit matters are those matters that, in the auditor’s professional judgement, were of most significance in the
audit of the consolidated financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by the auditor, 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, and any comments we make on the results of our procedures thereon, were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
98 JTC Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JTC PLC (CONTINUED)
KEY AUDIT MATTER
HOW OUR AUDIT ADDRESSED THE KEY
AUDITMATTER
Recoverability of Work in progress (“WIP”)
Recoverability of WIP, where services are provided on a time
spent basis for client matters which have not yet been billed,
is considered a key audit matter.
WIP is required to be stated at the amount which is recoverable.
There is a significant level of judgement as estimates are
applied by management in assessing and determining the value
of WIP at the year end. Therefore, there is a risk that WIP
may not be recoverable, and that revenue could be overstated.
Accounting policies and disclosures in respect of revenue
andWIP are set out in note 4 & 13 of the consolidated
financialstatements.
We understood and evaluated the design and implementation
ofcontrols around the billing process and valuation ofWIP,
testing the key controls in this process;
For a sample of clients where WIP has been recognised and is
outstanding at the year end, we confirmed subsequent billing
and, when possible, that the cash had been received post year
end to ensure appropriateness of revenue recognition;
Where WIP was not subsequently billed and recovered post
year end for any of the clients within the sample selected,
we challenged management’s estimate and rationale
around the recoverability of the amounts through analysis
of client agreements, communication with clients, billing
and payment history with a focus on current year payments,
including considering any potential impact from the current
macroeconomic andgeo-political factors;
We assessed the appropriateness of estimates made on the
implied recovery of WIP at the year end, particularly in light
of the current macroeconomic conditions of each jurisdiction;
We assessed the provision adjustments applied, the level of WIP
written-off and credit notes raised on post year end invoices, on
a sample basis and challenged the rationale for those provision
adjustments, WIP write-offs and credit notes raised; and
We performed a standback evaluation for the implied recovery
of WIP at year end in order to assess whether there are any
indicators of management bias.
As a result of the procedures performed, we have not identified
any matters to report to those charged with governance in
respect of the WIP balance at year end.
KEY AUDIT MATTER
HOW OUR AUDIT ADDRESSED THE KEY
AUDITMATTER
Impairment of Goodwill
Acquisitions made by the group have generated asignificant
amount of goodwill which has been recognised on the
consolidated balance sheet. Theinitial allocation of goodwill
(calculated as the fairvalue of the consideration paid less
the fair value ofnet assets acquired, including intangible
assets) isdetermined at the acquisition date. Management
isrequired to perform annual impairment assessments in
respect of thecarrying value of goodwill on a cash generating
unit (“CGU”) basis.
Management uses a discounted cash flow model todetermine
the value in use of each CGU to which goodwill is allocated.
The annual impairment assessments performed bymanagement
were considered significant to our audit due to the complexity
of the assessment process and the judgements applied by
management when determining the assumptions included in
the assessment. These assumptions are based on estimates that
are affected by expected future economic and market conditions
in the geographic region and division within which a particular
CGU operates.
Accounting policies and disclosures relating to impairment
ofgoodwill are set out in note 21 oftheconsolidated
financialstatements.
We understood and evaluated the design and implementation
of controls and the inputs and the assumptions around the
preparation and review of impairment assessments;
We evaluated the inputs and assumptions in the forecast used
by management in determining the value in use for each of the
CGUs, including the appropriateness of the basis of the forecast.
We challenged management’s judgements, tested the underlying
value in use calculation and compared the forecast used in the
calculation to management’s approved forecasts and budgets;
We compared the projected cash flows for the next financial
period with the latest approved budgets for consistency;
We compared the discount rates used by management intheir
discounted cash flows to our internally developed benchmarks;
We challenged management’s key assumptions used in the
forecasts, taking into consideration potential macroeconomic
and geo-political factors on those assumptions;
We compared the prior year’s approved management forecast
to actual performance (backtesting) to help assess the quality
of management’s estimates;
We performed sensitivity analysis to identify the key assumptions
within the value in use calculations and assumptions that would
result in zero headroom for sensitive CGUs and challenged
management’s rationale for the applied rates. We also performed
sensitivity analysis to determine the extent to which a reduction
in key assumptions would result in goodwill impairment and
challenged management on the likelihood of such events occurring;
We assessed the mathematical accuracy of each discounted
cash flow model;
We considered the adequacy of the sensitivity disclosures
relating to significant estimates in the impairment assessment
of goodwill in the consolidated financial statements;
We queried management on the impact of climate change on
future client revenues to assess the impact on future cash flows
used in the goodwill impairment assessments; and
We performed a standback evaluation for the key assumptions
used in the value in use calculation in order to assess whether
there are any indicators of management bias.
As a result of the testing performed, we have not identified any
matters to report to those charged with governance in respect
of the impairment of goodwill.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
99 JTC Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JTC PLC (CONTINUED)
KEY AUDIT MATTER
HOW OUR AUDIT ADDRESSED THE KEY
AUDITMATTER
Accounting for business combinations
The group has completed one acquisition during the year.
Significant judgement is involved in calculating the fair value
of acquired assets and the allocation of the purchase price.
Judgements arise from the fact that there are a number of
assumptions included in the valuation model used to determine
the fair value of intangible assets acquired which include
customer contracts. These assumptions include estimates for
the economic useful lives of the intangible assets, projected
future earning levels, growth rates, client attrition rates and
discount rates.
Judgement is also applied in considering whether acquisitions
meet the definition of a business combination, the date control
passed and any measurement period adjustments identified.
Accounting policies and disclosures relating to the
acquisitionsare disclosed in the note 31 of the consolidated
financial statements.
We understood and evaluated the design and implementation
of controls around the preparation, review and accounting for
the acquisition;
We obtained management’s accounting judgement paper
andassessed whether the transaction was appropriately
accounted for in accordance with applicable financial reporting
standards;
With the assistance of our valuation experts, we evaluated the
appropriateness of the valuation model applied by management.
We challenged management on the date the control was
passed to JTC for the acquisition;
We performed procedures to test the fair value of consideration
transferred by agreeing consideration paid in cash to bank
statement and testing completeness of the consideration by
reviewing the purchase agreement.
We challenged management on the assumptions used in
the valuation model such as attrition rates, useful economic
life and future projections of revenue/EBITDA margins. This
included benchmarking against comparable data;
We compared the discount rate used by management in
their model to our internally developed benchmark, with the
assistance of our valuation experts;
We compared the projected revenue for the next financial
period against historical performance as provided by
management, adjusted for attrition;
We assessed the EBIT margin used in the valuation model
bycomparing against the historical performance of the
acquired business;
We performed sensitivity analysis on the key assumptions used
in the valuation model, useful economic life, attrition rates,
discount rates and revenue growth rates;
We reconciled source data used in the model to underlying
accounting records;
We performed a stand back evaluation for the key assumptions used
to determine the fair value of the acquired intangibles in order to
assess whether there are any indicators of management bias; and
We challenged management on the impact of climate change and
the macro-economic environment including high inflation and
high interest rates with the forecast, and the assumptions used.
As a result of the testing performed, we have not identified
anymatters to report to those charged with governance in
respect of the accounting for the businesscombination.
HOW WE TAILORED THE AUDIT SCOPE
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
consolidated financial statements as a whole, taking into account the structure of the group, the accounting processes
and controls, the industry in which the group operates, and we considered the risk of climate change and the potential
impact thereof on our audit approach.
The group has operating components spread internationally and two segments, namely institutional client services
and private client services. Components were considered financially significant where they exceeded 2.5% of our
primary benchmark, adjusted profit before tax, as well as revenue and WIP.
Eleven of the components in scope for group reporting were audited by PwC Channel Islands, and a further two
components were audited by PwC Network member firms providing at least 80% coverage of adjusted profit before
tax. Two component were audited by a non-PwC Network member firm. We instructed component audit teams of these
financially significant components to perform full scope audit procedures on the component’s management information.
Procedures were performed by the group audit team over all other non-significant components, which included a
combination of audit procedures on a number of non-significant components’ financial statement line items, analytical
review and journal entries testing.
As the group audit team, we determined the level of involvement required for those components to be able to conclude
whether sufficient and appropriate audit evidence had been obtained as a basis for our opinion on the consolidated
financial statements as a whole. In our role as group auditor, we exercised oversight over the work performed by
auditors of the components including performing the following procedures:
• Maintained an active dialogue with reporting component audit teams, including regular group wide audit team
conference/video calls and specific conference/video calls for each reporting territory covering scope, status,
procedures performed and results prior to inter-office reporting; and
• Video conferencing, visits/onsite audit workpaper reviews, and remote audit workpaper reviews to satisfy
ourselves as to the sufficiency of audit work performed at the significant components.
MATERIALITY
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures
and in evaluating the effect of misstatements, both individually and in aggregate on the consolidated financial
statements as a whole.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
100 JTC Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JTC PLC (CONTINUED)
Based on our professional judgement, we determined materiality for the consolidated financial statements as a
whole as follows:
Overall group
materiality
£2,100,000 (2021: £1,070,000).
How we
determinedit
5% of the group’s profit before tax adjusted for the EIP share award expense (Prior year: 5% of the
group’s profit before tax, adjusted for the gain on revaluation of the contingent consideration relating
to the acquisition of NESF and the EIP share award expense)
Rationale for
benchmark applied
The determination of materiality and the benchmark used is a matter of professional judgement.
Profit before tax is the measure used by management to assess the performance of the business
and to communicate results to the market. We have adjusted the profit before tax for the EIP share
award expense as we do not consider these transactions to be reflective of the normal operations
of the business.
For each component in the scope of our group audit, we
allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across
components was between £190,000 and £1,900,000.
Certain components were audited to a local statutory
audit materiality that was also less than our overall
groupmateriality.
We use performance materiality to reduce to an
appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds
overall materiality. Specifically, we use performance
materiality in determining the scope of our audit and
the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality
was 75% (2021: 75%) of overall materiality, amounting to
£1,500,000 (2021: £802,500) for the group consolidated
financialstatements.
In determining the performance materiality, we considered
a number of factors including the history of misstatements,
risk assessment and aggregation risk and the effectiveness
of controls – and concluded that an amount at the upper
end of our normal range was appropriate.
We agreed with the Audit Committee that we would
report to them misstatements identified during our audit
above £105,000 (2021: £53,000) as well as misstatements
below that amount that, in our view, warranted reporting
for qualitative reasons.
REPORTING ON OTHER INFORMATION
The other information comprises all the information
included in the JTC Annual Report 2022 (the “Annual
Report”) but does not include the consolidated financial
statements and our auditor’s report thereon. The directors
are responsible for the other information, which includes
reporting based on the Task Force on Climate-related
Financial Disclosures (“TCFD”) recommendations.
Our opinion on the consolidated financial statements
does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated
financial statements, our responsibility is to read the
other information and, in doing so, consider whether
the other information is materially inconsistent with
the consolidated financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. 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 based on these responsibilities.
RESPONSIBILITIES FOR THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE AUDIT
RESPONSIBILITIES OF THE DIRECTORS FOR THE
CONSOLIDATED FINANCIAL STATEMENTS
As explained more fully in the Directors’ responsibility’
statement, the directors are responsible for the
preparation of the consolidated financial statements that
give a true and fair view in accordance with International
Financial Reporting Standards as adopted by the European
Union, the requirements of Jersey law and for such
internal control as the directors determine is necessary
to enable the preparation of consolidated financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the
directors are responsible for assessing the group’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 to cease operations, or
have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE CONSOLIDATED FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the consolidated 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 will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated
financial statements.
Our audit testing might include testing complete
populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically
involves selecting a limited number of items for testing,
rather than testing complete populations. We will often
seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the
population from which the sample is selected.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the consolidated financial
statements, whether due to fraud or error, design
and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the
effectiveness of the group’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a
material uncertainty exists related to events or
conditions that may cast significant doubt on the
group’s ability to continue as a going concern over a
period of at least twelve months from the date of
approval of the consolidated financial statements. If
we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report
to the related disclosures in the consolidated
financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events
or conditions may cause the group to cease to
continue as a going concern.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
101 JTC Annual Report 2022
• Evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the
consolidated financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or
business activities within the group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision and
performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the consolidated financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
USE OF THIS REPORT
This report, including the opinions, has been prepared for
and only for the members as a body in accordance with
Article 113A of the Companies (Jersey) Law 1991 and for
no other purpose. We do not, in giving these opinions,
accept or assume responsibility for any other purpose or
to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed
by our prior consent in writing.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
COMPANY LAW EXCEPTION REPORTING
Under the Companies (Jersey) Law 1991 we are required
to report to you if, in our opinion:
• we have not received all the information and
explanations we require for our audit;
• proper accounting records have not been kept; or
• the consolidated financial statements are not in
agreement with the accounting records.
We have no exceptions to report arising from
thisresponsibility.
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’
statements in relation to going concern,longer-term
viability and that part of the corporate governance
statement relating to the company’s compliance with
the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities
with respect to the corporate governance statement as
other information are described in the Reporting on other
information section of this report.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of
the corporate governance statement ,included within
the Strategic Report is materially consistent with the
consolidated financial statements and our knowledge
obtained during the audit, and we have nothing material
to add or draw attention to in relation to:
• The directors confirmation that they have carried
out a robust assessment of the emerging and
principal risks;
• The disclosures in the Annual Report that describe
those principal risks, what procedures are in place to
identify emerging risks and an explanation of how
these are being managed or mitigated;
• The directors’ statement in the consolidated
financial statements about whether they considered
it appropriate to adopt the going concern basis of
accounting in preparing them, and their
identification of any material uncertainties to the
group’s ability to continue to do so over a period of
at least twelve months from the date of approval of
the consolidated financial statements;
• The directors’ explanation as to their assessment of
the group’s prospects, the period this assessment
covers and why the period is appropriate; and
• The directors’ statement as to whether they have a
reasonable expectation that the company will be
able to continue in operation and meet its liabilities
as they fall due over the period of its assessment,
including any related disclosures drawing attention
to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the
longer-term viability of the group was substantially
less in scope than an audit and only consisted of
making inquiries and considering the directors’
process supporting their statements; checking that the
statements are in alignment with the relevant provisions
of the UK Corporate Governance Code (the “Code”); and
considering whether the statement is consistent with the
consolidated financial statements and our knowledge and
understanding of the group and its environment obtained
in the course of the audit.
In addition, 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 consolidated financial
statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced
andunderstandable, and provides the information
necessary for the members to assess the group’s
position, performance, business model and strategy;
• The section of the Annual Report that describes the
review of effectiveness of risk management and
internal control systems; and
• The section of the Annual Report describing the
work of the Audit Committee
We have nothing to report in respect of our responsibility
to report when the directors’ statement relating to the
company’s compliance with the Code does not properly
disclose a departure from a relevant provision of theCode
specified under the Listing Rules for review by the auditors.
OTHER MATTER
In due course, as required by the Financial Conduct
Authority Disclosure Guidance and Transparency Rule
4.1.14R, these consolidated financial statements will form
part of the ESEF-prepared annual financial report filed on
the National Storage Mechanism of the Financial Conduct
Authority in accordance with the ESEF Regulatory
Technical Standard (“ESEF RTS”). This auditor’s report
provides no assurance over whether the annual financial
report will be prepared using the single electronic format
specified in the ESEF RTS.
KARL HAIRON
For and on behalf of PricewaterhouseCoopers CI LLP
Chartered Accountants and Recognized Auditor
Jersey, Channel Islands
06 April 2023
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF JTC PLC (CONTINUED)
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
102 JTC Annual Report 2022
Note
2022
£’000
2021
£’000
Revenue 4 200,035 147,502
Staff expenses 5 (105,831) (89,540)
Other operating expenses 6 (35,570) (30,114)
Credit impairment losses 12 (3,092) (1,690)
Other operating income 44 61
Share of profit of equity-accounted investee 32 478 364
Earnings before interest, taxes, depreciation and amortisation (“EBITDA”) 56,064 26,583
Comprising:
Underlying EBITDA 66,039 48,405
Non-underlying items 7 (9,975) (21,822)
56,064 26,583
Depreciation and amortisation 8 (22,261) (17,591)
Profit from operating activities 33,803 8,992
Other gains 9 14,201 24,707
Finance income 10 244 112
Finance cost 10 (12,313) (6,028)
Profit before tax 35,935 27,783
Comprising:
Underlying profit before tax 34,052 24,908
Non-underlying items 7 1,883 2,875
35,935 27,783
Income tax 11 (1,221) (1,135)
Profit for the year 34,714 26,648
Earnings per Ordinary share (“EPS”)
Pence Pence
Basic EPS 34.1 23.92 20.49
Diluted EPS 34.2 23.60 20.21
The notes on pages 105 to 141 are an integral part of these consolidated financial statements.
Note
2022
£’000
2021
£’000
Profit for the year 34,714 26,648
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss
Exchange difference on translation of foreign operations (net of tax) 38 21,314 (2,476)
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations 5 316 61
Total comprehensive income for the year 56,344 24,233
The notes on pages 105 to 141 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
103 JTC Annual Report 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Note
Share
capital
£’000
Share
premium
£’000
Own
shares
£’000
Capital
reserve
£’000
Translation
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
Balance at 1 January 2022 1,476 285,852 (3,366) 17,536 (5,335) 48,462 344,625
Profit for the year – – – – – 34,714 34,714
Other comprehensive income – – – – 21,314 316 21,630
Total comprehensive income
fortheyear – – – – 21,314 35,030 56,344
Issue of share capital 26.1 15 4,654 – – – – 4,669
Cost of share issuance 26.1 – (71) – – – – (71)
Share-based payment expense 36.2 – – – 2,045 – – 2,045
EIP share-based payment expense 36.2 – – – 4,780 – – 4,780
Movement of own shares 26.2 – – (331) – – – (331)
Dividends paid 27 – – – – – (11,844) (11,844)
Total transactions with owners 15 4,583 (331) 6,825 – (11,844) (752)
Balance at 31 December 2022 1,491 290,435 (3,697) 24,361 15,979 71,648 400,217
Balance at 1 January 2021 1,225 130,823 (3,084) 1,456 (2,859) 30,844 158,405
Profit for the year – – – – – 26,648 26,648
Other comprehensive loss – – – – (2,476) 61 (2,415)
Total comprehensive income
fortheyear
– – – – (2,476) 26,709 24,233
Issue of share capital 26.1 251 159,537 – – – – 159,788
Cost of share issuance 26.1 – (4,508) – – – – (4,508)
Share-based payment expense 36.2 – – – 2,164 – – 2,164
EIP share-based payment expense 36.1 – – – 13,916 – – 13,916
Movement of own shares 26.2 – – (282) – – – (282)
Dividends paid 27 – – – – – (9,091) (9,091)
Total transactions with owners 251 155,029 (282) 16,080 – (9,091) 161,987
Balance at 31 December 2021 1,476 285,852 (3,366) 17,536 (5,335) 48,462 344,625
The notes on pages 105 to 141 are an integral part of these consolidated financial statements.
