FDM Group (Holdings) plc

Annual Report

and Accounts

2023

Powering the people

behind tech and innovation

We are a global consultancy powering

the people behind tech and innovation

for over 30 years. We help our clients

stay ahead of the latest tech trends

and thrive in a rapidly changing world.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Strategic Report

See pages

04-63

Governance

See pages

64-133

Financial Statements

See pages

134-185

Contents

Highlights

Strategic Report

We are FDM

Statement from the Chair of the Board

Chief Executive’s Review

Business Model

Our Markets

Key Performance Indicators

Financial Review

Risk Management

Sustainability Report

Governance

Board of Directors

Corporate Governance Report

Audit Committee Report

Nomination Committee Report

Remuneration Report

128

Directors’ Report

Financial Statements

136

Independent auditors’ report to the members

of FDM Group (Holdings) plc

143

Consolidated Income Statement

144

Consolidated Statement of Comprehensive Income

145

Consolidated Statement of Financial Position

146

Consolidated Statement of Cash Flows

147

Consolidated Statement of Changes in Equity

148

Notes to the Consolidated Financial Statements

176

Parent Company Statement of Financial Position

177

Parent Company Statement of Changes in Equity

178

Notes to the Parent Company Financial Statements

185

Shareholder Information

Financial

Revenue

£334.0m

+1%

2022: £330.0m

Profit before tax

£55.6m

+22%

2022: £45.7m

Basic earnings per share

37.3 pence

+17%

2022: 32.0 pence

Cash flow generated

from operations

£61.5m

+24%

2022: £49.7m

Cash conversion

111.8%

+3%

2022: 108.3%

Share-based payment

credit/ expense

£5.4m

credit

2022: £6.4m expense

Dividend per share

36.0

pence

2022: 36.0 pence

Adjusted operating profit

£49.6m

-5%

2022: £52.2m

Adjusted profit before tax

£50.2m

-3%

2022: £52.0m

Adjusted basic earnings per share

32.9 pence

-12%

2022: 37.3 pence

Cash position at

period end

£47.2m

+4%

2022: £45.5m

Adjusted cash conversion

124.1%

+30%

2022: 95.1%

Effective income

tax rate

26.7%

+14%

2022: 23.5%

Highlights

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Non-financial

3,892

Consultants assigned

to clients at week 52

(2022: 4,905)

Consultant utilisation

rate of

92.8%

(2022: 97.5%)

Ranked

in Social Mobility

Foundation Employer

Index (UK)

(2022: ranked 48)

657

university events

attended

in 2023

(2022: 780)

Forward-looking statements

This Annual Report contains statements which constitute “forward-looking statements”. Although

the Group believes that the expectations reflected in these forward-looking statements are

reasonable, it can give no assurance that these expectations will prove to be correct. Because

these statements involve risks and uncertainties, actual results may differ materially from those

expressed or implied by these forward-looking statements.

Adjusted operating profit and adjusted profit before tax are calculated before Performance

Share Plan credit/ expense (including social security costs) of £5.4 million

(2022: expense

£6.4 million). Adjusted basic earnings per share are calculated before the impact of

Performance Share Plan credit/ expense (including social security costs and associated

deferred tax). The adjusted cash conversion is calculated by dividing cash flow generated from

operations by adjusted operating profit. See page 22 for further details of adjusted items.

Cash conversion is calculated by dividing cash flow generated from operations by operating profit.

A recommended final dividend of 19.0 pence per share, following an interim dividend of

17.0 pence per share declared in July 2023, giving a total dividend for the year of 36.0 pence

per share (2022: 36.0 pence per share).

This is a mix of physical and virtual events attended.

Week 52 in 2023 commenced on 25 December 2023 (2022: week 52 commenced on

19 December 2022).

Utilisation is calculated as the ratio of cost of utilised Consultants to the total Consultant payroll cost.

1,338

training completions

in 2023

(2022: 3,179)

new clients globally

(2022: 74)

UK mean gender

pay gap of

-7.6%

(2022: -4.0%)

0.69

tCO

Scope 1, 2 and 3 greenhouse gas

emissions per employee

(2022: 0.58 tCO

Strategic

report

We are FDM

Statement from the Chair of the Board

Chief Executive’s Review

Business Model

Our Markets

Key Performance Indicators

Financial Review

Risk Management

Sustainability Report

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Financial Statements

Governance

Strategic Report

We are FDM

FDM Group (Holdings) plc (“the Company” or

“FDM”) and its subsidiaries (together “the

Group” or “FDM”) form a global professional

services provider with a focus on IT.

In recent years our purpose and our

values have evolved. This year we have

refined the way we explain our purpose

and our values, set out below, so that they

are a better reflection of our business,

who we are, and what we do.

This is our first Annual Report and

Accounts to be presented using our new

FDM branding, which reflects that refined

purpose and values. We have also taken

the opportunity to update some of the

terminology we have commonly used in

the past – for example, we now refer

to our training Academies as Skills Labs.

Our purpose

We are a global consultancy powering the people behind tech and

innovation for over 30 years. We help our clients stay ahead of the

latest tech trends and thrive in a rapidly changing world.

We aim to deliver client-led, sustainable, profitable growth

on a consistent basis, through our well-established

Consultant model:

•

Seek out talented individuals

through our programmes:

Graduate, Ex-Forces, Returners and Apprentices.

•

Develop individuals through our Skills Labs

– where our

Consultants access expertise, up-skilling and re-skilling

as part of continual learning and career development.

•

Grow our client presence profitably

– we look to create

new opportunities to deploy our Consultants amongst

our developing client base and into other markets and

territories.

•

Identify and fill our clients’ skills gaps

– we focus on

understanding and anticipating our clients’ requirements

and market trends, to ensure that we can add value

in the areas where our clients need it most, provide

opportunities to our Consultants, and deliver sustainable

profitable growth for our shareholders.

•

Create a long-term sustainable global business

–

we aim to have a beneficial impact on the communities

in which we operate. We are aware of our responsibility

towards our clients and suppliers, and are working to

minimise our impact on the environment.

•

Engage, retain, recognise and energise

internal employees

to support, enhance and grow the

business to deliver our Consultant model.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Our values

•

Social Mobility Foundation

Employer Index – The Top 75

(ranked 34)

•

FTSE4Good

•

Flexi-job apprenticeship status

awarded by the Department for

Education

•

West Yorkshire Apprenticeship

Awards: Diversity & Inclusion

Programme Winner

•

British Ex-Forces in Business

Awards: Military Values in

Business Award

•

Scottish Ex-Forces in Business

Awards: Role Model of the Year;

and Team Leader of the Year

•

100 Great British Employers of

Veterans

•

AIIA iAwards 23 Diversity Award –

Finalist (Australia)

• Prosple Top 100 Graduate Employer

(Australia)

•

GradConnection’s Top 100

(Australia)

•

Military Times: Best for Vets

Employers 2023 (USA)

•

VETS Indexes 4 Star employer

(USA)

•

RippleMatch’s Campus Forward

Award (USA)

Insightful

We're tuned in to the

latest tech trends and

business needs

Invigorating

We give people what

they need to succeed

Influential

We act boldly to

push boundaries and

set new standards

Awards and recognition

Awards and recognition received during the year included:

•

TalentEgg National Recruitment

Excellence Awards – Finalist in Best

Grad Progam and Best Contribution

to Student Career Development

(Employers)

(Canada)

•

GradConnection’s Top 10

(Hong Kong)

•

CT Good Jobs Best HR Awards:

Learning and Development Team

of the Year 2023 (Hong Kong)

•

Seek Star Awards: Best Employer

Brand Initiative – Finalist (Australia)

•

Seek Star Awards: Best Diversity,

Equity and Inclusion Initiative –

Finalist (Australia)

Financial Statements

Governance

Strategic Report

The adjusted operating profit is calculated

before Performance Share Plan credit/ expense

(including social security costs).

I am pleased to present

FDM’s Annual Report for

the financial year ended

31 December 2023.

Performance

FDM delivered a resilient performance

in 2023 against a backdrop of very

challenging market conditions,

returning a robust financial

performance overall and continuing

our investment in programmes to

support future growth as and when

market conditions improve.

The Group delivered an adjusted

profit before tax

of £50.2 million

(2022: £52.0 million). FDM’s balance

sheet remains strong with closing

cash balances of £47.2 million (2022:

£45.5 million) and no debt. The Group

made dividend payments during

the year of £39.3 million (2022:

£38.2 million).

Governance

The aim of this report is to present

a fair, balanced and understandable

picture of the progress we made

during 2023, providing a high level

of disclosure to enable all our

stakeholders, including current

and prospective shareholders, to

understand our business and its

prospects for growth. We are driven

by a strong purpose, which leads us

to look for profitable opportunities

where we can be ready with the

solutions to our clients’ most pressing

problems, maximising the value we

can add to their businesses, and

thereby launching more careers for

our Consultants.

The Board considers robust

corporate governance and a sound

approach to risk management to be

fundamental to the sustainability

of the Group and its operations.

For the 2023 financial year we are

guided by the 2018 UK Corporate

Governance Code (“2018 Code”).

We have reviewed the 2024 UK

Corporate Governance Code which

was published in January 2024,

and are considering its implications

for our approach to governance in

preparation for when it takes effect

on 1 January 2025.

Statement from the Chair of the Board

David Lister

Chair of the Board

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Engagement with our employees and

other stakeholders has always been

an important part of our approach

and we continue our efforts to ensure

employee voices are heard by the

Board. There is further information on

page 62 about how the Directors have

carried out their duties under Section

172 of the Companies Act 2006

to promote the long-term success

of the Company for the benefit of

its shareholders as a whole, while

having regard to the interests of all

stakeholders. I report on corporate

governance in more detail on page 68;

our framework of risk management

and governance will further evolve

during the coming year, following

our consideration of the 2024 UK

Corporate Governance Code, in line

with shareholder expectations and

best practice requirements.

We maintain our focus on reducing

our impact on the environment

whilst further developing the Group’s

response to climate-related risks

and opportunities. Our climate-

related financial disclosures are

presented in a way that is consistent

with all of the recommendations of

the Task Force on Climate-related

Financial Disclosures (“TCFD”).

Further information can be found on

page 50. As standard practices and

methodologies in measuring emissions

evolve, we aim to ensure that our

reporting of greenhouse gas emissions

is as useful as possible to readers

of this report. For example, this year

we have been able to gather more

emissions data from our suppliers,

which means that our reported Scope

3 emissions from purchased goods

and services are more accurate.

Culture and values

FDM’s business is supported by a

strong cultural identity that helps

to ensure our goals are understood

and shared by our people. I am

particularly proud of the work we

do to promote social mobility and to

make FDM a diverse and inclusive

place to work.

It was rewarding to improve our

ranking in the Social Mobility

Employer Index 2023, operated by

the Social Mobility Foundation, in

recognition of the steps we take

to enable those from lower socio-

economic backgrounds to succeed.

You can find more information on

our work in this area on page 40.

Towards the end of the year, we

asked our staff for their feedback

on a number of areas in our regular

employee survey; the survey is an

important part of our programme of

employee engagement and enables

us to understand their views on

matters relevant to their day-to-day

experience at FDM. There is more

information about our engagement

with our people on page 48.

Dividend

The Board continues to operate a

progressive dividend policy, aimed at

aligning the Group dividend broadly

with the Group’s earnings per share,

whilst taking into account the Board’s

desire to maintain an appropriate

cash buffer at Group-level, to fund

organic growth across the business

and to maintain the distributable

reserves available to the Group.

The Board will be recommending

a final dividend of 19.0 pence per

ordinary share in respect of the year

to 31 December 2023 (2022: final

dividend of 19.0 pence per ordinary

share) for approval by shareholders

at our Annual General Meeting

(“AGM”), which is scheduled to be

held on 14 May 2024, taking the total

ordinary dividend to 36.0 pence per

share (2022: 36.0 pence per share).

The Board and its Committees

I am delighted that Rowena Murray

joined our Board as a Non-Executive

Director on 1 August 2023. Rowena

is highly regarded for her experience

in investment banking and corporate

broking, and her insight into the

public markets in general. She has

a strong reputation for helping

businesses implement their strategies

effectively to generate growth and

create value.

The Board will benefit greatly from

the insight and support which Rowena

can offer. More information on

Rowena’s background and experience

can be found on page 69.

Peter Whiting, our Senior

Independent Director and Chair of the

Remuneration Committee, has now

served on the FDM Board since the

Company’s IPO in June 2014, almost

ten years ago. In line with the 2018

Code, Peter will therefore be stepping

down from the Board at this year’s

AGM. On behalf of the Board, I would

like to thank Peter for his invaluable

contribution to the Group over that

period, and the significant role he has

played in helping us to manage the

business through the successes and

challenges of the last decade.

As Peter steps down from the Board,

Jacqueline de Rojas, who has been a

Non-Executive Director on the Board

since October 2019, will take on the

role of Senior Independent Director.

Rowena Murray will become Chair of

the Remuneration Committee.

Outlook

Reflecting continuing worldwide

macroeconomic and geopolitical

uncertainties, market conditions

in the early months of the current

year have remained soft. As we

highlighted in January, levels of client

engagement remain encouraging. It

is however difficult to predict when

this will gain sufficient strength to

deliver meaningful increases in our

Consultants placed with clients.

We are maintaining our focus

on optimising our activities and

resources, while continuing the

development of our products and

services to support future growth.

Group-wide, our activity levels

in the year to date are below our

previous expectations, with 3,703

Consultants assigned to clients as at

18 March 2024. This, coupled with

our strategy to maintain appropriate

levels of Consultant resource, and

capacity in our internal teams, to

meet clients’ needs promptly when

our markets improve, means that

the Board believes that the Group’s

financial performance for 2024

is likely to be materially below its

earlier expectations.

FDM is a robust and agile business,

with a strong balance sheet and

experienced management team and

Board, operating in fundamentally

strong markets across a diversified

portfolio of clients, sectors and

geographies, and we remain

confident that our business is well

positioned to return to growth as

more usual market conditions return.

David Lister

Chair of the Board

19 March 2024

Financial Statements

Governance

Strategic Report

The adjusted operating profit is calculated

before Performance Share Plan credit/ expense

(including social security costs).

Our agile business model

allowed us to take the action

required to align our business

activity and resources

appropriately, a programme

which continues into the

current year.

Levels of client engagement

remain encouraging.”

Overview

Following a strong start to 2023,

market conditions became

challenging from the beginning of the

second quarter and remained so for

the rest of the year. Macroeconomic

and geopolitical uncertainties

impacted client confidence, causing

them to defer decisions relating

to project commencements and

Consultant placements. We ended

the year with 3,892 Consultants

placed with clients (2022: 4,905)

and 1,338 Consultants were trained

during the year (2022: 3,179). The

Group recorded revenue of £334.0

million (2022: £330.0 million) and

delivered an adjusted operating profit

of £49.6 million (2022: £52.2 million).

FDM’s scalable business model

enabled the Board to respond quickly

to the decrease in client demand

and to take appropriate measures

to adjust recruitment, training and

internal staffing levels and activities

to align with market conditions,

a programme that continues in

the current year.

We maintain a strong focus on cash

management and collection, ending

the year with £47.2 million cash

(2022: £45.5 million), after paying

£39.3 million to our shareholders in

dividends, and no debt.

Chief Executive’s Review

Rod Flavell

Chief Executive Officer

“The last nine months of 2023

saw difficult trading conditions

across our markets, with many

clients delaying and deferring

decisions around projects and

Consultant placements given the

macroeconomic and geopolitical

uncertainties they faced.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Our strategy

FDM’s strategy is straightforward: we

aim to deliver client-led, sustainable

and profitable growth on a consistent

basis through our well-established

and proven business model,

helping clients to stay ahead of the

latest tech trends and unlocking

opportunities to help them thrive in

a rapidly changing world. This model

has enabled us to deliver a resilient

performance in 2023, in the face

of particularly challenging market

conditions, by working to fulfil our

four key strategic objectives: attract

and develop talented Consultants;

invest in state-of-the-art Skills Labs

to provide expert training; grow and

diversify our client base; and expand

and consolidate our geographic

presence through sustainable and

efficient means.

Our strategy requires that all

activities and investments

produce the appropriate level of

return on investment, that they

deliver sustained and measurable

improvements for all our stakeholders

including clients, staff and

shareholders, and that they further

our objective of launching the careers

of talented people worldwide, which

remains core to everything we do.

To reinforce our strategy and

leadership position, in early 2024

we engaged in a major brand refresh

project. This followed extensive

consultation during 2023 with all

our stakeholders to understand their

views on FDM, our vision and our

values. The new branding reflects

who we are, and what we want to

achieve in the future, enabling us to

give a clear message to our investors,

clients and candidates reflecting

what we stand for and how this

benefits them.

Financial Statements

Governance

Strategic Report

Chief Executive’s Review

continued

Strategic objectives

Attract and develop

talented Consultants

The strength of our business model is

that it allows us to flex recruitment and

training in response to changing levels

of client demand, while at the same time

continuing to invest in our workforce so

that we are well positioned to capitalise

on opportunities when conditions improve.

When market conditions changed at the

beginning of the second quarter, with

client demand starting to decrease and

Consultant placements being deferred,

we were able to bring this flexibility and

scalability into play, reacting quickly

to make adjustments to our levels of

resource. Market conditions remained

difficult for the rest of the year and we

therefore delivered a reduced number of

training completions (2023: 1,338; 2022:

3,179), reflecting the change in levels of

client demand.

We continue to have an excellent pipeline

of already-assessed candidates in all our

territories, which our global recruitment

teams have worked hard to secure.

Our ongoing investment in our Ex-

Forces, Returners and Apprenticeships

programmes diversify our talent pipeline

further. This means that we are well

placed to accelerate recruitment and

training as and when market conditions

and client demand improve.

We continue to attract a high number

of applicants across all our operating

locations evidencing the appeal that

FDM’s market-leading, flexible training has

in tech skills and innovation globally.

Invest in state-of-the-art

Skills Labs to provide

expert training

Our hybrid training model offers high

quality and flexible training that is

attractive to our candidates and, while

our training schedules were adjusted in

the period in response to client demand,

our highly skilled coaches continued to

provide ongoing mentoring and upskilling

to our benched Consultants.

We remain focused on optimising both

the appeal of our training programmes

to candidates and of our Consultants

to clients. Accreditation of our courses

provides – both to candidates and

clients – external validation of FDM’s

programme content, delivery, approach

and assessment. Through our partnership

with TechSkills, we have now achieved

Tech Industry Gold standard accreditation

for ten programmes with the Ex-Forces

Advanced Course and the Returners

(Business) Programme each achieving

Tech Industry Gold accreditation during

the year. A total of 325 Consultants

completed accredited training in 2023

across the ten available programmes

(2022: 653 Consultants completed

accredited training across the eight

available programmes). Most of our

accredited courses have been converted

to experiential delivery, replacing

traditional academic exams with capability

assessments, and transforming the

classroom experience into real-world

learning through the use of augmented

digital content. All of the training content

is available through a new, easy to use,

and visually-appealing Skills Lab content

repository run by our coaches.

As clients look for more specific, detailed

and nuanced skillsets within each job

role, we have adopted a practice-based

approach to managing our benched

Consultants. This has enhanced our ability

to deploy Consultants whose skill profiles

and areas of expertise are a more precise

match for clients’ requirements.

Our Pods, first developed as a response

to the challenges of training during

the pandemic, have now become

the foundation of our Consultant

development. The Pod experience is

designed to simulate a client environment

where Consultants can work on real

projects. An example of this is our

development of the “Model Bank”, outlined

on the next page. Our account managers

have strong relationships with our clients

which enable them to identify the most in-

demand trends in emerging technologies.

Our experienced coaches can then adapt

the work assigned in the Pods to enable

our Consultants to develop skills aligned

with these emerging trends.

Grow and diversify our

client base

We continue to deliver the highest level

of service to our clients and work closely

with them to meet their requirements.

Client diversification remains a key part

of our strategy, with an element of the

performance bonus for the Executive

Board and senior management being

linked to client diversification targets. We

secured 47 new clients in the year (2022:

74), of which 23 were in the UK, 7 in North

America, 9 in APAC and 8 in EMEA. Of

these new clients, 68% were secured from

outside the financial services sector. The

number of new clients does not include

those clients which re-engaged with us

during 2023.

Expand and consolidate our

geographic presence through

sustainable and efficient

means

The expansion and consolidation of

our geographic presence remains

a key growth driver for FDM; whilst

global macroeconomic conditions have

impacted trading across all our operating

regions, we retain a strong management

and sales presence in each of our key

operating regions. In the first quarter of

2023, we opened new sales offices in

Tampa, Florida; Melbourne, Australia;

and Limerick, Ireland, each of which

contributed promising new business to

our portfolio.

An overview of the financial performance

and development in each of our markets is

set out on page 20.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Our services

Our business model is focused on

coaching and deploying passionate,

energetic and self-motivated

Consultants with skills across five

Practices; Software Engineering; Data

& Analytics; IT Operations; Change &

Transformation; and Risk, Regulation

& Compliance. These five core

areas of specialism include multiple

interconnected sprints within our

Skills Labs, building a versatile and

adaptable Consultant workforce.

Consultants acquire skills and

develop experience within a diverse

range of disciplines under each

Practice and can undertake a number

Model Bank

Having successfully deployed

significant numbers of

Consultants to work on KYC

(“Know Your Client”) projects

with our clients in the banking

sector, we have created our own

“Model Bank” – a simulation of

some of the IT systems typically

found in a major financial

services organisation. It is an

experiential, dynamic training

of different roles when deployed on

assignments.

Our core strengths include

our agility, prompt design and

delivery capabilities, and, notably,

our ability to adapt to the ever-

evolving technology landscape.

For instance, our growing expertise

in AI has enabled us to stay

ahead of the market, fostering

strong capabilities in the AI space.

We established multiple Pods

covering diverse scenarios involving

the integration of AI into business

operations, complemented by

successful workshops.

These included a workshop on

Prompt Engineering, which was

attended by seven executives and

over 45 engineers from our biggest

client and received exceptionally

positive feedback. Not only did it

consolidate our existing clients’

perception of our capabilities, but it

also opened doors for FDM to engage

with potential new clients regarding

opportunities to work together in

the future.

Our creation of the Model Bank

is a good example of the way in

which we can adapt our training

to clients’ needs.

environment designed and developed

in partnership with our clients, to

simulate real-world activities and

challenges, and to replicate the

complexities involved in protecting

against money laundering activities.

Our clients can see what we offer

through interactive demonstrations,

allowing them to translate their issues

into the development of the Model

Bank and our academic programme.

For our Consultants, it fosters a

culture of continuous learning,

encouraging them to look for

new ways to add value to clients’

businesses. We have found

that by using the Model Bank

our Consultants attain a higher

standard more quickly.

Consultancy Services

Underpinned by our core model, our

Consultancy Services team was set

up to provide added expertise and

capability. We help our clients to

identify problems, shape change and

deliver the right solutions. Using a

combination of senior professionals

and those at the beginning of their

careers, we have the ability to quickly

mobilise high-performing teams to

deliver collaborative solutions for a

wide range of technology problems.

Each project is supported by

experienced Senior Delivery

Consultants who provide

management capability. Delivery

can be alongside the client’s

workforce or by FDM Consultants.

During 2023 our Consultancy

Services delivered a number of

very successful projects, one of

which we have summarised via the

case study on the next page.

Financial Statements

Governance

Strategic Report

Chief Executive’s Review

continued

Technology Partnerships

Our Technology Partnerships with

some of the world’s most innovative

organisations ensure that we are

at the forefront of technological

advancements. The presence of

certified trainers authorised to

deliver official training from these

organisations enhances the support

and skillsets we offer to our clients.

In 2023, our Consultants obtained

training and certification from

Microsoft.

Furthermore, as a Workforce

Development Partner to Microsoft,

we collaborated to host Industry

Insight events aimed at showcasing

our capabilities to clients – the

events, held in our London and

Toronto centres, featured panel

discussions with senior leaders in the

AI space from Microsoft, our clients,

and FDM. They provided a platform

to explore the strategies, challenges

and success stories surrounding

the adoption of AI technologies,

while highlighting advice on how

AI transformation can align with

organisational goals and objectives.

The attendance of a large number

of clients added depth and value to

these discussions.

As part of our alliance with SAP,

Consultants were trained in SAP

S/4 HANA, SuccessFactors and

SAP Business Technology Platform,

allowing us to work with our clients to

drive SAP projects forward.

Case study

How we helped a client with its data capabilities

The issue

The client faced inconsistency

across their digital architecture

and data quality, which was

impacting day-to-day operations

and leading to frequent requests

from headquarters to branches.

Addressing this issue is a long-

term endeavour that required an

incremental and agile approach.

We worked carefully with the client

to avoid any disruptions to existing

contracts or core services.

What we delivered

In three months, we created a

powerful data strategy for the

client, providing and implementing

the necessary frameworks,

artefacts and processes to build

a set of robust data capabilities:

Data landscape – Interactive

overview of the client’s data

ecosystem and data flows across

the organisation and departments,

identifying single source data

opportunities.

Data artefacts – Setting the

department up for continual

success, we provided tooling

recommendations and created

re-useable artefacts, linking to

the corporate data model, data

dictionary and data catalogue.

Data governance

framework – The framework

embedded a structure and

methodology that allowed the

department to implement best

practice in data governance and

work streams.

Data vision & strategy – The data

strategy set the organisation

up to meet long-term business

objectives and met their digital

and data strategy.

“FDM’s programmes combined with SAP Partner

Talent Initiative bootcamps offer an excellent

opportunity for our clients and partners

globally to access a pipeline of diverse

talent in a cost-effective way.”

Peter Matejka,

SAP Partner Talent Initiative

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Our people – talented,

ambitious, enthusiastic, diverse

FDM is a people business, and I am

particularly proud of the passion

and commitment which our people

across all of our operating regions

continued to demonstrate, despite

the uncertain market conditions we

faced during 2023.

Our Technology Partners:

Microsoft

– Workforce

Development Partner

Salesforce

– Trailhead Academy

Authorised Learning Partner

ServiceNow

–

Placement

Partner

AWS

– AWS Approved Training

Partner & AWS reStart

Collaboration

Appian

– Education Partner

Our people strategy was designed to

enable FDM to maintain its position

as a high-performing and impactful

global organisation with a clear

focus on sustainability, scalability,

commercial efficiency and flexibility.

During 2023 we worked hard to

ensure delivery of our strategic aims.

Our Consultant Experience team

helps to anticipate our Consultants’

needs, so that we can deliver a

positive experience for them. We

have worked hard to put in place a

clear structure of career pathways

for our Consultants throughout

their FDM journey. Optimising our

Consultants’ performance in this way,

and using our close relationships with

clients to understand their business

needs, ensures that each Consultant

deployment has the best chance of

success for all stakeholders.

We remain committed to promoting

diversity, social mobility and inclusion

within our workplaces as the

statistics on page 39 demonstrate.

The wellbeing of all our people

remains a key priority for the Board.

The People Team continues to

engage with staff to ensure that

their wellbeing is monitored and

safeguarded.

I would like to extend the Board’s

thanks to every FDM employee for

the quality of their work during 2023,

which has enabled us to deliver a

resilient performance, while operating

in challenging market conditions. Our

results reflect their dedication, hard

work and commitment.

Looking forward

Our markets have remained uncertain

in the early months of 2024. Our

on-going investment programmes to

support future growth, appropriate

levels of trained Consultant resource

and access to an excellent pipeline of

already assessed candidates ensure

that we are well placed to meet

clients’ needs as and when market

conditions improve.

Rod Flavell

Chief Executive Officer

19 March 2024

FTSE4Good

I am pleased that FTSE Russell has assessed FDM as

having good sustainability practices and following its

June 2023 review included the company as a constituent

of its FTSE4Good Index Series. The FTSE4Good Index

Series is designed to measure the performance of

companies demonstrating strong Environmental, Social

and Governance (“ESG”) practices.

nCino

–

Workforce

Development Partner

SAP

–

Partner Talent Initiative

ISACA

–

Accredited Partner

Financial Statements

Governance

Strategic Report

Business Model

Powering the

people behind

tech and

innovation

What sets us apart

Our Consultants

•

We find driven people from diverse backgrounds

who are determined to succeed. By providing

core capabilities and ongoing training,

mentorship and assignments we guide them

to the future they want

Global coverage

•

International presence with localised support in

all our operating territories

•

Experienced coaches with remote and in-house

delivery capability

Track record of success

We collaborate with world-leading companies to

identify the expertise they need, exactly when

they need it.

•

Robust credentials with over 30 years of

operational success

•

Cost-effective, value-added business model

•

Client base of 300+

Tailored approach

•

Low-risk solution as FDM retains the employer/

employee relationship with Consultants

•

Scalable capacity with no minimum requirement

•

Ability to tailor recruitment and training

•

Option to transfer Consultants from FDM to a

permanent role with the client after initial period

FDM Group (Holdings) plc

Annual Report and Accounts 2023

How our business works

We find talented, high-quality individuals

through our Programmes:

• Graduates

•

Ex-Forces

• Returners

•

Apprentices

We train individuals remotely and

at our Skills Labs, providing career

development for our employees.

By focusing on understanding and

anticipating our clients’ requirements

and trends in technology, we can

help our clients build high-calibre

teams around their most pressing

business needs.

We realise opportunities for our

expertly-trained Consultants and other

employees, and deliver sustainable

profitable growth for our shareholders.

The value we create

For our clients

We provide our clients with a first-class, flexible resource

at a competitive cost

3,892

Consultants assigned to clients at year end

For our shareholders

We consistently deliver returns for our shareholders and

have a progressive dividend policy

36.0 pence

full-year dividend for 2023

Recommended final dividend of 19.0 pence per share,

following an interim dividend of 17.0 pence per share

For our employees

We provide ongoing professional development and support

to our employees throughout their careers at FDM

5,000+

FDM employees globally

90+

nationalities

For our Consultants

Our award-winning training enables our Consultants

to transition into IT and business professionals, with

relevant technical skills, commercial experience and other

accreditations and qualifications

1,338

training completions in 2023

For the environment

We are committed to reducing our greenhouse gas

emissions

0.69

tCO

per employee for Scope 1, 2 and 3

greenhouse gas emissions

Financial Statements

Governance

Strategic Report

North America

2023

2022

Revenue

£130.2m

£116.9m

Adjusted operating profit

£20.4m

£15.4m

Consultants deployed

1,322

1,618

Training completions

340

1,319

39%

of FDM’s

global revenue

2022: 35%

EMEA

2023

2022

Revenue

£24.1m

£19.7m

Adjusted operating profit

£2.1m

£2.3m

Consultants deployed

327

318

Training completions

256

223

of FDM’s

global revenue

2022: 6%

Our Markets

The adjusted operating profit is calculated before Performance Share Plan credit/

expense (including social security costs).

FDM Group (Holdings) plc

Annual Report and Accounts 2023

2023

2022

Revenue

£127.8m

£139.6m

Adjusted operating profit

£25.1m

£30.3m

Consultants deployed

1,411

1,958

Training completions

339

1,063

38%

of FDM’s

global revenue

2022: 42%

APAC

2023

2022

Revenue

£51.9m

£53.8m

Adjusted operating profit

£2.0m

£4.2m

Consultants deployed

832

1,011

Training completions

403

574

16%

of FDM’s

global revenue

2022: 16%

Financial Statements

Governance

Strategic Report

Macroeconomic uncertainty

impacted demand for new

Consultants and consequently UK

Consultant headcount at week 52

of 2023 was 1,411, a decrease of

547 (28%) on the prior year (2022:

1,958). Revenue decreased by 8% to

£127.8 million (2022: £139.6 million);

this decrease was less than the

decrease in Consultant headcount

due to the phasing of headcount.

During the year we continued to open

new business with 23 new clients

compared with the 38 that we added

in 2022.

Adjusted operating profit decreased

17% to £25.1 million (2022: £30.3

million) as, although there were fewer

training completions, the impact of

this was outweighed by the cost

of holding a higher than typical

number of undeployed (“benched”)

Consultants to service future

client demand.

In response to the change in demand,

training completions decreased by

68% to 339 (2022: 1,063).

North America

As in the UK, macroeconomic

uncertainty hindered demand for

new Consultants and North America

Consultant headcount at week 52 of

2023 was 1,322, a decrease of 296

(18%) on the prior year (2022: 1,618).

Despite the reduction in headcount,

revenue increased by 11% to £130.2

million (2022: £116.9 million) due to

the phasing of headcount year-on-

year (the 2023 average headcount

was 10% higher than 2022). During

the year we added seven new

clients compared with the 14 that

we added in 2022.

Adjusted operating profit increased

32% to £20.4 million (2022: £15.4

million) which is more than the

percentage increase in revenue due

to lower paid training costs arising

in 2023 compared to 2022. Training

completions decreased by 74% to

340 (2022: 1,319) as we adjusted

our training schedules to align with

client demand.

We continued with our Group

strategy to adjust our property

footprint to reflect changes in how

we train our Consultants with training

now being delivered predominantly

remotely. During the period, we

moved our New York sales office to

smaller premises with more flexible

tenancy terms and opened a sales

office in Florida to support client

activity in the region.

EMEA

EMEA Consultant headcount at week

52 of 2023 was 327, an increase of

nine (3%) on the prior year (2022:

318). Revenue increased by 22% to

£24.1 million (2022: £19.7 million); this

increase was more than the increase

in Consultant headcount due to the

phasing of headcount. During the

year we added eight new clients, the

same number as in 2022.

Adjusted operating profit decreased

9% to £2.1 million (2022: £2.3 million),

reflecting a higher than typical

number of undeployed Consultants.

Training completions increased by

15% to 256 (2022: 223).

Ireland experienced good growth in

the year with week 52 headcount

increasing by 57% to 69 and during

the period we opened a sales office

in Limerick, Ireland.

APAC

APAC Consultant headcount at week

52 of 2023 was 832, a decrease of

179 (18%) on the prior year (2022:

1,011). Revenue decreased by 4% to

£51.9 million (2022: £53.8 million);

the decrease was less than that in

the Consultant headcount due to

the phasing of headcount. During

the year we added nine new clients

compared with the 14 that we added

in 2022.

Adjusted operating profit decreased

52% to £2.0 million (2022:

£4.2 million) reflecting a higher

than typical number of undeployed

Consultants, as seen elsewhere in

the Group. Training completions

decreased by 30% to 403

(2022: 574).

In Australia, we expanded our

property footprint outside of Sydney,

taking on a sales office in Melbourne

to act as a base to support an

increasing Consultant presence

in the region.

The adjusted operating profit is calculated before Performance Share Plan credit/ expense

(including social security costs).

Our Markets

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Financial Statements

Governance

Strategic Report

Financial KPIs

Key Performance Indicators

We monitor a range of Key Performance Indicators

(“KPIs”) to identify trends in our operating and trading

performance. The Group aims to deliver an appropriate

level of profitability, maintain a robust balance sheet and

undertake strategic investment programmes.

The adjusted numbers in the KPI analysis remove the

financial impact associated with the Performance

Share Plan, to provide a clear understanding of the

underlying trading performance.

Each KPI is linked to different aspects of FDM’s Business

Model, as illustrated below. The Business Model is shown

on pages 16 to 17.

Revenue (£m)

+1%

Performance

Description

Revenue is broadly consistent

year-on-year, in line with the average

number of consultants deployed being

similar year-on-year.

Description

Adjusted operating profit decreased

by 5%, due to the additional cost of

carrying more undeployed Consultants

than in the prior year, partially offset by

a reduction in paid training costs.

Description

Cash flow generated from operations

has increased by 24% reflecting

continuing strong working capital

management. In particular, year-end

trade receivables decreased from £34.9

million to £24.9 million.

Description

Cash conversion was 111.8%, reflecting

continuing strong working capital

management by the Group.

Performance

334.0

330.0

267.4

49.6

111.8

61.5

52.2

108.3

49.7

47.3

124.1

52.1

202

2022

2021

202

2022

2021

202

2022

2021

202

2022

2021

Link to strategic objectives

Adjusted operating profit

(£m)

-5%

Link to strategic objectives

Adjusted basic earnings per share

(pence)

-12%

Link to strategic objectives

Cash flow generated from operations (£m)

+24%

Link to strategic objectives

Cash conversion (%)

+3%

Link to strategic objectives

Performance

Description

Adjusted basic earnings per share

decreased by 12% to 32.9 pence,

reflecting the Group’s lower adjusted

operating profit and an increase in the

effective tax rate.

Performance

32.9

37.3

33.2

202

2022

2021

FDM Group (Holdings) plc

Annual Report and Accounts 2023

The adjusted operating profit is calculated before Performance Share Plan credit/ expense (including social security costs). Adjusted basic earnings per

share are calculated before the impact of Performance Share Plan credit/ expense (including social security costs and associated deferred tax).

Consultants assigned to clients (week 52)

-21%

Performance

3,892

4,905

4,033

202

2022

2021

Description

The number of Consultants assigned to

clients decreased by 21%, reflecting the

impact of worsening macroeconomic

conditions on level of client confidence,

leading to reduced demand across all

our regions.

Performance

Training completions

-58%

Performance

1,338

3,179

2,410

2023

2022

2021

Description

Training completions reduced by 58%

in the year as the Group adjusted

recruitment and training levels to

match reduced client demand.

Performance

Consultant utilisation rate (%)

-5%

Performance

92.8

97.5

97.3

2023

2022

2021

Description

Consultant utilisation rate of 92.8%,

down on the prior year (97.5%) due to

the Group carrying a higher number of

undeployed Consultants.

Performance

Scope 1, 2 and 3 greenhouse gas emissions per employee (tCO

2e)

+19%

Performance

0.69

0.58

0.49

2023

2022

2021

Description

The Group’s annual emissions per

employee remain below 1 tCO

e. The

main driver of the increase in emissions

is from employee commuting, as

working patterns of FDM and our clients

change post-pandemic with increasing

levels of in-office attendance.

Performance

Link to strategic objectives

FDM’s four key strategic objectives

Attract and develop

talented Consultants

Invest in state-of-

the-art Skills Labs to

provide expert training

Grow and diversify

our client base

Expand and consolidate our geographic

presence through sustainable and

efficient means

FDM’s four key strategic objectives are explained in more detail on page 12.

Non-financial KPIs

Financial Statements

Governance

Strategic Report

Financial Review

Against a backdrop of challenging

market conditions from the beginning

of the second quarter, the Group

delivered a resilient performance

in 2023.

Revenue increased to £334.0

million, up 1% (2022: £330.0 million),

adjusted operating profit

decreased

by 5% to £49.6 million (2022: £52.2

million), with adjusted basic earnings

per share

down 12%, to 32.9 pence

(2022: 37.3 pence). We ended the

year with a robust balance sheet,

including cash balances of £47.2

million (2022: £45.5 million), having

converted 111.8% of our operating

profit into operating cash flow. We

remain well positioned for future

growth with a proven and agile

business model that allows us to

respond rapidly and effectively to

market fluctuations.

Mike McLaren

Chief Financial Officer

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Summary income statement

Year ending

31 December

2023

Year ending

31 December

2022

% change

Revenue

£334.0m

£330.0m

+1%

Adjusted operating profit

£49.6m

£52.2m

-5%

Operating profit

£55.0m

£45.8m

+20%

Adjusted profit before tax

£50.2m

£52.0m

-3%

Profit before tax

£55.6m

£45.7m

+22%

Adjusted basic EPS

32.9p

37.3p

-12%

Basic EPS

37.3p

32.0p

+17%

Overview

Revenue increased by £4.0 million to £334.0 million (2022: £330.0 million). On a constant-currency basis

revenue

increased by 2%, or £7.4 million. Consultants assigned to clients at week 52 of 2023 decreased by 21%, totalling 3,892

(week 52 of 2022: 4,905). The average number of Consultants assigned to clients was broadly similar in 2023 compared

with 2022, resulting in revenue earned in 2023 also being broadly similar to revenue earned in 2022. At week 52 of 2023

our Ex-Forces Programme accounted for 163 Consultants deployed worldwide (week 52 of 2022: 211). Our Returners

Programme had 219 Consultants deployed at week 52 of 2023 (week 52 of 2022: 220). The Consultant utilisation

rate dropped to 92.8% (2022: 97.5%) as a result of the Group carrying a higher-than-expected number of undeployed

Consultants.

An analysis of revenue and headcount by region is set out in the table below:

Year ending

31 December

2023

Revenue £m

Year ending

31 December

2022

Revenue £m

2023

Consultants

assigned to

clients at

week 52

2022

Consultants

assigned to

clients at

week 52

127.8

139.6

1,411

1,958

North America

130.2

116.9

1,322

1,618

EMEA

24.1

19.7

327

318

APAC

51.9

53.8

832

1,011

334.0

330.0

3,892

4,905

Adjusted Group operating profit margin decreased to 14.8% (2022: 15.8%), due primarily to the cost to the Group of

carrying more undeployed Consultants. Administrative expenses, excluding the share-based payment credit/ expense,

increased to £107.0 million (2022: £103.4 million) due to the costs arising from the higher number of undeployed

Consultants.

Adjusted operating profit and adjusted profit before tax are calculated before Performance Share Plan credit/ expense (including social security costs).

Adjusted basic earnings per share are calculated before the impact of Performance Share Plan credit/ expense (including social security costs and associated

deferred tax).

The constant-currency basis is calculated by translating current-year and prior-year reported amounts into comparable amounts using the 2023 average

exchange rate for each currency. The presentation of the constant-currency basis provides a better understanding of the Group’s trading performance by

removing the impact on revenue of movements in foreign exchange.

Week 52 in 2023 commenced on 25 December 2023 (2022: week 52 commenced on 19 December 2022).

Financial Statements

Governance

Strategic Report

Adjusting items

The Group presents adjusted

results, in addition to the statutory

results, as the Directors consider

that they provide a useful indication

of underlying trading performance.

The adjusted results are stated

before Performance Share Plan

credit including associated taxes

which totalled £5.4 million (2022:

expense of £6.4 million). Details of the

Performance Share Plan are set out

in note 25 to the financial statements.

The Directors believe that excluding

these costs provides a more

meaningful comparison of the trading

performance. The credit/ expense

is based on estimates relating to a

vesting which may occur up to three

years after the date of grant and the

assumptions underpinning those

estimates can change from year

to year.

Net finance expense

The finance expense includes lease

liability interest of £0.7 million (2022:

£0.5 million). The Group has no debt.

Taxation

The Group’s total tax charge for the

year was £14.9 million, equivalent

to an effective tax rate of 26.7%,

on profit before tax of £55.6 million

(2022: effective tax rate of 23.5%

based on a tax charge of £10.8

million and a profit before tax of

£45.7 million). The effective tax rate

in 2023 has increased from the prior

year primarily due to the increase in

the UK corporate tax rate from 19%

to 25%, effective from 1 April 2023.

The effective tax rate also reflects the

Group’s geographical mix of profits

and the impact of items considered to

be non-taxable or non-deductible for

tax purposes.

Earnings per share

Basic earnings per share increased

in the year to 37.3 pence (2022:

32.0 pence), whilst adjusted basic

earnings per share were 32.9 pence

(2022: 37.3 pence). Diluted earnings

per share were 37.2 pence (2022:

31.8 pence).

Dividend

During the year, the Group paid

two dividends with a total payment

to shareholders of £39.3 million

(2022: £38.2 million).

At the AGM held on 16 May 2023,

a final dividend of 19.0 pence per

share for 2022 was approved by

shareholders and was paid on 30

June 2023. On 25 July 2023, an

interim dividend of 17.0 pence per

share for 2023 was declared and was

paid on 13 October 2023.

The Board has recommended a final

dividend of 19.0 pence per share,

subject to shareholder approval at the

2024 AGM, taking the total dividend

arising from the 2023 financial year

to 36.0 pence per share (2022 total

dividend: 36.0 pence per share).

The Board has set a minimum

consistent cash buffer at a Group

level and will always consider the

ongoing needs for the funding of

organic growth across the business

and the distributable reserves

available to the Group when

considering dividend levels. As at

31 December 2023, the Company had

distributable reserves of £44.7 million.

This statement does not form part of

the audited financial statements and

the distributable reserves figure of

£44.7 million is therefore not audited

by PwC.

Cash flow and Statement of

Financial Position

The Group’s cash balance increased

to £47.2 million (2022: £45.5 million).

Cash conversion was 111.8% (2022:

108.3%) reflecting continuing strong

working capital management. In

particular, year-end trade receivables

decreased from £34.9 million to

£24.9 million. Dividends paid in the

year totalled £39.3 million (2022:

£38.2 million). Capital expenditure

was £0.7 million (2022: £1.2 million)

and tax paid was £12.7 million (2022:

£13.7 million).

Mike McLaren

Chief Financial Officer

19 March 2024

The adjusted operating profit is calculated before Performance Share Plan credit/ expense (including social security costs).

Financial Review

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Approach to risk

The Board has overall responsibility

for ensuring risk is managed

effectively across the Group, with a

focus on evaluating the nature and

extent of the significant risks the

Board is willing to take in achieving

its strategic objectives – its “risk

appetite”. The Board controls the

approach to risk management and

the procedures for the identification,

assessment, management, mitigation,

and reporting of risks. The Audit

Committee takes responsibility for

overseeing the effectiveness of sound

risk management and internal control

systems.

Risk appetite

As above, “risk appetite” defines the

level and type of risk the Board is

willing to accept to help the Group

achieve its strategic objectives.

The Group’s risk appetite influences

operating decisions and is reflected in

the way risk is managed. The Group

Risk Appetite Statement is reviewed

annually by the Audit Committee.

Risk Management

Effective risk management is

critical to the delivery of the Group’s

strategic objectives and to secure

the business for the long term.

Financial Statements

Governance

Strategic Report

Identifying and

monitoring key risks

The Board uses the Risk Register as

its principal tool for monitoring and

reporting risk. The preparation of the

Officer, supported by the Senior

Management Team. The register

details the Group’s risks, the potential

impact of each risk, the likelihood of

that risk occurring, the strength of

the mitigating controls in place and

how these are evidenced. The Risk

and third lines of defence or “sources

of assurance”. Input is obtained from

all areas of the business, including

support functions, as appropriate.

A member of the Executive Team is

assigned as the owner of each risk to

ensure an appropriate level of focus

and accountability to the Board.

The Board formally reviews the Risk

year-end, following a detailed review

by the Audit Committee as part of its

assessment of the effectiveness of

the risk management process.

The risk management process is

reviewed regularly by our Internal

Audit function. The latest review

concluded that our processes are

suitable for a business of our size and

complexity. The annual Internal Audit

programme is planned taking due

consideration of the Group

Risk Register.

The current Risk Register includes

32 risks categorised as strategic,

operational, compliance or financial

risks, 10 of which are considered to

be the Group’s principal risks. The

Risk Register was formally updated in

early 2024. In March 2024, the Audit

Committee and the Board carried out

a robust and formal assessment of

the Group’s emerging and principal

risks as set out in the updated

Risk Register.

Principal risks

Our principal risks and uncertainties,

as set out on pages 30-34, have

been assessed in accordance with

the processes outlined above. We

indicate how each principal risk aligns

with our strategic objectives, as set

out on pages 12, indicating those

aspects of the business strategy that

would be impacted by each risk, were

it to materialise.

We have made no changes to the net

risk scores of our principal risks in

this report. In reviewing the profile of

our principal risks, we considered the

following external factors and how

they impact the risks associated with

them. Although levels of economic

uncertainty and the risk of cyber-

attacks undoubtedly remained

elevated during 2023, we had already

rated the risks associated with these

factors as high and have not therefore

adjusted their net risk scores.

Economic uncertainty:

The global

economic outlook remains uncertain

as levels of national interest rates

and geopolitical volatility remain high.

‘Changes in the macroeconomic

environment’ is our highest-rated

risk, with a maximum risk-scoring in

terms of likelihood. FDM’s Consultant

business model remains attractive,

offering flexibility to our clients during

times of economic, political and social

uncertainty. The Group benefits from

a robust balance sheet and significant

cash balances.

Concentration exposure to particular

sectors or clients:

The majority of the

Group’s revenue is generated from

the financial services sector, with the

result that economic uncertainty or

other factors impacting that sector

can have a more material effect on

the Group’s trading. In certain regions,

a smaller number of key clients

make up a high percentage of the

overall Consultant headcount. Client

diversification remains a key part of

our strategy. Further information can

be found on page 11.

Risk Management

continued

Cybersecurity:

The threat of a

cyber-attack remains high, in terms

of sophistication, frequency of

attempts, scale and potential impact.

We believe that the current risk profile

(risk 7 below) is appropriate as we

continue to focus on strengthening

our cybersecurity and information-

safeguarding capabilities.

Balancing supply and demand of

Consultant resource:

As a direct

consequence of worsening economic

conditions, client demand reduced

and we saw an increase in our

undeployed resource. The business

responded, as detailed below. We

consider that the mitigations in place

for this risk are appropriate, and

have not therefore adjusted its net

risk score.

The following steps were taken to

manage the impact of this risk:

•

Significantly reducing Consultant

recruitment and training; and

•

Actively managing Consultants

on the bench, including: holding

multi-team resource meetings every

two weeks to review the ‘Pipeline

Management Dashboard’, which

shows availability by stream and

location, enabling us to manage

the overall numbers on the bench

where appropriate to match the

skills most in demand;

•

Training and re-skilling Consultants

at our Skills Labs, including through

the Pods; and

•

Investing in creating the Consultant

Career Framework, which will

enable a more efficient way for

Consultants to document and for

the Sales Team to see the different

experiences and skillsets available

(see pages 45-46).

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Changes in the macro economic environment

Concentration exposure to particular sectors or clients

Balancing supply and demand of

Consultant resource

Recruitment and development of

highly skilled Consultants

Talent development and succession planning

Development of new service offerings

Business interruption –

caused by successful cyberattack

Business interruption –

caused by natural disaster or other similar events

Reputation

International regulatory non-compliance

The above diagram shows the net

risk score for the principal risks

after taking account of controls

and mitigations.

Emerging risks

Our risks continue to evolve and

an awareness of emerging risks

and their potential implications is

important in driving our strategic

planning and decision-making. We

have not identified any emerging

risks not already covered in the

principal risks section above, or other

areas of focus considered below.

Almost certain

Very unlikely

Impact

Likelihood

Low

High

Other risk areas

of focus

Climate change

During 2023, the Board engaged

external consultancy CEN-ESG

to assist in updating our climate-

related risks and opportunities. The

management-level Climate-change

Action Group (“CAG”) assesses and

manages the Group’s climate-related

risks and opportunities on an ongoing

basis. As detailed on pages 52-56,

the Group’s climate change risk is

considered to be low.

As a result, climate change is not

considered to be one of the Group’s

principal risks.

We are aware that our clients in some

sectors could be adversely affected

by climate change and there is a risk

that this affects our own business

indirectly as clients’ spending

decisions are constrained by climate

change challenges. We look to

mitigate this risk by diversifying the

sectors and geographies in which we

operate. We also believe that there is

an opportunity for the Group to place

Consultants to help our clients find

and apply the optimal technical and

business solutions to the challenges

that climate change brings.

Financial Statements

Governance

Strategic Report

Risk Management

continued

Strategic risks

Risk and impact

Mitigation

Movement in the year

Changes in the macroeconomic

environment

No change

A downturn globally or in the territories

in which FDM operates, including from

geopolitical uncertainties, could curtail

demand and the ability of the Group to

deploy its Consultant resource, resulting

in an adverse impact on revenue, cost and

operating profit; a shrinking client base;

and a negative impact on share price.

Risk owner:

Chief Financial Officer

Alignment to strategic objectives:

Whilst external factors such as

macroeconomic risks are outside the

Group’s control, the Group has effective

measures in place to respond to changes,

including robust planning, budgeting

and forecasting and resource allocation

procedures. An updated three-year plan

has been approved by the Board.

The flexible nature of the Group’s business

model enables it to manage resource

availability allowing it to flex its cost base

in the medium term.

Bearing in mind the impact of risk 2 below,

the Group is also focused on diversifying

its client base both by sector and by

geography.

The Group’s current financial position

includes a robust balance sheet with no

debt, and significant cash balances.

The global economic outlook remains

uncertain as levels of geopolitical

volatility remain high. The conflicts

in Ukraine, the Middle East and

elsewhere continue to exacerbate the

broader economic situation. As a result,

the Board considers it appropriate

to maintain a high rating for this risk.

Whilst certain scenarios are outside

the Group’s control, the Board believes

that FDM’s business model is flexible,

and the agile resource represented

by our Consultants remains attractive

to clients during times of economic,

political and social uncertainty. Whilst

the Board will continue to review the

measures in place to identify and

react to changes in macroeconomic

conditions, these factors, together

with FDM’s strong cash and financial

position, give the Board confidence

that FDM can continue to respond

appropriately to ameliorate the effect

of any adverse economic conditions.

Concentration exposure to

particular sectors or clients

No change

The majority of the Group’s revenue is

generated from the financial services

sector. Some regions have a concentration

of headcount in a smaller number of key

clients in the financial services sector. A

crisis in the financial services sector could

reduce revenue significantly and have a

negative impact on the majority of the

Group’s KPIs.

Risk owner:

Chief Commercial Officer

Alignment to strategic objectives:

As above, the Group is focused on

growing its client base both by sector and

by geography as well as diversifying the

services it offers to clients.

Diversification into new client sectors

forms an element of bonus targets for

Directors and staff.

Further details of Directors’ bonus targets

are in the Remuneration Report on pages

109 and 110.

Although the proportion of the Group’s

revenue generated from the financial

services sector has remained broadly

similar to the prior year, the percentage

of new client wins outside of the

financial services sector during the

year was 68%.

The Group continues to broaden

the spread of its service offerings

to financial services clients to cover

operational, compliance and IT

services, in addition to increasing its

presence in other sectors.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

FDM’s four key strategic objectives

Attract and develop

talented Consultants

Invest in state-of-

the-art Skills Labs to

provide expert training

Grow and diversify

our client base

Expand and consolidate our geographic

presence through sustainable and

efficient means

FDM’s four key strategic objectives are explained in more detail on page 12.

Risk and impact

Mitigation

Movement in the year

Balancing supply and demand

of Consultant resource

No change

An inability to appropriately manage the

supply and demand of Consultant resource,

resulting in either excess or insufficient

Consultant resource would result in lost

revenue, increased costs, eroded client

confidence and an adverse reputational

impact.

Risk owner:

Chief Commercial Officer

Alignment to strategic objectives:

The flexibility of the Group’s business

model is a key mitigation to this risk.

The Group is able to flex the number of

Consultants it recruits relatively quickly

depending on the Group’s near-term

resourcing requirements.

Multi-team resource management

meetings occur fortnightly to ensure

supply and demand issues are identified

and resolved, and investments in IT enable

us to improve forward visibility of supply

and demand.

The recruitment team maintains strong

links to universities and other recruitment

channels.

The business operates to maximise

utilisation and optimise flow through of

trainees within the Skills Labs.

The Ex-Forces, Returners and Apprentice

programmes increase access to a diverse

talent pool.

This was the biggest area of focus for

the business in 2023.

During 2023, the levels of recruitment

and training of Consultants were flexed

in response to changing client demand,

while investing in sufficient resource

enabling us to capitalise on any upturn

in client confidence.

Operational Risks

Recruitment and development

of highly skilled Consultants

No change

A failure to provide high-quality Consultants

to clients could result in a loss of clients

and damage to the Group’s reputation.

Risk owner:

Chief Commercial Officer and

Chief Operating Officer

Alignment to strategic objectives:

Presently recruitment is operating

at reduced levels, reflecting the end

markets we serve. In the meantime,

our Recruitment Teams are maintaining

regular dialogue with successful

applicants to keep them engaged with

FDM, so that they are immediately ready

to enter the Skills Labs as we return to

normal levels of activity.

Consultant development and engagement

have been enhanced through the

Consultant Experience team’s Consultant

Career Framework.

In 2023, the Returners (Business)

programme and Ex-Forces Advanced

Course were each awarded Tech Industry

Gold accreditation for delivery.

The Board monitors and reviews the

level of Consultant recruitment levels.

There is a broad base of talent from

which to recruit through the Graduate,

Returners, Ex-Forces and Apprentice

programmes.

Financial Statements

Governance

Strategic Report

Risk Management

continued

Operational risks

Continued

Risk and impact

Mitigation

Movement in the year

Talent development and

succession planning

No change

The ability of the business to retain and

develop key employees, thereby enabling

the business to expand.

Risk owner:

All members of the Executive Team

The Group’s Remuneration Policy states

that the overall remuneration package

should be sufficiently competitive to

attract, retain and motivate Executive

Directors.

The remuneration packages of

all employees are reviewed and

benchmarked regularly to ensure they

remain competitive.

We have introduced leadership training

through the Future Leaders Development

Programme and the Senior Women

Leadership Network.

Employees’ annual development reviews

include the identification of training

requirements, fulfilled within the following

12 months.

The Nomination Committee considers

succession matters as a regular

agenda item.

Talent development and succession

planning includes mentoring and

coaching for selected senior managers

across the Group.

The Group’s remuneration packages

remain competitive and, for senior

employees, include long-term share

options to promote retention.

The Group operates an attractive Buy

As You Earn share plan, available to

all employees, to encourage share

ownership and drive talent retention.

Development of new

service offerings

No change

An inability to develop new service

offerings and sources of revenue could

result in a loss of clients and market share.

Risk owner:

Chief Commercial Officer

The Consultancy Services team offers

clients teams with a range of skills and

experience, with senior capability to

deliver collaborative solutions for a wide

array of technology problems.

We have developed Technology

Partnerships with key organisations

(see page 14).

FDM’s flexible training model develops

and maintains course material relevant

to clients’ evolving needs.

FDM’s training is designed to provide

high-quality content either face-to-face

or remotely.

The Group has a range of touch points

with clients and alumni, enabling us to

keep up to date with developments in the

marketplace and to identify client needs.

The Group is responsive to its clients’

needs which it identifies through

regular contact and feedback.

New service offerings are considered

and developed and are detailed on

pages 13-14.

The Executive Directors are actively

involved in key client relationships.

Alignment to strategic objectives:

FDM Group (Holdings) plc

Annual Report and Accounts 2023

FDM’s four key strategic objectives

Attract and develop

talented Consultants

Invest in state-of-

the-art Skills Labs to

provide expert training

Grow and diversify

our client base

Expand and consolidate our geographic

presence through sustainable and

efficient means

FDM’s four key strategic objectives are explained in more detail on page 12.

Risk and impact

Mitigation

Movement in the year

Business interruption –

caused by cyberattack

No change

Major IT system integrity issues or data

security issues, either due to internal or

external factors, could result in actual

financial loss of funds; potential loss

of sensitive data with risk of litigation;

loss of client confidence; and damage

to reputation.

Risk owner:

Chief Information Officer

Alignment to strategic objectives:

The Group continues to invest in

technology, whilst further bolstering and

driving the advancement of processes

and controls to mitigate evolving threats.

The Group’s IT Security team has

significant experience and includes a CISO

industry-certified expert.

Employees are regularly made aware of

the risk of cyberattacks, as well as the

appropriate actions to mitigate them,

which is outlined in the Global Standard

for Technology Security.

There are extensive and knowledgeable

discussions at the Board and Committees

on cyber defence and data protection.

Detailed reviews and desktop exercises

were undertaken throughout 2023,

assessing the management of cyber

and technology risks, and more in-depth

testing is planned for 2024.

With the ever-increasing global threat

of cyberattack, FDM continues to

focus on cybersecurity and information

safeguarding capabilities.

Business interruption – caused by

natural disaster or other similar events

No change

A natural disaster, epidemic or similar

health-related event, such as COVID

-19,

which could potentially result in the closure

of one or more of our operating locations,

the temporary closing down of clients, or

the prevention of staff travelling to their

place of work in regions impacted by such

events, could lead to disruption and a loss

of revenue.

Risk owner:

Chief Operating Officer

Alignment to strategic objectives:

FDM has a Business Continuity Plan in

place which includes the procedures to

be followed in the event of a major issue

such as a natural disaster, epidemic or

other health-related event beyond the

Group’s control.

The Group’s Business Continuity Plans

were updated in 2023 and the Audit

Committee received two Business

Continuity Plan updates during the year.

Financial Statements

Governance

Strategic Report

Risk Management

continued

Operational risks

Continued

Risk and impact

Mitigation

Movement in the year

Reputation

No change

Reputation is key to the Group maintaining

and growing its business. Substandard

service or the actions of Consultants or

staff could have an adverse impact on the

Group’s reputation. A failure to manage

any subsequent crisis through a lack of

reactive procedures could also exacerbate

potential damage. Several of the Group’s

other principal risks could also involve an

element of reputational risk if they were to

materialise (for example, Risk 4 and Risk 7).

Any impact could be far-reaching: failure to

meet financial targets; litigation; loss of key

clients; and loss of key staff.

Risk owner:

Chief Operating Officer

Alignment to strategic objectives:

Robust recruitment and training

procedures are in place which reduce the

risk of employing persons whose actions

could result in a negative impact on

FDM’s reputation.

FDM has a zero-tolerance policy with

respect to any inappropriate behaviour by

an individual employed by the Group or

acting on behalf of the Group.

The Group focuses on strong relationship

management and communication with all

stakeholders. Our Consultant Experience

team checks in regularly with Consultants

to ensure placements are going well,

and we seek feedback from clients on

our consultants’ performance where

appropriate.

The Group continues to invest in staff

development and high quality systems

and processes to mitigate the risk of

operational failure.

The Board regularly consults with its

PR advisors.

The Group has a dedicated Head of

Investor Relations to help manage the

relationships with shareholders and

stakeholders.

Compliance risk

International regulatory

non-compliance

No change

Failure to comply with international tax,

legal, employment and other business

regulations could result in significant

costs, fines and/ or revocation of

business licences.

Risk owner:

Chief Financial Officer

Alignment to strategic objectives: n/a

The Group has robust recruitment and

training procedures, which ensure the

employment of appropriately skilled

personnel in areas where compliance

with complex legislation and regulations

is required.

The Group seeks appropriate advice and

engages external advisors as necessary,

particularly in overseas locations, and

actively manages those relationships.

The Group regularly reviews and updates

contractual documentation, policies

and procedures, aiming for ongoing

improvement of the approach to managing

business risk.

The Group ensures that staff undertake

ongoing training and professional studies

where required.

The Group continues to invest in

appropriately skilled personnel and

will outsource where needed in areas

where compliance and expertise

are required.

The Group’s in-house Legal and People

Teams are augmented as required

by external advisors with specialist

experience and knowledge of the

countries in which the Group operates.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Viability statement

The Directors have assessed the prospects of the Group in

accordance with Provision 31 of the 2018 Code.

The period selected by the Board for its assessment is three

years. This period was chosen for the following reasons: the

core of FDM’s business is the Consultant model, and three years

represents approximately the average life cycle of Consultants’

engagement with FDM and the Group’s normal investment cycle

in its most important asset. Further, the Group’s strategic plan

covers a period of three years and is underpinned by robust

financial budgets, forecasts and a three-year financial plan.

In making its assessment and against a backdrop of challenging

market conditions that began in the second quarter of 2023,

the Board reviewed the Group’s current financial position

and prospects, the longer-term sustainability of the business

model, the Group’s cash flow requirements and other key

financial assumptions over the three-year period and carried

out a sensitivity analysis of certain of those assumptions as

appropriate. The sensitivity analysis included a low case scenario

in which headcount reduced from 3,892 at week 52 2023 to

2,500 at week 52 2024 and there was no subsequent growth

in headcount for the following two years. After applying the

sensitivities, our modelling showed that the Group would still

maintain a healthy cash balance while maintaining our current

dividend payment policy, without utilising any third-party debt.

In assessing its viability, the Board has considered the principal

risks affecting the Group. Together with the risk of climate

change, which was assessed as having a low net risk on the

business, the Board evaluated how these risks might impact

the Group’s future performance, solvency and liquidity. The

sensitivity analysis noted above also considered the impact

of certain principal risks. Individually, and when considered

together, no reasonable combination of sensitivities could result

in the Directors altering their view of the Group’s viability.

The Group’s financial position is robust with cash balances

of £47.2 million at the end of the year and no external debt.

Based on the results of this assessment, the Directors have

a reasonable expectation that the Company will be able to

continue in operation and meet its liabilities as they fall due over

the three-year period of their assessment.

Financial Statements

Governance

Strategic Report

Sustainability Report

UN Sustainable Development Goals

People and communities

Our people

Programmes

Employee development

Employee engagement

Partnerships

Charity involvement

Our clients and shareholders

People policies

Climate change

Implementation of the Task Force on

Climate-related Financial Disclosures

(“TCFD”) statement

Governance

Risk Management

Environmental performance

Statement by the Directors in

performance of their statutory duties

under s.172(1) Companies Act 2006

Non-financial and sustainability

information statement

FDM Group (Holdings) plc

Annual Report and Accounts 2023

UN Sustainable Development Goals

Improving the sustainability of our business can benefit all our

stakeholders, as we can deliver a broader impact on the lives of

those in our stakeholder communities.

In partnership with governments, the private sector and civil society, the United

Nations (“UN”) 17 Sustainable Development Goals (“UNSDGs”

) aim to improve the

lives of future generations. We have reviewed the UNSDGs and identified six goals

that are most closely aligned to our business and strategy, and will look to implement

our strategy in a way that will best support the achievement of these goals.

United Nations Sustainable

Development Goals

Our contribution

Examples

Ensure inclusive and

equitable quality education

and promote lifelong

learning opportunities for all.

Our recruitment processes are designed

to be as inclusive as possible.

Our training programmes are available to

anyone who can show us that they have

the aptitude and attitude to thrive.

Achieve gender equality

and empower all women

and girls.

Women currently make up 32% of our

global workforce. We are committed to

improving gender balance in our teams

around the world, making our business

more robust and sustainable.

We are a signatory to United Nations

Women’s Empowerment Principles

(“UNWEP”), and we run various initiatives

designed to create a more gender-

balanced workforce for FDM and

our clients.

Promote sustained, inclusive

and sustainable economic

growth, full and productive

employment and decent

work for all.

Our reputation is dependent on the people

we employ. We treat our employees

fairly and help them to launch rewarding

careers in technology.

We provide our graduates, ex-Forces

personnel, returners to work and

apprentices with bespoke IT and business

training, together with invaluable industry

experience gained whilst deployed with

our clients.

To reduce inequalities

within and among countries.

We take action to improve social mobility

in the workplace to identify, access and

progress talent from all backgrounds.

Our Apprenticeship programme takes

school leavers from a wide range of

backgrounds through to achieving a

university degree, all funded by FDM.

Ensure sustainable

consumption and

production patterns.

We are committed to reducing the impact

of our operations on the environment by

making our consumption of energy and

materials as sustainable as we can.

Our on-site and hosted infrastructure

uses a cloud-based solution using modern

datacentres to increase energy efficiency

and to reduce our carbon footprint.

Where possible, our old IT hardware is

donated to charities and schools who can

continue to use it.

Take urgent action to

combat climate change

and its impact.

The Group is committed to reducing

its Scope 1, 2 and 3 greenhouse gas

emissions (see pages 60 to 61).

In 2023 we undertook our first survey of

employee commuting. We continue to;

liaise with our landlords to reduce our

emissions from electricity consumption;

and engage with our top suppliers to

reduce emissions from our purchased

goods and services.

Financial Statements

Governance

Strategic Report

People and communities

The long-term prosperity of the business continues to be achieved

through an inclusive and collaborative approach with consideration

to our key stakeholders; our employees, clients, investors, and the

communities in which we operate. Throughout 2023, we continued

to promote diversity and inclusion in the workplace to enable equity,

with the aim of contributing to the success of our business and the

achievements of our people.

We encourage our employees to

be themselves at work, and to play

a part in creating and fostering

an inclusive and open workplace

where everyone can thrive. We know

the positive impact that a diverse

workforce has had on our business,

and this is an important factor which

makes our Consultant model so

attractive to many of our clients.

Our people

On the following pages we publish

data on certain characteristics

shared by our people. However, we

understand that the reality is more

complex, with intersectionality,

overlap and differences within each

group. We recognise that each

employee has a unique identity, and

that our people’s experiences can

be more nuanced than it is possible

to express in a matrix of data. We

celebrate these differences. It is

important that we create places

where our employees feel safe, have

the opportunity to thrive and are

encouraged to be their true selves

at work, as this promotes personal

wellbeing, psychological safety and

employee engagement.

Diversity, equity and inclusion

Our purpose is to help people forge

long-term careers whilst driving

diversity, equity and inclusion. We

are proactive and enthusiastic

promoters of diversity, social mobility

and inclusion within our workplaces.

FDM’s inclusive Programmes aim to

ensure that everyone begins their

professional life on an equal footing.

Our assessment processes are

designed to spot a range of qualities

including candidates’ potential.

We encourage applications from

candidates with non-STEM (Science,

technology, engineering, and

mathematics) backgrounds. We

use tools to assess behaviours and

aptitudes of applicants, providing

us with guidance as to whether

candidates have the behaviours

required for success on our

programme. We measure their

aptitude in processing information,

their ability to respond in a logical

manner, and whether they have

the required numerical literacy to

enable them to do well in our training.

The guidance provided by these

assessments helps us in the final

strength-based interview stage of

our selection process.

We value the fact that our colleagues

come from a wide range of

backgrounds, and we look to be

representative of the communities

and geographies in which

we operate.

We aim to measure our success in

recruiting a diverse workforce of

Consultants by carrying out analysis,

and where we have sufficient data

recorded by the FDM entity, subject

to local national legislation, we

publish our results. It includes the

following groups of respondents,

together with the response rate

of those that chose to disclose for

each group: UK Consultants (95%

response rate); US Consultants (100%

response rate); Canada Consultants

(67%); UK internal staff (91%

response rate); US internal staff (96%

response rate); and Canada internal

staff (82% response rate). We are

working to obtain data for employees

from other entities within the Group.

By measuring specific characteristics

across the employee groups we can

assess how the business and our

recruitment policies are performing

with reference to diversity.

FDM is a signatory to the

Tech Talent Charter, a UK

government-supported,

industry-led membership group

that equips signatories with

the networks and resources

to drive their diversity and

inclusion efforts.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Ethnicity

% of those that chose to disclose identify as:

Consultants

2023

Internal staff

2023

Arab or Arab British

Asian or Asian British

29%

17%

Black or Black British

13%

Mixed or Mixed British

White or White British

46%

67%

Other

Prefer not to say

100%

Ethnicity

% of those that chose to disclose identify as:

Canada

Consultants

2023

Canada

Internal staff

2023

Black

East Asian

13%

Latin/ Hispanic

Middle Eastern/ West Asian

16%

South Asian

41%

17%

Two or more ethnicities

White

34%

Other

20%

Prefer not to say

100%

Sexual orientation

Do you identify as LGBTQIA+?

% of those that chose to disclose:

Consultants

2023

Internal staff

2023

Yes

86%

85%

Prefer not to say

100%

Sexual orientation

Do you identify as LGBTQIA+?

% of those that chose to disclose:

Canada

Consultants

2023

Canada

Internal staff

2023

Yes

93%

85%

Prefer not to say

100%

Ethnicity

% of those that chose to disclose identify as:

Consultants

2023

Internal staff

2023

American Indian/

Alaskan

Native

Asian

23%

Black or African American

16%

13%

Hispanic or Latino

12%

14%

Native Hawaiian or other

Pacific island

Two or more races

White

35%

55%

Prefer not to say

100%

Religion

% of those that chose to disclose identify with:

Consultants

2023

Internal staff

2023

Buddhism

Christianity – Evangelical/ Protestant

Christianity – Other

10%

12%

Christianity – Roman Catholic

Hinduism

Islam

16%

10%

Judaism

No religion

35%

43%

Sikhism

Other

Prefer not to say

100%

Financial Statements

Governance

Strategic Report

People and communities

continued

Supporting social mobility

We are proud to have been

ranked 34th in the Social Mobility

Foundation’s Employer Index for

2023. The index recognises the

UK employers who have taken the

most action on social mobility in the

workplace, to identify, access and

progress talent from all backgrounds.

We strive to support people from

low opportunity communities,

promoting equal opportunities for

career success regardless of

socioeconomic demographic.

We have furthered our ongoing

relationship with ‘The Cornerstone’

network through our involvement

with FutureGoals’ Enterprise Adviser

Programme. This is a network of

business volunteers connected to

secondary schools and colleges to

prepare young people for the world

of work. Our collaboration with ‘The

Cornerstone’ will forge stronger links

between employers and education,

creating opportunities for FDM to

access new talent and shape the

Company’s future workforce.

In celebration of International

Women’s Day, we hosted a Digital

Bootcamp for students from

under-represented groups. We

combined the session with a

confidence-building workshop and

the opportunity for the students

to showcase their learned skills to

internal stakeholders. Additionally,

we hosted ‘IamRemarkable’ sessions

with our University Partners.

‘IamRemarkable’ is a Google initiative

empowering women and other under-

represented groups to celebrate

their achievements in the workplace

and beyond.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

School type attended

UK Consultants 2023

School type attended

UK internal staff 2023

First in family to attend university

UK Consultants 2023

First in family to attend university

UK internal staff 2023

State: Non-Grammar

State: Grammar

Private

Other

Outside the UK

Prefer not to say

Yes

Prefer not to say

57%

18%

12%

10%

59%

38%

55%

10%

35%

55%

Engagement with schools

We aim to tackle inequality through

partnering with schools in social

mobility cold spots where there

is higher dependence on the UK

Government’s pupil premium

grant funding (which aims to

improve educational outcomes

for disadvantaged pupils in state-

funded schools). By working with

these schools we hope to encourage

enthusiastic pupils to pursue a

career in tech. The Apprenticeship

Programme also provides an

opportunity to focus its efforts with

the early career year groups. This

academic year (from September

2023), FDM will curate a series of

workshops and bootcamps with

a number of schools in London

and Leeds to give the students an

opportunity to gain an understanding

of what it is like to work in the

tech industry.

Through targeted initiatives with

females, we aim to dismantle some of

the stereotypes that are preventing

capable young women pursuing an

interest in tech.

In 2023, we supported the

Apprenticeships and Technical

Education Programme, run by West

Yorkshire Combined Authority and

Amazing Apprenticeships. FDM works

closely with students from local

secondary schools and colleges with

the aim of increasing knowledge and

giving experience of apprenticeship

opportunities as well as the

application process.

Our recruitment processes are

reviewed regularly and designed

to be as inclusive as possible. For

example:

•

our opportunities are available to

everyone who can show us that

they have the aptitude to thrive

on our programme and have

the attitude that our clients are

looking for;

•

we use strength-based interview

questions throughout the process

ensuring candidates are not

assessed on previous experience

or social capital; and

•

all staff involved in interviewing

applicants undergo training to raise

awareness of the potential impact

of unconscious bias and to mitigate

this in the assessment process.

Financial Statements

Governance

Strategic Report

People and communities

continued

Gender equality

We have been a signatory to the United Nations

Women’s Empowerment Principles (“UNWEP”)

since 2013 and have a strong tradition of

recognising and celebrating the achievements

of women in the IT industry. We aim to provide

opportunities for candidates at all stages of their

careers. We recognise the achievements of female

FDM Consultants every week with Women in Tech

Wednesdays. This is a testament to the number

of talented Consultants that deliver positive

outcomes for our clients. We also leverage our

social channels to share their success, shining a

spotlight on our people.

We held a series of events as part of our She Lives

Tech initiative to inspire the careers of our female FDM

Consultants working in the tech sector. This includes

the She Lives Tech digital bootcamp and showcase.

We had attendees from a variety of degree disciplines

and they were tasked with creating interactive web

applications from scratch. They showcased their work

in our FDM centres on International Women’s Day.

In April 2023, we also had female Consultants join our

She Lives Tech cohorts in Software Development and

Data Engineering. These programmes trained them

in programming languages such as Python and Java

before placing them on-site with clients.

#SheLivesTech: Inspiring the next

generation of women in tech

In February 2023, FTSE Women Leaders ranked

FDM 12th in their ‘FTSE 250 Rankings 2023 Women

on Boards and in Leadership’ and we achieved the

highest position amongst participants in the Industrial

Goods and Services sector category for the level of

gender diversity in our senior management team.

FTSE Women Leaders (previously the Hampton-

Alexander Review) is the UK’s independent, voluntary

and business-led initiative supported by the UK

government, aimed at increasing the representation of

women on FTSE 350 Boards and in their Leadership

teams. We are proud that we meet the target to have

women make up at least 40% of Board members,

which has now also been included in the FCA’s Listing

Rules. With this in mind, we monitor our demographic

data regularly to help inform action plans and areas on

which to focus, from attraction and recruitment right

through to progression and retention. See page 46 for

details of our Senior Women Leadership Network.

The table below shows the gender split at different levels

within the Group as at 31 December 2023.

As at 31 December 2023

Number of

males

Number of

females

On the Board

Within senior management

(Executive Team)

Within senior management team and

their direct reports

All employees

3,807

1,830

Included in the above global statistics are the following

legal gender metrics (as at 31 December 2023):

•

UK employees: 33% female, 67% male

We recognise that the above gender information is binary

and that our employees have their own gender identity. In

2023, our UK employees identify as follows:

•

UK Consultants: 29% female; 69% male; below 0.5%

identify as either non-binary or transgender or other;

and 2% prefer not to say.

•

UK internal staff: 43% female; 54% male; below 0.5%

identify as non-binary; and 3% prefer not to say.

32% of our worldwide employees are female. Our UK

mean gender pay gap reported in 2023 was -7.6% (2022:

-4.0%), and our median gender pay gap for the same

period was -4.3% (2022: -4.3%) meaning that our median

female employee is paid more than our median male

employee. These figures are significantly better than

average for the UK where the average median pay gap

reported for full-time employees was +7.7% (Office for

National Statistics – Annual Survey of Hours and Earnings

2023). We monitor these results and keep our policies

under review.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Disability

The Group gives full and fair

consideration to the employment

of disabled people. Throughout the

recruitment and selection stages, we

encourage candidates to disclose

any reasonable adjustments they

may require, to remove barriers

and to ensure all candidates have

the opportunity to be successful.

These adjustments may include,

for example, providing additional

equipment, adapting our telephone

screening process or adjusting our

assessment day interviews and

tests to suit individual needs. In the

event of members of staff becoming

disabled, every effort is made to

ensure that their employment within

the Group can continue either in

their current role or in a suitable

alternative. The Group endeavours to

make any reasonable adjustments to

enable disabled employees to fulfil

the responsibilities of their job role.

It is the Group’s policy to support

disabled employees in all aspects

of their training, development and

promotion. The Group recognises

and delivers training to managers

working with employees who require

an adjustment due to disability.

We have been a member of the

Business Disability Forum since

2017 and are recognised as ‘Level 1

Confident’. The specialist advice and

support which it provides enables us

to improve our understanding of how

we can enhance our accessibility to

disabled employees, clients and other

visitors to our premises.

Disability

% of those that chose to disclose

Consultants

2023

Internal staff

2023

Identify as having a disability

Identify as not having a disability

91%

89%

Prefer not to say

100%

Disability

% of those that chose to disclose

Canada

Consultants

2023

Canada

Internal staff

2023

Identify as having a disability

Identify as not having a disability

96%

93%

Prefer not to say

100%

Disability

% of those that chose to disclose

Consultants

2023

Internal staff

2023

Identify as having a disability

Identify as not having a disability

92%

88%

Prefer not to say

100%

Financial Statements

Governance

Strategic Report

People and communities

continued

Programmes

In addition to our main Graduates

Programme, we also invest in

programmes for Returners, Ex-Forces

and Apprentices as detailed below.

Returners

Our Returners Programme aims to

address the challenges faced by

professional individuals who have

taken a planned career break. It gives

them the opportunity to re-enter

the workforce at a level appropriate

for their experience. Our returners

to work typically have between 10

and 15 years of experience and are

a valuable source of experienced

talent for our clients. Our programme

aims to provide participants from a

diverse range of social, ethnic and

educational backgrounds, and from

a wide range of age groups, with

intensive training to learn new skills,

refresh existing knowledge and help

individuals to regain the confidence

to return to their business careers.

On average the participants on the

programme have had a career break

of around five years. More than 500

careers have been relaunched since

our Returners Programme began.

Ex-Forces

We recognise that people who

have served in the Armed Forces

have many transferable skills for a

successful career in the corporate

world, ranging from adaptability

and maturity to responsibility and

leadership. Our dedicated Ex-

Forces Programme in the UK and

USA provides training to ex-Forces

personnel in relevant technical,

business and commercial skills.

We facilitate a smooth transition

into the civilian workplace and

offer deployment as one of our

Consultants. The Programme is

run by ex-service personnel and

employs ex-servicepeople from

all ranks across all three services.

We are proud holders of a Gold

Award from the UK Government’s

Defence Employer Recognition

Scheme, acknowledging our strong

commitment and drive in delivering

our pledges under the Armed Forces

Covenant, to which we are also

a signatory. We have again been

ranked as one of the Military Times

Best for Vets Employers in 2023.

We have relaunched more than

1,000 careers since our Ex-Forces

Programme began.

Apprenticeships

Our apprentices have the

opportunity to gain university degree

qualifications whilst developing the

skills required to succeed in key IT

roles. We provide school leavers from

a wide range of backgrounds with

technical and skills training while

enabling them to achieve a university

degree over three years, all funded

by FDM.

Apprenticeships: UK

The UK Apprenticeship Programme

aims to deliver a new, highly skilled

technical talent pipeline while

creating opportunities for a career

in technology for anyone regardless

of background. Driven by a desire to

increase access to and participation

in Higher Education, the programme

aims to include students from under-

represented groups.

Our first four apprentices from 2020

completed the programme and

graduated with first class and upper

second class degrees in September

2023 and have all been retained

by the business, progressing into

graduate-level roles with permanent

contracts. The programme has

been expanded so that we now

have 35 apprentices across Leeds,

Brighton and London. We have

partnered with the London arm of

Northeastern University London for

our London-based apprentice degree

students and we continue to work

with Sheffield Hallam University.

The three-year, fully-salaried

programme at levels 4-6, combines

on-the-job learning alongside a BSc

degree in Digital and Technology

Solutions with FDM meeting all of the

associated costs.

By mirroring our existing programmes

and partnering with clients to provide

work placements, our objective

is to expand talent pipelines of

young people, from a wide socio-

economic catchment, into business

to bridge the digital skills gap while

upskilling them in new technologies.

In October 2023 our application to

join the Department for Education’s

Flexi Apprenticeship Agency was

successful and we are now able to

deploy apprentices into all client

sectors, allowing us to expand the

programme outside of the internal

opportunities that FDM provides. The

first apprenticeship placement has

been secured and the focus for the

next twelve months will be to expand

the number of client opportunities

available.

70% of our current UK apprentices

are from an ethnic minority

background and 47% are first in

their family to go to university.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

The programme also aims to

increase participation of females

in technology and is partnering

with all-female schools, such as

Harris Academy (Bermondsey) and

Batley Girls High (Leeds) to help

students understand what a career

in technology could look like and

give them the confidence to apply.

Participating universities are selected

to ensure that the curriculum fits

with employer needs and taking

account of location to appeal to

local students in inner-city areas

from the right demographic. Each

apprentice receives an employer-

appointed mentor and is given a

minimum of one day per week of

off-the-job training time for university

study as well as exposure to specific

employment experiences in order

to cover the requirements of the

degree curriculum.

Apprenticeships: Australia

In Australia, we continue to work

with a leading professional services

firm on its Technology Traineeship.

This involves high school graduates

from Sydney joining a three-year

Technology Traineeship programme

to launch their careers in technology

as an alternative career pathway

to university. Our Technology

Traineeship programme offers each

trainee a mixture of FDM’s bespoke

training, followed by rotations in key

technology business units within a

leading professional services firm.

The apprentices work on real live

technology engagements, while

gaining micro-credentials and

New South Wales state certified

training qualifications. During

the course of the Technology

Traineeship, each trainee is

supported with buddies and FDM’s

support network. The Technology

Traineeship proved successful in

2022 and in 2023 we recruited

a further ten high school leavers

with a pipeline of an additional ten

apprentices for 2024. This will bring

the total on the programme to thirty

by 2024.

Employee development

Consultant experience

The purpose of the Consultant

Experience team is to deliver a

desirable, inclusive and engaging

experience focused on career

enhancement and community.

Consultants have support and career

guidance available to them from

Consultant Experience Partners while

working on assignment with our

clients. The Consultant Experience

Partners act as career coaches for

our Consultants to empower them

to explore their career goals using

the Career Framework (see below),

understand how they can achieve

their goals and define what success

looks like for them. The Consultant

Experience Partners also use their

expertise to work with client line

managers and Consultants to

facilitate regular feedback ensuring

a positive assignment.

Together with Sales Account

Managers and the respective client

line manager, the Consultant Success

Team arranges formal touchpoints

with Consultants to receive feedback

on their assignment and gauge

sentiment. The team enables us

to take a data-driven approach to

continuously improve the Consultant

experience. The touchpoints are an

effective support mechanism, which,

along with the social events that

the team runs for Consultants, help

build relationships.

Our Consultant Peer Support network

of experienced Consultants helps

introduce new Consultants to those

already working on assignment, to

help onboard and settle them into

their new role. We hold regular face-

to-face events at client sites and off-

site events to strengthen connections

between peers.

We have a significant alumni network

and whilst we have always remained

connected with our alumni, the

Consultant Experience department,

in collaboration with the Sales team,

will increase the engagement with

those who have come through our

various programmes over the years

to continue to strengthen our alumni

network. Through continuing to build

and engage with our extensive alumni

community, our aim is to develop and

maintain an effective ecosystem to

create learning and development,

professional networking and

increased career opportunities for our

past, present and future Consultants.

Consultant Career Framework

In 2023, we developed our

Consultant Career Framework,

which along with career coaching

support, empowers our Consultants

to articulate and work towards their

career goals. Our career framework

is skills-based enabling us to support

non-linear careers and promote

the benefit of Consultants having

a flexible mindset to harness the

wealth of opportunities our clients

offer. At FDM, we understand the

importance of our clients being able

to have the organisational agility to

deploy the right skills at the right time

to the right projects. Consultants are

encouraged to focus on developing

their skillset through taking on

new challenges rather than seeing

a job description as a finite list

of requirements.

Financial Statements

Governance

Strategic Report

Alongside our career framework, we

are currently implementing processes

to support ongoing development,

performance awareness and career

progression. We have applied an

inclusive design approach to ensure

that we can track and assess

the career outcomes for people

from diverse backgrounds. Being

data-driven underpins our career

framework and its supporting

practice, which allows us to learn and

improve from the insights gained.

As our Consultants build up their

skillsets through experience with our

clients, we support validating new

skills to add to their digital profile

so our Sales team can effectively

align an individual’s current skills,

capability, and experience to open

client opportunities. In future, this will

enable us to predict future skills gaps

and understand trends in technology

as they emerge.

Employee opportunities

We provide our people with a

range of opportunities for their

development, including face-to-

face and online training on diverse

subjects. Ongoing learning and

development for our Consultants

is supported through access to

e-learning platforms such as LinkedIn

Learning, Intuition Knowhow, Skillsoft

and our own bespoke Skills Labs’

materials. Alongside the coaching,

mentors also help Consultants to

identify development areas and skills

gaps so they can signpost individuals

to resources or opportunities.

Via the Skillsoft platform we provide

our employees with a range of

compliance-related topics, with each

employee receiving modules when

they start and refresher modules

annually. Alongside our compliance

training we provide an Inclusivity

Awareness Programme, covering

Diversity, Equity and Inclusion topics.

Topics such as unconscious bias

and disability awareness provide our

employees with an inclusive mindset

to apply to recruitment or to their

day-to-day work.

Our Pods continue to be run globally

and provide Consultants with hands-

on, project-based experience of

working in cross-functional groups

using an Agile methodology. Pods

produce Consultants who are able

to get up to speed quickly and

deliver what our clients need most

effectively. With the support of the

Skills Labs, we have provided training

to internal staff in Scrum and Agile

methodologies, whilst also providing

workshops to Consultants in skills

such as coaching, leadership and

time management. Several of our

colleagues are currently undertaking

study toward FDM-sponsored

degree-equivalent or higher

qualifications.

Accreditation

Our Consultant training is accredited

to Gold Standard by TechSkills. This

is the industry ‘kitemark’ for tech

related education and training (see

next page).

Leadership training: Future

Leaders Development

Programme

We identify future leaders within

the business and offer them the

opportunity to participate in a

detailed programme of coaching

and support. The Future Leaders

Development Programme runs

over ten months, and includes

discussions, group exercises and

one-to-one coaching to build

the interpersonal excellence of

a strong leader. The programme

covers building relationships,

communication, influencing, the

psychology of leadership and getting

the most out of the people.

Leadership training: Senior

Women Leadership Network

In 2023, the Senior Women’s

Leadership Network was created to

influence and champion change so

that FDM may continue to push the

agenda forward both internally across

the business and externally among

professional business communities.

The group aims to create role model

female leaders while contributing to

retention and progression pathways

for future female leaders who aspire

to senior positions.

People and communities

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Accreditation

Foundation Certification

In 2023, FDM added two career

transition training programmes

to its catalogue of accredited

courses; Returners (Business)

Programme and Ex-Forces

Advanced Course. We now have

ten programmes accredited at

Tech Industry Gold Foundation

level, the other eight are at

graduate level.

All Foundation accredited training

programmes are now available

across our UK and EMEA Skills

Labs. In total, 325 Consultants

completed accredited training

in 2023 across the ten

available programmes (2022:

653 Consultants completed

accredited training across eight

programmes). The number of

Consultants being awarded

Foundation credentials closely

tracks the overall numbers

recruited for training in our Skills

Labs.

Returners (Business)

Programme and Ex-Forces

Advanced Course

Consultants from these

programmes differ from our

graduate intake in many ways,

including:

•

that they come from various

mid-career positions;

•

after initial training, they go into

a wide variety of roles; and

•

much of the training they

receive is focused around

refreshing previous knowledge

and skills, as well as building

confidence to apply these and

new knowledge and skills in a

different working environment.

The credentials awarded to

successful Consultants on

these programmes showcase

their special achievements

and capabilities.

Tech Industry Gold Certified

Practitioner Programme

In 2022, FDM was successfully

accredited to administer a

scheme leading to a credential

which is awarded to graduate

Consultants who have completed

18-24 months of assignments

with clients, applying and

practising what they have

learned in their initial training

in a reflective way on-site. This

credential is known as “Certified

Practitioner”. Consultants are

awarded this credential at around

the two-year mark with FDM

if they present a satisfactory

portfolio of their experience, at

which point there is a rigorous

assessment process, quality

assured by our accreditation

provider, TechSkills. The Certified

Practitioner Programme has

benefits for FDM, Consultants

and our clients in the following

ways:

•

it provides Consultants with

recognition for practical

achievement in the workplace;

•

clients benefit from

motivated Consultants who

are demonstrating their

commitment to improve their

professional practice and

progress their careers; and

•

it assists FDM in the retention

of motivated Consultants.

Financial Statements

Governance

Strategic Report

Employee engagement

Employee Networks provide an

inclusive place for discussion and

learning and a sense of belonging.

They were created by our people

for our people, providing an

opportunity for individuals to share

their experiences and support each

other. They also enable valuable

and productive consultation with

the business on process, policy

and learning. During the year each

Employee Network has held various

events and campaigns on Viva

Engage (previously called Yammer),

including for example, Charity Book

Drive, Neurodiversity Week, LGBT

History Month and Indigenous

History Month.

We continue to monitor employee

engagement through Group-wide

surveys and listening sessions

with Jacqueline de Rojas, our Non-

Executive Director responsible for

‘FDM Voices,’ our programme to help

ensure that voices of our employees

are heard at Board Level. Jacqueline

also led numerous focus groups so

she could explore a range of topics

directly with our Consultants and

internal staff.

In 2023 we carried out a survey to

give all our employees an opportunity

to express their views on a range

of subjects to enable us to identify

areas for improvement. The survey

covered themes such as: employee

sentiment and advocacy; career and

personal development; organisational

and personal commitment; workload;

line manager support; perception of

alignment of values; and the subjects

of diversity, equity and inclusion. The

survey has provided some insights

into our strengths as well as those

that are important to our staff for us

to target for improvement.

Our social collaboration platform Viva

Engage (previously called Yammer)

enables our employees to keep up to

date with news and upcoming events

whilst communicating with fellow

FDM employees across the globe.

This internal communication tool

allows us to stay connected with our

Consultants when they are on a client

assignment, helping to foster a sense

of belonging with FDM.

Wellbeing

Our global Employee Assistance

Programme provides all employees

with access to a 24/7 confidential

helpline for support, guidance

and resources, and structured

counselling. We have also hosted

drop-in sessions, informational talks

and listening circles to help remove

the stigma around mental ill health.

Employees receive support from

trained Mental Health First Aiders

throughout FDM.

Recognition

We believe it is important to

recognise and reward the

commitment and hard work of our

colleagues. The FDM Consultant

of the Month and FDM Stars

initiatives reward those that excel,

as nominated by our clients or other

employees within the business.

We recognise and reward the

commitment and contribution of

employees who have completed five,

ten, twenty, and even thirty years

with FDM.

Our Buy As You Earn share plan is

open to all employees, providing

a longer-term incentive to enable

participants to share in the success

of our business and reap the rewards

of their contribution to our shared

goals. At year end our Buy As You

Earn share plan had more than 150

participants, who had demonstrated

their commitment to the business

by setting aside a portion of their

monthly salary to purchase shares

in FDM. The shares purchased are

matched with additional shares

for those who hold their shares

and remain in employment for the

required period.

People and communities

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Employee Networks

Employee Networks are the voice of our

employees and play a vital role in fostering

an empathetic and inclusive culture.

This network provides a

safe and respectful space

for the increasing number

of carers and caregivers

within FDM. Members raise

awareness, understanding

and offer practical help and

support.

A platform that encourages

employees of all beliefs

and religions to support

each other and share

experiences.

Leading, educating and

supporting diversity,

this network provides a

platform to connect and

build a community for

Black, Asian and Ethnic

Minorities within FDM.

Through education and

representation, the

network supports all

LGBTQIA+ employees

by creating a space that

encourages authenticity

within the workplace.

Aiming to unify, empower

and celebrate gender

diversity at FDM, the

network provides

employees with a

voice through sharing

experiences, challenges

and ideas.

Supporting employees with

visible and non-visible disabilities,

including long-term illness and

mental health conditions. Unique

aims to create a place where

people of different abilities feel

welcome and included.

L.E.A.D.

Unique

Elevate

Care

Pride

Faith

Financial Statements

Governance

Strategic Report

Partnerships

We work with numerous charitable

partners and community groups

through a combination of employee

volunteering, donations, and

employee time. We tailor our

community activities to reflect

the needs and interests of the

communities in which we operate,

prioritising programmes that use

our training expertise to illustrate

the possibilities surrounding a

career in technology – particularly

for underrepresented groups – and

require that each of our charitable

ventures aligns with our values.

University Partners

Our close relationships with our

University Partners continue. Our

Recruitment team attended 657

university events (2022: 780). The

overall number of recruitment events

decreased as we continued to

change the mix of events to attend

more face-to-face and fewer virtual

events in 2023. Face-to-face events

are more personal to potential

candidates and more impactful.

FDM Attraction Events

Events continue to operate on

a hybrid basis, which promotes

opportunities for wider student

and university outreach. In 2023,

the number of in-office and on-

campus fairs and events increased.

Using both formats allows us to

connect with students who are more

comfortable engaging in person

or virtually, and with or without

their peers.

Events include technical content for

those with a STEM background as

well as those from other courses

who would like to upskill; information

about the diverse, equitable and

inclusive culture at FDM; and

employability skills to help students

and graduates. Events are open to

students from all universities and

degree subjects.

We have provided digital bootcamps

focusing on Excel, introductory

sessions on Python, SQL, HTML and

CSS, and sessions that explain to

students from all degrees which of the

skills they will gain at university will be

useful in a career in IT. These events

enable us to engage with a new

audience of non-technical students,

helping them to gain practical skills

which they can use elsewhere,

including when applying for graduate

roles with FDM. We believe our digital

upskilling bootcamps provide unique

interest for students in a sector where

the market for job opportunities is

buoyant.

Hackathon: u-Hack university challenge

In Summer 2023, we held the u-Hack

university challenge which offered

students an opportunity to work as

part of a team that operated as a

mini-consultancy firm. This involved

speaking directly to key stakeholders

to create a wireframe for use in

mapping out the main features and

navigation of a new web platform.

This gave attendees an insight into

consultancy through work on a real-

world project. They also learnt the

fundamentals of the Agile project

management philosophy and the

Scrum methodology and gained

insight and experience of working in

an Agile environment. We focused

promotion on final year students

and had participants from 19 UK

universities.

University Partnership’s

‘Curriculum Projects’

In support of our UK University

Partners, in 2023 we participated

in nine university curriculum and

consultancy-based projects with

over 500 student participants. We

designed, delivered, and supported

the students with project briefs that

contributed towards their university

grade and/ or experience. These

projects gave students from all

degree backgrounds the opportunity

to gain commercial insight,

experience working on live business

challenges and the opportunity to

build relationships with industry

professionals, whilst developing

their soft skills.

Charity involvement

Donation of IT hardware

During the year we donated

computers, refurbished by our IT

team, to schools in the UK and

New York City.

Walking With The Wounded

Spearheaded by the Ex-Forces team,

our employees are involved with

Walking With The Wounded, a UK

charity that delivers employment,

mental health care coordination

and volunteering programmes in

collaboration with the NHS to support

those who served in the Forces,

and their families, whether mentally,

socially or physically wounded, in

reintegrating back into society.

In 2023, FDM was a lead partner

of Walking With The Wounded’s

Cumbrian Challenge, with numerous

FDM UK teams participating in the

hike and raising funds.

Changing Faces

We are proud to partner with

Changing Faces for a second year

running. The UK-based charity

provides support services for

people with visible differences or

disfigurements. The partnership

epitomises our values as an

organisation, accepting people for

who they are, rather than what

they look like. In 2023, FDM staff

participated in various charity

fundraisers in support of Changing

Faces. We will continue to foster a

culture committed to an inclusive,

non-discriminatory workplace.

People and communities

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Our clients and

shareholders

Our business development teams

develop relationships with our clients

to gain insight and understanding of

their evolving requirements. We work

closely with our clients through the

process of interviewing and selecting

our Consultants for deployment

on client projects, which enhances

our understanding of the skills and

qualities they are looking for. Clients

have attended virtual demonstrations

and feedback sessions for our agile

Pod training tool. This interaction

helps to ensure that the Consultants

we put forward are well matched to

the client’s requirements and project

criteria, which ultimately makes for a

successful deployment.

This year we hosted virtual and

in-person meetings with current

and potential investors, involving

our Executive Directors and senior

managers, to enable shareholders

to further their understanding of our

work, ethos and activities in other

areas. Our in-house investor relations

function works with our external

brokers and financial PR advisors

to provide an overall programme of

communication with shareholders

and prospective investors, and to

increase the information available

to them through our website and

other channels.

People policies

Human resource policies and

respect for human rights

We are committed to making FDM

a great place for all our employees.

Our policies on maternity, paternity,

adoption, personal and special leave,

and on sickness absence go beyond

the minimum required by law. We are

committed to fulfilling our obligations

in accordance with the relevant

legislation for applicants and existing

employees who have disabilities. We

give equal consideration to applicants

with disabilities, and our staff who

interview applicants receive training in

disability awareness and unconscious

bias in the recruitment process.

We have in place policies that

prohibit discrimination and

harassment in the workplace. We

believe that our policies provide an

effective framework to ensure that

all our stakeholders and any other

individuals with whom we interact in

the course of our work are treated

with respect and dignity, and in a

way which accords with the Universal

Declaration of Human Rights.

Anti-slavery and human

trafficking policy

We are committed to ensuring that

there is no modern slavery or human

trafficking in our supply chains or in

any part of the business. We have

considered the degree of risk that

modern slavery could present within

the organisation or in supply chains.

The nature of our business and

the direct relationship we have

with applicants to the training

programmes means that the risk

of modern slavery in our own

organisation is low. We have reviewed

supply chains and taken steps to

address the potential risks of modern

slavery and human trafficking.

The Group has in place an Anti-

Slavery and Human Trafficking policy

to assist in mitigating this risk, and

maintains a process of due diligence

on key suppliers to ensure that

they meet our expectations in this

area, enabling us to comply with

our obligations under the Modern

Slavery Act 2015. There is a pre-

contract due diligence process,

used with new suppliers to ensure

that they confirm their commitment

to comply with our policies and

values, or that they have in place

appropriate equivalent policies of

their own. We have also developed a

set of standard contractual clauses

for inclusion in supplier contracts to

reinforce this approach. The Group

aims to promote a high level of

understanding of the risks of modern

slavery and familiarises all staff with

these policies on induction. Additional

training may be provided to key

staff members where appropriate.

The effectiveness of these steps is

monitored annually by the Board.

Financial Statements

Governance

Strategic Report

Implementation of the Task Force on Climate-related

Financial Disclosures (“TCFD”) framework

This report covers FDM’s governance of climate change,

its integration with overall risk management, strategy

for managing climate-related issues and opportunities,

and the metrics used to measure progress towards our

targets. This year FDM has continued to develop its

systems for climate change management. We conclude

that the business strategy continues to be resilient

against the risk level from climate change, which

remains ‘minor’.

In recognition of Listing Rule 9.8.6R(8), the following

pages set out our climate-related financial disclosures

consistent with the Recommendations and

Recommended Disclosures as outlined in “Implementing

the Recommendations of the Task Force on Climate-

related Financial Disclosures”, published in October

2021 by the Task Force on Climate-related Financial

Disclosures (“TCFD”). These disclosures also meet the

new mandatory climate-related financial disclosures

under the Companies (Strategic Report)

(Climate-related

Financial Disclosure) Regulations 2022.