Note
2022
£’000
2021
£’000
Assets
Property, plant and equipment 20 49,566 48,340
Goodwill 21 363,708 341,605
Other intangible assets 21 128,020 120,715
Investments 32 3,156 2,638
Other non-financial assets 22 2,369 558
Other receivables 15 535 988
Deferred tax assets 23 143 119
Total non-current assets 547,497 514,963
Trade receivables 12 33,290 28,870
Work in progress 13 12,525 12,834
Accrued income 14 23,911 19,587
Other non-financial assets 22 5,983 4,147
Other receivables 15 3,827 2,090
Cash and cash equivalents 16 48,861 39,326
Total current assets 128,397 106,854
Total assets 675,894 621,817
Equity
Share capital 26.1 1,491 1,476
Share premium 26.1 290,435 285,852
Own shares 26.2 (3,697) (3,366)
Capital reserve 26.3 24,361 17,536
Translation reserve 26.3 15,979 (5,335)
Retained earnings 26.3 71,648 48,462
Total equity 400,217 344,625
Liabilities
Trade and other payables 17 26,896 22,903
Loans and borrowings 18 153,622 152,578
Lease liabilities 19 40,602 37,916
Deferred tax liabilities 23 11,184 24,355
Other non-financial liabilities 24 788 956
Provisions 25 1,884 1,720
Total non-current liabilities 234,976 240,428
Trade and other payables 17 23,424 19,497
Lease liabilities 19 4,292 5,463
Other non-financial liabilities 24 8,628 8,579
Current tax liabilities 11 4,088 2,978
Provisions 25 269 247
Total current liabilities 40,701 36,764
Total equity and liabilities 675,894 621,817
The consolidated financial statements on pages 103 to 105 were approved by the Board of Directors
on6 April2023 andsigned on its behalf by:
MARTIN FOTHERINGHAM
CHIEF FINANCIAL OFFICER
NIGEL LE QUESNE
CHIEF EXECUTIVE OFFICER
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2022
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
104 JTC Annual Report 2022
Note
2022
£’000
2021
£’000
Cash generated from operations 35.1 55,366 30,697
Income taxes paid (2,053) (1,835)
Net movement in cash generated from operations 53,313 28,862
Comprising:
Underlying cash generated from operations 60,308 38,402
Non-underlying cash items 35.2 (4,942) (7,705)
55,366 30,697
Investing activities
Interest received 254 87
Property, plant and equipment 20 (2,979) (1,378)
Intangible assets 21 (5,491) (1,603)
Business combinations (net of cash acquired) 31 (15,113) (186,433)
Costs to obtain or fulfil a contract 22 (2,210) (1,017)
Loans to related parties – (415)
Net cash used in investing activities (25,539) (190,759)
Financing activities
Proceeds from issue of shares – 144,801
Share issuance costs (169) (4,409)
Purchase of own shares (320) (269)
Dividends paid 27 (11,844) (9,091)
Proceeds from repayment of employee loans – 2,028
Repayment of loans and borrowings – (125,099)
Proceeds from loans and borrowings – 176,662
Loan arrangement fees – (3,364)
Interest paid on loans and borrowings (6,173) (2,571)
Facility fees paid on loans and borrowings – (285)
Repayment of other loans – (2,684)
Principal paid on lease liabilities (4,907) (4,639)
Interest paid on lease liabilities (1,336) (1,183)
Net cash (used in)/generated from financing activities (24,749) 169,896
Net increase in cash and cash equivalents 3,025 7,999
Cash and cash equivalents at the beginning of the year 39,326 31,078
Effect of foreign exchange rate changes 6,510 249
Cash and cash equivalents at the end of the year 16 48,861 39,326
The notes on pages 105 to 141 are an integral part of these consolidated financial statements.
SECTION 1 – BASIS FOR REPORTING
ANDGENERAL INFORMATION
1. Reporting entity
2. Basis of preparation
3. Significant accounting policies and standards
SECTION 2 – RESULT FOR THE YEAR
4. Operating segments
5. Staff expenses
6. Other operating expenses
7. Non-underlying items
8. Depreciation and amortisation
9. Other gains
10. Finance income and finance cost
11. Income tax
SECTION 3 – FINANCIAL ASSETS
ANDFINANCIAL LIABILITIES
12. Trade receivables
13. Work in progress
14. Accrued income
15. Other receivables
16. Cash and cash equivalents
17. Trade and other payables
18. Loans and borrowings
19. Lease liabilities
SECTION 4 – NON-FINANCIAL ASSETS
ANDNON-FINANCIAL LIABILITIES
20. Property, plant and equipment
21. Goodwill and other intangible assets
22. Other non-financial assets
23. Deferred taxation
24. Other non-financial liabilities
25. Provisions
SECTION 5 – EQUITY
26. Share capital and reserves
27. Dividends
SECTION 6 – RISK
28. Critical accounting estimates and judgements
29. Financial risk management
30. Capital management
SECTION 7 – GROUP STRUCTURE
31. Business combinations
32. Investments
33. Subsidiaries
SECTION 8 – OTHER DISCLOSURES
34. Earnings Per Share
35. Cash flow information
36. Share-based payments
37. Contingencies
38. Foreign currency
39. Related party transactions
40. Consideration of climate change
41. Events occurring after the reporting period
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
105 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES
ANDSTAND STANDARDS
3.1. CHANGES IN ACCOUNTING POLICIES
ANDNEW STAND NEW STANDARDS ADOPTED
The accounting policies set out in these consolidated
financial statements have been consistently applied
toall tto all the years presented, and have been applied
consistently by Group entities. There have been
nosigno significant changes compared with the prior year
consolidated financial statements as at and for the
yeareyear ended 31 December 2021.
To the extent relevant, all IFRS standards and
interpretations, including amendments that were in
issue and effective from 1 January 2022, have been
adopted by the Group from 1 January 2022. These
standards and interpretations had no material impact
for the Group.
New and amended standards adopted
bytheGby the Group
The Group has applied the following amendments
forthfor the first time for the annual reporting period
commencing 1 January 2022:
• Property, Plant and Equipment: Proceeds before
Intended Use – Amendments to IAS 16
• Onerous Contracts – Cost of Fulfilling a Contract –
Amendments to IAS 37
• Annual Improvement to IFRS Standards 2018-2020
• Reference to the Conceptual Framework –
Amendments to IFRS 3
The amendments listed above did not have any
impacton tt on the amounts recognised in prior periods
andaand are not expected to significantly affect the
currentor fnt or future periods.
New standards and interpretations
notyenot yetadot adopted
Certain new accounting standards and interpretations
have been published that are not mandatory for
31 December 2022 reporting periods and have not
been early adopted by the Group. These standards are
not expected to have a material impact on the entity
inthin the current or future reporting periods or on
foreseeable future transactions.
3.2. SUMMARY OF SIGNIFICANT
ACCOUNTINGPOLICIESCOUNTING POLICIES
The basis of consolidation is described below, otherwise
significant accounting policies related to specific items
are described under the relevant note. The description
of the accounting policy in the notes forms an integral
part of the accounting policies. Unless otherwise
stated, these policies have been consistently applied
toall tto all the years presented.
Basis of consolidation
The consolidated financial statements incorporate
thefinthe financial statements of the Company and entities
controlled by the Company (its “subsidiaries”). The
Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with
theethe entity and has the ability to affect those returns
through its power to direct the activities of the entity.
De-facto control exists where the Company has the
practical ability to direct the relevant activities of the
investee without holding the majority of the voting
rights. In determining whether de-facto control exists
the Company considers the size of the Company’s
voting rights relative to other parties, substantive
potential voting rights held by the Company and by
other parties, other contractual arrangements and
historical patterns in voting attendance.
SECTION 1 – BASIS FOR REPORTING
ANDGED GENERAL INFORMATION
1. REPORTING ENTITY
JTC PLC (the “Company”) was incorporated on
12 January 2018 and is domiciled in Jersey, Channel
Islands. The Company was admitted to the London
Stock Exchange on 14 March 2018 (the “IPO”).
Theadde address of the Company’s registered office
isis 28E28 Esplanade, St Helier, Jersey.
The consolidated financial statements of the Company
for the year ended 31 December 2022 comprise the
Company and its subsidiaries (together the “Group”
or“JTC”) aor “JTC”) and the Group’s interest in an associate
andiand investments.
The Group provides fund, corporate and private wealth
services to institutional and private clients.
2. BASIS OF PREPARATION
2.1. STATEMENT OF COMPLIANCE AND BASIS
OFOF MEASUREMENT
The consolidated financial statements have been
prepared in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the
European Union, the interpretations of the IFRS
Interpretations Committee (“IFRS IC”) and Companies
(Jersey) Law 1991.
The consolidated financial statements are prepared
ona goion a going concern basis and under the historical cost
convention except for the following:
• Certain financial liabilities measured at fair value
(see note 29)
• Defined benefit liabilities/(assets) recognised
atthat thefaie fair value of plan assets less the present
valueofdefe of defined benefit obligations (see note 5).
In assessing the going concern assumption, the
Directors considered the challenging global economic
and political backdrop, and increasing inflationary
pressures, and noted that the Group continued to
experience revenue growth and generate positive cash
flows from its operating activities. Considering these
factors as part of the review of the Group’s financial
performance and position, forecasts and expected
liquidity, the Directors have a reasonable expectation
that the Group will have adequate resources to
continue in operational existence for the foreseeable
future, being at least 12 months from the date of
approval of the consolidated financial statements.
Theyhave cey have concluded it is appropriate to adopt the
going concern basis of accounting in preparing the
consolidated financial statements.
2.2. FUNCTIONAL AND
PRESENTATIONCURREION CURRENCY
The consolidated financial statements are presented
inpoin pounds sterling, which is the functional and
reporting currency of the Company and the
presentation currency of the consolidated financial
statements. All amounts disclosed in the consolidated
financial statements and notes have been rounded to
the nearest thousand (£’000) unless otherwise stated.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
106 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES
ANDSTAND STANDARDS (CONTINUED)
3.2. SUMMARY OF SIGNIFICANT
ACCOUNTINGCOUNTING POLICIES (CONTINUED)
Basis of consolidation (Continued)
Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
When the Group loses control over a subsidiary, it
derecognises the assets and liabilities of the subsidiary,
and any related non-controlling interest and other
components of equity. Any resulting gain or loss is
recognised in the consolidated income statement.
Where necessary, adjustments are made to the
financial statements of subsidiaries to bring their
accounting policies in line with the Group. All
inter-company transactions and balances,
includingunrealiseincluding unrealised gains and losses, arising
fromtrm transactions between Group companies
areare eliminated on consolidation.
The acquisition method of accounting is used to
account for business combinations by the Group
(seeno(see note 31). Associates and investments
inasin associatesates are accounted for via the equity
methodof accd of accounting (seenote 32).e note 32).
Company only financial statements
Under Article 105(11) of the Companies (Jersey) Law
1991, the directors of a holding company need not
prepare separate financial statements (i.e. company
only financial statements). Separate financial
statements for the Company are not prepared unless
required to do so by the members of the Company by
ordinary resolution. The members of the Company had
not passed a resolution requiring separate financial
statements and, in the Directors’ opinion, the Company
meets the definition of a holding company. As
permitted by law, the Directors have elected not to
prepare separate financial statements.
SECTION 2 – RESULT FOR THE YEAR
4. OPERATING SEGMENTS
Revenue recognition
Revenue is measured as the fair value of the consideration received or receivable for satisfying performance
obligations contained in contracts with customers excluding discounts, VAT and other sales-related taxes.
To recognise revenue in accordance with IFRS 15 “Revenue from Contracts with Customers”, the Group applies
the five step approach: identify the contract(s) with a customer, identify the performance obligations in the
contract, determine the transaction price, allocate the transaction price to the performance obligations and
recognise revenue when, or as, performance obligations are satisfied by the Group.
The Group enters into contractual agreements with institutional and private clients for the provision of fund,
corporate and private client services. The agreements set out the services to be provided and each component
is distinct and can be performed and delivered separately. For each of these performance obligations, the
transaction price can be either a pre-set (fixed) fee based on the expected amount of work to be performed or
a variable time spent fee for the actual amount of work performed. For some clients, the fee for agreed services
is set at a percentage of the net asset value (“NAV”) of funds being administered or deposits held. Where
contracts include multiple performance obligations, the transaction price is allocated to each performance
obligation based onid on itssts stand-alone selling price.
Revenue is recognised in the consolidated income statement when, or as, the Group satisfies performance
obligations by transferring control of services to clients. This occurs as follows depending upon the nature
ofthecof the contract for services:
• Variable fees are recognised over time as services are provided at the agreed charge out rates in force at the
work date where there is an enforceable right to payment for performance completed to date. Time recorded
but not invoiced is shown in the consolidated balance sheet as work in progress (see note 13). To determine
the transaction price, an assessment of the variable consideration for services rendered is performed by
estimating the expected value, including any price concessions, of the unbilled amount due from clients for
the work performed to date (see note 28.2).
• Pre-set (fixed), cash management and NAV based fees are recognised over time; based on the actual service
provided to the end of the reporting period as a proportion of the total services to be provided where there
isaneis an enforceable right to payment for performance completed to date. This is determined based on the
actual inputs of time and expenses relative to the total expected inputs.
Where services have been rendered and performance obligations have been met but clients have not been
invoiced at the reporting date, accrued income is recognised, this is recorded based on agreed fees to be
billed inard in arrears (see note 14).
Where fees are billed in advance in respect of services under contract and give rise to a trade receivable
when recognised, deferred income is recognised and released to revenue on a time apportioned basis in the
appropriate reporting period (see note 24).
The Group does not adjust transaction prices for the time value of money as it does not have any contracts
wherethewhere the period between the transfer of the promised services to the client and the payment by the client
exceeds one year.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
107 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
4. OPERATING SEGMENTS (CONTINUED)
4.1. BASIS OF SEGMENTATION
The Group has a multi-jurisdictional footprint and the
core focus of operations is on providing services to its
institutional and private client base, with revenues
from alternative asset managers, financial institutions,
corporates, HNW and UHNW individuals and family
office clients. Recognised revenue is generated from
external customers. Business activities include:
Fund services
Supporting a diverse range of asset classes, including
real estate, private equity, renewables, hedge, debt and
alternative asset classes providing a comprehensive set
of fund administration services (e.g. fund launch, NAV
calculations, accounting, compliance and risk
monitoring, investor reporting, listing services).
Corporate services
Includes clients spanning across small and medium
entities, public companies, multinationals, sovereign
wealth funds, fund managers, HNW and UHNW
individuals and families requiring a ‘corporate’ service
for business and investments. As well as entity
formation, administration and other company
secretarial services, the Group also services
international and local pension plans, employee share
incentive plans, employee ownership plans and
deferred compensation plans.
Private client services
Supporting HNW and UHNW individuals and families,
from ‘emerging entrepreneurs’ to established single and
multi-family offices. Services include JTC’s own
comprehensive Private Office, a range of cash
management, foreign exchange and lending services, as
well as the formation and administration of trusts,
companies, partnerships, and other vehicles and
structures across a range of asset classes, including
cash and investments.
The Chief Executive Officer and Chief Financial Officer
are together the Chief Operating Decision Makers of
the Group and determine the appropriate business
segments to monitor financial performance. Each
segment is defined as a set of business activities
generating a revenue stream determined by divisional
responsibility and the management information
reviewed by the Board. They have determined that the
Group has two reportable segments: these are
Institutional Client Services and Private Client Services.
4.2. SEGMENTAL INFORMATION
The table below shows the segmental information provided to the Board for the two reportable segments
(ICSa(ICS andPnd PCS) on an underlying basis:
ICS PCS Total
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Revenue 136,657 92,706 63,378 54,796 200,035 147,502
Direct staff costs (56,157) (39,256) (24,525) (20,025) (80,682) (59,281)
Other direct costs (2,499) (640) (1,874) (1,467) (4,373) (2,107)
Underlying gross profit 78,001 52,810 36,979 33,304 114,980 86,114
Underlying gross profit margin % 57.1% 57.0% 58.3% 60.8% 57.5% 58.4%
Indirect staff costs (12,091) (8,225) (6,414) (6,296) (18,505) (14,521)
Other operating expenses (22,886) (16,573) (8,072) (7,040) (30,958) (23,613)
Other income 9 18 513 407 522 425
Underlying EBITDA 43,033 28,030 23,006 20,375 66,039 48,405
Underlying EBITDA margin % 31.5% 30.2% 36.3% 37.2% 33.0% 32.8%
The Board evaluates segmental performance based on revenue, underlying EBITDA and underlying EBITDA margin.
Profit before tax is not used to measure the performance of the individual segments as items such as depreciation,
amortisation of intangibles, other gains and finance costs are not allocated to individual segments. Consistent with
the aforementioned reasoning, segment assets and liabilities are not reviewed regularly on a by-segment basis and
are therefore not included in segmental reporting.
4.3. GEOGRAPHICAL INFORMATION
The table below shows revenue generated by the geographical location of the contracting Group entity.
Increase/(decrease)
2022
£’000
2021
£’000 £’000 %
UK & Channel Islands 107,778 87,038 20,740 23.8%
US 38,039 15,661 22,378 142.9%
Rest of Europe 34,323 29,867 4,456 14.9%
Rest of the World 19,895 14,935 4,960 33.2%
200,035 147,501 52,534 35.6%
The geographical location is based on the jurisdiction in which the legal entity is based and not on the location
ofthecof the client.
No single customer made up more than 10% of the Group’s revenue in the current or prior year.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
108 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
5. STAFF EXPENSES
EMPLOYEE BENEFITS
Short-term benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee, and the obligation can be estimated reliably.
Defined contribution pension plans
Under defined contribution pension plans, the Group pays contributions to publicly or privately administered
pension insurance plans. The Group has no further payment obligation once the contributions have been paid.
The contributions are recognised as an employee benefit expense when they are due.
Defined benefit pension plans
The liability or asset recognised in the consolidated balance sheet in respect of defined benefit pension plans is
the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan
assets. The calculation of defined benefit obligations is performed annually by independent qualified actuaries
using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high quality corporate bonds that are denominated in the currency in which
the benefits will be paid, and that have terms approximating to the terms of the related obligation. In countries
where there is no established market in such bonds, the market rates on local government bonds are used.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included as an employee benefit expense in the
consolidated income statement.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income. They are included in
retained earnings in the consolidated statement of changes in equity and the consolidated balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in the consolidated income statement as past service costs.
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those
benefits and when the Group recognises costs for a restructuring that is within the scope of IAS 37 and involves
the payment of termination benefits. If benefits are not expected to be settled wholly within one year of the
end of the reporting period, then they are discounted to their present value using an appropriate discount rate.
Note
2022
£’000
2021
£’000
Salaries and Directors’ fees 82,739 62,685
Employer-related taxes and other staff-related costs 8,841 6,141
Other short-term employee benefits 3,508 2,099
Pension employee benefits
1
3,841 2,535
Share-based payments 36.2 2,122 2,164
Employee Incentive Plan (“EIP”) share-based payments 36.2 4,780 13,916
105,831 89,540
1 Pension employee benefits include defined contributions of £3.41m (2021: £2.39m) and defined benefits of £0.43m (2021: £0.14m).
Defined benefit pension plans
The Group operates defined benefit pension plans in Switzerland and Mauritius. Both plans are contribution based
with guarantee of a minimum interest credit and fixed conversion rates at retirement. Disability and death benefits
are defined as a percentage of the insured salary.
At 31 December 2022, the Group net defined benefit obligation recognised on the consolidated balance sheet in
respect of amounts that are expected to be paid out to employees was £0.6m (2021: £0.8m). The Group does not
expect a significant change in contributions for the following years.
The Swiss plan must be fully funded in accordance with Swiss Federal Law on Occupational Benefits (LPP/BVG)
ona son a static basis at all times. The subsidiary, JTC (Suisse) SA, is affiliated to the collective foundation Swiss Life.
Thecole collective foundation is a separate legal entity. The foundation is responsible for the governance of the plan,
the board is composed of an equal number of representatives from the employers and the employees chosen
fromall am all affiliated companies. The foundation has set up investment guidelines, defining in particular the strategic
allocation with margins. Additionally, there is a pension committee responsible for the set-up of the plan benefit,
this is composed of an equal number of representatives of JTC (Suisse) SA and its employees.
The Mauritius plan is administered by Swan Life Ltd. JTC Fiduciary Services (Mauritius) Limited is required to
contribute a specific percentage of payroll costs to the retirement benefit scheme. Employees under this pension
plan are entitled to statutory benefits prescribed under parts VIII and IX of the Workers’ Rights Act 2019.
The amounts recognised in the consolidated balance sheet are as follows:
2022
£’000
2021
£’000
Present value of funded obligations (3,344) (2,010)
Fair value of plan assets
1
2,772 1,233
Consolidated balance sheet liability (572) (777)
1 All plan assets are held in insurance contracts .
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
109 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
5. STAFF EXPENSES (CONTINUED)
Defined benefit pension plans (Continued)
The movement in the net defined benefit obligation recognised in the consolidated balance sheet is as follows:
2022 2021
Defined
benefit
obligation
£’000
Fair value
of plan
assets
£’000
Net defined
benefit
obligation
£’000
Defined
benefit
obligation
£’000
Fair value
of plan
assets
£’000
Net defined
benefit
obligation
£’000
At 1 January 2,010 1,233 777 2,285 1,382 903
Included in the consolidated
incomeincome statement
Current service cost 233 – 233 207 – 207
Past service cost 18 – 18 (66) – (66)
Interest 13 4 9 5 1 4
Total 264 4 260 146 1 145
Included in other comprehensive income/
(loss)
Remeasurements loss/(gain):
– Change in financial assumptions (739) – (739) (42) – (42)
– Experience adjustment 432 – 432 (93) – (93)
– Return on plan assets – 9 (9) – (74) 74
Total (307) 9 (316) (135) (74) (61)
Other
Contributions:
– Employers – 214 (214) – 177 (177)
– Plan participants 105 105 – 87 87 –
Benefit payments 994 994 – (302) (302) –
Exchange differences 276 211 65 (71) (38) (33)
Total 1,375 1,524 (149) (286) (76) (210)
At 31 December 3,342 2,770 572 2,010 1,233 777
The plans are exposed to actuarial risks relating to discount rate, interest rate for the projection of the savings
capital, salary increase and pension increase.
The principal annual actuarial assumptions used for the IAS 19 disclosures were as follows:
Switzerland Mauritius
Discount rate at 1 January 2022 0.3% 4.6%
Discount rate at 31 December 2022 2.4% 5.2%
Future salary increases 1.6% 4.0%
Rate of increase in deferred pensions 0.0% 0.0%
In Switzerland, longevity must be reflected in the defined benefit liability. The mortality probabilities were
determined based on BVG 2020 Generational tables (CMI 1.25%) and the life expectancy is asfols follows:
2022
Years
2021
Years
Mortality probabilities for pensioners at age 65
– Males 21.84 21.70
– Females 23.58 23.41
Mortality probabilities at age 65 for current members aged 45
– Males 23.50 23.29
– Females 25.18 24.98
6. OTHER OPERATING EXPENSES
Other operating expenses are accounted for on an accruals basis.
2022
£’000
2021
£’000
Third party administration fees 4,403 2,300
Legal and professional fees
1
8,354 9,846
Auditor’s remuneration for audit services 1,255 1,126
Auditor’s remuneration for other assurance services 337 190
Establishment costs 3,618 2,611
Insurance 1,660 1,703
Travel and accommodation 1,772 433
Marketing 1,950 1,493
IT expenses 9,286 7,942
Telephone and postage 1,638 1,390
Other expenses 1,297 1,080
Other operating expenses 35,570 30,114
1 Included in legal and professional fees are £1.4m (2021: £5.2m) of non-underlying items.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
110 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
8. DEPRECIATION AND AMORTISATION
Note
2022
£’000
2021
£’000
Depreciation of property, plant and equipment 20 7,883 7,157
Amortisation of intangible assets 21 13,562 9,776
Amortisation of assets recognised from costs to obtain or fulfil a contract 22 816 658
Depreciation and amortisation 22,261 17,591
9. OTHER GAINS
Note
2022
£’000
2021
£’000
Net (loss)/profit on disposal of property, plant and equipment (130) 2
Gain on bargain purchase – 5,357
(Loss)/gain on revaluation of contingent consideration (78) 20,910
(Loss) on settlement of contingent consideration – (701)
Foreign exchange gains/(losses)
1
38 14,409 (861)
Other gains 14,201 24,707
1 This includes £11.9m of foreign exchange gains (2021: £0.9m losses) that relate to the revaluation of inter-company loans; these foreign exchange
movements are considered by Management to be non-underlying items.
7. NON-UNDERLYING ITEMS
Non-underlying items represent specific items of income or expenditure that are not of a continuing
operational nature or do not represent the underlying operating results, and based on their significance
insizeoin size or nature are presented separately to provide further understanding about the financial performance
ofthe Gof the Group.
Note
2022
£’000
2021
£’000
EBITDA 56,064 26,583
Non-underlying items within EBITDA:
Acquisition and integration costs
1
3,380 6,610
Revision of ICS operating model
2
402 421
Office start-up costs
3
768 –
Other
4
228 263
EIP share-based payments
5
5,197 14,528
Total non-underlying items within EBITDA 9,975 21,822
Underlying EBITDA 66,039 48,405
Profit before tax 35,935 27,783
Total non-underlying items within EBITDA 9,975 21,822
Gain on bargain purchase
6
9 – (5,357)
Loss/(gain) on revaluation of contingent consideration
7
9 78 (20,910)
Loss on settlement of contingent consideration
8
9 – 701
Foreign exchange (gains)/losses
9
9 (11,936) 869
Total non-underlying items within profit before tax (1,883) (2,875)
Underlying profit before tax 34,052 24,908
1 Acquisition and integration costs include deal and tax advisory fees, legal and professional fees, any client-acquired penalties, staff reorganisation costs
and other integration costs. This includes acquisition-related share-based payment awards granted to act as retention tools for key management and/
or to recruit senior management to support various acquisitions. Most acquisition and integration costs are incurred in the first two years following
acquisition, but this period can be longer depending on the nature of the costs.
2 During 2022, the Group incurred costs to complete the implementation of a revised operating model for the fund services practice; the timing of
delivery was initially impacted by Covid-19.
3 Relates to pre-trading costs incurred by the Group in order to establish an additional fund administration offering in Ireland. This included significant
up-front investment in personnel in order to meet regulatory requirements in advance of obtaining the license to trade and generate profits.
4 This includes further legal costs relating to a regulatory action from the Dutch Central Bank and aborted project costs.
5 Following the conclusion of the Odyssey business plan era at the end of 2020, share awards with a two year vesting period were made to staff members
under the EIP (see note 36.1); the expense includes employer-related taxes relating to the share awards.
6 Gain on bargain purchase arising on the acquisition of RBC cees (see note 31.2).
7 Includes a loss on revaluation of contingent consideration for Segue of £0.13m (see note 31.4) and a gain on revaluation of liability-classified contingent
consideration payable for perfORM of £0.05m (see note 31.5). The prior year gain related to the release of the NESF contingent consideration.
8 In the prior year, a loss was recognised on settlement of the holdback fund share consideration for NESF.
9 Foreign exchange (gains)/losses that relate to the revaluation of inter-company loans. Management consider these to be non-underlying as they are
unrealisable (gains)/losses as the loans are eliminated upon consolidation.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
111 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
10. FINANCE INCOME AND FINANCE COST
Finance income includes interest income from loan receivables and bank deposits and is recognised when
itisprit is probable that the economic benefits will flow to the Group and the amount of revenue can be
measuredreliably.measured reliably.
Finance costs include interest expenses on loans and borrowings, the unwinding of the discount on provisions,
contingent consideration and lease liabilities and the amortisation of directly attributable transaction costs
which have been capitalised upon issuance of the financial instrument and released to the consolidated income
statement on a straight-line basis over the contractual term.
Note
2022
£’000
2021
£’000
Bank interest 239 80
Loan interest 5 32
Finance income 244 112
Bank loan interest 5,112 1,772
Amortisation of loan arrangement fees 34.3 1,062 1,501
Unwinding of net present value (“NPV”) discounts
1
4,852 1,769
Other finance expense 1,287 986
Finance cost 12,313 6,028
1 Of the £4.85m total, £3.5m relates to unwinding of NPV discounts on contingent consideration (see note 17); this is excluded when calculating
adjusted underlying basic EPS (see note 34.3). By acquisition this is as follows:
Acquisition
date Note
2022
£’000
2021
£’000
INDOS 1 June 2021 161 94
Segue 15 September 2021 342 79
perfORM 18 October 2021 472 84
Ballybunion 3 November 2021 214 43
SALI 12 November 2021 2,329 287
34.3 3,518 587
11. INCOME TAX
Income tax
Income tax includes current and deferred tax. Current and deferred tax are recognised in the consolidated
income statement, except when they relate to items that are recognised in other comprehensive income or
directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive
income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting
for a business combination, the tax effect is included in the accounting for the business combination.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year using tax laws
enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of
previous years.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference
arises from the initial recognition of goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be recovered.
Deferred tax is calculated using tax rates that are expected to apply when the liability is settled or the asset
realised using tax rates enacted or substantively enacted at the balance sheet date.
Deferred tax assets offset with deferred tax liabilities when there is a legally enforceable right to set off tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and liabilities on a net basis.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
112 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
11. INCOME TAX (CONTINUED)
Note
2022
£’000
2021
£’000
The tax charges comprises:
Jersey tax on current year profit 1,197 1,362
Foreign company taxes on current year profit 1,611 1,249
Total current tax expense 2,808 2,611
Deferred tax: 23
Jersey origination and reversal of temporary differences (17) (15)
Temporary differences in relation to acquired intangible assets 34.3 (1,531) (1,446)
Foreign company origination and reversal of temporary differences (39) (15)
Total deferred tax credit (1,587) (1,476)
Total tax charge for the year 1,221 1,135
The difference between the total current tax shown above and the amount calculated by applying the standard
rate of Jersey income tax to the profit before tax is as follows:
2022
£’000
2021
£’000
Profit on ordinary activities before tax 35,935 27,783
Tax on profit on ordinary activities at standard Jersey income tax rate of 10%
(2021:10%)1: 10%) 3,594 2,778
Effects of:
Results from entities subject to tax at a rate of 0% (Jersey company) (1,040) (432)
Results from tax exempt entities (foreign company) (223) (120)
Foreign taxes not at Jersey rate (1,301) 664
Depreciation in excess of capital allowances (Jersey company) (17) (15)
Depreciation in excess of capital allowances (foreign company) (39) (15)
Temporary differences in relation to acquired intangible assets (1,531) (1,446)
Non-deductible expenses
1
479 1,398
Consolidation adjustments
2
1,304 (1,738)
Other differences (5) 61
Total tax charge for the year 1,221 1,135
1 The current year includes £4.6m of expenses relating to share awards made under the EIP (2021: £13.9m), see note 36.1.
2 The current year includes a loss on revaluation of contingent consideration for Segue of £0.13m (see note 31.4) and a gain on revaluation of
liability-classified contingent consideration payable for perfORM of £0.05m (see note 31.5).
Income tax expense computations are based on the jurisdictions in which profits were earned at prevailing rates in
the respective jurisdictions.
The Company is subject to Jersey income tax at the general rate of 0%; however, the majority of the Group’s
profits are reported in Jersey by Jersey financial services companies. JTC subsidiaries located in Jersey are
categorised as financial services companies and are subject to an income tax rate of 10%. It is therefore
appropriate to use this rate for reconciliation purposes.
2022
£’000
2021
£’000
Reconciliation of effective tax rates
Tax on profit on ordinary activities 10.00% 10.00%
Effect of:
Results from entities subject to tax at a rate of 0% (Jersey company) (2.89%) (1.55% )
Results from tax exempt entities (foreign company) (0.62%) (0.43% )
Foreign taxes not at Jersey rate (3.62%) 2.39%
Depreciation in excess of capital allowances (Jersey company) (0.05%) (0.05% )
Depreciation in excess of capital allowances (foreign company) (0.11%) (0.06% )
Temporary differences in relation to acquired intangible assets (4.26%) (5.20% )
Non-deductible expenses 1.33% 5.03%
Consolidation adjustments 3.63% (6.26%)
Other differences (0.01%) 0.22%
Effective tax rate 3.40% 4.09%
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
113 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
SECTION 3 – FINANCIAL ASSETS AND FINANCIAL LIABILITIES
This section provides information about the Group’s financial instruments, including; accounting policies;
specific information about each type of financial instrument; and, where applicable, information about
determining the fair value, including judgements and estimation uncertainty involved.
Financial assets
The Group classifies its financial assets as either amortised cost, fair value through profit or loss (“FVTPL”) or
fair value through other comprehensive income (“FVOCI”) depending on the Group’s business model objective
for managing financial assets and their contractual cash flow characteristics.
As the Group’s financial assets arise principally from the provision of services to clients (e.g. trade receivables),
but also incorporate other types of financial assets where the objective is to hold these assets in order to
collect contractual cash flows and the contractual cash flows are solely payments of principal and interest,
they are classified at amortised cost.
Financial assets are recognised initially on the trade date, which is the date that the Group became party to the
contractual provisions of the instrument and are derecognised when the contractual rights to the cash flows
from the asset expire, or the rights to receive the contractual cash flows from the transaction in which
substantially all of the risks and rewards of ownership of the financial asset have been transferred.
Financial assets are initially recognised at fair value plus transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method,
less provision for impairment.
The Group assesses, on a forward-looking basis, the expected credit losses (“ECL”) associated with its financial
assets carried at amortised cost. The impairment methodology applied takes into consideration whether there
has been a significant increase in credit risk.
Financial assets comprise trade receivables, work in progress, accrued income, other receivables and cash and
cash equivalents. For further details on impairment for each, see notes 12 to 16.
Financial liabilities
The Group classifies its financial liabilities as either amortised cost or FVTPL depending on the purpose for
which the liability was acquired.
As the Group does not have any financial liabilities held for trading (derivatives), all other financial liabilities are
classified as measured at amortised cost unless otherwise noted. Other financial liabilities include trade and
other payables, borrowings and lease liabilities.
Trade and other payables represent liabilities incurred for goods and services provided to the Group prior to the
end of the financial year which are unpaid. They are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method and are presented as current liabilities unless
payment is not due within 12 months after the reporting period. The Group derecognises a financial liability
when its contractual obligations are discharged, cancelled or expired.
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in the consolidated income statement over the period of the borrowings
using the effective interest rate method.
Borrowings are removed from the consolidated balance sheet when the obligation specified in the contract is
discharged, cancelled or has expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in the consolidated income statement as finance income
or finance cost.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
114 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
Financial liabilities (Continued)
Lease liabilities are financial liabilities measured at amortised cost. They are initially measured at the NPV of
the following lease payments:
• fixed payments, less any lease incentives receivable;
• variable lease payments that are based on an index or a rate;
• amounts expected to be payable by the lessee under residual value guarantees;
• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement
of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used,
being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The incremental borrowing rate applied to each lease was determined considering the Group’s borrowing rate
and the risk-free interest rate, adjusted for factors specific to the country, currency and term of the lease.
The Group can be exposed to potential future increases in variable lease payments based on an index or rate
which are not included in the lease liability until they take effect. When adjustments to lease payments based
on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the
consolidated income statement over the lease period so as to produce a constant periodic rate of interest on
the remaining balance of the liability for each period.
Offsetting financial assets and liabilities
Financial assets and liabilities are offset and the net amount is reported in the consolidated balance sheet
where there is a legally enforceable right to offset the recognised amounts, and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously.
12. TRADE RECEIVABLES
The ageing analysis of trade receivables with the loss allowance is as follows:
2022
Gross
£’000
Loss allowance
£’000
Net
£’000
<30 days 15,161 (125) 15,036
30 – 60 days 3,401 (114) 3,287
61 – 90 days 2,091 (111) 1,980
91 – 120 days 2,208 (101) 2,107
121 – 180 days 1,558 (165) 1,393
180> days 14,516 (5,029) 9,487
Total 38,935 (5,645) 33,290
2021
Gross
£’000
Loss allowance
£’000
Net
£’000
<30 days 15,167 (164) 15,003
30 – 60 days 3,493 (100) 3,393
61 – 90 days 1,868 (136) 1,732
91 – 120 days 3,579 (203) 3,376
121 – 180 days 1,965 (412) 1,553
180> days 7,629 (3,816) 3,813
Total 33,701 (4,831) 28,870
The movement in the allowances for trade receivables is as follows:
2022
£’000
2021
£’000
Balance at the beginning of the year (4,832) (4,892 )
Credit impairment losses in the consolidated income statement (3,092) (1,690 )
Amounts written off (including unused amounts reversed) 2,279 1,750
Total allowance for doubtful debts (5,645) (4,832)
The loss allowance includes both specific and ECL provisions. To measure the ECL, trade receivables are grouped
based on shared credit risk characteristics and the days past due. The ECLs are estimated collectively using a
provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the
debtor’s financial position (this includes unlikely to pay indicators such as liquidity issues, insolvency or other
financial difficulties) and an assessment of both the current as well as the forecast direction of macroeconomic
conditions at the reporting date. Management have identified gross domestic product and inflation in each
country the Group provides services in to be the most relevant macroeconomic factors.
Management have given consideration to these factors as well as climate-related changes on customers and are
satisfied that any impact is not material to the ultimate recovery of receivables, such is the diversification across
the book in industries and geographies. The loss allowance at 31 December 2022 is in line with previous trading
and supports this conclusion. See note 29.2 for further comment on credit risk management.
Provision rates are segregated according to geographical location and by business line. The Group considers any
specific impairments on a by-client basis rather than on a collective basis. The carrying amount of the asset is
reduced through the use of an allowance account and the amount of the loss is recognised in the consolidated
income statement as a credit impairment loss. When a trade receivable is uncollectible, it is written off against
theathe allowance account. Subsequent recoveries of amounts previously written off are credited against credit
impairment losses.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
115 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
13. WORK IN PROGRESS
2022
£’000
2021
£’000
Total 12,594 12,906
Loss allowance (69) (72)
Net 12,525 12,834
Work in progress (“WIP”) relates to variable fee contracts and represents the net unbilled amount expected to be
collected from clients for work performed to date. It is measured at the chargeable rate agreed with the individual
clients adjusted for unrecoverable amounts less progress billed and ECL. As these financial assets relate to unbilled
work and have substantially the same risk characteristics as trade receivables, the Group has concluded that the
expected loss rates for trade receivables <30 days is an appropriate estimation of the ECL.
Sensitivity analysis
The total carrying amount of WIP (before ECL allowances) is £12.6m (2021: £12.9m). If Management’s estimate of
the recoverability of the WIP (the amount expected to be billed and collected from clients for work performed to
date) is 10% lower than expected on the total WIP balance due to adjustments for unrecoverable amounts,
revenue would be £1.3m lower (2021: £1.3m lower).
14. ACCRUED INCOME
2022
£’000
2021
£’000
Total 23,936 19,621
Loss allowance (25) (34)
Net 23,911 19,587
Accrued income relates to fixed and NAV based fees across all service lines and represents the billable amount
relating to the provision of services to clients which has not been invoiced at the reporting date. Accrued income is
recorded based on agreed fees billed in arrears less ECL. As these financial assets relate to unbilled work and have
substantially the same risk characteristics as trade receivables, the Group has concluded that the expected loss
rates for trade receivables <30 days is an appropriate estimation of the ECL.
The £4.3m increase in accrued income is reflective of overall revenue growth and that revenue from recently
acquired businesses is on a fixed or NAV based fee basis.
15. OTHER RECEIVABLES
2022
£’000
2021
£’000
Non-current
Loans receivable from related undertakings
1
– 833
Loan receivable from third party
2
535 155
Total non-current 535 988
Current
Other receivables
3
2,804 1,884
Loans receivable from employees
4
162 206
Loan receivable from related undertakings
1
861 –
Total current 3,827 2,090
Total other receivables 4,362 3,078
1 Includes loans receivable from Harmonate Corp. (see note 32) of £0.86m current (2021: £0.77m non-current) and, in the prior year, Northpoint Byala IC
(£0.05m) and Northpoint Finance IC (£0.01m); both of these balances were impaired to £nil at the year end. The Harmonate loan is unsecured, interest
bearing at 4% per annum and repayable on demand at any time on or after 31 December 2023.
2 The loan receivable from a third party is interest bearing at 2.5% per annum and is repayable by 19 October 2024.
3 Other receivables includes mortgage-backed securities held at fair value of £0.4m (2021: £nil) that were sold in January 2023 (see note 31.1(a)).
4 Includes £0.16m due from employees participating in Advance to Buy (“A2B”) programmes (2021: £0.2m). These are interest bearing at 3% per annum
and repayable two years after the commencement date of each annual programme unless the employment contract is terminated at an earlier date.
Other receivables are subject to the impairment requirements of IFRS 9 but, as balances are primarily with
relatedpated parties or part of a business combination, they were assessed to have low credit risk and no loss
allowanceis rce is recognised.
16. CASH AND CASH EQUIVALENTS
2022
£’000
2021
£’000
Cash attributable to the Group 48,861 39,326
Total 48,861 39,326
For the purpose of presentation in the statement of cash flow, cash and cash equivalents includes cash in hand,
deposits held on call with banks, other short-term highly liquid investments with original maturities of three
months or less and bank overdrafts.