Recommendation

Recommended disclosures

Reference

Governance

Disclose the organisation’s

governance around climate-related

risks and opportunities

a) Describe the Board’s oversight of climate-related risks

and opportunities

Page 53

b) Describe management’s role in assessing and managing

climate-related risks and opportunities

Page 53

Strategy

Disclose the actual and potential

impacts of climate-related risks and

opportunities on the organisation’s

businesses, strategy, and financial

planning where such information

is material

a) Describe the climate-related risks and opportunities the

organisation has identified over the short, medium, and

long term

Page 54

b) Describe the impact of climate-related risks and opportunities

on the organisation’s businesses, strategy, and financial planning

Pages 54-55

c) Describe the resilience of the organisation’s strategy, taking

into consideration different climate-related scenarios, including

a 2°C or lower scenario

Page 55

Risk management

Disclose how the organisation

identifies, assesses, and manages

climate-related risks

a) Describe the organisation’s processes for identifying and

assessing climate-related risks

Page 54

b) Describe the organisation’s processes for managing

climate-related risks

Pages 55-56

c) Describe how processes for identifying, assessing, and

managing climate-related risks are integrated into the

organisation’s overall risk management

Page 29

Metrics and targets

Disclose the metrics and targets

used to assess and manage

relevant climate-related risks

and opportunities where such

information is material

a) Disclose the metrics used by the organisation to assess

climate-related risks and opportunities in line with its strategy

and risk management process

Page 58

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3

greenhouse gas emissions, and the related risks

Page 59

c) Describe the targets used by the organisation to manage

climate-related risks and opportunities and performance

against targets

Page 61

Climate change

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Operational and strategic

channel

Risk and reporting channel

The Board

Overall responsibility for managing climate-change

Climate-change Action Group (‘CAG’)

Cross-functional team

Mike McLaren (CFO)

Board-level sponsor for

climate change

Audit Committee

Bi-annual risk review

Risk Management Team

Bi-annual risk review

Governance

Board level

The Board has overall responsibility

for climate change management,

including oversight of climate-related

risks and opportunities, as with

all matters of Group strategy. The

Board is supported and informed

on climate-related issues via two

channels to ensure that any potential

impacts of climate change are

incorporated into the reviews of

Group strategy, business plans and

risk management. An operational

and strategic channel reports into

the Board via the Board sponsor for

climate change, Mike McLaren (CFO).

This occurs through the Climate-

change Action Group which reports

to the CFO every three months. The

risk channel monitors and informs the

Board of climate-related risks through

the Audit Committee, supported by

the Risk Management Team.

Progress against climate targets

is monitored and overseen by

the Board, based on information

(progress, KPIs and metrics) received

from the Audit Committee. The

Audit Committee meets twice a year

to review all risks, with the Audit

Committee referring key matters of

risk to the Board, including climate-

related issues. The level of climate-

related expertise is considered to be

sufficient given our assessment of

climate-rated risk and opportunities

and the likely impact on the Group’s

strategy. External advice is obtained

where appropriate.

Management level

Mike McLaren (CFO) has executive-

level responsibility for climate

change and leads the management-

level Climate-change Action Group

(‘CAG’), a cross-functional team that

assesses and manages climate-

related risks and opportunities and

resulting strategic impact, reporting

into the Board.

FDM’s risk management framework

also channels climate-related

risk information from the Risk

Management Team to the

Audit Committee. Progress and

measurement against FDM’s

Carbon Reduction Plan have

been incentivised since 2022 at

the executive and certain senior

management levels through a metric

relating to reduction of greenhouse

gas emissions.

For 2023, the metric applied to the

annual bonus under the Directors’

Remuneration Policy is set out on

page 110.

Financial Statements

Governance

Strategic Report

Climate change

continued

Risk management

FDM’s climate-related risk

management is integrated into the

Group’s overall risk management

framework. All climate-related risks

are assessed in the same manner

as other Group risks, so that their

relative significance can be assessed.

The Group’s Risk Register categorises

all existing and emerging risks,

including climate-related risks, with

the register covering the probability

of the risk occurring and the degree

of the potential impact.

Potential risks are assessed whether

they occur within the Group’s

own operations, or upstream and

downstream of the Group and the

timeframe in which they first occur.

The following timeframes have

been chosen:

•

Short-term (0

-2 years) aligns to the

business planning cycle;

•

Medium-term (2025

-2030) aligns

to near-term targets;

•

Long-term (beyond 2030) aligns

to our net zero ambitions and

encompasses long-term industry

and policy trends. This timeframe

also allows for climate-related risks

and opportunities to manifest.

Climate-related risks and

opportunities relevant to FDM were

identified with the help of an external

consultancy, CEN-ESG. All risks are

assessed on a 5x5 matri

x assessing

both impact and likelihood, which

allows for the prioritisation of risks.

Risk impact (materiality) is defined by the following table, in respect of the year in which the event takes place:

Insignificant

Minor

Moderate

Major

Serious

Impact on profit before

tax or lost opportunity

of <£0.5m

Impact on profit before

tax or lost opportunity

of £0.5m – £2m

Impact on profit before

tax or lost opportunity

of £2m – £7.5m

Impact on profit before

tax or lost opportunity

of £7.5m – £30m

Impact on profit before

tax or lost opportunity

of >£30m

Risk likelihood is defined under five

categories: Very unlikely, Unlikely,

Possible, Likely, Almost certain.

Any mitigation factors for risks,

including climate-related risks,

are also included in the Group

Risk Register and this combined

exposure informs the decision

for managing risks (e.g. further

mitigation, accept, or control).

Internally, the cost of mitigation is

described, where possible, along

with an explanation of how this is

derived. Risks are subject to ongoing

refinement and quantification over

time, which enables us to build a

complete picture and assists with

incorporating the management of any

climate-related risks into the ongoing

strategy, budgets and financial

statements. The Risk Management

Team meets regularly and reports

to the Audit Committee twice a year

(see page 28).

Strategy

Climate change has had observable

effects on the environment and we

realise climate change may present

both risks and opportunities to

FDM. As a service business, FDM

Group’s overall net climate risk,

accounting for mitigation, has been

assessed as minor. The combined

gross risk, before mitigation and

controls, has been assessed as

moderate and, in isolation, the

impact of most climate-related risks

before mitigation is minor. Our main

physical risk exposure is from riverine

flood risk, over a timeframe out to

2050, however given that all of our

locations are in large cities with

modern flood defences, we consider

this risk to be insignificant. Further

mitigative actions to this risk include:

•

All offices are leased, and most

leases are short or medium

term. In many locations we use

flexible workspaces with even

shorter lease commitments, and

if appropriate, we will expand this

approach, decreasing our asset risk

exposure further.

•

Insurance recovery in the event of

natural disasters.

•

Consultants work from client

sites or at home and not from our

centres.

•

Established work-from-home

procedures and an agile and

flexible working model mean limited

loss of business productivity in the

event of travel-related or site-

related disruption.

•

High-rise office locations in central

business districts.

Other physical climate-related risks

(higher mean temperatures, rising

sea levels, wildfires, severe weather)

are not seen as having any impact

over the forecast period.

New sites in 2023 have been

assessed for physical risks and

the conclusion above remains

unchanged.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

We have used scenario analysis to

improve our understanding of the

sensitivity of certain risks to different

climate outcomes, which helps

assess the resilience of our business

to climate change. We have used the

same three climate-related scenarios

as last year, looking out over a

timeframe to 2050:

•

Net Zero Emissions by 2050

(NZE)*: a normative scenario which

sets out a narrow but achievable

pathway for the global energy

sector to achieve net zero CO

emissions by 2050.

•

It does not rely on emissions

reductions from outside the energy

sector to achieve its goals. This

meets the TCFD requirement

of using a “below 2°C” scenario

and is included as it informs the

decarbonisation pathways used by

the Science Based Targets initiative

(“SBTi”).

•

Stated Policies (STEPS)*: the roll

forward of already announced

policy measures. This scenario

outlines a combination of physical

and transition risk impacts.

This scenario is included as it

represents a mid-way pathway

with a trajectory implied by today’s

policy settings.

RCP 8.5**: where global

temperatures rise between 4.1-

4.8°C by 2100. This scenario is

included for its extreme physical

climate risks as the global response

to mitigating climate change is

limited.

IEA (2022), World Energy Outlook 2022, IEA,

Paris.

** IPCC, 2014: Climate Change 2014: Synthesis

Report. Contribution of Working Groups I, II

and III to the Fifth Assessment Report of the

Intergovernmental Panel on Climate Change.

Risks

Looking out over a timeframe to 2050, the three key climate-related risks identified are medium term risks:

Risk

1. Risk to FDM of not meeting

its Scope 1 and 2 targets

2. Cost to FDM of carbon

pricing in the value chain

3. Risk of failure to meet the

expectations of clients and

other stakeholders

Type

Transition

(Market and reputation)

Transition

(Current and emerging

regulation)

Transition

(Market and reputation)

Area

Own operations/ upstream

Primary potential

financial impact

Lower profit margins through

increased costs and lower

revenue

Higher costs associated with

energy and other inputs

Loss of revenue due to

decreased client demand

Time horizon

Medium term

Gross likelihood

Unlikely

Likely

Possible

Gross impact

Moderate

Minor

Major

Net likelihood

(with mitigation)

Unlikely

Possible

Unlikely

Net impact

(with mitigation)

Minor

Insignificant

Minor

Location or service

most impacted

New York, Singapore,

Hong Kong

Purchased goods and

services

Global

Metrics used to

monitor risk

Scope 1 and 2 greenhouse

gas emissions

Scope 3 greenhouse gas

emissions

Scores from external

sustainability ratings

(including CDP and EcoVadis)

Financial Statements

Governance

Strategic Report

1) Risk to FDM of not meeting its Scope 1

and 2 targets

FDM Group has clear targets associated with climate

change and there are aspects of the delivery against

this plan that are reliant on third parties. At present the

largest source of operational emissions for the Group is

within Scope 2 (electricity purchased), where the ability

to decarbonise our electricity supply may be hindered by

the pace of renewable energy adoption by the Group’s

landlords. Some of our centres (i.e. New York, Singapore

and Hong Kong) are currently in locations with limited

options for renewable energy. Failure to meet the defined

net zero targets could cause reputational damage,

dissuading potential investors and could impact client

retention resulting in lost revenue. Due to the introduction

of carbon pricing, failure to reduce Scope 1 & 2 emissions

could also result in greater costs. These potential

outcomes have been reflected in the choice of assigning

a ‘moderate’ impact level to the risk before mitigation.

The following table estimates the residual emissions for

FDM Group with no action taken, factoring in forecast

global electricity grid decarbonisation. Results are shown

under both STEPS and NZE scenarios projected out

to 2050. The resulting emissions balance is that which

requires direct action from FDM or indirect action from

third parties.

FDM market-based Scope 2 residual emissions tCO

2023

2030

2040

2050

STEPS

No action (grid decarbonisation)

109

NZE

No action (grid decarbonisation)

109

The business negotiates with its landlords on an ongoing

basis to move towards energy supply agreements that

are fully renewable. Incentives have been put in place for

management to align with the Carbon Reduction Plan and

switching to renewable energy is a key part to achieving

the associated targets.

2) Cost to FDM of carbon pricing in the

value chain

The scope of carbon pricing (applied directly or indirectly)

is expected to expand over the medium term, and the

price of carbon is expected to rise in the drive to make

businesses more accountable for their energy use and

carbon emissions. Our analysis has shown the impact to

be mostly ‘insignificant’. As part of our Carbon Reduction

Plan, there are plans for an IT hardware recycling scheme,

increasing use of efficient data centres and continued

engagement with top suppliers to reduce purchased

goods and services, in order to reduce Scope 3 emissions

and mitigate this risk.

3) Risk of failure to meet the expectations of

clients and other stakeholders

FDM Group has an obligation to communicate progress

against sustainability goals to its stakeholders such as

investors, as well as to meet client expectations. For

example, some of FDM’s largest clients require suppliers

to maintain SBTi approved targets, have a net zero

emissions plan in place, and submit climate change data

to CDP and other similar ratings platforms. Failure to

communicate progress effectively or meet stakeholder

expectations may lead to reputational issues or lower

revenue due to lost custom. We have categorised the

net likelihood of this risk as ‘unlikely’, given the Group

has net zero emissions targets approved by SBTi

and meets all necessary expectations from external

stakeholders in terms of reporting. Although stakeholder

expectations continue to grow, the business has taken a

forward-looking approach to identify and action these in

advance. We rather view our market position with respect

to climate change performance and reporting as an

opportunity, as outlined below.

Climate change

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Opportunities

Looking out over a timeframe to 2050, four key climate-related opportunities have been identified across the medium

and long term:

Opportunity

1. Opportunities in

climate-related

consulting

2. Energy savings

3. Renewable energy

4. Increased competitive

advantage in the

market

Type

Products and services

Resource efficiency

Energy source

Resource efficiency

Primary potential

financial impact

Increased sales

Decreased costs

Time horizon

Medium to long term

Medium term

Likelihood

Possible to likely

Almost certain

Possible

Impact

Minor to moderate

Minor

Location or service

most impacted

Global

New York, Singapore,

Hong Kong

New York, Singapore,

Hong Kong

All services

1) Opportunities in climate-related consulting

Clients, especially within the Energy and Utilities sectors,

will increasingly require Consultants to assist with

accelerating their green transition. Some clients are

creating training content that enables staff to be pre-

disposed to help in their green transition and raise ESG

awareness. In addition, large energy/ utility companies

are starting to make acquisitions of smaller renewable

businesses, requiring IT Consultants to facilitate the

integration with the wider group’s architecture. Under the

NZE scenario, companies will need to be more proactive

with transitioning to net zero and these opportunities

will continue to increase, increasing the work for FDM to

capture and increase revenue. A secondary impact as

a result may be an improved reputation with regards to

this type of work, leading to further sales opportunities

and enable FDM to expand its client base in the sector.

Although minimal strategy shift is required for FDM,

some work needs to be done to target the new markets

and areas of work. This is an area that continues to be

investigated. Although the likely impact is minor in the

medium term, it is likely to increase to moderate in the

long-term.

2) Energy savings

Decreasing energy consumption by reducing energy

use and increasing efficiency may decrease costs and

mitigate against the cost of future carbon pricing. This

will have the emergent benefit of further mitigating the

impact of Risk 1 outlined above, as the magnitude of

this opportunity is the inverse of the cost of residual

emissions from Scopes 1 and 2. As offices are leased,

the strategy to realise this opportunity will involve

engagement with landlords to introduce energy saving

measures. Best practice in energy management with

current offices will also factor in reducing consumption.

Further, the business will consider using more energy

efficient office locations when the opportunity arises, for

example at the time of lease renewals.

3) Renewable energy

Transitioning to renewable energy sources (self-

generation or power purchase agreements) can help

in reducing market-based emissions to zero. Based on

this, the effect of carbon pricing on Scope 2 emissions

would become nullified. As per Risk 1, the locations most

impacted have been identified based on the currently

limited renewable energy options. Negotiation of

landlords’ power purchase agreements for the supply of

renewable energy would be required. Given the short-

term lease agreements (one to ten-year lease terms)

and energy requirements of a services-based business,

investment in self-generation would be unfeasible.

4) Increased competitive advantage in the market

We believe the Group is well-placed in terms of its

sustainability reporting. FDM is meeting the expectations

from stakeholder expectations and transparently

reports on non-financial information including, near term

targets that are SBTi approved and a long-term net zero

commitment. This presents an opportunity for FDM to be

competitive in the market. Compared to the market, this

positions the business well and if more potential clients

become selective in their sustainability requirements,

it could lead to more opportunities to capture market

share against competitors. This will be achieved by

continuing to support the Group’s sustainability strategy,

maintain engagement with clients to understand future

expectations, and ensuring that targets are met.

Financial Statements

Governance

Strategic Report

Metrics and targets

FDM is committed to net zero emissions across Scope

1,2 and 3 greenhouse gas emissions by 2050. As an

important step towards this goal, we have set near-term

reduction targets which have been verified by SBTi.

These are:

•

Reduce absolute Scope 1 and 2 emissions by 50% by

2030 from a 2020 base year; and

•

Reduce Scope 3 emissions by 62% per employee by

2030 from a 2020 base year.

We report our emissions and energy data on pages 59-

60, and our progress against these targets on page 61.

The calculation of FDM’s carbon footprint is in line with

the principles and requirements of the Greenhouse Gas

Protocol. We also monitor the amount and percentage of

electricity consumed from renewable sources; this metric

is included on page 59.

Whilst acknowledging the recommendation to integrate

an internal carbon price, Risk 2 highlights that it is

currently not financially material and therefore deemed

unnecessary.

Operating in a sustainable manner

At FDM, we recognise the significance of climate change,

and realise that our activities and operations have an

associated environmental impact. As such, we take into

consideration and aim to reduce the impact our business

activities have on the environment and on climate change.

The risks from climate change on the Group are

described on pages 55-56. This includes assessing the

risks of the direct physical effects of climate change,

the transition to a low carbon economy and how climate

change might impact the Group’s ability to continue its

business activities.

We report our carbon and energy data following

Streamlined Energy and Carbon Reporting (“SECR”)

requirements.

Carbon and energy data 2023

Directors’ statement of SECR compliance

FDM Group continues to meet the greenhouse gas

emissions reporting requirements of The Companies

(Directors’ Report) and Limited Liability Partnerships

(Energy and Carbon Report) Regulations 2018. We have

prepared this report in accordance with the requirements

for quoted companies under these regulations.

We report the Group’s carbon footprint from our global

operations to include Scope 1, Scope 2 and Scope 3

emissions from the following categories:

Scope 3 emissions reported by category

Purchased goods and services

Capital goods

Fuel- and energy-related activities

Waste generated in operations

Business travel

Employee commuting

There are 15 categories of Scope 3 emissions, however,

the following Scope 3 categories are not applicable

to FDM: Category 4 (Upstream transportation and

distribution. Emissions from transport costs related to

capital goods are captured under Scope 3 Category 2

Capital goods); Category 8 (Upstream leased assets);

Category 9 (Downstream transportation and distribution);

Category 10 (Processing of sold products); Category 11

(Use of sold products); Category 12 (End-of-life treatment

of sold products); Category 13 (Downstream leased

assets); Category 14 (Franchises); and Category 15

(Investments).

We also include metrics related to our Group Carbon

Reduction Plan, which is outlined on page 61.

Climate change

continued

Environmental performance

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Emissions

Emissions source

2022

tCO

2023

tCO

Scope 1

Natural gas

Company cars

Total Scope 1

103

Scope 2

Electricity (Market based)

112

109

Total Scope 2

112

109

Scope 3

Purchased goods and services

1,705

1,833

Capital goods

172

Fuel- and energy-related activities (not included in Scope 1

or Scope 2)

122

135

Waste generated in operations

Flights

521

540

Other business travel

Employee commuting

1,184

1,464

Total Scope 3

3,692

4,229

Total emissions (Scope 1, 2 and 3) (Market based

)

3,866

4,441

Total emissions (Scope 1, 2 and 3) (Location based

)

3,986

4,578

Average number of employees

6,685

6,482

Emissions (Scope 3 only) per employee

(tCO

0.55

0.65

Emissions (Scope 1, 2 and 3) per employee

(tCO

0.58

0.69

£ million of revenue

330.0

334.0

Emissions (Scope 1, 2 and 3) per £ million of revenue

(tCO

11.7

13.3

Greenhouse gas emissions from employee commuting for 2022 have been restated based on data extracted from our first employee commuting survey

conducted in 2023.

Scope 2 location-based electricity emissions are: 2022

: 232 tCO

e; 2023: 246 tCO

Energy usage

2022

kWh

2023

kWh

Energy usage

1,457,533

1,767,533

– from renewable sources

622,634

654,052

– from non-renewable sources

834,899

1,113,481

2022

2023

% of electricity consumed from renewable sources

58%

64%

2022

2023

Emissions and energy usage by geography

Global

(excluding UK)

Global

(excluding UK)

Scope 1 and 2 emissions (tCO

(Market-based)

115

114

Total energy usage

(kWh)

– from renewable sources

622,634

642,835

11,217

– from non-renewable sources

346,610

488,289

624,625

488,856

969,244

488,289

1,267,460

500,073

Energy reporting includes kWh associated with Scope 1 and Scope 2 emissions and fuel used in personal or hire cars on business use.

Financial Statements

Governance

Strategic Report

Environmental performance

continued

Annual greenhouse gas

emissions

Our total emissions per employee

remain below 1 tCO

The Group’s Scope 1 and Scope 2

emissions are minimal, and our total

worldwide Scope 3 emissions remain

low. In 2023, we conducted our first

employee commuting survey which

provided us with greater insight into

our employees’ travel patterns and

enabled us to obtain more reliable

data on the frequency and means of

employees’ travel. We used this data

to recalculate and restate our 2022

employee commuting emissions. The

restated 2022 employee commuting

emissions are 1,184 tCO

e, these are

significantly higher than 525 tCO

emissions reported in last year’s

annual report.

In 2023, the largest contributor

to our increased emissions from

purchased goods and services was

the conversion factors applied to

the spend from the Environmentally-

Extended Input-Output (“EEIO”)

model that we use to calculate our

emissions. These factors are applied

to our overhead and capex spend.

The extent of the increase was

unexpected, however over time we

anticipate that the EEIO conversion

factors will reduce as businesses and

organisations reduce their emissions.

On a constant emission-factor basis

the emissions from purchased goods

and services fell by 10%. Supplier

specific data has been used to

calculate emissions where the data

was publicly available and reliable.

In 2023, emissions from specific

suppliers were 16% of total emissions

from purchased goods and services

(2022: 11%).

In the year, although our combined

total Scope 1, Scope 2 and Scope

3 emissions increased by 15%, this

remains low at 4,441 tCO

e. Our total

emissions per employee increased

by 19% to 0.69 tCO

e as the average

number of employees fell by 3%

between 2022 and 2023.

At year-end the Group had three

company cars (2022: two). The new

car is based in our new centre in

Tampa, Florida and is a self-charging

electric hybrid. The type of vehicle

was chosen for its low emissions.

All three are pool cars available for

business use only.

Environmental initiatives

In 2023, we engaged with our

employees by conducting an

employee commuting survey. The

results are included in our emission

results.

We continue to engage with our top

suppliers with the aim to reduce their

emissions, which will reduce our

emissions from purchased goods and

services.

We remain in regular dialogue

with our landlords regarding the

introduction of further energy-saving

initiatives and switching to electricity

tariffs sourced from 100% renewables

sources.

We continue to virtualise our IT

estate: Our energy requirement is

lower because our cloud-based

systems and data are hosted

at efficient datacentres, run by

Microsoft Azure, that flex capacity

in line with our usage.

We have policies and facilities in

place to promote:

•

recycling of paper, plastics and

cans at our centres; and

•

the use of video conferencing

technology and other collaborative

tools to reduce the need for travel.

2023 emissions’ methodology

As an IT-focused global professional

services provider, we recognise

the importance of quality data

management. We have processes

and controls in place to capture

actual consumption where possible.

In line with common practice,

where the data is incomplete we

model the consumption using

estimates. We work with CEN-ESG,

a leading provider of sustainability

advisory services, to ensure that

we continue to follow best practice

in the assessment and reporting

of our environmental performance.

Our engagement with CEN-ESG

enables us to provide transparency

to stakeholders and to further

identify opportunities to improve our

environmental performance.

The Group has defined its

organisational boundary using an

operational control approach with no

material omissions from within the

organisational boundary of the Group.

The methodology used to calculate

the greenhouse gas emissions is in

accordance with the principles and

requirements of the following:

•

World Resources Institute (WRI)

GHG Protocol: A Corporate

Accounting and Reporting Standard

(revised version); and

•

DEFRA’s Environmental Reporting

Guidelines: Including Streamlined

Energy and Carbon Reporting

requirements (March 2019).

Emissions have been calculated

using the appropriate conversion

factors such as the 2023 issue of the

UK government’s Greenhouse Gas

Conversion Factors for Company

Reporting and spend-based factors

from Environmentally-Extended

Input-Output (“EEIO”) models.

Reported annual emissions

information and annual energy usage

is presented for the same period as

the accounting period, being the

twelve months ending 31 December.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Group Carbon Reduction Plan and progress update

The Board approved the Group Carbon Reduction Plan in December 2021. FDM is fully committed to playing its part

in addressing the climate crisis and to ambitious near-term science-based targets in line with a 1.5°C limit to global

warming, and to delivering net zero emissions across all Scopes by 2050.

In June 2022, the SBTi validated that FDM’s near-term targets conform with the SBTi Criteria and Recommendations

(version 4.2). FDM’s progress against these targets is detailed below:

SBTi-validated target

Progress

To reduce absolute Scope 1 and 2 GHG

emissions by 50% by 2030 from a 2020

base year

2023 Scope 1 and 2 GHG emissions are 47% lower than 2020. FDM is focused

on working with its landlords to reduce further its Scope 2 emissions from

electricity by switching to tariffs that source 100% renewable electricity.

To reduce Scope 3 GHG emissions by

62% per employee by 2030 from a 2020

base year

Although the number of employees has increased since 2020, it has not

increased in line with our forecast at the time we submitted our targets to

SBTi. The 2020 base year was not representative of our Scope 3 emissions

for business travel and employee commuting because of the impacts from the

national lockdowns and restrictions on our travel patterns. These factors make

the achievement of this target challenging.

However, we continue to monitor our performance and the related underlying

factors, in particular for our two largest sources of Scope 3 emissions; from

purchased goods and services; and from employee commuting. Engaging with

our suppliers will enable us to obtain more accurate information about their

emissions.

Outlined below are our ongoing actions planned to reduce our greenhouse gas emissions. We will continue to:

Engagement with our supply chain

Engaging with our top suppliers to report their emissions reduction goals and disclose annually reliable information on

emissions performance and targets.

Improve energy efficiency

Implement energy efficiency measures across our operations, including by our data centre providers, and IT

equipment. Conduct energy efficiency audits to identify opportunities for energy and cost savings.

Procure renewable energy

Work with our landlords to move to 100% renewable sourced electricity supplies.

Financial Statements

Governance

Strategic Report

Statement by the Directors in performance

of their statutory duties under s.172(1)

Companies Act 2006

The Directors of the Company have an obligation to act in accordance with a general set of duties which are set out

in section 172 of the Companies Act 2006 (“Companies Act”). This states that the Directors must act in the way they

consider, in good faith, would be most likely to promote the success of the Company for the benefit of its shareholders

as a whole and, in doing so, have regard (amongst other matters) to:

•

the likely consequences of any decisions in the long term;

•

the interests of the Company’s employees;

•

the need to foster the Company’s business relationships with suppliers, clients and others;

•

the impact of the Company’s operations on the community and environment;

•

the desirability of the Company maintaining a reputation for high standards of business conduct; and

•

the need to act fairly as between shareholders of the Company.

Directors are briefed on these duties as part of their induction, and have access to professional advice on them, from

the Company Secretary or, if they consider it necessary, from an external independent advisor. The Directors fulfil

this duty partly by delegating responsibility for day-to-day decision-making to the Executive Team and other senior

managers, under a robust governance structure which is described in further detail in our Corporate Governance

Report, and by consulting on a regular basis with all its regular stakeholders as also outlined throughout this report and

taking into account their feedback.

The Directors consider, both individually and together, that they have acted in accordance with their duties under

s.172 of the Companies Act in the decisions taken during the year ended 31 December 2023 (see page 71). There are

examples throughout this Annual Report of how the Board takes into account the matters referred to above.

The table below sets out the matters which reflect decisions the Board has made in response to engagement with, or

taking into consideration importance of particular matters to, different stakeholder groups. Further, the key focuses

of the Board (as set out from page 74) also reflect the steps taken by the Directors to meet their obligations in

accordance with s.172 of the Companies Act.

Relevant stakeholders

Decisions made and outcome

Employees, Clients, Shareholders

The Group has engaged in an extensive rebranding project which has involved

wide consultation with all stakeholder groups to understand their views of

FDM’s values, purpose, and position in the market. Consultation has included

Consultants and internal staff, clients and analysts (who have passed on

their understanding of shareholder thinking). Further information about our

employee engagement can be found in our Sustainability Report from page 48.

Employees, Clients

Introduction of Consultant Career framework, to provide clarity and direction

to align consultants to an ongoing career progression. This improves

engagement and retention rates of Consultants, benefitting both Consultants

and clients.

Shareholders

The Remuneration Committee has worked on the new Directors’ Remuneration

Policy and a new Long Term Incentive Plan for approval by shareholders at the

AGM in May 2024. The process of preparing this policy involved consulting

with FDM’s largest shareholders (see page 106).

Shareholders, Employees,

the Environment

Broadening the use of bonus metrics based on ESG factors beyond the

Directors to include senior managers, in particular targeting managers on the

satisfaction of Consultants and internal employees.

Employees, Clients

Reduction in the training contribution payable by those not completing the

two-year commitment in Europe, Hong Kong and Singapore. This improves the

proportionality of the contribution relative to the Consultant salary.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Non-financial and Sustainability

Information Statement

Compliance Statement

We comply with the requirements of sections 414CA and 414CB of the Companies Act (as amended by The Companies

(Strategic Report)

(Climate-related Financial Disclosure) Regulations 2022

) with the table disclosed below and other

disclosures throughout the Strategic Report. The information provided below is to help our stakeholders understand

our position on key non-financial matters, specifically activity relating to:

a) climate-change related financial disclosures

b) environmental matters (including the impact of the Company’s business on the environment);

c) the Company’s employees;

d) social matters;

e) respect for human rights; and anti-corruption and anti-bribery matters.

Reporting requirements

How we govern our approach

Outcomes and additional information

Page

Climate-change related

disclosures

Task Force on Climate-related Financial

Disclosures (‘TCFD’)

TCFD compliance statement

Strategy

Environmental matters

Group Environmental Policy

Annual greenhouse gas emissions and

energy usage

Group Carbon Reduction Plan

54-55

Employees

Employee policies

Diversity, equity and inclusion

Employee development

Employee engagement

45-46

Social matters

Group Social Policy

Engagement with schools

Involvement with charities

Respect for human

rights

Anti-Slavery and Human Trafficking

policy

Anti-slavery and human trafficking

Anti-corruption and

anti-bribery matters

Anti-bribery and Corruption policy

Anti-bribery and corruption

Additional information

Page

Non-financial key performance indicators

Description of the business model

16 to 17

Description and management of principal risks and impact of business activity

27 to 34

The Strategic Report was approved by the Board on 19 March 2024 and signed on its behalf by:

Rod Flavell

Chief Executive Officer

Financial Statements

Governance

Strategic Report

Governance

Board of Directors

Corporate Governance Report

Audit Committee Report

Nomination Committee Report

Remuneration Report

128

Directors’ Report

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Financial Statements

Governance

Strategic Report

Board of Directors

Remuneration Committee

Audit Committee Member

Nomination Committee Member

Chair of Committee

Committee Membership

David Lister

Non-Executive Chair of the Board

Rod Flavell

Chief Executive Officer

Sheila Flavell CBE

Chief Operating Officer

Date of Appointment

Chair of the Board March 2019

Non-Executive Director March 2016

Date of Appointment

Founded FDM in 1990

Date of Appointment

Chief Operating Officer January 2008

Joined FDM 1998

Experience

David has over 40 years of experience in

operations and technology roles across

multiple industries for international

businesses such as Diageo, GlaxoSmithKline,

Boots, Reuters, Royal Bank of Scotland

and National Grid. He also has experience

in the professional services sector where

he was a management consultant at

PricewaterhouseCoopers LLP (“PwC”).

Other former non-executive appointments

include Interxion Holdings B.V., HSBC Bank

plc, CIS General Insurance Limited and the

Department for Work and Pensions.

Experience

Rod is the founder and Chief Executive

Officer of FDM Group and has more than 40

years’ experience in the technology sector.

He has been instrumental in the development

of the Group into an international, award-

winning employer with a prestigious client

base operating in multiple markets.

Rod is a strong advocate of improving

diversity in the technology industry, as

demonstrated by the Group’s Women in

Tech, Returners Programme, Ex-Forces and

veteran career transition initiatives. In 2019,

he was featured in the Management Today

Agents of Change Power List for the second

consecutive year. He was also featured in the

Yahoo HERoes Top Advocate Executives of

2019 for his work promoting gender equality

in the workplace.

Experience

Sheila has over 30 years of experience in

both the public and private IT sectors. She

spearheads FDM’s global Women in Tech

initiative and Returners Programme.

Sheila was awarded a CBE in the 2020 New

Year Honours List for services to gender

equality in IT, and graduate and returners’

employment.

In 2022 Sheila was elected President

of techUK, the trade association which

brings together business, government and

stakeholders to realise the potential of

what digital technology can achieve. She

has been invited to advise government

committees on improving the digital skills

shortage and gender pay gap in the UK. Her

work has been acknowledged by numerous

awards, including inclusion in Computer

Weekly’s ‘Most Influential Women in UK Tech,

Hall of Fame’. At the 2020 European Tech

Women Awards, the Department of Trade

and Industry recognised her outstanding

achievements by conferring Sheila with a

‘Career Recognition’ award.

External Appointments

HSBC Private Bank (UK) Limited (Non-

Executive Chair, appointed December 2019)

Marks and Spencer Financial Services Plc

(Non-Executive Chair, appointed

September 2020)

HSBC UK Bank Plc (Non-Executive Director,

appointed May 2019)

Nuffield Health (Member of the Board of

Governors, appointed February 2014)

External Appointments

Rod has no external appointments

External Appointments

techUK Limited (President, originally

appointed June 2016)

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Andy Brown

Chief Commercial Officer

Mike McLaren

Chief Financial Officer

Date of Appointment

Chief Financial Officer January 2008

Joined FDM 1994

Date of Appointment

Chief Financial Officer April 2011

Joined FDM 2011

Experience

Andy progressed through the Group’s Sales

team to become Global Sales Director in

2007 and, subsequently, Chief Commercial

Officer.

Andy oversees the expansion of the Group

with a focus on the sales and recruitment

functions. Andy’s strategic focus is around

developing new service streams in line with

client demands, as well as increasing the

number of applicants to the Group’s Graduate

programme, which are both key areas to the

success and growth of the Group. Andy also

played a key role in the launch and success

of the UK Ex-Forces Programme.

Experience

Mike is a Fellow of the Institute of Chartered

Accountants in England and Wales.

Prior to joining FDM, Mike fulfilled the

roles of Group Finance Director and Chief

Operating Officer in a premium listed

business in the software and services sector.

In addition, Mike has been an Independent

Non-Executive Chair and Non-Executive

Director on the boards of a number of other

companies. Overall, Mike has more than

30 years’ experience of working within

the technology sector in a range of senior

financial, commercial and operational roles.

External Appointments

Andy has no external appointments

External Appointments

ActiveOps plc (Non-Executive Director, Chair

of Audit Committee, appointed March 2021)

Financial Statements

Governance

Strategic Report

Board of Directors

continued

Committee Membership

Peter Whiting

Non-Executive Director

Michelle Senecal de Fonseca

Non-Executive Director

Jacqueline de Rojas CBE

Non-Executive Director

Date of Appointment

Non-Executive Director June 2014

Senior Independent Director June 2014

Chair of the Remuneration Committee

June 2014

Date of Appointment

Non-Executive Director January 2016

Date of Appointment

Non-Executive Director October 2019

Experience

Peter has over 20 years of experience as

an investment banker specialising in the

software and IT services sector. Peter

joined UBS in 2000 and led its UK small

and mid-cap research team. Between 2007

and 2011 he was Chief Operating Officer

of UBS European Equity Research. One of

his responsibilities during this period was

the oversight of the graduate recruitment,

training and development programmes, both

for the Research business and the Equities

operation as a whole. With more than thirty

board-years of NED experience in the

financial services and technology industries,

including with TruFin plc, Keystone Law

Group plc and Aptitude Software Group plc,

Peter has developed a strong technology-led

NED portfolio.

Experience

Michelle is an experienced senior executive

specialising in technology and international

communications. She was formerly the

Global Vice President for Global Strategic

Alliance Partnerships and Regional VP for

Sales and Services at Citrix Systems. Prior

to Citrix, she was Global Director of Cloud

and Hosting Services at Vodafone. Michelle

has previously worked at the European

Bank for Reconstruction and Development

where she managed the Telecom, Media

and Technology banking team. Michelle is

a co-founder and board member of Women

in Telecoms and Technology, a UK not-

for-profit organisation. In 2020, Michelle

joined the Strategic Advisory committee to

TEDI-London, a new design

-led engineering

school in the UK.

Experience

Jacqueline is a highly regarded leader

in the UK technology field, with a strong

reputation as a champion of women and

minority voices. She sits on the board of

technology trade association techUK where

she has used her platform as president to

shape policy over the last seven years to

enable the technology industry to thrive.

Her commitment to diversity and building

tech skills in the sector is her driver for

co-chairing the Governance Board of the

Institute of Coding.

Prior to this, Jacqueline held senior executive

roles at major tech companies including Sage

Group, Citrix Systems, CA Technologies,

Novell and McAfee International. She was

previously a non-executive director at AO

World plc and Home Retail Group plc. In 2019,

Jacqueline was awarded a CBE for Services

to International Trade in Technology.

Jacqueline is the Board’s designated Non-

Executive Director for engagement with

the Group’s workforce, enabling employees

to share ideas and concerns with senior

management and the Board.

External Appointments

Kooth plc (Non-Executive Chair, appointed

September 2020)

Celebrus Technologies Plc (formerly D4T4

Solutions plc) (Non-Executive Director, Chair

of Remuneration Committee, appointed

July 2018).

Team17 Group Plc (Non-Executive Director,

appointed August 2023)

Aurrigo International Plc (Non-Executive

Director, Chair of Audit Committee,

appointed 1 February 2024)

External Appointments

Alphawave IP Group Plc (Non-Executive

Director, appointed May 2021)

Redcentric plc (Non-Executive Director,

Chair of Remuneration Committee, appointed

13 February 2024)

Women in Telecoms and Technology (WITT)

Limited (Director, appointed May 2008)

Thunderbird School of Global Management

(Director, appointed April 2009)

ASU Global Foundation UK Ltd (Director,

appointed October 2021)

MOVE Capital (Investment Board member,

appointed September 2017)

External Appointments

Rightmove plc (Senior Independent Director,

appointed December 2016)

techUK Limited (Director, appointed

July 2014)

Industrial and Financial Systems, IFS AB

(Sweden)

(Non-Executive Director, appointed

May 2021)

Having served more than nine years on the

Board since his appointment, Peter Whiting

will step down from the Board at the end of

this year’s AGM which is due to be held on

14 May 2024.

Remuneration Committee

Audit Committee Member

Nomination Committee Member

Chair of Committee

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Alan Kinnear

Non-Executive Director

Rowena Murray

Non-Executive Director

Date of Appointment

Non-Executive Director January 2020

Date of Appointment

Non-Executive Director August 2023

Experience

Alan is a member of the Institute of

Chartered Accountants of Scotland.

Alan was with PwC for 35 years until his

retirement in 2015, including 23 years

as an audit partner working with listed,

private equity-backed and fast-growth

entrepreneurial companies. He was a

member of PwC’s South East regional board

and a national leader for audit services in

the private equity sector. He has significant

skills and experience in financial reporting,

regulation, corporate governance and risk

management.

During the year following his retirement

from PwC in 2015, Alan was a non-executive

director with CEGA Holdings Limited.

Experience

Rowena is highly regarded for her experience

in investment banking and corporate

broking, and her insight into the public

markets. She has a strong reputation for

helping businesses to implement their

strategies effectively to generate growth

and create value.

Rowena began her career in Sydney as a

corporate lawyer at a leading Australian law

firm. She moved to the UK in 2004 and joined

Investec Bank plc (“Investec”). As a director

in Investec’s Investment Banking division,

Rowena provided strategic advice to public

and private companies and led corporate

transactions across a variety of sectors,

including business services and technology.

In 2017 she moved to Tenzing Private Equity,

an investor in high-growth UK and European

SMEs, where she has been the appointed

non-executive director for various companies

within the Tenzing portfolio.

External Appointments

Alan has no external appointments

External Appointments

Altum Group

Eikon Group

Financial Statements

Governance

Strategic Report

Corporate Governance Report

On behalf of the Board, I am pleased to present the Corporate

Governance Report for the year ended 31 December 2023.

Chair’s Governance Overview

This report aims to provide readers with an understanding

of how the Board has monitored the Group’s progress,

and how we ensure that we make informed decisions to

secure sustainable growth for the long-term benefit of

our shareholders and other key stakeholders. Although

this report follows the principles of the 2018 Code, we

are also considering the updated provisions set out in the

newly-published 2024 UK Corporate Governance Code,

and will make changes to our approach where necessary

to ensure alignment with its provisions when it comes into

force on 1 January 2025. As we have mentioned earlier

in this Annual Report (see page 9), 2023 has been a

challenging year for trading, with difficult macroeconomic

conditions and geopolitical instability causing uncertainty

across global markets and inhibiting the confidence

of many of our clients. The Board’s governance role

becomes even more important against this backdrop,

and we are committed to maintaining high standards of

corporate governance and control, supported by a robust

framework which is summarised in this report. I hope you

find it informative and useful.

We take great care to ensure that the content of our

Annual Report is fair, balanced and understandable. A

review by the Audit Committee can be found on page 93

and a formal statement from the Directors is included on

page 133.

Further information on the Board’s primary areas of focus

in 2023 is set out on page 74. Lack of client confidence

in committing to new projects in the current economic

environment led to reduced levels of demand from our

clients during a large proportion of the year. In response

to this, the Board supported the executive team’s focus

on controlling cost, and a programme to increase the

efficiency of our training organisation. By adjusting levels

of recruitment and training, and careful management of

our unallocated resource we have aimed to ensure that

we have appropriate levels of high-quality resource,

with the optimal blend of skills, to give us a head start

in meeting our clients’ needs as market conditions,

confidence and demand improve. The business

has continued to develop its virtualised Skills Labs

environment to enhance the experience of our trainees;

most of the technological changes in this area which we

have been working on over the last year have now been

implemented, which will further enhance the delivery of

our training, supporting the cornerstones of our strategy

(see page 12).

The Board continues to focus on the Group’s

environmental and social impact, including our response

to climate-related risks and opportunities, and our

approach is outlined on page 52. We have made progress

this year in obtaining actual carbon emissions data from

an increased number of our larger suppliers, which

enables us to reduce our reliance on estimates produced

by economic impact models for the emissions generated

by Scope 3 Purchased Goods and Services, improving

the accuracy of our reporting for that category.

We have improved our ranking in the 2023 Employer

Index published by the Social Mobility Foundation, being

placed at number 34 in the top 75 employers in the Index,

which analyses what employers are doing to improve

social mobility across seven critical employee milestones

and an employee survey.

Our aim is to continue improving our work in these areas

over the coming year.

David Lister

Chair of the Board

FDM Group (Holdings) plc

Annual Report and Accounts 2023

UK Corporate Governance Code 2018

As a premium listed company, we are expected to explain

how FDM Group has applied the main principles of the

2018 Code issued by the Financial Reporting Council in

July 2018.

The Board considers that FDM Group has complied with

the 2018 Code during 2023.

Further information on the 2018 Code can be found at:

www.frc.org.uk

The main principles of the 2018 Code are as follows:

•

Board Leadership and Company Purpose

•

Division of Responsibilities

•

Composition, Succession and Evaluation

•

Audit, Risk and Internal Control

•

Remuneration

1. Board leadership and Company purpose

An overview of the Board’s role

The Board is required to establish the Group’s purpose

and to define its strategy. FDM exists to deliver client-

led, sustainable, profitable growth on a consistent basis,

through our well-established Consultant model. This is

our purpose, and its key components are set out in more

detail on pages 16-17. The Board’s view is that enabling

the successful achievement of FDM’s purpose will secure

the long-term sustainable success of the Group for our

staff, clients and other stakeholders, generating value for

shareholders.

In support of this purpose, the Board has developed a

strategy that will enable us to launch new careers for

our Consultants around the world, while delivering high

levels of client service. This aims to ensure that all the

investments we make and activities we carry out can

deliver quantifiable improvements to our business for our

clients, staff and shareholders. You can read more about

our strategy and its four key objectives, including how

each has been delivered during 2023, on page 12 of the

Strategic Report.

The Group has established a set of core values that

reflect FDM’s culture. Each of the Executive Board

members aims to be a role model for these values,

promoting them and FDM’s culture. Our values and culture

are central to the continued success of the Group and

support the implementation of our strategy.

The Board is responsible for identifying the risks that may

stand in the way of meeting FDM’s strategic objectives,

considering which of those risks the Group is prepared

to take to achieve its goals, ensuring that appropriate

procedures and controls are in place to manage or

mitigate those risks insofar as it is reasonably practicable

to do so, and regularly testing the effectiveness of

those mitigations.

The Board has a remit to ensure that the Group has the

necessary resources in place to achieve its strategic

goals, both in terms of people, finance, and systems,

and to monitor performance and measure progress

towards those goals. It is the Board’s duty to support

and challenge the Executive Team to ensure that FDM’s

business is managed in accordance with that strategy.

The Board meets regularly during the year to

review operational and financial matters, develop

and refine strategy, and monitor progress towards

strategic objectives. When setting and monitoring the

implementation of the Group’s strategy, the Directors

keep in mind their individual duty to act in the way

that they consider, in good faith, will be most likely to

promote the success of the Group for the benefit of

its stakeholders as a whole, as set out in s.172 of the

Companies Act. Further details of the steps taken by

the Board to meet the requirements of s.172 of the

Companies Act are set out in our s.172 Statement which

can be found on page 62.

The Directors act with reasonable care, skill and diligence

in their work, taking steps to ensure that they exercise

independent judgement at all times and that processes

are in place to enable robust decision-making, especially

when there are more difficult decisions to be made.

FDM’s network of stakeholders includes its shareholders,

clients, employees, and members of the communities in

which we operate. The interests of these stakeholders

are varied but interconnected, and we recognise our

responsibilities to engage with them and to take their

interests into account. Additionally, in the event of any

notable vote against a Board recommendation proposed

at an AGM, FDM will carefully review the voting outcomes

and will engage with shareholders to understand their

reasons. We will then provide details of the actions taken

in response in the next Annual Report.

The Board has responsibility for managing the Group’s

strategy on climate change, including oversight of

climate-related risks and opportunities. The Board

is supported and informed on these matters via two

channels: an operational and strategic channel reporting

through the Board sponsor for climate change (CFO),

and a risk channel, which monitors climate-related risks

through the Audit Committee with input from the Risk

Management Team.

Further information on the Group’s climate change

governance can be found beginning on page 52. In

line with Listing Rule 9.8.7R(8), the Group sets out its

climate-related financial disclosures consistent with

the Recommendations and Recommended disclosures

of TCFD, including providing information on risks and

opportunities arising from climate change and the

transition to a low-carbon economy, and the use of

scenario analysis to assist in understanding the impact

of different potential climate outcomes on certain risks to

the Group’s business.

Financial Statements

Governance

Strategic Report

The Board’s financial responsibilities include approving

the interim, preliminary and annual financial statements,

the annual budget and longer-term forecasts, significant

contracts and capital investment. Each of these

responsibilities underpins the principles of the 2018 Code.

The Board’s other responsibilities include monitoring the

impact of its decisions on our employees, promoting

strong business relationships with clients, suppliers and

others, and considering the impact of our operations on

the wider community and the environment. The Board

supports the Executive Team in ensuring that the Group’s

reputation for high standards of business conduct is

maintained, and is mindful of the need to achieve a fair

balance between the interests of different shareholders

and other stakeholders.

The Board and its Committees – a structure for robust

governance

The Board understands that the opportunity to promote

the long-term sustainable success of the Group is

maximised by ensuring that the Board remains effective,

has the right blend of skills, knowledge and experience,

and retains the key elements of an entrepreneurial culture

which is at the core of FDM.

As recommended by the 2018 Code, where appropriate,

the Board delegates some of its responsibilities to

the Audit Committee, Remuneration Committee and

Nomination Committee (“the Committees”), which

play a key role in supporting the Board’s aims and the

application of the principles of the 2018 Code. The terms

of reference and composition of these Committees are

reviewed annually and updated as appropriate. Whilst

the Board retains overall responsibility, the establishment

of Committees enables particular aspects of the Board’s

work to be carried out at a more detailed level by Board

members who have particular expertise, experience

and interest, allowing deeper analysis and oversight of

those areas. The Chairs of each Committee report to

the Board on matters considered and decisions taken

and make recommendations on matters for which the

Board reserves final approval. Minutes of all Committee

meetings are made available to other Board members to

be viewed at any time via the Board’s secure online portal.

The Nomination Committee keeps under review the

blend of skills, experience, independence and knowledge

across the Board’s members. It leads the process for

new appointments to the Board, ensuring a fresh and

entrepreneurial approach which enables strategic

opportunities to be identified, analysed and effectively

managed to ensure long-term sustainable success.

More information about these areas is set out in the

“Composition, succession and evaluation” section on

page 79 and in the Nomination Committee Report on

pages 96-98.

The Audit Committee monitors the application of the

financial reporting, internal control, and risk management

principles set out in the 2018 Code and ensures that

the Group maintains an appropriate relationship with its

auditors. More information about risk and internal controls

can be found in the “Audit, risk and internal control”

section on page 82 and in the Audit Committee Report

beginning on page 85.

The Remuneration Committee is responsible for setting

the Company’s Remuneration Policy, determining

each Executive Director’s total individual remuneration

package (including salary, benefits, bonus and

pension entitlements, and participation in share and

other incentive schemes) and setting the targets

for performance-related pay. The Committee is also

responsible for determining the remuneration of the

next tier of senior management below Board level. The

Remuneration Committee’s work supports the strategy

set by the Board, by promoting the opportunity for long-

term sustainable success, and by aligning executive and

senior managers’ remuneration to the achievement of

the Group’s purpose and promotion of its values, and to

the successful delivery of long-term strategic goals. The

Remuneration Report, beginning on page 99, contains

more information on our application of these principles of

the 2018 Code. This year the Remuneration Report also

contains a new Remuneration Policy which we will submit

to shareholders for approval at our AGM which is planned

for 14 May 2024.

Information about the membership of each Committee

can be found in the relevant Committee’s report.

The Board’s agenda

The Board meets regularly throughout the year, following

an agenda which is agreed in advance based on themes

from the Group’s business plan. Although the setting of

the agenda is led by the Chair of the Board in discussion

with the Chief Executive and the Company Secretary,

all Board members are welcome to put forward topics

for discussion.

Standing items, including operational and financial

reviews and Committee updates are considered at each

scheduled Board meeting, with unplanned items such

as commercial or property-related decisions considered

as and when required. In addition, potential topics

are identified for management updates and other

Board discussions.

Corporate Governance Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Ahead of each Board meeting, all Board members are

supplied with an agenda and a set of specific papers

on particular strategic issues, as well as reports and

management information on current trading, operational

issues, compliance, risk, accounting and financial

matters. This enables the Chair to ensure all Directors

are properly briefed on the matters to be discussed.

The Chair works with the Company Secretary to ensure

that the supporting papers are clear, accurate, timely

and of sufficient detail to enable the Board to discharge

its duties effectively. The Board’s forward agenda is

coordinated with those of its Committees and the

Chairs of the Committees report on the activity of their

Committees at Board meetings. The agenda is designed

to provide an appropriate balance between strategic

planning items and reports which enable the Board to

monitor the management and performance of the Group,

ensuring it operates within the appropriate risk appetite

and the Board’s strategy to deliver FDM’s purpose.

The format of the Board Reports is reviewed regularly

and updated as appropriate to ensure that the reports

provide the required information in the most useful format

to enable Board members to carry out their oversight

role effectively.

At regular intervals throughout the year, senior managers

from around the Group attend Board meetings to update

the Board on progress being made and matters arising

in their areas of operation. The Board aims to ensure

that there is sufficient time for the Board to discuss

significant matters or matters of a more discursive nature.

To assist with this, the usual approach is to hold informal

gatherings after certain scheduled Board meetings which

allow the Directors greater time to discuss key topics

with additional internal and external participants. This

enables the Non-Executive Directors to explore business

and operational issues in greater depth with the senior

managers who have reported to the Board.

The Board has identified certain matters on which

decisions are formally reserved for the Board’s approval,

a schedule of which is available on the Group’s website

www.fdmgroup.com/investors/corporate-governance/.

They include the following:

•

Approving financial results and other financial,

corporate and governance matters;

•

Approving material contracts;

•

Approving material capital or operational expenditure;

•

Approving Group strategy;

•

Approving appointments to the Board;

•

Determining dividend policy, as well as approving and

recommending dividends, as appropriate;

•

Reviewing material litigation;

•

Reviewing annually the effectiveness of internal control

and the nature and extent of significant risks identified

by management and associated mitigation strategies;

and

•

Approving the Group’s annual budgets and three-year

plans.