Cash and cash equivalents are subject to the impairment requirements of IFRS 9 but, as balances are held
withreph reputable international banking institutions, they were assessed to have low credit risk and no loss
allowanceis rce is recognised.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
116 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
17. TRADE AND OTHER PAYABLES
2022
£’000
2021
£’000
Non-current
Other payables 72 382
Contingent consideration
1
26,824 22,521
Total non-current 26,896 22,903
Current
Trade payables 2,728 2,091
Other taxation and social security 926 642
Other payables 4,391 3,803
Accruals 9,907 7,059
Contingent consideration
1
5,472 5,902
Total current 23,424 19,497
Total trade and other payables 50,320 42,400
1 Contingent consideration payables are discounted to NPV, split between current and non-current, and are due as follows:
Acquisition Note
2022
£’000
2021
£’000
Segue – 773
perfORM 31.5 3,181 2,768
SALI 31.7 23,643 18,980
Total non-current contingent consideration 26,824 22,521
INDOS 31.3 1,483 1,322
Segue 31.4 2,163 917
Ballybunion – 1,607
SALI – 2,037
EFS – 19
Sterling 21.2(b) 1,826 –
Total current contingent consideration 5,472 5,902
For current trade and other payables, due to their short-term nature, Management consider the carrying value of
these financial liabilities to approximate to their fair value.
18. LOANS AND BORROWINGS
This note provides information about the contractual term of the Group’s interest-bearing loans and borrowings,
which are measured at amortised cost. For more information about the Group’s exposure to interest rates, foreign
currency and liquidity risk, see note 29.
2022
£’000
2021
£’000
Non-current
Bank loans 153,622 152,578
Total loans and borrowings 153,622 152,578
18.1. BANK LOANS
The terms and conditions of outstanding loan facilities are as follows:
Facility Currency Termination date Interest rate
2022
£’000
2021
£’000
Term facility GBP 6 October 2025 SONIA + 1.65% margin 75,000 75,000
Revolving credit facility GBP 6 October 2025 SONIA + 1.65% margin 80,662 80,662
Total principal value 155,662 155,662
Issue costs (2,040) (3,084 )
Total bank loans 153,622 152,578
The interest rate applied to loan facilities is determined using SONIA plus a margin based on net leverage
calculations. At 1 January 2022, the margin was 1.9%; this changed to 1.65% effective from 16 September 2022
and this is the margin as at 31 December 2022 (2021: 1.9%).
Under the terms of the facility, the debt is supported by guarantees from JTC PLC and other applicable
subsidiariesdes deemed to be obligors, and in the event of default, demand could be placed on these entities
tosetto settleoutle outstanding liabilities.
Movement in loan facilities is as follows:
At 1 January
2022
£’000
Drawdowns
£’000
Repayment
£’000
Amortisation
release
£’000
Effect of
foreign
exchange
£’000
At 31 December
2022
£’000
Principal value 155,662 – – – – 155,662
Issue costs (3,084) – – 1,044 – (2,040)
Total 152,578 – – 1,044 – 153,622
At 1 January
2021
£’000
Drawdowns
£’000
Repayment
£’000
Amortisation
release
£’000
Effect of
foreign
exchange
£’000
At 31 December
2021
£’000
Principal value 105,594 176,662 (125,099) – (1,495) 155,662
Issue costs (1,218) (3,364) – 1,498 – (3,084)
Total 104,376 173,298 (125,099) 1,498 (1,495) 152,578
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
117 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
18. LOANS AND BORROWINGS (CONTINUED)
18.1. BANK LOANS (CONTINUED)
On 6 October 2021, the Group entered into a multicurrency loan facility agreement (the “facilities agreement”)
with HSBC for a total commitment of £225m consisting of a term loan of £75m and a revolving credit facility
(“RCF”) of £150m. The initial termination date is the third anniversary of the date of the agreement, being
6 October 2024. The facilities agreement was amended on 22 November 2021 and introduced Fifth Third Bank
and Citibank N.A. as incoming lenders, joining the syndicate that includes existing lenders HSBC, Barclays Bank Plc,
Santander UK Plc and the Bank of Ireland. On 8 November 2022, the facilities agreement was further amended to
extend the termination date by one year to 6 October 2025. All facilities are due to be repaid on or before the
termination date of 6 October 2025 unless the termination date is extended for the available one year extension.
The cost of the facility depends upon net leverage, being the ratio of total net debt to underlying EBITDA (for LTM
at average FX rates and adjusted for pro-forma contributions from acquisitions) for a relevant period as defined in
the facilities agreement. At 31 December 2022, arrangement and legal fees amounting to £3.4m have been
capitalised for amortisation over the term of the loan (2021: £3.4m).
At 31 December 2022, the Group had available £69.3m of committed facilities currently undrawn (2021: £69.3m).
18.2. COMPLIANCE WITH LOAN COVENANTS
The Company has complied with the financial covenants of its borrowing facilities during the 2022 and 2021
reporting periods (see note 30).
18.3. FAIR VALUE
For the majority of the borrowings, the fair values are not materially different from their carrying amounts,
sincethe the interest payable on those borrowings is close to current market rates or the borrowings are short
terminnam in nature.
19. LEASE LIABILITIES
Where the Group is a lessee its lease contracts are for the rental of buildings for office space and also office
furniture and equipment. In accordance with IFRS 16 ‘Leases’, the Group recognises right-of-use assets which are
shown with property, plant and equipment (see note 20), and lease liabilities, which are shown separately on the
consolidated balance sheet.
2022
£’000
2021
£’000
Non-current 40,602 37,916
Current 4,292 5,463
Total lease liabilities 44,894 43,379
The Group makes business decisions that affect its lease contracts and those containing renewal and termination
clauses are reassessed to determine whether there is any change to the lease term. Management haveant have an ongoing
programme of review and have not identified any leases with an extension option that would have a significant
impact on the carrying amount of lease assets and liabilities.
SECTION 4 – NON-FINANCIAL ASSETS AND NON-FINANCIAL LIABILITIES
20. PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are initially recorded at cost and are stated at historical cost less
depreciation and impairment losses. Depreciation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives, using the straight-line method, on the following bases:
• Computer equipment – 4 years
• Office furniture and equipment – 4 years
• Leasehold improvements – over the period of the lease
The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting
period with the effect of any changes in estimate accounted for on a prospective basis.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the consolidated income statement when the asset is derecognised.
Assets under the course of construction are stated at cost. These assets are not depreciated until they are
available for use.
For right-of-use assets, upon inception of a contract, the Group assesses whether a contract conveys the right
to control the use of an identified asset for a period in exchange for consideration, in which case it is classified
as a lease. The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
Right-of-use assets are measured at cost comprising of 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 estimated restoration costs.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the end of the useful life; this is considered to be the end of the lease term as assessed by Management.
The lease asset is periodically adjusted for certain remeasurements of the lease liability and impairment losses
(if any).
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
118 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
20. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
The movements of all tangible assets are as follows:
Computer
equipment
£’000
Office furniture
and equipment
£’000
Leasehold
improvements
£’000
Right-of-use
assets
£’000
Total
£’000
Cost
At 1 January 2021 4,162 2,398 8,441 48,810 63,811
Additions 114 299 1,092 4,037 5,542
Additions through business combinations 20 100 – 1,495 1,615
Disposals (6) – – (79) (85)
Exchange differences (102) (87) (76) (959) (1,224)
At 31 December 2021 4,188 2,710 9,457 53,304 69,659
Additions 633 1,249 1,076 4,592 7,550
Additions through business combinations 22 – – 471 493
Disposals (330) (977) (671) – (1,978)
Exchange differences 116 249 351 2,085 2,801
At 31 December 2022 4,629 3,231 10,213 60,452 78,525
Accumulated depreciation
At 1 January 2021 2,805 1,107 2,988 7,662 14,562
Charge for the year 471 449 687 5,500 7,107
Disposals (6) – – – (6)
Exchange differences (55) (45) (48) (196) (344)
At 31 December 2021 3,215 1,511 3,627 12,966 21,319
Charge for the year 524 516 759 6,346 8,145
Disposals (329) (842) (548) – (1,719)
Exchange differences 77 267 116 754 1,214
At 31 December 2022 3,487 1,452 3,954 20,066 28,959
Carrying amount
At 31 December 2022 1,142 1,779 6,259 40,386 49,566
At 31 December 2021 973 1,199 5,830 40,338 48,340
21. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill that arises on the acquisition of subsidiaries is considered an intangible asset. See note 31 for the
measurement of goodwill at initial recognition; subsequent to this, measurement is at cost less accumulated
impairment losses.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date (which is regarded as their cost). The initial valuation work
is performed with support from external valuation specialists. Subsequent to initial recognition, these are
measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised in the consolidated income statement on a straight-line basis over the estimated
useful life of the asset from the date of acquisition. The estimated useful lives are as follows:
• Customer relationships – 2 to 25 years
• Software – 5 to 10 years
• Brand – 5 to 10 years
The estimated useful lives and residual value are reviewed at each reporting date and adjusted if appropriate,
with the effect of any change in estimate being accounted for on a prospective basis.
Intangible assets acquired separately
Intangible assets that are acquired separately by the Group and have finite useful lives are measured at cost
less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised in the consolidated income statement on a straight-line basis over the estimated
useful life of the asset from the date that they are available for use. The estimated useful lives are as follows:
• Customer relationships – 10 years
• Software – 4 years
• Regulatory licence – 12 years
The estimated useful lives and residual value are reviewed at each reporting date and adjusted if appropriate,
with the effect of any change in estimate being accounted for on a prospective basis.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
119 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
21. GOODWILL AND OTHER INTANGIBLE ASSETS (CONTINUED)
Internally generated software intangible assets
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by the Group are recognised as intangible assets where the following criteria are met:
• It is technically feasible to complete the software so that it will be available for use
• Management intend to complete the software and use or sell it
• There is an ability to use or sell the software
• It can be demonstrated how the software will generate probable future economic benefits
• Adequate technical, financial and other resources to complete the development and to use or sell the
software are available
• The expenditure attributable to the software during its development stage can be reliably measured
Directly attributable costs that are capitalised as part of the software include employee costs and an
appropriate portion of relevant overheads. Capitalised development costs are recorded as intangible assets and
amortisation is recognised in the consolidated income statement on a straight-line basis over the estimated
useful life of the asset from the date at which the asset is ready to use. The estimated useful life for internally
generated software intangible assets is 4 years.
The estimated useful lives and residual value are reviewed at each reporting date and adjusted if appropriate,
with the effect of any change in estimate being accounted for on a prospective basis.
Impairment of non-financial assets
Goodwill that arises on the acquisition of business combinations and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events
or changes in circumstances indicate that they might be impaired. Other non-financial assets are tested for
impairment whenever events or changes in circumstances indicate that the carrying amount might not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds
itsres recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (“CGUs”). Non-financial assets other than goodwill that suffered an impairment are reviewed
for possible reversal of the impairment at the end of each reporting period.
The movements in goodwill and other intangible assets are as follows:
Goodwill
£’000
Customer
relationships
£’000
Regulatory
licence
£’000
Software
£’000
Brands
£’000
Total
£’000
Cost
At 1 January 2021 173,777 67,351 338 7,926 630 250,022
Additions – – – 1,771 – 1,771
Additions through
businesscombinatss combinations 171,983 72,393 – 1,151 1,993 247,520
Exchange differences (4,155) (1,975) (24) 13 (10) (6,151)
At 31 December 2021 341,605 137,769 314 10,861 2,613 493,162
Additions – 4,288 – 3,018 – 7,306
Additions through
businesscombinationsbusiness combinations 10,982 5,663 – – – 16,645
Measurement period
adjustments (13,737) – – – – (13,737)
Disposals – – – (46) – (46)
Exchange differences 24,858 8,884 17 316 268 34,343
At 31 December 2022 363,708 156,604 331 14,149 2,881 537,673
Accumulated amortisation
At 1 January 2021 – 17,149 131 3,937 84 21,301
Charge for the year – 8,070 58 1,462 186 9,776
Exchange differences – (235) (11) 7 4 (235)
At 31 December 2021 – 24,984 178 5,406 274 30,842
Charge for the year
1
– 11,219 29 1,817 525 13,590
Disposals – – – (46) – (46)
Exchange differences – 1,374 11 130 44 1,559
At 31 December 2022 – 37,577 218 7,307 843 45,945
Carrying amount
At 31 December 2022 363,708 119,027 113 6,842 2,038 491,728
At 31 December 2021 341,605 112,785 136 5,455 2,339 462,320
1 Total amortisation charge includes £1.2m related to software not acquired through business combinations; the balance of £12.4m is excluded when
calculating underlying basic EPS (see note 34.3) .
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
120 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
21. GOODWILL AND OTHER INTANGIBLE ASSETS (CONTINUED)
21.1. GOODWILL
Goodwill impairment
Goodwill is not amortised but is tested for impairment annually, or more frequently if events or changes in
circumstances indicate that the carrying amount may not be recoverable. With the exception of US, goodwill is
monitored at a jurisdictional level by Management. Goodwill is allocated to CGUs for the purpose of impairment
testing and this allocation is made to those CGUs that are expected to benefit from the business combination in
which the goodwill arose. The aggregate carrying amounts of goodwill allocated to each CGU is as follows:
In the current year:
CGU Note
Balance at
1 Jan 2022
£’000
Business
combinations
£’000
Measurement
period
adjustments
£’000
Exchange
differences
£’000
Balance at
31 Dec 2022
£’000
Jersey 66,104 – – – 66,104
Guernsey 10,761 – – – 10,761
BVI 752 – – – 752
Switzerland 2,366 – – 138 2,504
Cayman 224 – – 27 251
Luxembourg 27,809 – – 1,377 29,186
Netherlands 14,220 – – 772 14,992
Dubai 1,763 – – 212 1,975
Mauritius 2,379 – – 277 2,656
US – NESF 44,387 – – 5,317 49,704
US – SALI 31.7 139,573 2,598 (13,437) 15,537 144,271
US – Other 31.8 10,603 – (426) 1,269 11,446
US – NYPTC 31.1 – 8,384 – (322) 8,062
Ireland 8,688 – 108 255 9,051
UK 11,976 – 18 (1) 11,993
Total 341,605 10,982 (13,737) 24,858 363,708
In the prior year:
CGU
Balance at
1 Jan 2021
£’000
Business
combinations
£’000
Measurement
period
adjustments
£’000
Exchange
differences
£’000
Balance at
31 Dec 2021
£’000
Jersey 66,569 – (465) – 66,104
Guernsey 10,761 – – – 10,761
BVI 752 – – – 752
Switzerland 2,400 – – (34) 2,366
Cayman 222 – – 2 224
Luxembourg 29,721 – – (1,912) 27,809
Netherlands 15,292 – – (1,072) 14,220
Dubai 1,746 – – 17 1,763
Mauritius 2,357 – – 22 2,379
US – NESF 43,957 – – 430 44,387
US – Other – 151,724 – (1,548) 150,176
Ireland – 8,748 – (60) 8,688
UK – 11,976 – – 11,976
Total 173,777 172,448 (465) (4,155) 341,605
Key assumptions used to calculate the recoverable amount for each CGU
The recoverable amount of all CGUs has been determined based on the higher of the value in use calculation and
fair value less cost to sell. Projected cash flows are calculated with reference to each CGU’s latest budget and
business plan which are subject to a rigorous review and challenge process. Management prepare the budgets
through an assessment of historical revenues from existing clients, the pipeline of new projects, historical pricing,
and the required resource base needed to service new and existing clients, coupled with their knowledge of wider
industry trends and the economic environment.
The year 1 cash flow projections are based on the latest approved budget and years 2 to 5 on detailed outlooks
prepared by Management, except for the recently acquired US – SALI CGU, which covers a 10 year period due to
the significantly longer useful economic life of its customer relationships.
Previously, the terminal growth rate was based on expected long-term inflation. This has been updated to also
consider the long-term average growth rate for the jurisdiction and services provided.
Management estimate discount rates using pre-tax rates that reflect current market assessments of the time value
of money. In assessing the discount rate applicable to the Group, the following factors have been considered:
• Long-term treasury bond rate for the relevant jurisdiction
• The cost of equity based on an adjusted Beta for the relevant jurisdiction
• The risk premium to reflect the increased risk of investing in equities
Management have given due consideration to climate change and any potential impact on projected cash flows.
Such is the nature of JTC’s business and the diversification of customer relationships that Management have
concluded the impact to be immaterial to each CGU’s recoverable amount.
A summary of the values assigned to the key assumptions used in the value in use calculations are as follows:
• Revenue growth rate: up to 56.1%
• Terminal value growth rate: between 0.5% and 4.0%
• Discount rate: between 10.5% and 15.3%
The key assumptions used for CGUs where the carrying amount is a significant proportion of the total carrying
value of goodwill is as follows:
Average annual revenue
growthrth rate Terminal value growth rate Discount rate
CGU
% of total carrying
value of goodwill 2022 2021 2022 2021 2022 2021
Jersey 18.2% 7.6% 2.7% 2.5% 0.0% 11.2% 10.6%
Luxembourg 8.0% 10.9% 7.9% 2.0% 1.5% 11.4% 12.4%
US – NESF 13.7% 17.1% 19.0% 3.0% 3.0% 11.3% 11.4%
US – SALI 39.7% 17.2% – 4.0% – 10.5% –
Conclusion
The recoverable amount of goodwill determined for each CGU as at 31 December 2022 was found to be higher
than its carrying amount.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
121 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
21. GOODWILL AND OTHER INTANGIBLE ASSETS (CONTINUED)
21.1. GOODWILL (CONTINUED)
Sensitivity to changes in assumptions
Management believe that any reasonable changes to the key assumptions on which recoverable amounts are
based would not cause the aggregate carrying amount to exceed the recoverable amount of the CGUs, except for
US – NESF and US – SALI where the sensitivity of key assumptions have been detailed below.
US – SALI
The following would cause the carrying amount to exceed the recoverable amount:
• A reduction of 4.1% in the average annual revenue growth rate would result in a £3.0m impairment
• An increase of 2.0% in the discount rate would result in a £2.8m impairment
For the recoverable amount to equal the carrying amount, there would need to be a reduction of £63.6m. This
may be caused by either of the following:
• A reduction of 3.9% in the average annual revenue growth rate from 17.2% to 13.3%
• An increase of 1.9% in the discount rate from 10.5% to 12.4%
US – NESF
The following would cause the carrying amount to exceed the recoverable amount:
• A reduction of 2.0% in the average annual revenue growth rate would result in a £2.7m impairment
• An increase of 2.5% in discount rate would result in a £3.2m impairment
For the recoverable amount to equal the carrying amount, there would need to be a reduction of £11.7m. This may
be caused by either of the following:
• A reduction of 1.6% in the average annual revenue growth rate from 17.1% to 15.4%
• An increase of 1.9% in the discount rate from 11.3% to 13.2%
21.2. CUSTOMER RELATIONSHIP INTANGIBLE ASSETS
The carrying amount of identifiable customer relationship intangible assets acquired separately and through
business combinations are as follows:
Carrying amount
Acquisitions Note
Amortisation
period end
Useful
economic
life (“UEL”)
2022
£’000
2021
£’00 0
Previous financial reporting periods
Signes 30 April 2025 10 years 699 928
KB Group 30 June 2027 12 years 1,570 1,918
S&GFA 30 September 2025 10 years 1,143 1,392
BAML 30 September 2029 12 years 6,016 6,168
NACT 31 July 2027 10 years 957 1,146
Van Doorn 28 February 2030 11.4 years 4,724 5,114
Minerva 30 May 2027–30July 203030 May 2027–30 July 2030 8.7–11.8 years 8,762 9,759
Exequtive 31 March 2029 10 years 6,373 7,012
Aufisco 30 June 2029 10 years 1,365 1,494
Sackville 28 February 2029 10 years 681 703
NESF 30 April 2022–30April 202830 April 2022–30 April 2028 2–8 years 1,256 1,555
Sanne Private Clients 30 June 2030 10 years 4,794 5,433
Anson Registrars 28 February 2030 10 years 22 2 5
RBC cees 31.2 31 March 2033 12 years 19,105 20,969
INDOS 31.3 31 May 2031 10 years 1,138 1,273
Segue 31.4 30 September 2031 10 years 1,016 1,036
perfORM 31.5 30 September 2031 10 years 23 2 6
Ballybunion 31.6 31 October 2031 10 years 2,362 2,494
SALI 31.7 31 October 2046 25 years 46,215 42,999
EFS 31.8 30 November 2031 10 years 1,351 1,341
For the year ended 31 December 2022
NYPTC 31.1 31 October 2032 10 years 5,356 –
Sterling 21.2(b) 30 June 2032 10 years 4,099 –
Total 119,027 112,785
(a) Customer relationships acquired in a business combination
Customer relationship intangible assets acquired in a business combination and recognised separately from
goodwill are initially recognised at their fair value at the acquisition date. In 2022, the Group recognised customer
relationship intangible assets for NYPTC of £5.7m ($6.6m). The UEL and carrying amounts at 31 December 2022
are shown in the table above.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
122 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
21. GOODWILL AND OTHER INTANGIBLE ASSETS (CONTINUED)
21.2. CUSTOMER RELATIONSHIP INTANGIBLE ASSETS (CONTINUED)
Key assumptions in determining fair value
The fair value at acquisition was derived using the multi-period excess earnings method (“MEEM”) financial
valuation model. Management consider the following key assumptions to be significant for the valuation of new
customer relationships:
• Year on year revenue growth
• The discount rate applied to free cash flow
• Year on year client attrition rate
Sensitivity analysis
Management carried out a sensitivity analysis on the key assumptions used in the valuation of new customer
relationship intangible assets for NYPTC. Management concluded that any reasonable change to the key
assumptions for the new customer relationship intangible assets recognised in the year would not result
inasignin a significant change to fair value.
(b) Customer relationships acquired separately
On 17 June 2022, JTC entered into a facilitation and referral agreement (“F&R agreement”) and an outsourcing
agreement with Sterling Trust (Cayman) Limited (“Sterling”), whereby Sterling will, on an exclusive basis, refer,
introduce and recommend its clients to JTC as a replacement provider of services. Such services include initial
onboarding and client due diligence services, and subsequent provision of trust, custody, director, company
management and administration services.
The fair value of the customer relationships acquired is the consideration due; this is based on a percentage of
revenue attributable to each client successfully introduced. The assets are being amortised over their estimated
useful economic life of 10 years.
JTC made an initial payment of £2.2m ($3.0m) following the signing of the F&R agreement and a final payment of
£1.8m ($2.2m) will become due on 17 June 2023 subject to the successful onboarding of at least 75% of the client
revenue. Management are confident that the contingent consideration will be settled in full, see note 17.
(c) Customer relationship intangibles impairment
Management review customer relationship intangible assets for indicators of impairment at each reporting date.
Whilst significant consideration was given to the challenging global political and economic backdrop, including
increasing inflationary pressures, Management did not consider this to be an indicator of impairment.
Management concluded that no indicators of impairment were present as at 31 December 2022.
22. OTHER NON-FINANCIAL ASSETS
Assets recognised from costs to obtain or fulfil a contract
Incremental costs of obtaining a contract (i.e. costs that would not have been incurred if the contract had not
been obtained) and the costs incurred to fulfil a contract are recognised as assets within non-financial assets if
the costs are expected to be recovered. The capitalised costs are amortised on a straight-line basis over the
estimated useful economic life of the contract. The carrying amount of the asset is tested for impairment in
accordance with the policy described in note 21.
2022
£’000
2021
£’000
Non-current
Prepayments 361 42
Assets recognised from costs to obtain or fulfil a contract 2,008 516
Total non-current 2,369 558
Current
Prepayments 4,660 3,468
Assets recognised from costs to obtain or fulfil a contract 549 247
Current tax receivables 774 432
Total current 5,983 4,147
Total other non-financial assets 8,352 4,705
Current and non-current assets recognised from costs to obtain or fulfil a contract include £1.2m for costs to
obtain a contract (2021: £0.6m) and £1.4m for costs incurred to fulfil a contract (2021: £0.2m). The amortisation
charge for the year was £0.8m (2021: £0.7m). Management review assets recognised from costs to obtain or fulfil
acona contract for indicators of impairment at each reporting date and have concluded that no indicators were present
as at 31 December 2022.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
123 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
23. DEFERRED TAXATION
For the accounting policy on deferred income tax, see note 11.
The deferred taxation (assets) and liabilities recognised in the consolidated financial statements are set out below:
2022
£’000
2021
£’000
Deferred tax assets (143) (119)
Deferred tax liabilities 11,184 24,355
11,041 24,236
Intangible assets 11,097 24,238
Other origination and reversal of temporary differences (56) (2)
11,041 24,236
The movement in the year is analysed as follows:
Intangible assets Note
2022
£’000
2021
£’000
Balance at the beginning of the year 24,238 8,784
Measurement period adjustments (13,863) –
Recognised through business combinations
1
31 1,682 17,349
Recognised in the consolidated income statement 11 (1,531) (1,446)
Foreign exchange (to other comprehensive income) 571 (449)
Balance at 31 December 11,097 24,238
Other origination and reversal of temporary differences
Balance at the beginning of the year (2) 14
Acquired through acquisitions – 14
Recognised in the consolidated income statement (54) (30)
Balance at 31 December (56) (2)
1 Deferred tax liabilities have been recognised in relation to identified intangible assets, the amortisation of which is non-deductible against
CorporationTax iion Tax in the jurisdictions in which the business operates and therefore creates temporary differences between the accounting
andtad taxableproe profits. See note 31.
24. OTHER NON-FINANCIAL LIABILITIES
Deferred income
Fixed fees received in advance across all the service lines and up-front fees in respect of services due under
contract are time apportioned to respective accounting periods, and those billed but not yet earned are
included in deferred income in the consolidated balance sheet. As such liabilities are associated with future
services, they do not give rise to a contractual obligation to pay cash or another financial asset.
Contract liabilities
Commissions expected to be paid over the term of a customer contract are discounted and recognised at the
NPV. The finance cost is charged to the consolidated income statement over the contract life so as to produce
a constant periodic rate of interest on the remaining balance of the liability for each period.
Employee benefit obligations
For the accounting policy on employee benefit obligations, see note 5.
Note
2022
£’000
2021
£’000
Non-current
Contract liabilities 216 179
Employee benefit obligations 5 572 777
Total non-current 788 956
Current
Deferred income
1
7,856 8,205
Contract liabilities 772 374
Total current 8,628 8,579
Total other non-financial liabilities 9,416 9,535
1 Of the £8.2m of deferred income at 31 December 2021, £8.1m was recognised as revenue in the 2022 consolidated income statement.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
124 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
25. PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of
apaa pastevest event, it is probable that an outflow of resources will be required to settle the obligation, and a
reliableeble estimate can be made of the amount of the obligation. Provisions are not recognised for future
operating losses.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. If the impact of the time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost
inthin thecone consolidated income statement.
Dilapidations
The Group has entered into lease agreements for the rental of office space in different countries. There are
anuma number of leases which include an obligation to remove any leasehold improvements (thus returning the
premises to an agreed condition at the end of the respective lease terms) and to restore wear and tear by
repairing and repainting (this is known as “dilapidations”). The estimated cost of the dilapidations payable
atthat the end of each tenancy, unless specified, is generally estimated by reference to the square footage of the
building and in consultation with local property agents, landlords and prior experience. Having estimated the
likely amount due, a country specific discount rate is applied to calculate the present value of the expected
outflow. The provisions are expected to be utilised when the leases expire or upon exit. The discounted
dilapidation cost has been capitalised against the leasehold improvement asset in accordance with IFRS 16.
Dilapidation
provisions
£’000
At 1 January 2021 1,640
Additions 178
Additions through business combinations 116
Unwind of discount 60
Amounts utilised (31)
Impact of foreign exchange 4
At 31 December 2021 1,967
Additions 219
Additions through business combinations 56
Disposals (181)
Unwind of discount 22
Amounts utilised (21)
Impact of foreign exchange 91
At 31 December 2022 2,153
Analysis of total provisions:
2022
£’000
2021
£’000
Non-current 1,884 1,720
Current 269 247
Total 2,153 1,967
SECTION 5 – EQUITY
26. SHARE CAPITAL AND RESERVES
26.1. SHARE CAPITAL AND SHARE PREMIUM
The Group’s Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
ofOrdof Ordinary shares are recognised as a deduction from equity, net of any tax effects.
2022
£’000
2021
£’000
Authorised
300,000,000 Ordinary shares (2021: 300,000,000 Ordinary shares) 3,000 3,000
Called up, issued and fully paid
149,061,113 Ordinary shares (2021: 147,585,261 Ordinary shares) 1,491 1,476
Ordinary shares have a par value of £0.01 each. All shares are equally eligible to receive dividends and the
repayment of capital, and represent one vote at Shareholders’ meetings of JTC PLC.
Movements in Ordinary shares Note
No. of shares
(thousands)
Par value
£’000
Share premium
£’000
At 1 January 2021 122,522 1,225 130,823
Shares issued for equity raises 21,618 216 144,585
PLC EBT issue 1,333 13 –
Acquisition of INDOS 177 2 1,078
Acquisition of Segue 110 1 802
Acquisition of Ballybunion 77 1 664
Acquisition of SALI 1,260 13 8,570
Acquisition of EFS 85 1 706
Acquisition of NESF 404 4 3,132
Less: Cost of share issuance – – (4,508)
Movement in the year 25,064 251 155,029
At 31 December 2021 147,586 1,476 285,852
PLC EBT issue
1
1,150 12 –
Acquisition of SALI – EBT contribution
1
31.7 325 3 2,056
Acquisition of SALI – adjust fair value of equity instruments
2
31.7 – – 2,598
Less: Cost of share issuance – – (71)
Movement in the year 1,475 15 4,583
At 31 December 2022 149,061 1,491 290,435
1 On 14 June 2022, the Company issued an additional 1,475,852 Ordinary shares to the Company’s Employee Benefit Trust (“PLC EBT”), see note 26.2.
OftOf this amount, 325,272 Ordinary shares settled an element of consideration for the SALI acquisition; the remaining 1,150,580 Ordinary shares were
issued in order for PLC EBT to satisfy anticipated future exercises of awards granted to beneficiaries.
2 Following a review by the FRC, an adjustment was made to the fair value of equity instruments issued as initial consideration (see note 31.7(a)).
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
125 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
26. SHARE CAPITAL AND RESERVES (CONTINUED)
26.2. OWN SHARES
Own shares represent the shares of the Company that are unallocated and currently held by PLC EBT. They are
recorded at cost and deducted from equity. When shares vest unconditionally, are cancelled or are reissued,
they are transferred from the own shares reserve at their cost. Any consideration paid or received for the
purchase or sale of the Company’s own shares is shown as a movement in Shareholders’ equity.
Note
No. of shares
(thousands)
PLC EBT
£’000
At 1 January 2021 3,317 3,084
EIP awards 36.1(a) (1,545) –
PSP awards 36.1(b) (153) –
DBSP awards 36.1(c) (42) –
Other awards 36.1(d) (57) –
PLC EBT issue 1,333 13
Acquisition of Segue 26 –
Acquisition of Ballybunion 30 –
Acquisition of SALI 215 –
Purchase of own shares 47 269
Movement in year (146) 282
At 31 December 2021 3,171 3,366
EIP awards 36.1(a) (1,411) –
PSP awards 36.1(b) (188) –
DBSP awards 36.1(c) (62) –
Other awards 36.1(d) (70) –
PLC EBT issue 26.1 1,475 12
Purchase of own shares
1
42 319
Movement in year (214) 331
At 31 December 2022 2,957 3,697
1 Shares were purchased for PLC EBT using its surplus cash held as a result of dividend income.
26.3. OTHER RESERVES
Capital reserve
This reserve is used to record the gains or losses recognised on the purchase, sale, issue or cancellation of the
Company’s own shares, which may arise from capital transactions by the Group’s employee benefit trusts as well
as any movements in share-based awards to employees (see note 36).
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.
Retained earnings
Retained earnings includes accumulated profits and losses.
27. DIVIDENDS
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the
reporting period. Interim dividends are recognised when paid.
The following dividends were declared and paid by the Company for the year:
2022
£’000
2021
£’000
Final dividend for 2020 of 4.35p per qualifying Ordinary share – 5,670
Interim dividend for 2021 of 2.6p per qualifying Ordinary share – 3,421
Final dividend for 2021 of 5.07p per qualifying Ordinary share 7,322 –
Interim dividend for 2022 of 3.1p per qualifying Ordinary share 4,522 –
Total dividend declared and paid 11,844 9,091
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
126 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
SECTION 6 – RISK
28. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
In the application of the Group’s accounting policies, Management are required to make judgements, estimates
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are regularly evaluated based on historical experience, current
circumstances, expectation of future events and other factors that are considered to be relevant. Actual results
may differ from these estimates. In preparing the financial statements, Management have ensured that they have
assessed any direct and indirect impacts of rising inflation and interest rates when applying IFRS.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of
items which are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong.
The following are the critical judgements and estimates that Management have made in the process of applying
the Group’s accounting policies and that have the most significant effect on the amounts recognised in the
consolidated financial statements.
28.1. CRITICAL JUDGEMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES
Recognition of separately identifiable intangibles
In 2022, the Group acquired New York Private Trust Company (see Note 31.1). IFRS 3 ‘Business Combinations’
requires Management to identify assets and liabilities purchased including intangible assets. Following their
assessment, Management concluded that the only intangible asset meeting the recognition criteria was customer
relationships. The fair value at acquisition date was £5.7m ($6.6m).
28.2. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
Recoverability of WIP
To assess the fair value of consideration received for services rendered, Management are required to make an
assessment of the net unbilled amount expected to be collected from clients for work performed to date. To make
this assessment, WIP balances are reviewed regularly on a by-client basis and the following factors are taken into
account: the ageing profile of the WIP, the agreed billing arrangements, value added and status of the client
relationship. See note 13 for the sensitivity analysis.
Goodwill impairment – key assumptions used to calculate the recoverable amount for each CGU
Goodwill is tested annually for impairment and the recoverable amount of CGUs is determined based on a value in
use calculation using cash flow projections containing key assumptions. See note 21.1 for further detail on key
assumptions and sensitivity analysis.
Fair value of customer relationship intangibles
The customer relationship intangible assets are valued using the MEEM financial valuation model. Cash flow
forecasts and projections are produced by Management and form the basis of the valuation analysis. Other key
estimates and assumptions used in the modelling to derive the fair values include: year on year growth rates,
clientatnt attrition rates, EBIT margins and the discount rate applied to free cash flow. See note 21.2(a) for the
sensitivity analysis.
Fair value of earn-out consideration for SALI
To derive the fair value of the earn-out contingent consideration, Management assessed the likelihood of
achievingprng pre-defined revenue targets to determine the value of contingent consideration. Management
considersthe fos the forecast revenue to be the key assumption in the calculation of the fair value. See note 31.7
forthfor thesee sensitivity analysis.
29. FINANCIAL RISK MANAGEMENT
The Group is exposed through its operations to the following financial risks: market risk (including foreign currency
risk and interest rate risk), credit risk and liquidity risk.
The Group is exposed to risks that arise from the use of its financial instruments. This note describes the Group’s
objectives, policies and processes for managing those risks and the methods used to measure them.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives,
policies and processes for managing those risks or the methods used to measure them from previous periods
unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows.
All are classified as measured at amortised cost:
Note
2022
£’000
2021
£’000
Financial assets – measured at amortised cost
Trade receivables 12 33,290 28,870
Work in progress 13 12,525 12,834
Accrued income 14 23,911 19,587
Other receivables 15 3,991 3,078
Cash and cash equivalents 16 48,861 39,326
122,578 103,695
Financial assets – measured at fair value
Other receivables
1
15 371 –
371 –
Financial liabilities – measured at amortised cost
Trade and other payables 17 48,722 41,058
Loans and borrowings 18 153,622 152,578
Lease Liabilities 19 44,894 43,379
247,238 237,015
Financial liabilities – measured at fair value
Trade and other payables
1
17 1,598 1,342
1,598 1,342
1 All financial assets and liabilities are measured at amortised cost which is deemed to be representative of fair value. The exception to this is
liability-classified contingent consideration of £1.6m for perfORM (2021: £1.3m) (see note 31.5) and mortgage-backed securities included in other
receivables of £0.4m (2021: £nil) (see note 31.1).
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
127 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
29. FINANCIAL RISK MANAGEMENT (CONTINUED)
Management considered the following fair value hierarchy levels in line with IFRS 13:
• Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset and liability,
either directly or indirectly
• Level 3 – Inputs are unobservable inputs for the asset or liability
Management concluded that contingent consideration was classified under Level 3 inputs and mortgage-backed
securities under Level 1 inputs.
General objectives, policies and processes
The Board has overall responsibility for determining the Group’s financial risk management objectives and policies
and, whilst retaining ultimate responsibility for them, it delegates the authority for designing and operating
processes that ensure effective implementation of the objectives and policies to Management, in conjunction with
the Group’s finance department.
The financial risk management policies are considered on a regular basis to ensure that these are in line with the
overall business strategies and the Board’s risk management philosophy. The overall objective is to set policies
tominimto minimise risk as far as possible without adversely affecting the Group’s financial performance, competitiveness
and flexibility.
29.1. MARKET RISK
Market risk arises from the Group’s use of interest-bearing, tradable and foreign currency financial instruments.
Itis thIt is the risk that changes in interest rates (interest rate risk) or foreign exchange rates (currency risk) will affect
theGthe Group’s future cash flows or the fair value of the financial instruments held. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising
therthe return.
Foreign currency risk management
Foreign currency risk arises when individual Group entities enter into transactions denominated in a currency
other than their functional currency. The Group’s policy is, where possible, to allow Group entities to settle
liabilities denominated in their functional currency with the cash generated from their own operations in that
currency. Where Group entities have liabilities denominated in a currency other than their functional currency
(and have insufficient reserves of that currency to settle them), cash already denominated in the required currency
will, where possible and ensuring no adverse impact on local regulatory capital adequacy requirements (see note
30), be transferred from elsewhere in the Group.
The Group’s exposure to the risk of changes in exchange rates relates primarily to the Group’s operating
activitieswes when the revenue or expenses are denominated in a different currency from the Group’s functional
andpand presentation currency of pounds sterling (“£”). For trading entities that principally affect the profit or net
assets ofts of the Group, the exposure is mainly from Euro and US dollar. The Group’s bank loans are denominated
in£,altin £, although the facility is multicurrency.
As at 31 December 2022, the Group’s exposure to the Group’s material foreign currency denominated financial
assets and liabilities are as follows:
£ Euro US dollar
Net foreign currency assets/(liabilities)
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Trade receivables 17,612 18,048 3,502 1,712 12,031 5,031
Work in progress 9,628 10,327 1,625 1,518 743 1,062
Accrued income 12,802 9,499 1,704 1,243 9,395 8,207
Other receivables 1,693 1,141 374 317 2,053 1,487
Cash and cash equivalents 9,811 11,361 10,192 7,418 27,114 19,178
Trade and other payables (10,435) (11,665) (6,236) (4,070) (32,695) (25,840)
Loans and borrowings (153,622) (152,578) – – – –
Lease liabilities (26,621) (28,149) (10,863) (9,387) (5,603) (3,986 )
Total net exposure (139,132) (142,016) 298 (1,249) 13,038 5,139
In order to implement and monitor this policy, on an ongoing basis Management periodically analyse cash reserves
by individual Group entities and in major currencies together with information on expected liabilities due for
settlement. The effectiveness of this policy is measured by the number of resulting cash transfers made between
entities and any necessary foreign exchange trades. Management consider this policy to be working effectively but
continues to regularly assess if foreign currency hedging is appropriate.
Foreign currency risk sensitivity
The following table illustrates the possible effect on comprehensive income for the year and net assets arising
from a 20% strengthening or weakening of pounds sterling against other currencies.
Effect on comprehensive
incomeane and net assets
Strengthening/
(weakening) of
pound sterling
1
2022
£’000
2021
£’000
Euro +20% (50) 208
US dollar +20% (2,173) (857 )
Total (2,223) (649 )
Euro (20%) 74 (312 )
US dollar (20%) 3,259 1,285
Total 3,333 973
1 Holding all other variables constant .
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
128 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
29. FINANCIAL RISK MANAGEMENT (CONTINUED)
29.1. MARKET RISK (CONTINUED)
Interest rate risk management and sensitivity
Bank loans
The Group is exposed to interest rate risk as it borrows all funds at floating interest rates. The interest rate applied
to loan facilities is determined using SONIA plus a margin based on net leverage calculations. The interest rate risk
is managed by the Group maintaining an appropriate leverage ratio and through this ensuring that the interest rate
is kept as low as possible.