Board decisions are generally reached by consensus

at Board meetings. However, should the situation arise,

decisions may be taken by a majority of Board members.

FDM’s Articles of Association provide the Chair with a

casting vote in the case of an equality of votes.

Details of the number of meetings of the Board and

Committees (which only certain Directors are required

to attend) and individual attendances by Directors are

set out in the table below. The Board’s policy is that

meetings are held in person by preference, as discussions

flow more naturally when taking place face to face in

the same room. However, the increased availability of,

and familiarity with, video conferencing technology over

recent years enables a greater degree of flexibility for

hybrid Board meetings when necessary, if any Director is

unable to be present in person. The Company’s Articles of

Association allow meetings of the Board to be held validly

in this manner.

Financial Statements

Governance

Strategic Report

Board

meetings

Audit

Committee

meetings

Remuneration

Committee

meetings

Nomination

Committee

meetings

Number of meetings held in 2023

Number of meetings at which present, as a proportion of maximum possible

David Lister

8/8

n/a

3/3

Andy Brown

8/8

n/a

Rod Flavell

8/8

n/a

1,2

n/a

1,3

Sheila Flavell

8/8

n/a

Mike McLaren

8/8

n/a

1,2

n/a

Alan Kinnear

8/8

4/4

3/3

n/a

Rowena Murray

3/3

1/1

n/a

Jacqueline de Rojas

8/8

n/a

3/3

Michelle Senecal de Fonseca

8/8

4/4

3/3

Peter Whiting

8/8

4/4

3/3

Not applicable, not a member of the Committee and not required to attend.

At the invitation of the Audit Committee (but not as members) Rod Flavell attended three meetings and Mike McLaren attended four meetings of the

Committee during the year.

At the invitation of the Nomination Committee (but not as a member) Rod Flavell attended three meetings of the Committee during the year.

Rowena Murray was appointed as a Non-Executive Director of the Company on 1 August 2023. In addition to the attendance indicated above, she attended

the meetings of the Audit Committee and the Board held in July 2023 as a guest/ observer prior to her formal appointment as a Director on 1 August 2023.

Conflicts of interest

Procedures are in place for the disclosure by the

Directors of any interest that conflicts, or may possibly

conflict, with the Group’s interests and for the appropriate

authorisation to be sought if a potential conflict arises, in

accordance with the Company’s Articles of Association.

An up-to-date schedule of the Directors’ other Board

appointments, related parties’ interests and relevant

shareholdings is included as an appendix to each set

of Board papers to ensure full transparency of their

respective relevant interests.

In deciding whether to authorise a conflict or potential

conflict of interest only non-interested Directors

(i.e. those who have no interest in the matter under

consideration) will be able to vote on and take the

relevant decision. In doing so, the Directors must act in

a way they consider, in good faith, will be most likely to

promote the success of the Company, such that they

may impose any limits or conditions which they think

fit. The Board has reviewed the procedures in place

and considers that they operate effectively. No actual

conflicts of interest arose during the year under review, to

the date of this report or in the previous year.

The key areas of focus by the Board in 2023

During the year there have been a number of areas where

the Board has focused its governance to ensure the

delivery of the Group’s strategy:

•

The Board has worked with management to support

a Group-wide review of utilisation of staff, balancing

the supply of consultant resource with client demand,

managing the consultant bench to increase cost

efficiency during a period of slower trading, and

ensuring the right quality and blend of skills is available

on the bench. At the beginning of the year the Board

received a presentation from the Group’s Global

Director of Education and Academy, initiating an in-

depth review of training strategy, including trainer skills

and utilisation. Subsequently, the Board supported

the management team of our Skills Labs in a project

to restructure the Skills Lab organisation to ensure

that trainers are allocated in the most efficient way,

with their time and expertise directed in the way most

likely to optimise the marketability of consultants’ skills

and knowledge.

•

The Board strives to ensure that its capital returns

policy meets the expectations of Shareholders. During

the year the Board received feedback and, with the

help of its Corporate Brokers, carried out a detailed

review of the policy, including consideration of whether

a share buy-back programme would be an appropriate

approach in the current economic conditions. The Board

determined that its policy of effecting capital return

by way of dividends remained the most appropriate

approach for the Group.

Corporate Governance Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Other areas of focus for the Board during the year are set out below.

Strategy

•

Reviewed the Group’s budget and three-year plan (2023

-2025)

•

Received regular updates on the evolution of the Group’s training model

•

Received regular updates on the Group’s project to roll out TechSkills accreditation for the Group’s

training courses and the development of the “Foundation” and “Practitioner” accreditation levels

•

Received updates on the development of the FDM apprentice programme in the UK the

successful application to be included in the UK Government’s Register of Flexi-Job Apprenticeship

Agencies

•

Received strategic updates from the Group’s senior management teams

Operational

•

Reviewed the requirements for our Skills Lab and other office space in the light of changes

to methods of working (including the delivery of training in FDM’s Skills Labs), and the most

appropriate structure for renting office space

•

Received business updates from the Group’s senior management teams

•

Reviewed information on recruitment and Skills Lab utilisation

•

Received a presentation from the marketing team on the Group’s rebranding project

Financial

•

Reviewed monthly business performance against strategic goals

•

Reviewed trading updates

•

Reviewed and updated the Treasury policy and Treasury risk appetite statement

•

Reviewed and approved preliminary, full-year, and half-year results and associated statements

(including those regarding risk, internal control, going concern/ viability and compliance with s.172

Companies Act 1986)

•

Reviewed and approved Group budget, three-year plan and reforecasts

•

Approved a final dividend in respect of the 2022 financial year

•

Approved an interim dividend in respect of the period ending 30 June 2023

•

Reviewed the Board’s dividend policy and considered alternative options for capital allocation

Risk

•

Undertook bi-annual reviews of the Risk Register and risk management process, including reviews

of the potential risks posed by climate change to the Group’s business

•

Reviewed the Group’s cybersecurity arrangements and controls

Governance

•

Reviewed data on the Group’s Scope 1, Scope 2 and full Scope 3 carbon emissions and received

an update on progress against the Group’s carbon reduction plan

•

Reviewed an analysis of the potential impact on the business of different climate scenarios, and

considered the risks and opportunities arising for the Group’s business from the transition to a

low-carbon economy

•

Carried out a review of the effectiveness of the Board and its Committees

•

Reviewed the Group’s Gender Pay Gap data

•

Provided an update on Modern Slavery Act compliance

•

Approved updated terms of reference for the Board’s Committees

•

Assessed and approved the viability statement

•

Conducted a going concern review

•

Received updates on proposed regulatory reforms to corporate governance and their potential

impact on the Group

Employees

•

Received updates on employee engagement

Financial Statements

Governance

Strategic Report

Engagement with stakeholders

The Board has identified the following key stakeholders:

shareholders, clients, employees, prospective candidates,

university partners, our local communities and the

environment.

Engagement with shareholders

The Group has an internal investor relations function led

by Mark Heather, the Company Secretary, who works

with the Group’s brokers and financial public relations

advisors to operate a programme of regular engagement

with current and prospective investors. We will continue

to develop our investor relations activities, to include

an expansion of the investor area of our website to

provide additional information on our strategy, business

model, competitive position, financial information and

strategic progress.

To maintain dialogue with institutional shareholders,

the Chief Executive Officer and Chief Financial Officer

meet with major shareholders following interim and final

results announcements and otherwise as appropriate.

The Chief Executive Officer, Chief Financial Officer

and Company Secretary also speak regularly with

shareholders and potential investors to explain details of

our business model, our Consultant recruitment, training

and deployment programme, and our approach to other

important aspects of our work such as sustainability,

inclusion, diversity, social mobility and our plans for

carbon reduction. The Chair of the Board and other

Non-Executive Directors have made themselves available

and met institutional investors on a number of occasions

throughout the year.

We are always happy to host visits in person from current

and prospective shareholders at our offices around the

world, offering the opportunity for investors to tour our

facilities and speak informally to members of our sales

and recruitment teams, as well as trainers and trainees.

Those investors who take advantage of these visits often

tell us that they provide an ideal way to understand our

business model, and we are glad to have the opportunity

to demonstrate our purpose and the way in which our

culture and values support this to drive our business

towards our strategic objectives.

Other Executive and Non-Executive Directors engage

with shareholders from time to time, in particular when

there are matters of governance to be discussed or when

feedback is sought on particular proposals.

The Company uses the AGM as an opportunity to

communicate with its shareholders and welcomes their

participation; shareholders who attend the AGM have

the opportunity to ask questions and all Directors are

expected to be available to take questions. In accordance

with the 2018 Code, the Notice of AGM will be sent

to shareholders at least 20 working days before the

meeting and any other notice of general meeting will

be sent to shareholders at least 14 days before each

general meeting and will include details of the proposed

resolutions and explanatory notes. It is proposed that the

AGM will be held at 2.00 pm on 14 May 2024.

The Board proposes separate resolutions for each issue

and proxy forms allow shareholders who are unable

to attend the AGM (or general meeting, as applicable)

to vote for or against or withhold their vote on each

resolution. As soon as practical after the conclusion

of the AGM (or general meeting, as applicable), we

will announce the proxy votes cast, including details

of votes withheld, to the London Stock Exchange via

its Regulatory News Service. We will also publish the

information on our website.

The Group’s website

(www.fdmgroup.com)

is the primary

source of information on the Group.

Engagement with employees

The Executive Directors and senior management team

regularly spend time in each FDM centre and meet

with employees at all levels of seniority. This enables

them to promote FDM’s culture and values throughout

the organisation. The Group’s internal communications

team produces regular updates via email and posts on

the Group’s internal platform for knowledge-sharing,

enhancing a sense of community, and delivering

corporate communications. This enables the Group’s

culture to be spread from the Executive Team to all

employees. In June 2023 the regular Board meeting was

held at our Leeds office, enabling directors and staff to

meet and discuss topical matters of particular relevance

to that part of the business.

The management team meets with partners that promote

the transition to the civilian work environment from the

Armed Forces, and those returning to work after a career

break. Sheila Flavell is President of techUK. In this role she

engages extensively with the UK Government to assist

them in developing policy to allow the technology industry

to thrive. She has advised government committees

on issues including bridging the digital skills gap and

enhancing diversity in the workplace.

Jacqueline de Rojas is a member of the board of techUK.

In her role as co-chair of the Governance Board at

the Institute of Coding, she promotes lifelong learning

through industry collaboration to address the growing

skills gap in technology and to encourage widening

participation and pathways to digital skills through

diversity and inclusion programmes.

Key managers in our People Team work closely with the

Board and its Committees to assist them in assessing

and monitoring the culture of FDM to ensure that policy

and behaviour are aligned with the Group’s purpose and

strategy. We carry out regular surveys of our Consultants

and internal staff to gather their views on a range of

matters. Our new Consultant Experience programme is

driving more frequent engagement with our Consultants.

Corporate Governance Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

The priorities identified from our engagement with

employees have directly influenced a number of areas

considered by the Board this year. Including:

•

The Group has engaged in an extensive rebranding

project which has involved wide consultation with

employees (and other stakeholder groups) to

understand their views of FDM’s values, purpose, and

position in the market.

•

The Group has continued to build on the work of its

Consultant Success and Consultant Experience teams.

The development of the Consultant Career framework

has continued, to provide clarity and direction to align

consultants to an ongoing career progression. This is

expected to improve engagement and retention rates of

consultants, benefitting both consultants and clients.

Further information about our employee engagement can

be found in our Sustainability Report from pages 36-63.

The results of our programmes will continue to inform

our engagement with staff. This will assist us in

promoting a diverse, inclusive and fulfilling culture in

which our people can thrive, optimising our Consultants’

experience during their time with us, and ensuring that

our employees promote and embody our values and our

unique service offering.

In accordance with Provision 5 of the 2018 Code,

Jacqueline de Rojas is the nominated Non-Executive

Director to engage with the workforce to ensure that the

voices of our employees are heard at Board level.

Engagement with clients

Together with members of the Sales team, members of

the Executive Team meet on a regular basis with clients

in our different territories to discuss their requirements.

The senior members of our Sales team maintain close

long-term relationships with senior executives in our

client organisations to ensure we are able to anticipate

our clients’ needs. We regularly update the structure and

content of our training programme to reflect commercial

and technological changes in the sectors in which our

clients work.

Engagement with University Partners

We have continued to engage with our University

Partners, working to help them develop more effective

ways of hosting remote careers fairs. We have also

created our new “FDM attraction events” allowing us to

engage with students from multiple universities in one

event. Further information about these engagements can

be found on page 50.

Environmental responsibility

Recently the Group’s Climate Change Action Group

has met regularly to identify opportunities to reduce

the Group’s carbon footprint and promote their

implementation. The group monitors greenhouse gas

emissions against the targets set by the business and

reports to the Board on the emerging trends. The Group

is engaging with FDM’s key suppliers to reduce the Scope

3 emissions from our purchased goods and services and

has worked with landlords of our premises to increase the

use of energy from renewable sources.

During the year the business made its second climate

change submission to CDP. CDP is a global environmental

disclosure and ratings platform which is recognised as

one of the leaders in the market and is used by many of

our clients and shareholders to help them make decisions

about supply chains and investments. CDP enables our

shareholders and clients to obtain an independently-

validated view of FDM’s efforts to measure and manage

our risks and opportunities on climate change. Further

information on the steps we are taking can be found on

pages 52 to 61.

2. Division of responsibilities

Chair of the Board, Chief Executive and Senior

Independent Director

The roles of the Chair and Chief Executive, as well as

those of the Senior Independent Director, and the division

of responsibilities between them are clearly defined and

agreed by the Board. As Chair, David Lister leads the

Board and is responsible for ensuring that it performs

its role effectively. The Chair aims to ensure that Board

meetings are collaborative and provide an opportunity

for all Directors to express their views, to contribute and

add value to the Board’s work. David Lister was appointed

as Chair on 5 March 2016 and on appointment was

independent when assessed against the circumstances

set out in Provision 10 of the 2018 Code.

As Chief Executive, Rod Flavell’s main responsibility is to

manage the Group’s business and to lead the Executive

Team in the implementation of the strategies that are

adopted by the Board. The Executive Directors under

the leadership of the Chief Executive are responsible

for managing the day-to-day activities of the Group,

communicating the Group’s objectives to the wider

management team and ensuring that the necessary

resources are available to enable those objectives to

be achieved. The Executive Team has formal monthly

meetings and meets more informally at other times

between those meetings.

This separation of roles enhances the independent

oversight of executive management by the Board and

more closely aligns the Board with shareholders. It also

means that no one individual or group of individuals

dominates the Board’s decision-making. This oversight

is further strengthened by the formal reservation of

certain matters for the Board’s approval, as referred

to on page 73. The Directors’ powers are set out in the

Company’s Articles of Association.

Financial Statements

Governance

Strategic Report

Peter Whiting is the Group’s Senior Independent Director.

In performing this role, Peter acts as a sounding board

to provide support to the Chair and the Non-Executive

Directors. He also provides shareholders with a point

of contact with whom they can meet if they have any

concerns which might not be addressed through normal

channels, for example with the Chair or Executive

Directors, and ensures that meetings with the Non-

Executive Directors are held at least once per annum (or

more regularly if circumstances so require) to evaluate

the Chair’s performance. The Senior Independent

Director serves as an important intermediary role in

FDM’s governance process. In carrying out his role, Peter

ensures he maintains a thorough understanding of the

views of the Company’s shareholders. Peter Whiting will

be stepping down from the Board at the end of the Annual

General Meeting to be held in May 2024, having served

more than nine years on the Board since his appointment

in June 2014. At that point, Jacqueline de Rojas will be

appointed as Senior Independent Director.

Support available to the Board

All Board Directors have access to the Company

Secretary, who advises them on Board and governance

matters. During the year, members of the Audit

Committee received external training covering

updates in corporate governance and corporate

reporting. The Remuneration Committee Chair and the

Company Secretary also received external updates on

developments during the year in governance and trends

in shareholder expectations and good practice relating to

executive remuneration.

As well as the support of the Company Secretary, there is

a procedure in place for any Director to take independent

external professional advice at the Company’s expense in

the furtherance of their duties. As stated previously, the

Chair and the Company Secretary work to ensure that

comprehensive information is provided well in advance of

Board meetings to give Directors the time and materials

they need to contribute to an effective and efficient Board.

Role of the Non-Executive Directors

The Group’s Non-Executive Directors have a broad and

complementary mix of business skills, knowledge and

experience acquired across diverse business sectors

and territories. This allows them to provide strong,

independent, external perspectives to Board discussions,

which complement the skills and experience of the

Executive Directors, facilitating a diversity of views aired

at Board meetings. This diversity of skills, expertise and

backgrounds enables the Non-Executive Directors to

offer specialist advice where appropriate, enables robust

and constructive debate and improves the quality of

the decision-making process. At the same time, it also

reduces the likelihood of any one perspective prevailing

unduly. A key role performed by the Non-Executive

Directors is the scrutiny of executive management in

meeting agreed objectives and monitoring the reporting

of performance.

They also constructively challenge and help develop

proposals on strategy and ensure that financial controls

are rigorous and that the Group is operating within

the governance and risk framework approved by the

Board. The Chair works to ensure a culture of open and

transparent debate in Board meetings. Non-Executive

Directors are appointed for an initial minimum period of

three years and are subject to annual re-election at the

Company’s AGM. Their appointments then continue until

terminated by either the Director or the Company giving

notice to terminate. Their appointments as Directors

would end if they were not re-elected by the shareholders

at the Company’s AGM. The terms and conditions of

appointment of Non-Executive Directors, including the

expected time commitment, are available for inspection at

the Company’s registered office.

The Board regularly reviews the independence of each of

the Non-Executive Directors. When determining whether

a Non-Executive Director is independent, the Board

considers each individual against the criteria set out in

the 2018 Code and also considers how they conduct

themselves in Board meetings, including how they

exercise judgement and independent thinking. Taking

these factors into account, the Board considers that

all the Non-Executive Directors are independent when

assessed against the criteria specified in Provision 10 of

the 2018 Code.

Under Provision 10 of the 2018 Code, having served

on the Board for more than nine years from the date

of their first appointment is given as one example of

circumstances which could impair a non-executive

director’s independence. Peter Whiting (Senior

Independent Director and Chair of the Remuneration

Committee) was appointed as a Non-Executive Director at

the time of the Company’s IPO in June 2014. Since June

2023 he has therefore served on the Board for more than

nine years from the date of his first appointment. Peter

Whiting will not be standing for re-election at the Annual

General Meeting to be held in May 2024, and will step

down from the Board at the end of that Meeting. When

Peter Whiting steps down from the Board, Jacqueline de

Rojas will be appointed as Senior Independent Director,

and Rowena Murray will be appointed as Chair of the

Remuneration Committee.

Although Peter Whiting has served on the Board for more

than nine years, the Board considers that he continues to

be independent in his role. He is an experienced non-

executive director with a long background of serving on

a range of boards of listed companies, and the fact that

he will be stepping down in May 2024 enables him to

carry out his role professionally and objectively during

the remainder of his tenure. The Board considered it was

important for Peter to continue on the Board until the next

Annual General Meeting, to develop the new Directors’

Remuneration Policy (which can be found on pages 123

to 127) and the new long-term incentive plan (about

which more information can be found on page 127), both

of which will be put to shareholders for approval at the

Corporate Governance Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Annual General Meeting in May 2024. Since Rowena

Murray joined the Board in August 2023, this period will

also enable an effective handover of the role of Chair of

Remuneration Committee to her before Peter steps down

in May 2024.

Board commitment

When making new appointments, the Board considers

other demands on Directors’ time to ensure that they are

able to devote sufficient time and focus to their role at

FDM. New external appointments may not be undertaken

without the prior approval of the Board, and where any

significant new appointments are approved by the Board,

we intend to explain in the subsequent Annual Report the

Board’s rationale in giving that approval. For Executive

Directors we recognise that external board exposure can

be useful as part of their development as Directors, but

we will not normally permit them to take on more than one

external non-executive directorship of a publicly listed

company (or another equivalent significant appointment).

Sheila Flavell is President of techUK. Mike McLaren is a

non-executive director and chair of the audit committee

on the board of ActiveOps plc. No other Executive

Director currently has an external commitment.

Non-Executive Directors are expected to commit at least

24 days per annum to FDM and in practice may commit

considerably more time than this. The Board keeps this

under regular review.

The current key external commitments of the Directors

are included within their biographies on pages 66-69.

The Board has reviewed the time commitments of its

Directors to ensure that they remain able to devote

the appropriate amount of time and focus to their work

at FDM.

Board commitment

In approving any external appointments, the Board

considers the size and complexity of the relevant

businesses, the work involved in the roles, and the overall

time commitments involved. The Board also recognises

that there is a benefit to FDM from enabling

its Directors to gain experience from operating on

different boards, and to have a rounded exposure to a

range of businesses and markets. During the year, Peter

Whiting was appointed as a non-executive director of

Team17 Group Plc. The Board approved his acceptance

of this appointment having considered the matters

referred to above and concluded that this additional role

would not have any negative impact upon his ability to

carry out his responsibilities as a Non-Executive Director

of the Company.

The Board considers that throughout the year all FDM’s

Directors (including the Chair) have been, and will

continue to be, able to devote sufficient time and focus to

their respective roles at FDM.

Details of the remuneration received by each of the

Executive Directors for the year ended 31 December

2023 are shown in the single figure table presented on

page 108 of the Remuneration Report.

3. Composition, succession and evaluation

Composition of the Board

The Board currently comprises four Executive Directors

and six Non-Executive Directors (including the Non-

Executive Chair). Further biographical details about each

Director, including information on their prior experience,

are set out on pages 66-69.

As required by Provision 11 of the 2018 Code, at least

half the Board (excluding the Chair) is made up of

independent Non-Executive Directors.

Disclosure on the diversity of the Board and

Executive team

As required by Listing Rule 9.8.6(9), (10) and (11), the

following tables set out details of the diversity of the

individuals on the Board and the Executive Management

Team at 31 December 2023.

There are ten Directors of the Board and seven members

of the Executive Management Team (including four

Executive Directors and the Company Secretary).

The data in the tables below was reported directly by the

relevant individuals via their secure profiles on the Group’s

HR Information System, which requests them to record

gender identity and ethnicity.

The diversity targets set by the FCA in Listing Rule

9.8.6(9) are:

FCA Diversity Target

Target met by FDM as at

31 December 2023?

At least 40% of the individuals on

the Board of Directors are women

Met

At least one of the senior

positions (Chair, CEO, SID, CFO)

on the Board of Directors is held

by a woman

Not met

At least one individual on the

Board of Directors is from a

minority ethnic background

Met

As at 31 December 2023, the Board has not met the target

of having at least one of the senior positions on the Board

of Directors held by a woman. However, Peter Whiting, the

current Senior Independent Director, will be stepping down

from the Board at the end of the Annual General Meeting

to be held in May 2024, having served more than nine

years on the Board since his appointment in June 2014. At

that point, Jacqueline de Rojas will be appointed as Senior

Independent Director, and the Board will then meet the

targets set by Listing Rule 9.8.6(9) in full.

Financial Statements

Governance

Strategic Report

Further details required by the FCA’s diversity disclosure requirements are set out below.

Number

of Board

members

% of the

Board

Number

of senior

positions on

the Board

(CEO, CFO,

SID & Chair)

Number in

executive

management

% of

executive

management

Men

60%

85.7%

Women

40%

–

14.3%

Not specified/ prefer not to say

–

Number

of Board

members

% of the

Board

Number

of senior

positions on

the Board

(CEO, CFO,

SID & Chair)

Number in

executive

management

% of

executive

management

White British or other White (including minority-white

groups)

90%

100%

Mixed/ Multiple Ethnic Groups

10%

–

Asian/ Asian British

–

Black/ African/ Caribbean/ Black British

–

Other ethnic group, including Arab

–

Not specified/ prefer not to say

–

Board Diversity Policy

The Board is committed to the promotion of diversity and

inclusiveness of all kinds throughout the organisation. In

2023, we reported a UK median gender pay-gap of

-4.3%

(2022: -4.3%), and our UK mean gender pay

-gap was

-7.6% (2022: -4%).

We believe that by making the most of our differences

of approach, and using the collective experiences,

backgrounds, skillsets and knowledge of our talented

and diverse employees, we will drive innovation and

success and achieve more for our stakeholders. This

applies equally to our Board and its Committees. The

composition of our Board and its Committees is vital

to their effectiveness and that, in turn, enhances

good governance. Diversity at Board level enables our

employees who are from traditionally under-represented

groups to aspire to senior management positions. This

strengthens diversity and inclusion throughout our

workforce, and directly supports our strategic aim to

attract, train and develop high-calibre Consultants by

making FDM attractive to the widest possible group

of people as a place for them to launch their careers

in technology.

The Board’s primary obligation is to make appointments

based on objective criteria to ensure that the best

individuals are appointed for every role. Within this

context, the Board is committed to a policy of promoting

a rounded Board and Committees which reflect a diversity

of all relevant personal attributes, including skills,

experience, educational and professional background,

gender, race and age. In support of this policy, the

Board intends:

•

to consider all aspects of diversity including gender and

ethnicity when reviewing the composition and balance

of the Board as part of the Board’s annual effectiveness

evaluation;

•

to ensure that the succession planning and talent

management programme includes initiatives to develop

the pipeline of talent, to encourage and monitor the

development of a diverse range of internal high-calibre

employees and to promote diversity in appointments to

the senior management team who will in turn aspire to a

Board position;

•

wherever possible to engage executive search firms

who have signed up to the Voluntary Code of Conduct

for Executive Search Firms on gender diversity and

best practice;

Corporate Governance Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

•

to require executive search firms to identify and present

an appropriately diverse range of candidates for each

vacancy;

•

to develop further the level, frequency and quality of

interaction between Board members (including Non-

Executive Directors in particular) and those aspiring

senior managers to enable them to gain more exposure

to, and understanding of, the Board’s work; and

•

to review this policy and report on progress on an

annual basis.

The application of this policy during the year was a

contributing factor in an increase in the percentage

of female members of the Board, from 33% to 40%.

Similarly, the percentage of female members of the

Audit Committee and the Remuneration Committee each

increased from 33% to 50% in each case.

Appointments to the Board, succession planning and

talent management

Rowena Murray joined the Board as a Non-Executive

Director on 1 August 2023, and is also a member of the

Audit Committee and the Remuneration Committee.

Information about Rowena’s background and experience

can be found on page 69. When Peter Whiting steps

down from the Board following the Annual General

Meeting to be held in May 2024, Rowena will become

Chair of the Remuneration Committee. There have been

no other changes to the Board during the financial year.

Rowena Murray has considerable experience in

Investment Banking and Corporate Broking, as well as

working more recently with Private Equity. In making this

appointment the Board considered that (i) her insight into

the public markets would add a valuable dimension to its

understanding of the strategies and priorities of many

of the Group’s clients and shareholders, and (ii) that her

strong reputation for helping businesses to implement

their strategies effectively to generate growth and create

value would bring useful insight and experience to the

Board’s work.

When making new appointments, the Board operates a

formal and transparent procedure for the appointment

of new Directors, the primary responsibility for which

is delegated to the Nomination Committee. There is

more information about this procedure and the way

the Nomination Committee applies it on page 97. The

appointment and removal of the Company Secretary is a

matter reserved for the decision of the Board.

The Board recognises its responsibility for succession

planning and regularly considers the balance of skills,

experience and knowledge of the Board, to ensure

it remains appropriate to the business and that the

Board is best placed to achieve the Group’s strategic

objectives. The Group’s People Team has in place a Talent

Management and Succession Planning programme with

the following key elements:

•

building effective succession by proactively managing

risk and distributing key knowledge and skills more

widely;

•

ensuring a well-prepared pipeline of talent in advance

of requirements arising, based on merit and objective

criteria, identifying and resolving any gaps in the

pipeline; and

•

focusing on the skills and diversity of representation

which the business needs to ensure sustained

future growth.

The programme is designed to promote sustainable

organisational performance through smooth succession

and to provide investors with assurance that there is

stability of talent within the FDM Group. By further

developing diversity in our organisation, we ensure we

can draw from a range of experiences, backgrounds and

approaches which should help us to avoid “groupthink”

and maximise our ability to recognise potential

opportunities and threats. The programme also provides

our senior managers clarity with regard to career paths,

which will enable increased engagement and improved

retention of key talent. The Nomination Committee will

continue to monitor progress of the programme in the

coming year.

Board induction and development

On appointment, each Director takes part in a tailored

induction programme, designed to give him or her an

understanding of the Group’s business, governance and

stakeholders.

Elements of the programme include:

•

briefings from senior management to provide a

business overview, update on current trading conditions

and strategic commercial issues;

•

meetings with the Company’s key advisors and major

shareholders, where necessary;

•

meetings with employees at different FDM Skills Labs

and centres;

•

provision of a legal and regulatory memorandum and

briefing on the duties of directors of listed companies;

•

details of the Group’s corporate structure, Board and

Committee structures and arrangements and key

policies and procedures; and

•

the latest statutory financial reports and management

accounts.

Financial Statements

Governance

Strategic Report

The Chair, in conjunction with the Company Secretary,

ensures that Directors are provided with updates on

changes to the legal and regulatory environment in which

the Company operates. These are incorporated into the

annual agenda of the Board’s activities along with wider

business and industry updates. The Company’s principal

external advisors provide updates to the Board, at least

annually, on the latest developments in their respective

fields, and relevant update sessions are included in the

Board’s meetings. The Company Secretary updates the

Board as appropriate on developments in corporate

governance and any relevant legal or regulatory changes.

In this way, each Director keeps their skills and knowledge

current so that they remain competent at fulfilling their

role, both on the Board and on any Committee of which

they are a member. Specific training and development

needs of individual Directors are explored as part of

Board evaluations (and may be requested by individual

Directors directly) and are addressed by the provision

of in-house training or external courses, as appropriate.

Non-Executive Directors also experience development

in the course of the outside roles they may hold, which

contributes to their knowledge and experience in

performing their work at FDM.

Evaluation of the Board and its Committees

In accordance with current best practice and the 2018

Code, the Board undertakes a rigorous and formal annual

evaluation of its performance and effectiveness and that

of each Director and its Committees. The process is led

by the Nomination Committee, and it is the Board’s policy

to invite external advisors to assist with that evaluation

every three years.

In January 2024 an internal evaluation of the

effectiveness of the Board and its Committees during the

2023 financial year was carried out as recommended by

the 2018 Code. This year the evaluation was facilitated

internally by the Company Secretary, in consultation

with the Chair and the Board Committee Chairs. The

most recent external evaluation was conducted by Lien

Consulting Limited in 2021. Further information about the

evaluation can be found in the Nomination Committee

Report on page 98. Overall, the evaluation concluded that

the Board and its Committees functioned well, were well

chaired and the position was positive. Members of the

Committees had the appropriate skills, experience and a

particular interest in the work of the Committee to debate

issues and provide challenge to management. All of the

individual Directors demonstrated the expected level of

commitment to the role and contributed effectively during

board discussions.

The Non-Executive Directors met without the Chair

to evaluate David Lister’s performance as Chair and

concluded that he had operated effectively in the role.

Re-election of Directors at the 2024 AGM

The Company’s Articles of Association require that

existing Directors offer themselves for re-election at

intervals of no more than three years. At the 2024 AGM,

in compliance with Provision 18 of the 2018 Code, all

Directors will retire and offer themselves for re-election.

In determining whether a Director should be proposed

for re-election at the 2024 AGM, the Board took into

account the Nomination Committee’s advice based on

the results of a review of each Director’s contribution to

the Board’s effectiveness, which formed part of the 2023

Board evaluation. This review confirmed that all Directors

continue to be effective and demonstrate commitment

to their roles and so the Committee recommended their

reappointment.

The Board notes that Peter Whiting (Senior Independent

Director and Chair of Remuneration Committee) has

served on the board for more than nine years from the

date of his first appointment, and accordingly will not

seek re-election at this year’s AGM, which is due to

be held on 14 May 2024. As stated earlier, when Peter

Whiting steps down from the Board, he will be replaced

by Rowena Murray as Chair of the Remuneration

Committee, and Jacqueline de Rojas will take on the role

of Senior Independent Director.

4. Audit, risk and internal control

Financial and business reporting

In its reporting to shareholders, the Board recognises

its responsibility to present a fair, balanced and

understandable assessment of the Group’s position and

prospects. The Board has ensured that processes are

in place to achieve this and more information on the

processes can be found in the Audit Committee Report

on page 93. A statement of the Directors’ responsibilities

in relation to the financial statements is set out on

pages 132.

Independence of internal and external audit functions

The Board has in place processes which are managed

on its behalf by the Audit Committee, and which are

intended to ensure that the services provided by the

internal and external auditors remain independent and

effective. Further information on these processes is set

out in the Audit Committee Report on page 94.

Risk management and internal control

The Board is ultimately responsible for maintaining

sound risk management and internal control systems

and for reviewing their effectiveness. These systems are

designed to meet the Group’s needs and to manage the

risks to which it is exposed, including the risks of failure to

achieve business objectives and of material misstatement

or loss. However, such risks cannot be eliminated. The

Group’s systems can only provide reasonable but not

Corporate Governance Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

absolute assurance. They can never completely protect

against factors such as unforeseeable events, human

fallibility or fraud.

The Board has established a continuous process for

identifying and managing the significant risks faced by

the Group (in accordance with the Financial Reporting

Council’s ‘Guidance on Risk Management Internal

Control and Related Financial and Business Reporting’

(September 2014)). This process has been in place for the

year under review and up to the date of approval of the

Annual Report. The Group’s principal risks are recorded

in a Group Risk Register which is updated twice a year

by the management team and reviewed by the Executive

Team. After each update it is reviewed by the Audit

Committee and then submitted to the Board for approval.

The Board’s view of the Group’s key risks and how the

Group seeks to manage those risks is set out on

pages 27-34.

The Group has in place appropriate internal control and

risk management systems around financial reporting. The

Group’s accounting function is centralised and financial

information is held on a central accounting system from

which internal management reporting, budgeting and

external reporting is collated.

The Board monitors the effectiveness of the Group’s

internal controls by receiving regular updates from

the Audit Committee on the findings of Internal Audit

reports, and is provided with updates on progress with

commercial IT systems implementations and on any

material matters arising from routine internal compliance

reviews.

An outsourced Internal Audit function is in place for the

Group and the scope of work undertaken during 2023

was carried out in accordance with the annual Internal

Audit Plan which was discussed and approved in advance

by the Audit Committee. A more detailed overview of the

areas of focus and programme of work undertaken by the

Internal Audit team in the year appears on page 93.

The key elements of the system of internal controls

include:

•

The Board meets on a regular basis and is responsible

for the operational strategy, reviewing operating results,

identification and mitigation of risks and communication

and application of the Group’s policies and procedures;

•

The Group has a clear organisational structure with

defined responsibilities and accountabilities;

•

Regular reports are made available to the Board on key

developments, financial performance against budget

and prior year and operational issues in the business;

•

Operational and financial controls and procedures

are in place including authorisation and approval

policies for financial expenditure; authorisation and

approval policies for contracts and agreements; signing

authorities; IT application controls; and appropriate

segregation of duties and reviews by management.

Further, there are additional procedures in place to

address other risks to the business, including a code of

conduct and covering ethics and conflicts of interest,

an Anti-Fraud policy, an Anti-Slavery and Human

Trafficking policy, an Anti-Bribery and Corruption policy,

policies covering Environmental, Social and Governance

matters, a Vetting policy and a Procurement Policy;

•

Financial controls are documented in a detailed Risk

Controls Matrix (“RCM”). The RCM is reviewed and

tested on a continuing basis by the Finance Team and a

sample of controls from the RCM are subject to testing

on an annual basis by the Internal Auditors;

•

The Group’s finance function is centralised;

•

There are appropriate protocols in place to control

access to IT systems;

•

The Group has implemented a portal to deliver training

to all employees on key regulatory and compliance

matters such as Health and Safety, Workplace

Harassment and Information Security and the General

Data Protection Regulation. Successful completion of

the training is monitored, and employees’ understanding

can be refreshed as appropriate;

•

An outsourced Internal Audit function is in place,

working for and reporting back to the Audit Committee;

•

A formal budgeting process occurs annually. The

budgets and forecasts are reviewed, approved and

monitored by the Board; and

•

Regular meetings occur between the Executive Board

and senior management team.

5. Remuneration

The Remuneration Committee is focused on ensuring

that remuneration policies and practices for Executive

Directors and other senior managers support the Group’s

strategy and promote long-term sustainable success.

Targets and metrics for bonuses and long-term incentives

are reviewed annually by the Committee to ensure that

they incentivise the behaviours which are necessary

to deliver the Group’s strategy and promote long-term

sustainable success. The primary aim of the strategy

established by the Board is to deliver the Group’s purpose

(which is described in further detail on page 6). Setting

executive remuneration in a way which promotes the

delivery of that strategy ensures that remuneration is

aligned to the Group’s purpose and values.

Financial Statements

Governance

Strategic Report

The Board delegates responsibility for developing

policy on executive and senior managers’ remuneration

to the Remuneration Committee to ensure that the

development of the policy is formal and transparent. The

Committee regularly seeks independent advice from its

external remuneration advisors and keeps itself informed

about market trends in executive remuneration and on

remuneration-related areas which are important to the

Group’s shareholders. The Committee consults with key

shareholders prior to making significant changes in the

Remuneration Policy.

The Directors’ remuneration Policy contains detailed and

transparent information about the rationale behind its key

provisions to enable shareholders to understand the link

between the policy and delivery of the Group’s long-term

strategy. Each member of the Remuneration Committee

exercises independent judgement and discretion when

authorising remuneration outcomes, in line with the policy.

The Board as a whole takes responsibility for approving

the remuneration of Non-Executive Directors.

The Directors’ Remuneration Report provides more

detailed information about the work of the Remuneration

Committee and details of the remuneration of

each Director.

Updated UK Corporate Governance Code published in

January 2024

Throughout 2023 the Board monitored developments

in the UK Government’s proposals for new regulation

on corporate governance, which began with the BEIS

consultation on “Restoring Trust in Audit and Corporate

Governance” in 2021. It had been proposed that audit and

corporate governance reform would be delivered via new

legislation, and some wide-ranging changes to the UK

Corporate Governance Code. In October 2023, however,

the UK Government announced that the proposed

legislation had been withdrawn. The FRC then confirmed

that only a small number of the original proposed changes

to the 2018 Code would be taken forward (primarily the

changes relating to internal controls). The new Corporate

Governance Code was then published in January 2024

(the “2024 Code”). With the help of the Audit Committee,

the Board is reviewing the changes set out in the 2024

Code to identify any areas where the Group’s procedures

may need to be updated to ensure compliance with

these provisions, and believes that the Group is already

well prepared to meet the recommendations of the 2024

Code.

The UK Government has restated its continued

commitment to reform and bringing forward legislation

to modernise further the regulation of audit, corporate

reporting and governance when Parliamentary time

allows. The FRC has also indicated that it will consider

whether its guidance on the 2024 Code could be

improved to ensure the right balance is struck between

supporting effective governance and reducing

unnecessary burdens on business. The Board will

therefore keep all these matters under review to ensure

that it operates best practice wherever appropriate.

The Corporate Governance Report was approved by the

Board on 19 March 2024 and signed on its behalf by:

David Lister

Chair of the Board

19 March 2024

Corporate Governance Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Audit Committee Report

On behalf of the Board, I am pleased to introduce the Audit

Committee Report for the year ended 31 December 2023.

Chair’s introduction

This report has been prepared in accordance with

the 2018 Code and the Minimum Standard for Audit

Committees and the External Audit (published by the

FRC in May 2023) (the “Minimum Standard”

). It provides

insight into the activities the Committee has undertaken

during the year.

The Committee continues to have a key governance

role for the Group and oversees, on behalf of the Board

and shareholders, important matters relating to financial

reporting, risk management, the assurance framework

and internal controls. We reviewed our terms of reference

during the year to ensure that they remain aligned with

the requirements of the 2018 Code and the Minimum

Standard. No updates were required at that stage.

Following the UK Government’s withdrawal in October

2023 of the proposed secondary legislation implementing

audit and corporate governance reform, and the

publication of the new Corporate Governance Code in

January 2024 (the “2024 Code”), it appears that the

more substantial proposed reforms which had originally

been expected will be more limited in scope for the time

being. Nonetheless, the 2024 Code includes an important

update to the provisions on internal controls and the

Committee is currently reviewing the Group’s procedures

to identify any areas where these may need to be

updated to ensure compliance with these provisions.

The Committee notes that, although the proposed

legislative changes were not prioritised for the current

parliamentary session, the UK Government restated its

continued commitment to reform and bringing forward

legislation to modernise further the regulation of audit,

corporate reporting and governance when Parliamentary

time allows. The FRC has also indicated that it will

consider whether its guidance on the 2024 Code

could be improved to ensure the right balance is struck

between supporting effective governance and reducing

unnecessary burdens on business. The Committee will

therefore keep all these matters under review and will

implement the necessary changes in a way which adds

value to the Committee’s work and enhances assurance

for our stakeholders.

In recent years, the risks arising from Brexit and COVID-19

have been a major area of focus for the Committee.

Although the worst impacts of those challenges have

now receded, the 2023 financial year continued to be

dominated by the instability arising from other threats

to geopolitical and macroeconomic security. Major

conflicts in Ukraine and Gaza, along with high inflation

and increases in interest rates and unemployment,

have caused economic uncertainties to persist in many

territories, leading to a lack of market confidence and,

consequently, difficult trading conditions in all parts of

our business (as reported on page 9).

These factors continue to heighten the risk of recession

occurring in some territories, most notably in the UK. The

Committee’s role in careful monitoring of the financial

performance of the Group therefore remains as important

as ever. During the year we obtained assurance from

management and the Internal Audit function that the

Group’s key financial controls continued to operate

as designed. The Committee also applied scrutiny to

management’s stress testing of the financial and business

models. The Executive Team’s focus on a strong balance

sheet and prudent cash buffer have continued to provide

assurance to the Board that the business is in a solid

position to continue as a going concern despite these

macroeconomic challenges. The Committee was also able

to support the Board in its assessment of the viability of

the Company over the longer term.

Alan Kinnear

Audit Committee Chair

Financial Statements

Governance

Strategic Report

In 2023, the Internal Audit plan included a detailed

follow-up review of some findings identified in previous

reviews. The follow-up work found that improvements

had been made in many areas, with other enhancements

in progress. In addition, the Internal Auditors performed

work on financial controls, fraud risk, and the architecture

of data flow through the Group’s IT systems.

In November, the members of the Audit Committee

visited FDM’s Finance Team at our office in Brighton. We

received comprehensive updates and assurance from our

experienced finance management team on the following

areas: preparation and review of the annual budget and

regular reforecasts; financial controls including testing of

the Risk Controls Matrix (“RCM”); controls covering the

reporting of non-financial information; and finance-related

systems and the status of ongoing automation projects.

We also received an update from our in-house Legal Team

as to how they contribute to the management of risk

within the business.

Effective risk management is critical to the delivery of

the Group’s strategic objectives. The Board establishes

the nature and extent of the risks it is prepared to take

in order to achieve its strategic aims, and is responsible

for ensuring that the Group’s internal control and risk

management systems operate effectively across

our business. The Board has delegated to the Audit

Committee responsibility for oversight of the measures

we have in place. Having carried out a review of the

Group’s risk management process during the year,

the Committee’s overall conclusion is that the process

continues to operate effectively across the Group. The

Committee is reassured that our approach to reviewing

potential risks, which includes discussions with a wider

range of employees within the organisation, has shown

that risk management is increasingly embedded in the

culture of our business. The process is designed to

provide us with earlier visibility of emerging risks, and has

been successful in increasing the breadth of information

available to us to update our assessment of risk. We keep

the process and risk-management culture under review

to identify any areas where further improvements can be

achieved. Further information about the principal risks to

our business is set out on pages 27-34.

The risk management process this year has further

integrated climate-related risks and opportunities as

part of our work on TCFD reporting. The enhanced

governance structures which we established in 2022

around our efforts to reduce our carbon footprint have

helped us to make progress in this area, and we have

continued to develop our reporting of Environmental,

Social and Governance matters and the controls around

the data which forms an important part of that reporting.

The risk of cyberattacks and the threats to data security

are ever increasing and the Committee continues to

receive regular updates from the Chief Information Officer

and the IT Security team. The Committee also received

progress reports on the Group’s key IT development and

implementation projects, and on a project to audit our

business continuity plans and test their effectiveness.

The Committee continues to provide appropriate

challenge to the decisions and approach taken by

the management team in relation to the content and

disclosures within the Group financial reports and

challenges management to explain the rationale and

basis for key judgements and estimates before accepting

them. The Committee aims to ensure that the information

provided about the key judgements and estimates made

is clear and helpful, and assists investors in reaching a fair

assessment of FDM’s financial position. The Committee

has also focused on ensuring that disclosures are fair,

balanced and understandable. The key management

judgement areas and significant financial reporting items

in respect of the financial year are disclosed in this report

on page 91.

Role of the Committee

The Committee is appointed by, and reports to, the

Board. The Committee’s terms of reference were

reviewed during the year to ensure that they continue to

reflect the Committee’s approach, the requirements of the

2018 Code and the Minimum Standard. No amendments

were required following that review, but the Committee

is in the course of considering the changes introduced

by the 2024 Code (which will apply from 1 January 2025)

and will keep the terms of reference under close review

during the coming year to implement the necessary

changes. The terms of reference are available in the

Corporate Governance section of the Group’s website

at www.fdmgroup.com.

The key responsibilities of the Committee are to:

•

Monitor the application of financial reporting and

internal control principles set out in the 2018 Code,

and to maintain an appropriate relationship with the

Company’s auditors;

•

Monitor the integrity of the financial statements of the

Company and any formal announcements relating to

the Company’s financial performance, including any

significant financial reporting judgements contained in

them;

•

Provide advice to the Board on whether the Annual

Report and Accounts, taken as a whole, is fair, balanced

and understandable, and provides the information

necessary for shareholders to assess the Company’s

position and performance, business model and strategy;

Audit Committee Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

•

Review the Company’s internal financial controls and

the Company’s internal control and risk management

systems;

•

Agree the scope of work for the Internal Auditors and

review their reports and findings;

•

Monitor and review the effectiveness of the Company’s

Internal Audit function;

•

Review the arrangements by which the Company’s

staff may raise concerns in confidence about possible

improprieties in matters of financial reporting or other

matters, and ensure that arrangements are in place

for the proportionate and independent investigation of

such matters and for appropriate follow-up action;

•

Monitor the effectiveness of key policies and

procedures of the business which have a role in

governance, compliance and the management of risk,

for example the Whistleblowing Policy, Anti-Bribery

Policy, Environmental and Social Policies, and

Fraud Policy;

•

Ensure compliance with laws, regulations, ethical and

other issues;

•

Make recommendations to the Board, and for approval

by shareholders, on the appointment, reappointment

and removal of the external auditors;

•

Agree the scope of the external audit and review the

reports and findings of the external auditors;

•

Monitor the external auditors’ independence and

objectivity and the effectiveness of the external audit

process;

•

Oversee the engagement of the external auditors to

supply non-audit services; and

•

Manage the external audit tender process.

Priorities

Last year, in addition to the business-as-usual work, the Committee set itself some key priorities for 2023, progress

against which is outlined below:

2023 priorities

Progress

Review the findings and

recommendations of each of the

Internal Audit reviews carried out

during the year in accordance

with the 2023 Internal Audit Plan.

The Committee received reports from the Internal Auditors on two internal audit

reviews which had been commenced in 2022, and two internal audit reviews carried

out in 2023. The Committee reviewed the findings of the reviews and the plans

which have been put in place to implement improvements to address them. Further

information on Internal Audit work during the year is on page 93.

Following up the findings and

recommendations of the Internal

Audit reviews carried out during

2022 in accordance with the

2023 Internal Audit Plan

The Committee requested the Internal Auditors to carry out a follow-up review to

check on progress with the implementation of recommendations made following

Internal Audit reviews carried out between 2019 and 2022. This review commenced

in September 2023, and its findings will be reported to the Committee in the first

quarter of 2024. Further information on this review can be found on page 93.

Carry out an assessment of the

risk of fraud in the Group.

Building on the work done by management in 2022 in assessing fraud risk in the

business, the Internal Auditors carried out their own detailed review of the risk of

fraud in the Group, as part of their Internal Audit plan for the year. The findings of

the review were reported to the Committee in July 2023. Further information on this

review can be found on page 93. In addition, in October 2023, management updated

its assessment of this risk, and produced a paper which the Committee reviewed.

The Committee also reviewed and re-approved the Group’s Fraud Policy.

As in 2022, the external auditors will be required to apply ‘The International Standard

on Auditing (UK) 240 (Revised May 2022)’. This sets out the external auditors’

responsibility for obtaining reasonable assurance that the financial statements

taken as a whole, are free from material misstatement, whether caused by fraud or

error. The October 2023 management paper on fraud risk and the work done by the

Internal Auditors (referred to above) will assist the external auditors with this.

Financial Statements

Governance

Strategic Report

2023 priorities

Progress

Review the Group’s cybersecurity

arrangements.

During the year, the Committee received regular updates from the Chief Information

Officer and the Information Security team on their work. The Committee has been

encouraged by the evident technical knowledge of the IT teams and their continued

vigilance in protecting FDM. Changes have been made to IT systems to increase

resilience to cybersecurity incidents. The IT Security Team has enhanced its work

to increase awareness in the organisation of the risk of phishing attacks and other

similar activity. During the year the team also enhanced the Group’s cyber-security

and business continuity plans, and plans are in preparation with management to carry

out a cyber wargame scenario to test the Group’s readiness to deal with the potential

aftermath in the event of a successful future cyberattack. The Committee continues

to monitor closely the management of these issues.

Monitor the impact of current

macroeconomic pressures on the

Group’s business.

The Committee invited the CEO and CFO to attend its meetings regularly during 2023

to enable close monitoring of the impact of these factors on the Group’s trading and

financial position. Management has continued to take a prudent financial approach,

maintaining a robust balance sheet and strong cash management to maximise

resilience. Careful adjustment of recruitment, training, and staffing levels to align with

the current market conditions has been at the forefront of management’s focus, to

ensure the business weathers the current market conditions and has the right levels

of resource when demand increases.

Monitor regulatory change,

focusing in particular on

proposed changes to regulation

of the statutory audit profession

and of audit committees.

The Committee has carefully monitored the evolution of proposals to update the

UK’s audit and corporate governance framework. Under the UK Government’s

original proposals, the requirements for (i) an Audit and Assurance Policy, and (ii) a

disclosure on the steps the Board has taken to prevent and detect material fraud,

would not have been mandatory for FDM. However, the Committee developed a draft

Audit and Assurance Policy to assist in drawing together the different sources from

which management and the Committee obtain assurance on the integrity of FDM’s

reporting – including, but not limited to, the financial statements – and the handling

of risk. In October 2023 the UK Government withdrew the legislation intended to

implement these changes. In response to this, the FRC reduced the scope of the

changes to the 2018 Code which it had originally planned, with a more limited update

being published in the 2024 Code in January 2024. During this year the Committee

will review the 2024 Code and will implement the required changes to ensure

compliance. As the guidance is developed, our draft Audit and Assurance Policy will

continue to serve as a helpful guide to our sources and levels of assurance. Over

the last two years the reporting team has already made good progress in developing

a system of controls over the reporting of non-financial information which will be

helpful in aligning the business with requirements of the 2024 Code.