Interest rates have been low in recent history, but the current economic environment has resulted in higher
interest rates and costs. Management continue to assess the cost versus benefit of taking hedging instruments to
manage this exposure based on their expectation of future interest rate movements.
Sensitivity analysis for variable rate instruments
An increase/decrease of 100 basis points in interest rates on loans and borrowing with floating interest rates would
have decreased/increased the profit and loss before tax by £1.6m (2021: increase by 50 basis points, £0.8m). This
analysis assumes that all other variables remain constant.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note.
29.2. CREDIT RISK MANAGEMENT
Credit risk is the risk of financial loss to the Group should a customer or counterparty to a financial instrument fail
to meet its contractual obligations. The Group’s principal exposure to credit risk arises from contracts with
customers and therefore the following financial assets: trade receivables, work in progress and accrued income
(together “customer receivables”).
The Group manages credit risk for each new customer by giving consideration to the risk of insolvency or closure
of the customer’s business, current or forecast liquidity issues and general creditworthiness (including past default
experience of the customer or customer type).
Subsequently, customer credit risk is managed by each of the Group entities subject to the Group’s policy,
procedures and control relating to customer credit risk management. Outstanding customer receivables are
monitored and followed up continuously. Specific provisions incremental to ECL are made when there is objective
forward-looking evidence that the Group will not be able to bill the customer in line with the contract or collect
the debts arising from previous invoices. This evidence can include the following: indication that the customer is
experiencing significant financial difficulty or default, probability of bankruptcy, problems in contacting the
customer, disputes with a customer, or similar factors.
Given the current economic environment of rising inflation and interest rates, and climate-related risks,
Management have ensured close and regular consideration of these factors and the impact to customer behaviours
and ability to pay. This analysis is performed on a customer-by-customer basis. Such is the diversification across
the book in industries and geographies that any impact is not considered to be material to the recoverability of
customer receivables. For more commentary on this, the ageing of trade receivables and the provisions thereon
atthat the year end, including the movement in the provision, see note 12.
Credit risk in relation to other receivables is considered for each separate contractual arrangement by
Management. As these are primarily with related parties the risk of the counterparty defaulting is considered
tobelow.to be low.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. Cash and
cash equivalents are held mainly with banks which are rated ‘A-’ or higher by Standard & Poor’s Rating Services
orFitcor Fitch Ratings Ltd for long-term credit rating.
The financial assets are subject to the impairment requirements of IFRS 9; for further detail of how this is assessed
and measured, see notes 12 to 16.
Credit risk exposure
Trade receivables, work in progress and accrued income result from the provision of services to a large number
ofcusof customers (individuals and corporate), spread across different industries and geographies. The gross carrying
amount of financial assets represents the maximum credit exposure and as at the reporting date this can be
summarised as follows:
Total
2022
£’000
Loss
allowance
2022
£’000
Net
2022
£’000
Total
2021
£’000
Loss
allowance
2021
£’000
Net
2021
£’000
Trade receivables 38,935 (5,645) 33,290 33,701 (4,831) 28,870
Work in progress 12,594 (69) 12,525 12,906 (72) 12,834
Accrued income 23,936 (25) 23,911 19,621 (34) 19,587
Other receivables 4,362 – 4,362 3,078 – 3,078
Cash and cash equivalents 48,861 – 48,861 39,326 – 39,326
128,688 (5,739) 122,949 108,632 (4,937) 103,695
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
129 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
29. FINANCIAL RISK MANAGEMENT (CONTINUED)
29.3. LIQUIDITY RISK MANAGEMENT
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group
manages liquidity risk to maintain adequate reserves by regular review around the working capital cycle using
information on forecast and actual cash flows. Management have considered the impact of rising inflation and
interest rates, and do not consider there to be a significant negative impact.
The Board is responsible for liquidity risk management and they have established an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity
management requirements. Regulation in most jurisdictions also requires the Group to maintain a level of liquidity
in order that the Group does not become exposed.
Liquidity tables
The tables detail the Group’s remaining contractual maturity for its financial liabilities with agreed repayment
years. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.
To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rates at the
balance sheet date. The contractual maturity is based on the earliest date on which the Group may be required
topay.to pay.
The total contractual cash flows are as follows:
2022
<6
months
£’000
6 – 12
months
£’000
1 – 3
years
£’000
3 – 5
years
£’000
5 – 10
years
£’000
>10
years
£’000
Total
contractual
cash flow
£’000
Loans and borrowings
1
4,221 4,344 170,020 – – – 178,585
Trade payables and accruals – – – – – – –
Contingent consideration 2,734 – 29,358 – – – 32,092
Lease liabilities 3,537 3,511 13,225 10,346 14,812 7,806 53,237
Total 10,492 7,855 212,603 10,346 14,812 7,806 263,914
2021
<6
months
£’000
6 – 12
months
£’000
1 – 3
years
£’000
3 – 5
years
£’000
5 – 10
years
£’000
>10
years
£’000
Total
contractual
cash flow
£’000
Loans and borrowings
1
1,019 2,038 3,210 157,802 – – 164,069
Trade payables and accruals 13,483 – 1,047 – – – 14,530
Contingent consideration 177 4,271 619 20,363 – – 25,430
Lease liabilities 3,305 3,270 11,522 9,597 15,375 9,682 52,751
Total 17,984 9,579 16,398 187,762 15,375 9,682 256,780
1 This includes the future interest payments not yet accrued and the repayment of capital upon maturity.
30. CAPITAL MANAGEMENT
Risk management
The Group’s objective for managing capital is to safeguard the ability to continue as a going concern, while
maximising the return to Shareholders through the optimisation of the debt and equity balance, and to ensure that
capital adequacy requirements are met for local regulatory requirements at entity level.
The managed capital refers to the Group’s debt and equity balances; for quantitative disclosures, see note 18 for
loans and borrowings and note 26 for share capital.
Loan covenants
The Group has bank loans which require it to meet leverage and interest cover covenants. In order to achieve the
Group’s capital risk management objective, the Group aims to ensure that it meets financial covenants attached to
bank borrowings. Breaches in meeting the financial covenants would permit the lender to immediately recall the
loan. In line with the loan agreement the Group tests compliance with the financial covenants on a bi-annual basis.
Under the terms of the loan facility, the Group is required to comply with the following financial covenants:
• Leverage (being the ratio of total net debt to underlying EBITDA (for LTM at average FX rates and adjusted for
pro-forma contributions from acquisitions) for a relevant period) must not be more than 3:1
• Interest cover (being the ratio of EBITDA to net finance charges) must not be less than 4:1
The Group has complied with all financial covenants throughout the reporting period and is satisfied that there is
sufficient headroom should rising inflation and interest rates adversely affect trading going forward.
Capital adequacy
Individual regulated entities within the Group are subject to regulatory requirements to ensure adequate capital
and liquidity to meet local requirements in Jersey, Guernsey, Ireland, the Isle of Man, the UK, the US, Switzerland,
the Netherlands, Luxembourg, Mauritius, South Africa and the Caribbean; all are monitored regularly to ensure
compliance. There have been no breaches of applicable regulatory requirements during the reporting period.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
130 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
SECTION 7 – GROUP STRUCTURE
31. BUSINESS COMBINATIONS
A business combination is defined as a transaction or other event in which an acquirer obtains control of one or
more businesses. Where the business combination does not include the purchase of a legal entity but the
transaction includes acquired inputs and processes applied to those inputs in order to generate outputs, the
transaction is also considered a business combination.
The Group applies the acquisition method to account for business combinations. The consideration transferred
in an acquisition comprises the fair value of assets transferred, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. The
identifiable assets acquired and liabilities assumed in a business combination are measured at their fair values
at the acquisition date. Acquisition-related costs are recognised in the consolidated income statement as
non-underlying items within operating expenses.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition date fair value of any previous equity interest in the acquiree over the fair value of the identifiable
net assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable
assets of the business acquired, the difference is recognised directly in the consolidated income statement as a
gain on bargain purchase.
When the consideration transferred includes an asset or liability resulting from a contingent consideration
arrangement, this is measured at its acquisition-date fair value. Changes in fair value of the contingent
consideration that qualify as measurement period adjustments are adjusted retrospectively, with
corresponding adjustments against goodwill.
Measurement period adjustments are adjustments that arise from additional information obtained during the
measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances
that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify
asmeasuremeas measurement period adjustments depend on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is
remeasured at subsequent reporting dates at fair value with the corresponding gain or loss being recognised
inthin the consolidated income statement.
31.1. NEW YORK PRIVATE TRUST COMPANY (“NYPTC”)
On 27 April 2022, JTC entered into an agreement to acquire 100% of the share capital of NYPTC, a Delaware
non-deposit trust company. NYPTC offers a broad range of fiduciary services, including trust services, estate
administration services and white label trust services to HNW and UHNW individuals, families and corporate
clients. The acquisition supports JTC’s strategy to further develop its presence in the high growth US market and in
particular to develop a US domestic trust services offering and is highly complementary to JTC’s existing private
client operations in the US in Miami, New York and South Dakota.
Following regulatory approval for the transaction, 100% of the cash consideration was transferred on 28 October
2022 in advance of completion on 31 October 2022. The results of the acquired business have been consolidated
from 31 October 2022 as Management concluded this was the date control was obtained by the Group.
The acquired business contributed revenues of £1.0m and underlying profit before tax (before central costs have
been applied) of £0.3m to the Group for the period from 31 October 2022 to 31 December 2022. If the business
had been acquired on 1 January 2022, the consolidated pro-forma revenue and underlying profit before tax for the
period would have been £204.1m and £37.2m respectively.
(a) Identifiable assets acquired and liabilities assumed on acquisition
The following table shows, at fair value, the recognised assets acquired and liabilities assumed at the
acquisitionacquisition date:
Book value at
acquisition
£’000
Adjustments
£’000
Fair value
£’000
Fair value
$’000
Property, plant and equipment
1,3
22 471 493 573
Intangible assets – customer relationships
2
1,334 4,328 5,662 6,566
Trade receivables 514 – 514 595
Other receivables
4
371 – 371 431
Cash and cash equivalents 3,997 – 3,997 4,634
Assets 6,238 4,799 11,037 12,799
Trade and other payables 275 (14) 261 302
Lease liabilities
1
– 413 413 479
Deferred tax liabilities
2
– 1,682 1,682 1,950
Deferred income 24 – 24 27
Provisions
3
– 58 58 68
Liabilities 299 2,139 2,438 2,826
Total identifiable net assets 5,939 2,660 8,599 9,973
1 The acquired business leases office premises; a lease liability of £0.4m ($0.5m) is measured at the present value of the remaining lease payments with
an equal right-of-use asset.
2 Acquisition-related intangible assets of £5.7m ($6.6m) relate to the valuation of customer relationships; these were valued with the assistance of an
expert using the MEEM financial valuation model (see note 21.2(a) for key assumptions and sensitivity analysis). The useful economic life of 10 years
was based on the historical length of relationships as well as observed attrition rates for companies operating in the wealth management and fund
administration sector. Deferred tax liabilities of £1.7m ($1.95m) have been recognised in relation to the identified intangible assets, the amortisation of
which is non-deductible against US Corporation taxes and therefore creates temporary differences between the accounting and taxable profits.
3 The discounted dilapidation cost in relation to leased office premises is recognised as a provision (see note 25) and capitalised against leasehold
improvements.
4 Other receivables includes mortgage-backed securities held at fair value that were sold in January 2023.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
131 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
31. BUSINESS COMBINATIONS (CONTINUED)
31.1. NEW YORK PRIVATE TRUST COMPANY (“NYPTC”) (CONTINUED)
(b) Consideration
Consideration for the acquisition was cash of £16.98m ($19.69m) with £17.0m ($19.71m) paid on 28 October 2022
in advance of completion and £0.16m ($0.19m) received subsequently for purchase price adjustments.
(c) Goodwill
£’000 $’000
Total consideration 16,983 19,691
Less: Fair value of identifiable net assets (8,599) (9,973)
Goodwill 8,384 9,718
Goodwill is represented by assets that do not qualify for separate recognition or other factors. The acquisition
adds scale and is transformative to JTC PCS’s offering in the large and growing US trust market, including new
customer relationships and the effects of an assembled workforce.
(d) Impact on cash flow
£’000 $’000
Cash consideration 17,043 19,710
Less: cash balances acquired (3,997) (4,634)
Net cash outflow from acquisition 13,046 15,076
(e) Acquisition-related costs
The Group incurred acquisition-related costs of £0.5m for legal, professional, advisory and other operating
expenses. These costs have been recognised in other operating expenses in the Group’s consolidated income
statement (see note 6) and are treated as non-underlying items to calculate underlying EBITDA (see note 7).
31.2. RBC CEES LIMITED (“RBC CEES”)
On 6 April 2021, JTC acquired RBC cees, the provider of a market-leading employee benefits platform for an
internationally diverse blue-chip corporate client base. The acquisition was complementary to JTC’s existing
corporate and trustee services, and significantly enhanced the Group’s employee benefits offering.
At the acquisition date, the fair value of consideration was £20.2m for acquired identifiable net assets of £25.5m,
resulting in negative goodwill of £5.3m, which was recognised as a gain on bargain purchase in the prior year (see
note 9).
Within the acquired identifiable net assets were customer relationship intangibles of £22.4m with a UEL of 12
years. Deferred tax liabilities of £2.2m were recognised in relation to identified intangible assets, the amortisation
of which is non-deductible against Jersey and Guernsey Corporation Tax and therefore creates temporary
differences between the accounting and taxable profits.
31.3. INDOS FINANCIAL LIMITED (“INDOS”)
On 1 June 2021, JTC acquired INDOS, a privately owned UK and Irish based, specialist provider of depositary and
other high value services for alternative investment funds. This acquisition added further technical expertise for
fund services within the ICS division and directly added scale in the UK and Ireland, two growth jurisdictions.
At the acquisition date, the fair value of consideration was £12.3m for acquired identifiable net assets of £3.0m,
resulting in goodwill of £9.3m. This included contingent consideration of £1.5m (discounted to £1.2m) which is
payable subject to JTC PLC meeting an adjusted underlying EPS target for the period ending 31 December 2022.
Management anticipate this will be paid in full following the release of their results in April 2023; the NPV at
31 December 2022 is £1.5m (2021: £1.3m), see note 17. The consideration is payable in equity and is subject to a
one year lock in period which expires on 31 December 2023.
Within the acquired identifiable net assets were customer relationship intangibles of £1.4m, a brand intangible
of£0.4of £0.4m and an internally generated software intangible of £1.2m; all have a UEL of 10 years. Deferred tax
liabilities of £0.2m were recognised in relation to identified intangible assets, the amortisation of which is
non-deductible against UK and Irish Corporation Tax, and therefore creates temporary differences between
theathe accounting and taxable profits.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
132 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
31. BUSINESS COMBINATIONS (CONTINUED)
31.4. SEGUE PARTNERS LLC (“SEGUE”)
On 15 September 2021, JTC acquired Segue, an innovative fund services provider headquartered in St. Louis,
Missouri, US. The business provides a range of sophisticated fund solutions to meet the needs of private equity,
venture capital, debt funds and family offices, and also delivers accounting services specifically designed to meet
the needs of entrepreneurs, portfolio companies and start-ups.
At the acquisition date, the fair value of consideration was £6.3m ($8.4m) for acquired identifiable net assets of
£1.0m ($1.3m), resulting in goodwill of £5.3m ($7.1m). This included contingent consideration of £2.2m ($3.0m)
(discounted to £1.6m ($2.2m)) which was subject to Segue meeting adjusted EBITDA targets over the calendar
years 2022 and 2023. The contingent consideration is to be paid in a 80%/20% ratio of cash and JTC PLC Ordinary
shares. During 2022, Management determined that the maximum earn-out of $3.0m would be settled and a
part-payment of £0.2m ($0.3m) in cash. The remaining cash and the issuance of JTC PLC Ordinary shares equal to
20% is anticipated in April 2023. The NPV of contingent consideration at 31 December 2022 is now £2.2m ($2.6m)
(see note 17) and as the settlement is earlier than initially anticipated, it resulted in a loss on revaluation of
contingent consideration of £0.13m to accelerate the discount (see note 9).
Within the acquired identifiable net assets were customer relationship intangibles of £1.1m ($1.4m) with a UEL of
10 years. Deferred tax liabilities of £0.3m ($0.4m) were recognised in relation to identified intangible assets, the
amortisation of which is non-deductible against US Corporation Taxes and therefore creates temporary differences
between the accounting and taxable profits.
31.5. PERFORM DUE DILIGENCE SERVICES LIMITED (“PERFORM”)
On 18 October 2021, JTC acquired perfORM, a London based, technology-led provider of due diligence services for
a diverse base of UK and international investment managers and allocators.
At the acquisition date, the fair value of consideration was £2.74m, including a total estimated earn-out contingent
consideration due of £4.48m (discounted to £2.69m) for acquired identifiable net assets of £0.05m, resulting in
goodwill of £2.69m.
The earn-out for perfORM is calculated based on a multiple of underlying EBITDA for the year ended 31 December
2024 (up to a maximum of £6.0m) and payable in an equal split of cash and JTC PLC Ordinary shares; the 50%
payable in shares is liability-classified contingent consideration. In accordance with IAS 32, Management are
required to update the fair value at each reporting date.
Management therefore reassessed the forecast EBITDA and identified no evidence to indicate an adjustment was
required to the £4.48m estimated as due. The Monte Carlo simulation was updated, decreasing the share price
applied to the 282,854 JTC PLC Ordinary shares to £7.92 (31.12.2021: £7.99).
The simulation is based on JTC’s share price at 31 December 2022, factoring in historical volatility and projected
dividend payments and is then discounted using an appropriate risk-free rate.
The updated share price resulted in a gain on revaluation of £0.05m (see note 9) as the fair value of the contingent
consideration payable in JTC Ordinary shares decreased to £2.24m (2021: £2.26m).
The revalued earn-out contingent consideration of £4.46m (cash £2.22m/JTC PLC Ordinary shares £2.24m) has
then been discounted to a present value of £3.18m (see note 17).
Within the acquired identifiable net assets were customer relationship intangibles of £0.03m with a UEL of 10
years. Deferred tax liabilities of £0.01m were recognised in relation to identified intangible assets, the amortisation
of which is non-deductible against UK Corporation Tax and therefore creates temporary differences between the
accounting and taxable profits.
31.6. BALLYBUNION CAPITAL LIMITED (“BALLYBUNION”)
On 3 November 2021, JTC acquired Ballybunion, a boutique asset manager based in Dublin that provides
management and regulatory oversight services to investment funds.
At the acquisition date, the fair value of consideration was £11.9m (¤14.1m) for acquired identifiable net assets of
£3.1m (¤3.7m), resulting in goodwill of £8.8m ($10.4m). This included contingent consideration payable in cash
subject to meeting an underlying EBITDA target for the period ended 30 June 2022 and a put/call option
agreement to acquire the remaining 5% of equity in Ballybunion. As the business performed successfully,
exceeding the EBITDA target for 30 June 2022 and JTC exercised its option, £1.85m (¤2.05m) was paid in during
the year.
On 21 March 2023, Ballybunion changed its name to JTC Global AIFM Solutions (Ireland) Limited.
31.7. SALI FUND MANAGEMENT LLC AND SALI GP HOLDINGS LLC (“SALI”)
On 12 November 2021, JTC acquired SALI, a US based and market-leading provider of fund services to the
Insurance Dedicated Fund (“IDF”) and Separately Managed Account (“SMA”) market.
The fair value of consideration at acquisition recorded in the 31 December 2021 financial statements was £174.3m
($233.0m) for acquired identifiable net assets of £33.4m ($44.6m), resulting in goodwill of £140.9m ($188.4m).