Climate change risk and

environmental sustainability,

and our reporting on it.

The Committee has received updates during the year on our approach to SECR, the

development of matters forming part of our disclosures under the TCFD framework,

and the new requirements of IFRS S1 and IFRS S2, effective from 1 January 2024. As

in 2022, our TCFD disclosure this year includes analysis of risks and opportunities

arising from climate change, and a climate change scenario analysis. We are fully

compliant with the TCFD recommendations and our disclosure can be found on

page 53.

The Committee considered the requirements of the EU Corporate Sustainability

Reporting Directive (CSRD). We are satisfied that the size of our operations in Europe

is currently below the threshold which would bring FDM into the scope of these

regulations, but we will keep the situation under review.

FDM has continued working with its external sustainability consultancy to continue

analysing its carbon emissions, which will now be measured half-yearly, enabling us

to see more clearly the trends in our progress against our carbon reduction targets

from the 2020 baseline. The Committee continues to monitor the quality of the

Group’s reporting on these matters.

Review the Group’s financial

controls framework.

The Internal Audit team carried out its annual review of Financial Controls during the

year and reported that the controls tested were operating effectively. Management

has adopted recommendations to the processes which will enable the documentation

of control descriptions to be clarified or improved.

Audit Committee Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

In addition to continuing to focus on a number of

the issues referred to above, in the coming year the

Committee intends to focus on the following:

•

The Group’s financial controls framework.

•

The findings and recommendations of each of the

Internal Audit reviews carried out during the year in

accordance with the 2024 Internal Audit Plan, and

the remaining two reviews performed under the 2023

Internal Audit Plan.

•

The findings and action plan developed from the cyber

wargame scenario to be conducted by management in

early 2024.

•

A further assessment of the risk of fraud in the Group.

•

Continuing to be kept informed of IT systems

developments during the year.

•

Assessing the requirements of the 2024 Code which

are relevant to the Committee’s work, continuing

to monitor any further proposals made by the UK

Government to enhance the UK’s audit and corporate

governance framework, and implementing any resulting

changes in approach, policies, procedures, and

reporting.

Composition of the Committee

During the year, the members of the Committee were Alan

Kinnear (Chair of the Committee), Michelle Senecal de

Fonseca, Peter Whiting and Rowena Murray (who joined

the Committee from 1 August 2023).

The Board is satisfied that Alan Kinnear, a chartered

accountant with significant financial and audit experience

in a public company environment, has the recent and

relevant financial and accounting experience required

by the 2018 Code. Michelle Senecal de Fonseca,

Rowena Murray and Peter Whiting also have experience

in financial and reporting matters through their other

business experience and current external roles. The

Committee as a whole has a sufficiently wide range of

business experience and expertise, including significant

experience and competence in the sector within which

FDM operates, such that the Committee is in a position to

fulfil its role effectively.

In compliance with the 2018 Code, the Committee

membership is limited to independent Non-Executive

Directors of the Company.

Members’ experience is documented in their biographies

included on pages 66-69.

The Chair of the Committee is available for discussions

with shareholders, and joined the Chair of the Board

in a meeting with a top-10 shareholder during the year

to discuss matters relating to governance, as part of

that shareholder’s routine programme of stewardship

and engagement.

As reported elsewhere in this Annual Report, Peter

Whiting does not intend to stand for re-election to the

Board at the AGM to be held in 2024, because he will, by

then, have served on the Board for more than nine years

from the date of his first appointment. As explained on

page 78, the Board considers that Peter Whiting remains

independent and that the composition of the Committee

therefore remains in compliance with Provision 24 of the

2018 Code.

The Committee’s agenda

The Committee has a broad agenda of business

which focuses on the Group’s risk assurance and audit

processes through a series of scheduled meetings during

the year. The agenda follows an annual plan which is

set in advance in discussion with senior management,

the financial reporting team, the external auditors, and

the Internal Audit function. The annual plan incorporates

items driven primarily by the financial calendar of the

Group but also includes work on the Internal Audit

programme and regulatory developments, and is adapted

through the year to address any other relevant matters

which may require the Committee’s attention.

The Committee acts autonomously and sets its own

agenda in addition to routine matters and those

suggested by the main Board. In setting the agenda, the

Committee keeps in mind the regulatory framework, the

2018 Code and the FRC’s Guidance on Audit Committees.

The Committee met four times during the financial year

with all members in attendance. During the year, the

Chief Executive Officer, Chief Financial Officer, Chief

Information Officer, Group Financial Controller, Head

of Commercial Finance, Group Director of Information

Security, Commercial Systems Manager and Director of IT

Portfolio Management attended certain meetings at the

invitation of the Committee to ensure that the Committee

remained fully informed of events and developments

within the business. Presentations were received on legal,

regulatory and climate change matters, IT security and

systems projects, contributing to the Committee’s role in

monitoring the management of risk.

The Group’s external auditors, PwC, attended all of the

Committee meetings during 2023.

The Internal Auditors, KPMG LLP (“KPMG”), also attended

all of the Committee meetings during the year to discuss

plans for their programme of work and to present their

findings. KPMG attend for the full duration of each

meeting (except when the Committee discussed their

effectiveness), as the Committee believes that the

effectiveness of the Internal Audit function is enhanced

by an understanding of other matters covered at the

meetings, and of the external audit work being carried

out by PwC. KPMG and PwC have direct access to the

Committee Chair.

Financial Statements

Governance

Strategic Report

On a number of occasions after the formal meetings during the year, PwC and KMPG had the opportunity to hold an

informal discussion with the Committee members without any of the executive management team being present. The

Committee Chair also met with PwC and KPMG on several occasions outside of the Committee.

In addition to the meetings of the Committee, the Committee Chair and other Committee members met with other

members of the Finance team, senior management, and regional operating management during the year. This included

a visit by the members of the Committee to the Group’s office in Brighton to meet with senior members of the Finance

and Legal teams. This enabled them to discuss in further detail, outside the formal setting of a Committee meeting,

the finance team’s work and the controls in place to mitigate risk in this area of the business. It also provided an

opportunity to obtain a more detailed understanding of the development of the Group’s 2024 budget and assumptions.

The Legal team provided a helpful insight into their work, which is an important element in the Group’s management

of risk.

Activity

Principal activities during the year

The following principal activities have been carried out by the Committee during the financial year:

March 2023

•

Reviewed the draft Internal Audit plan for 2023, making some adjustments to reflect the Committee’s updated priorities

•

Received reports from KPMG covering their reviews of:

–

FDM’s policies and procedures relating to Consultant working hours and time recording; and

–

FDM’s policies and procedures on the use of Social Media by the business.

•

Received a presentation from PwC on their audit of the financial statements for the year ended 31 December 2022, and

reviewed the Auditors’ Report to the Audit Committee

•

Reviewed the latest updates to the Group Risk Register

•

Reviewed and recommended to the Board the approval of the Preliminary Announcement and the 2022 Annual Report.

This work included: ensuring that the report is fair, balanced and understandable; reviewing the significant judgements

applied in the Annual Report; reviewing disclosures and the summary of significant accounting policies; considering the

appropriateness of the going concern statement and the viability statement; reviewing the Directors’ statement about the

performance of their statutory duties under s.172 of the Companies Act; and approving the statement of principal risks to

the business as set out in the Annual Report

•

Approved the Committee’s agenda for the remainder of 2023

May 2023

•

Approved the updated 2023 Internal Audit plan

•

Received an update from KPMG on the proposed terms of reference for the Internal Audit reviews of Fraud Risk and

Financial Controls to be carried out during the year

•

Received an update on current systems projects, including the CRM system upgrade, HR Information system and the

implementation of an application to integrate systems and create more efficient data flows across the business

•

Received a presentation from the Chief Information Officer on cybersecurity and IT business continuity

•

Received an update on the reporting, accounting and governance changes applicable to the Group

•

Reviewed the Audit Committee’s Terms of Reference and identified areas for updating

•

Reviewed a draft Audit & Assurance Policy

•

Reviewed the effectiveness of the external auditors

•

Considered the effectiveness of the Internal Audit function

July 2023

•

Received a report from KPMG on their reviews of Fraud Risk and Financial Controls

•

Received a report on the review of, and updates to, the Group Risk Register

•

Reviewed PwC’s report to the Committee (interim review for the six months to 30 June 2023)

•

Reviewed the Interim Report, including the going concern statement, the statement of principal risks and uncertainties, and

other key disclosures, and recommended its approval to the Board

•

Received an update from the Chief Information Office on an ongoing audit of Business Continuity plans

•

Reviewed and approved the letter of engagement for the external auditors and their proposed fees for the interim review

and the full year audit for the 2023 financial year

Audit Committee Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

October 2023

•

Reviewed and approved PwC’s plan for the audit of the 2023 financial results

•

Received a progress report from the Internal Auditors on the internal audit reviews currently underway

•

Considered potential areas to be reviewed as part of the 2024 Internal Audit Plan

•

Received an update on reporting, accounting and corporate governance changes and the processes and key themes for

inclusion in the Annual Report 2023

•

Reviewed steps taken by the Directors during the year to comply with s.172 of the Companies Act 2006, and matters

proposed for disclosure in the s.172 Statement to be included in the Annual Report 2023

•

Received a progress report on the implementation of the key IT systems projects and the management of risks within

those projects

•

Received an update from the Group Operations Director on preparations for testing of the Group’s Business

Continuity Plans

•

Reviewed and approved the Group’s Whistleblowing Policy, Anti-Bribery & Corruption Policy, Environmental &

Sustainability Policy, Social Policy, and Fraud Policy

•

Reviewed a paper from management assessing fraud risk in the business

•

Considered the latest regulatory changes relevant to the Audit Committee’s work

•

Carried out a review of the Committee’s effectiveness

In addition to the work outlined above, as a standing item on the agenda of every meeting, the Committee reviews

the level of fees incurred with PwC on non-audit work to ensure compliance with the Group’s policy on non-audit fees.

During 2023, the only non-audit work performed by PwC has been their review and report on the Group’s half-year

financial statements.

Application of the Group’s Accounting Policies

A summary of the Group’s Accounting Policies is set out in note 3 to the Consolidated Financial Statements (which

begins on page 148 of this Annual Report). The Audit Committee received a paper from the Finance team on the

application of the Group’s accounting policies and considers that the Consolidated Financial Statements have been

prepared in accordance with the Accounting Policies and that the Accounting Policies applied are appropriate for

the Group.

Significant financial reporting items

The Committee scrutinises matters it considers important by virtue of their potential impact on the Group’s results

or the degree of estimation or judgement involved in their application to the Consolidated Financial Statements. To

this end, the Committee receives regular reports from the Chief Financial Officer and the Group’s external auditors,

PwC. During the year the Committee challenged management in respect of their underlying rationale and basis for

key judgements and estimates before accepting them. The Committee has considered the estimate identified in note

4 to the Consolidated Financial Statements, having received drafts of the Annual Report and Accounts in sufficient

time ahead of signature to enable a thorough review, and allow for the opportunity to challenge and discuss the

Report’s content.

Financial Statements

Governance

Strategic Report

The main areas of focus are set out below:

Area of focus

Steps taken to address each area

Revenue

The Group’s Revenue is recognised based on contracted

rates for each Consultant being applied to timesheets

submitted by Consultants and authorised by the Group’s

clients. Revenue in respect of timesheets which have not yet

been received is accrued at a percentage of the estimated

contract value where timesheets have not been received at

the cut-off date.

Volume rebates are accrued in the period in which the

revenue is recognised, with the value of the rebate offset

against revenue. The rebates are calculated with regard to

specific threshold levels of revenue recognised for certain

clients in a contractual period. To the extent the volume

rebates are material, amounts are disclosed, along with any

significant judgements made in their estimation.

The Group’s automated time recording system enables

invoices to be automatically generated from timesheets

submitted on the system. Processes are in place, including

automated reminders being sent from the timesheet

system, to ensure the number of late timesheets is

minimised.

The Committee discussed and reviewed revenue

recognition in detail with management and PwC and

remains satisfied that Group accounting policies with

regard to revenue recognition have been adhered to and

that estimates remain appropriate.

The Committee discussed with management and the

auditors the basis of the calculations supporting the

volume discount accrual and the disclosures contained

in the Annual Report. The value of volume rebates at

31 December 2023 is disclosed on page 167.

Share-based payments

In prior years, the Company has granted awards under the

FDM Performance Share Plan. No such awards were granted

in 2023. Accounting for the awards which are outstanding

from prior years involves estimates relating to the number of

shares which will vest.

The Share-based payment charge, including any changes

to the estimates relating to the number of shares that will

vest, is reported monthly to the full Board, via the Board

Pack. The Committee is also separately informed of the

key assumptions and estimates applied in calculating

the share-based payment charge at the year end. The

Committee is satisfied that the assumptions and estimates

applied are appropriate.

Going concern and viability

The Committee has considered the going concern basis

assumed within the financial statements and viability

period. The underlying assumptions, the reasonableness

of those assumptions and the headroom available were

considered as part of the Committee’s review. The review

also considered the impact of a range of sensitivities on the

key assumptions.

The Committee received and reviewed a paper prepared

by the Finance team supporting the adoption of the

going concern basis and the appropriateness of the

viability period. The Committee is satisfied with the

judgements in these areas, including that the risk of

climate change to the business is low. The Committee

challenged management’s going concern analysis and was

satisfied that, despite the much more challenging trading

environment, there were no indicators of impairment. This

work enabled the Committee to conclude on the adoption

of the going concern basis. The Committee also reviewed

and concurred with the reasonableness of the viability

period included within the viability statement on page 34.

Climate risk and reporting

To be consistent with the TCFD’s recommendations, FDM is

required to:

•

Demonstrate that climate change is incorporated into

FDM’s risk management processes and business strategy

•

Consider the risks and opportunities arising from climate

change, in line with the categories outlined in the

TCFD guidance

FDM has worked with external sustainability advisors

to identify opportunities for the Group to work towards

TCFD best practice. Based upon their recommendations,

management has established a Climate-change Action

Group with formal governance structures and internal

reporting processes.

With the external advisors, management has considered

all risk and opportunity categories outlined in the TCFD

guidance. Further information can be found on page 52.

The Audit Committee considers that the likely impacts

from climate change are not material enough to require

revisions to the Group’s current capital expenditure plans

or meaningful for additional strategic consideration.

FDM’s risk management framework channels climate risk

information from the bi-annual risk reviews to the Audit

Committee and on to the Board.

Audit Committee Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Fair, balanced and understandable

As requested by the Board, the Committee has

considered whether, in its opinion, the Annual Report and

Accounts 2023 is fair, balanced and understandable and

provides the information necessary for shareholders to

assess the Group’s position and performance, business

model and strategy. In forming its opinion, the Committee

considered the information it had received and the

discussions that have taken place with senior managers in

the business.

All members of the Committee received a full draft of

the Annual Report and Accounts two weeks prior to

the meeting at which it was required to provide its final

opinion. The Committee reviewed the report to ensure

that: it provided a balanced reflection of the Group’s

performance; the presentation of adjusted measurements

was relevant and understandable; all material matters

were considered; and there was internal consistency

and there were linkages throughout, including the

presentation of the estimates and significant risks.

The Committee concluded that the Annual Report and

Accounts 2023, taken as a whole, was fair, balanced,

and understandable, and considers that it provides the

information necessary for shareholders to assess the

Group’s position and performance, business model and

strategy. The Committee made a recommendation to

the Board to this effect. The Directors’ statement of

responsibilities on a fair, balanced and understandable

Annual Report is given on page 133.

Internal control and risk management

The Committee is responsible for monitoring and

reviewing the effectiveness of the Group’s internal control

and risk management systems. This is achieved by the

presentation and review of management reports relating

to internal control and risk management systems as

well as reports from Internal Audit throughout the year.

Through monitoring the effectiveness of its internal

controls and risk management, the Committee maintains a

sound understanding of the Group’s trading performance,

its key judgemental areas and management’s decision-

making processes.

The key elements of the Group’s internal control

framework and procedures are set out on page 83.

Internal audit

The Committee oversees and monitors the work of

the Internal Audit function, which is wholly outsourced

to KPMG. The Committee considers that it remains

appropriate to outsource the Internal Audit function for

the following reasons: first, outsourcing ensures the

process is independent and second, it guarantees that

specialist input is available when required, taking into

account the international nature of FDM’s business and

the need for technical specialism, particularly when

reviewing non-financial areas of the business.

The Internal Audit Plan for 2023 was reviewed by the

Audit Committee in March 2023 and approved in May

2023. The Plan is risk-based, prioritising reviews of the

areas which are identified as principal risks in the Group

Risk Register, and covering all key financial, operational,

and regulatory parts of the business. Specifically, in

2023, the Committee received reports on reviews of the

following areas:

•

Working Hours, assessing the culture and

communications impacting compliance with the Group’s

local time-recording guidance in the UK, US and

Canada;

•

Social Media, including the framework and policies

governing FDM’s social media and online marketing

activities, and assessing the robustness of the

applicable controls and processes relevant to FDM’s

online activity and presence;

•

Fraud Risk, identifying the fraud risks arising from the

day to day operations of the Group, and developing a

Fraud Risk Register to capture the main risks identified

and the mitigations and controls in place to manage

them; and

•

Financial Controls.

The findings from the reviews were presented to the

Audit Committee during the period. The Group’s financial

controls were found to be operating effectively, and no

serious weaknesses were identified by the Internal Audit

reviews in any of the other areas.

During the year the Internal Auditors also commenced

reviews of the following areas, and will report to the Audit

Committee on their findings in the first quarter of 2024:

•

Data Flow Architecture; and

•

A Follow-up Review to identify progress in addressing

the findings of previous reviews.

The effectiveness of the Internal Audit function’s work is

monitored on an ongoing basis using a number of inputs,

including the reports received, the Audit Committee’s

engagement with the Group Financial Controller who is

the Group’s primary point of contact with the internal

auditors, and an assessment during the year of the

internal auditors’ performance against the KPIs identified

in the Internal Audit Plan. The Audit Committee considers

that the Internal Audit process is an effective tool in the

overall context of the Group’s risk management systems.

The Audit Committee Chair also met with the Internal

Audit team in advance of every meeting without

management present.

Financial Statements

Governance

Strategic Report

External auditors

PwC is the Group’s current external auditors, having

first been appointed in 2013, and re-appointed in 2022

following a competitive tender process to appoint external

auditors beginning with the audit in respect of the

financial year ending 31 December 2023.

The Statutory Audit Services for Large Companies

Market Investigation (Mandatory Use of Competitive

Tender Processes and Audit Committee

Responsibilities) Order 2014 (“CMA Order”)

The Company confirms that it has complied with the

provisions of the CMA Order for the 2023 financial year.

In 2022 the Group carried out a competitive tender

process which resulted in the re-appointment of PwC

as external auditors beginning with the audit in respect

of the financial year ending 31 December 2023. In

accordance with the CMA Order, the Company is required

to put the external audit contract out to tender not later

than 2033.

Auditors’ independence and objectivity

Both the Committee and the Board keep the external

auditors’ independence under review. Since July 2016,

the Committee has been monitoring the fees paid to the

external auditors for non-audit work at each Committee

meeting. Any non-audit work which will result in fees

exceeding £5,000 must be approved in advance by

the Committee Chair. More substantial work involving

fees exceeding £50,000 requires the approval of the

Committee as a whole. The Group receives a formal

statement of independence and objectivity from PwC

each year, and confirmation that PwC’s partners and

staff have complied with UK regulatory and professional

requirements, including the Ethical Standard 2019 issued

by the Financial Reporting Council. The Committee also

obtains quotes in a competitive tender for all non-audit

work performed, other than for the auditors’ review of the

half-year results.

Fees for non-audit work carried out by PwC as a

percentage of audit fees for the year ended 31 December

2023 were 22% (2022: 22%) and related solely to

PwC’s review of our Interim Report. See note 7 to the

Consolidated Financial Statements.

External audit partners are rotated every five years. The

external audit partner in respect of the 2023 financial

year has been Katharine Finn, who has now completed

four years in the role.

The Group continues to engage KPMG, an independent

accounting firm, to perform Internal Audit work.

Effectiveness of external auditors

During the year, the Committee reviewed the

effectiveness and independence of the external auditors,

using a questionnaire which was completed by key

members of the Finance team and each member of

the Committee. The questionnaire asked individuals

to rate the performance of the PwC audit team in the

following areas: knowledge and expertise; independence

and objectivity; effectiveness of the planning process;

ability to firmly challenge management; and quality of

audit deliverables. The feedback from the questionnaire

was then used as the basis for a more wide-ranging

discussion at the meeting held in May 2023 (at which

PwC were not present). The Committee reviewed the

external auditors’ discussions with, and reports to,

the Committee over the year to examine the degree

of objectivity exercised by the external auditors, the

robustness of their challenge to management, their

views on controls around the Group and their testing of

areas which involved the exercise of judgement by the

management team. Based on the feedback and their

further discussions, the Committee concluded that:

•

the overall audit approach, materiality threshold and

areas of audit focus were appropriate to the business;

•

the auditors had displayed the necessary level of

challenge and objectivity to demonstrate an appropriate

level of independence; and

•

due attention had been given to the matters discussed

during the audit tender process in 2022; and the audit

team possessed the necessary quality, expertise, and

experience to provide an independent and objective

audit.

The findings were fed back to PwC by the Chair of the

Committee.

The Committee has also reviewed PwC’s UK Transparency

Report 2023, and has discussed with the external

auditors the FRC’s most recent Audit Quality Inspection

and Supervision Report relating to PwC.

Whistleblowing

The Group has in place a whistleblowing policy which

enables employees to report concerns on matters

affecting the Group or their employment, without fear

of recrimination.

The Committee reviewed the Group’s whistleblowing

policy and procedures in October 2023 and is satisfied

that they remain appropriate with the key aspects of

the review were discussed at the next meeting of the

full Board.

There were no instances of whistleblowing during

the year.

Audit Committee Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Anti-bribery and corruption policy

The Group has a zero-tolerance policy to bribery and

corruption. The Group’s Anti-bribery and Corruption policy

is issued to all employees, and training is provided to all

current employees and new starters to ensure that they

understand the Group’s policy and the importance of

compliance. The Committee reviewed the effectiveness

of the policy in October 2023 and concluded that it

remains an effective tool for managing the anti-bribery

and corruption risks faced by the Group.

Fraud policy

The Group is committed to acting with integrity and

honesty and takes all reasonable steps to mitigate the risk

of fraud arising within the organisation. The reputation of

FDM’s business is based on the trust which our clients,

shareholders, employees, and other stakeholders have in

the integrity of our business.

During 2023 the Committee reviewed and re-approved

the Group Fraud Policy which outlines the steps which

the Group takes to reduce the opportunity for fraud by

implementing and maintaining appropriate technical

and organisational security measures and controls, and

by such other methods as considered necessary. The

Group’s policy is to take prompt action in the case of any

suspected fraudulent activity from any source.

Audit Committee effectiveness

An evaluation of the effectiveness of the Committee in

discharging its duties was conducted internally during

October 2023. The evaluation process was facilitated

by the Company Secretary and was based on the

completion of questionnaires (which included questions

to be scored and free text questions) by members of the

Committee. The questionnaire was designed to address

the key elements of Audit Committee effectiveness

identified in the 2018 Code, the FRC’s Guidance on Board

Effectiveness published in July 2020, and the FRC’s

Guidance on Audit.

Committees published in April 2016. The results, once

summarised by the Company Secretary, were then

discussed with the Committee Chair, and tabled at a

meeting of the Committee for discussion. The Committee

regularly reviews its terms of reference and updates

them as necessary to reflect current best practice and

to ensure that its approach remains in line with those

terms of reference and the Financial Reporting Council’s

Guidance for Audit Committees.

The effectiveness of the Audit Committee was also

reviewed as part of the main Board Effectiveness

Evaluation which was facilitated internally this year.

Further information on that review can be found on

page 98.

Following these reviews, the Committee is satisfied that it

continues to be effective in discharging its duties.

Alan Kinnear

Audit Committee Chair

19 March 2024

Financial Statements

Governance

Strategic Report

Nomination Committee Report

I am pleased to present the report of the Nomination Committee

for the year ended 31 December 2023.

Chair’s introduction

The primary role of the Nomination Committee is to lead

the process for appointments to the Board, to monitor its

composition, diversity and performance, and to plan for

orderly succession to the Board and the Group’s senior

management team.

The Board undertook a review of its effectiveness

during 2023 and concluded that it continues to operate

effectively. Of course, there are areas where can enhance

our effectiveness further and we will ensure that we

address the key themes arising from that review during

the coming year.

Information on the activities of the Committee during the

year is set out in this report.

Committee composition

The Committee is appointed by, and reports to, the Board.

Its members during the year were as follows:

•

David Lister (Committee Chair)

•

Peter Whiting

•

Michelle Senecal de Fonseca

•

Jacqueline de Rojas

In line with provision 17 of the 2018 Code, a majority of

members of the Nomination Committee are independent

Non-Executive Directors.

Role of the Nomination Committee

The role of the Committee is summarised below and

detailed in full in its terms of reference, a copy of which is

available on the Group’s website (www.fdmgroup.com).

The main responsibilities of the Committee are to:

•

Review the structure, size and composition of the

Board and its Committees including its balance of

skills, knowledge, experience and diversity, and make

recommendations to the Board with regard to any

changes;

•

Lead the process for identifying candidates to fill Board

vacancies as and when they arise, and recommend new

appointments to the Board for approval;

•

Consider succession planning for Directors and other

senior executives taking into account the challenges

and opportunities facing the Company, and the skills

and experience needed on the Board now and in

the future;

•

Keep under review the leadership needs of the Group,

both executive and non-executive, with a view to

ensuring that FDM can continue to compete effectively

in the marketplace;

•

Review the results of the Board performance evaluation

process which impact on Board composition; and

•

Ensure that Non-Executive Directors are allocating

sufficient time to their work at FDM to allow them to

fulfil their duties.

David Lister

Chair of the Nomination Committee

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Appointment of new Non-Executive Director and

Board role changes

•

As reported in the Statement from the Chair of the

Board on page 9, Peter Whiting, our Senior Independent

Director and Chair of the Remuneration Committee, has

now served on the FDM Board since the Company’s

IPO in June 2014. In line with the 2018 Code, Peter

will therefore be stepping down from the Board at this

year’s AGM.

•

With this in mind, the Committee undertook a

process to identify and appoint a new Non-Executive

Director to join the Board, with the intention that

the individual appointed would step into the role of

Chair of the Remuneration Committee at the time of

Peter’s departure.

•

The Committee considered carefully the qualities,

experience, skills and personal attributes required for

the new appointment, with particular focus on the

skills and knowledge required for the Remuneration

Committee Chair role. It was also particularly important

to the Board to find an individual with experience of

the public markets and the City, which is one of Peter’s

areas of expertise.

•

Through their own networks of contacts, Board

members were aware of a number of potential

candidates for this role. Given the specific combination

of qualities which the Board was looking for, the

Committee decided that it was unnecessary to incur the

significant cost of engaging an external search agency

for the role, and the Committee therefore approached

a number of the potential candidates to gauge their

interest in joining the Board, identifying a shortlist of

those who had currently available.

•

Subsequently, following a formal process involving

interviews with all members of the Board, and a

recommendation from the Committee to the Board,

Rowena Murray was appointed as a Non-Executive

Director on 1 August 2023.

•

When Peter Whiting steps down from the Board in May

2024, Rowena Murray will take on the role of Chair of

Remuneration Committee, and Jacqueline de Rojas will

become the Senior Independent Director.

Succession planning

•

The most important ongoing responsibility of the

Committee is to oversee the Company’s succession

plans for members of the Board and the senior

management team over the short, medium and

longer term, to ensure that the Board maintains the

appropriate balance of skills and experience to carry

out its work in the most effective way. In particular,

when the opportunity arises for refreshment of the

Board, the Board is mindful of the need to ensure that

its membership is diverse. The Board currently meets

the targets set by the FTSE Women Leaders Review

(formerly the Hampton-Alexander Review) and the

Parker Review, and details of the Board’s diversity

policy are set out on page 80.

•

The Board’s primary aim is to make appointments

based on objective criteria that ensure that the best

individuals are appointed to each Board role. We

believe that a Board made up of individuals with a

diverse range of personal attributes, including skills,

experience, educational and professional background,

gender, race and age, will contribute to diversity in the

Board’s thinking and approach and, in turn, will enhance

the quality of decision-making.

•

During the year the Committee carried out a review

of the remaining tenure of our existing Non-Executive

Directors, noting that the 2018 Code recommends

that Non-Executive Directors who have served on

the Board for more than nine years from the date of

their first appointment should no longer be considered

independent. The Committee noted that the timing of

appointments over the last seven years means that

Michelle Senecal de Fonseca (Non-Executive Director)

and David Lister (Non-Executive Chair of the Board) will

reach the ninth anniversary of their appointments to the

Board in January 2025 and March 2025 respectively.

The Committee has begun to plan the processes by

which appointments will be made, and the timings of

those appointments, as those individuals retire from

the Board. Those processes will be driven primarily

by an intention to ensure that the Board incorporates

a wide range of experience and the necessary skills,

enabling it to support as effectively as possible the

Group’s plans for growth. As the opportunity arises we

will also keep in mind the Board’s emphatic view that a

diverse Board is an effective Board. By making the most

of the Directors’ differences of approach, and using

the collective experiences, backgrounds, skillsets and

knowledge of our talented and diverse employees, we

will be able to drive innovation, growth and success and

achieve more for our stakeholders. Details of the tenure

of our Directors can be found in the Board of Directors

section of this report on pages 66-69.

•

FDM operates a Group-wide formal mentoring

programme. In recent years, this has been expanded

to involve the Non-Executive Directors providing

mentoring to a selection of senior managers from

across our territories. The programme has been

successful and has been highly valued by those who

have taken part. We intend to expand this senior

management mentoring programme in the coming year,

as well as relaunching the formal mentoring programme

which is in place across the rest of the Group. The

Committee will continue to monitor the progress of

these projects carefully during 2023 and will review

the strengths identified in the talent pipeline and

actions needed to close any gaps. The Committee will

focus closely on the data arising from the programme

which will help to assess diversity in the Group, career

progression and attrition.

Financial Statements

Governance

Strategic Report

2023 Board effectiveness review

Our view is that the Board evaluation is a valuable

process that provides a regular mechanism by which the

Board can challenge itself to identify any areas where its

performance can be improved to enhance the effective

and efficient conduct of Board business, for the benefit of

FDM and all its stakeholders. The 2018 Code requires that

FTSE 350 Companies should arrange for the evaluation of

the Board to be externally facilitated at least every three

years, and our last external evaluation was carried out by

Caroline Lien of Lien Consulting Limited in 2021.

Our evaluation of the Board and its Committee in respect

of 2023 was conducted internally. The evaluation of the

main Board was facilitated by the Chair of the Board

with support from the Company Secretary and was

based on a set of formal questions designed to assess

the performance of the Board, including the Chair and

individual Directors, against the priorities identified

during last year’s evaluation, and a selection of other

areas of particular priority to the Board. The questions

were provided to all Board members in advance and then

formed the basis of a formal but open and wide-ranging

round-table discussion.

The results of the evaluation discussions were collated

and reviewed by the Chair and the Company Secretary

and an action plan was subsequently presented to

the Board with which to address areas where it was

considered that the Board’s effectiveness could be

improved, as well as recognising the strengths of the

Board. The review found that some good progress

had been made against the areas which last year’s

evaluation had identified for further work. A summary

of the key action points arising from the 2023 evaluation

is as follows:

•

The Board intends to allow time for additional focus on

medium- to long-term strategic factors, such as key

technological developments of interest or concern to

our clients, trends in working practices and in using

technology to optimise efficiency, and enhancements to

the Group’s business model.

•

The Board will review the content and format of the

regular papers which are provided to the Board for each

meeting to ensure that they provide the optimal content

for the Board to consider and ask the most important

questions for the Board to address.

•

The Board will aim to provide more opportunities

for senior managers to attend Board meetings to

provide an update on key issues arising with their

departments, their successes, and any challenges they

are facing. As well as helping the Board to gain a better

understanding of progress in the business at a more

detailed level, these discussions provide members of

the senior management teams with the opportunity

to gain experience of presenting to the Board and to

understand the Board’s work which, in turn, is good for

the development of talent and for succession planning

generally within the business.

The Board intends to review progress against the action

plan on an ongoing basis through 2024.

Each of the Board’s principal Committees evaluated its

own effectiveness using a similar process, either by the

completion of questionnaires (using both scoring and

free-text questions) by Committee members, or the

circulation of a list of key questions and topics used

as the basis of a formal discussion, according to the

preference of each Committee Chair. The results of each

Committee’s evaluation were then presented to the Board.

Peter Whiting, as the Senior Independent Director, led

a review of the Chair of the Board’s performance in

discussion with the other Non-Executive Directors.

In line with the recommendation of the Code, the Board

intends to carry out an externally-facilitated review of its

effectiveness during the 2024 financial year.

Independence and effectiveness

As recommended by the 2018 Code, all the current

Directors will be standing for re-election at the AGM

in 2024, other than Peter Whiting, who will retire from

the Board at the end of the AGM. Having reviewed

the independence and contribution of the Directors,

the Committee confirms that the performance of each

of the Directors continues to be effective and each

demonstrates commitment to their roles, including

independence of judgement, commitment of time for

the Board and (where relevant) Committee meetings

and their other duties. Accordingly, the Committee has

recommended to the Board that all current Directors

of the Company be proposed for re-election at the

forthcoming AGM.

David Lister

Chair of the Nomination Committee

19 March 2024

Nomination Committee Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Peter Whiting

Chair of the Remuneration

Committee

Remuneration Report

On behalf of the Board, I am pleased to

present our Remuneration Report for the

year ended 31 December 2023.

Statement from the Chair of the

Remuneration Committee

On behalf of the Board, I am pleased to present our

Remuneration Report for the year ended 31 December

2023. In addition to this Statement from me, this report

contains two further sections: the Annual Report on

Remuneration which sets out the remuneration earned by

Directors in 2023, followed by the Directors’ Remuneration

Policy for which shareholder approval will be sought at

the 2024 AGM. A summary of how the Remuneration

Committee proposes to implement the new Policy in 2024

is set out in this statement.

During 2023, the Committee has reviewed the Policy

approved at the 2021 AGM to consider whether it remains

appropriate and continues to support the delivery of

FDM’s strategy. We are confident that this is the case and

that, overall, it provides sufficient flexibility to support our

current and future needs. Our proposed approach to the

new Policy is, therefore, broadly to roll forward the Policy

approved in 2021. Where changes have been made, these

are to reflect changes in practice or introduce additional

areas of operational flexibility. No significant changes

have been made and there is no increase in the variable

pay opportunities which may be awarded. Early in 2024

we contacted our top ten institutional shareholders to

inform them of this approach, providing a summary of

the proposed rolled-forward policy and explaining the

key areas where changes had been made. We offered

to engage with any of those shareholders to answer

any questions they might have about our proposals. We

were grateful for the positive levels of engagement we

received, and were pleased that all shareholders who

responded indicated that they were supportive of our

approach to all of these matters.

Because there are no significant differences between

the Policy approved in 2021 and the new Policy, the table

below summarises the key feature of both the new Policy

and the Policy approved in 2021; the full new Policy is set

out on pages 116-119. Following the table below I have

addressed FDM’s performance in 2023, the remuneration

decisions for 2023, and how we propose to implement

the new Policy in 2024.

Financial Statements

Governance

Strategic Report

Our new Directors’ Remuneration Policy – Key Features of both the proposed new Policy and the Policy

approved in 2021

Policy element

Key Features (all unchanged between the Policy approved in 2021 and the proposed new Policy)

Base salary

Salary levels are determined taking into account a range of factors. Increases are normally

within the range of increases awarded to the wider workforce but scope exists to award

higher increases in appropriate circumstances.

Benefits

•

Benefits provided currently include car allowances and private health insurance.

•

Other benefits may be provided based on individual circumstances.

Retirement benefits

Defined contribution scheme or a cash allowance in lieu.

Maximum company contribution (or cash allowance) not exceeding the contribution

available to the majority of the workforce (currently 4%).

Annual Bonus

•

Maximum bonus opportunity of 150% of base salary (although currently awards are

made at the level of 120% of salary), with up to 50% earned for on-target performance.

•

At least 50% of the bonus is assessed against financial performance measures.

•

Ordinarily, up to 33% of the bonus earned is deferred into shares for two years where a

bonus opportunity of more than 100% of salary is awarded. In practice, deferral has been

c.16% reflecting the fact that the maximum bonus opportunity is 120% of salary.

Buy-As-You-Earn

(“BAYE”)

•

Broad based employee share scheme under which participants may acquire up to

£12,000 of shares each year and receive additional “Matching Shares”.

•

The BAYE operates on the same basis for the Executive Directors as for other

employees, except that Executive Directors’ awards are subject to malus/ clawback

provisions.

Performance Share Plan

(“PSP”)

•

Usual maximum award of 150% of salary, with discretion to grant at up to 200% of salary.

25% vesting at threshold.

•

Executive Directors’ awards are subject to a holding period of two years after vesting.

Shareholding requirements

•

200% of salary shareholding requirement during employment.

•

Two-year post-employment shareholding requirement applying to shares acquired from

share plan awards granted after 1 January 2020: 200% of salary until the audit sign-off

for the year in which the Director leaves; 100% of salary until the audit sign-off for the

following year.

Malus and clawback

Malus and clawback provisions apply to the annual bonus, PSP and BAYE Matching Shares.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

100

Our performance in 2023

Elsewhere in this Annual Report the Board reports on the progress which the Group has made during 2023, delivering

a resilient financial performance against a backdrop of very challenging market conditions. The Group continued to

adjust recruitment, training, Consultant resource, and internal staffing levels to align with these market conditions,

while maintaining investment in the business to support future growth. Re-engagement with clients who have been

dormant for some years has led to the signature of new Master Services Agreements which lay the foundation for

potential significant new business over the coming years. The Group made good progress in its ongoing project to

diversify into new client sectors outside financial services. Notwithstanding the difficult trading environment, the

Group did not lose sight of its social and environmental agenda. The continued development of our accreditation

programmes and certifications will help to ensure that Consultants have the best possible preparation for their careers

in technology, bringing job-ready skills which are most valued by employers.

The Remuneration Committee aims to set bonus metrics for the Executive Directors which are aligned to the culture

of the Group, and are capable of being cascaded down to managers throughout the organisation. Non-financial

metrics forming part of the Executive Directors’ bonus were initially applied to elements of the bonuses for some

senior managers in 2022, and this approach was broadened during 2023. The Committee has encouraged further

progress with the Group’s social and environmental agenda this year, which is reflected in the Social Mobility,

Employee Satisfaction and Carbon Reduction targets which now form part of the significant non-financial element of

the Executive Directors’ bonus opportunity. The Group has made encouraging advances in some of these areas, in

particular by improving its ranking in the UK Social Mobility Foundation’s Employer Index. A focus on delivering social

mobility has been, and continues to be, a key element in the success of FDM’s business model, and the consequent

diversity of our Consultants is recognised and valued by our clients.

The Committee had regard to overall Group performance in the year when approving the Executive Directors’ bonus

outturns. Each Executive Director was eligible to earn a bonus of up to 120% of salary, subject to the achievement of

stretching performance targets based on financial and strategic measures. Based on the performance delivered, each

Executive Director earned a bonus of 27.5% of salary (22.9% of the maximum). Further information is set out later in

this statement, with details of the performance against the measures then set out beginning on page 109. In approving

the bonus outturns, the Committee was mindful that for each of the financial measures, the target level of performance

(at which bonuses start to be earned) had not been met so that no bonus was earned by reference to these elements.

Notwithstanding this, the Committee was strongly of the view that the bonuses earned by reference to the strategic

measures were appropriate. In particular, the Committee had regard to the following factors.

•

In line with our usual practice, we did not set a below-base level threshold target of financial performance. Although

the base level targets for the financial measures were not achieved, we were comfortable that the overall financial

performance of the Group in the year should not preclude the payment of the bonuses by reference to the strategic

measures.

•

The overall opportunity based on the strategic measures accounts for only a minority of the overall bonus

opportunity.

•

Part of the bonuses earned will be deferred into shares to ensure longer term alignment with the interests of

shareholders.

•

The overall approach is aligned with the approach taken for the wider workforce. Members of the wider workforce

whose remuneration includes a bonus element based on the Group’s financial performance were awarded a

proportion of their bonus entitlement during 2023 on a discretionary basis, notwithstanding that the relevant

financial targets had not been met. This was done in order to incentivise employees during a difficult trading year

and to safeguard retention of key staff.

101

Financial Statements

Governance

Strategic Report

Remuneration in 2023 and implementation of the new Directors’ Remuneration Policy in 2024

The table below summarises the principal decisions in 2023 in relation to Directors’ Remuneration, along with the

proposed implementation of the new Policy in respect of 2024.

When taking decisions in relation to the Executive Directors’ remuneration, we always have regard to the remuneration

arrangements for the wider workforce.

Decisions in respect of 2023

Proposed implementation for 2024

Salary and

fees

Executive Director salaries

I explained in last year’s Directors’ Remuneration Report that the Executive Directors’ salaries for 2023

were to be increased with effect from 1 April 2023 in line with our usual timing for salary increases across

the business. The increases awarded to the Executive Directors were 5.5% compared to an average

range of increases across the wider workforce of 4.4% to 6.1%. A review of the Executive Directors’

salaries for 2024 is currently underway, the result of which has not yet been determined. Any increases

will be applied from 1 April 2024, will be within or below the average range of increases awarded to the

wider workforce, and will be confirmed in next year’s report. The table below shows the 2022 and 2023

salaries for the Executive Directors.

Executive Director

2022

(Salary with effect from 1 April 2022)

2023

(Salary with effect from 1 April 2023)

Rod Flavell

£500,000

£527,500

Sheila Flavell

£342,000

£360,810

Mike McLaren

£342,000

£360,810

Andy Brown

£342,000

£360,810

Board Chair and Non-Executive Director fees

In last year’s Remuneration Report, we explained that the Committee was reviewing the Chair’s fee

and that the Board was reviewing the fees of the Non-Executive Directors, having regard to the time

commitments required for these roles and the competitive positioning of those fees. Following that

review, the fees were increased with effect from 1 April 2023. In line with the approach commonly taken

by other listed Companies, the Board decided that the additional fee for the Chair of the Nomination

Committee would no longer be expressed as a separate fee but would be included in the overall fee for

the Chair of the Board (as the two roles are currently held by the same individual and the expectation is

that this will continue to be the case). The Committee (as regards the Chair) and the Board (as regard

the Non-Executive Directors) are in the process of considering the fees to determine whether any further

increases will be applied with effect from 1 April 2024. The table below shows the 2022 and 2023 fees

for the Chair and the Non-Executive Directors.

Role

Fee with effect from

1 April 2022

Fee with effect from

1 April 2023

Chair of the Board

£170,000

£184,625

Non-Executive Director basic fee

£57,000

£60,000

Nomination Committee Chair fee

£5,000

nil

Audit or Remuneration Committee Chair fee

£12,500

£13,000

Senior Independent Director fee

£12,500

£13,000

Fee for holding the position of designated Non-Executive

Director for engagement with the workforce

£5,000

£7,000

1 Includes fee for the role of Chair of the Nomination Committee.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

102

Decisions in respect of 2023

Proposed implementation for 2024

Bonus

Each Executive Director was eligible to earn a

bonus in respect of 2023 up to 120% of salary.

Bonuses were subject to performance measures

weighted as follows.

•

Adjusted Profit Before Tax: up to 40% of salary

•

Consultant Revenue: up to 40% of salary

•

Employee Engagement and Satisfaction: up to

10% of salary

•

Client Diversification: up to 10% of salary

•

Social Mobility: up to 10% of salary

•

Reduction in Greenhouse Gas Emissions: up to

10% of salary

As I have already mentioned, each Executive

Director earned a bonus of 27.5% of salary (22.9%

of the maximum) by reference to the performance

achieved. Details of the performance against the

measures is set out beginning on page 109. The

Committee considers that the outturn is reflective

of the overall performance of the Group in the

year and is appropriate. The bonus will be paid

part in cash and part in shares deferred for two

years, as set out on page 110.

The maximum bonus that may be earned for 2024 will

remain 120% of salary. The bonus will be subject to

performance measures weighted as follows.

•

Adjusted Profit Before Tax: up to 40% of salary

•

Consultant Revenue: up to 40% of salary

•

Employee Engagement and Satisfaction: up to 10%

of salary

•

Client Diversification: up to 10% of salary

•

Social Mobility: up to 10% of salary

•

Reduction in Greenhouse Gas Emissions: up to 10%

of salary

The targets are commercially sensitive and further

information will be disclosed in the 2024 Directors’

Remuneration Report.

In line with our usual practice, bonuses will be

calculated by reference to the salary earned in the

year, and not solely by reference to the rate of salary

applying at the end of the financial year.

PSP

PSP awards vesting by reference to

performance over the period 2020 – 2023

The awards granted to the Executive Directors

in 2021 under the Company’s Performance

Share Plan were subject to a performance

condition based on earnings per share over the

performance period 2021 – 2023. The threshold

level of performance was not achieved and the

awards lapsed; further information is given on

page 111.

Executive Directors

We propose to grant PSP awards to the Executive

Directors and other members of the management

team in respect of 2024. The awards will be subject

to performance conditions based on FDM’s earnings

per share assessed over a three-year performance

period commencing with FDM’s 2024 financial year.

Details of the performance conditions and targets will

be announced at the time the awards are granted,

in addition to being included in the 2024 Directors’

Remuneration Report.

In line with FDM’s usual practice, it is proposed that

each Executive Director will receive an award over

the same number of shares. The number of shares

will have a value not exceeding 100% of the lowest

Executive Director’s annual salary as at the date the

award is made.

103

Financial Statements

Governance

Strategic Report

Decisions in respect of 2023

Proposed implementation for 2024

PSP

(continued)

Approach to the grant of PSP awards in 2023

We reported last year that we intended to grant

PSP awards in 2023 based on earnings per

share performance assessed over the three-year

period 2023 to 2025. As the year progressed, it

became clear that setting appropriate targets for

the awards was challenging given the economic

environment. Therefore, with the agreement of

the Executive Directors, the decision was taken

not to grant PSP awards in 2023.

Wider workforce long-term share plan awards

We operate our share plans, including the PSP, on

a wide basis to broaden the scope and benefits of

employee share ownership, which is fundamental to

FDM’s culture. Given the importance of this approach

to FDM, it will continue in 2024. However, as we

have grown and developed as a business and as the

international spread of our workforce increases, it has

become apparent that those more junior members of

the workforce who participate in the PSP do not have

the same visibility of the earnings-per-share-based

performance targets as more senior managers, and

feel less able to influence them. For those employees

we propose to grant “restricted stock” awards

which would vest subject to continued employment.

The restricted stock awards would not be subject

to any earnings-based performance condition

but it is proposed that vesting will be subject to

the satisfaction of one or more financial underpin

conditions. The quantum of the awards granted to

each individual would be reduced to reflect the higher

probability of vesting. The restricted stock awards

are proposed to be granted under the revised and

renewed PSP, to which I refer below.

Share plan renewal

FDM’s discretionary share plans (the PSP and a separate Company Share Option Plan) were adopted in June 2014 in

advance of FDM’s IPO. In line with usual practice, those plans expire (for the purposes of new awards) after ten years

in June 2024. Therefore, at the 2024 AGM, shareholders will be asked to approve an extension to the PSP, with certain

revisions to reflect the current approach to such plans. These will include the explicit ability to grant awards which

are not performance-based to employees below Board level, so as to facilitate the restricted stock approach to which

I refer above; the application of performance conditions to Executive Directors’ awards will continue to reflect the

approach in the Policy. A summary of the proposed revisions to the terms of the extended PSP will be included in the

Notice of AGM.

Changes to the Remuneration Committee

As we reported in last year’s Annual Report and as discussed elsewhere in this year’s Annual Report, having served

on the Board for over nine years since FDM’s IPO, I will not seek re-election at this year’s AGM, which is due to be

held on 14 May 2024. I will retire from the Board at the end of the AGM, at which point the position of Chair of the

Remuneration Committee will be taken up by Rowena Murray. More information in relation to Rowena’s experience is

included in the Board of Directors section of this Annual Report on page 69 and in the Nomination Committee Report

on page 97. Rowena has been a member of the Remuneration Committee since her appointment in August 2023, and

has experience of matters related to executive remuneration through her private equity roles on other boards. She

has worked closely with me in relation to Remuneration Committee matters since her appointment. I know she will

ensure that FDM ‘s executive remuneration arrangements continue to support the Group’s overall strategy and are

implemented in a responsible way.

The Committee and the Board remain committed to a responsible approach to executive pay and believe the Policy

operated as intended during 2023. We recognise the importance of engagement with shareholders in relation to

executive remuneration and Rowena Murray and I will be pleased to answer any questions you may have on our

approach, including at the 2024 AGM where we will be available to discuss this report with shareholders. We hope that

we continue to receive your support at the AGM.

Peter Whiting

Chair of the Remuneration Committee

19 March 2024

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

104

Alignment of the Directors’ Remuneration Policy with the Corporate Governance Code

In determining the new Policy, the Committee took into account the principles of clarity, simplicity, risk, predictability,

proportionality, and alignment to culture, as set out in the 2018 Code.

Clarity:

remuneration arrangements should

be transparent and promote effective

engagement with shareholders and the

workforce

Our remuneration arrangements are clear and simple, and we fully

disclose performance outturns and associated vestings in the Directors’

Remuneration Report. We follow a standard UK listed company

approach to Directors’ remuneration with established incentive schemes

that operate on a clear and consistent basis. We operate our share plans

on a wide basis to broaden the scope and benefits of employee share

ownership, which is fundamental to the Company’s culture.

Simplicity:

remuneration structures should

avoid complexity and their rationale and

operation should be easy to understand

Risk:

remuneration arrangements should

ensure reputational and other risks from

excessive rewards, and behavioural risks that

can arise from target-based incentive plans,

are identified and mitigated

Malus and clawback provisions apply to all Executive Director variable

remuneration and reflect the Code. The Committee has discretion to

override formulaic vesting outturns in order that any risks associated

with targets can be mitigated. Bonus deferral, the holding period for

PSP awards and the in-employment and post-employment shareholding

requirements mean that Executive Directors’ interests are further

aligned with the longer-term interests of shareholders.

Predictability:

the range of possible values

of rewards to individual Directors and other

limits or discretions should be identified and

explained

Variable remuneration opportunities are clearly expressed as a

percentage of base salary. The new Directors’ Remuneration Policy

clearly sets out on page 123 illustrations of the amounts that could be

earned under the Policy by the Executive Directors in 2024. Discretions

reserved to the Committee are set out in the Directors’ Remuneration

Policy.

Proportionality:

the link between individual

awards, the delivery of strategy and the long-

term performance of the Company should

be clear. Outcomes should not reward poor

performance

Variable remuneration for Executive Directors is subject to the

achievement of performance targets. The Committee has discretion

to override formulaic outturns to ensure that poor performance is

not rewarded, and delivery of a significant proportion of the variable

remuneration in shares means that the overall reward is strongly aligned

with the interests of shareholders. The application of strategic measures

to part of the annual bonus means that overall reward is linked to the

delivery of key strategic measures, in addition to financial performance.

Alignment to culture:

incentive schemes

should drive behaviours consistent with the

Company’s purpose, values and strategy

A high proportion of the workforce participates in an annual bonus

award. The Committee aims to choose bonus metrics for the Executive

Directors which are capable of being cascaded down to managers

throughout the organisation. Accordingly, some of the non-financial

metrics forming part of the Executive Directors’ bonus were applied to

elements of the bonuses for some senior managers in 2023. This means

that the wider workforce remuneration is also aligned with overall

performance with a consistent approach to performance assessment

across the leadership team, and that members of the wider workforce

are also able to benefit from their contribution to the overall success of

the Group.

Employee share ownership is fundamental to the Company’s culture

and this is reflected in the level of direct share ownership and the broad

extension of our Performance Share Plan and Buy-As-You-Earn plan

through the Group’s workforce. In 2023 we expanded the group of

senior managers for whom an element of their bonus is deferred into

shares, further aligning their interests with the longer-term interests of

shareholders.

105

Financial Statements

Governance

Strategic Report

Stakeholder engagement

The Remuneration Committee recognises the importance of engagement with our stakeholders in relation to executive

remuneration.

We have an established investor relations function, the work of which is discussed in the Corporate Governance

Report. Additional engagement takes place with investors during years when a new remuneration policy is to be

put to shareholders for approval, or when the Committee is seeking feedback on any other more significant matters

concerning executive remuneration. As explained in the statement from the Chair of the Committee at the beginning

of this Directors’ Remuneration Report, in early 2024 the Committee engaged with major shareholders to explain the

proposed approach to the new remuneration policy to be submitted for shareholder approval at the AGM to be held

in May 2024, and confirmed that the Committee would be pleased to answer any questions they may have had. In

addition to this, executive remuneration is always a topic available for discussion in any of the meetings forming part of

our more general programme of shareholder engagement. Feedback from investors is taken into account in finalising

our approach to executive remuneration.

As in previous years, the Remuneration Committee did not formally consult with employees in relation to executive

remuneration and remuneration was not raised as a priority by employees with whom the Board engaged throughout

the year (including in the employee engagement sessions carried out by Jacqueline de Rojas, the Non-Executive

Director with responsibility for ensuring that the voices of our employees are heard at Board level). However, as noted

above, elements of the Executive Directors’ bonus metrics are being cascaded down to managers in the organisation,

and bonus deferral has been introduced for an increasing number of senior managers. Members of the Committee, as

well as Executive Directors and the Company Secretary, engage with the relevant managers to explain the rationale for

this approach, how Executive Director remuneration and wider workforce remuneration are aligned in this regard, and

how these arrangements align remuneration with the interests of shareholders and the overall strategy.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

106

Annual Report on Remuneration

Audited Section

The Audited section of this report comprises only the following sections:

•

Single figure table

•

Annual bonus for 2023

•

Strategic Measures

•

Long-term incentives vesting in respect of 2023

•

Payments to former Directors

•

Payments for loss of office

•

Directors’ shareholdings and share interests

•

Performance Share Plan awards and deferred bonus shares awarded in 2023

Single figure table

The table below details the total remuneration receivable by each Director for the financial years ended 31 December

2023 and 31 December 2022. Where necessary, further explanation of the values provided is included in the notes to

the table or the additional information that follows it in relation to the 2023 annual bonus.

The figures in the single figure table are derived from the following:

Salary and fees

The total salaries and fees paid in respect of the year.

Benefits

The value of benefits received in the year, comprising private medical insurance and car

allowance.

Annual bonus

The value of the bonuses earned in respect of the year. For 2023, bonuses were calculated

by reference to the salary earned in the year, and not solely by reference to the rate of salary

applying at the end of the financial year.

Long-term incentives

The value of the Executive Directors’ long-term incentives vesting by reference to performance in

the relevant year.

Pension

The cash value of a salary supplement paid to the Executive Director in lieu of company pension

contributions to the Company’s defined contribution scheme. No Director participates in a defined

benefit pension arrangement in respect of their service with FDM.

107

Financial Statements

Governance

Strategic Report

Single figure table

continued

Salary and

fees

£000

Benefits

£000

Annual

bonus

£000

Long-term

incentives

£000

Pension

£000

Total

£000

Total fixed

£000

Total

variable

£000

Executive Directors

Rod Flavell

2023

520.6

19.7

143.2

–

18.0

701.5

558.3

143.2

2022

490.0

19.6

519.2

243.0

23.1

1,294.9

532.7

762.2

Sheila Flavell

2023

356.1

13.9

97.9

–

12.3

480.2

382.3

97.9

2022

339.0

13.7

359.2

243.0

16.3

971.2

369.0

602.2

Mike McLaren

2023

356.1

14.8

97.9

–

12.3

481.1

383.2

97.9

2022

337.8

14.7

357.8

243.0

16.1

969.4

368.6

600.8

Andy Brown

2023

356.1

13.9

97.9

–

12.3

480.2

382.3

97.9

2022

339.0

13.8

359.2

243.0

16.3

971.3

369.1

602.2

Non-Executive Directors

David Lister

2023

182.2

–

182.2

–

2022

173.8

–

173.8

–

Peter Whiting

2023

85.0

–

85.0

–

2022

81.3

–

81.3

–

Alan Kinnear

2023

72.1

–

72.1

–

2022

68.9

–

68.9

–

Michelle Senecal

de Fonseca

2023

59.3

–

59.3

–

2022

56.5

–

56.5

–

Jacqueline de Rojas

2023

65.7

–

65.7

–

2022

61.5

–

61.5

–

Rowena Murray

2023

25.0

–

25.0

–

2022

–

The payment made to each Executive Director in 2022 in lieu of company pension contributions to the Company’s defined contribution scheme includes a

one-off amount paid to correct an underpayment in respect of previous years. The proportion of the 2022 total for each Executive Director which relates to

this element is as follows: Rod Flavell £16,708; Sheila Flavell £11,560; Andy Brown £11,560; Mike McLaren, £11,517.

Rowena Murray was appointed as a Non-Executive Director of the Company on 1 August 2023.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

108

Annual bonus for 2023

As described in the Committee Chair’s statement on page 103, each Executive Director earned a bonus of 27.5% of

salary for 2023, out of a maximum of 120% of salary. Details of the performance against the applicable targets is set

out on next page.

While the Remuneration Policy permits a payment of 20% of the maximum payable upon achieving a threshold level of

performance, the Committee decided not to set such a target for any element of the available bonus.

Weighting

Threshold

(20% of

maximum

payable)

Base Target

(50% of

maximum

payable)

Stretch

Target (100%

of maximum

payable)

Actual

performance

Bonus

earned

(percentage

of maximum

payable)

Adjusted profit before tax

33.33%

(40% of salary)

n/a

£57.2m

£60.0m

£50.2m

Consultant revenue

33.33%

(40% of salary)

n/a

£360.7m

£367.8m

£334.0m

Employee engagement and satisfaction

8.33%

(10% of salary)

Performance for these elements was assessed

by reference to the achievements delivered

in the year relative to the measures, as

described below.

75%

Client base diversification

8.33%

(10% of salary)

100%

Social mobility

8.33%

(10% of salary)

100%

Reduction in greenhouse gas emissions

8.33%

(10% of salary)

Strategic measures

The achievements in respect of the strategic measures are described below.

Strategic measure

Achievements

Employee

engagement and

satisfaction

Achievement in respect of this measure was based on responses to survey questions asked

of internal staff and Consultants about recommending FDM as a place to work and providing

opportunities for learning and career development. Each of the four results accounted for 2.5%

of the 10% weighting achievable for this measure.

The targets for each question were based on an average of the scores achieved across the

responses in the survey.

The target level for the average scores was achieved for three of the four questions; a more

granular description of the outturn is not given as the Committee considers the details to be

commercially sensitive. This resulted in a bonus achievement of 7.5% of salary (75% of the

maximum bonus available for this metric).

Client base

diversification

Achievement in respect of this measure was based on the number of new clients with whom

Consultants were placed in sectors outside the Group’s core financial services client base,

with both a base target and a stretch target set. The target numbers and sector details are not

disclosed as they are commercially sensitive and would give competitors insight into our strategy

and plans.

The number of Consultants placed with clients outside the financial services sector exceeded

the stretch target; a more granular description of the outturn is not given as the Committee

considers the details to be commercially sensitive. The bonus achievement for the Client-base

Diversification metric was therefore 10% of salary (100% of the maximum bonus available for

this metric).

109

Financial Statements

Governance

Strategic Report

Strategic measure

Achievements

Social mobility

Achievement in respect of this measure was based on an assessment by the Committee of the

Group’s progress in promoting social mobility amongst its employees.

The Committee reviewed a number of aspects of the Group’s business which help promote social

mobility. In particular, the Committee noted that the Group increased its ranking to 34 (2022: 48)

in the Social Mobility Foundation’s Employer Index for 2024. The Index is a leading authority on

employer-led social mobility, measuring employers’ performance on eight areas through which

companies can make a positive impact on social mobility, and ranking the top 75. The Committee

also noted that:

•

the Returners (Business) programme and Ex-Forces Advanced Course, which are key drivers

of social mobility across the FDM Consultant workforce, each achieved Tech Industry Gold

accreditation during the year; and

•

the Group’s apprenticeship programme expanded to 35 apprentices, and the first four

apprentices from 2020 completed the programme and graduated with first class and upper

second class degrees in September 2023. They were all retained by the business and have

progressed into graduate-level roles with permanent contracts.

Having considered the progress made, the Committee determined that it was appropriate to pay

the Executive Directors 10% of salary, (100% of the maximum available) under this element of

the bonus.

Reduction in

greenhouse gas

emissions

Achievement in respect of this measure was based on a target to reduce the Group’s Scope 1,

2 and 3 carbon emissions per employee. Both a base target and a stretch target were set, as

follows.

Base Target

Reduce the 2023 emissions (Scope 1, 2 and 3) per employee by 3% or more

(as compared with the 2022 emissions

(Scope 1, 2 and 3) per employee

)

Stretch Target

Reduce the 2023 emissions (Scope 1, 2 and 3) per employee by 5% or more

(as compared with the 2022 emissions

(Scope 1, 2 and 3) per employee

)

5% of the total 10% available was payable on achieving the base target, and the other 5% was

payable on achieving the stretch target. The amount payable was calculated on a straight-line

basis for performance between base and stretch.

Performance against this measure was that 2023 emissions (Scope 1, 2 and 3) per employee

had increased by 19% on the restated 2022 emissions (increased by 44% on 2022 emissions

before restatement). The restatement and the significant factors contributing to the increase in

emissions per employee are set out in further detail on page 60. No bonus was therefore payable

in respect of this metric.

Accordingly, each Executive Director earned a bonus equal to 27.5% of their salary in respect of 2023, which will be

paid in cash and deferred shares as set out below.

Executive Director

Bonus earned

Bonus paid in cash

Bonus to be deferred

into shares

Rod Flavell

£143,172

£119,310

£23,862

Sheila Flavell

£97,930

£81,608

£16,322

Mike McLaren

£97,930

£81,608

£16,322

Andy Brown

£97,930

£81,608

£16,322

The deferred share awards will vest after two years, are not subject to any further performance condition and may be

subject to forfeiture in the event of fraud, dishonesty leading to a material misstatement of financial results, serious

reputational damage, or material corporate failure or cessation of employment due to summary dismissal or resignation

to join or establish a competing business.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

110

Long-term incentive awards vesting in respect of 2023

Each Executive Director (namely Rod Flavell, Sheila Flavell, Andy Brown, Mike McLaren) was granted an award

under the Company’s Performance Share Plan on 21 April 2021 over 30,000 shares. Each award was subject to a

performance condition based on the adjusted EPS in the final financial year of the performance period (2023) in

accordance with the following table.

Adjusted EPS

in 2023

Percentage of the award that will vest

Performance outcome

(2023 adjusted EPS)

Vesting outcome

35.7 pence

25%

32.9 pence

Greater than 35.7 pence

but less than 38.3 pence

Determined on a straight-line basis

between 25% and 100%

38.3 pence or more than

38.3 pence

100%

The Committee has discretion to assess the performance outcome based on adjusted EPS (as defined in note 12 in the Consolidated Financial Statements).

Payment to former Directors

During the year, no payments were made to any former Director of the Company.

Payment for loss of office

During the year, no payments were made in respect of loss of office.

Directors’ shareholding and share interests

The Company’s formal shareholding guideline for Executive Directors is that each Executive Director should hold

shares with a value equal to at least 200% of salary. The current Executive Directors have shareholdings with

values significantly in excess of this guideline, reflecting the Company’s historic culture of share ownership and

entrepreneurialism. The interests as at 31 December 2023 were as follows:

Ordinary shares

as at

31 December 2023

Number

Ordinary shares

value as at

31 December 2023

£000

Value (multiple of

base salary

)

Executive Directors

Rod Flavell

7,352,313

33,710

63.9

Sheila Flavell

7,345,813

33,681

93.3

Mike McLaren

491,163

2,252

6.2

Andy Brown

4,037,739

18,513

51.3

Non-Executive Directors

David Lister

–

Peter Whiting

10,453

0.6

Michelle Senecal de Fonseca

5,459

0.4

Alan Kinnear

–

Jacqueline de Rojas

–

Rowena Murray

–

Including the interests of persons closely associated with the Director, other than in the case of Rod Flavell and Sheila Flavell whose interests are reported

separately, interests in shares acquired pursuant to bonus deferral arrangements, and the net of assumed tax number of shares subject to any PSP awards

which are in a holding period.

Calculated based on the closing share price of 458.5 pence on 31 December 2023.

Calculated on base salary and fees as at 31 December 2023.

111

Financial Statements

Governance

Strategic Report

Since 31 December 2023 the holdings of Rod Flavell, Sheila Flavell and Mike McLaren in the share capital of the

Company have increased as a result of their participation in the BAYE Plan, as set out in the table below. There have

been no other changes in the Directors’ holdings between 31 December 2023 and the date the financial statements

were approved.

Executive Director

BAYE Purchased

Shares acquired in

January 2024

BAYE Purchased

Shares acquired in

February 2024

BAYE Purchased

Shares acquired in

March 2024

Rod Flavell

229

230

246

Sheila Flavell

229

230

246

Mike McLaren

114

115

123

Each Executive Director also holds awards under the Company’s PSP as set out below. Each Executive Director holds

the same awards.

Date of award

Number at

1 January

2023

Granted in

2023

Lapsed in

2023

Exercised in

2023

Number at

31 December

2023

Status

30 December 2020

29,000

–

29,000

Vested

21 April 2021

30,000

–

30,000

Lapsed

22 March 2022

30,000

–

30,000

Unvested and subject to

performance condition

The awards granted in 2020 vested on 14 March 2023 as described in the 2020 Directors’ Remuneration Report and are subject to a two-year holding period

post vesting before the vested shares can be acquired.

The awards granted in 2021 lapsed on 19 March 2024 as described on the previous page.

The awards granted in March 2022 are subject to a performance condition based wholly on the adjusted EPS at the end of a three-year performance period

(2022 – 2024).

Performance Share Plan awards granted in 2023

As described in the Committee Chair’s statement on page 104, no PSP awards were granted in 2023.

Approach to Directors’ remuneration for 2024

Base salary and fees

The Executive Directors’ salaries are currently under review by the Committee, having regard to the size and

complexity of the Group’s business and the competitive positioning of the salaries for each role.

The Board Chair’s fee and the fees of the Non-Executive Directors are currently also under review (by the Committee,

in the case of the Board Chair, and by the Board, in the case of the Non-Executive Directors).

Any changes have yet to be determined, but are proposed to take effect from 1 April 2024 and will be reported on in

the 2024 Directors’ Remuneration Report.

Annual bonus and long-term incentives for 2024

The maximum annual bonus opportunity for all Executive Directors for 2024 is 120% of salary, as set out in the

statement from the Chair of the Committee on page 103. Information in relation to the performance measures,

weightings and approach to deferral is also set out in that statement.

The Committee proposes to grant awards under the PSP in respect of 2024, as discussed in the statement from the

Committee Chair.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

112

Performance graph and historical Chief Executive Officer remuneration outcomes

The graph below shows the Company’s Total Shareholder Return (“TSR”) performance since the date of listing

compared to the FTSE 250 Index; the FTSE 250 Index was chosen as the Company was a constituent of that index

during 2023.

Total Shareholder Return (rebased to 100)

300

Dec

2014

Jun

2015

Dec

2015

Jun

2016

Dec

2016

Jun

2017

Dec

2017

Jun

2018

Dec

2018

Jun

2019

Dec

2019

Jun

2020

Dec

2020

Dec

2021

Jun

2021

Dec

2022

Jun

2022

Dec

2023

Jun

2023

Jun

2014

600

200

100

400

500

FDM

FTSE 250

The table below details the total remuneration, annual bonus and LTIP vesting (as a percentage of the maximum

opportunity) for the Chief Executive Officer (“CEO”) for the last ten years. Note that for 2014 this is the remuneration

received for the whole of 2014 and so is not directly comparable to the TSR performance chart above, which is for the

period from 20 June 2014.

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Total remuneration (£000)

658.5

668.1

764.5

1,134.1

995.0

802.0

750.5

982.5 1,294.9

701.5

Annual bonus as a % of maximum

opportunity

55%

82%

100%

80%

58%

50%

65%

94%

88%

22.9%

Long-term incentives as a % of

maximum opportunity

n/a

100%

Change in Directors’ remuneration in relation to the wider workforce

The table below shows the percentage change in each Director’s salary/ fees, benefits and annual bonus between

the financial years 2019 – 2020, 2020 – 2021, 2021 – 2022 and 2022 – 2023. Rowena Murray has been excluded from

the table as she was appointed to the Board during 2023. The applicable regulations require us to show the average

change in the same elements of remuneration for the employees of FDM Group (Holdings) plc on a full-time equivalent

(“FTE”) basis. FDM Group

(Holdings) plc has no employees other than the Directors. Accordingly, in order to provide a

meaningful comparison, we have shown the change based on a wider workforce comparator group which, consistent

with previous years, includes all UK employees other than Consultants. Notes in relation to changes for previous years

can be found in the Directors’ Remuneration Report for the year in question.

113

Financial Statements

Governance

Strategic Report

Wider

workforce

Rod

Flavell

Sheila

Flavell

Mike

McLaren

Andy

Brown

David

Lister

Peter

Whiting

Alan

Kinnear

Michelle

Senecal

Fonseca

Jacqueline

de Rojas

Rowena

Murray

Salary/

fees

2022 – 2023

9.6%

6.2%

5.0%

5.4%

5.0%

4.8%

4.6%

5.0%

6.8%

n/a

2021 – 2022

11.5%

9.8%

5.1%

6.9%

5.1%

2.2%

5.9%

5.7%

5.0%

7.0%

n/a

2020 – 2021

9.0%

10.3%

7.4%

9.4%

7.4%

9.7%

15.0%

7.6%

15.0%

n/a

2019 – 2020

7.5%

14.2%

n/a

Annual

bonus

2022 – 2023

-33.1% -72.4%

-72.7% -72.6%

-72.7%

n/a

2021 – 2022

4.2%

3.5%

-1.0%

0.7%

-1.0%

n/a

2020 – 2021

57.8%

59.2%

55.0%

57.8%

55.0%

n/a

2019 – 2020

-6.8%

56.6%

n/a

Taxable

benefits

2022 – 2023

-28.3%

0.50%

1.5%

0.7%

n/a

2021 – 2022

12.1%

0.0%

1.5%

-0.7%

1.5%

n/a

2020 – 2021

-6.8%

-4.4%

0.0%

-1.3%

-0.7%

n/a

2019 – 2020

3.5%

-0.5%

-1.5%

-1.3%

-2.1%

n/a

Rowena Murray was appointed to the Board with effect from 1 August 2023 and, accordingly, there is no change shown in relation to her fees.

CEO pay ratio

The following table sets out the ratio of the CEO’s total remuneration in respect of the 2023 financial year (taken from

the single figure table on page 108) to the 25th percentile, 50th percentile (i.e. the median

) and the 75th percentile

FTE of the Company’s UK employees. In line with the applicable regulations, the corresponding ratios for 2018, 2019,

2020, 2021 and 2022 are also included. For consistency with the “change in CEO remuneration in relation to the wider

workforce” disclosure, the table below also provides the same ratio in respect of the Company’s UK FTE employees

excluding Consultants. This reflects the fact that Consultants’ remuneration is not subject to the same annual review

process as the rest of the UK workforce.

25th percentile pay ratio

Median pay ratio

75th percentile pay ratio

Year

Method

Including

Consultants

Excluding

Consultants

Including

Consultants

Excluding

Consultants

Including

Consultants

Excluding

Consultants

2018

Option A

43:1

36:1

40:1

23:1

31:1

14:1

2019

Option A

32:1

27:1

29:1

19:1

21:1

13:1

2020

Option A

28:1

29:1

22:1

19:1

17:1

14:1

2021

Option A

42:1

35:1

34:1

23:1

25:1

17:1

2022

Option A

54:1

46:1

49:1

33:1

34:1

20:1

2023

Option A

27:1

24:1

25:1

17:1

18:1

12:1

The Company adopted “Option A” in the regulations for the purposes of calculating the pay ratios as it considers

this to be the most accurate method. Remuneration for other employees for the purposes of the calculations was

as at 31 December in each year. In calculating the ratio for all UK employees in the above table, the Company has

determined the total FTE remuneration for all its UK employees for the financial year and has then ranked those

employees based on their total FTE remuneration from low to high. The employees whose remuneration places them

at the 25th, 50th (median) and 75th percentile points in this ranking have then been identified. Consultants were then

excluded, and the process was repeated to calculate the ratio for all UK employees excluding Consultants.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

114

In line with the applicable regulations, we have set out below for the same employee percentiles (and for the CEO)

their total remuneration for each relevant year and the salary component of that remuneration.

Year

CEO total

remuneration

(salary

component

of total

remuneration)

25th percentile employee total

remuneration (salary component of

total remuneration)

Median employee total

remuneration (salary component of

total remuneration)

75th percentile employee total

remuneration (salary component of

total remuneration)

Including

Consultants

Excluding

Consultants

Including

Consultants

Excluding

Consultants

Including

Consultants

Excluding

Consultants

2018

£995,000

(£395,100)

£23,015

(£19,500)

£27,627

(£25,838)

£24,722

(£19,500)

£43,596

(£41,349)

£32,157

(£23,902)

£72,100

(£48,500)

2019

£801,968

(£404,250)

£24,911

(£20,000)

£29,682

(£24,982)

£27,339

(£20,000)

£42,150

(£36,000)

£37,305

(£20,000)

£63,498

(£55,000)

2020

£750,509

(£404,250)

£27,210

(£24,750)

£26,037

(£25,638)

£34,775

(£20,000)

£39,089

(£25,000)

£44,483

(£20,000)

£53,280

(£49,115)

2021

£982,538

(£446,062)

£23,607

(£20,000)

£28,100

(£25,500)

£28,765

(£20,000)

£42,970

(£35,870)

£39,779

(£20,000)

£57,500

(£50,000)

2022

£1,294,894

(£490,000)

£23,902

(£23,417)

£28,173

(£26,173)

£26,626

(£25,636)

£39,643

(£31,333)

£37,641

(£26,250)

£63,448

(£48,006)

2023

£701,525

(£520,625)

£25,886

(£25,886)

£29,000

(£29,000)

£28,585

(£28,585)

£42,200

(£40,000)

£39,538

(£39,538)

£60,374

(£31,000)

A significant proportion of the Executive Directors’ remuneration is performance-related. The ratios will therefore vary

depending upon the extent to which performance conditions are satisfied and the Executive Directors’ performance-

related remuneration is earned. The changes in the ratios between 2022 and 2023 are principally attributable to the

reduction in the Executive Directors’ bonus outturn for 2023 compared to 2022 (a reduction from 88% of maximum to

22.9% of maximum). The Committee considers that the median ratio for 2023 is consistent with the pay, reward and

progression policies for employees as a whole.

Spend on pay

The following table sets out the percentage change in dividends paid and the overall expenditure on pay (as a whole

across the organisation).

Year ended

31 December 2023

£000

Year ended

31 December 2022

£000

Percentage

change

Total dividends paid

39,320

38,153

+3%

Overall expenditure on pay to employees

252,389

257,202

-2%

Shareholder approval of our Directors’ Remuneration Policy and Directors’ Remuneration Report

The Company’s Directors’ Remuneration Policy and the Company’s 2022 Directors’ Remuneration Report were

approved at the AGMs held on 28 April 2021 and 16 May 2023 respectively. The results of the votes are set out below:

Resolution

Votes for

% of votes for

Votes against

% of votes against

Votes withheld

Approve the Directors’

Remuneration Policy

90,648,379

96.49%

3,298,797

3.51%

2,678,296

Approve the Directors’

Remuneration Report

85,336,883

97.04%

2,604,676

2.96%

401

115

Financial Statements

Governance

Strategic Report

Membership of and Advisors to the Remuneration Committee

During the financial year the Committee’s membership was Peter Whiting (Chair), Michelle Senecal de Fonseca, Alan

Kinnear and, with effect from 1 August 2023, Rowena Murray.

During the financial year, the Committee received independent advice from Deloitte LLP (“Deloitte”), which was

appointed by the Committee, in relation to the Committee’s consideration of matters relating to Directors’ remuneration.

Deloitte was appointed in 2014 following a formal tender process. Fees for advice provided to the Remuneration

Committee during the year were £7,600. Fees were charged on a time and disbursements basis.

Deloitte is a member of the Remuneration Consultants Group and voluntarily operates under its code of conduct in its

dealings with the Remuneration Committee.

Deloitte also provides advice to the Company on the operation of its employee share plans and employee benefit trust.

The Committee took this work into account as part of its ongoing review of the appointment of Deloitte and, due to

the nature and extent of the work performed, concluded that it did not impair Deloitte’s ability to advise the Committee

objectively and free from influence. Accordingly, it is the view of the Committee that the advice it receives from

Deloitte is objective and independent.

The Board Chair, Chief Executive Officer and other members of the executive management attend the Committee by

invitation to provide input, but no Executive Director or other member of management is present when his or her own

remuneration is discussed. Details of individual attendances by Directors at the Remuneration Committee meetings

during 2023 are set out on page 74.

Directors’ Remuneration Policy

This part of the Report sets out the Company’s Directors’ Remuneration Policy, which, subject to shareholder approval

at the 2024 Annual General Meeting, shall take binding effect from the close of that meeting. The new Policy has been

determined by the Committee. The Company’s Directors’ Remuneration Policy was most recently approved at the

2021 Annual General Meeting and has applied since the date of that meeting. The new Directors’ Remuneration Policy

does not make significant changes to the overall remuneration structure, and continues to reflect our reward strategy

of providing competitive remuneration packages that promote the long-term success of the Company. As noted in

the Statement from the Chair of the Remuneration Committee on pages 99-104, there are no significant differences

between the Policy approved in 2021 and the new Policy.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

116

Executive Directors

Purpose and link to

strategy

Operation

Maximum opportunity

Performance measures

Base salary

Core element of

fixed remuneration

to reflect the

individual’s role

and experience as

part of a broadly

market competitive

total remuneration

package, to enable

the Group to recruit

and maintain the

required skills and

expertise to enable

it to achieve its

strategy.

Salary levels are determined taking into

account a range of factors, which may

include (but are not limited to):

•

Underlying Group performance;

•

The size and scope of the Executive

Director’s role and responsibilities;

•

The Executive Director’s skill, experience

and performance;

•

Salary levels for equivalent roles at other

listed companies of a similar size and/ or

complexity to the Group; and

•

Pay and conditions elsewhere in the

Group.

Whilst there is no maximum

salary level, salary increases

will normally be within or below

the range of increases awarded

to the wider workforce in

percentage of salary terms.

Higher salary increases may

be awarded in appropriate

circumstances including but

not limited to:

•

Where an Executive Director

has been promoted or has

had a change in scope or

responsibility;

•

To reflect an individual’s

development or performance

in role (e.g. a newly

appointed Executive Director

being moved to align with

the market over time); or

•

Where there has been a

change in the size and/ or

complexity of the business.

Such increases may be

implemented over such time

period as the Committee

deems appropriate.

Not applicable.

Benefits

To provide benefits

as part of a broadly

market competitive

total remuneration

package.

Executive Directors receive benefits set at

an appropriate level taking into account total

remuneration, market practice, the benefits

provided to other employees in the Group

and individual circumstances. Benefits

provided currently include car allowances

and private health insurance.

Other benefits may be provided based on

individual circumstances. These may include,

for example, relocation expenses and

expatriate allowances.

Whilst the Committee has not

set an absolute maximum on

the level of benefits Executive

Directors may receive, the

value of benefits is set at a

level which the Committee

considers to be appropriately

positioned taking into account

relevant market levels based

on the nature and location of

the role, the level of benefits

provided for other employees

in the Group and individual

circumstances.

Not applicable.

Retirement benefits

To provide an

appropriate level of

retirement benefit

(or cash allowance

equivalent) as

part of a broadly

market competitive

total remuneration

package.

Executive Directors are eligible to participate

in a defined contribution pension plan.

Executive Directors may take a taxable

cash supplement instead of some or all

contributions to a pension plan.

Company pension contribution

(or cash allowance equivalent)

not exceeding the contribution

available to the majority of the

workforce, as determined by

the Committee (currently 4% in

the UK).

Not applicable.

117

Financial Statements

Governance

Strategic Report

Purpose and link to

strategy

Operation

Maximum opportunity

Performance measures

Annual bonus

Rewards Executive

Directors for

achieving financial,

strategic and/ or

individual targets in

the relevant year, to

provide an incentive

for achieving the

Group’s strategy.

Performance measures and targets are

reviewed annually and pay-out levels

are determined by the Committee after

the year end based on performance

against the targets. The Committee has

discretion to amend the pay-out including in

circumstances where any formulaic outcome

does not reflect the Committee’s assessment

of overall performance or is not considered

appropriate in the context of circumstances

that were unexpected or unforeseen at the

start of the relevant year.

Ordinarily, up to 33% of the bonus earned

will be deferred into an award of shares,

which shall be released following the end of

a two-year deferral period. The Committee

may require or permit the deferral of higher

levels of bonus. The Committee may pay the

whole of any bonus earned in cash where the

deferred amount would otherwise be below

£10,000.

Deferred bonus awards may take the form

of a nil or nominal cost option to acquire the

relevant shares following release, or as a

requirement to invest the after-tax portion

of the bonus into shares which must be

retained until release.

The Committee may award additional shares

in respect of deferred amounts to reflect

dividends that would have been paid on

the deferred award shares over the period

to their release; these dividend equivalents

may assume the reinvestment of dividends

into Company shares on such basis as the

Committee determines.

Recovery

Recovery provisions apply as summarised

below the table.

Maximum annual bonus

opportunity for Executive

Directors is 150% of base

salary, although for 2024 the

opportunity will be limited to

120% of base salary.

Performance measures and

targets are set annually

reflecting the Company’s

strategy and aligned with key

financial, strategic and/ or

individual targets.

For financial measures,

subject to the Committee’s

discretion to override

formulaic outturns, pay-out

of up to 20% of maximum for

threshold performance (the

minimum level of performance

resulting in any payment),

50% of maximum for on-target

performance and full pay-

out for stretch performance.

There is ordinarily straight-line

vesting between each of the

points.

For non-financial measures, a

vesting schedule may apply

on a similar basis to that

described above for financial

measures. Alternatively, the

pay-out will be determined

by the Committee between

0% and 100% based on its

assessment of the extent to

which the measure has been

achieved.

At least 50% of the bonus

will be assessed against

key financial performance

measures which may

include revenue, pre-tax

profit or other key financial

performance metrics of the

Company. Any balance of

the bonus may be assessed

against non-financial strategic

measures and/ or individual

performance.

Buy As You Earn (“BAYE”) Plan

To create staff

alignment with

the Group and

encourage share

ownership.

Participants may acquire up to £12,000 of

shares in respect of a year from their after-

tax remuneration (“Purchased Shares”).

Provided the Purchased Shares are retained

in the plan and subject, ordinarily, to

continued employment, additional “Matching

Shares” are awarded on the basis of a 1 for

3 match following the end of each of the

first, third and fifth years following the year

in respect of which the purchased shares

were acquired. For example, if 900 shares

are purchased by a participant in respect

of 2024, they will receive an additional 300

Matching Shares following the end of each

of 2025, 2027 and 2029 (giving a total of

900 Matching Shares against the 900 shares

purchased in 2024).

Recovery

Recovery provisions apply to Matching

Shares as summarised on page 121.

Maximum value of Purchased

Shares that may be acquired in

respect of any year is £12,000.

The maximum ratio of Matching

Shares to Purchased Shares is

as described in the “Operation”

column.

Not subject to performance

measures, in line with typical

market practice.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

118

Purpose and link to

strategy

Operation

Maximum opportunity

Performance measures

Performance Share Plan (“PSP”)

To incentivise

Executive Directors

over the longer

term, and to deliver

performance-

related pay, with a

clear line of sight

for Executives and

direct alignment

with shareholders’

interests.

Awards under the PSP will typically be

granted as a conditional award or the grant

of a nil or nominal cost option, in either

case vesting subject to the achievement of

specified performance conditions, over a

period of at least three years.

The Committee has discretion to adjust

the formulaic vesting outturn including in

circumstances where the formulaic outcome

does not reflect the Committee’s assessment

of overall performance, or is not considered

appropriate in the context of circumstances

that were unexpected or unforeseen at the

date of grant.

Awards are granted subject to a holding

period of two years beginning on the vesting

date either on the basis that they will not

ordinarily be released (so that the participant

is entitled to acquire the shares) until the

end of that period or on the basis that the

participant is entitled to acquire shares

following the assessment of the applicable

performance condition but that (other than

as regards sales to cover tax liabilities) the

award is not released (so that the participant

is able to dispose of those shares) until the

end of the holding period.

Awards under the PSP may include the

right to receive additional shares to reflect

dividends paid over the vesting period

and/ or the holding period; these dividend

equivalents may assume the reinvestment

of dividends into Company shares on such

basis as the Committee determines.

The Committee may at its discretion

structure awards as Approved Performance

Share Plan (“APSP”) awards comprising

both a tax-favoured option with a per share

exercise price equal to the market value of a

share when the option is granted and a PSP

award. APSP awards enable an Executive

Director and the Company to benefit from

tax-favoured option treatment in respect of

part of the award without increasing the pre-

tax value delivered to participants.

APSP awards would be structured as either:

(1) a tax-favoured option and a PSP award,

with the vesting of the PSP award scaled

back to take account of any gain made on

exercise of the tax-favoured option; or (2)

a tax favoured option, PSP award over a

reduced number of shares and separate PSP

award which is to fund the exercise price of

the tax-favoured option. The provisions of

this policy will apply to a tax-favoured option

with any amendments necessary to take

account of the applicable legislation. Other

than to enable the grant of APSP awards, the

Company will not grant market value options

to Executive Directors.

Recovery

Recovery provisions apply as summarised

below the table.

The usual maximum award

level under the PSP in respect

of any financial year for

Executive Directors is awards

over shares with a value of

150% of salary. The approach

proposed to the grant of PSP

awards in respect of 2024 is

described on page 112.

The Committee has discretion

to grant awards under the PSP

in respect of any financial year

for Executive Directors up to a

maximum of 200% of salary.

The Committee may at its

discretion structure awards

as Approved Performance

Share Plan (“APSP”) awards as

described in the “Operation”

column. Reflecting the

interaction between the tax-

favoured option and the PSP

award, the shares subject to

the tax-favoured option are

not taken into account when

assessing these limits in order

to avoid double counting.

Performance will be

assessed against challenging

performance targets.

Performance will be based

typically on financial measures

including, but not limited to,

EPS.

Awards will also be subject

to a financial underpin such

that PSP awards will only vest

if the Committee is satisfied

with the overall performance

of the Company.

Performance measures (and

their weighting where there

is more than one measure)

are reviewed annually to

maintain appropriateness and

relevance.

Subject to the Committee’s

discretion to override

formulaic outturns, for

threshold performance up

to 25% of the award will

vest, rising to 100% of the

award vesting for maximum

performance, typically

with straight-line vesting in

between. Below threshold

performance, the award will

not vest.

119

Financial Statements

Governance

Strategic Report

Information supporting the policy table

Explanation of performance measures chosen

Performance measures for the annual bonus and PSP awards which reflect the Company’s strategy are selected.

Stretching performance targets are set each year by the Committee taking into account a number of different factors.

The annual bonus can be assessed against financial, strategic and/ or individual targets determined by the Committee

with at least 50% subject to key financial targets. The Committee considers financial measures like profit before tax

and revenue to be important performance metrics because they encourage behaviours that facilitate profitable growth

and the successful future strategic development of the business. Strategic measures will be aligned to the Company’s

strategy in order that Executive Directors are appropriately rewarded for taking decisions which reflect the overall

direction of the Group.

Long-term performance measures are chosen by the Committee to provide a robust and transparent basis on which

to measure the Company’s performance over the longer term and to provide alignment with the business strategy.

They are selected to be aligned with the interests of shareholders and to drive business performance. Currently EPS

performance is considered to be a key measure of success as it encapsulates the outcomes of many of the strategic

drivers of the business, and helps align management incentives with growth in shareholder value.

The Committee retains the discretion to adjust or set different performance measures or targets where it considers

it appropriate to do so (for example, to reflect a change in strategy, a material acquisition and/ or a divestment of a

Group business or a change in prevailing market conditions) and to assess performance on a fair and consistent basis

from year to year.

Operation of the Company’s share plans

The PSP, BAYE and any deferred bonus plan will be operated by the Committee in accordance with their rules,

including the ability to adjust the number of shares subject to awards in the event of a variation of share capital,

demerger, delisting, special dividend, rights issue or other event which may, in the opinion of the Committee, affect the

current or future value of shares. All discretions available under the rules of any share plan will be available under this

policy, except where expressly limited under this policy.

At the discretion of the Committee, awards under the PSP, BAYE and any deferred bonus plan may be settled, in whole

or in part, in cash (or granted as a cash award over a notional number of shares). However, the Committee would only

settle or grant an Executive Director’s award in cash where the particular circumstances made that appropriate – for

example in the event of a regulatory restriction on the delivery of shares, or in respect of the tax arising on the vesting

or release of the award.

Shareholding guidelines

To align the interests of Executive Directors with those of shareholders, the Committee has adopted shareholding

guidelines which apply in employment and after cessation of employment. The Committee retains discretion to

disapply or vary these provisions in exceptional circumstances.

In employment

Executive Directors are required to retain half of any shares acquired under the PSP and any deferred bonus award

(after sales to cover tax) until such time as their holding has a value equal to 200% of salary.

Shares subject to PSP awards which have vested but not been released, shares subject to released PSP awards

which have not been exercised, and shares subject to deferred bonus awards count towards the guideline on a net of

assumed tax basis.

After cessation of employment

Shares are subject to this requirement only if they are acquired from share plan awards (PSP, BAYE Matching Shares

and deferred bonuses) granted after 1 January 2020. The Executive Director must retain: (a) until the audit sign-off

of the financial statements for the year in which they leave the business, such of those shares as are subject to this

requirement as have a value equal to the in-employment guideline; and (b) until the audit sign-off of the financial

statements for the following year, such of those shares as have a value equal to 50% of the in-employment guideline,

or in either case and if fewer, all of those shares. The vesting of relevant share awards granted from 1 January 2020

onwards will be conditional upon the Executive Director agreeing to the shares being held in a nominee arrangement to

enable the effective monitoring and implementation of this policy.

Remuneration Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

120

Recovery

Annual bonus

For up to three years following the payment of the non-deferred part of an annual bonus award, the Committee may

require the repayment of some or the entire cash award paid (or may cancel or reduce any deferred share award or

require the forfeiture of shares acquired pursuant to a deferred share award) in the event of fraud, dishonesty leading

to a material misstatement of financial results, serious reputational damage, or material corporate failure.

PSP and BAYE

At the discretion of the Committee, unvested PSP awards and unvested BAYE matching awards may be reduced,

cancelled or have further conditions imposed in certain circumstances including (but not limited to):

•

A material misstatement of the Company’s audited financial results;

•

A material failure of risk management by the Company or any subsidiary company within the Group;

•

A material miscalculation of any performance measure;

•

Serious reputational damage; or

•

Material corporate failure.

For up to three years following the vesting of an award, the Committee may require the repayment (which may be

affected by the cancellation or forfeiture of a vested but unreleased PSP award) of some or the entire award in the

event of fraud, dishonesty leading to a material misstatement of financial results, serious reputational damage, or

material corporate failure.

Early vesting of awards

PSP

In the event of a change of control of the Company or other relevant corporate event (such as a demerger, delisting,

special dividend or other event which may affect the value of an award), unvested awards under the PSP may

vest in accordance with the rules of the PSP and vested but unreleased awards will be released. The Committee

shall determine the extent to which an unvested award vests taking into account the extent to which the relevant

performance condition has been satisfied; such vesting would ordinarily be on a time pro rata basis although the

Committee has discretion not to apply time prorating.

Deferred bonus arrangements

In the event of a change of control of the Company or other relevant corporate event (such as a demerger, delisting,

special dividend or other event which may affect the value of an award), deferred bonus awards will vest in full.

BAYE awards

In the event of change of control of the Company or other relevant corporate event (such as a demerger, delisting,

special dividend or other event which may affect the value of an award), Matching Shares related to Purchased Shares

acquired in respect of a completed year will vest. Other Matching Shares will lapse, unless the Committee determines

otherwise.

Cessation of employment

The treatment of PSP awards, deferred bonus awards and BAYE awards on cessation of employment is described on

page 120.

121

Financial Statements

Governance

Strategic Report

Remuneration Report

continued

Non-Executive Directors

Purpose and link to strategy

Operation

Other items

To enable the Company to attract and

retain Non-Executive Directors of the

required calibre by offering market

competitive rates

The Chair is paid a basic Chair fee

which also covers the role of Chair of

the Nomination Committee (for which

no additional fee is paid, assuming that

the two roles are held by the same

individual).

Non-Executive Directors receive a basic

fee and additional fees for chairing of

any Board committees, holding the

position of Senior Independent Director,

holding the position of Non-Executive

Director designated for engagement

with the workforce, or for other

responsibilities or time commitments.

The Chair’s fee is determined by the

Committee and the fees of the other

Non-Executive Directors are determined

by the Board.

Fees are based on the time commitment

and contribution expected for the

role and the level of fees paid to Non-

Executive Directors serving on the board

of similar-sized UK listed companies.

Overall fees paid to Non-Executive

Directors will remain within the limit set

by the Company’s Articles of Association

from time to time.

Non-Executive Directors may be eligible

to be reimbursed travel and subsistence

costs incurred in the performance of

their duties and to receive other benefits

relevant to the performance of their roles

(and any tax thereon).

The Non-Executive Directors do not

participate in the Company’s annual

bonus, share plans or pension schemes

or other benefit in kind arrangements.

Illustration of the application of remuneration policy

The following charts set out for each Executive Director an illustration of the application for 2024 of the remuneration

policy set out above. The charts show the split of remuneration between fixed pay (base salary, taxable benefits and

pension), annual bonus and PSP on the basis of minimum remuneration, remuneration receivable for performance in line

with the Company’s expectations, maximum remuneration, and maximum remuneration assuming a 50% increase in the

share price in the case of the PSP. Having regard to FDM’s approach to the determination of the number of shares subject

to PSP awards as discussed on page 119, these charts assume, for simplicity, a grant of 100% of the lowest Executive

Director’s annual salary (£360,810). No dividends or dividend equivalents are taken into account in the calculations of the

values in the charts. The BAYE is not taken into account for the purposes of these illustrations as the level of benefit will

depend upon the Executive Director’s decision as to the acquisition of Purchased Shares.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

122

£0.5m

£1.0m

£1.5m

£2.0m

Minimum

performance

Performance

in line with

expectations

Maximum

performance

Maximum

performance

plus share price

appreciation

PSP

Annual Bonus

Base salary, benefits and pension

100%

£568,300

£975,003

£1,562,110

£1,742,515

58%

36%

33%

32%

10%

41%

36%

23%

31%

Rod Flavell

Minimum

performance

Performance

in line with

expectations

Maximum

performance

Maximum

performance

plus share price

appreciation

PSP

Annual Bonus

Base salary, benefits and pension

£0.5m

£1.0m

£1.5m

£2.0m

100%

£390,042

£696,731

£1,183,824

£1,364,229

56%

33%

29%

31%

13%

37%

32%

30%

39%

Mike McLaren

Minimum

performance

Performance

in line with

expectations

Maximum

performance

Maximum

performance

plus share price

appreciation

PSP

Annual Bonus

Base salary, benefits and pension

£0.5m

£1.0m

£1.5m

£2.0m

100%

£389,142

£695,831

£1,182,924

£1,363,329

56%

33%

29%

31%

13%

37%

32%

30%

39%

Sheila Flavell

Minimum

performance

Performance

in line with

expectations

Maximum

performance

Maximum

performance

plus share price

appreciation

PSP

Annual Bonus

Base salary, benefits and pension

£0.5m

£1.0m

£1.5m

£2.0m

100%

£389,142

£695,831

£1,182,924

£1,363,329

56%

33%

29%

31%

13%

37%

32%

30%

39%

Andy Brown

In illustrating the potential reward, the following assumptions have been made:

Fixed pay

Annual bonus

PSP

Minimum performance

Performance below plan approved

by the Board.

Fixed elements of remuneration

only:

Base salary applying as at

1 January 2024, as referred to

on page 102 (being the latest

known salary);

Taxable benefits as disclosed

in the single figure table on

page 108 for the year ended

31 December 2023; and

Pension assuming an employer

contribution of 4% of salary.

No bonus.

No PSP vesting.

Performance in line with

expectations

Performance in line with plan

approved by the Board.

50% of maximum

awarded (equivalent

to 60% of salary).

25% of maximum awarded

(i.e. £90,203 being 25%

of the lowest Executive

Director’s salary).

Maximum performance

Performance meets stretch target

approved by the Board.

100% of maximum

awarded (equivalent

to 120% of salary).

100% of maximum awarded

(i.e. £360,810 being 100%

of the lowest Executive

Director’s salary).

Maximum performance plus

share price appreciation

Performance meets stretch target

approved by the Board and for the

purposes of the PSP element there

is an assumed 50% increase in the

share price.

100% of maximum

awarded (equivalent

to 120% of salary).

100% of maximum awarded

(i.e. £360,810 being 100%

of the lowest Executive

Director’s salary) and an

assumed 50% increase in

the share price to vesting.

123

Financial Statements

Governance

Strategic Report

Remuneration Report

continued

Policy for the remuneration of employees more generally

The Group aims to provide a remuneration package that is competitive in an employee’s country of employment and

which is appropriate to promote the long-term success of the Group. The Group intends to apply this policy fairly and

consistently and does not intend to pay more than is necessary to attract and motivate staff. In respect of Executive

Directors, a greater proportion of the remuneration package is “at risk” and determined by reference to performance

conditions. Executive Directors and other employees are eligible to participate in the BAYE on the same basis.

Approach to recruitment remuneration

When hiring a new Executive Director, the Committee will seek to align the remuneration package with the above policy.

When determining appropriate remuneration arrangements, the Committee may include other elements of pay which it

considers are appropriate and necessary to recruit and retain the individual. However, this discretion is capped and is

subject to the limits referred to below:

•

Base salary will be set at a level appropriate to the role and the experience of the Director being appointed. This may

include agreement on future increases up to a market rate, in line with increased experience and/ or responsibilities,

subject to good performance, where it is considered appropriate;

•

Benefits and pension will only be provided in line with the above policy;

•

The Committee will not offer non-performance related incentive payments (for example a “guaranteed sign-on

bonus” or “golden hello”);

•

A newly appointed Executive Director will be eligible to participate in the BAYE on the same basis as other Executive

Directors and employees;

•

Other elements may be included in the following circumstances:

–

An interim appointment being made to fill an Executive Director role on a short-term basis;

–

If exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive function on a

short-term basis;

–

If an Executive Director is recruited at a time in the year when it would be inappropriate to provide a bonus or long-

term incentive award for that year as there would not be sufficient time to assess performance. Subject to the limit

on variable remuneration set out below, the quantum in respect of the months employed during the year may be

transferred to the subsequent year so that reward is provided on a fair and appropriate basis; or

–

If the Director will be required to relocate in order to take up the position, it is the Company’s policy to allow reasonable

relocation, travel and subsistence payments. Any such payments will be at the discretion of the Committee;

•

The Committee may also alter the performance measures, performance period, vesting period and holding period of

the annual bonus or PSP and the proportion of any annual bonus that must be deferred, if the Committee determines

that the circumstances of the recruitment merit such alteration. The rationale of any such alterations will be clearly

explained in the subsequent Directors’ Remuneration Report; and

•

The maximum level of variable remuneration which may be granted (excluding buyout awards as referred to below)

is 350% of salary, in line with the Policy table set out on pages 117-119, plus any participation in the BAYE in line with

the Policy table.

The Committee may make payments or awards in respect of hiring an employee to buy out remuneration arrangements

forfeited on leaving a previous employment or engagement. In doing so, the Committee will take account of relevant

factors including any performance conditions attached to the forfeited arrangements and the time over which they

would have vested or been paid. The Committee will generally seek to structure buyout awards or payments on a

comparable basis to the remuneration arrangements forfeited. Any such payments or awards are excluded from the

maximum level of variable remuneration referred to above. Buyout awards will ordinarily be granted on the basis that

they are subject to forfeiture or ‘clawback’ in the event of departure within twelve months of joining the Company,

although the Committee will retain discretion not to apply forfeiture or clawback in appropriate circumstances.

Any share awards referred to in this section will be granted as far as possible under the Company’s share plans. If

necessary and subject to the limits referred to above, recruitment awards may be granted outside of these plans.

Where a position is filled internally, any ongoing remuneration obligations or outstanding variable pay elements shall be

allowed to continue in accordance with their terms.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

124

Fees payable to a newly appointed Chair or Non-Executive Director will be in line with the policy in place at the time of

appointment.

Letters of appointment for the Directors are available for inspection by shareholders at each AGM and during normal

business hours at the Company’s registered office.

Service contracts

FDM’s policy is that Executive Directors’ service agreements should have a notice period of up to twelve months, and

each Executive Director has a service contract which may be terminated by the Company or Director by giving twelve

months’ notice. Each Non-Executive Director has a letter of appointment with the Company which may be terminated

by the Company or Director by giving three months’ notice. Details of the Directors’ service contracts (or letter of

appointment in the case of a Non-Executive Director), notice periods and, where applicable, expiry dates are set

out below:

Name

Commencement

Expiry

Notice period

Rod Flavell

16 June 2014

–

12 months

Sheila Flavell

16 June 2014

–

12 months

Mike McLaren

16 June 2014

–

12 months

Andy Brown

16 June 2014

–

12 months

Peter Whiting

16 June 2014

–

3 months

Michelle Senecal de Fonseca

15 January 2016

–

3 months

David Lister

9 March 2016

–

3 months

Jacqueline de Rojas

1 October 2019

–

3 months

Alan Kinnear

1 January 2020

–

3 months

Rowena Murray

1 August 2023

–

3 months

Payments for loss of office

The principles on which the determination of payments for loss of office will be approached are set out below:

Payment in lieu of notice

Each Executive Director’s service contract contains provision for payment in lieu of notice at the discretion of the

Company. Such payment would consist of basic salary plus pension and benefits only for the notice period (or the

balance of the notice period if relevant) together with any accrued but untaken holiday pay entitlement. Alternatively,

benefits may continue to be provided for the duration of the notice period that would otherwise have applied.