Within the acquired identifiable net assets were customer relationship intangibles of £43.6m ($58.3m) with a
UELof 25 yearUEL of 25 years and a brand intangible of £1.6m ($2.2m) with a UEL of 5 years. Deferred tax liabilities of £13.4m
($18.0m) were recognised in relation to identified intangible assets, the amortisation of which is non-deductible
against US Corporation Taxes and therefore creates temporary differences between the accounting and
taxableprble profits.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
133 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
31. BUSINESS COMBINATIONS (CONTINUED)
31.7. SALI FUND MANAGEMENT LLC AND SALI GP HOLDINGS LLC (“SALI”) (CONTINUED)
(a) Consideration
Total consideration was satisfied by the following:
£’000 $’000
Cash consideration 144,791 193,593
Equity instruments (1,260,457 Ordinary shares)
1
8,583 11,471
Contingent consideration – EBT contribution
2
1,871 2,500
Contingent consideration – Closing payment 159 212
Contingent consideration – Earn-out
3
18,899 25,258
Fair value of total consideration at acquisition date 174,303 233,034
Adjustment to fair value of shares issued as consideration following FRC review
Equity instruments valued at acquisition date 2,020 2,701
Removal of discount for lack of marketability 578 772
Total adjustment to fair value of equity instruments 2,598 3,473
Adjusted fair value of total consideration at acquisition date 176,901 236,507
1 FRC review
Following a review of the JTC Annual Report and Accounts 2021 by the FRC in accordance with Part 2 of the FRC Corporate Reporting Review Operating
Procedures, further information was requested in respect of the valuation of shares issued as consideration. Upon investigation by Management, it was
understood that our approach where equity instruments are issued as consideration did not adhere to the strict interpretation of IFRS 3 ‘Business
Combinations’, paragraph 37 (“IFRS 3 p37”), which requires consideration transferred in a business combination to be measured at the acquisition-date fair
value.
On 19 November 2021, the Company issued and admitted 1,260,457 Ordinary shares to satisfy the equity element of initial consideration. At 31 December
2021, the fair value of the shares was derived using a share price of £7.18 on 6 October 2021, the date of the Share Purchase Agreement (“SPA”), rather than
the share price of £8.87, the end of day share price on the acquisition date of 12 November 2022 as required by IFRS 3 p37. As a result, the fair value of
consideration at the date of the acquisition was understated by £2.02m.
In addition, it was identified that a discount for lack of marketability had been applied to the equity instruments in the 31 December 2021 financial
statements. On review, it was concluded that this had been incorrectly applied, as the restriction applies to the holders of the shares and not the Company.
This resulted in an understatement of the fair value of consideration at the date of the acquisition of £0.58m.
The fair value of equity instruments should have been £11.2m ($14.9m) rather than £8.6m ($11.5m); the result was a total adjustment to the fair value of
equity instruments of £2.6m ($3.5m). This was adjusted during 2022, increasing both goodwill (see (c) and note 21) and share premium (see note 26.1).
2 Contingent consideration – EBT contribution
On 14 June 2022, the Company issued 325,272 Ordinary shares to PLC EBT to settle this element of consideration (see note 26.1).
3 Contingent consideration – Earn-out
A total of up to £26.1m ($31.5m) is payable in cash subject to meeting revenue targets for the two year period following acquisition. Based on
Management’s assessment of the performance to date and the budgeted forecast for the remaining period, it is estimated that the earn-out will be paid in
full. At 31 December 2022, the total amount due has been discounted to its present value £23.6m ($28.5m) (2021: £18.9m ($25.3m)), see note 17.
Sensitivity analysis on fair value of earn-out consideration
Management carried out a sensitivity analysis on the output of the key assumptions and estimates used to
calculate the fair value of the earn-out contingent consideration. Management consider the key assumption and
estimate to be forecast revenue for the two year period. A decrease in the forecast revenue of 10% would decrease
the earn-out contingent consideration by £2.6m ($3.5m). Discounted to its present value, this would be equal to a
£2.4m ($3.2m) decrease.
(b) Identifiable assets acquired and liabilities assumed
At acquisition, deferred tax liabilities of £13.44m ($17.96m) were recognised in relation to acquired intangible
assets where it was anticipated that the amortisation would be non-deductible against US Corporation taxes and
therefore give rise to temporary differences between the accounting and taxable profits. Subsequent information
received identified that the purchase consideration would be tax deductible.
Management have therefore recognised a measurement period adjustment to the initial accounting for the
business combination. The deferred tax liability has been derecognised resulting in a £13.44m ($17.96m) decrease
to acquired goodwill and an adjustment of £0.07m ($0.09m) to income tax for the previous unwinding of the
deferred tax liability.
(c) Goodwill
£’000 $’000
Goodwill at acquisition date 140,903 188,396
Exchange differences at 31 December 2021 (1,330) –
Goodwill at 1 January 2022 139,573 188,396
Total adjustment to fair value of equity instruments 2,598 3,473
Adjusted goodwill at acquisition date 142,171 191,869
Measurement period adjustment (13,437) (17,964)
Exchange differences at 31 December 2022 15,537 –
Goodwill at 31 December 2022 144,271 173,905
31.8. ESSENTIAL FUND SERVICES, LLC (“EFS”)
On 15 December 2021, JTC acquired EFS, a fund services provider headquartered in New York, US. The business
provides a broad range of services in the alternative assets space, including accounting, reporting and
administrative services to investment partnerships and their investment managers.
The fair value of consideration was £6.5m ($8.5m) for acquired identifiable net assets of £1m ($1.3m), resulting
in goodwill of £5.5m ($7.2m). Contingent consideration of £0.02m ($0.03m) was paid during the year following
the reconciliation of the closing cash reserve.
At acquisition, deferred tax liabilities of £0.4m ($0.5m) were recognised in relation to acquired intangible assets
where it was anticipated that the amortisation would be non-deductible against US Corporation taxes and
therefore give rise to temporary differences between the accounting and taxable profits. Subsequent information
received identified that the purchase consideration would be tax deductible.
Management have therefore recognised a measurement period adjustment to the initial accounting for the
business combination. The deferred tax liability has been derecognised resulting in a £0.4m ($0.5m) decrease to
acquired goodwill.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
134 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
32. INVESTMENTS
The Group’s interest in other entities includes an associate and an investment held at cost.
An associate is an entity in which the Group has significant influence, but not control or joint control, over the
financial and operating policies. The Group’s interest in an equity-accounted investee solely comprises of an
interest in an associate.
Investments in associates are accounted for using the equity method. Under the equity method, the
investment in an associate is initially recognised at cost, which includes transaction costs. Subsequent to initial
recognition, the carrying amount of the investment is adjusted to recognise the Group’s share of post-
acquisition profits or losses in the consolidated income statement within EBITDA, and the Group’s share of
movements in other comprehensive income of the investee in other comprehensive income. Unrealised gains
and losses resulting from transactions between the Group and the associate are eliminated to the extent of the
interest in the associate.
The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy
described in note 21.
Where the Group has an interest in an entity but does not have significant influence, the investment is held
atcosat cost.
The following table details the associate and an investment the Group holds as at 31 December 2022. The entities
listed have share capital consisting solely of Ordinary shares, which are held directly by the Group. The country of
incorporation is also their principal place of business, and the proportion of ownership interest is the same as the
proportion of voting rights held.
% of ownership interest Carrying amount
Name of entity
Country of
incorporation
Nature of
relationship
Measurement
method
2022
%
2021
%
2022
£’000
2021
£’000
Kensington International
Group Pte. Ltd Singapore Associate
1
Equity
method 42 42 2,325 1,847
Harmonate Corp. US Investment
2
Cost method 11.2 16 831 791
Total investments 3,156 2,638
1 Kensington International Group Pte. Ltd (“KIG”) provides corporate, fiduciary, trust and accounting services, and is a strategic partner of the Group,
providing access to new clients and markets in the Far East.
2 Harmonate Corp. (“Harmonate”) provides fund operation and data management solutions to clients in the financial services industry.
The summarised financial information for KIG, which is accounted for using the equity method, is as follows:
Summarised income statement
2022
£’000
2021
£’000
Revenue 7,253 6,184
Gross profit 6,133 5,217
Profit for the year 668 654
Summarised balance sheet
2022
£’000
2021
£’000
Total non-current assets 600 637
Total current assets 10,805 6,043
Total assets 11,405 6,680
Total current liabilities 7,141 3,547
Net assets less current liabilities 4,264 3,133
Reconciliation of summarised financial information
2022
£’000
2021
£’000
Opening net assets 3,133 2,272
Profit for the year 668 654
Foreign exchange differences 463 207
Closing net assets 4,264 3,133
Group’s share of closing net assets 1,803 1,325
Goodwill 522 522
Carrying value of investment in associate 2,325 1,847
Impact on consolidated income statement Note
2022
£’000
2021
£’000
Balance at 1 January 1,847 1,483
Share of profit of equity-accounted investee 35.1 478 364
Balance at 31 December 2,325 1,847
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
135 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
33. SUBSIDIARIES
In the opinion of Management, the Group’s subsidiaries which principally affect the profit or the net assets of the
Group at 31 December 2022 are listed below. Unless otherwise stated, the Company owns 100% of share capital
consisting solely of Ordinary shares, and the proportion of ownership interests held equals the voting rights held
by the Group. The country of incorporation is also their principal place of business.
Where shareholding and voting rights are less than 100%, Management have considered the circumstances of
each subsidiary shareholding and any specific agreements in support, and have concluded that the subsidiaries
should be consolidated (as per the accounting policy in note 3.2), the interest attributed in full to the Company
and no minority interest recognised. Please see specific comments below the table.
Name of subsidiary
Country of incorporation
and place of business Activity
%
holding
JTC Group Holdings Limited Jersey Holding 100
JTC Group Limited Jersey Head office services 100
JTC (Jersey) Limited Jersey Trading 100
JTC Employer Solutions Limited Jersey Trading 100
JTC Fund Solutions (Jersey) Limited Jersey Trading 100
JTC (BVI) Limited British Virgin Islands Trading 100
JTC (Cayman) Limited Cayman Islands Trading 100
JTC Fund Services (Cayman) Ltd Cayman Islands Trading 100
JTC Corporate Services (DIFC) Limited Dubai Trading 100
JTC Fund Solutions (Guernsey) Limited Guernsey Trading 100
JTC Global AIFM Solutions Limited Guernsey Trading 100
JTC Registrars Limited Guernsey Trading 100
JTC Employer Solutions (Guernsey) Limited Guernsey Trading 100
JTC Corporate Services (Ireland) Limited Ireland Trading 100
JTC Fund Solutions (Ireland) Limited Ireland Trading 100
JTC Global AIFM Solutions (Ireland) Limited (formerly
Ballybunion Capital Limited)
1
Ireland Trading 100
INDOS Financial (Ireland) Limited Ireland Trading 100
JTC Trustees (IOM) Limited Isle of Man Trading 100
JTC Luxembourg Holdings S.à r.l. Luxembourg Holding 100
JTC (Luxembourg) S.A. Luxembourg Trading 100
JTC Global AIFM Solutions SA Luxembourg Trading 100
JTC Corporate Services (Luxembourg) SARL Luxembourg Trading 100
JTC Signes Services SA Luxembourg Trading 100
Exequtive Services S.à r.l. Luxembourg Trading 100
JTC Fiduciary Services (Mauritius) Limited Mauritius Trading 100
JTC (Netherlands) B.V. Netherlands Trading 100
JTC Holdings (Netherlands) B.V. Netherlands Holding 100
JTC Institutional Services Netherlands B.V. Netherlands Trading 100
Global Tax Support B.V.
2
Netherlands Trading –
JTC Fund and Corporate Services (Singapore) Pte. Limited
(formerly JTC Fiduciary Services (Singapore) Pte. Limited) Singapore Trading 100
JTC Fund Solutions RSA (Pty) Ltd South Africa Trading 100
JTC (Suisse) SA Switzerland Trading 100
JTC Trustees (Suisse) Sàrl Switzerland Trading 100
JTC Group Holdings (UK) Limited UK Holding 100
INDOS Financial Limited UK Trading 100
Name of subsidiary
Country of incorporation
and place of business Activity
%
holding
JTC Fund Services (UK) Limited UK Trading 100
JTC Trust Company (UK) Limited UK Trading 100
JTC (UK) Limited UK Trading 100
JTC UK (Amsterdam) Limited UK Holding 100
JTC Registrars (UK) Limited UK Trading 100
perfORM Due Diligence Services Limited UK Trading 100
JTC USA Holdings, Inc. US Trading 100
JTC Miami Corporation
3
US Trading 50
JTC Trust Company (South Dakota) Ltd (formerly JTC
Trustees (USA) Ltd) US Trading 100
Essential Fund Services, LLC US Trading 100
SALI Fund Management, LLC US Trading 100
JTC Americas Holdings, LLC US Holding 100
Segue Partners, LLC US Trading 100
JTC Trust Company (Delaware) Limited US Trading 100
1 During the year, JTC paid £0.6m to exercise a call option to purchase the remaining 5% of share capital to increase to a 100% holding.
2 JTC has a call option to purchase Global Tax Support B.V. for ¤1 from its parent company, therefore Management consider it has control of this entity
and no minority interest is recognised.
3 JTC Miami Corporation is 50% owned by an employee as part of their residential status in the US. The employee has signed a declaration of trust to
confirm they hold the shares in trust for JTC, would vote as directed nor seek to benefit from dividends or profit. Management therefore consider it
appropriate to attribute 100% of the interest to JTC and no minority interest is recognised.
JTC PLC has the following dormant UK subsidiaries that are exempt from filing individual accounts with the
registrar in accordance with s448A of Companies Act 2006: PTC Securities Limited, Stratford Securities Limited, St
James’s Securities Limited, JTC Fiduciary Services (UK) Limited, JTC Trustees (UK) Limited, PTC Investments
Limited, Castle Directors (UK) Limited, JTC Securities (UK) Limited, JTC Corporate Services (UK) Limited, JTC
Trustees Services (UK) Limited and JTC Directors (UK) Limited.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
136 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
SECTION 8 – OTHER DISCLOSURES
34. EARNINGS PER SHARE
Basic Earnings Per Share
The calculation of basic Earnings Per Share is based on the profit for the year divided by the weighted average
number of Ordinary shares for the same year.
Diluted Earnings Per Share
The calculation of diluted Earnings Per Share is based on basic Earnings Per Share after adjusting for the
potentially dilutive effect of Ordinary shares that have been granted.
Adjusted underlying basic Earnings Per Share
The calculation of underlying basic Earnings Per Share is based on basic Earnings Per Share after adjusting profit
for the year for non-underlying items and to remove the amortisation of acquired intangible assets and
associated deferred tax, amortisation of loan arrangement fees and unwinding of NPV discounts in relation
tocontingent considerationto contingent consideration.
The Group calculates basic, diluted and adjusted underlying basic Earnings Per Share. The results can be
summarised as follows:
Note
2022
Pence
2021
Pence
Basic EPS 34.1 23.92 20.49
Diluted EPS 34.2 23.60 20.21
Adjusted underlying basic EPS 34.3 33.27 25.55
34.1. BASIC EARNINGS PER SHARE
2022
£’000
2021
£’000
Profit for the year 34,714 26,648
No. of shares
(thousands)
No. of shares
(thousands)
Issued Ordinary shares at 1 January 144,326 119,097
Effect of shares issued to acquire business combinations – 362
Effect of movement in treasury shares held 811 850
Effect of placing – 9,735
Weighted average number of Ordinary shares (basic): 145,137 130,044
Basic EPS (pence) 23.92 20.49
34.2. DILUTED EARNINGS PER SHARE
2022
£’000
2021
£’000
Profit for the year 34,714 26,648
Note
No. of shares
(thousands)
No. of shares
(thousands)
Weighted average number of Ordinary shares (basic) 34.1 145,137 130,044
Effect of share-based payments issued 1,930 1,796
Weighted average number of Ordinary shares (diluted): 147,067 131,840
Diluted EPS (pence) 23.60 20.21
34.3. ADJUSTED UNDERLYING BASIC EARNINGS PER SHARE
Note
2022
£’000
2021
£’000
Profit for the year 34,714 26,648
Non-underlying items 7 (1,883) (2,875)
Amortisation of customer relationships, acquired software and brands 21 12,400 8,809
Amortisation of loan arrangement fees 10 1,062 1,501
Unwinding of NPV discounts for contingent consideration 10 3,518 586
Temporary tax differences arising on amortisation of customer
relationships, acquired software and brands 11 (1,531) (1,446 )
Adjusted underlying profit for the year 48,280 33,223
Note
No. of shares
(thousands)
No. of shares
(thousands)
Weighted average number of Ordinary shares (basic) 34.1 145,137 130,044
Adjusted underlying basic EPS (pence) 33.27 25.55
Adjusted underlying basic EPS is an alternative performance measure which reflects the underlying activities
oftheGof the Group. The following definition is not consistent with the requirements of IAS 33.
The Group’s definition of underlying basic EPS reflects the profit for the year adjusted to remove the impact of
non-underlying items (see note 7). Additionally, a number of other items relating to the Group’s acquisition
activities including amortisation of acquired intangible assets and associated deferred tax, amortisation of loan
arrangement fees and unwinding of NPV discounts in relation to contingent consideration are removed to present
an adjusted underlying basic EPS which is used more widely by external investors and analysts.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
137 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
35. CASH FLOW INFORMATION
35.1. CASH GENERATED FROM OPERATIONS
Note
2022
£’000
2021
£’000
Operating profit 33,803 8,992
Adjustments:
Depreciation of property, plant and equipment 7,883 7,157
Amortisation of intangible assets 14,378 10,434
Equity-settled share-based payment expense 2,045 1,708
EIP share-based payment expense 4,780 13,778
Share of profit of equity-accounted investee 32 (478) (364)
Operating cash flows before movements in working capital 62,411 41,705
Net changes in working capital:
Increase in receivables (10,247) (9,972)
Decrease in payables 3,202 (1,036)
Cash generated from operations 55,366 30,697
35.2. NON-UNDERLYING ITEMS WITHIN CASH GENERATED FROM OPERATIONS
2022
£’000
2021
£’000
Cash generated from operations 55,366 30,697
Non-underlying items:
Capital distribution from EBT 417 581
Acquisition and integration 3,127 6,440
Office start ups 768 –
Revision of ICS operating model 402 421
Other 228 263
Total non-underlying items within cash generated from operations 4,942 7,705
Underlying cash generated from operations 60,308 38,402
35.3. FINANCING ACTIVITIES
Changes in liabilities arising from financing activities:
Lease
liabilities
due within
one year
£’000
Lease
liabilities
due after
one year
£’000
Borrowings
due within
one year
£’000
Borrowings
due after
one year
£’000
Total
£’000
At 1 January 2021 4,215 39,155 2,456 104,376 150,202
Cash flows:
Acquired on acquisition 324 1,018 – – 1,342
Drawdowns – – – 176,662 176,662
Repayments (74) (5,748) (2,434) (125,099) (133,355)
Other non-cash movements
1
998 3,491 (22) (3,361) 1,106
At 31 December 2021 5,463 37,916 – 152,578 195,957
Cash flows:
Acquired on acquisition 216 101 – – 317
Repayments (41) (6,202) – – (6,243)
Other non-cash movements
1
(1,346) 8,787 – – 7,441
At 31 December 2022 4,292 40,602 – 152,578 197,472
1 Other non-cash movements include the capitalisation and amortisation of loan arrangement fees, foreign exchange movements, additions and
disposals of lease liabilities relating to right-of-use assets and the unwinding of NPV discounts.
35.4. NET DEBT
Notes
2022
£’000
2021
£’000
Bank loans 18 (153,622) (152,578)
Trapped cash
1
(15,673) (3,903)
Loans receivable from employees 15 16 3
Less: cash and cash equivalents 48,861 39,326
Total net debt (120,418) (117,152)
1 Trapped cash represents the minimum cash balance to be held to meet regulatory capital requirements.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
138 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
36. SHARE-BASED PAYMENTS
The Company operates equity-settled share-based payment arrangements under which services are received
from eligible employees as consideration for equity instruments. The total amount to be expensed for services
received is determined by reference to the fair value at grant date of the share-based payment awards made,
including the impact of any non-vesting and market conditions.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period,
basedoed on Management’s estimate of equity instruments that will eventually vest. At each balance sheet
date,Mdate, Management revise its estimate of the number of equity instruments expected to vest as a result of
theefthe effectof not of non-market based vesting conditions. The impact of the revision of the original estimates, if any,
is recognised in the consolidated income statement such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to equity reserves.