Annual bonus

This will be at the discretion of the Committee on an individual basis and the decision as to whether or not to award

a bonus in full or in part will be dependent on a number of factors, including the circumstances of the individual’s

departure and their contribution to the business during the bonus period in question, such that a bonus will be paid

only in circumstances that the Committee considers are “good leaver” circumstances. Any bonus amounts paid will

be prorated for time in service during the bonus period and will be paid at the usual time (although the Committee

retains discretion to pay the bonus earlier in appropriate circumstances). Where bonus deferral would otherwise apply,

the Committee may permit the payment of the whole bonus for the year of departure and previous year in cash,

although would only do so in circumstances that in the opinion of the Committee amount to compassionate

“good leaver” circumstances.

Deferred bonus awards will continue (other than in the case of summary dismissal, or resignation to join or establish

a competing business in which case they will lapse/ be forfeited) and will typically be released at the ordinary release

date, although the Committee retains discretion to release the award at cessation or at some other date prior to the

ordinary release date; release would be of the full award, unless the Committee were to decide to apply a time-based

reduction to reflect the proportion of the deferral period served.

125

Financial Statements

Governance

Strategic Report

Remuneration Report

continued

PSP

The extent to which any unvested award will vest and be released will be determined in accordance with the rules

of the PSP. Unvested awards will normally lapse on cessation of employment. However, the Committee may, in its

absolute discretion, determine that on cessation of employment an award that has not yet vested will vest and be

released at cessation or at the normal release date (or at some other time between those dates). In either case, the

extent of vesting will be determined by the Committee taking into account the extent to which the performance

condition is satisfied and, unless the Committee determines otherwise, the period of time elapsed from the date of

grant to the date of cessation as a proportion of the vesting period. Awards may then be exercised during such period

as the Committee determines.

If an award has vested but not been released (i.e. if it is in a holding period), that award will:

•

lapse/ be forfeited if cessation is due to summary dismissal; and

•

be released at the ordinary release date if cessation is for any other reason.

The Committee retains discretion to release the award at cessation or at some other date prior to the ordinary release

date. Awards will be released to the extent they vested by reference to the performance conditions.

If an award has vested and, where relevant, been released prior to an individual’s cessation of employment, the

Committee may, in its absolute discretion, allow the award to be exercised for such period as the Committee

determines.

BAYE

If a participant leaves due to death, ill-health, disability or any other reason at the Committee’s discretion, Matching

Shares related to Purchased Shares acquired in respect of a completed year will vest at the originally anticipated

vesting date, unless the Committee decides that they should vest at the date of cessation or some other time. Other

Matching Shares will lapse, unless the Committee determines otherwise. Purchased Shares are not forfeited on

cessation of employment for any reason.

Other payments

In appropriate circumstances, payments may also be made in respect of outplacement and legal/ other professional

advisor fees. Where a buyout award is made, the leaver provisions would be determined at the time of the award.

The Committee reserves the right to make additional exit payments where such payments are made in good faith

in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of

settlement or compromise of any claim arising in connection with the termination of a Director’s office or employment.

Existing contractual arrangements

The Committee retains discretion to make any remuneration payment or payment for loss of office outside the policy in

this report:

•

Where the terms of the payment were agreed before the policy came into effect, provided that, in the case of a

payment agreed after 30 April 2015 it is consistent with the Directors’ Remuneration Policy applying at the date it

was agreed;

•

Where the terms of the payment were agreed at a time when the relevant individual was not a Director of the

Company (or other person to whom the policy applies) and, in the opinion of the Committee, the payment was not in

consideration of the individual becoming a Director of the Company (or other such person);

•

Under legacy remuneration arrangements.

For these purposes, “payments” includes the satisfaction of awards of variable remuneration and, in relation to an

award over shares, the terms of the payment are agreed at the time the award is granted.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

126

Statement of consideration of employment conditions elsewhere in the Company

The Committee generally considers pay and employment conditions elsewhere in the Company when considering the

Directors’ remuneration. When considering base salary increases, the Committee reviews overall levels of base pay

increases offered to other employees. Employees are not actively consulted on Directors’ remuneration. Employee

share ownership is fundamental to the Company’s culture and is reflected in the wide participation in our share

incentive plans.

Statement of consideration of shareholder views

The Committee is committed to an ongoing dialogue with shareholders and welcomes feedback on the Directors’

remuneration. The Committee consulted with the Company’s largest shareholders in respect of the development of

this Policy (as referred to in further detail on page 106).

Approval

This Report was approved by the Board on 19 March 2024 and signed on its behalf by:

Peter Whiting

Chair of the Remuneration Committee

19 March 2024

127

Financial Statements

Governance

Strategic Report

Directors’ Report

The Directors present the Directors’ Report and audited Consolidated Financial Statements of FDM Group (Holdings)

plc, registered number 07078823, for the year ended 31 December 2023.

Principal activities, business review and future developments

The Group is a global professional services provider with a focus on Information Technology. The Group’s principal

business activities involve recruiting, training and deploying its own permanent IT and business Consultants to clients,

either on site or remotely. The Strategic Report on pages 2 to 63 provides a review of the Group’s performance during

the financial year as well as its future prospects.

Results and dividends

The Group reported a profit after tax for the year of £40.8 million (2022: £34.9 million). Results for the year are set out

in the Consolidated Income Statement on page 143.

The Directors propose a final dividend of 19.0 pence per share for the year to 31 December 2023. Subject to

shareholder approval, this dividend will be paid on 28 June 2024 to shareholders on the register on 7 June 2024.

An interim dividend of 17.0 pence per share was declared by the Directors on 25 July 2023 and was paid on

13 October 2023 to shareholders on the register on 22 September 2023.

Directors

The Directors of the Company who were in office during the year and up to the date of signing the financial statements

unless otherwise stated, were:

David Lister

Non-Executive Chair

Roderick Flavell

Chief Executive Officer

Sheila Flavell

Chief Operating Officer

Michael McLaren

Chief Financial Officer

Andrew Brown

Chief Commercial Officer

Peter Whiting

Non-Executive Director

Michelle Senecal de Fonseca

Non-Executive Director

Jacqueline de Rojas

Non-Executive Director

Alan Kinnear

Non-Executive Director

Rowena Pinder

Non-Executive Director (Appointed 1 August 2023)

Known professionally as Rowena Murray, and referred to by that name elsewhere in this report.

The biographies of the currently serving Directors are provided on pages 66-69.

Director share interests

Details of the interests of Directors in the shares of the Company are provided on page 111.

Director long-term incentive schemes

For the purposes of the UK Listing Authority Listing Rules section 9.8.4C R, details of the Group’s long-term incentive

schemes are disclosed in the Remuneration Report starting on page 99. All other information required to be disclosed

by Listing Rule section 9.8.4 R is not applicable for the year under review.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

128

Directors’ indemnity and liability insurance

As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third-

party indemnity provision as defined by Section 234 of the Companies Act. The indemnity was in force throughout the

last financial year and is currently in force. The Company also purchased and maintained throughout the financial year

Directors’ and Officers’ liability insurance in respect of itself and its Directors.

Risk management objectives and policies

The Group through its operations is exposed to a number of risks. Details of the Group’s financial risk management

objectives and policies are set out in note 28 to the Consolidated Financial Statements. The principal risks that the

Group faces are set out on pages 27 to 34 of the Strategic Report.

Controls in place over consolidation of financial results

The Group’s Consolidated Financial Statements are prepared by the Group’s Finance team. The team is based in one

central location, where all the individual entity general ledgers are also maintained. The consolidation process involves

preparation and separate reviews of the results by qualified and experienced finance staff.

Corporate governance

For details of the Corporate Governance Report see page 64. The Sustainability Report, on pages 36 to 63, includes

information about the Group’s employment policies and greenhouse gas emissions. The Sustainability Report also

includes information on the steps taken by the Group to ensure that slavery and human trafficking are not taking place

within the Group’s business, in line with the Modern Slavery Act 2015.

Branches outside the UK

The Group operates branches in France, Denmark and Spain.

Substantial shareholders

As at 31 December 2023 and as at 11 March 2024, the Company had been advised, in accordance with the Disclosure

Guidance and Transparency Rules of the Financial Conduct Authority, of the following notifiable interests (whether

directly or indirectly held) in 3% or more of its voting rights:

Substantial shareholder

Direct/ indirect interest

As at 31 December 2023

As at 11 March 2024

Number of

% of issued

share capital

Number of

% of issued

share capital

Rod Flavell

Direct

7,336,943

6.7%

7,337,648

6.7%

Sheila Flavell

Direct

7,330,443

6.7%

7,331,148

6.7%

abrdn Standard Life Investments

Indirect

7,312,140

6.7%

7,312,140

6.7%

Kayne Anderson Rudnick

Investment Management, LLC

Direct

6,699,185

6.1%

6,699,185

6.1%

Aegon Ltd

Indirect

–

5,688,180

5.2%

Invesco Ltd

Indirect

5,497,082

5.0%

5,497,082

5.0%

Artemis Investment Management LLP

Indirect

5,491,747

5.0%

5,491,747

5.0%

Majedie Asset Management

Indirect

5,435,803

5.0%

5,435,803

5.0%

Ameriprise Financial, Inc. and its group

Direct and indirect

5,314,856

4.8%

5,314,856

4.8%

BlackRock, Inc.

Indirect

5,210,213

4.8%

5,210,213

4.8%

Baillie Gifford & Co

Indirect

5,157,882

4.7%

5,157,882

4.7%

Andy Brown

Direct

4,022,369

3.7%

4,022,369

3.7%

129

Financial Statements

Governance

Strategic Report

Political donations

The Group made no political donations in the year (2022: £nil).

Going concern

The Group’s business activities, together with the factors that are likely to affect its future development, performance

and position are summarised in the Strategic Report. The principal risks, uncertainties and risk management processes

are also described in the Strategic Report.

The Group’s positive operating cash flow and liquidity position, together with its distinctive business model and

infrastructure, enable the Group to manage its business risks successfully. The Group’s forecasts and projections show

that it will continue to operate with adequate cash resources.

The Directors therefore have a reasonable expectation that the Company and the Group will have adequate resources

to continue in operational existence for at least twelve months. Accordingly, the Directors continue to adopt the going

concern basis for preparing the financial statements.

UK Streamlined Energy and Carbon Reporting (“SECR”)

In accordance with SECR requirements, a summary of UK and worldwide energy consumption and emissions for

2023 and 2022 is presented on page 59. Details of the Group’s compliance with legislation relating to greenhouse gas

emissions reporting are set out on page 58 and in the Sustainability Report.

Articles of Association

The Company’s Articles of Association may only be amended by special resolution of the shareholders.

Employee engagement

Information about how the Directors have engaged with employees and have regard to their interests is detailed on

page 76.

We use a number of methods to consult our employees regularly so that their views can be taken into account in

making decisions that are likely to affect their interests, and we encourage our staff to become involved in FDM

Group’s performance through our discretionary Performance Share Plan and our all-employee Buy As You Earn

share plan. We have also appointed a Non-Executive Director with responsibility for engaging with matters which

are important to our employees and ensuring that their voices are heard at Board level. Further information on these

initiatives to engage with our employees is set out on page 48 of the Sustainability Report.

Engagement with other stakeholders

Information on the Directors’ engagement with other stakeholders can be found on pages 76 to 77.

Employee information

Information on the Group’s employee policies is included on page 63 in the Sustainability Report. Information on

the Group’s policies in respect of persons that become disabled during their employment, and the training, career

development and promotion of disabled persons, is set out on page 43 in the Sustainability Report.

Directors’ Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

130

Capital structure

The Group’s capital structure is detailed in note 22 to the Consolidated Financial Statements. During 2023 the number

of ordinary shares in issue increased from 109,191,669 at 1 January 2023 to 109,611,852 at 31 December 2023.

Investment in own shares

During the AGM held on 16 May 2023, the shareholders approved that up to 10% of the Company’s shares could be

purchased by the Company and held as own shares, renewing the authority agreed on 24 May 2022. The authority

expires at the conclusion of the Company’s next Annual General Meeting after the passing of this resolution or, if

earlier, 15 August 2024.

During 2018, the FDM Group Employee Benefit Trust was established to purchase shares sold by option holders upon

exercise of options under the FDM Performance Share Plan. The Group accounts for its own shares held by the Trustee

of the FDM Group Employee Benefit Trust as a deduction from shareholders’ funds.

Change of control and other arrangements

The Group has agreements in place with certain of its banking clients that give those clients the right to terminate the

contract on a change of control in the event of a successful takeover bid for the Group.

The Group has no agreements with employees or Directors that provide for compensation for loss of office or

employment that occurs resulting from a takeover bid.

The Group knows of no agreements under which holders of securities in the Company may restrict votes or transfers in

the Company’s shares.

Each participant who holds shares in the Group’s BAYE share plan is entitled, as beneficial owner of those shares,

to request that the administrator of the BAYE (as nominee in respect of those shares) exercises the voting rights

attaching to those shares in the manner directed by the participant.

Post balance sheet events

There are no post balance sheet events.

Related party transactions

The Group’s related party transactions are detailed in note 27 to the Consolidated Financial Statements.

Independent auditors

In accordance with Section 487 of the Companies Act, a resolution for the reappointment of PricewaterhouseCoopers

LLP as auditors of the Company is to be proposed at the forthcoming Annual General Meeting.

131

Financial Statements

Governance

Strategic Report

Statement of Directors’ responsibilities in respect of the financial statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with

applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the

Directors have prepared the Group financial statements in accordance with UK-adopted international accounting

standards and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and

applicable law).

Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true

and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. In

preparing the financial statements, the Directors are required to:

•

select suitable accounting policies and then apply them consistently;

•

state whether applicable UK-adopted international accounting standards have been followed for the Group financial

statements and United Kingdom Accounting Standards, comprising FRS 101 have been followed for the Company

financial statements, subject to any material departures disclosed and explained in the financial statements;

•

make judgements and accounting estimates that are reasonable and prudent; and

•

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and

Company will continue in business.

The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the

Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the

Group and Company and enable them to ensure that the financial statements and the Directors’ Remuneration Report

comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the

United Kingdom governing the preparation and dissemination of financial statements may differ from legislation

in other jurisdictions.

Directors’ Report

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

132

Directors’ confirmations

The Directors consider that the FDM Group (Holdings) plc Annual Report, taken as a whole, is fair, balanced and

understandable and provides the information necessary for shareholders to assess the Group’s and Company’s

position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in Directors’ Report confirm that, to the best of their

knowledge:

•

the Group financial statements, which have been prepared in accordance with UK-adopted international accounting

standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group;

•

the Company financial statements, which have been prepared in accordance with United Kingdom Accounting

Standards, comprising FRS 101, give a true and fair view of the assets, liabilities and financial position of the

Company; and

•

the Strategic Report in the Annual Report includes a fair review of the development and performance of the business

and the position of the Group and Company, together with a description of the principal risks and uncertainties that

it faces.

In the case of each Director in office at the date the Directors’ Report is approved:

•

so far as the Director is aware, there is no relevant audit information of which the Group’s and Company’s auditors

are unaware; and

•

they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any

relevant audit information and to establish that the Group’s and Company’s auditors are aware of that information.

The Directors’ Report has been approved by the Board of Directors of FDM Group (Holdings) plc on 19 March 2024 and

signed on its behalf by:

Rod Flavell

Mike McLaren

Chief Executive Officer

Chief Financial Officer

19 March 2024

133

Financial Statements

Governance

Strategic Report

Financial

statements

136

Independent auditors’ report to the members

of FDM Group (Holdings) plc

143

Consolidated Income Statement

144

Consolidated Statement of Comprehensive Income

145

Consolidated Statement of Financial Position

146

Consolidated Statement of Cash Flows

147

Consolidated Statement of Changes in Equity

148

Notes to the Consolidated Financial Statements

176

Parent Company Statement of Financial Position

177

Parent Company Statement of Changes in Equity

178

Notes to the Parent Company Financial Statements

185

Shareholder Information

FDM Group (Holdings) plc

Annual Report and Accounts 2023

134

135

Financial Statements

Governance

Strategic Report

Independent auditors’ report to the members of

FDM Group (Holdings) plc

Report on the audit of the financial statements

Opinion

In our opinion:

•

FDM Group (Holdings) plc’s group financial statements and parent company financial statements

(the “financial

statements”) give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31

December 2023 and of the group’s profit and the group’s cash flows for the year then ended;

•

the group financial statements have been properly prepared in accordance with UK-adopted international accounting

standards as applied in accordance with the provisions of the Companies Act 2006;

•

the parent company financial statements have been properly prepared in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure

Framework”, and applicable law); and

•

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts 2023 (the “Annual Report”),

which comprise: the Consolidated Statement of Financial Position and the Parent Company Statement of Financial

Position as at 31 December 2023; the Consolidated Income Statement, the Consolidated Statement of Comprehensive

Income, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity and the

Parent Company Statement of Changes in Equity for the year then ended; and the notes to the financial statements,

comprising material accounting policy information and other explanatory information.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial

statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to

provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the

financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities,

and we have fulfilled our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard

were not provided.

Other than those disclosed in Note 7, we have provided no non-audit services to the parent company or its controlled

undertakings in the period under audit.

Our audit approach

Overview

Audit scope

•

The group financial statements are a consolidation of 19 reporting units

•

We performed full scope audits of the UK, USA and Canadian reporting units

•

We also audited property leases and the associated property, plant and equipment, in the Australian reporting unit

•

Our full scope audits covered 77% of revenue and 87% of absolute profit before tax

Key audit matters

•

Share option plan expenses (group and parent)

Materiality

•

Overall group materiality: £2,750,000 (2022

: £2,280,000) based on approximately 5% of profit before tax.

•

Overall parent company materiality: £550,000 (2022

: £700,000) based on approximately 1% of total assets.

•

Performance materiality: £2,050,000 (2022

: £1,700,000) (group

) and £410,000 (2022: £525,000

) (parent company

FDM Group (Holdings) plc

Annual Report and Accounts 2023

136

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the

financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the

audit of the financial statements of the current period and include the most significant assessed risks of material

misstatement (whether or not due to fraud) identified by the auditors, 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 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.

The key audit matters below are consistent with last year.

Key audit matter

How our audit addressed the key audit matter

Share option plan expenses

(group and parent)

Refer to notes 3.3 (m), 4, and

25 to the Financial statements

for the directors’ disclosures of

the related accounting policies,

judgements and estimates, and

page 91 (‘Significant financial

reporting items’) within the Audit

Committee Report. During 2015,

the group implemented a share

option plan for management and

senior employees. We focussed

on this area because the

assumptions used in calculating

the (credit) / charge recognised

in the income statement are

judgemental and complex,

including an estimate of the

number of leavers from the

scheme in each period as well as

an estimate of the future growth

in adjusted earnings per share of

the group (refer to pages 103-104

(‘Annual Report on Remuneration’)

for details on the share option

plan).

We gained an understanding from management of the key assumptions

underpinning the share option valuation model. We evaluated the assumption

made by management for forecast growth in adjusted earnings per share by

comparing it to recent historical performance as well as reviewing budgets and

forecasts approved by the Board of Directors and found it to be appropriate.

We evaluated the sensitivity analysis performed by management to assess the

potential impact of changes in key assumptions, noting that a significant change

in the assumptions would be needed to cause a material error in the share

option plan credit.

We evaluated management’s assumption for the number of leavers from the

scheme by comparing it to historical leavers from the scheme and found it to be

appropriate.

We concluded that stress testing these assumptions did not have a material

impact on the income statement credit.

In addition:

•

We checked the mathematical integrity of the model and found it to be

accurate.

•

We tested a sample of options granted to deeds of grant and leavers from

the scheme to resignation letters, and we noted no material exceptions in

our testing.

We also considered the disclosures made in note 25 to the financial statements

and determined that they are consistent with the requirements of relevant

accounting standards.

Based on the results of our work we found that the share option payment credit

falls within a reasonable range of estimates.

137

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Governance

Strategic Report

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 financial statements as a whole, taking into account the structure of the group and the parent company, the

accounting processes and controls, and the industry in which they operate.

The group is structured by division, with significant reporting units in the UK, USA, and Canada, and further smaller

reporting units in locations across Europe, Asia, Oceania and South Africa. The group financial statements are a

consolidation of 19 reporting units, comprising the group’s operating businesses and centralised functions.

The accounting and financial management for all reporting units is controlled from the UK, so we as the group

engagement team have performed all audit work.

We determined the type of work that needed to be performed at the reporting units to be able to conclude that

sufficient appropriate audit evidence had been obtained as a basis for our opinion on the group financial statements as

a whole. Accordingly, we determined that audits of the complete financial information were required for three reporting

units, comprising the UK, USA and Canadian trading reporting units. We also included in our audit scope the property

leases and associated Property, Plant and Equipment in the Australian reporting unit, which we performed in the UK,

where the accounting is administered.

As a result, full scope audit procedures were conducted on reporting units representing 77% of revenue and 87% of

absolute profit before tax.

In addition, we performed a full scope audit of the FDM Group (Holdings) plc entity.

The impact of climate risk on our audit

The impact of climate change has been an area of focus for the group, as further explained in the Strategic Report.

The group is mindful of its impact on the environment and focussed on ways to reduce climate related impacts as

they continue to work through their “Carbon reduction plan”. The group is committed to carbon emissions targets

consistent with reductions required to keep global warming down to 1.5°C, and has set out their progress against

these targets within the Strategic Report. As part of our audit we have made enquiries of management to understand

the process they have adopted to assess the extent of the potential impact of climate change risk on the group’s

financial statements. Management consider that the impact of climate change does not give rise to a material financial

statement impact.

We have used our knowledge of the group to evaluate the group’s risk assessment process in respect of climate

change. We assessed there was no significant impact to our audit nor our Key Audit Matters. We discussed with

management and the Audit Committee that the estimated financial reporting impacts of climate change will need

to be frequently reassessed, as well as the ways in which disclosures in respect of climate change should evolve as

the group continues to develop its response to the impact of these risks. We also considered the consistency of the

disclosures in relation to climate change made in the other information within the Annual Report with both the financial

statements and the knowledge we obtained from our audit.

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 financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements – group

Financial statements – parent company

Overall materiality

£2,750,000 (2022: £2,280,000).

£550,000 (2022: £700,000).

How we

determined it

Approximately 5% of profit before tax

Approximately 1% of total assets

Rationale for

benchmark applied

Based on the benchmarks used in the annual

report, profit before tax is the primary measure

used by the shareholders in assessing the

performance of the group, and is a generally

accepted auditing benchmark.

We believe that total assets is the primary

measure used by the shareholders in assessing

the performance of the entity, and is a generally

accepted auditing benchmark.

Independent auditors’ report to the members of

FDM Group (Holdings) plc

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

138

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 £2,100,000 and £2,600,000. 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% (2022:

75%) of overall materiality, amounting to £2,050,000 (2022: £1,700,000) for the group financial statements and

£410,000 (2022: £525,000) for the parent company financial statements.

In determining the performance materiality, we considered a number of factors – 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 £139,000 (group audit) (2022: £114,000

) and £27,000 (parent company audit

) (2022: £35,000

) as well as

misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the group’s and the parent company’s ability to continue to adopt the

going concern basis of accounting included:

•

agreeing the underlying cash flow projections to board approved forecasts, assessing how these forecasts are

compiled, and assessing the accuracy of management’s forecasts;

•

evaluating the key assumptions applied within management’s forecasts;

•

considering liquidity and available financial resources;

•

assessing whether the stress testing performed by management appropriately considered the principal risks facing

the business; and

•

evaluating the feasibility of management’s mitigating actions in the stress testing scenarios.

Based on the work we have performed, we have not identified any material uncertainties relating to events or

conditions that, individually or collectively, may cast significant doubt on the group’s and the parent company’s

ability to continue as a going concern for a period of at least twelve months from when the financial statements are

authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the

group’s and the parent company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing

material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the

directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant

sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and

our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial

statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the

extent otherwise explicitly stated in this report, any form of assurance thereon.

139

Financial Statements

Governance

Strategic Report

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency

or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement

of the financial statements or a material misstatement of the other information. 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.

With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the

UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain

opinions and matters as described below.

Strategic report and Directors’ Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report

and Directors’ Report for the year ended 31 December 2023 is consistent with the financial statements and has been

prepared in accordance with applicable legal requirements.

In light of the knowledge and understanding of the group and parent company and their environment obtained in the

course of the audit, we did not identify any material misstatements in the Strategic report and Directors’ Report.

Directors’ Remuneration

In our opinion, the part of the Remuneration Report to be audited has been properly prepared in accordance with the

Companies Act 2006.

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 parent 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 is materially consistent with the 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 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

and parent company’s ability to continue to do so over a period of at least twelve months from the date of approval

of the financial statements;

•

The directors’ explanation as to their assessment of the group’s and parent company’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 parent 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 and parent company was

substantially less in scope than an audit and only consisted of making inquiries and considering the directors’ process

supporting their statement; checking that the statement is in alignment with the relevant provisions of the UK

Corporate Governance Code; and considering whether the statement is consistent with the financial statements and

our knowledge and understanding of the group and parent company and their environment obtained in the course of

the audit.

Independent auditors’ report to the members of

FDM Group (Holdings) plc

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

140

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 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 and parent

company’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

parent 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.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements, the

directors are responsible for the preparation of the financial statements in accordance with the applicable framework

and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as

they determine is necessary to enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease

operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error

and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line

with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with

laws and regulations related to local employment laws, and we considered the extent to which non-compliance might

have a material effect on the financial statements. We also considered those laws and regulations that have a direct

impact on the financial statements such as the Companies Act 2006, tax regulation and the Listing rules. We evaluated

management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk

of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to

increase revenue or reduce expenditure, and management bias in accounting estimates. Audit procedures performed

by the engagement team included:

•

Discussions with management, internal audit and the company’s legal advisors, including consideration of known or

suspected instances of non-compliance with laws and regulation, and fraud;

•

Review of any employment disputes or litigation to ensure there were no broader non-compliance issues with

employment laws and regulations;

•

Review of the financial statement disclosures to underlying supporting documentation;

•

Challenging assumptions and judgements made by management in their significant accounting estimates;

•

Review of internal audit reports in so far that they related to the financial statements; and

•

Evaluating and testing journal entries which may be indicative of fraud, for example journal entries posted with

unusual account combinations.

141

Financial Statements

Governance

Strategic Report

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances

of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the

financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not

detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional

misrepresentations, or through collusion.

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.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the parent company’s members as a body in

accordance with Chapter 3 of Part 16 of the Companies Act 2006 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.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

•

we have not obtained all the information and explanations we require for our audit; or

•

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not

been received from branches not visited by us; or

•

certain disclosures of directors’ remuneration specified by law are not made; or

•

the parent company financial statements and the part of the Remuneration Report to be audited are not in

agreement with the accounting records and returns.

•

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the directors on 25 March 2013 to audit

the financial statements for the year ended 31 December 2013 and subsequent financial periods. The period of total

uninterrupted engagement is 11 years, covering the years ended 31 December 2013 to 31 December 2023.

Other matter

In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R,

these 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 auditors’ report provides no assurance over whether the annual financial report will be prepared using the

single electronic format specified in the ESEF RTS.

Katharine Finn (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

19 March 2024

Independent auditors’ report to the members of

FDM Group (Holdings) plc

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

142

Note

2023

£000

2022

£000

Revenue

333,975

329,972

Cost of sales

(177,449)

(174,353)

Gross profit

156,526

155,619

Administrative expenses

(101,500)

(109,772)

Operating profit

55,026

45,847

Finance income

1,396

418

Finance expense

(796)

(604)

Net finance income/ (expense)

600

(186)

Profit before income tax

55,626

45,661

Taxation

(14,861)

(10,753)

Profit for the year

40,765

34,908

Earnings per ordinary share

2023

pence

2022

pence

Basic

37.3

32.0

Diluted

37.2

31.8

The results for the year shown above arise from continuing operations.

The notes on pages 148 to 175 are an integral part of these Consolidated Financial Statements.

Consolidated Income Statement

for the year ended 31 December 2023

143

Financial Statements

Governance

Strategic Report

2023

£000

2022

£000

Profit for the year

40,765

34,908

Other comprehensive (expense)/ income

Items that may be subsequently reclassified to profit or loss

Exchange differences on retranslation of foreign operations (net of tax)

(1,329)

2,148

Total other comprehensive (expense)/ income

(1,329)

2,148

Total comprehensive income for the year

39,436

37,056

The notes on pages 148 to 175 are an integral part of these Consolidated Financial Statements.

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2023

FDM Group (Holdings) plc

Annual Report and Accounts 2023

144

Note

2023

£000

2022

£000

Non-current assets

Right-of-use assets

18,215

10,073

Property, plant and equipment

2,616

3,666

Intangible assets

19,571

19,729

Deferred income tax assets

552

2,316

40,954

35,784

Current assets

Trade and other receivables

32,613

45,473

Income tax receivables

3,384

3,450

Cash and cash equivalents

47,226

45,523

83,223

94,446

Total assets

124,177

130,230

Current liabilities

Trade and other payables

25,638

32,962

Lease liabilities

4,512

4,643

Current income tax liabilities

1,428

1,172

31,578

38,777

Non-current liabilities

Lease liabilities

15,669

8,250

Provisions

228

–

Deferred income tax liability

–

15,928

8,250

Total liabilities

47,506

47,027

Net assets

76,671

83,203

Equity attributable to owners of the parent

Share capital

1,096

1,092

Share premium

9,705

All Other reserves

1,567

13,525

Retained earnings

64,303

58,881

Total equity

76,671

83,203

The notes on pages 148 to 175 are an integral part of these Consolidated Financial Statements.

The financial statements on pages 143 to 175 were approved by the Board of Directors on 19 March 2024 and were

signed on its behalf by:

Rod Flavell

Mike McLaren

Chief Executive Officer

Chief Financial Officer

19 March 2024

Consolidated Statement of Financial Position

as at 31 December 2023

145

Financial Statements

Governance

Strategic Report

Note

2023

£000

2022

£000

Cash flows from operating activities

Group profit before tax for the year

55,626

45,661

Adjustments for:

Depreciation and amortisation

5,742

6,423

Loss on disposal of non-current assets

155

130

Finance income

(1,396)

(418)

Finance expense

796

604

Share-based payment (credit)/ charge (including associated social security costs)

(5,340)

6,727

Decrease/ (increase) in trade and other receivables

11,386

(11,334)

(Decrease)/ increase in trade and other payables

(5,470)

1,872

Cash flows generated from operations

61,499

49,665

Interest received

1,396

418

Income tax paid

(12,741)

(13,665)

Net cash inflow from operating activities

50,154

36,418

Cash flows from investing activities

Acquisition of property, plant and equipment

(651)

(1,204)

Net cash used in investing activities

(651)

(1,204)

Cash flows from financing activities

Proceeds from issuance of ordinary shares

–

Proceeds from sale of shares from EBT

468

484

Principal elements of lease payments

(4,807)

(5,470)

Interest elements of lease payments

(718)

(472)

Proceeds from sale of own shares

Payment for shares bought back

(2,525)

–

Finance costs paid

(72)

(132)

Dividends paid

(39,320)

(38,153)

Net cash used in financing activities

(46,954)

(43,719)

Exchange (losses)/ gains on cash and cash equivalents

(846)

908

Net increase/ (decrease) in cash and cash equivalents

1,703

(7,597)

Cash and cash equivalents at beginning of year

45,523

53,120

Cash and cash equivalents at end of year

47,226

45,523

The notes on pages 148 to 175 are an integral part of these Consolidated Financial Statements.

Consolidated Statement of Cash Flows

for the year ended 31 December 2023

FDM Group (Holdings) plc

Annual Report and Accounts 2023

146

capital

£000

premium

£000

All Other

reserves

(Note 24)

£000

Retained

earnings

£000

Total

equity

£000

Balance at 1 January 2023

1,092

9,705

13,525

58,881

83,203

Profit for the year

–

40,765

Other comprehensive expense for the year

–

(1,329)

–

(1,329)

Total comprehensive income for the year

–

(1,329)

40,765

39,436

Share-based payments (note 25)

–

(4,434)

–

(4,434)

Transfer to retained earnings

–

(4,673)

4,673

–

Own shares sold

–

1,003

(496)

507

Own shares purchased

–

(2,525)

–

(2,525)

Recharge of net settled share options

–

(200)

Dividends (note 23)

–

(39,320)

Issue of new shares (note 22)

–

Total transactions with owners, recognised directly

in equity

–

(10,629)

(35,343)

(45,968)

Balance at 31 December 2023

1,096

9,705

1,567

64,303

76,671

capital

£000

premium

£000

All Other

reserves

(Note 24)

£000

Retained

earnings

£000

Total

equity

£000

Balance at 1 January 2022

1,092

9,705

5,126

62,207

78,130

Profit for the year

–

34,908

Other comprehensive income for the year

–

2,148

–

2,148

Total comprehensive income for the year

–

2,148

34,908

37,056

Share-based payments (note 25)

–

5,844

–

5,844

Transfer to retained earnings

–

(454)

454

–

Own shares sold

–

861

(353)

508

Recharge of net settled share options

–

(182)

Dividends (note 23)

–

(38,153)

Total transactions with owners, recognised directly

in equity

–

6,251

(38,234)

(31,983)

Balance at 31 December 2022

1,092

9,705

13,525

58,881

83,203

The notes on pages 148 to 175 are an integral part of these Consolidated Financial Statements.

Consolidated Statement of Changes in Equity

for the year ended 31 December 2023

147

Financial Statements

Governance

Strategic Report

1 General information

The Group is an international professional services provider focusing principally on IT, specialising in the recruitment,

development and deployment of its own permanent Consultants.

The Company is limited by shares, incorporated and domiciled in the UK and registered as a public limited company

in England and Wales with a Premium Listing on the London Stock Exchange. The Company’s registered office is

3rd Floor, Cottons Centre, Cottons Lane, London, SE1 2QG and its registered number is 07078823.

The Consolidated Financial Statements consolidate those of the Company and its subsidiaries. Subsidiaries and their

countries of incorporation are presented in note 4 to the Parent Company Financial Statements.

The Consolidated Financial Statements present the results for the year ended 31 December 2023. The Consolidated

Financial Statements were approved by Rod Flavell and Mike McLaren on behalf of the Board of Directors on

19 March 2024.

2 Going concern

The Group’s business activities, together with the factors likely to affect its future development, performance and

position are summarised in the Strategic Report. The principal risks and uncertainties, our assessment of the impact

of climate change, and risk management processes are also described in the Strategic Report.

The Group’s continued and forecast global growth, positive operating cash flow and liquidity position, together with its

distinctive business model and infrastructure, enable the Group to manage its business risks. The Group’s forecasts

and projections show that it will continue to operate with adequate cash resources.

The Directors therefore have a reasonable expectation that the Company and the Group will have adequate resources

to continue in operational existence for at least twelve months. Accordingly, the Directors continue to adopt the going

concern basis for preparing the financial statements.

3 Accounting policies

The principal accounting policies applied in the preparation of these Consolidated Financial Statements are set out

below. These policies have been consistently applied to all the years presented, unless otherwise stated.

3.1 Basis of preparation

The financial statements of the Group have been prepared in accordance with UK-adopted International Accounting

Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those

standards.

The Consolidated Financial Statements have been prepared on a historical cost basis. The Consolidated Financial

Statements are presented in Pounds Sterling and all values are rounded to the nearest thousand (£000), except where

otherwise indicated.

3.2 Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of the Group and its subsidiaries for the year

ending 31 December 2023.

Subsidiaries

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control,

and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries

are prepared for the same reporting period as the Parent Company, using consistent accounting policies. All intra-

group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are

eliminated in full.

Details of the subsidiaries owned by the Group are presented in Note 4 to the Parent Company Financial Statements.

There are no minority interests in the subsidiaries of the Company.

Notes to the Consolidated Financial Statements

FDM Group (Holdings) plc

Annual Report and Accounts 2023

148

Strategic Report

Governance

Financial Statements

149

3.3 Summary of significant accounting policies

a) Revenue recognition

Revenue is recognised under IFRS 15 and is measured at the fair value of the consideration received or receivable and

excluding sales taxes.

Rendering of services

Revenue from the provision of Consultants to third-party clients is recognised as follows:

•

The revenue is recognised in the period in which the Consultants perform the work at the contracted rates for

each Consultant. Revenue is based on timesheets from our Consultants which are authorised by the Group’s clients

detailing the hours and service provided;

•

If advance payments are made by clients, these are deferred and the income recognised in the period in which the

Consultants perform the work.

•

Revenue in respect of outstanding timesheets is accrued based upon estimates at the contract value; and

•

Volume rebates are accrued in the period in which the revenue is recognised, with the value of the rebate offset

against revenue. They are calculated with regard to specific threshold levels of revenue recognised for certain

clients in a contractual period. To the extent the volume rebates are material, amounts are disclosed along with any

significant judgements made in their estimation.

Sales invoices are issued following fulfilment of FDM’s performance obligation, confirmed by receipt of approved

timesheets. Invoices are due for payment in line with agreed credit terms.

b) Foreign currency translation

The individual financial statements of each Group entity are presented in the currency of the primary economic

environment in which the Company operates (its functional currency). Foreign exchange gains and losses resulting

from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in

foreign currencies at year end exchange rates, are generally recognised in profit or loss.

For the purpose of the Consolidated Financial Statements, the results and financial position of each entity are

expressed in Pounds Sterling (£), which is the functional currency of the Parent Company and the presentation

currency for the Consolidated Financial Statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s

functional currency (foreign currencies) are recorded at the rate prevailing at the time of the transaction. At the end

of each reporting period, monetary items and goodwill denominated in foreign currencies are retranslated at the rates

prevailing at the end of the reporting period.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the

exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign

currency are translated using exchange rates at the date when the fair value was determined.

For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of the Group’s foreign

operations are expressed in the Group’s presentation currency using exchange rates prevailing at the end of

the reporting period. Income and expense related items are translated at the average exchange rates for the

period. Exchange differences arising are classified as other comprehensive income and transferred to the Group’s

translation reserve.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

150

c) Taxes

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered

from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are

enacted or substantively enacted at the reporting date in the countries where the Group operates and generates

income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the income

statement. Management periodically evaluates positions taken in the tax returns with respect to situations in which

applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided in full, using the liability method, on temporary differences between the carrying amounts

of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following

temporary differences are not provided for: goodwill not deductible for tax purposes; and the initial recognition of

assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based

on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates

enacted or substantively enacted at the reporting date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available

against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that

the related tax benefit will be realised.

d) Property, plant and equipment

Property, plant and equipment are stated at cost net of accumulated depreciation. Cost includes the original purchase

price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of

an item of property, plant and equipment. The estimated useful lives are as follows:

Plant and equipment	4 years
Fixtures and fittings	4 years
Leasehold improvements	Length of lease

The assets’ residual values, useful lives and methods of depreciation are reviewed each financial year end and adjusted

if appropriate.

e) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The costs of intangible assets

acquired in a business combination are their fair values as at the date of acquisition.

Software and software licences

Software and software licence costs are recognised as an expense as incurred. Development costs that are directly

attributable to the design and testing of identifiable and unique software controlled by the Group are recognised as

intangible assets and amortised over the useful economic life of the software. Directly attributable costs that are

capitalised include invoiced supplier costs and employee costs.

Goodwill

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses, and is revalued

based on the prevailing foreign exchange rates at the end of the reporting period. For the purposes of impairment

testing, goodwill is allocated to the Group’s cash-generating units.

Goodwill is reviewed at least annually or more regularly when there is an indication of impairment. Impairment of

goodwill is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates.

Where the recoverable amount of the cash-generating unit is less than the carrying value of the cash-generating unit

to which the goodwill has been allocated, an impairment loss is recognised. Impairment losses relating to goodwill

cannot be reversed in future periods.

3 Accounting policies

continued

b) Foreign currency translation

continued

Strategic Report

Governance

Financial Statements

151

f) Trade receivables

Trade receivables are recognised initially at transaction price. They are subsequently measured at amortised cost

using an expected credit loss model in line with IFRS 9 which uses a lifetime expected loss allowance for all trade

receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk

characteristics. Shared credit risk characteristics include current and forward-looking information on macroeconomic

factors affecting the sector in which the debtor operates.

When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables.

Subsequent recoveries of amounts previously written off are credited against administrative expenses in the income

statement.

g) Cash and cash equivalents

Cash and cash equivalents comprise cash at banks and on hand and short-term deposits with a maturity of three

months or less.

h) Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial

year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and

other payables are presented as current liabilities unless payment is not due within twelve months after the reporting

period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective

interest method.

Financial instruments

Non-derivative financial instruments

The Group’s non-derivative financial instruments comprise trade receivables, trade payables, and cash and cash

equivalents.

The Group does not have any debt.

Pensions and other post-employment benefits

The Group operates a number of defined contribution pension schemes. The assets of each scheme are held

separately from those of the Group in an independently administered fund. The amount charged to the income

statement represents the contributions payable to the schemes in respect of the accounting period.

k) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event,

it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably

estimated. If the effect is material, provisions are determined by discounting the expected, risk adjusted, future cash

flows at a pre-tax risk-free rate. Provisions are measured at management’s best estimate of the expenditure required

to settle the Group’s liability. These estimates are reviewed each year and updated as necessary. In each circumstance

either adequate provisions are established or appropriate disclosures are made in accordance with the provisions of

IAS 37.

Provisions for legal claims

FDM is a people business and, in the ordinary course, we receive legal claims from time to time, most commonly

employment related. Our in-house legal team deals promptly with these claims where appropriate, but we engage

specialist external lawyers when it is required for us to access additional expertise or resource and we think it prudent

to do so. We are confident in our employment practices and it is our policy to defend these claims and our business

model robustly. We will also take a commercial approach and from time to time may choose to settle claims if we

consider it pragmatic and in the Group’s best interests to do so, particularly having regard to the time and effort

management need to dedicate to a given claim. The Directors evaluate the possibility of an outflow of resources to

determine if it is either remote, possible or probable.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

152

Provisions for dilapidations

To the extent that the Group is required to pay a termination fee or restore a property to its original conditions at the

end of the lease term, we recognise a provision for dilapidations at the net present value of the forecast expenditure.

Equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or

options are shown in equity as a deduction, net of tax, from the proceeds. The share premium reflects the extra paid

for new shares above their nominal value.

Other reserves represent the cost of equity on settled share-based payments until such share options are exercised or

lapse. Own shares reserve represents those Company shares held by the Trustee of the FDM Group Employee Benefit

Trust and are a deduction from shareholders’ funds (see note 26).

The translation reserve comprises all foreign exchange differences arising from the translation of the financial

statements of foreign operations. The capital redemption reserve arose from the purchase by the Company in 2015 of

5,200,392 deferred shares, which had a nominal value of £0.01 each.

m) Share-based payments

Employees of the Group receive remuneration in the form of share-based payments, whereby employees render

services as consideration for equity instruments (equity-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is recognised, together with a corresponding increase in other reserves in

equity, over the period in which the performance and/ or service conditions are fulfilled. The cumulative expense

recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which

the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately

vest. The income statement expense or credit for a period represents the movement in cumulative expense recognised

between the beginning and end of that period and is recognised in employee benefits expense. The equity-settled

transactions are fair valued at the grant date and the expense recognised over the duration of the vesting period.

No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for which

vesting is conditional upon a market or non-vesting condition. These are treated as vesting irrespective of whether or

not the market or non-vesting condition is satisfied, provided that all other performance and/ or service conditions are

satisfied.

When the terms of an equity-settled transaction award are modified, the minimum expense recognised is the expense

as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognised

for any modification that increases the total fair value of the share-based payment transaction, or is otherwise

beneficial to the employee as measured at the date of modification.

When an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not

yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within

the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled

award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are

treated as if they were a modification of the original award, as described in the previous paragraph.

Included within the results for the year ending 31 December 2023 is a charge relating to a portion of the Directors’

bonus earned during 2023, the balance will be settled via issue of shares equal to the amount which would have been

payable to them.

n) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting to the Board of Directors. The

Executive Directors have been identified as the chief operating decision maker.

o) Dividends

Dividends are recognised as a liability in the period in which they are approved such that the Company is obligated to

pay the dividend.

3 Accounting policies

continued

k) Provisions

continued

Strategic Report

Governance

Financial Statements

153

p) Employee Benefit Trust

FDM Group (Holdings) plc has an established Employee Benefit Trust

(“EBT”) to which it is the sponsoring entity.

Notwithstanding the legal duties of the Trustee, the Company considers that it has “de facto” control. The EBT is

included in the Parent Company Financial Statements and the Consolidated Financial Statements.

No gain or loss is recognised in profit or loss or other comprehensive income on the purchase, sale or cancellation of

the Company’s own equity held by the EBT. For further information, see note 26.

q) Leases

Under IFRS 16 ‘Leases’, a liability and an asset are recognised at the inception of the lease, the lease liability being the

present value of future lease payments. A right-of-use asset is recognised as the same amount adjusted for any initial

direct costs, lease incentives received, or lease payments made at or before the commencement date, as applicable.

The charge to the Income Statement comprises i) an interest expense on the lease liability (included within finance

expense) and ii) a depreciation expense on the right-of-use asset (included within operating costs). The right-of-use

asset is depreciated straight-line over the term of the lease.

The liabilities are measured at the present value of the remaining lease payments, discounted using the lessee

company’s estimated incremental borrowing rate at the date of lease inception. Lease payments are presented as

cash flows from financing activities, split between principal and interest elements, on the Statement of Cash Flows.

For short-term leases and leases of low-value assets, the Group has chosen to recognise the associated lease

payments as an expense on a straight-line basis over the lease term.

r) Government grants

Government grants are recognised at fair value when there is reasonable assurance that conditions attached to the

grant will be complied with and the grant will be received. Income is offset against the expenses the grant is intended

to support. The grant is recognised as income over the period necessary to match them with the related costs, for

which they are intended to compensate, on a systematic basis.

4 Other accounting estimate

The preparation of the Group’s financial statements requires management to make estimates and assumptions that

affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities,

at the end of the reporting year. However, uncertainty about these assumptions and estimates could result in

outcomes that require a material adjustment to the carrying amount of the asset and liability affected in future periods.

The following estimate is not considered to be a significant estimate as it is considered there is not a significant

risk of the estimate resulting in a material adjustment to the carrying amounts of assets and liabilities in the next

financial year.

Share-based payment charge

A share-based payment charge is recognised in respect of share awards based on the Directors’ best estimate of the

number of shares that will vest based on the performance conditions of the awards, which comprise adjusted EPS

growth and the number of employees that will leave before vesting. In estimating the number of shares likely to vest,

the Directors have based their assessment of the adjusted EPS growth in the forecasts contained within the Group’s

three-year plan, adjusted for the impact of potential scenarios that could potentially impact EPS growth. The charge is

calculated based on the fair value on the grant date using the Black-Scholes model and is expensed over the vesting

period. The key assumptions in respect of the share-based payment charges are set out in note 25. The credit is as a

result of a change in the vesting assumptions of the adjusted earnings per share performance, with the outstanding

awards now expected not to vest. This, combined with that there were no new options awarded in 2023, has reduced

the level of uncertainty over the accounting estimate that was present at prior year ends.

No individual judgements have been made that have a significant impact on the financial statements (2022: none).

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

154

5 New standards and interpretations

The International Accounting Standards Board (“IASB”) and IFRS IC have issued the following new standards

and amendments which were effective during the year and were adopted by the Group in preparing the

financial statements.

The adoption of these amendments has not had a material impact on the Group’s financial statements in the year:

	Effective for	Endorsed by the
	accounting periods	UK Endorsement
Effective in 2023	beginning on or after	Board (UKEB)
IFRS 17, ‘Insurance contracts’	1 January 2023	Yes
Amendments
Deferred Tax related to Assets and Liabilities arising from a Single	1 January 2023	Yes
Transaction (Amendments to IAS 12)
Definition of Accounting Estimates (Amendments to IAS 8)	1 January 2023	Yes
Disclosure of Accounting policies	1 January 2023	Yes
(Amendments to IAS 1 and IFRS Practice Statement 2)
International Tax Reform – Pillar Two Model Rules	1 January 2023	Yes
(Amendments to IAS 12)

The following standards and interpretations had been issued but were not mandatory for annual reporting periods

ending on 31 December 2023, and were not adopted in the Group’s financial statements for the year and are not

expected to have a material impact on the Group when adopted:

	Effective for	Endorsed by the
	accounting periods	UK Endorsement
Effective after 31 December 2023	beginning on or after	Board (UKEB)
Classification of Liabilities as Current or Non-current	1 January 2024	Yes
(Amendments to IAS 1)
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)	1 January 2024	Yes
Supplier finance arrangements (Amendments to IAS 7 and IFRS 7)	1 January 2024	No

6 Segmental reporting

Management has determined the operating segments based on the operating reports reviewed by the Board of Directors

that are used to assess both performance and strategic decisions. Management has identified that the Executive

Directors are the chief operating decision-maker in accordance with the requirements of IFRS 8 ‘Operating segments’.

As of 31 December 2023, the Board of Directors consider that the Group is organised on a worldwide basis into four

core geographical operating segments:

1. UK;

2. North America;

3. Europe, Middle East and Africa, excluding UK (“EMEA”); and

4. Asia Pacific (“APAC”).

Each geographical segment is engaged in providing services within a particular economic environment and is subject

to risks and returns that are different from those of segments operating in other economic environments.

Strategic Report

Governance

Financial Statements

155

All segment revenue, profit before taxation, assets and liabilities are attributable to the principal activity of the Group,

being a global professional services provider with a focus on IT.

For the year ended 31 December 2023

		North
	UK	America	EMEA	APAC	Total
	£000	£000	£000	£000	£000
Revenue	127,770	130,167	24,093	51,945	333,975
Depreciation and amortisation	2,420	1,324	362	1,636	5,742
Segment operating profit	28,608	21,641	2,398	2,379	55,026
Finance income¹	1,334	260	24	11	1,629
Finance costs¹	(401)	(55)	(61)	(512)	(1,029)
Profit before income tax	29,541	21,846	2,361	1,878	55,626
As at 31 December 2023
Total assets	71,625	21,147	13,766	17,639	124,177
Total liabilities	(11,093)	(8,629)	(5,479)	(22,305)	(47,506)

Finance income and finance costs include intercompany interest which is eliminated upon consolidation.

Included in total assets above are non-current assets (excluding deferred tax) as follows:

		North
	UK	America	EMEA	APAC	Total
	£000	£000	£000	£000	£000
31 December 2023	32,358	1,409	911	5,724	40,402

The following foreign entities, which are 100% owned subsidiaries, are material by their size at 31 December 2023:

			FDM Group
	FDM	FDM Group	Australia
Entity name	Group Inc.	Canada Inc.	Pty Ltd
Country of registration	USA	Canada	Australia
	£000	£000	£000
Revenue	71,884	58,283	21,665
Non-current assets (excluding deferred tax)	1,185	224	4,377

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

156

For the year ended 31 December 2022

		North
	UK	America	EMEA	APAC	Total
	£000	£000	£000	£000	£000
Revenue	139,560	116,937	19,665	53,810	329,972
Depreciation and amortisation	2,599	1,698	291	1,835	6,423
Segment operating profit	25,856	14,111	2,039	3,841	45,847
Finance income¹	515	152	2	5	674
Finance costs¹	(196)	(59)	(86)	(519)	(860)
Profit before income tax	26,175	14,204	1,955	3,327	45,661
As at 31 December 2022
Total assets	69,706	26,915	11,983	21,626	130,230
Total liabilities	(8,602)	(9,775)	(4,906)	(23,744)	(47,027)

Finance income and finance costs include intercompany interest which is eliminated upon consolidation.

Included in total assets above are non-current assets (excluding deferred tax) as follows:

		North
	UK	America	EMEA	APAC	Total
	£000	£000	£000	£000	£000
31 December 2022	23,124	1,654	1,112	7,578	33,468

The following foreign entities, which are 100% owned subsidiaries, are material by their size at 31 December 2022 :

			FDM Group
	FDM	FDM Group	Australia
Entity name	Group Inc.	Canada Inc.	Pty Ltd
Country of registration	USA	Canada	Australia
	£000	£000	£000
Revenue	63,512	53,425	23,552
Non-current assets (excluding deferred tax)	890	764	5,532

Information about major clients

Clients A and B represent 10% or more of the Group’s 2023 and 2022 revenues. Revenue from client A is attributed

across all our operating segments, revenue from client B is attributed to North America.

	2023	2022
	£000	£000
Revenue from client A	48,960	37,227
Revenue from client B	21,467	40,297

6 Segmental reporting

continued

Strategic Report

Governance

Financial Statements

157

7 Operating profit

Operating profit for the year has been arrived at after charging/ (crediting):

	2023	2022
	£000	£000
Net foreign exchange differences	174	(415)
Loss on disposal of property, plant and equipment	148	95
Depreciation of right-of-use assets	4,279	4,533
Depreciation of property, plant and equipment and amortisation of software and software	1,463	1,890
licences
Expense relating to short-term leases	600	13

Auditors’ remuneration

During the year the Group (including its overseas subsidiaries) obtained the following services from the Group’s

auditors:

	2023	2022
	£000	£000
Fees payable to the Group’s auditors for the audit of the Parent Company and Consolidated
Financial Statements	103	95
Fees payable to the Group’s auditors for other services:
– The audit of the Group’s subsidiaries	170	160
– Audit-related assurance services- Interim review	59	55
	332	310

8 Staff numbers and costs

The monthly average number of persons employed by the Group (including Executive Directors) during the year,

analysed by category, was as follows:

	2023	2022
	Number	Number
Consultants and trainees	5,687	5,916
Administration	795	769
	6,482	6,685

The aggregate payroll costs of these persons were as follows:

	2023	2022
	£000	£000
Wages and salaries	227,644	222,862
Social security costs	22,166	20,836
Other pension costs	8,028	7,148
Share-based payments	(5,449)	6,356
	252,389	257,202

Retirement benefits

The Group operates a number of defined contribution pension plans. The pension charge for the year represents

contributions payable by the Group to the schemes. The pension contributions payable at 31 December 2023 were

£594,000 (2022: £710,000). There were no prepaid contributions at the end of the financial year (2022: £nil

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

158

9 Directors’ remuneration

Details of the Directors’ (who also represent the key management personnel of the Group) remuneration in respect of

the year ended 31 December 2023 and 2022 is set out below:

	2023	2022
	£000	£000
Short-term employee benefits	2,577	3,612
Post-employment benefits	55	72
Share-based payments	(755)	977
	1,877	4,661

Included within Short-term employee benefits in 2023 is £73,000 relating to annual bonus which was deferred

into shares for two years (2022: £266,000). There are no ‘Other long-term benefits’ or ‘Termination benefits’ made

in the year (2022: nil). For further information on this and Directors’ remuneration, see the audited sections of the

Remuneration Report as defined on page 107.

10 Finance income and expense

	2023	2022
	£000	£000
Bank interest	1,396	418
Finance income	1,396	418

	2023	2022
	£000	£000
Interest on lease liabilities	(718)	(472)
Interest on provision for dilapidations	(7)	–
Finance fees and charges	(71)	(132)
Finance expense	(796)	(604)

11 Taxation

The major components of income tax expense for the years ended 31 December 2023 and 2022 are:

	2023	2022
	£000	£000
Current income tax:
Current income tax charge	13,352	11,699
Adjustments in respect of prior periods	(249)	(592)
Total current income tax	13,103	11,107
Deferred tax:
Relating to origination and reversal of temporary differences (note 17)	1,758	(354)
Total deferred tax	1,758	(354)
Total tax expense reported in the income statement	14,861	10,753

Strategic Report

Governance

Financial Statements

159

The standard rate of corporation tax in the UK increased from 19% to 25% effective 1 April 2023, accordingly, the

profits for 2023 are taxed at 23.5% (2022: 19%). The tax charge for the year is higher (2022: higher

) than the standard

rate of corporation tax in the UK. The differences are set out below:

	2023	2022
	£000	£000
Profit before income tax	55,626	45,661
Profit before income tax multiplied by UK standard rate of corporation
tax of 23.5% (2022: 19%)	13,072	8,676
Effect of different tax rates on overseas earnings	1,562	2,090
Effect of expenses not deductible for tax purposes	99	579
Adjustments in respect of prior periods	(249)	(592)
Effect of unused tax losses not recognised for deferred tax assets	377	–
Total tax charge	14,861	10,753

Factors affecting future tax charges

Deferred tax assets and liabilities are measured at the rate that is expected to apply to the period when the asset is

realised or the liability is settled, based on the rates that have been enacted or substantively enacted at the reporting

date. Therefore, at each year end, deferred tax assets and liabilities have been calculated based on the rates that have

been substantively enacted by the reporting date.

On 19 July 2023, the UK Endorsement Board endorsed the amendments introducing a global minimum effective tax

rate of 15%. On 15 December 2023, the Organisation for Economic Co-Operation and Development (OECD) unveiled

further Administrative Guidance related to Pillar 2. We will continue to monitor, but do not expect to be impacted by

Pillar 2 requirements as the Group does not currently meet the Euro 750 million consolidated revenue threshold.

12 Earnings per ordinary share

Basic earnings per share are calculated by dividing the profit attributable to ordinary equity holders of the Parent

Company by the weighted average number of ordinary shares in issue during the year.

		2023	2022
Profit for the year	£000	40,765	34,908
Average number of ordinary shares in issue (thousands)		109,151	109,192
Basic earnings per share	Pence	37.3	32.0

Adjusted basic earnings per share are calculated by dividing the profit attributable to ordinary equity holders of the

Parent Company, excluding Performance Share Plan expense (including social security costs and associated deferred

tax), by the weighted average number of ordinary shares in issue during the year.

11 Taxation

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

160

		2023	2022
Profit for the year (basic earnings)	£000	40,765	34,908
Share-based payment (credit)/ expense (including social security costs) (note 25 )	£000	(5,449)	6,356
Tax effect of share-based payment (credit)/ expense	£000	563	(522)
Adjusted profit for the year	£000	35,879	40,742
Average number of ordinary shares in issue (thousands)		109,151	109,192
Adjusted basic earnings per share	Pence	32.9	37.3

Diluted earnings per share

Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding

to assume conversion of all dilutive potential ordinary shares. The Company has one type of dilutive potential ordinary

shares in the form of share options; the number of shares in issue has been adjusted to include the number of shares

that would have been issued assuming the exercise of the share options.

		2023	2022
Profit for the year (basic earnings)	£000	40,765	34,908
Average number of ordinary shares in issue (thousands)		109,151	109,192
Adjustment for share options (thousands)		329	594
Diluted number of ordinary shares in issue (thousands)		109,480	109,786
Diluted earnings per share	Pence	37.2	31.8

13 Right-of-use assets and lease liabilities

i) Right-of-use assets

	2023	2022
Properties	£000	£000
Cost
At 1 January	37,211	37,006
Additions	12,784	2,697
Disposals	(12,456)	(4,217)
Effect of movements in foreign exchange	(894)	1,725
At 31 December	36,645	37,211
Accumulated depreciation
At 1 January	27,138	25,375
Depreciation charge for the year	4,279	4,533
Disposals	(12,450)	(3,971)
Effect of movements in foreign exchange	(537)	1,201
At 31 December	18,430	27,138
Net book value at 31 December	18,215	10,073

12 Earnings per ordinary share

continued

Strategic Report

Governance

Financial Statements

161

ii) Lease liabilities

	2023	2022
	£000	£000
Current lease liabilities	4,512	4,643
Non-current lease liabilities	15,669	8,250
	20,181	12,893

	2023	2022
Movement in lease liabilities in the year	£000	£000
At 1 January	12,893	15,230
New leases	12,563	2,697
Interest expense	718	472
Cash payments	(5,525)	(5,942)
Termination of leases	(6)	(211)
Effect of movements in foreign exchange	(462)	647
At 31 December	20,181	12,893

Contractual maturities of lease liabilities:

	At net present value		Not discounted
	2023	2022	2023	2022
	£000	£000	£000	£000
Less than one year	4,512	4,643	4,637	4,738
Between 1 and 2 years	3,599	2,964	3,929	3,147
Between 2 and 5 years	7,421	4,198	9,090	4,737
Over 5 years	4,649	1,088	7,814	1,398
Total lease liabilities	20,181	12,893	25,470	14,020

The total cash outflow for leases was £6,125,000 (2022: £5,955,000), which includes short-term lease payments of

£600,000 (2022: £13,000). Extension and termination options are included in a number of property leases across

the Group. These are used to maximise operational flexibility in terms of managing the assets used in the Group’s

operations. All extension and termination options held are exercisable only by the Group and not by the respective

lessor. Where there is reasonable certainty that an option to extend a lease will be exercised, lease liabilities have

been recognised accordingly. During 2023, we exited one lease early (2022: three leases). The impact of termination

of the lease liabilities was £6,000 (2022: £211,000) and the disposal of the right-of-use assets, by net book value, was

£6,000 (2022: £246,000). During 2023, the business signed a new 10-year lease for our London headquarters, which

resulted in a right-of-use addition of £11,297,000.

iii) Amounts recognised in the Income Statement

The Income Statement shows the following amounts relating to leases:

	2023	2022
	£000	£000
Depreciation of right-of-use assets – properties	4,279	4,533
Loss on disposal of right-of-use asset	–	35
Interest expense (included in finance cost)	718	472
Expense relating to short-term leases	600	13

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

162

14 Property, plant and equipment

	Leasehold	Fixtures and	Plant and
	improvements	fittings	equipment	Total
2023	£000	£000	£000	£000
Cost
At 1 January 2023	8,583	1,640	4,372	14,595
Additions	356	162	133	651
Disposals	(2,463)	(575)	(794)	(3,832)
Effect of movements in foreign exchange	(197)	(32)	(87)	(316)
At 31 December 2023	6,279	1,195	3,624	11,098
Accumulated depreciation
At 1 January 2023	6,395	1,614	2,920	10,929
Depreciation charge for the year	802	54	607	1,463
Disposals	(2,331)	(575)	(778)	(3,684)
Effect of movements in foreign exchange	(125)	(32)	(69)	(226)
At 31 December 2023	4,741	1,061	2,680	8,482
Net book value at 31 December 2023	1,538	134	944	2,616

	Leasehold	Fixtures and	Plant and
	improvements	fittings	equipment	Total
2022	£000	£000	£000	£000
Cost
At 1 January 2022	8,266	1,706	4,161	14,133
Additions	2	7	1,195	1,204
Disposals	–	(150)	(1,162)	(1,312)
Effect of movements in foreign exchange	315	77	178	570
At 31 December 2022	8,583	1,640	4,372	14,595
Accumulated depreciation
At 1 January 2022	5,297	1,604	3,163	10,064
Depreciation charge for the year	888	86	693	1,667
Disposals	–	(149)	(1,068)	(1,217)
Effect of movements in foreign exchange	210	73	132	415
At 31 December 2022	6,395	1,614	2,920	10,929
Net book value at 31 December 2022	2,188	26	1,452	3,666

Strategic Report

Governance

Financial Statements

163

15 Intangible assets

	Software and
	software
	licences	Goodwill	Total
2023	£000	£000	£000
Cost
At 1 January 2023	707	19,729	20,436
Disposals	(707)	–	(707)
Effect of movements in foreign exchange	–	(158)	(158)
At 31 December 2023	–	19,571	19,571
Accumulated amortisation
At 1 January 2023	707	–	707
Disposals	(707)	–	(707)
At 31 December 2023	–	–	–
Net book value at 31 December 2023	–	19,571	19,571

	Software and
	software
	licences	Goodwill	Total
2022	£000	£000	£000
Cost
At 1 January 2022	697	19,374	20,071
Additions	–	–	–
Effect of movements in foreign exchange	10	355	365
At 31 December 2022	707	19,729	20,436
Accumulated amortisation
At 1 January 2022	474	–	474
Amortisation for the year	223	–	223
Effect of movements in foreign exchange	10	–	10
At 31 December 2022	707	–	707
Net book value at 31 December 2022	–	19,729	19,729

The amortisation charge is recognised in administrative expenses in the income statement. The amortisation period of

the software and software licences is four years. Goodwill is not amortised but is subject to an annual impairment test.

The goodwill has been allocated to cash generating units (“CGUs”) summarised as follows:

		North
	UK	America	EMEA	APAC	Total
	£000	£000	£000	£000	£000
Cost and NBV at 31 December 2023	14,843	1,750	2,978	–	19,571
Cost and NBV at 31 December 2022	14,843	1,848	3,038	–	19,729

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

164

16 Impairment testing of goodwill

An overview of impairment reviews performed by CGUs is set out below. The recoverable amount of each CGU

has been determined on value in use calculations using cash flow projections from financial budgets and forecasts

approved by the Board covering a two-year period from the date of the relevant impairment review. In setting those

budgets and forecasts the Board also considered the risks to the business (including the risk of climate change which

was considered minor). The key assumptions in the projections, for all CGUs, were as follows:

•

Revenue and gross margin were based on expected levels of activity under existing major contractual arrangements

together with growth based upon medium-term historical growth rates and having regard to expected economic and

market conditions for other clients;

•

Administrative expenses were forecast to move in line with expected levels of activity in the CGU; and

•

The growth rate used to extrapolate the cash flows beyond the two-year forecast period was 2% up to a period of

15 years in total.

The pre-tax (nominal) discount rates used in the calculations were as follows:

	2023	2022
	%	%
UK	11.55	19.47
North America	20.05	18.75
EMEA	11.08	13.43

The review found that the present value of future cash flows was significantly higher than the value of goodwill.

As a result of the review the Directors did not identify any impairment for the goodwill in each CGU. In considering

sensitivities, no reasonable change in any of the above key assumptions would cause the recoverable amount to

fall below the carrying value of the CGUs.

17 Deferred income tax assets and liabilities

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is

the analysis of the deferred tax balances (after offset) for financial reporting purposes:

	2023	2022
	£000	£000
Non-current asset:
Non-current temporary differences	552	2,316
Deferred tax asset	552	2,316

	2023	2022
	£000	£000
Non-current liability:
Non-current temporary differences	31	–
Deferred tax liability	31	–

Strategic Report

Governance

Financial Statements

165

The Directors consider the deferred tax asset is recoverable within two to five years. Deferred tax assets have been

recognised in respect of timing differences associated with share-based payment expenses where it is considered

probable that these assets will be recovered.

Movement in deferred tax asset during 2023:

		Recognised		Recognised
	1 January	in income	Deferred tax	in other	Exchange	31 December
	2023	statement	liability	reserves	difference	2023
	£000	£000	£000	£000	£000	£000
Share-based payments	1,971	(1,578)	–	(4)	(29)	360
Right-of-use assets	129	(112)	–	–	(3)	14
Property, plant and equipment	(29)	75	31	–	(2)	75
Other	245	(143)	–	–	1	103
	2,316	(1,758)	31	(4)	(33)	552

Movement in deferred tax liability during 2023:

		Recognised
	1 January	in income	31 December
	2023	statement	2023
	£000	£000	£000
Property, plant and equipment	–	(31)	(31)

Movement in deferred tax asset during 2022:

		Recognised	Recognised	Transferred
	1 January	in income	in other	to retained	Exchange	31 December
	2022	statement	reserves	earnings	difference	2022
	£000	£000	£000	£000	£000	£000
Share-based payments	2,012	517	(594)	(8)	44	1,971
Right-of-use assets	135	(7)	–	–	1	129
Property, plant and equipment	66	(102)	–	–	7	(29)
Other	271	(54)	–	–	28	245
	2,484	354	(594)	(8)	80	2,316

The Group has unused tax losses for which no deferred tax asset has been recognised totalling £7,456,000 (2022:

£5,458,000) with a potential tax benefit of £2,261,000 (2022: £1,637,000), no asset has been recognised as the losses

have been generated in regions where the Group does not expect to generate profits in the short term. The losses can

be carried forward indefinitely.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

166

18 Trade and other receivables

Due to their short-term nature, the Directors consider that the carrying amount of trade receivables approximates

to their transaction price. The standard credit terms are 30 days.

	2023	2022*
	£000	£000
Trade receivables	24,944	34,892
Prepayments and accrued income	6,717	9,389
Other receivables	952	1,192
	32,613	45,473

* The 2022 comparative has been restated as the income tax receivable balance has been presented individually on

the face of the Consolidated Statement of Financial Position.

Included within prepayments and accrued income is £2,340,000 of accrued income (2022: £3,862,000).

The expected loss rate and the aged gross trade receivables and aged loss allowance as at 31 December are as follows:

		Gross trade	Loss
	Expected	receivable	allowance
31 December 2023	loss rate	£000	£000
Not overdue	2%	21,873	(443)
Not more than three months past due	2%	3,562	(72)
More than three months but not more than six months past due	2%	25	(1)
		25,460	(516)

		Gross trade	Loss
	Expected	receivable	allowance
31 December 2022	loss rate	£000	£000
Not overdue	1%	31,760	(447)
Not more than three months past due	1%	3,630	(51)
		35,390	(498)

The movement in the allowance for expected credit loss is as below:

	2023	2022
	£000	£000
At 1 January	(498)	(749)
Increase in allowance	(18)	–
Unused amount reversed	–	251
At 31 December	(516)	(498)

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected

loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped

based on shared credit risk characteristics. Shared credit risk characteristics include current and forward-looking

information on macroeconomic factors affecting the sector in which the debtor operates and those affecting the

ability of the client to settle the receivables. The Group has identified relevant factors including the GDP and the

unemployment rate of the countries in which it trades, and accordingly adjusts the loss rates based on expected

changes in these factors.

Strategic Report

Governance

Financial Statements

167

19 Cash and cash equivalents

	2023	2022
	£000	£000
Cash at bank and in hand	47,226	45,523

The Group has issued guarantees in favour of the Swiss Office of Labour and Economy for CHF 150,000.

The credit quality of financial assets can be assessed by reference to external credit ratings issued by credit ratings

agencies registered in the EU. Cash at bank is held with banks with the following ratings:

	2023	2022
Cash at bank by credit rating	£000	£000
A	47,202	45,360
BB	24	23
BBB	–	140
	47,226	45,523

20 Trade and other payables

Due to their short-term nature, the Directors consider that the carrying amount of trade payables approximates to their

fair value.

	2023	2022
	£000	£000
Trade payables	1,435	2,184
Other payables	2,147	1,856
Other taxes and social security	7,031	9,309
Accruals	15,025	19,613
	25,638	32,962

Included within accruals are volume rebates of £2,336,000 (2022: £3,183,000) and payroll accruals of £3,182,000

(2022: £4,734,000). No significant judgements were made in the estimation of the volume rebate accrual or payroll

accruals. Any volume rebates, where the rebate period is non-coterminous with the financial period, are accrued based

on forecast revenue for the remainder of the rebate period. No individual client rebates were material in value in 2023

or 2022.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

168

21 Provisions

	2023	2022
Non-current	£000	£000
Dilapidation provision
At 1 January	–	–
Provision in year	221	–
Interest expense	7	–
At 31 December	228	–

The Group is required to pay a fee or to restore the leased premises to their original conditions at the end of the

respective lease terms. A provision for dilapidations has been recognised for the net present value of the expenditure

expected to be incurred at the end of lease. These costs have been capitalised as part of the right-of-use asset and

are amortised over the term of the lease. There was one new provision in 2023, recognised when the new property

lease term commenced.

22 Share capital

Authorised, called-up, allotted and fully-paid share capital

	2023	2023	2022	2022
	Number of shares	£000	Number of shares	£000
Ordinary shares of £0.01 each
At 1 January	109,191,669	1,092	109,191,669	1,092
Issued in year	420,183	4	–	–
At 31 December	109,611,852	1,096	109,191,669	1,092

Ordinary shares

All ordinary shares rank equally for all dividends and distributions that may be declared on such shares. At general

meetings of the Company, each shareholder who is present (in person, by proxy or by representative) is entitled to

one vote on a show of hands and, on a poll, to one vote per share.

There were no changes in the authorised, called-up, allotted and fully-paid share capital during the year.

Strategic Report

Governance

Financial Statements

169

23 Dividends

	2023	2022
	£000	£000
Dividends paid
Paid to shareholders	39,320	38,153

2023

An interim dividend of 17.0 pence per ordinary share was declared by the Directors on 25 July 2023 and was paid

on 13 October 2023 to holders on the register on 22 September 2023; the amount paid was £18,539,000.

The Board is proposing a final dividend of 19.0 pence per share in respect of the year to 31 December 2023, for

approval by shareholders at the AGM on 14 May 2024; the amount payable will be £20,724,000. Subject to shareholder

approval the dividend will be paid on 28 June 2024 to shareholders on the register on 7 June 2024.

This brings the Company’s total dividend for the year to 36.0 pence per share (2022: 36.0 pence per share).

The Board continues to operate its dividend policy; the Group will retain sufficient capital to fund ongoing operating

requirements, maintain an appropriate level of dividend cover and sufficient funds to invest in the Group’s longer-

term growth.

2022

An interim dividend of 17.0 pence per ordinary share was declared by the Directors on 27 July 2022 and was paid

on 30 September 2022 to holders on the register on 26 August 2022; the amount paid was £18,533,000.

The Board paid a final dividend of 19.0 pence per share on 30 June 2023, to shareholders on the register on 9 June

2023; the amount paid was £20,781,000.

24 All Other reserves

	Capital	Own			Total of
	redemption	shares	Translation	Other	All Other
	reserve	reserve	reserve	reserves	reserves
	£000	£000	£000	£000	£000
Balance at 1 January 2023	52	(1,494)	2,391	12,576	13,525
Other comprehensive expense for the year	–	–	(1,329)	–	(1,329)
Total comprehensive expense for the year	–	–	(1,329)	–	(1,329)
Share-based payments (note 25)	–	–	–	(4,434)	(4,434)
Transfer to retained earnings	–	–	–	(4,673)	(4,673)
Own shares sold	–	1,003	–	–	1,003
Own shares purchased	–	(2,525)	–	–	(2,525)
Total transactions with owners, recognised directly	–	(1,522)	–	(9,107)	(10,629)
in equity
Balance at 31 December 2023	52	(3,016)	1,062	3,469	1,567

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

170

	Capital	Own			Total of
	redemption	shares	Translation	Other	All Other
	reserve	reserve	reserve	reserves	reserves
	£000	£000	£000	£000	£000
Balance at 1 January 2022	52	(2,355)	243	7,186	5,126
Other comprehensive income for the year	–	–	2,148	–	2,148
Total comprehensive income for the year	–	–	2,148	–	2,148
Share-based payments (note 25)	–	–	–	5,844	5,844
Transfer to retained earnings	–	–	–	(454)	(454)
Own shares sold	–	861	–	–	861
Total transactions with owners, recognised directly	–	861	–	5,390	6,251
in equity
Balance at 31 December 2022	52	(1,494)	2,391	12,576	13,525

25 Share-based payments

	2023	2022
Recognised in Income Statement	£000	£000
(Credit)/ expense arising from equity-settled share-based payment transaction	(4,748)	6,196
Social security accrued thereon	(701)	160
Expenses arising from bonus deferred as shares	109	371
(Credit)/ expense arising from equity-settled share-based payment transaction	(5,340)	6,727

	2023	2022
Recognised in Equity	£000	£000
(Credit)/ expense arising from equity-settled share-based payment transaction	(4,639)	6,567
Deferred tax recognised in other reserves arising from equity-settled share-based
payment transaction (note 17)	(4)	(594)
Transfer to retained earnings – Deferred tax	–	(8)
Transfer to retained earnings – Recharge	(4,661)	(446)
Transfer to retained earnings – Lapsed options	(12)	–
Currency difference on retranslation	209	(129)
	(9,107)	5,390

The credit arising from equity-settled share-based payment transactions in 2023 reflects the latest assessment of the

forecast adjusted EPS. During 2023, the share options issued in 2020 vested, following which 421,954 options were

exercised. The share options exercised were satisfied primarily via issue of shares, with 420,183 shares issued. For

detail of the shares held in the FDM Group Employee Benefit Trust see note 26. A transfer of £4,661,000 was made

from ‘Other reserves’ to ‘Retained earnings’ in respect of the exercise of share options during the period (2022: transfer

of £446,000).

As disclosed in the Directors’ Remuneration Report, the during the year the Company did not grant any nominal cost

options over ordinary shares in the Company under the PSP. Awards were made in 2015 to 2022, the vesting of which

is subject to the achievement of a three-year performance condition relating to earnings per share.

24 All Other reserves

continued

Strategic Report

Governance

Financial Statements

171

Options are exercisable no later than the tenth anniversary of the date of grant. The table below summarises the

outstanding share options:

	2023		2022
		Weighted average		Weighted average
	Number of shares	exercise price	Number of shares	exercise price
Outstanding at 1 January	2,395,160	6p	2,211,572	8p
Granted during the year	–	n/a	923,500	1p
Forfeited during the year	(140,865)	1p	(188,000)	1p
Exercised during the year	(421,954)	4p	(7,311)	340p
Lapsed during the year	(9,801)	640p	(544,601)	1p
Outstanding at 31 December	1,822,540	4p	2,395,160	6p
Exercisable at the end of the year	170,290	34p	37,660	302p
Weighted average remaining
contractual life (years)	7.49	n/a	8.24	n/a

The weighted average share price at the date of exercise of options exercised during the year ended 31 December

2023 was 656 pence (2022: 893 pence).

The fair values of the PSP Share options made were determined using the Black-Scholes valuation model.

The significant inputs to the model were as follows:

			30
	23 March	21 April	December	17 April
Date of grant	2022	2021	2020	2019
Share price at date of grant	1000p	1038p	1116p	937p
Exercise price	1p	1p	1p	1p
Dividend yield	3.2%	3.0%	2.7%	3.3%
Expected volatility	30%	30%	30%	28%
Risk free interest rate	1.684%	0%	0%	0.88%
Expected life	4 years	4 years	4 years	4 years
Fair value at date of grant	880p	921p	999p	820p

The expected volatility applied in the Black-Scholes models reflects the assumption that the historical volatility is

indicative of future trends, which may not necessarily be the actual outcome.

Buy As You Earn

The Group operates a Buy As You Earn Plan, participants may acquire up to £12,000 of shares each year from their

after tax remuneration (“Purchased Shares”). Provided the Purchased Shares are retained in the plan and subject,

ordinarily, to continued employment, additional “Matching Shares” are awarded on the basis of a 1 for 3 match

following the end of each of the first, third and fifth years following the year in respect of which the purchased shares

were acquired. The fair values of grants under the Buy As You Earn Plan were determined using the Black-Scholes

valuation model.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

172

26 Investment in own shares

During the AGM held on 16 May 2023, the shareholders approved that up to a maximum of 10% of the Company’s

shares could be purchased by the Company and held as own shares, renewing the authority agreed on 24 May

2022. The authority expires at the conclusion of the Company’s next Annual General Meeting after the passing of this

resolution or, if earlier, at 23:59 on 15 August 2024.

Established in 2018, the FDM Group Employee Benefit Trust was used to purchase shares sold by option holders upon

exercise of options under the FDM Performance Share Plan and sell shares to the members of the FDM Group Buy As

You Earn Plan. The Group accounts for the Company’s shares held by the Trustee of the FDM Group Employee Benefit

Trust as a deduction from shareholders’ funds.

The administrative costs of running the Trust have been consolidated in the results of FDM Group (Holdings) plc.

	2023	2022
Number of shares in the Company owned by the EBT	536,914	151,894
Nominal value of shares held	£5,369	£1,519
Cost price of shares held	£3,015,942	£1,493,907
Prevailing valuation per share	£4.585	£7.49
Total market value of shares	£2,461,751	£1,137,686
Minimum number of shares in the Company owned by EBT during the year	129,084	151,894
Maximum number of shares in the Company owned by EBT during the year	565,571	239,505

27 Related parties

During 2023, eight family members of Directors were employed by the Group (2022: eight family members), each

at market rate on an arm’s length basis. The total remuneration relating to these staff in aggregate was £251,000,

comprising salary and bonus of £1,028,000 and share-based payment credit of £777,000 (2022: eight individuals,

aggregate remuneration of £1,569,000 comprising salary and annual bonus of £1,181,000 and share-based payment

expenses of £388,000).

For information on Directors’ remuneration see note 9 and the audited sections of the Remuneration Report as defined

on page 107.

The full registered addresses of all subsidiaries of the Parent Company are disclosed on page 181.

28 Financial risk management

The Group manages its capital to ensure the Company and all its subsidiaries will be able to continue as a going

concern whilst maximising the return to shareholders.

The use of financial instruments is managed under policies and procedures approved by the Board. These are

designed to reduce the financial risks faced by the Group and Company, which primarily relate to credit, interest,

liquidity, capital management and foreign currency risks, which arise in the normal course of the Group’s business.

There are no adjustments between the amounts presented in the Statement of Financial Position and the fair values of

the assets and liabilities.

Credit risk

Credit risk is managed on a Group basis and arises from cash and cash equivalents and trade receivables. The Group

provides credit to clients in the normal course of business and the amount that appears in the Consolidated Statement

of Financial Position is net of an allowance for expected credit losses of £516,000 (2022: £498,000).

All material trade receivable balances relate to sales transactions with the Group’s blue-chip client base. At the

reporting date, although the Group had significant balances with key clients, there were no significant concentrations

of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset.

Strategic Report

Governance

Financial Statements

173

Credit risk is managed through agreed procedures which include managing and analysing the credit risk for new clients

and managing existing clients. For new clients we obtain and review credit ratings and set credit limits based upon our

past experience. £531,000 of trade receivables at 31 December 2023 (2022: £1,235,000) is owed from new clients

(less than six months).

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of

changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates is limited as

the Group had no debt therefore it has limited exposure to interest rate risk. The Group manages its interest rate risk

through regular reviews of its exposure to changes in interest rates.

Liquidity risk

The Group manages liquidity risk by maintaining adequate cash reserves and continuously monitoring forecast and

actual cash flows and where appropriate matches the maturity of financial assets and liabilities.

The Group has no debt from third parties at the year end and therefore liquidity risk is not considered a significant risk

at this time due to the Group’s cash balances.

Capital management

The Group’s policy is to maintain a strong capital base so as to maintain investor market, creditor, client and employee

confidence and to sustain future investment and development of the business. The capital structure of the Group

consists of equity attributable to the equity holders of the Group comprising issued share capital, other reserves and

retained earnings.

The Board monitors the capital structure on a regular basis and determines the level of annual dividend. The Group is

not exposed to any externally imposed capital requirements.

Fair values

There is no significant difference between the carrying amounts shown in the Consolidated Statement of Financial

Position and the fair values of the Group and Company’s financial instruments. For current trade and other receivables

or payables with a remaining life of less than one year, the amortised cost is deemed to reflect the fair value. There are

no assets or liabilities measured at fair value through profit and loss, no derivatives used for hedging, or other financial

liabilities at amortised cost.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because

of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates

primarily to the Group’s operating activities (when revenue or expense is denominated in a different currency from the

Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

The currencies giving rise to this risk are primarily the US Dollar, Canadian Dollar, Hong Kong Dollar and Euro.

The Group has both cash inflows and outflows in these currencies that create a natural hedge.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

continued

Notes to the Consolidated Financial Statements

174

Cash and cash equivalents

The Group’s cash and cash equivalents are denominated in the following currencies:

	2023	2022
	£000	£000
Pounds Sterling	27,550	27,100
Euro	6,987	6,233
US Dollar	3,035	1,940
Chinese Renminbi	2,132	2,025
Canadian Dollar	1,752	3,580
Australian Dollar	1,467	1,983
Singapore Dollar	1,463	771
Polish Zloty	1,198	725
Hong Kong Dollar	693	459
South African Rand	688	247
Swiss Franc	239	325
New Zealand Dollar	22	135
	47,226	45,523

Trade receivables

The gross carrying amounts of the Group’s trade receivables are denominated in the following currencies:

	2023	2022
	£000	£000
Pounds Sterling	11,103	15,932
US Dollar	5,412	7,560
Euro	2,019	1,979
Canadian Dollar	2,029	2,717
Hong Kong Dollar	1,421	1,763
Australian Dollar	1,485	1,972
Singapore Dollar	1,111	2,566
Chinese Renminbi	256	441
Swiss Franc	112	141
Polish Zloty	440	277
South African Rand	72	42
	25,460	35,390

28 Financial risk management

continued

Strategic Report

Governance

Financial Statements

175

Trade and other payables

The carrying amounts of the Group’s trade and other payables are denominated in the following currencies:

	2023	2022
	£000	£000
Pounds Sterling	12,576	17,690
Euro	2,311	2,626
US Dollar	1,938	2,436
Canadian Dollar	4,565	5,247
Australian Dollar	2,062	2,491
Singapore Dollar	625	1,366
Hong Kong Dollar	627	450
Swiss Franc	50	42
Polish Zloty	451	353
Chinese Renminbi	134	158
South African Rand	52	54
New Zealand Dollar	34	49
	25,425	32,962

FDM Group (Holdings) plc

Annual Report and Accounts 2023

Parent Company Statement of Financial Position

as at 31 December 2023

		2023	2022
	Note	£000	£000
Fixed assets
Investments	4	3,469	12,572
		3,469	12,572
Current assets
Trade and other receivables	5	52,273	57,709
Cash and cash equivalents	6	201	33
Creditors : amounts falling due within one year
Trade and other payables	7	(367)	(56)
Net assets		55,576	70,258
Equity
Called up share capital	8	1,096	1,092
Share premium account		9,705	9,705
Capital redemption reserve		52	52
Own shares reserve	9	(3,016)	(1,494)
Other reserves		3,469	12,572
Retained earnings		44,270	48,331
Total equity		55,576	70,258

The Parent Company made a profit for the year of £31,295,000 (2022: profit of £39,624,000). In accordance with

section 408 of the Companies Act 2006, the Parent Company’s individual profit and loss account is not included in

these financial statements.

The notes on pages 178 to 184 are an integral part of the Parent Company Financial Statements (Registered Company

07078823).

These financial statements on pages 176 to 184 were approved by the Board of Directors on 19 March 2024 and were

signed on its behalf by:

Rod Flavell

Mike McLaren

Chief Executive Officer

Chief Financial Officer

19 March 2024

176

Strategic Report

Governance

Financial Statements

Parent Company Statement of Changes in Equity

for the year ended 31 December 2023

	Called up	Share	Capital	Own
	Share	premium	redemption	shares	Other	Retained	Total
	capital	account	reserve	reserve	reserves	earnings	equity
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2023	1,092	9,705	52	(1,494)	12,572	48,331	70,258
Profit for the year	–	–	–	–	–	31,295	31,295
Total comprehensive income	–	–	–	–	–	31,295	31,295
for the year
Share-based payments (note 4)	–	–	–	–	(4,442)	–	(4,442)
Issue of new shares (note 8)	4	–	–	–	–	–	4
Transfer to retained earnings
(note 4)	–	–	–	–	(4,661)	4,661	–
Recharge of net settled share
options	–	–	–	–	–	(201)	(201)
Own shares purchased/ sold	–	–	–	(1,522)	–	(496)	(2,018)
Dividends paid (note 11)	–	–	–	–	–	(39,320)	(39,320)
Total transaction with owners,	4	–	–	(1,522)	(9,103)	(35,356)	(45,977)
recognised directly in equity
Balance at 31 December 2023	1,096	9,705	52	(3,016)	3,469	44,270	55,576

	Called up	Share	Capital	Own
	Share	premium	redemption	shares	Other	Retained	Total
	capital	account	reserve	reserve	reserves	earnings	equity
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2022	1,092	9,705	52	(2,355)	6,588	46,949	62,031
Profit for the year	–	–	–	–	–	39,624	39,624
Total comprehensive income	–	–	–	–	–	39,624	39,624
for the year
Share-based payments (note 4)	–	–	–	–	6,430	–	6,430
Transfer to retained earnings
(note 4)	–	–	–	–	(446)	446	–
Recharge of net settled
share options	–	–	–	–	–	(182)	(182)
Own shares sold	–	–	–	861	–	(353)	508
Dividends paid (note 11)	–	–	–	–	–	(38,153)	(38,153)
Total transaction with owners,	–	–	–	861	5,984	(38,242)	(31,397)
recognised directly in equity
Balance at 31 December 2022	1,092	9,705	52	(1,494)	12,572	48,331	70,258

The notes on pages 178 to 184 are an integral part of the Parent Company Financial Statements.

177

Notes to the Parent Company Financial Statements

1 General information

The Company is limited by shares, incorporated and domiciled in the UK and registered as a public limited company

in England and Wales with a Premium Listing on the London Stock Exchange. The Company’s registered office is 3rd

Floor, Cottons Centre, Cottons Lane, London, SE1 2QG and its registered number is 07078823.

2 Going concern

The Directors have a reasonable expectation that with the continued support of its Subsidiaries, the Company will

have adequate resources to continue in operational existence as a holding company for at least twelve months.

Accordingly, the Directors continue to adopt the going concern basis for preparing the financial statements.

3 Accounting policies

The separate financial statements of the Company have been prepared in accordance with Financial Reporting

Standard 101 ‘Reduced disclosure framework’ (FRS 101) and the requirements of the Companies Act 2006 as

applicable to companies using FRS101.

The Company has taken the exemption under section 408 of the Companies Act 2006 not to present the parent

company income statement. The profit for the year was £31,295,000 (2022: profit of £39,624,000).

The financial information has been prepared on a historical cost basis and is presented in Pounds Sterling and all

values are rounded to the nearest thousand (£000), except where otherwise indicated.

The following exemptions available under FRS 101 have been applied:

•

The following paragraphs of IAS 1 ‘Presentation of financial statements’

–

10(d) (statement of cash flows);

–

16 (statement of compliance with all IFRS);

–

38A (requirement for minimum of two primary statements, including cash flow statements)’

–

38 B-D (additional comparative information);

–

40 A-D (requirements for a third statement of financial position);

–

111 (cash flow statement information); and

–

134-136 (Capital management disclosures)

•

IAS 7 ‘Statement of cashflows’

•

Paragraph 30 and 31 of IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ (requirement for the

disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet effective);

•

The requirements in IAS 24 ‘Related party disclosures’ to disclose related party transactions entered into between

two or more members of a group;

As permitted by section 408(3) of the Companies Act 2006, the income statement of the Company is not presented in

this Annual Report.

These separate financial statements are not intended to give a true and fair view of the profit or loss or cash flows of

the Company. The Company has not published its individual cash flow statement as its liquidity, solvency and financial

adaptability are dependent on the Group rather than its own cash flows.

The accounting policies of the Company are the same as those of the Group and have been applied consistently.

These are set out in note 3 in the Notes to the Consolidated Financial Statements, except the adoption of FRS101 as

outlined above and that the Company has no policy in respect of consolidation. Investments in subsidiaries are carried

at historical cost, share options transactions flow through parent company investments as required under IFRS2.

Details of the Company’s other accounting estimate, being the share-based payments, is consistent with the

disclosure in note 4 to the Consolidated Financial Statements on page 153.

No individual judgements have been made that have a significant impact on the financial statements (2022: none).

FDM Group (Holdings) plc

Annual Report and Accounts 2023

178

FDM Group (Holdings) plc

Annual Report and Accounts 2023

178

4 Investments

2023

£000

2022

£000

At 1 January

12,572

6,588

Additions

–

6,430

Disposals

(4,442)

–

Recharge of IFRS 2 investment

(4,661)

(446)

At 31 December

3,469

12,572

The investments balance represents costs associated with the investment in subsidiary undertakings and with the PSP.

Share-based payment

The Group operates an equity-settled share-based payment plan for the employees of subsidiaries using the

Company’s equity instruments. The fair value of the compensation given in respect of the share-based payment plan

is recognised as a capital contribution to the Company’s subsidiaries over the vesting period. The capital contribution

is reduced by any payments received from subsidiaries in respect of these share-based payments. The Company

currently uses a number of equity-settled share plans to grant options and shares to the Directors and employees

of its subsidiaries. At 31 December 2023, the Company had 1,821,290 share options outstanding (2022: 2,395,160

shares outstanding).

During the year ended 31 December 2023, the reduction in total capital contribution arising from share-based

payments was £4,442,000 (2022: increase in capital contribution of £6,430,000), the reduction in the year, presented

as a disposal, arises due to reassessment of the estimated performance outcome. Payments of £4,661,000 (2022:

£446,000) received from subsidiaries shown as a transfer to Retained earnings from the Other reserves. Full details

of share-based payments and share plans are disclosed in note 25 to the Consolidated Financial Statements.

Investment in subsidiary undertakings

The total cost of investments in subsidiaries, is £2 (2022: £2). Astra 5.0 Limited acts as an intermediate holding

company and provides human resources and marketing services to the Group. The remaining subsidiaries carry

out the principal activity of the Group.

179

Financial Statements

Governance

Strategic Report

179

Financial Statements

Governance

Strategic Report

Notes to the Parent Company Financial Statements

continued

The Company holds the following investments in its subsidiaries:

Company

Country of

incorporation

Class of share held

Direct/ indirect

Ownership

Astra 5.0 Limited

Great Britain

Ordinary

Direct

100%

FDM Group Limited

Great Britain

Ordinary

Indirect

100%

FDM Astra Ireland Limited

Ireland

Ordinary

Indirect

100%

FDM Group Inc.

USA

Ordinary

Indirect

100%

FDM Group Canada Inc.

Canada

Ordinary

Indirect

100%

FDM Group NV

Belgium

Ordinary

Indirect

100%

FDM Group GmbH

Germany

Ordinary

Indirect

100%

FDM Switzerland GmbH

Switzerland

Ordinary

Indirect

100%

FDM Luxembourg S.A.

Luxembourg

Ordinary

Indirect

100%

FDM South Africa (PTY) Limited

South Africa

Ordinary

Indirect

100%

FDM Singapore Consulting PTE Limited

Singapore

Ordinary

Indirect

100%

FDM Technology (Shanghai) Co. Limited

China

Ordinary

Indirect

100%

FDM Group HK Limited

Hong Kong

Ordinary

Indirect

100%

FDM Group Australia Pty Ltd

Australia

Ordinary

Indirect

100%

FDM Group Austria GmbH

Austria

Ordinary

Indirect

100%

FDM Group BV

The Netherlands

Ordinary

Indirect

100%

FDM Grupa Polska

Poland

Ordinary

Indirect

100%

FDM Group New Zealand Limited

New Zealand

Ordinary

Indirect

100%

4 Investments

continued

FDM Group (Holdings) plc

Annual Report and Accounts 2023

180

FDM Group (Holdings) plc

Annual Report and Accounts 2023

180

The registered address for each subsidiary of the Company as at 31 December 2023 is listed below. The principal

place of business of each company is considered the same as the registered office.

Company

Registered address

Astra 5.0 Limited

3rd Floor, Cottons Centre, Cottons Lane, London SE1 2QG, UK

FDM Group Limited

3rd Floor, Cottons Centre, Cottons Lane, London SE1 2QG, UK

FDM Astra Ireland Limited

3 Dublin Landings, North Wall Quay, Dublin 1, Ireland

FDM Group Inc.

105 and 105F, 34

Floor, 199 Water Street, New York, NY, 10038, USA

FDM Group Canada Inc.

1 Place Ville Marie, 37

Floor, Montreal, QC H3B 3P4, Canada

FDM Group NV

Rue Medori 99, B-1020 Brussels, Belgium

FDM Group GmbH

6th Floor, MainzerLandstrasse 41, 60329 Frankfurt am Main, Germany

FDM Switzerland GmbH

Lavaterstrasse 40, Zurich, CH 8002, Switzerland

FDM Luxembourg S.A.

Office No. 17, 12c Rue Guillaume Kroll, L-1882, Luxembourg

FDM South Africa (PTY) Limited

9 Kinross Street, Germiston South, 1401 South Africa

FDM Singapore Consulting PTE Limited

77 Robinson Road, #13-00 Robinson 77, Singapore 068896

FDM Technology (Shanghai) Co. Limited

C33, 22/F Jing’an Kerry Centre Office Tower 3, 1228 Middle Yan An Road,

Jing An, Shanghai, 200040, China

FDM Group HK Limited

6/F, The Annex, Central Plaza, 18 Harbour Road, Hong Kong

FDM Group Australia Pty Ltd

Level 21, Tower Three, International Towers, 300 Barangaroo Avenue,

NSW 2000, Sydney, Australia

FDM Group Austria GmbH

Handelskai 92/Gate 2/7A, 1200 Wien, Austria

FDM Group BV

Westerdoksdijk 423, 1013 BX, Amsterdam, Nederland

FDM Grupa Polska

ul. Grzybowska nr 2 lok. 29, Warsaw, 00-131, Poland

FDM Group New Zealand Limited

Grant Thornton New Zealand Ltd, L4, 152 Fanshawe Street, Auckland,

1010, New Zealand

5 Trade and other receivables

2023

£000

2022

£000

Amounts owed by subsidiary undertakings

52,266

57,549

Other receivables

–

147

Prepayments and accrued income

52,273

57,709

All trade and other receivables are receivable in Pounds Sterling and are fully performing. The amounts owed by

subsidiary undertakings are unsecured, non-interest bearing and repayable on demand. There is a regular flow of

funds between FDM Group (Holdings) plc and FDM Group Limited, primarily to facilitate the payment of dividends by

FDM Group (Holdings) plc to its shareholders.

181

Financial Statements

Governance

Strategic Report

181

Financial Statements

Governance

Strategic Report

Notes to the Parent Company Financial Statements

continued

6 Cash and cash equivalents

2023

£000

2022

£000

Cash at bank and in hand

201

The Company’s cash is held with a financial institution with a credit rating of A at the date of signing the

financial statements.

7 Trade and other payables

2023

£000

2022

£000

Trade payables

Other payables

Accruals

108

Payables due to subsidiaries

–

Current tax liability

233

–

367

8 Called up share capital

Authorised, called-up, allotted and fully-paid share capital

2023

Number of

2023

£000

2022

Number of

2022

£000

Ordinary shares of £0.01 each

At 1 January

109,191,669

1,092

109,191,669

1,092

Issued in year

420,183

–

At 31 December

109,611,852

1,096

109,191,669

1,092

Ordinary shares

All ordinary shares rank equally for all dividends and distributions that may be declared on such shares. At general

meetings of the Company, each shareholder who is present (in person, by proxy or by representative) is entitled to

one vote on a show of hands and, on a poll, to one vote per share.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

182

FDM Group (Holdings) plc

Annual Report and Accounts 2023

182

9 Own shares reserve

During the AGM held on 16 May 2023, the shareholders approved that up to a maximum of 10% of the Company’s

shares could be purchased by the Company and held as own shares, renewing the authority agreed on 24 May

2022. The authority expires at the conclusion of the Company’s next Annual General Meeting after the passing of

this resolution or, if earlier, at 23:59 on 15 August 2024.

Established in 2018, the FDM Group Employee Benefit Trust was used to purchase shares sold by option holders upon

exercise of options under the FDM Performance Share Plan and sell shares to the members of the FDM Group Buy As

You Earn Plan. The Group accounts for the Company’s shares held by the Trustee of the FDM Group Employee Benefit

Trust as a deduction from shareholders’ funds.

The administrative costs of running the Trust have been consolidated in the results of FDM Group (Holdings) plc.

31 December

2023

31 December

2022

Number of shares in the Company owned by the EBT

536,914

151,894

Nominal value of shares held

£5,369

£1,519

Cost price of shares held

£3,015,942

£1,493,907

Prevailing valuation per share

£4.585

£7.490

Total market value of shares

£2,461,751

£1,137,686

Minimum number of shares in the Company owned by EBT during the year

129,084

151,894

Maximum number of shares in the Company owned by EBT during the year

565,571

239,505

10 Financial risk management

The financial risks and uncertainties the Company faces are the same as those of the Group. These are set out on

pages 172 to 173.

183

Financial Statements

Governance

Strategic Report

183

Financial Statements

Governance

Strategic Report

Notes to the Parent Company Financial Statements

continued

11 Dividends

2023

£000

2022

£000

Dividends received

Received from subsidiaries

32,000

40,000

Dividends paid

Paid to shareholders

39,320

38,153

2023

An interim dividend of 17.0 pence per ordinary share was declared by the Directors on 27 July 2023 and was paid on

13 October 2023 to holders on the register on 22 September 2023; the amount payable was £18,539,000.

The Board is proposing a final dividend of 19.0 pence per share in respect of the year to 31 December 2023, for

approval by shareholders at the AGM to be held on 14 May 2024; the amount payable will be £20,724,000. Subject to

shareholder approval the dividend will be paid on 28 June 2024 to shareholders on the register on 7 June 2024.

This brings the Company’s total dividend for the year to 36 pence per share (2022: 36.0 pence per share).

The Board continues to operate a progressive dividend policy; the Group will retain sufficient capital to fund ongoing

operating requirements, maintain an appropriate level of dividend cover and sufficient funds to invest in the Group’s

longer-term growth.

2022

An interim dividend of 17.0 pence per ordinary share was declared by the Directors on 27 July 2022 and was paid on

30 September 2022 to holders on the register on 26 August 2022; the amount payable was £18,533,000.

The Board paid a final dividend of 19.0 pence per share on 30 June 2023 to shareholders on record on 9 June 2023;

the amount payable was £20,781,000.

12 Directors’ remuneration

Directors’ remuneration was paid by FDM Group Limited in both the current and prior year and no recharge was made

to the Company. For further details see note 9 to the Consolidated Financial Statements on page 158.

13 Auditors’ remuneration

Auditors’ remuneration of £10,000 was charged in relation to 2023 (2022: £10,000), the fees were paid by FDM Group

Limited in both the current and prior year and no recharge was made to the Company.

14 Employees

The Company had no employees during the current or prior year.

FDM Group (Holdings) plc

Annual Report and Accounts 2023

184

FDM Group (Holdings) plc

Annual Report and Accounts 2023

184

Directors

David Lister

Rod Flavell

Sheila Flavell

Mike McLaren

Andy Brown

Peter Whiting

Michelle Senecal de Fonseca

Jacqueline de Rojas

Alan Kinnear

Rowena Murray

Non-Executive Chair

Chief Executive Officer

Chief Operating Officer

Chief Financial Officer

Chief Commercial Officer

Non-Executive Director

Company Secretary

Mark Heather

Registered office

3rd Floor

Cottons Centre

Cottons Lane

London

SE1 2QG

Independent Auditors

PricewaterhouseCoopers LLP

1 Embankment Place

London

WC2N 6RH

Bankers

HSBC Bank plc

8 Canada Square

London

E14 5HQ

Registrars

Link Group

10th Floor

Central Square

29 Wellington Street

Leeds

LS1 4DL

Stockbrokers (joint)

Investec Bank plc

30 Gresham Street

London

EC2V 7QP

HSBC Bank plc

8 Canada Square

London

E14 5HQ

Shore Capital

Cassini House

St James’s Street

London

SW1A 1LD

Shareholder Information

185

Financial Statements

Governance

Strategic Report

185

Financial Statements

Governance

Strategic Report

Powering the people

behind tech and innovation

fdmgroup.com

FDM Group (Holdings) plc

3rd Floor, Cottons Centre,

Cottons Lane, London SE1 2QG

Tel: +44 (0) 20 3056 8240

Email: enquiries@fdmgroup.com