36.1. DESCRIPTION OF SHARE-BASED PAYMENT ARRANGEMENTS
The Group has implemented and made awards to eligible employees under three equity-settled share-based
payment plans; it also continues to make awards when employees join the business, for the retention of key
employees following acquisition and to incentivise key employees (see ‘Other awards’). Details of the share plans
are as follows:
(a) Employee Incentive Plan
JTC has an ongoing commitment to the concept of shared ownership and adopted the EIP upon listing
onthon theLoe London Stock Exchange in March 2018. The EIP is designed to recognise and reward long-term performance
across the whole Group and its alignment of employees’ and Shareholders’ interests is linked to multi-year
business plans. All permanent employees of the Group (excluding all Executive Directors of JTC PLC) areeligs of JTC PLC) are eligible
tobe gto be granted an award under the EIP at the discretion of the Remuneration Committee.
On 22 July 2021, following the conclusion of the Odyssey business plan (which ran from the IPO until the end of
2020), JTC PLC granted 3,104,007 shares to employees of the Group. Each award was separated into two tranches:
50% vested at the grant date (“Tranche one”) and 50% was a deferred award in the form of a conditional right
torecto receive shares on the first anniversary of grant, subject to the achievement of the applicable performance
conditions (“Tranche two”). Tranche one was expensed in full upon grant and Tranche two was expensed over
theothe one year vesting period.
On 22 July 2021, 1,544,950 Ordinary shares were exercised and on 22 July 2022, tranche two vested and
1,411,248 Ordinary shares were exercised by employees of the Group.
Details of movements in the number of shares are as follows:
Note
No. of shares
(thousands)
2022
£’000
No. of shares
(thousands)
2021
£’000
Outstanding at the beginning of the year 1,479 9,240 – –
Granted – – 3,104 19,372
Exercised 26.1 (1,411) (8,813) (1,545) (9,652)
Forfeited (68) (427) (80) (480)
Outstanding at the end of the year – – 1,479 9,240
(b) Performance share plan (“PSP”)
Executive Directors and senior managers may receive awards of shares, which may be granted annually under the
PSP. The maximum policy opportunity award size under the PSP for an Executive Director is 150% of annual base
salary; however, the plan rules allow the Remuneration Committee the discretion to award up to 250% of annual
base salary in exceptional circumstances. The Remuneration Committee determines the appropriate performance
measures, weightings and targets prior to granting any awards. Performance conditions include Total Shareholder
Return relative to a relevant comparator group and the Company’s absolute adjusted underlying EPS performance.
The following table provides details for each PSP award:
Plan name Performance period Grant date Vest date
No. of shares
(thousands)
Fixed amount
at fair value
£’000
PSP 2018 14 March 2018 to 31 December 2020 18 September 2018 15 April 2021 157 534
PSP 2019 1 January 2019 to 31 December 2021 3 April 2019 19 April 2022 254 614
PSP 2020 1 January 2020 to 31 December 2022 23 April 2020
1
213 825
PSP 2021 1 January 2021 to 31 December 2023 20 May 2021
1
283 1,507
PSP 2022 1 January 2022 to 31 December 2024 19 April 2022
1
246 1,384
1 The vesting of awards is subject to continued employment and achievement of performance conditions over the specified period. The awards will vest
for each PSP when the conditions have been measured for the relevant performance period.
Details of movements in the number of shares are as follows:
No. of shares
(thousands)
2022
£’000
No. of shares
(thousands)
2021
£’000
Outstanding at the beginning of the year 733 2,903 607 1,930
Awarded 246 1,384 283 1,507
Exercised (188) (425) (153) (519)
Forfeited (118) (516) (4) (15)
Outstanding at the end of the year 673 3,346 733 2,903
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
139 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
36. SHARE-BASED PAYMENTS (CONTINUED)
36.1. DESCRIPTION OF SHARE-BASED PAYMENT ARRANGEMENTS (CONTINUED)
(c) Deferred bonus share plan (“DBSP”)
Certain employees at director level may be eligible for an annual bonus designed to incentivise high performance
based on financial and non-financial performance measures. In line with market practice, a portion of the bonus
due, as determined by the Remuneration Committee, may be deferred into shares before it is paid.
Depending on the performance of the Group, consideration is given annually by the Remuneration Committee to
the granting of share awards under DBSP to eligible Directors as part of the annual bonus award for performance
during the preceding financial year end.
The following table provides details for each DBSP award:
Plan name Performance period Grant date Vest date
1
No. of shares
(thousands)
Fixed amount
at fair value
£’000
DBSP 1 Year ended 31 December 2018 3 April 2019 3 April 2021 50 149
DBSP 2 Year ended 31 December 2019 23 April 2020 23 April 2022 73 313
DBSP 3 Year ended 31 December 2020 14 April 2021 1 January 2023 56 364
DBSP 4 Year ended 31 December 2021 19 April 2022 1 January 2024 67 476
DBSP 5 Year ended 31 December 2022
2
1 January 2025
2
679
1 The vesting of awards is subject to continued employment up to the vest date.
2 The date of grant will be determined following the release of the Annual Report for the relevant performance period, upon which the no. of shares will
be determined.
No. of shares
(thousands)
2022
£’000
No. of shares
(thousands)
2021
£’000
Outstanding at the beginning of the year 114 614 108 411
Awarded 67 476 56 364
Exercised (62) (267) (42) (127)
Forfeited (10) (67) (8) (34)
Outstanding at the end of the year 109 756 114 614
(d) Other awards
The Group has continued to make awards to employees joining the business. The grant date of each award
isthis theste start date of employment with the fair value being a fixed amount stated in an employee’s offer letter.
Thenume number of shares awarded is determined by the market value at the grant date. The awards will vest on
theseconthe second anniversary of the grant date subject to continued employment.
Details of movements in the number of shares are as follows:
No. of shares
(thousands)
2022
£’000
No. of shares
(thousands)
2021
£’000
Outstanding at the beginning of the year 260 2,102 102 398
Awarded
1
86 683 217 1,933
Exercised (70) (451) (57) (219)
Forfeited (22) (230) (2) (10)
Outstanding at the end of the year 254 2,104 260 2,102
1 In the prior year, as part of the RBC cees acquisition, the Group inherited historic share awards for the eligible Directors of the acquired entities. These
awards are settled in cash or a combination of 50% cash and 50% equity, as such, they are recorded as a liability, on the basis that this is at the
discretion of the holder, with the fair value being remeasured at each reporting period end. At the date of acquisition, 141,875 shares with a fair value of
£0.88m were awarded. During the year, 52,622 shares vested; the fair value of the outstanding awards as at 31 December 2022 is £0.5m.
36.2. EXPENSES RECOGNISED DURING THE YEAR
The equity-settled share-based payment expenses recognised during the year, per plan and in total, are as follows:
2022
£’000
2021
£’000
PSP awards 879 988
DBSP awards 455 334
Other awards 788 842
Share-based payments
1
2,122 2,164
EIP share-based payments
2
4,780 13,778
Total share-based payments expense 6,902 15,942
1 The share-based expense in the capital reserve is £2.04m as other awards includes cash settled or 50% cash and 50% equity settled awards of £0.08m
(2021: £0.46m).
2 The prior year EIP expense of £13.92m as disclosed in note 5, included £0.14m of cash awards.
37. CONTINGENCIES
The Group operates in a number of jurisdictions and enjoys a close working relationship with all of its regulators.
Itis noIt is not unusual for the Group to find itself in discussion with regulators in relation to past events. With any such
discussions there is inherent uncertainty in the ultimate outcome but the Board currently does not believe that
any such current discussions are likely to result in an outcome that would have a material impact upon the Group.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
140 JTC Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 CONTINUED
38. FOREIGN CURRENCY
The individual financial statements of each Group company are presented in the currency of the primary
economic environment in which it operates (its functional currency). For the purpose of the consolidated
financial statements, the results and financial position of each Group company are expressed in pounds
sterling, which is the functional currency of the Company and the presentation currency for the consolidated
financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the
entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates
of the transactions.
At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing at that date. Exchange differences are recognised in the consolidated
income statement in the year in which they arise.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
operations with a functional currency other than pounds sterling are translated at exchange rates prevailing on
the balance sheet date.
Income and expense items are translated at the average exchange rates for the year, unless exchange rates
fluctuate significantly during that year, in which case the exchange rates at the date of transactions are used.
Goodwill and other intangible assets arising on the acquisition of a foreign operation are treated as assets of
the foreign operation and are translated at the closing rate. Exchange differences arising, if any, are recognised
in other comprehensive income and accumulated in equity in the translation reserve.
For the year ended 31 December 2022, mainly due to the Euro and US dollar foreign currency exchange rate
movements, we have recognised the following:
• A foreign exchange gain of £21.3m in other comprehensive income (2021: £2.5m loss) upon translating our
foreign operations to our functional currency.
• A foreign exchange gain of £14.4m (2021: £0.9m loss) in the consolidated income statement upon the
retranslation of monetary assets and liabilities denominated in foreign currencies (see note 9).
39. RELATED PARTY TRANSACTIONS
Balances and transactions between the Company and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
39.1. KEY MANAGEMENT PERSONNEL
The Group has defined key management personnel as Directors and members of senior management who have the
authority and responsibility to plan, direct and control the activities of the Group. The remuneration of key
management personnel in aggregate for each of the specified categories is as follows:
2022
£’000
2021
£’000
Salaries and other short-term employee benefits 2,716 2,723
Post-employment and other long-term benefits 145 133
Share-based payments 979 1,066
EIP share-based payments 115 418
Total payments 3,955 4,340
39.2. OTHER RELATED PARTY TRANSACTIONS
Loans receivable from employees, associates and other related undertakings are disclosed in note 15.
The Group’s associate, KIG (see note 32), has provided £0.94m of services to Group entities during the year
(2021: £0.80).
The Group has an interest in Harmonate (see note 32). During the year, the Group has not provided any services
(2021: £0.08m) but received £0.15m of services (2021: £0.16m).
39.3. ULTIMATE CONTROLLING PARTY
JTC PLC is the ultimate controlling party of the Group.
40. CONSIDERATION OF CLIMATE CHANGE
As set out in the TCFD disclosures on page 38 of the Annual Report, climate change has the potential to give rise
to a number of transition risks, physical risks and opportunities.
In preparing the consolidated financial statements, Management have considered the impacts and areas that
couldpoteld potentially be affected by climate-related changes and initiatives. No material impact was identified on
thekey athe key areas of judgement or sources of estimation uncertainty for the year ended 31 December 2022. Items
thatmay be it may be impacted by climate-related risks and were considered by Management were the recoverability
oftrof trade receivables (see note 12) and the cash flow forecasts used in the impairment assessments of goodwill
(seeno(see note 21.1).
Whilst Management consider there is no material medium-term impact expected from climate change, they are
aware of the ever-changing risks related to climate change and will ensure regular assessment of risks against
judgements and estimates when preparing the consolidated financial statements.
41. EVENTS OCCURRING AFTER THE REPORTING PERIOD
There are no material subsequent events to disclose other than those already noted in the consolidated
financialstatements. statements.
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
141 JTC Annual Report 2022
A2B
Advance to Buy programme created to help staff
purchase JTC shares directly, independent of eligibility
or participation in other parts of the Ownership for All
programme (e.g. EIP, DBSP or PSP)
ADJUSTED UNDERLYING BASIC EARNINGS
PERSHARE
Profit for the year is adjusted to remove the impact
ofnon-underlying items within profit after tax,
amortisation of acquired intangible assets and
associated deferred tax, amortisation of loan
arrangement fees and unwinding of net present
valuediscounts then divided by the weighted
averagenumber of Ordinary shares
AEOI
Automatic Exchange of Information
AGM
Annual General Meeting
AIFM
Alternative Investment Fund Manager
AML
Anti-Money Laundering
ANSON REGISTRARS OR ANSON GSY
Anson Registrars Limited and Anson Registrars
(UK)Limited
APM
Alternative Performance Measures
AUA
Assets under Administration
AUM
Assets under Management
AVNBW
Annualised value of new business won
BALLYBUNION
Ballybunion Capital Limited (now JTC Global AIFM
Solutions (Ireland) Limited)
BCP
Business continuity planning
BOARD
The Board of JTC PLC
CAGR
Compounded Annual Growth Rate
CASH CONVERSION
The ratio of net cash from operating activities
compared with EBITDA
CCO
Chief Commercial Officer
CDP
Carbon Disclosure Project
CEO
Chief Executive Officer
CFO
Chief Financial Officer
CFT
Combating the Financing of Terrorism
CGU
Cash-generating unit
COMPANY
JTC PLC
COO
Chief Operating Officer
COVID-19 OR COVID
The global pandemic caused by Covid-19
CPD
Continuing Professional Development
CRO
Chief Risk Officer
CSO
Chief Sustainability Officer
CSR
Corporate Social Responsibility
DBSP
Deferred Bonus Share Plan
E4A
‘Equity for All’ – JTC’s programme to promote wide
employee share ownership in the Company
EBIT
Profit before interest and tax
EBITDA
Profit from operating activities before depreciation,
amortisation, interest and tax
EBT
Employee Benefit Trust
ECL
Expected credit losses
EDGE
Internally developed client portal for private clients
andpart of the JTC Private Office proposition
EFS
Essential Fund Services, LLC
EIP
JTC PLC Employee Incentive Plan
EPS
Earnings Per Share
ESG
Environmental, Social and Governance
EU
The European Union
EUR OR ¤
The single currency introduced at the start of the third
stage of the European Economic and Monetary Union
pursuant to the Treaty on the functioning of the
European Community, as amended from time to time
FCA
Financial Conduct Authority
FRC
Financial Reporting Council
GLOSSARY
DEFINED TERMS
The following list of defined terms is not intended tobeanexhaustive list of definitions, but provides a listof the defined terms used in this Annual Report
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
142 JTC Annual Report 2022
FTSE
Financial Times Stock Exchange
FVOCI
Fair value through other comprehensive income
FVTPL
Fair value through profit or loss
FX
Foreign exchange
GBP, £ OR STERLING
The lawful currency of the United Kingdom
GDC
Group Development Committee
GDP
Gross domestic product
GDPR
The General Data Protection Regulation (2016/679)
ondata protection and privacy for all individuals within
the European Union and the European Economic Area
GHB
Group Holdings Board
GROSS ORGANIC REVENUE GROWTH
Net organic revenue growth excluding the impact of
attrition
GROUP
The Company and its subsidiaries
HNW OR HNWI
High net worth or High net worth individual
IASB
International Accounting Standards Board
ICS
Institutional Client Services
IDF
Insurance Dedicated Fund
IFRS
International Financial Reporting Standards as adopted
by the European Union
INDOS
INDOS Financial Limited
IPO
Initial Public Offering
ISAE 3402
Assurance standard developed by the International
Auditing and Assurance Standards Board and supported
by the International Federation of Accountants
ISAS
International Standards on Auditing
LSE
London Stock Exchange
LTIP
Long-Term Incentive Plan
LTM
Last twelve months
LVW
Lifetime Value Won is 10 times annualised value
ofwork won minus value of attrition in past year
M&A
Merger and acquisition
MANAGEMENT
The Directors of JTC Group Holdings Limited
MEEM
Multi-period excess earnings method financial
valuationmodel
NED
Non-Executive Director
NESF
NES Financial Corp (now JTC USA Holdings, Inc)
NET DEBT
Total debt and total committed capital distributions
lesscash and cash equivalents
NET LEVERAGE
Total net debt divided by underlying EBITDA (for the
LTM at average FX rates) adjusted for pro-forma
contribution from acquisitions and synergies
NET ORGANIC REVENUE GROWTH
Revenue growth from clients not acquired through
business combinations and reported on a constant
currency basis
NON-UNDERLYING ITEMS
These represent specific items of income or
expenditure that are not of an operational nature
anddo not represent the underlying operating results,
and based on their significance in size or nature are
presented separately to provide further understanding
about the financial performance of the Group
NPV
Net present value
NYPTC
New York Private Trust Company
ODD
Operational Due Diligence
OECD
Organisation for Economic Co-operation
andDevelopment
PCS
Private Client Services
PERFORM
perfORM Due Diligence Services Limited
PLC EBT
JTC PLC Employee Benefit Trust
PRO-FORMA
Taking into account a full year’s trading
PSP
Performance Share Plan
PWC
PricewaterhouseCoopers CI LLP
RBC CEES
RBC cees Limited
RECOMMENDATION FOR SIGNING OR RFS
A JTC internal control tool ensuring that decisions made
by the business are thoroughly documented, reviewed
and approved at an appropriate level on a ‘six-eyes’ basis
RFD
Recommendation for development
RFP
Recommendation for promotion
RFR
Recommendation for recruitment
ROIC
A post-tax Return on Invested Capital
GLOSSARY CONTINUED
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
143 JTC Annual Report 2022
GLOSSARY CONTINUED
SALI
SALI Fund Management, LLC and SALI GP Holdings, LLC
SANNE PRIVATE CLIENTS OR SANNE PCS
Sanne’s Private Client’s business in Jersey
SASB
Sustainability Accounting Standards Board
SEGUE
Segue Partners LLC
SHAREHOLDER
Any holder of Ordinary shares at any time
SHARES
The Ordinary shares in the capital of the Company
SONIA
Sterling Overnight Interbank Average Rate
STERLING
Sterling Trust (Cayman) Limited
TCFD
Task Force on Climate-related Financial Disclosures
TSR
Total Shareholder Return
UHNW OR UHNWI
Ultra high net worth or Ultra high net worth individual
UNDERLYING EBITDA
EBITDA excluding specific items of income or
expenditure that are not of an operational nature
anddo not represent the underlying operating results
UNDERLYING EBITDA MARGIN
Underlying EBITDA divided by revenue, and expressed
as a percentage
UNDERLYING GROSS PROFIT
Gross profit (being revenue less direct staff and other
direct costs) excluding specific items of income or
expenditure that are not of an operational nature and
do not represent the underlying operating results
UNDERLYING GROSS PROFIT MARGIN
Underlying gross profit divided by revenue, and
expressed as a percentage
UNDERLYING PROFIT FOR THE YEAR
Profit for the year excluding specific items of income or
expenditure that are not of an operational nature and
do not represent the underlying operating results
UNPRI
UN Principles for Responsible Investment
USD OR $
The lawful currency of the United States
WACC
Weighted average cost of capital
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
144 JTC Annual Report 2022
COMPANY
INVESTOR RELATIONS
DAVID VIEIRA
Chief Communications Officer
JTC House
28 Esplanade
St Helier
Jersey
JE4 2QP
Email david.vieira@jtcgroup.com
Call +44 1534 816 246
MEDIA RELATIONS
DAVID VIEIRA
Chief Communications Officer
JTC House
28 Esplanade
St Helier
Jersey
JE4 2QP
Email david.vieira@jtcgroup.com
Call +44 1534 916 246
COMPANY SECRETARY
JTC (JERSEY) LIMITED
JTC House
28 Esplanade
St Helier
Jersey
JE4 2QP
Email jtc@jtcgroup.com
Call +44 1534 700 000
REGISTRAR
COMPUTERSHARE INVESTOR
SERVICES(JERSEY)LIMITED
Queensway House
Hilgrove Street
St Helier
Jersey
JE1 1ES
Call +44 370 707 4040
ADVISERS
FINANCIAL ADVISERS
NUMIS SECURITIES LIMITED
The London Stock Exchange Building
10 Paternoster Square
London
EC4M 7LT
Email mail@numis.com
Call +44 20 7260 1000
BERENBERG
60 Threadneedle Street
London
EC2R 8HP
Email JTC@berenberg.com
Call +44 20 3207 7800
AUDITOR
PRICEWATERHOUSECOOPERS CI LLP
37 Esplanade
St Helier
Jersey
JE1 4XA
Call +44 1534 838200
FINANCIAL PUBLIC RELATIONS
CAMARCO
107 Cheapside
London
EC2V 6DN
United Kingdom
Email info@camarco.co.uk
Call +44 20 3757 4980
BANKERS
THE ROYAL BANK OF SCOTLAND
INTERNATIONALLIMITED
71 Bath Street
St Helier
Jersey
JE4 8PJ
Call +44 1534 285200
INVESTOR RELATIONS INFORMATION
Design and production
www.luminous.co.uk
STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ADDITIONAL INFORMATION
145 JTC Annual Report 2022
JTC PLC
JTC House
28 Esplanade
St Helier
Jersey
JE2 3QA
Channel Islands
jtcgroup.com